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The Vended Foods Market
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Jan 1, 1997
162 Pages - Pub ID: LA456
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- Executive Summary
The Products
- Scope of Report
- Development of Automatic Vending
- Packaging No Longer Special
The Market
- Sales of Nearly $7 Billion in 1996
- Economic Recovery Fuels Growth, But Not as
- Much as Previous Recoveries
- Vending Sales Linked to Employment
- Bill Validators and Other Technical Improvements
- Breaking Down Barriers to Vending Purchases
- Product Mix Changes to Appeal to the Health
- Conscious—A Largely Untapped Market
- Vended Foods to Reach $9.4 Billion in 2001
- Table 1-1: Size and Growth of the U.S. Vended
Foods Market, 1991-2001 (dollars)
Confections/Snacks Make Up More Than Two-Thirds of Market
The Marketers
- About 100 Candy/Snack Manufacturers and 60
- Food Processors Are Actively Involved in Vending
- Seven Companies Dominate Candy/Snack Category
- Major Food Processors and Packaged Food Companies
- Lead in Vended Entrees and Side Dishes
- Nearly 10,000 Vending Operators in the United States
- Large Vending Companies are More Likely to Vend
- Entrees and Side Dishes
- Leading National Operators
- Product and Marketing Trends
Distribution and Retail
- Vending Operators are Supplied by a Variety of Sources
- Most Refrigerated Foods Prepared at Vendor- Operated
- and Third-Party Commissaries
- The Role of the Route Driver
- Most Vending Machines Are Found in Factories and Offices
- Display in the Machine
- Snacks Get Lion's Share of Display Space
The Consumer
- Core Consumer Is Employed Adult
Scope and Methodology
- The Products
Scope of Report
- Candy, Snacks, and Other Foods Sold Through
- Automatic Vending Machines
- Beverages Not Included
- Non-Foods Excluded
The Development of Automatic Vending
- A Very Modern Idea with a Long History
- The Advent of a Separate Vending Machine Industry
- The 1960s: The Golden Age of the Vending Machine
- The Challenges of the Seventies
- Automatic Vending and the Electronic Revolution
The Products
- Seven Major Categories of Vended Foods
- Eight Basic Segments Within Bagged Snacks
- A Handful of Segments within Baked Snacks
- Eight Segments within Cookies
- Six Basic Segments within Chocolate Candy
- Product Segments Within Nonchocolate Candy
- Types of Bulk-Vended Snacks and Candy
- Product Segments within Vended Entrees and Side Dishes
Packaging and Labeling
- Most Products are Sold in Same Package Through Other Venues
- Packaging is Same as for Products in a Given Category
- But: Size and Sometimes Shape are Key Restrictions
- Shelf Life and Packaging of Candy
- Snacks are Packaged to Lengthen Shelf Life
- Table 2-1: Shelf Life of Selected Salted Snacks: By Type of
Snack, 1991 (weeks); Dried Meat Snacks, Baked, No Oil Tortilla
Chips, Pretzels, Snack Nuts, Microwave Popcorn, Tortilla Chips, Extruded Snacks, Pork Rinds, Corn Chips, Ready-To-Eat Popcorn, Potato Chips
Packaging Protects Potato Chips and Popcorn from Moisture
- and Rancidity
- Eye Appeal Generally Outweighs Spoilage Concerns in Cookie Packaging
- Metal Components Avoided in Frozen Food
- NLEA Regulations Mandate Nutritional Information on Label
- Healthy Snack Terminology
- The Market
Market Size and Growth
- Vended Food Sales Pass $8 Billion in 1996
- Economic Recovery Fuels Growth, But Not as Much as
- Previous Recoveries
- Table 3-1: Size and Growth of U.S. Vended Foods Market:
By Major Category, 1992-1996 (dollars); Category: Candy/
Snacks, All-Purpose Foods
Factors in Future Market Growth
- Vending Sales Linked to Employment
- Affects of Shift to Service Economy, Freelance, Temporary,
- and Home Employment
- Inflation and Vending Sales
- Bill Validators, Credit/Bank Cards, and Debit Cards Breaking
- Down Barriers to Vending Purchases
- The Dollar Coin
- Improvements in Vending Machines Give Consumers More
- Choices—Hot Foods
- Americans Continue to Spend More on Prepared Food Away from Home
- Table 3-2: Share of U.S. Consumer Food Dollars Spent Away
from Home, 1975-1995 (percent)
- Product Mix Changes to Appeal to the Health- Conscious—
- A Largely Untapped Market
- Vending Machines as "Nontraditional Location" for Fast Feeders
- Downsizing of America is a Drag on Market for Vended Foods
- An Overall Economic Downturn Likely within Next Five Years
Projected Sales
- Market to Reach $9.4 Billion by 2001
- Table 3-3: Projected Size and Growth of the U.S. Vended Foods
Market: By Major Category, 1996-2001 (dollars); Category:
Candy/Snacks, All-Purpose Foods
Market Composition
- Candy/Snacks Make Up More Than Two-Thirds of Market
- Figure 3-1: Share of U.S. Vended Foods Market: By Category,
- 1995 (percent); Category: Candy/Snacks, All-Purpose Foods,
- Pastries, Bulk
- Candy Bars and Boxed Candy Represent 34% of Candy/Snack Vending
- Figure 3-2: Share of Sales in U.S. Candy/Snack Machines:
By Segment, 1995 (percent); Category: Candy Bars/Boxes;
- Bagged Snacks, Cookies/Crackers/Pastries, Nuts and Other,
- Popcorn, Gum, Roll Candy
- Sandwiches Account for About Half of All-Purpose (Refrigerated,
- Frozen, and Canned) Foods
- Figure 3-3: Share of All-Purpose Vended Foods Sales: By Segment, 1995 (percent); Segment: Sandwiches, Ethnic Specialties, Canned
and Bottled Juices, Salads, Platters/Entrees, Desserts/Pastries,
- Yogurt/Cottage Cheese, Fresh Fruit and Vegetables, Aseptically
- Packed Juices, Canned Fruit/Puddings, Milk Shakes
- Vending Machines Overwhelmingly Located in Workplaces
- Figure 3-4: Share of U.S. Vended Foods Sales: By Type of Location, 1995 (percent); Type: Plants, Offices, Schools, Hospitals, Military Bases, Other
Market Composition By Consumer: Blue-Collar Males
- 36% of Candy/Snack Machine Columns Are in Southeast
- Figure 3-5: Share of U.S. Vended Foods Machine Columns:
By Region, 1995 (percent); Region: Southeast, Central, West, Northeast
- Summer Is a Slower Season
- Refrigerated Foods Gain Share Over Vended Foods
- Table 3-4: Trends of U.S. Vended Foods: Hot Canned vs.
Refrigerated, 1980-1995 (dollar sales, unit sales, machines)
- The Marketers
The Marketers
- Food Processors/Marketers and Vending Operators
- About 100 Candy/Snack Marketers Actively Involved in Vending
- Some 60 Food Processors Actively Involved in Vending
Candy/Snack Marketers
- Seven Companies Dominate Candy/Snack Category
- Second-Tier Candy/Snack Marketers
- Table 4-1: Leading U.S. Candy/Snack Marketers in Vending Machines and Their Brands, 1996 (listing); Marketer: Hershey Foods, Lance, Mars, Nestle, PepsiCo, RJR Nabisco, Wm. Wrigley
- Table 4-2: Selected Other U.S. Candy/Snack Marketers in Vending Machines and Their Brands, 1996 (listing); Marketer: Beer Nuts,
- Blue Diamond Growers, Kohlberg Kravis Roberts, California Naturals, Campbell Soup Company/Pepperidge Farm, Christie Brown, Culinar, Ferraro, Fleetwood Snacks, Gardetto's, Goodmark Foods, Huhtamaki, Interstate Brands, Kar Nut Products, Keebler/Sunshine Biscuits, M.C. Cookie, Mr. Nature, Otis Spunkmeyer, Philip Morris/Kraft Foods, Plantain Products, President Baking, Procter & Gamble, Quaker Oats, Ralcorp Holdings, Skinner Salted Nuts, Snyders of Hanover, Spangler Candy, Storck, Tootsie Roll Industries, Van Melle, Warner-Lambert
Refrigerated, Hot Canned, and Frozen Food Marketers
- Major Food Processors and Packaged Food Companies Lead in
- Vended Entrees and Side Dishes
- Table 4-3: Leading U.S. Marketers of Vended Entrees and Side Dishes and Their Brands, 1996 (listing); Marketer: Bridgeford Foods, Camp-
- bell Soup, ConAgra, Hormel Foods, Schwan's Sales Enterprises, Philip Morris, Hudson Foods, Ruiz Food Products, Wal-Mart Stores, Multifoods, Sara Lee, Tyson Foods
Vending Operators
- Nearly 10,000 Vending Operators in the United States
- Table 4-4: Size of U.S. Vending Operating Companies: By Number
- of Employees, 1995 (percent)
- The Top 1,000 Vending Companies Have Over a 50% Market Share
- Large Vending Companies Are More Likely to Vend Entrees
- and Side Dishes
- Leading National Operators
Competitive Focus: Candy and Snack Marketers
- Three Highly Competitive Markets
- Snack Wars
- Hershey and Mars Vie for Top Place in Candy Market
- Nabisco's SnackWell's Introduction Stirs Up Cookie Market
Competitive Profile: PepsiCo/Frito-Lay
- A World Leader in Soft Drink Bottling, Fast Food Restaurants,
- and Snack Foods
- Diversification and Movement into Growth Businesses
- Top Snack Chip Marketer in United States
- Vending Success Based on Overall Success of Frito-Lay Brands
- Frito-Lay Thrives During Snack Chip War
- Low/Reduced-Fat Versions of Familiar Brands
Competitive Profile: Hershey Foods Corporation
- About a $4 Billion Company
- Marketing Products in Two Food Groups
- Four Divisions
- Building Through Acquisition
- Most of Hershey's Candies are Major Vending Brands
- War With Mars
Competitive Profile: Mars, Inc.
- Privately Owned Company With More Than $11 Billion in Sales
- Four Divisions
- A Close Second, Striving for First Place
Competitive Profile: Nestle, S.A.
- Sales of 56.5 Billion Swiss Francs in 1995
- Five Business Segments
- Familiar Brands
- Nestle USA
- Recent Nestle Activity in the Candy Market
Competitive Profile: RJR Nabisco, Inc.
- A Multi-National Marketer of Food and Tobacco Products
- A Brief Company History
- R.J. Reynolds Tobacco
- Nabisco Foods
- Top Cookie Brands in Supermarkets and Vending
- New Fruits Wake Up Newtons
- The SnackWell's Phenomenon
Competitive Profile: Lance, Inc.
- Largest Independent Snack Producer
- Products Sold Through Company-Owned Vending Machines
- More Dedicated to Vending Than its Competition
- 1995 Restructuring
- New Reduced-Fat Products
Competitive Profile: Wm. Wrigley Jr. Company
- Sales of $1.75 Billion in 1995, and Continuing to Rise
- Major Brands
- Competitive Strategies
Competitive Profile: Tootsie Roll Industries, Inc.
- Sales Probably Approaching $340 Million in 1996
- Familiar Brands, Conservative Outlook
- 25 Subsidiaries
- A Highly Seasonal Product Line
- Ad and Public Relations Campaigns
- Vertical Integration
Competitive Profile: President Enterprises/President Baking Company
- Privately Owned Taiwanese Food Conglomerate
- Acquired Famous Amos Cookie Company in 1992
- Famous Amos: A Vending Success Story
Competitive Profile: Keebler/Sunshine Biscuit (Inflo Holdings)
- Sales Estimated at $2.3 Billion to $2.4 Billion
- Divestiture and Merger
- Keebler History
- Sunshine Biscuit Company
Competitive Profile: Snyder's of Hanover, Inc.
- A Private Company with an Estimated $100 Million in Annual Sales
- The Originator of Pretzel Pieces
Competitive Situation: Food Processors
- In Competition with Third-Party and Vendor Commissaries
- Vendors See Downside to Branded Products
Competitive Profile: Multifoods, Inc.
- Sales of $2.5 Billion in 1996
- Multifoods VSA Division: 10 Times Larger than Nearest
- Competitor in Vending Distribution
- Commitment to Vended Frozen Foods
- Multifoods's Own Vended Brands
Competitive Profile: Bridgford Foods Corporation
- Sales of $112 Million in 1995
- A Food Processor with Roots in Retailing
- Vending Products
- Distribution
Competitive Profile: Campbell Soup Company
- Worldwide Sales of Almost $7.7 Billion
- Three Divisions
- Major Brands
- Vending Products
Competitive Profile: ConAgra
- Fiscal 1996 Sales Approached $25 Billion
- Three Product Segments
- Vending Program
Competitive Profile: Hormel Foods
- 105 Years in Business
- Corporate Structure
- From Meat to "Value-Added" Foods
- Three Major Groups
- Products from Many Brands Promoted to Vending as "The Hot Line"
Competitive Profile: Philip Morris Companies
- Worldwide Operating Revenues Top $66 Billion
- The Company That Marlboro Built, Diversified, and Internationalized
- Four Business Segments
- Vending Products
- Lunchables Lunch Combinations
Competitive Profile: Hudson Foods
- Sales of $1.4 Billion in 1996
- Corporate Structure
- Vending Products
Competitive Profile: Ruiz Food Products
- A Privately Held Company
- A Complete Line of Frozen Burritos
Competitive Profile: Wal-Mart Stores, Inc./McLane Company
- The World's Largest Retailer
- The Largest Wholesale Distributor to Convenience Stores
- McLane Entered Vending Industry in 1991
Competitive Profile: Sara Lee Corporation
- Markets a Very Diverse Product Line
- Major Brands in Most of Its Businesses
- Jimmy Dean Foods Aimed at Vending Channel
- "Better-For-You" Meat Products
- Corporate Strategy
Competitive Profile: Tyson Foods, Inc.
- The World's Largest Producer and Marketer of Poultry-Based Food
- Products Tailored to Different Markets and Sales Channels
- Vending Products
- Growing by Acquisition
Product and Marketing Trends
- Major Vending Innovations are Slow to Take Off
Low-Reduced-Fat, Low-Calorie Healthy Snacks and Foods
- Healthy Snacks Pioneered in Other Sales Channels
- Vending Success of Kellogg's Nutri-Grain and Fleetwood's Whale of a Snack Helps Change Minds
- Tagging Programs Help Push Healthy Snacks
- Table 4-5: Selected Healthy Snacks Available in Vending in 1996 (listing); Marketer: All Good, Bakery Wagon, Continental Baking,
Bon Appetit Danish, Farley Foods, FitFoods, Fleetwood Snacks,
Frito-Lay, Golden Valley Microwave Foods, Greenfield Healthy
Food, Guiltless Gourmet, Heritage Wafers, lane, Nabisco, Quaker
Oats, Sherwood Brands, Skinny Snacks, Snyder of Hanover, Wedge Pretzel
Healthy Refrigerated Foods
- Low-Fat Trend in Refrigerated Vended Foods Reflects Low-Fat
- Food Trend in Other Sales Channels
- Health Clubs and YMCAs
- Focus on Health is Greater in White-Collar Locations
- Third-Party Certification/Tagging of Healthy Products
- Proprietary Tagging Programs
- Table 4-6: Selected Healthy Vended Refrigerated Foods, 1996 (listing); Marketer: Philip Morris, Weight Watchers, Pierre Frozen Foods,
Sara Lee, Dole Food
Hot Foods in Vending Machines
- Enersyst Development Licenses Hot Food Vending Machine
- Convenience Stores Give New Vending Technology a Foothold
- Hot Vended Pizza
- Hot Vended French Fries
Vended Frozen Foods
- Foods Vended Frozen and Heated by the Customer
- Time Food Takes to Heat is a Critical Factor
- Relatively Large Start-Up Costs
- Gourmet Cuisine's Single-Serve Vending Machines
- Shortage of Frozen Entrees Available to Vending Operators
- Number of Frozen Food Vending Machines Rising Rapidly
- Demographics of Vended Frozen Food Customers
Technical Innovations in Vending Machines
- Microprocessors Linked to Several Innovations
- Prepaid Card Systems
- Wireless Transmission
Consumer Advertising
- Almost No Advertising Directed Specifically Toward Vending Consumers
Trade Advertising
- Ads are Common in Trade Press
- New Product a Common Theme of Ads
- Other Vendor Concerns Addressed
- Trade Ads Tend to be Uninspired
- Trade Ads Push for Display
Consumer Promotion
- Little Promotion Compared with Other Sales Channels
- Lack of Marketer Support for Consumer Promotions
- Most Marketer Promotional Efforts Aimed at Vending Operators
- Price Promotions Especially Rare
- Some Large Vendors Initiate Their Own Promotions
- Service America's Bravo Program
- Philip Morris Consumer Promotion
Trade Promotion
- Trade Allowances and Rebates are Common
- Candy Marketers Reward Volume Increases
- Prizes for Trade Operators
- Trade Expos and Symposia
- Distribution And Retail
Distribution
- Vending Operators are Supplied by a Variety of Sources
- Figure 5-1: Percentage of Vending Product Supplied: By Type
of Supplier, 1995 (percent); Type: Vending and Office Coffee
Service Distributors, Foodservice Distributors, Manufacturers, Warehouse Clubs, Other
Warehouse Clubs Seeking to Expand Share of Vending Distribution
- Most Refrigerated Foods Prepared at Vendor- Operated and
- Third-Party Commissaries
- Commissaries May Change Their Product Mix
- Table 5-1: Commissary-Prepared Foods' Share of Vended and
Manual Food Sales: By Product Type, 1986 vs. 1995; Type: Sandwiches, Salads, Entrees, Desserts, Soup, Pastries
- The Role of the Route Driver
At the Retail Level
- Most Vending Machines are Found in Factories and Offices
- Figure 5-2: Share of Vending Sales: By Location, 1995 (percent); Location: Plants, Offices, Schools, Hospitals, Military Bases, Other
Vended Refrigerated Foods Often Supplements Manual Foodservice
- Vending Operators are Small Businesses
- Table 5-2: Distribution of Operating Companies: By Number
of Company Employees, 1993 vs. 1995 (percent)
- Most Vending Operators Have Small Capital Investment Budgets
- Food (As Opposed to Candy/Snacks) Regarded as a Loss Leader
- Display in the Machine
- Snacks Get Lion's Share of Display Space
- Turns and Pricing in Candy/Snack Machines
- Prices Rise by Nickel Increments
- Customers are Reluctant to Pay a Premium for Vending
- Candy/Snack Prices by Product Segment
- Table 5-3: Distribution of Vended Candy/Snack Sales: By Vended
Price Point, 1995 (percent); Segment: Candy Bars, Boxes; Cookies, Crackers; Bagged Snacks; Gum; Roll Candy; Nuts; All Other
Vended Food Prices by Product Segment
- Table 5-3: Distribution of Vended Food Sales: By Vended Price
Point, 1995 (percent); Segment: Sandwiches, Entrees, Salads,
Desserts, Ethnic Specials, Canned Pudding
- The Consumer
The Consumer
- Core Vending Consumers are Working Adults Aged 18 to 55
- Males Outnumber Females at Least Seven to Six
- Slightly Fewer Than Half of U.S. Employees Have Vending
- Machines in Their Workplace
- Table 6-1: Availability and Use of Vending Services and Microwave Ovens at U.S. Work Sites, 1995 (percent); Factor: Snack Vending Machine(s), Candy Vending Machine(s), Sandwich Machine(s), Microwave Oven(s); Available at Work Place, Used in Last Week
Geographic Distribution of Vending in Urban Offices
- Table 6-2: Incidence of Use of Vending Among Offices: By State
or Metro Area, 1995 (percent); State/Metro Area: Atlanta, Boston, Chicago, Florida, Indianapolis, Los Angeles, Minneapolis, New York City, Philadelphia, San Francisco, Seattle, Texas (Austin, Dallas, and Houston)
- Candy and Salted Snacks Have Different Profiles
- Heavy Candy Bar Use Associated with Downscale Profile
- 55% of Roll Candy Consumed by Heavy Users
- Sugarless Roll Candy and Breath Mints
- Potato Chip User Profile
- Corn and Tortilla Chips, Extruded Cheese Snacks
- Snack Nut Users' Upscale Profile
- Pretzel Use Also Slightly Upscale
- Age is Key Factor Affecting Use of Bakery Snacks and Cookies
- Demographics of Low-Fat and Low-Cholesterol Food Use
- Table 6-3: Demographic Characteristics Favoring Use of Low-
Fat, Low-Cholesterol Foods, 1994 (listing); Factor: Region, Education, Household Income, Sex, Race, Age, Health, Weight Range
- Geographical Factors Affecting Request for Healthy Vended Snacks
- Table 6-4: Employees Requesting Healthy/Low-Fat Snacks Among Offices Providing Vending, 1995 (percent); Area: Atlanta, Boston, Chicago, Florida, Indianapolis, Los Angeles, Minneapolis, New
York, Philadelphia, San Francisco, Seattle, Texas
- Gender and Occupation are Significant Factors in Vended
- Frozen Food Preferences
Appendix I: Addresses Of Selected Marketers
Appendix II: Addresses Of Vend Distributors
Appendix III: Addresses Of Vending
Machine Manufacturers
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