Friday, September 24, 1999

Vending machine business evolving

Equipment more sophisticated

The Associated Press

        ST. PAUL, Minn. — The Egyptians used them to dispense holy water in 215 B.C., and the Chinese sold pencils from them in 1076 A.D.

        The English began using coin-operated vending devices for tobacco in the 1700s, and in 1888 the Thomas Adams company installed Tutti-Frutti gum machines on New York elevated train platforms.

        Automatic vending machines are nearly everywhere today, so much a part of life that people take them for granted except when they won't accept a crumpled dollar bill.

        The vending machine industry, which had U.S. sales of $22.1 billion last year, continues to evolve, with high-tech equipment that can grind coffee, give a soft-drink can a soft landing and let executives miles away analyze sales trends.

        Many of the new machines are being crafted at Automatic Products International Ltd. in St. Paul.

        “There's a lot more to the vending machine than people see,” said John Black, a former Chrysler Corp. engineer who designs machines for API.

        “People just think the cups magically fall where they're supposed to,” Mr. Black said, as he worked on a three-dimensional computer model of an electronic coffee kiosk. The actual machine grinds beans on the spot for drinks as fresh as those purchased in a coffee shop.

        Push the cafe mocha button, for example, and the machine grinds the coffee beans, whips up hot chocolate, blends the two and pours the beverage into a cup. The kiosk has 15 selections, but many more possible coffee combinations that can be programmed in by the company servicing the machine.

        “With 15 buttons, there's no (other) machine in the market that has the ability to create such a diverse selection base,” said Gloria Cosby, publisher of Automatic Merchandiser, a monthly industry publication based in Fort Atkinson, Wis.

        API, which has been in the vending machine business for 50 years, manufactures more than half the U.S. snack and coffee machines. The company's biggest competition comes from St. Louis-based Crane National Vendors, which dominates the cold beverage machine market and which also makes machines that dispense plain and specialty coffees, snacks, food and ice cream.

        API sells machines to companies that place them in business and commercial locations and then service them. It also sells directly to large companies that service their own machines.

        Prices range from around $1,000 for a small counter-top model to about $3,500 for high-tech machines with refrigeration.

        The newest machines can be tracked by a computer that alerts the user or service company when there is a breakdown or something needs refilling.

        API's new Cafe Diem kiosk is in field-testing and will go into production this fall. API will enter the canned and bottled beverage machine business in the second quarter of next year with a glass-front machine dubbed Robo Quencher.

        Robo has a robotic arm that retrieves the bottle or can and moves it slowly down to the delivery door before the customer's eyes. With this machine, there's no big jolt that might make the soda fizz when the can or bottle is opened.

        API introduced its first vending machine — a cigarette machine called the Smokeshop — in 1949. Since then, it has sent more than 1 million vending machines around the world, but it's no longer in the cigarette machine business.

        Alan Suitor, API president and chief executive, says the privately held company's sales are “in excess of $100 million.”


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- Vending machine business evolving