SIC 3581

AUTOMATIC VENDING MACHINES

This industry consists of establishments primarily engaged in manufacturing automatic peddle machines and coin-operated mechanisms for such machines .

NAICS Code(s)

333311 ( automatic Vending Machine Manufacturing )

Industry Snapshot

The peddle machine industry generated U.S. sales of about $ 22.1 billion annually in the deep 1990s. With meaning advances in engineering and invention, the vending machine industry served numerous markets. In 2000, shipments of coin-operated vending machines by manufacturers totaled $ 1.24 billion, up from $ 767 million in 1995, though lower than shipments in both 1998 and 1999 of $ 1.44 billion.

The diligence segments itself by the kind of service provided by the vending operator. Some of the major categories include : the 4 C ‘s, which include coffee, club sodium carbonate, candy, and cigarettes ; full-line peddle, which includes hot food, canned sodium carbonate, and diary and freeze food ; peculiarity vending, which encompasses such particular products as pizza or french fries ; OCS, or agency coffee bean avail ; bulk vending, focusing on such unpackaged items as gum or nuts ; and street vending, which includes music machines, video recording games, and other vending machines used in populace places .

Organization and Structure

Vending is basically a three-step process involving three separate industries : manufacture companies, distributors, and vending car operators. This diligence group ( SIC 358l ) primarily covers the manufacturing step in this multi-stage industrial sequence .
About 90 U.S. companies produced automatic vending machines or parts for them in the 1990s. Although a huge majority of vending machines were manufactured by large companies, the industry did sustain quite a few smaller firms. The merchandise vending diligence is basically function of the minor business residential district .
The U.S. Department of Commerce reported that 45 companies were engaged in manufacturing coin-operated vending machines in 1996. Thirty-five of the companies produced beverage machines, 27 were involved in manufacturing machines that sold food and confections, and 31 manufactured other types of vending machines, including those selling cigarettes, water, and postage stamps. As the numbers indicate, many of the companies manufacture machines for respective segments. Canned and bottled easy drink machines made up by far the largest parcel of beverage machines manufactured in 1996, totaling 316,362 units. Among confection and food peddle machines, those that sold bulge confections and charms predominated, totaling 158,039, while bagged snacks and confections made up another significant plowshare at 88,271 .
The National Automatic Merchandising Association ( NAMA ) has been the most important trade wind arrangement in the peddle industry in the 1990s. NAMA represents companies involved in every aspect of vending, from machine manufacturers to suppliers of peddle products. Founded in 1936, NAMA compiles a wide range of statistics and produces respective periodicals, including a regular industry newsletter, a reappraisal of apposite submit legislation, and a labor issues bulletin .
The National Bulk Vendors Association ( NBVA ) concentrates specifically on the manufacture and process of bulk vending equipment. The NBVA was founded in 1949 and is based in Chicago .

Background and Development

The earliest recorded “ vending machine ” was in 215 B.C. when the mathematician Hero identify and illustrated a count of inventions conceived by himself and his teacher, Tesibius, in a book called Pneumatika. Included in the reserve was the plan for a wholly automatic, coin-operated machine that dispensed a small amount of sacrificial water when a five-drachma coin was deposited. It is improbable that the car was used on a boastfully scale, and there is no attest to suggest that anything was sold automatically again for centuries .
coin-operated machines that sold snuff and tobacco appeared in English taverns around 1615. These machines were actually cruder than Hero ‘s device and required the owner to shut the hat after each habit. normally made of boldness, the machines were portable and were carried from customer to customer .
In the nineteenth hundred, vending machines began to appear in a lot greater diverseness and measure. An early incarnation of the newspaper machine appeared in England in 1822. The device was the inspiration of Richard Carlile, a bookseller trying to avoid catch for peddling copies of banned works such as Thomas Paine ‘s
The Age of Reason.
While his machine worked, his plan to avoid halt did n’t .
The first known apparent for a vending car was issued in 1857 to Simeon Denham for a penny postage stamp device. Over the next couple of decades, inventors began showing up at patent offices all over the earth with coin-operated machines that sold candy, cigarettes, handkerchiefs, and early little items. In 1884, the first U.S. vending machine apparent was issued to W.H. Fruen for a appliance unusually similar to Hero’s holy water machine .
The american vending machine diligence was in truth born in 1888, when Thomas Adams of the Adams Gum Company began selling his Tutti-Frutti chewing gum out of machines on the platforms of New York ‘s elevated rail organization. These machines were an immediate achiever, and toward the end of the century, postage cast machines besides became more common. The automatic Machine Company of Buffalo, New York, was the first gear company to sell stamps mechanically on a bombastic scale, beginning in 1891. Bulk vending machines began to appear around the plow of the hundred. The Mills Novelty Company introduced the first base of these, which sold a pre-set amount of peanuts for a penny, at the Pan American Exposition in 1901. The comply year, the Horn & Hardart Baking Company revolutionized vending in the United States by opening is first Automat restaurant in Philadelphia .
anterior to 1908, beverage vending machines dispensed alone the beverages themselves, which the customer then drank out of a common cup. That year, with public awareness of sanitation grow, the Public Cup Vendor Company of New York ( late to become the Dixie Cup Company ) unveiled a car that dispensed water in person newspaper cups .
By the 1920s, the vending industry had been divided into manufacturers and operators. The Doehler Die Casting Company, for exemplar, developed machines for vending a divers scope of products that included Life Savers, lighter fluid, and sanitary napkins. Another industry rotation took place in 1925, when three new machines were developed, all of which sold cigarettes. Candy machines offering customers a choice of products began to spread in the 1930s. Nathaniel Leverone, the collapse of the Canteen Company, was a pioneer in the development of this type of machine .
The fabrication of vending machines was suspended during World War II, but at the war ‘s decision the industry regained its momentum. Among the machines that appeared during this clock time were the first hot coffee vendors and a hot frank machine. In the first base ten after World War II, hundreds of minor manufacture companies entered the vending machine arena, and huge improvements were made in design—especially in the sphere of coin mechanisms. In 1960, wallpaper money changers came into far-flung practice. When machines for vending displace soft drinks were introduced in 1961, vending sales soared.

Since that meter the vending car industry has been consolidating to a big degree. fabricate has become increasingly dominated by large companies. At the same clock, advances in electronic components, which beginning appeared in vending machines in 1980, have made machines “ fresh, ” enabling them to keep records and diagnose glitches. The kind of products vended automatically has continued to grow explosively, as items specifically created for machine peddle, such as microwave popcorn, have made their appearances .
In the early on l990s, vending machine fabrication appeared to be entering a newfangled earned run average. The emergence of “ smart ” machines was certain to affect every part of the industry. The handiness of full-service machines that could handle a assortment of products and perform their own record keeping was enabling bottling companies to take over many of the chores that were previously handed over to third-party operators. This represented the reversal of a tendency that began in the l950s, when bottlers began to remove themselves from the daily service of machines. In addition, the replacement of moving parts by electronic components was expected to contribute to a promote concentration of fabricate companies, since the demand for spare parts was sure to decline sharply .
The new generation of bright vending machines was besides expected to give manufacturers a goodly promote. Since the beginning of the 1990s, the slumping U.S. economy had led operators to seek ways to hold their costs in check mark. frequently, this entail refurbishing old machines quite than purchasing fresh ones. Dixie-Narco Inc., for model, saw its sales dangle by about 18 percentage in 1990, while its parts business was actually more active than usual. The better security and record keeping capabilities offered by newer machines, and their electric potential to save operators money in the long run, might provide operators an incentive to invest in the latest equipment .
ostentation in the 1990s affected the vending industry adversely ampere well. The public toilet of dropping coins into a machine in exchange for merchandise disappeared when the price of an detail exceeded the amount of variety reasonably accommodated in a scoop. Manufacturers reacted to this trouble in two ways. One involved the introduction of debit cards, first introduced in 1985. Debit cards eliminated the want to carry change, enabling regular users of a vending area to pre-pay for several dollars worth of trade at a time. mechanize dollar beak acceptors, notoriously busy and uncooperative, had besides improved slightly by the mid to late 1990s .

Current Conditions

several significant changes were taking topographic point in the vending industry in the late 1990s. Some resulted from fresh technology, while others stemmed more directly from general social changes. New machines developed during this time were capable of vending food of much higher quality than was previously possible. This ability was having a particularly noticeable impression in the employment rate, as corporate retrenchment necessitated the successor of many ship’s company cafeteria with vending areas. With a new emphasis on hot, alimentary foods, the major manufacturers began producing machines that sold items such as french fries, fresh pizza, and a much broader line of microwaveable frozen foods .
According to the “ State of The Vending Industry Report, ” published by
Automatic Merchandiser,
the automatic selling industry grew 5.6 percentage in 1998, to $ 23.3 billion. The derail represented the largest annual increase in the 1990s. All intersection categories enjoyed increases with the exception of cigarettes, a segment that accounted for less than 1 percentage of the sum in 1998. The beverage category was particularly enthusiastic about vending machines, and about 1.2 billion cases of cushy drinks were traded via vending machines in the U.S. in 1998. One reason delicate beverage companies invested in vending machines was because vending machine drink prices were less subject to the discount and extreme rival affecting beverage brands in supermarkets. Growth began to slow in 1999, as the measure of industry shipments declined slenderly from $ 1.444 billion to $ 1.443 billion. The value of shipments fell to $ 1.244 billion in 2000. between 1998 and 2000 the cost of materials dropped from $ 786 million to $ 625 million .
other trends in the late 1990s included the increase of plastic beverage bottles in vending machines. As soft drink manufacturers turned to larger, fictile bottles, vending machine manufacturers developed machines that accommodated not alone the larger sized bottles but different sizes of bottles a well. early advanced machines accepted credit cards, debit cards, and coupons. Glassfront cold beverage machines that showcased the enclose drinks gained in popularity, and isolate machines that allowed sugarcoat machines to be placed outdoors were developed .
The sharp descent in cigarette smoking the United States throughout the 1990s has had a dramatic impact on the vending diligence. Once a huge seller as one the four Cs of vending, cigarettes entirely generated a little parcel of the vending operator ‘s gross compared to the considerable share of tax income cigarettes generated in the 1960s ( at 45.5 percentage ) .
One of the most significant issues affecting the vending machine industry in the late 1990s was the introduction of newly currency. When new $ 20 bills were released in the U.S. in 1998, many vending machine manufacturers were unprepared. As a consequence, about 250,000 vending machines that normally accepted $ 20 bills, including poster changers and fare batting order machines, were unable to take the newly designed bills. New $ 5 and $ 10 bills were scheduled for release in 2000, and the Bureau of Engraving and Printing, the printers of U.S. currentness, worked closely with the vending machine industry to make sure machines would be prepared. The adaptation of the new machines was estimated to be a $ 100 million project .

Industry Leaders

Dixie-Narco, Inc., a division of Maytag Corporation, was one of the nation ‘s conduct manufacturers of automatic vending machines. other major companies in the industry included Multiplex Co., Inc., and Automatic Products International Inc. About 40 percentage of Multiplex ‘s sales were from overseas sales .

America and the World

The United States was not alone in its compulsion with the appliance offered by vending machines. Industry drawing card Dixie-Narco, for example, was selling a complete telephone line of models in over 30 countries by 1990. The ship’s company began to emphasize exports, tailoring machines for the specific needs of its foreign markets rather than merely making small adjustments in existing models .
The popularity of the peddle machine proved even stronger in Japan. Half of Japan ‘s retail soft toast sales in the early 1990s came through vending machines, and this market contribution is expected to increase. In Japan, the machines lined the sidewalks, playing music and offering a wide variety of trade, including beer, sushi, and pantie hose. One advantage that vending operators in Japan had over their american counterparts was that vandalism was about unheard of in that country in the l990s .
The exuberance for peddle goods was not ball-shaped, however. Although american manufacturers sold machines successfully in Europe for years, the machines were not always welcome. cafe proprietors in Bordeaux, France, for example, refused to serve Coca Cola for a period in 1990 in protest of the placement of Coke machines on populace sidewalks in their city, an offense to both their smell of good taste and fair contest.

Research and Technology

flexibility and security system were two areas in which engineers in the peddle diligence made big strides in the 1990s. The Merlin 2000 series developed by a company called InterBev in 1989 provided a good example of the flexibility built into the modern generation of vending machines. The Merlin 2000 machines could sell both sodas and juice from a individual machine, with an better mechanism for adjusting prices from one excerpt to the following .
furthermore, electronic bill and coin changing mechanisms made fraud more unmanageable. A coarse phase of vandalism, injecting salt water into the coin mechanism, and putting the machine in “ jackpot ” mode by shorting out the electronic parts was circumvented by improved shield of electronic components. Programmable security code devices were besides installed on many raw machines to prevent unauthorized individuals from tampering with price and removing money or merchandise .
other innovations in the 1990s included a new vending technology that provided computerize capabilities of the machines to record their own peddle statistics. In 1999 Coca-Cola Company began testing a new vending machine that was able of raising beverage prices as the outdoor temperature increased. Though the company would not reveal the technology behind the machine, it was believed a computer chip and temperature detector were responsible for regulating the prices .

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Category : Finance