Demand for products sold through vending machines remained strong in 2003, the year for which the 2004 Census gathered and analyzed sales data for vending machines and soda vending machine sales. Strong demand continued for soft drinks in 12-ounce cans despite an increase in bottled drink beverage sales. Sales of frozen food increased significantly as vending companies continue a trend to move away from vending fresh food with a short shelf life. And snacks, including candy and pastry, remained in high demand. In summary, the 2004 Census reported the following:

Milk, up 10.5% in dollar volume
Vended Foods (all kinds), up 4.7% in dollar volume
Hot Beverages, up 4.4% in dollar volume
Ice Cream, up 3.3% in dollar volume
Packaged Cold Beverages, up 3.8% in dollar volume
Snacks, Confections, and Pastry, up 2.5% in dollar volume

2003 Vended Product Volume

The total dollar volume spent in vending machines nationwide continued a ten-year pattern of increases. In 1993, the total vended dollar volume was $28,716,040,000. In 2003, the total vended dollar volume reached $42,150,228,000.

The vending product categories accounting for this total dollar volume in 2003 is as follows:

VENDED PRODUCT	DOLLAR VOLUME	% SHARE
Packaged Cold Beverages (soft drinks, juice, water, tea, energy, isotonic drinks in cans and bottles)	$20,877,000,000	49.5%
Snacks, Confections, Pastry (single serve candy, snack, and pastry sold through non-refrigerated vending machines)	$8,695,000,000	20.6%
Hot Drinks Vended Foods (refrigerated, frozen, can/bowl pack, and other meal items)	$4,070,000,000 $3,055,000,000	9.7% 7.2%
Cold Drinks (cup drop vend)	$1,555,478,000	3.7%
Cigarettes All Other Ice Cream Milk Bulk Vending TOTAL	$1,162,500,000 $977,000,000 $860,000,000 $493,000,000 $405,310,000 $42,150,288,000	2.8% 2.3% 2.0% 1.2% 1.0% 100%

For the 2004 Census, Vending Times combined its tallies of canned cold drinks, bottled cold drinks, and juice/juice drinks. In 2003, vending operators offered a growing number of products and packaging to vend not only traditional soft drinks in cans and bottles but bottled water, fruit juice, fruit juice drinks, energy drinks, and dairy products.

Despite the increasing number of drink selections in bottles, vending operators reported that 75% of their cold drink vending sales were generated by 11.5- and 12-fl.oz. cans. The percentage of sales for cold drink vending products for 2003 are as follows:

Soft Drinks: 55% of sales
Diet soft drinks: 15% of sales
Bottled water: 8% of sales
Juice and juice drinks: 7% of sales
Sports drinks: 6% of sales
Ready-to-drink teas: 6% of sales
Energy drinks: 2% of sales
Specialty beverages: 1% of sales

1993: total vended $ for cold drink = $13,086,000,000
2003: total vended $ for cold drink = $20,877,000,000

2003:
total unit volume of cold drinks sold = 22,215,992,000
total weekly unit volume per machine = 174 vends
number machines vending cold drinks = 3,229,000.

Vended Confections and Snacks

Glassfront vendors were originally used only for the sale of candy, snacks, and pastries. Today, glassfront-type vending machines are used to vend a complete array of packaged foods that include energy and meal replacement type bars. The increasing popularity of "energy" foods, "breakfast" bars and "meal replacement" foods makes it more difficult to define what is a snack and what is a food item. The percentage of sales for snack and food products for 2003 are as follows:

Bagged Snacks and Pastries: 38% of sales
Candy Bars and Boxed Candy: 23% of sales
Cookies and Crackers: 20% of sales
Popcorn (microwaveable and bagged): 7% of sales
Nuts and other snacks: 7% of sales
Roll Candy: 3% of sales
Gum: 2% of sales

1993: total vended dollar for snack = $5,375,600,000
2003: total vended dollar for snack = $8,695,000,000

2003:
total unit volume of snacks sold = 11,653,616,000
total weekly unit volume per machine = 179 vends
number of snack machines on location = 1,252,000

The pricing trend for the most popular items sold in candy and snack vending machines ranged from 50¢ to 75¢.
47% of all bagged snacks and pastries sold for between 65¢ and 75¢.
26% of bagged snacks and pastries sold for between 50¢ and 60¢.

70% of candy bars and boxed candy sold for between 65¢ and 75¢.
15% of candy bars and boxed candy sold for between 50¢ and 60¢.

50% of cookies and crackers sold for between 65¢ and 75¢.
37% of cookies and crackers sold for 50¢ and 60¢.

Hot Beverage Vending

Hot beverage machines continue to produce impressive revenue for the vending industry. Consumers are not only responding to premium blends of coffee but to hot chocolate, soup, espresso, tea, and special blends such as French vanilla coffee mix. The percentage of sales for these hot beverage vending selections sold in 2003 are as follows:

Coffee (including gourmet mixes): 76% of sales
Hot Chocolate:11 % of sales
Decaffeinated Coffee: 10.5% of sales
Soup, Tea, and other hot drinks: 2.5% of sales

1993: total vended dollar for hot beverage = $2,263,000,000
2003: total vended dollar for hot beverage = $4,070,000,000

2003:
total unit volume of hot beverages sold = 7,019,116,000
total weekly unit volume per machine = 389 vends
number of hot beverage machines on location = 347,000

Fresh and Frozen Food and Desserts

Fresh food as a category includes refrigerated, perishable foods such as sandwiches, salads, and yogurt, canned and bottled juices not sold through dedicated vending machines, ethnic specialties, platters, entrees, desserts, and pastries.

As a group, fresh food sales through vending machines totaled $3,055,000,000 in 2003 compared to $1,896,220,000 in 1993. Sales have remained flat as vending operators increase their sale of frozen food through dedicated frozen food vending machines.

It should be noted, however, that milk is a category separate from fresh food and continues to grow in popularity. The sale of milk and flavored milk products through glass-front type refrigerated vendors has increased considerably in recent years, especially to children at schools.

Frozen food vending continues to increase in popularity. The wide choice of frozen food vending machines available, name brand products to offer consumers, and a minimization of spoilage risk, are all compelling reasons for vending companies to continue the trend away from selling fresh food through traditional refrigerated food vending machines.

Providing ice cream and frozen dessert selections in vending machines are also gaining popularity. Vending operators are increasingly using one cost-efficient frozen food vending machine to offer frozen food entrees, as well as ice cream and desserts.

There is no more authoritative source of vending industry trends than the annual Vending Times Census Of The Industry. Since 1947, Vending Times has tracked merchandise vending.

Results for the 2004 Census were compiled by analyzing the results of sales data from 6,000 vending operators across the entire United States. Vending Times is published monthly and is available by subscription by calling (212) 302-4700 or visiting www.vendingtimes.com.

Vencoa management gratefully acknowledges the permission of Vending Times to summarize the important census data above.

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