Currently In the research phase before diving into healthy vending (non-franchise)

[cwb]

Hey all,

Figured I'd introduce myself here as a first post on these forums. 

I'm looking into what it'll take to start up a healthy vending business by using my own machines and sourcing my own products.

Thanks, and hope to see you around!

 

[Poplady1]

Do not do it.

[cwb]

Thanks for the input, .. I Think?

This might come off a little rude, but it bothers me that every time the word 'healthy' is brought up in conversation, whoever mentions it gets shut down before the other person even has even looked through the details of their plan. 

I'm not seeking out a franchise 'opportunity'. I want to start with one simple machine in an area heavily trafficked by healthy people. I want to sell foods that are ACTUALLY healthy. Not the crap I've found listed on Naturals2Go. 

I live in a very active and health conscious city where there are a ton of healthy places within a small radius. As a healthy person myself, I have a good idea of what appeals to this demographic.

I plan to test the waters by starting small. I also plan to invest in a high quality machine that'll hold its value should my venture not succeed and I am forced to sell.

As a new member around these forums, it would be nice to see a little more constructive criticism, or at least have people willing to listen to my plans before shutting me down.. 

I'd also like to say, I'm not trying to step on toes.. I know a lot of you have been around for a long time and have surely seen plenty of people get burned by fly-by-night franchise folks and I do appreciate the fact that you're just trying to prevent that from happening to more people. 

Regardless of all the dire warnings, I do still plan to push forward with my healthy vending idea and I'm hoping that I can at least get some conversations going around here no matter how opinionated they might become..

Thanks again

 

[AZVendor]

If you think the idea will fly and you have ideas of the products you can successfully sell then go forward with it and try.  The only problem then is that you're probably planning to sell drinks and snacks which you'll think are best in a combo machine.  Perhaps for your first machine a combo machine will be the easiest to invest in but you need to realize that combo machines don't return the investment that dedicated machines will.  AMS makes the best combo machine so plan on that if you're only doing one machine.  You can wrap if if you want your machine to look similar to other healthy franchise machines that people may have seen.  That is actually a good idea to call attention to the different products you sell compared to other unwrapped machines.  Source the products you think will sell well and go for it.  Only you will know if it's as successful as you hope and if it's not then sell the machine and be done with it.  Keep in mind that one machine makes it difficult to avoid large numbers of stales if you guess wrong on your selection so be prepared to eat some of your failures (don't give them away at the location).

[Southeast Treats]

Hey - Think I saw a post from you in food and beverage forum.  Sorry if everyone seems so negative about "healthy" vending, it's something that a lot of us have been burnt on, not just by bizops but in other ways.

Yes, that is a growing market - slow growing.  I have my opinions about why, for whatever they may be worth, so here goes (and please take these in the positive attitude in which I will try to offer them!)

1) "Healthy" vending is an vague term for the most part.  Everyone has a different idea what it is.  It may also be called "BFY - better for you" vending.  NAMA has a set of standards for products that are supposed to be better http://www.fitpick.org/nwc/ . The government has issued standards for healthy vending in schools that are all you might expect from a government standard - rigid and arbitrary:  https://www.fns.usda.gov/healthierschoolday/tools-schools-focusing-smart-snacks

By whatever standard, healthy vending is whatever someone wants it to be on any given day.  It also implies that all other vending is somehow unhealthy, regardless of the product.

2) Healthy vending products are, as you have already observed, not always healthier than traditional products.  They can also be poor tasting and overpriced.  They are getting somewhat better as more companies are developing products for the market.

3) The demand for healthy vending often comes from people who are not, and will not be, your vending customers.  Location managers who are sold on the idea that forcing choices on their employees will magically cut their insurance costs are a good example.  The employees putting money into the machines often don't want the products offered.  They may try them or buy them out of desperation, but in much smaller quantities.  Yes, you can host product tastings and promote your choices; if you have good products that likely will help your sales.  You should realize that people still want the familiar and the comfortable products they enjoy.  There is nothing wrong with that.  Very few people make vending a major part of their diet but they do enjoy snacks in moderation.  

Most of us approach "healthy" items as part of our offering, not the entire line.  When you look at your customers you will see a wide variety of dietary and health concerns - gluten free, sugar free, kosher, vegetarian, diabetic - the list goes on.  A good vendor will provide products to meet as many of these needs as are commonly found among their customers.

As for practical matters, healthy vending items are more difficult to source from suppliers as the overall demand is still very low.  They also seem to need rotation more often as people tire of a particular item.  An entire machine of healthy items may generate more stales than sales in many locations. 

Be sure to include beverages in your plans; drink sales can be 60% or more of your sales at any given location.  Take a look at Pepsi's "Hello Goodness" campaign for some good ideas on product mix.  https://pepsicohellogoodness.com/

Best of luck in your adventure into vending!

 

 

[cwb]

12 minutes ago, AZVendor said:

If you think the idea will fly and you have ideas of the products you can successfully sell then go forward with it and try.  The only problem then is that you're probably planning to sell drinks and snacks which you'll think are best in a combo machine.  Perhaps for your first machine a combo machine will be the easiest to invest in but you need to realize that combo machines don't return the investment that dedicated machines will.  AMS makes the best combo machine so plan on that if you're only doing one machine.  You can wrap if if you want your machine to look similar to other healthy franchise machines that people may have seen.  That is actually a good idea to call attention to the different products you sell compared to other unwrapped machines.  Source the products you think will sell well and go for it.  Only you will know if it's as successful as you hope and if it's not then sell the machine and be done with it.  Keep in mind that one machine makes it difficult to avoid large numbers of stales if you guess wrong on your selection so be prepared to eat some of your failures (don't give them away at the location).

Thank you for the input!

Currently I am leaning more towards starting out by only offering snacks. But Rather than go with a full-sized machine, I am thinking it might be better to go with something like a 16 selection. With fewer products, I could hope to keep the spoilage rate lower until I figure out what it is that I'm doing. If I find that enough of the items are selling well, I can choose to upgrade the machine to full size and move the smaller one to another test location and repeat the process.

I definitely plan on getting a wrap for whichever machine I decide on, and am actually thinking to get one custom made by a local artist as a way to help promote the machine(s).

 

[cwb]

@Southeast Treats

Thanks for the kind words and helpful information.

You make a lot of good points and have given me a few additional things to mull over.

As to your third point, about demand for healthy products sometimes coming from non-customers, the warnings are well heeded. I understand that pleasing managers of the property is going to play a huge role in being successful, but I also realize that high rewards come from giving the customers what they want. I don't intend to set up healthy vending machines in locations that aren't well trafficked by actual health-conscious folks, so hopefully I can avoid the pitfalls you mention. 

In response to the question of offering drinks, I'd say it's definitely in my eventual plan but I'm struggling with how and when to offer them during my start up phase. I would certainly like to avoid the oft-mentioned drawbacks of the combo machines, so that means either starting with only snacks or only drinks. I am leaning much more in direction of starting with just snacks, but am considering a smaller 16 selection machine that would be easier to manage. I want to keep spoilage to a minimum and a smaller machine seems like a better 'test vehicle' for proving this business model. If the small snack machine moves enough product, the second phase could be to upgrade it to full size or get a drink machine to go alongside it.

At anyrate, thanks again for your detailed response and helpful links!

 

[Southeast Treats]

You are welcome.  As far as avoiding spoilage with snacks, the conventional wisdom is that you need at least 5 machines on different locations to have effective rotation.  If you are buying case lots of each item, one machine likely won't sell an entire case before the expiration date.  Multiply that problem by 16 selections...  buying variety packs can help, but will your items be available like that?  I know you can get some items in variety packs, like Sun Chips; but others may require large case purchases.  One problem I ran into with school vending was that when I had to special order the items that met the criteria, I sometimes had to buy multiple cases to get the order.  That particular location had the demand to support that on some items, but not all of them...

If your budget is limited, you may want to hunt good used machines for sale to start with.  They are out there, you just have to be able to buy when you find them and have somewhere to store them until needed.  It's nice to have new equipment (I buy one or two new machines a year) but it eats capital.  Good used machines can be wrapped and look like new when they get on location...

[cwb]

24 minutes ago, Southeast Treats said:

Multiply that problem by 16 selections...

How does a single larger machine help with this problem? I could have multiple selections set up with the same product, so I'd have to service the machine less often but it seems that wouldn't help the product move any faster. I get your point about the variety packs, and that's definitely something I'll try do as much as possible, but how would a smaller machine be a disadvantage there? .. I'm asking because I'm generally curious.

Another draw back to the smaller machine that I've thought of is that because I'd fewer selections, I'd also have less information about which products sell well at a particular location. So my small 'test' machine would be less effective than something with more selections when it comes to gathering information about the popularity of various different products. I'd also have less freedom to experiment with new products due to the limited amount of space in the machine.

I suppose my major hesitation about buying a full size machine has to do with my lack of confidence in finding enough products that move fast enough. I'm imagining a scenario where some things move great and others just sit there until they spoil. .. So my logical self asks, Why have those selections to begin with?

38 minutes ago, Southeast Treats said:

If your budget is limited, you may want to hunt good used machines for sale to start with.

That's the plan! I've set up some Craigslist notifications that alert me about new machines for sale in my area. .. At the moment, I've got a very wide net cast because I'm still uncertain about which specific type of machine I'm after. Once I get that figured out, I can narrow my search and perhaps start sending out inquiries through the recommended channels. 

I definitely plan to buy used for my first machine, but want something 'like new' if possible. I also want to invest in a machine that's got all the modern upgrades (or at least upgrade-ability). I'm thinking here specifically about card readers. I'd like to find a machine that already has an installed and properly working card reader, but if they aren't too much trouble to retrofit, I might decide to have it done myself (and learn how to do it in the process).

I'm pretty good from both a mechanical and technical stand point, so I am interested in maintaining my own machines, but obviously don't want to be constantly repairing them or buying parts for them. Whatever I decide to go with has to be top quality; in great condition and from a reputable manufacturer.

Like I said though, I'm still in the research phase so I'm still trying to get a complete idea of what all's available!

 

 

[Southeast Treats]

Well, a single larger machine does not help with stales; what helps is having several locations to spread the product out and get some sales volume moving.  Let's say you buy one case of 104 packages of an item, and the expiration date is 7 weeks out.  So you need to sell about 15 units of that item a week to get everything sold just before it expires.  One very good location might do that, but lets say your one machine only sells about 9 or 10 of that item each week.  After 7 weeks you will have about 34 units that you have to throw out just for that item.  If you have 5 locations and each location sells just 6 units weekly for a total of 30 per week, that means your stock is sold in less than 4 weeks with no stales.  And again, that's just one item, so when you only have one machine you could end up eating a lot of stale product.  That's not to say that slow locations are better!  It's just better to have multiple locations... but you have to start somewhere.

As far as machine size, for snacks you should have at least a 4-wide machine.  Typical tray setup would give you 16 snack slots and 16 small slots.  3-wides are too small IMO; 5-wides are OK.  Crane merchant media makes a 6-wide that is very nice but that is a lot of real estate to fill with product.   You want to give the customers a good choice of products without getting too far into the weeds with a massive inventory, especially starting out. 

[Southeast Treats]

good related article....

http://www.vendingmarketwatch.com/article/12341957/3-ways-vending-can-compete-with-other-channels?platform=hootsuite

 

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