Micro-Markets Offer Snacking Alternatives

May 26, 2015

Workers looking for convenience can purchase quality snacks from these new concepts.

Now workers might never have to leave the building for snacks or even meals.

An increasingly popular concept, the micro-market, is filling the gap between vending machines and in-house dining services. It is also creating opportunities for snack manufacturers to offer their foods to consumers who eat snacks at work but do not want to leave the office to spend time searching for a bite to eat, several times a day. In fact, according to Chicago-based research firm Technomic, 50 percent of people who snack eat the items en-route, 43 percent eat them at work, and only 23 percent eat snacks in a restaurant.

snacking is on the rise

For these productive, time-management-savvy workers, the traditional choices were the vending machine or, if they worked for famously perk-happy companies, the in-house cafeteria.

Now there is another option, micro-markets, standalone areas that sell self-serve snacks and even meals. The micro-market resembles an airport kiosk or a snack shop in an office building, but requires no staff. The customer chooses an item, scans it on the payment terminal and then pays with a prepaid card, debit or credit card or biometrics. There is no cashier, but there is a security camera. More importantly, there are many more snacks than there would be with a traditional vending machine.

“You create an extremely satisfying consumer experience due to the increased variety and consumer direct access to the products,” says Brad Bachtelle, a Palm Springs, Calif.-based consultant who works with micro-market companies. “You take a vending machine that had 45 selections and replace it with a 6- to 12-foot racking wall unit that can have anywhere from 60 to 100 different snack items of all shapes, sizes and prices.”

The variety changes as the operator — usually a business and institution setting — can adjust the product selections to meet changing audience demands. Bachtelle says a snack set should include a product list one would typically find at a convenience store: salty snacks, candy, pastry, cookies, healthier better-for-you items, meat and gum. The offerings vary by employer. For example, he says, one micro-market in a tech firm may provide snacks and meals for mostly vegan engineers, and another micro-market might be stocked with items that are geared for blue-collar workers.

In any setting, one benefit of the micro-market is it can boost sell-through. People who shun vending machines often find the micro-market to be much more inviting. Instead of buying a candy bar from a machine, consumers have a real shopping experience. They pick up the item, read the label, and make a decision the way they would at a supermarket.

“Micro-markets allow consumers to create a shopping basket,” Bachtelle says. “They buy a soda or energy drink, sandwich and a snack.”

In fact, snacks are the second-largest category of sales in micro-markets, behind beverages and ahead of food such as fresh fruit and sandwiches. People are likely to eat these snacks after traditional snack kiosks — such as those in some office buildings — have closed for the day. Also according to Technomic, in its 2014 Snacking Occasion Consumer Trend Report, when asked what time of day do they typically have a snack, 37 percent of consumers said midmorning, 71 percent said midafternoon, 39 percent said midevening, and 40 percent said late night.

That creates opportunities for micro-market operators. Workplaces that have cafeterias, such as healthcare settings and universities, often close the eating places in mid-afternoon. “Every foodservice has grab-and-go, so why not flip the wall around, shut the gates down, and the grab-and-go area becomes a full blown micro-market with snacks, cereal, you name it, with 24/7 access,” Bachtelle says.

One limitation of the micro-market is that it is must be located in an area that is not accessible by the general public. Good locations would include employee break rooms in which workers use their ID badges for access.

Tukwila, Wash.-based Avanti Markets has installed hundreds of micro-markets in hospitals, colleges and gyms throughout the country. Security is usually the client’s No. 1 concern, says Heather Quandt, marketing and communications manager. “Once they install a market and realize that employees value the market it becomes less of a worry for the company,” she says. Avanti provides operators with tools and extra security measures that have reduced shrinkage to 1 to 2 percent.

“Having fresh healthy items such as salads, fruit, and sandwiches vastly outweigh the small percentage of shrinkage that may occur at a market,” she says.

Kansas City, Kan.-based Company Kitchen, a Treat America company, also has micro-markets in hospitals and colleges, but only in employee break rooms that are not high-traffic areas for general consumers, says Jim Mitchell, president of Company Kitchen.

“The biggest challenge would be to make sure that only CK account holders use the Company Kitchen because the food and drink are in coolers and open shelves that can be accessed,” he says. “People who use Company Kitchen have to be registered account holders to use their Company Kitchen keycards.”

Unquestionably, the micro-market concept is growing, experts say. “The opportunity for growth in micro-market vertical is significant,” says Roni Moore, vice president of marketing and public relations for the National Automatic Merchandising Association (NAMA) in Chicago. “With 6,000 micro-markets today, there are more than 35,000 expected in the next five years.”