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News / Business

Food and drink vending and self-serve kiosk operators want to be everywhere you are

By Maria Halkias, The Dallas Morning News
Published: May 12, 2024, 5:46am

Commercial real estate isn’t the only industry anxiously watching return-to-office mandates.

Operators of vending machines, coffee service, office pantry services and self-checkout micro markets collectively saw their business decline by 70% in 2020.

It took three years for the convenience services business to recover from the pandemic and last year reached its 2019 prior peak of annual sales of more than $26 billion. The industry is forecast to grow 9% to $40 billion by 2028, said Carla Balakgie, CEO of the National Automatic Merchandising Association.

The downturn was uneven, mostly in major cities and particularly Silicon Valley with jobs where remote work was possible, Balakgie said. At the same time, demand for vending machines serving up hot food and self-serve micro markets increased at factories, warehouses, schools, hospitals, prisons and government buildings.

“Think about hospitals and first responders and other types of places where people had to be there constantly. So it was not a one-size-fits-all thing,” she said. “The long tail on this (the pandemic) is the return to office. That’s still the slow part.”

While white-collar workers are coming back into the office, “remote work is here to stay,” she said, and when workers are in the office they’re back on different schedules, fewer days a week, fewer hours a day.

Some companies have been slow to force their employees to return to their physical workplaces. A five-day-a-week, in-person mandate just took effect in March at the corporate office of UPS in Sandy Springs, Ga. IBM ended remote work in January and asked U.S. managers to be in person at least three days a week.

Most companies in Dallas-Fort Worth started to change remote work policies by early 2023. Office occupancy in Dallas as of late April was 66.7%, compared to a U.S. average of 60% and 48.9% in Silicon Valley’s San Jose, according to data from security firm Kastle Systems.

When workers return, the cafeteria often has been replaced by a combo of vending and self-checkout shelves that stock more fresh food, healthy options, and the familiar candy and chips.

“People still want great experiences at work,” said Balakgie. “And so rather than a vending machine or micro markets with basics, we’re having more fresh meals, fresh food, we’re having higher and better quality coffee.”

Frisco-based Keurig Dr Pepper had one of the largest exhibit booths on Tuesday and Wednesday at the annual meeting of the National Automatic Merchandising Association at the Kay Bailey Hutchison Convention Center in Dallas. The booth was filled with both cold and hot coffee options for self-serve locations, but nothing like the Robojo My App Cafe, a large coffee kiosk operated by a robotic arm that replaced a human barista. It was on display in the show’s emerging technologies section along with a frozen meal vending machine pitched by Dallas-based Sandenvendo America Inc.

Yasuhiro Ikemori, vice president at Sandenvendo said the company sees potential for its frozen food machine in hotels and college dorms and has one in Arizona so far.

A robot barista is already working in Texas.

The Freelancers Café on the square in Athens has one of only ten CafeX robots in operation, including two at the San Francisco International Airport. It’s a competitor to Robojo.

Paul Benson, the owner of the e-sport cafe, paid $250,000 and spent another $50,000 testing recipes and programming the robot to make more than coffee from the nearby Van Zandt Coffee Co.

“Strawberry lemonade is popular and it had to make sweet tea in Texas,” Benson said.

The machine is paying for itself by working 10 a.m. to 7 p.m. Monday through Saturday and overtime during e-sport events, he said. The cafe has two 16-foot glass garage doors that open onto the town square where the robot grabs the attention of passersby.

Technology is driving convenience business. Three years ago, David Chessler, owner of Automated Retail Technologies based in Sarasota, Fla. found a market for his Just Baked Smart Bistro vending machine that makes breakfast, lunch and dinner items including bestselling White Castle 4-pack of sliders. Menu items range from $5.50 to under $10.

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“It’s a fully automated QSR (quick service restaurant) that can deliver in 60 seconds,” Chessler said. “That’s faster than DoorDash.”

Just Baked vending machines are at Children’s Medical in Dallas and Plano, Texas Health Presbyterian Hospital in Dallas and Baylor Scott & White Medical Center in Irving.

Balakgie said facilities with hundreds of employees working shifts such as big retail fulfillment and distribution centers, manufacturing and food processing are places where micro markets would help employees leaving work with milk, eggs, bread and other staples and ingredients they may need to pick up on the way home.

Alabama-based Pepi Food Services has installed a refrigerated micro market with groceries that accepts SNAP food benefit payment cards.

“We have one in a rural southeastern Alabama food processing plant where there’s no grocery store in the area,” said Pepi chief operating officer David Pemberton. “These blue-collar workers sometimes are working two jobs and we help them save time.”