Vending Machine Operators

Industry Profile Report

Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters

Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 3,100 vending machine operators in the US generate revenue by reselling a variety of merchandise through automated machines. The majority of companies are full-line vending machine operators which distribute multiple product categories. About a quarter of the industry specializes in a product category, such as candy or cigarettes. Common locations for vending machines include manufacturing facilities, offices, hotels, restaurants, bars, retailers, schools, hospitals or nursing homes, and government buildings.

Mitigating Theft

Because vending is generally a cash business, companies are at risk for theft from both internal and external sources.

Technology Improves Performance

More vending machine operators are investing in technology to improve operating efficiency and boost sales and profitability.

Industry size & Structure

The average vending machine operator operates out of a single location, employs 14 workers, and generates almost $3 million annually.

    • The vending machine operations industry consists of about 2,800 companies that employ about 35,000 workers and generate about $7 billion annually.
    • The industry is concentrated at the top and fragmented at the bottom. The top 50 firms account for 61% of sales.
    • Many vending machine operators are small to medium-size businesses. Some operators service routes part-time.
    • Some large food and beverage manufacturers and food service operators have vending operations. Food service companies Aramark and Compass Group have large vending machine operations. Compass owns Canteen Vending Services.
                                    Industry Forecast
                                    Vending Machine Operators Industry Growth
                                    Source: Vertical IQ and Inforum

                                    Recent Developments

                                    Jan 9, 2024 - Office Vacancy Up in Q4
                                    • Nearly 20% of office space in major US cities was not leased as of Q4 2023, with the continuing popularity of remote work and a long-standing oversupply contributing to higher vacancy rates, according to Moody’s Analytics data in the Wall Street Journal. The 19.6% vacancy in the fourth quarter of 2023 was slightly higher than the 18.8% a year ago and is the highest vacancy rate since 1979. The top three US cities with the highest office vacancy rates in Q4 were all in Texas: Houston, Dallas, and Austin. Some industry analysts think the higher vacancy rate could linger due to the continuing popularity of working from home. Office occupancy levels are a demand indicator for vending machine operators.
                                    • Inflation was the most important problem facing small business owners, according to 23% of owners in a survey by the National Federation of Independent Business (NFIB). The NFIB’s Small Business Optimism Index fell 0.1 points in November 2023 to 90.6, marking the 23rd consecutive month below the 49-year average of 98. According to NFIB Chief Economist Bill Dunkelberg, “Job openings on Main Street remain elevated as the economy saw a strong third quarter. However, even with the growing economy, small business owners have not seen a strong wave of workers to fill their open positions. Inflation also continues to be an issue among small businesses.” Small business owners are still encountering historically high job opening levels, with a seasonally adjusted 54% of owners reporting hiring or trying to hire in November. Over 60% of owners reported making capital outlays in the past six months, with 41% spending on new equipment, 23% acquiring vehicles, and 17% improving or expanding facilities.
                                    • Technology advancements, a solid labor market, and a greater return-to-the-office are expected to support growth in the US vending machine operators industry, which is projected to grow at an over 4% CAGR from 2022 to 2027, according to a recent Inforum forecast. This rate is comparable than the projected growth of the overall economy. The forecast follows several years of volatility during the pandemic in 2020 (-23.8%), 2021 (4.2%), and 2022 (15.6%).
                                    • Consumer confidence levels rose in December 2023 for the second month in a row, following three consecutive months of declines, according to data from The Conference Board. The Conference Board’s consumer confidence index increased to 110.7 in December 2023 from 101 in November 2023. According to Dana Peterson, Chief Economist at The Conference Board, “December’s write-in responses revealed the top issue affecting consumers remains rising prices in general, while politics, interest rates, and global conflicts all saw downticks as top concerns.” Peterson added that the gains in consumer confidence were largest in householders aged 35-54 and households with income levels of $125,000 and above. Plans to purchase homes, autos, and large appliances rose moderately on a month-to-month basis as interest rates moderated.
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