With 2015 being a thing of the past, and our foot already through the door of 2016, it is time to look toward the future and what is coming. 2016 holds many opportunities and potential challenges for not only OCS, Vending, and Micro-Market businesses, but also the the Vending industry itself. These different opportunities and challenges range from Micro-Market Growth to the importance of a continual push of OCS services. So without any more fluff, here are some challenges and opportunities that 2016 has in store for the industry as well as some 2015 trends to keep in mind for the future.
1. Technological Advancement
With every passing year, the advances in technology make having cash in your wallet less important. Many companies have noticed and taken the appropriate steps to adapt their machines for “cashless” purchases to reach a growing portion of the customer population. This “cashless” trend is nothing new, and has been the main technological advance in the Vending industry for years.
However, this year may be the signal that a different area of technology will begin to heavily affect the industry. In an article published in Automatic Merchandiser, Paresh Patel, the CEO of Payrange, makes a comment that should be a large flag for all businesses. He said “The IPhone was introduced in 2007. This means those that were entering high school that year will now be graduating from college next year. This is the first truly mobile generation that will be entering the workforce.” The words spoken by Patel could not be any more significant.
With that generation finally graduating and coming into the workforce, they will gain independance and buying power, and that will make a world of difference in the consumer market. The percentage of consumers who use mobile technology not only to communicate, but to live their whole life will steadily increase. The number of customers who are willing and able to make purchases through mobile technology will increase. The number of customers who would desire mobile interactions with every aspect of their life also would increase as well. These changes would not only affect the percentage breakdown and sizes of customer populations, but also would also increase with every generation after that.
The meaningful incorporation of mobile technology into the vending industry, to the point of it being a cornerstone in a business plan, has yet to occur, but soon mobile technology will play a large part in vending strategy. The potential to have a completely different consumer makeup in the near future is real, and getting much closer starting next year.
2. Office Coffee: Still Growing
There are many different reasons as to why OCS is still on the rise. From the consumer demand for variety, to its multiple newly discovered health benefits, there are many reasons for office coffee to be in demand. According to Packaged Facts’ proprietary consumer research, the Office Coffee market is forecasted to grow 4.5% in 2016, which means keep pushing OCS sales! Oh yeah, just in case you didn’t believe me on the “multiple newly discovered health benefits” of coffee, click here to watch a very interesting clip on all of coffee’s goodness.
3. Potential DOE & FDA Ammendments and Rules
The Department Of Energy has proposed an amendment for its energy conservation standards. The proposed amendment basically means that many old vending machines will have to be scrapped or updated to meet the amendment requirements by 2019, if it passes. The amendment bodes well for energy conservation but casts a very expensive shadow for businesses. To be frank, it means that vending companies will face an increase in equpment expenses in the coming years to get machines up to date, again only if the amendment passes as it is. Currently NAMA is making several attempts to have the amendment altered to be more friendly to vending businesses. The total potential impact this amendment will have on the industry is unknown, but it will have a large impact for sure. To learn more about the amendment, click here
The Food and Drug Administration has new rule which may require vending machines to display the nutritional information on or near vending machines. This new ruling may affect the development of future vending machine technologies, by prompting most standard vending machines a way to provide product information in an aesthetically appealing way.
4. The Continued Strength of Micro-markets
Micro-markets are still a very dominant part of vending. According to our very own Greg McCall, micro-markets here at Five Star Food Service are seeing annual growth rates above 45%. A properly designed, manufactured, and executed micro-market, coupled with great support from the vendor is profitable in almost any suitable situation. Here is a little infographic provided by Coke that shows just why micro-market growth is so strong.
The points mentioned above are just some of the main factors that will affect the vending industry in 2016. As we all know, unexpected events will definitely happen during the year, because thats just life, but having some information to work with going forward is better than none. Good luck with 2016, go forth and make it yours! And remember, knowledge is power.