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 2,740 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 $2.5 million annually.

    • The vending machine operations industry consists of about 2,740 companies that employ about 37,000 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

                                    May 14, 2024 - Office Vacancy Rates Remain High
                                    • US office vacancy rates reached a 30-year high of 19% in the first quarter of 2024 compared to 17.8% in the same quarter a year ago, according to real estate firm CBRE’s 1Q office report in Facilities Dive. The majority of the 57 office markets tracked by CBRE in Q1 saw negative net absorption, meaning more space was vacated than leased. Still, tenant downsizing has slowed in the past 12 months as part of a gradual rebound, according to a JLL report on Q1 US Office Market Dynamics. The report expects office leasing to reach 85% of pre-pandemic levels in 2024. Office occupancy levels are a demand indicator for vending machine operators.
                                    • The National Federation of Independent Business (NFIB) monthly jobs report shows that unfilled job openings were up in April 2024, with a seasonally adjusted 40% of business owners reporting jobs they could not fill. The reading is up three points from March 2024, which had the lowest reading since January 2021. A seasonally adjusted net 12% of small business owners plan to create new jobs over the next three months, up one point since March. About 19% of owners reported labor quality as the most important problem facing the business. According to NFIB Chief Economist Bill Dunkelberg, “Hiring plans among small businesses once again in April, but open positions remain largely unfilled as owners struggle month after month to find employees. Overall, small businesses are not reporting net gains in employment as wage pressures and inflation keep the labor market tight.”
                                    • According to a new report from Transparency Market Research in Vending Times, the intelligent vending machine market value is set to surpass $8 billion by 2031. The market valuation in 2022 was $4.9 billion. Growth during the forecast period will come from increased consumer demand for convenience and contactless payments, the growth of urbanization, greater demand for healthy options, and the rise of AI and Internet of Things (IoT) technology. The report cites challenges facing the industry such as the higher cost of entry for smart vending compared to traditional vending machines, security concerns, and a lack of standardized technology and regulations in the industry.
                                    • Consumer confidence levels fell in April 2024 from March 2024, marking a third consecutive month of weakness, according to data from The Conference Board. The Conference Board’s consumer confidence index was 97 in April 2024 from 103.1 in March 2024. According to Dana Peterson, Chief Economist at The Conference Board, “Confidence retreated further in April, reaching its lowest level since July 2022 as consumers became less positive about the current labor market situation, and more concerned about future business conditions, job availability, and income.” Peterson added that confidence declined among consumers of all age groups and for all income groups except those in the $25,000 to $49,999 range. Plans for vacations, home purchases, and large appliances decreased on a six-month basis.
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