Vending machines are popular with customers who are away from home, and branded products can boost that business significantly. Alan Sutton reports
There cannot be too many people who need persuading that brands sell - just ask any parent who has tried to get away with giving their child a pair of unbranded trainers.
The vending industry has certainly recognised the potential, which accounts for the highly stylised machines featuring back-lit bottles of Coca-Cola or giant logos for Typhoo tea or Kenco coffee.
Vendepac, which has more than 60 machines at Gatwick Airport in staff and public areas, says the airport is just one of its many sites that has benefited from the introduction of branded machines.
The contract began in 1990 and was renewed in 1995. "The new contract, together with the introduction of Nestlé, Cadbury's and SmithKline Beecham branded machines, has resulted in a sales increase of around 20%," says Vendepac marketing director Andy Porter.
"Recognised leading consumer brands have done much to increase the public's acceptance of vending as a whole. At Gatwick, where a quick and satisfying solution to customer demand is needed, the accent is on quality of product combined with the highest level of service."
The airport features Nestlé-branded Westomatic machines with a full range of hot and cold drinks in the departure lounges, 16 Ribena carton machines and five Cadbury's-branded machines. In the staff areas, where eight hot-and-cold drinks machines and seven snack machines operate, Vendepac encourages usage through on-machine promotions and competitions run in conjunction with the ingredient manufacturers.
"Vendepac has been working with us now for more than five years," says BAA group retail services manager Ian Campbell. "In that time we have seen a marked increase in the use of vending machines."
Introducing its Concept 5800 machine at AVEX '97, Wittenborg's UK marketing manager Jan Podsiadly said: "The image of vending has improved tremendously in recent years. The rise of branding and the recognition of its benefits is one of the most significant changes."
The new Wittenborg machine was designed to exploit the branding concept to the full, he says. Its large back-lit panels, while seemingly a simple addition, provoked a wave of interest, allowing posters of any type to be displayed and giving individual or ingredient branding a great deal of prominence.
"Not only can individual ingredient suppliers display their own product on the posters on almost any form of transparency, but each individual customer can display their own particular branding," says Podsiadly.
Redwood Catering has taken a clever line by combining its FB10 beverage machine with the FS2000 "automatic supermarket", giving customers the option of fresh-brew tea or coffee plus a range of confectionery and canned and bottled soft drinks. This part of the duo combines spirals and modular chutes, which means it can dispense any form of branded bottle or can together with snacks and confectionery.
But the most convincing research comes from some of the ingredient manufacturers themselves. "All vending supply companies face a constant battle to maintain a diverse portfolio that manages to address the prevailing tastes and trends in the market," says Nigel Follos, marketing director at Nichols Foods. "This is only possible if companies are willing to listen to their customers and be flexible enough to incorporate any changes in demand, adding to the range where necessary and adjusting the formulation and positioning of existing products."
Advances in vending technology mean that consumers increasingly expect vended beverages to match the quality of the drinks they enjoy at home. "The new formulation of Tetley tea has been welcomed by customers as one of the first teas to offer freshly brewed flavour, matching consumers' expectations of the brand," he says.
Tetley Vending itself has produced figures which, its says, show that 72% of consumers would be encouraged to choose tea from a vending machine if it were branded with the Tetley label.
"When Tetley-branded machines were introduced into Granada Vending Services, tea consumption went from 11% of all drinks served to 45%," says senior brand manager Tetley Foodservices Julia Reeves. "Likewise, when Tetley-branded machines were installed at Proven Services, tea sales rose by 18%."
The company also claims that branding affects the perception of actual taste. Even when exactly the same tea was vended from two machines, one branded and the other not, 41% of tasters gave top ratings to the Tetley-branded machine, compared with only 25% from the second vendor.
Premier Brands has come up with some similar research into branding, comparing sales in a branded machine against those of unbranded products in a contract catering location. The result was a 200% increase of sales in the branded machine, with sales of unbranded products accounting for 23% while the branded ingredients took 77%.
"Branded vending machines are the only way to meet growing customer demand for familiar hot beverages when they're away from home," says Premier Brands vending manger Andrew Jones. "Caterers and operators can maximise the profit opportunities from their beverage service by using big brand names and charging customers a premium price. Brands also attract customers who are reassured that the drink they purchase will be of a high quality and a consistent taste."
As well as its familiar names such as Cadbury's and Typhoo, Premier Brands produces a range of branded whiteners to accompany tea and coffee, pointing out that a branded drink can have its taste significantly altered by the choice of whitener.
Contract caterer and vending operator Eurest uses a range of machines for its drinks and confectionery vending, but is firmly committed to the branding concept. Nescafé Gold Blend and Coke machines proliferate in its outlets backed up by glass-fronted vendors displaying Walkers Crisps, KP Nuts, Cadbury's, Nestlé and Mars confectionery. But the caterer has taken the concept one stage further with the recent introduction of StopGap Vend. StopGap is one of the in-house New Famous Foods (NFF) brands from parent company Compass Group. It is a retail outlet selling "emergency" lines - newspapers, snacks and sandwiches - and the NFF brand Ritazza coffee, designed for staff feeding locations and now being introduced by another Compass operating company, Select Service Partner, on railway station concourses.
StopGap Vend is an extension of the theme, selling a selection of drinks and snacks, and with plans to introduce frozen food and bank all of the vending machines together in one StopGap Vend unit.
"It's a bit early to say how it has affected sales," says Eurest director of vending services Angus Fraser. "But indications appear to show a 25 to 30% increase. It has, however, significantly increased the vending profile."
Eurest is also planning to introduce branded lines into its food vending operations, although no decision has yet been made on the lines to be included.
- A full list of vending machine manufacturers and ingredient suppliers can be found in the 1998 Caterer & Hotelkeeper Directory.