With American diets and eating habits changing (sometimes daily), it is important to keep up with current nutritional trends and provide offerings that meet the consumer demand. Vending is no exception. As a point-of-purchase or impulse marketer, vend operators are in the unique position to provide items to suit the changing desires of the consumer within a very short turnaround time. However, in order to realize and capitalize on these opportunities, one must be able to study and understand his or her particular market and area. Proper category management can provide the information and data required to make even the most complex decisions necessary to keep up with current marketing trends.

Understanding your customers and their needs is important in every industry. If you don’t know what your customers want, then you are shooting in the dark when attempting to provide products that will result in successful sales for your organization. Category management allows you to specifically target products tailored to your customer’s needs. The snack industry is vast and ever-changing, and determining what to offer can be a daunting task. However, with proper item level and category information, you can get a “leg up” on the competition, to position yourself as the leader in your particular market. Instead of keeping up with the Joneses, be Mr. Jones!

Currently, the diet craze is wreaking havoc with the CPG market. Atkins, South Beach, low-fat, Weight Watchers — how do you keep up? The best way to understand what is happening is through the use of market data designed to provide insight into current trends and where they may be going. The overall snack market has declined 17% over the last year (52 weeks ending June 29, 2004). At first, this can seem devastating. But take a closer look at what is happening within individual snack segments, and opportunities begin to appear that may help you survive and thrive.

Knowing the impact of the current low-carb dieting trends, it is no surprise to find that when looking at the various categories within the snack segment, crackers and chips reflect the majority of the decline, with drops of 11% and 19% in vending sales, respectively. What does this mean to you, the vend operator? At face value, it could spell the end of your business. However, there are a couple of other categories within the snack segment to consider, mainly nuts/seeds and food snacks (meat and cheese). These segments show increases for the same period of 6% and 16%, respectively. All is not lost! And you are able to see and understand this because you took the time to consider the various categories within the market, as opposed to relying on overall market figures and trends. That is the power of category management: understanding which segments within your market are profitable and capitalizing on those opportunities.

and items which can be provided as nutritious alternatives to the traditional snack and beverage items. Altering your product mix to accommodate school requirements not only provides you the ability to meet the needs of the school, but also provides untold benefits in the positive reaction of the parents and community, who will undoubtedly applaud your efforts to help fight the current issues associated with diet and exercise with our youth. With proper category analysis and management, vend operators can take a proactive stance in providing the right product, at the right time, to the right target market, wherever your machines may be.
A quick analysis of market and segment data reveals the following:
Although overall snack sales appear to be declining …
… several categories within the segment show opportunity for improved sales:

NOTE: Food snacks includes meat snacks, cheese snacks and pickles. Misc. salty snacks includes items such as pork skins, bagel chips, corn nuts, etc.

So, before the panic sets in, remember to take a good long look at all aspects of your business. Consider the social and economic factors currently affecting buying habits, and look at each category within your particular business segment. Gather all relevant information available, then analyze, consider and finally make the smart decisions that will put you on top and provide you the opportunities to grow your business and succeed.

Management Science Associates, founded in 1963, has 950 employees and offices in six U.S. cities, as well as in Canada, Malaysia and the United Kingdom. MSA pioneered the introduction of syndicated retail scanner data services in the late 1970s. In the last decade, MSA teamed up with Validata Computer & Research (Montgomery, AL) to develop VendScape®, which was launched in 1999. Their objective was to create a vending tool that accurately reports market-wide product sales performance in a form immediately useful to clients. MSA recently introduced ProVen(tm), the first projected national vending sales data available. For more information on services available contact MSA at 1-800-MSA-Info or via www.msa.com or vend specific at www.allaboutvending.com.