Next generation retail

When was the last time you bought your dinner from a vending machine? If that question conjures up images of stale tuna sandwiches, it’s probably been a while. You may also be surprised to learn that these retail gold mines are undergoing a revival.

This month Byte Foods, a vending machine business specializing in high-end fresh and healthy foods, made headlines when it announced that it was partnering with Chef’d, a Los Angeles-based meal kit company, to bring the latter’s dinner solutions to 100 Byte retail units in Sacramento and the San Francisco Bay Area. Byte has more than 500 of its unattended vending machines in the region, and plans to expand the meal solutions to all of these within the next six months.

Byte offers the next generation of retail — patented “smart” refrigerators placed in offices, apartment buildings, gyms, universities and hospitals. According to the company, its “real-time data allow Byte to algorithmically customize the assortment at every location.” The units are the ideal retailer (and an important new channel) for ready-to-cook, pre-portioned meals, especially considering the number of consumers who prefer not to leave the office for lunch, or who routinely shop for dinner items on their way home.

For food and beverage manufacturers, vending machines are another important point of sale, one that can quickly and easily go where your customers go. As a result, vending machines are popping up at sports games, music festivals, theatres, malls and other public spaces, offering every type of food and beverage imaginable. Attention-grabbing product launches and limited-edition items are a popular choice for vending, especially when there’s an imaginative twist to the experience. Younger consumers are especially drawn to the format for its speed, convenience and fun factor.

That may be why Reis & Irvy’s (the franchise brand of San Diego’s Generation NEXT Vending Robots) had pre-sold more than 1,000 units worth an estimated US$40 million before it even hit the market in April in the U.S. This month it announced it had master franchise agreements in place for Edmonton and Calgary worth over $5.2 million. The company’s FroYo Kiosk, a fully automated frozen yogurt robot vending machine, offers Dannon YoCream’s frozen yogurt, ice cream, sorbets and gelatos, as well as a wide choice of toppings. Customers interact with the robotic unit through a touchscreen, with a lot of action to keep them engaged.

This new format vending machine — part retailer and part entertainer — is designed to disrupt the ubiquitous ice cream/frozen yogurt store format. If it succeeds we’ll likely see the concept spread into other foodservice and food products. With the traditional grocery store no longer the only retailer in town, vending offers an interesting option. To learn more about the revival of vending, turn to “Vending va-va-voom” on pg. 18 of Food in Canada May 2018.