Consumers are snacking a lot more frequently than they did decades ago, but they've also become more health-conscious.
Both trends are fueling sustained growth for an Annapolis-based operator of natural and organic snack vending machines, says the company's CEO.
"Vending has been around a long time … but this isn't like traditional vending," said William Carpenter, CEO of Vend Natural, which bills itself as the oldest "healthy" vending company in the United States. "You are giving an option to people that necessarily weren't buying out of vending machines."
Since buying the company in 2009 and signing the U.S. Naval Academy as one of its first Baltimore-area customers, Carpenter and his partners have seen sales grow each year, the CEO said.
The 8-year-old company does not disclose annual revenue, but says it owns and operates more than 300 machines, plus more than 600 more in partnership with regional distributors, at colleges, universities, schools, municipalities, hospitals and businesses in 14 states. Typically, the machines sit next to traditional vending machines selling soda and candy bars.
Amid concerns over childhood obesity and other health threats, interest in alterative vending is growing from schools and colleges, including a contract Vend Natural announced this month with the University of Virginia. The company, which fills its machines with fruits and vegetables, baked pita chips, energy bars and other snacks and drinks, also is now branching out into chilled and flavored water and gourmet coffee.
Sales of organic and natural snacks represent a small but growing share of the snack and vending machine industry, which had $42.7 billion annual revenue and 4.5 million machines in 2013, according to Vending Times.
"Mainstream vending operators have been trying to sell healthy products for the past 30 years, and it's only recently that it's become a big issue business-wise, health-wise, and compliance-wise," said Nick Montano, managing editor of Vending Times. "What's driving it is different municipalities and government buildings have requirements to have so much product dedicated to low calorie or healthy."
"Now, we're actually seeing so many 'better-for-you' brands out there and people are recognizing those brands and starting to buy them," Montano said.
At Baltimore Polytechnic Institute, Vend Natural machines were installed at the start of the school year, the first vending machines for students at the high school.
The snacks meet the state's nutritional guidelines, and the company contributes a portion of sales to the school's athletic department, said Carla Barrera, the school's athletic director.
"The kids really like it," she said
The company tailors its mix of products for each location and can monitor inventory and sales in real time through wireless technology, then make adjustments to the mix.
Vending technology also is evolving with the development of dual-zone machines.
"We're able to carry chilled beverages, fruits and vegetables in the same machine where we carry a Clif bar," Carpenter said of the new machines.
At University of Virginia, Vend Natural will also provide Evive Station beverage kiosks, which can clean reusable bottles and refill them with purified, chilled water or fruit-infused flavored water, and Rubi gourmet coffee stations.
The company's machines meet a need at a time when snacking is on the rise, Carpenter said, citing statistics showing that 91 percent of consumers regularly snack as opposed to 70 percent who in 1980 avoided snacking.
"Snacking has become the fourth meal. We snack four to five times a day now," he said. "Our behavior has changed. Your not sitting down. … There's not breakfast, lunch and dinner."
Meanwhile, the millennial generation is helping to drive the trend toward healthier eating, Carpenter said.
At Loyola University, students can choose from traditional machines — which also have begun to offer more healthy choices — as well as natural or organic vending machines.
"We've had them in one version or another for about five years," said Jennifer Wood, director of campus services. "They are really popular because students are looking for healthy options. … Students are on the move and have class and studying and playing sports, so they want something they can grab quick" and "not feel bad about."
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The university's vendors, including Vend Natural, have been flexible in adjusting the mix because "every year the idea of healthy changes," Wood said. "What's healthy one year is not healthy the next."
Carpenter and his partners bought a Vend Natural distributorship in 2009, two years after the company was founded in California, then bought the company outright. Carpenter previously had founded Baltimore-based Prime Retail, which owned 52 outlet malls across the country before the company was sold to Simon Property Group.
Carpenter, who earlier in his career worked for the Rouse Co. on projects such as Harborplace in Baltimore and Faneuil Hall in Boston, sees similarities between operating shopping centers and operating vending machines.
"A machine is like a shopping mall," he said. "You have 46 spaces and you have to find the optimal mix to meet the customer [demand] in a particular location," he said.
Carpenter said he believes healthy vending machines will remain an option for hungry people.
"We think people should have a choice," he said.