Coin Machine Review (& Pacific ...)

VENDOR.S IN PLANTS
Due to the advances being made in the use of
automatic vendors for in-plant feeding , or auxiliary
thereto, the following information reported in a
survey made by the Field Research Division of the
Paper Cup and Container I nstitute is valuable for
reference purposes :
Operators of vending machines to dispense candy
bars , soft drinks, ice cream, coffee, soups, milk,
sandwiches, juices l cookies and other items in the
food class compete ·to some extent with other types
of in-plant feeding services, the survey indicated.
But the trend is to regard vendors as a supplemen-
tary service or to use vendors altogether. In-plant
food
services
may
include
a
cafeteria,
canteen,
mobile cart, etc.
The survey revealed that automatic vendors may
profitably supplement all of the in-plant feeding
services and hence will be one of the best sales
talks for vendors that an operator can get to show
to plant managements.
The complete 19-page report can be had by
writing to the research firm at 49 West 46th St.,
New York 19, N. Y. The I nstitute prepared a digest
of its complete report which is a decided sales talk
for vendors, as follows:
A study of in-plant feeding systems in locations
where fewer than 1000 persons are employed has
been completed by the Field Research Division ' of
the Paper Cup and Container Institute and reports
of results are now available . The study indicates
that, in general , full scale cafeterias are the most
expensive way to serve food in such locations, and
that supplementary services, including vending ma-
chines, will probably do an increasing ' part of small
plant feeding .
The Field Research Division is set up by the
Paper Cup and Container Institute to furnish facts
and figures that might be of help to customers of
the cup manufacturing companies that comprise the
Institute's membership. In addition to the technical
aid which individual cup companies have given to
develop equipment for vending, the Research Divi-
sion is now spending an increasing part of its time
in gathering material on that field , directors say.
I. The survey was initiated to find out how
small plants are providing food for fewer workers
than it takes to support the type of in-plant food
service now customary in large plants. Field re-
porters visited 26 in-plant food services in repre-
sentative factories employing fewer than 1000
workers. Plants were located in ten states and en -
gaged in a broad range of manufacturing enter-
prises.
2. Vending machines were the most popular
source of supplementary food reported . Most of the
factories had more than one food system. The group
included 17 cafeterias, nine mobile cart systems, and
four canteens. In 12 factories, vending machines
were used to supply candy, cookies, peanuts and
soft drinks. Several reported experimentation with
vending machines selling wrapped sandwiches, but
no vending machines of this type were in operation
at the time of the survey. High cost, and difficulty
of getting fresh sandwiches were reasons given for
the discontinuance of the service, but many plant
managers expressed interest in future development
of vending machines serving substantial hot food
items, particularly coffee.
3. Vending machines were the only source of
food which consistently ran in the black. One New
England textile firm employing a ' thousand feeds its
workers at noon through a mobile cart system which
circulates hot food in paper containers prepared by
the caterer at his own commissary. Employees like
the service, which provides a moderate profit to
the concessionaire.
In addition, vending
selling soft drinks earn $200 a
employees' association.
1953 SOURCE BOOK
month
machines
for
the
Supplementary food services, such as canteens,
mobile
carts,
and
vending
mach ines
were
more
popular with employees and aln:lOst all of them paid
their own way in contrast to the traditional deficits
in small plant cafeterias. Profits on snack services
we re frequently applied to the cafeteria , or to
employee welfare~,.rpo.5es .
4.
Factory managers in many cases insist on cup
vending machines for soft drinks to reduce accidents
from broken or rolling bott les. The Armstrong Cork
Co. does not permit breakable utensils on the fac-
tory floor. The company says this safety measure
also protects valuable stock.
5. Competition between vending machines and
other food services in the plant was not regarded
as a serious problem . One company thought the
candy and pop machines competed with sale of
candy and pop in the cafeteria. I n other plants,
competition was avoided by not serving vended
goods in the cafeterias, but most felt that the
competition was unimportant because the machines
were selling at hours when the cafeteria was closed.
A Cleveland foundry, for instance, liked the vend-
ing machines because they made it unnecessary to
keep the cafeteria open beyond the lunch hour for
snackers.
Value of Cigarette Routes
The National Assn . of Tobacco Distributors con-
ducts a clinic discussion on cigarette vending ma-
chines at its annual convent ions, since it is some-
times estimated that as many as 50 per cent of the
tobacco distributors of the nation also operate
cigarette vendors direct ly or indirectly.
At the convention an official question suggested
that the approximate cost of soliciting and placing a
machine on a new location may be estimated at
$50 and there seemed to be genera l agreement that
this estimate was approximate.
.
It was also suggested that in buying a route the
pu rchaser could estimate the value of the route on
the basis of $1 ,000 for each case of cigarettes sold
weekly. This value would be for an established route
in full operation. But opinion among operators dif-
fered on this valuation standard. T hey said territory
would have much to · do with the value--that it
would not be enough for routes in cities like New
York and that it would be too high for routes in
smaller areas.
Other operators suggested that a route should be
worth two to two and a half times its month ly vol-
ume. An operator should be able to make a net
of 10 per cent before taxes and depreciation and
thus payoff the purchase price in two years.
Two experienced operators of cigar machines also
expressed their views on mi'nimum sales per machine.
One said that 50 sales per week per machine was
profitable. Another said a location that se ll s 100
cigars per month, at 3 1/ 2 cents margin per cigar,
is profitable.
Tax Rate For Vendors
The automatic vending industry has consistently
opposed t he trend of states and cities to place a tax
on each separate vending machine as unfair. The
trade has suggested that a tax, if any, should be
applied to the operator as a business license as any
other retail or wholesale business would be licensed .
The National Automatic Merchandising Assn. has
suggested the following percentage scale of taxa -
tion on the average monthly gross receipts as a
basis for such business tax :
Less than $500 gross-rate of $1.50 per quarter;
$500 to $1,000 volume--$3 tax; $1 ,000 to $2,000
volume--$5 tax; $2,000 to $5,000 volume--$7.50
tax. The schedule thus advances so that a tax rate •
of $25 would apply to a monthly volume of $20,000
to $25,000.
73