Technology Leading the Revitalization of the Vending Machine Industry

Technology Leading the Revitalization of the Vending Machine Industry

By: Dylan Sikes - AllPennyStocks.com News

Friday, December 19, 2014

The Automatic Vending Association says vending machines date back to 215 B.C. when Greek mathematician Hero invented a machine to vend holy water in Egyptian temples. From a commercial standpoint, the legacy of vending machines goes back to the 1880’s when postcards were dispensed in England and Tutti-Fruiti gum was sold with the turn of a handle at elevated subway stations in New York City. Safe to say, the vending machines of today may have the same basic marketing idea of delivering product quickly to people on the move, but technology has changed about everything else. In fact, the machines often aren’t even called vending machines by some, now dubbed “automatic retailing” or “electronic kiosks” as an alternative. Advanced technologies are changing payment methods and the products inside for sale, often making them healthier to cater to a shifting dynamic in consumer demand. For just a few examples, consider that in Japan a Chef’s Farm machine grows lettuce using fluorescent lights and nutria-culture beds that can be bought with coins. In China, vending machines sell live crabs by utilizing refrigeration to keep the craps in a state of hibernation to keep them fresh without killing them. In Europe, pizza dough is kneaded and pressed, toppings are added and the pizza cooked and dispensed all in a matter of minutes for consumers. Hot, fresh bread is also an option. In Australia, people can buy fresh bananas from vending machines. Chicago-based Farmer's Fridge uses reclaimed barn wood, touch screens, recycled packaging material and recycling bins to give its machines, which dispense fresh, healthy meals that are made daily, an innovative appearance and user-friendly function.


For soft drinks, the leading product sold from vending machines, even that is changing with Coca-Cola (NYSE:KO) launching in 2009 the Freestyle machine that mixes pop on-site and offers more than 100 different kinds of Coke products from a single machine. Exemplifying the power of today’s technology, data on products and inventory levels are collected and transmitted to the appropriate parties responsible for servicing the machines and logging information.

All of this is leading to an expected turnaround in the vending industry after several years of substantial decline. According to Packaged Facts, the $11.7-billion U.S. vending machine market is projected to grow by 1.5% in 2015. A broader study last year conducted by global research and advisory firm IHL Group forecast transactions at self-service kiosks are growing more than 7% per year in North America with transactions through these devices expected to grow past $1.0 trillion in 2014.

Investors can look at different directions for opportunities in the vending industry. There’s a different business model in place by Fastenal (NASDAQ:FAST), which is quickly ramping distribution of its industrial vending machines. These are not the typical machines one may think of to get a beverage, meal or snack. Fastenal provides these machines for installation on work floors of manufacturers to house corporate resources, which better documents inventory and makes employees more aware of use of corporate resources while detailing who is using what, amongst other things.

There are companies like USA Technologies, Inc. (NASDAQ:USAT) that are generating revenue through wireless, cashless payment technology and machine-to-machine telemetry solutions for self-serve retail industries. The company has partnered with Five Star Food Service for a broad launch of USAT’s ePort Connect service and ePort hardware that lets owners and operators of vending machines, kiosks, coffee brewers, etc. network the assets via the Internet, meaning accepting credit and debit cards and remotely monitor machine performance through an online portal. More than 3,000 ePort systems have been installed to date with another 3,000 on tap for installation.

Through its offices in Santa Monica, Chicago and Ontario, Canada, consumer products and technology company U-Vend, Inc. (OTCPK:UVND), develops, distributes and markets next-generation self-serve electronic kiosks across various high-traffic environments, including malls, grocery and drug stores and airports in North America. The company’s products are largely focused on “healthy vending,” a growing trend in the industry to meet the demand of a more health conscious, yet still on-the-go, consumer.

In that vein, U-Vend has become Del Monte (NYSE:FDP) Foods’ exclusive U.S. provider of its healthy fruit snack and squeezer self-serve kiosks and merchandisers. Partnered in October, the rollout of kiosks began in the Chicago region earlier this month. Additionally, is the exclusive self-serve merchandiser of “Arthur’s Smoothies” and also the operator for the distribution and sale of Mini Melts USA frozen ice products throughout the greater Chicago, Illinois region.

To grow its presence in North America, U-Vend inked a Master Distributor Agreement with FastCorp Vending, a world leader in frozen vending machine sales and robotic vending technology, to become exclusive vending distributor in Canada for FastCorp.

U-Vend also uses leading technologies for an integrated content management system to facilitate cashless payment and remote system monitoring and has added the option of specialty software for digital advertising. The company develops low-cost private label television networks to be used with commercial grade signage players for internal control of creative ads to directly communicate and interact with customers at the point of sale.

Technology and a shift in product offerings are revitalizing the vending machine industry. The result is easier payment methods, better consumer engagement, branding and advertising while introducing new products to the self-serve business and ultimately having superior control over servicing the machines. It’s a win for all involved.

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