The results of the 2021 Automatic Merchandiser State of the Industry Report are in. The report provides several key bits of data, pointing to ongoing strength for operators in industrial locations and some definite emerging trends.

Nick Montano, a former editor and now contributor for Automatic Merchandiser, compiled and analyzed the data, interviewed operators, and wrote the report, which was recently released in June. Over the past three surveys, Montano has seen some wild revenue fluctuations in the micro market and vending industry. “Clearly, the 2021 report showed a significant recovery for operators over 2020,” he said.

Riding High in 2019 – Grounded in 2020

“The industry was riding high in 2019, and we saw higher growth levels than we had seen for a long time,” Montano added, reflecting on the period just before the pandemic. “As for 2020, the results were devastating for many operators. From a data standpoint, it has to be looked at as a blip on the radar, a one-time event, since the declines were so significant.”

Key Data from the 2021 Report

The 2021 report shows that the vending and micro market retail channel regained most of 2020’s losses, but sales remained 13% behind 2019’s benchmark high.

“Most of the lost sales levels from 2020 were recovered in 2021,” Montano observed. “Operators did a fantastic job compensating for the losses of 2020, with the revenue helped by micro market gains and significant price increases. The industrial sector, with vending and micro markets, was also very strong.”

Supply Chain Pain

Montano said he was told by some of the country’s most successful operators that if the supply chain had been working normally, the revenue gains would have been even stronger in 2021.

“Some operators did especially well in 2021, up to 95% of 2019 sales levels. The combination of price increases, geographical location, strength in manufacturing/industrial, the growth of micro markets – that combination drove revenue for many operators,” he added.

Segment Breakdowns

The combined vending machine and micro market revenue gains over 2020:

• Healthy items (including plant based) up 200%
• Food (sandwiches, salads, entrées) up 170%
• Snacks (salted, bars, mixes, etc.) up 120%
• Packaged cold drinks up 92%
• Candy (chocolate and non-chocolate) up 85%
• Confections (pastries, cookies, etc.) up 64%
• Ice cream/frozen items up 50%
• Hot drinks (vended coffee, tea, cocoa, etc.) up 40%
• Miscellaneous “other” items up 26%

As Always – Strength in Snacks and Beverages

Together, snacks, confections and candy made up the largest market share of convenience services. In 2021, items in these categories led the way in dollar volume, generating 38% of all sales through vending machines and 34% of all sales in micro markets, or $6.3 billion and $1.2 billion, respectively.

Packaged cold drinks was the leading individual product category in 2021, generating 25% of the revenue, or $4.8 billion in sales.

Healthy Segment

Sales in the healthy segment (combined vending and micro market) beat 2019’s high by 25%, increasing from $1.4 billion to $1.8 billion. “We saw this coming – it is no surprise,” said Montano. “The study also showed plant-based foods grew three times faster than total food sales in 2021. It is a strong product with consumers today, and those products were available, which helped sales.”.

Industry Revenue

49.5% of the industry’s revenue is generated by just 5.6% of operators. Montano said that this data is evidence of the ongoing consolidation in the industry.

“Acquisitions are going to continue happening, and it’s not just the big companies that are buying,” said Montano. “Smaller groups are buying operators and building, improving and adding technology to enhance the value of what they are buying.”

Number of Placements

The industry saw growth in both vending machine and micro market placements in 2021 over 2020.

“With all of the interest in micro markets, many thought vending was going to decline in 2021,” said Montano. Based on conversations that Montano had with operators, some industrial locations were very hesitant about placing micro markets because they feared having to fire an employee due to theft. “As desperate as they were for employees, many did not want to even offer the temptation of stealing from a micro market,” he added. “This actually contributed to the growth of vending.”

Vending Is Still Strong in the Right Locations

Montano pointed out that while there is an ongoing increase in micro market operators, which the data shows, more than 50% of the operators out there still do not operate micro markets. “In some locations, particularly industrial and blue collar, vending is still strong,” he said.

Low Unemployment Can Mean Little for Operators

One constant for operators that no longer exists – unemployment rates were always tied directly to sales. Low unemployment meant more potential customers for an operator. Montano noted that the pandemic changed that. “We had low unemployment for the last two years, but it did not help sales as it typically does. In 2020 and 2021, this whole concept of working from home, flex scheduling, hybrid workplaces – it changed everything,” he said.

Looking Ahead

What will 2022 look like overall? Montano said there are so many factors to consider, from inflation, to massive price increases, to possible recession. “The verdict is not in yet, but more employees are being told to return to the office. From the reports we hear, sales are going up and for operators, that is good news,” he said.

Read more on vending and micro market trends at www.mdlzvending.com