The NAMA Show was back in full swing this year. From April 6-8, operators and professionals in vending and micro markets gathered at McCormick Place in downtown Chicago to discuss the trends and future of the industry.
We spoke with Malcolm McAlpine, Business Manager, Branded Snacks and Confections for vending and micro markets at Mondelēz International, and CJ Recher, Vice President, Marketing at Five Star Food Service, on their top takeaways from the conference.
Takeaway #1: The Industry Continues to Grow & Evolve
What’s clear from NAMA is that the vending and micro market industry will continue to expand and evolve, with opportunities for innovation ahead.
“The next two to five-years will be quite interesting and honestly probably a roller coaster. The opportunities for innovation and growth ahead of the industry are incredibly exciting,” said Recher. “There will need to be risks taken and true collaboration amongst key players in our industry to see us all through. It will probably get messy at times as we fail forward and figure out how to operate in the post-pandemic workplace. For those that persist and have the stomach for the ride, the reward will be great!”
Takeaway #2: Industry Boundaries Are Blurring
The growth in micro markets will be challenged by the blurring lines between industries. Micro markets and vending aren’t just competing with convenience stores and restaurants but also with companies like DoorDash and UberEats.
“Micro markets are the real solution for our industry moving forward, but they need to understand who they’re competing against,” said McAlpine. “They’re competing against everyone outside. So moving forward, you’ll see a better retail mindset—more focus on true category management and planograms. Operators are realizing they’re going to have to expand their micro market offerings.”
Companies can’t sit on the sidelines and operate in the same ways today as they did even two years ago. “The old models are breaking down and the lines are continuing to blur between traditional retail/restaurants models and our space,” said Recher. “As autonomous, delivery and other convenient services take hold with consumers, the companies who’ve always been the closest to the end consumer need to make sure we remain there. It’s prime real estate for those that are brave enough to step into the gap!”
Takeaway #3: Consumer Experience Is at the Forefront
Meeting customer expectations regarding the consumer experience will be a big challenge, according to Recher.
“It takes a mindset shift and a commitment to being open to new ways of serving clients and doing business. The pandemic took us on a wild ride and reset customers’ and consumers’ expectations for our industry,” he said. “Employers are begging us to help them get their workforce back to the office with requests we’ve never seen or thought we’d see. They’re also asking us to help them recruit great talent to fill the 11 million open jobs in America. The headwinds have never been stronger for operators, but we must fight through.”
McAlpine agreed, stating that operators need to shift to a consumer-focused mindset to succeed, echoing his presentation on promotions in micro markets.
“In today’s business climate, manufacturers would much rather fund consumer-focused, retail-style promotions in micro markets than simply give operators a dollar off per case,” he said. “For operators, the benefits are significant because promotions increase sales, and the data proves that there is a measurable ROI when promotions are applied, so there is plenty in it for both the operators and manufacturers.”
Technology is one of the many factors in making optimizations that keep consumers interested, according to Recher.
“It will be very difficult for operators to keep up if they aren’t embracing technology and leveraging data to run their business and improve the consumer experience,” he said. “Our services need to seamlessly integrate into the lives of consumers on a day-to-day basis. The experience can no longer be clunky and slow—the consumer will quickly opt for another solution that’s more convenient to them.”
Overall, the vending and micro market industry is poised for exciting growth and change in the future, and that should be taken seriously, said Recher.
“Our industry needs to change the narrative from the ‘vending is cheap’ mentality and stop selling that story. Our services add value to and impact the daily lives of millions across the country and the world. We need to take credit for that and ensure we aren’t selling ourselves short by asking a fair value for the products and services we sell. The pandemic has proven that consumers will pay for convenience.”
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