Vending machine operators struggle amid abandoned break rooms

In pre-pandemic times, office workers in need of a midday pick-me-up strolled over to a vending machine, punched in their selections and returned to their desks with a Snickers, some chili cheese Fritos or a bottle of Mountain Dew.

College students, library patrons, hotel-dwellers and mall-goers followed similar routines. But now that many gathering spots are sparsely populated — or abandoned entirely — bags of peanut M&M’s and sleeves of powdered doughnuts hang in a metal-coil limbo.

“Everything runs downhill,” said Ryan Coyne, owner of Maryland Heights-based Eire Vending. “If there’s half a staff at work, they’re going to be drinking half the amount of water and soda, eating half the snacks.”

And he and other vending service providers are going to be earning half the income.

Remote working, online learning and shuttered stores have eaten away at the $7.4 billion U.S. vending industry. To stay afloat, vending companies have reduced routes and tried to diversify their clients — seeking contracts with businesses that are adding workers and expanding shifts, such as manufacturing plants and delivery services.

Improvements in technology, which allow for remote sales tracking and contactless use, have provided a lifeline. But already-slim profit margins make foot traffic critical. Ten months into the pandemic, many smaller vending machine operators have closed, and larger ones have undergone layoffs or buyouts.

“You’re working similar hours for a lot less money, but you kind of have to,” said Coyne, who got into vending seven years ago, after retiring from professional boxing.

He learned about the trade from a couple of old training partners. He was drawn to the flexible schedule and low startup costs. He only has himself to answer to.

“Up until this year, I’ve enjoyed it quite a bit,” Coyne said.

Coyne found his niche with smaller workplaces. As his client list grew to almost 200, he considered hiring help, but decided he was happier running the routes himself.

“This isn’t rocket science, but it’s almost like hyper-logistics,” he said. “It requires lots of attention and being hands-on.”

Since March, his revenue has fallen by a third. Coyne manages a few rental properties, which has helped him get by.

Jeffrey Buchanan of Emma Mae’s Vending Co. in University City also has a safety net. He operates a laundromat in Florissant and is looking to add a car wash to his portfolio.

So far, Emma Mae’s — named for Buchanan’s mother — has held on to all of its accounts and kept its five employees on the payroll.

“Location has a lot to do with thriving in this industry,” Buchanan said. Most of his clients were deemed essential businesses during the spring shutdown. None has had to close.

But machine refilling is less frequent. Routes that were run three times a week now only need to be traced twice.

To be successful, vending machine companies have to compensate for their inexpensive products with a high sales volume.

The markup on wholesale snacks and drinks depends on location. Universities, hotels and entertainment venues sell products at higher prices. Mom-and-pops that just want to give their workers break room options charge less.

New machines can top $4,000, with refurbished models selling for about $2,500. On average, a machine grosses about $300 a month, but that fluctuates widely.

Contract terms between clients and vendors also vary. Many businesses take a commission, usually 10% to 25%, on the snacks sold; others give the vendors the full proceeds in exchange for their service.

As technology has evolved, machines have become more complex. Cashless payments have been available for years, and touchless options are becoming more prevalent: A QR code on the machine turns a smartphone into a keypad; customers enter their choices on their phones, and the snacks are released.

Smart vending machines have reduced labor costs. Drivers no longer have to check machines, jot down what needs to be replenished, return to the warehouse to stock up and then make a second trip for refilling.

Now, machines send daily alerts, notifying stockers remotely of what items are getting low, which aren’t selling and how much money is inside.

“That’s been a huge deal pre-COVID but it’s even more of a big deal now,” said David Griesedieck, co-owner of Griesedieck Vending Co. in Overland.

Griesedieck has also seen an increase in business from micro markets, a new trend that works like a convenience store but without a cashier. Customers pick their salad, sandwich or drink from a rack or a cooler and pay at a kiosk on their way out.

But overall, 2020 has been an unparalleled struggle. Griesedieck has owned the company, founded by his father in 1971, for 35 years. He brought on a partner 18 months ago.

“No doubt about it, this is the most challenging it’s been,” he said.

During the spring shutdown, his staff had to empty the contents of multiple machines, throwing out or donating to food pantries thousands of dollars worth of chips, candy, soda and tea.

He’s had to furlough and then lay off six of his 23 employees since March. Many of his machines are sitting idle, and he’s had to downsize routes.

But there have been bright spots. Some new accounts are “going gangbusters,” Griesedieck said, and some existing ones have started to rebound.

‘Last man standing’

When vending machine companies aren’t busy, neither are the people who service the machines.

Bob Briggen has operated Able Vending Repair for decades in north St. Louis County.

“I am basically the last man standing on individual repair guys,” he said.

Some have sold out to bigger companies; others have folded. With less competition, Briggen is juggling more calls than usual, often working six days a week.

He hears from dozens of vending machine operators. Some have lost more than half of their business.

“If you’ve got more office accounts, you’re in trouble,” Briggen said. “With more blue-collar service, you’re not so bad. It’s just been a growing nightmare.”

He is grateful to have picked up jobs, but is concerned about the virus. He is in and out of businesses all day, and sometimes in close contact with dozens of people.

Briggen started keeping a journal in March, logging all the changes he was seeing: the struggle to get replacement parts for his machines, the nursing home employees with tired eyes, the manufacturing plant that shifted to making protective gear, the distressed office managers.

His journal is at 200 pages and counting, and he plans to donate it to the Missouri History Museum.

“I’m not a first responder,” Briggen said. “But I come and go all day long. My concern is what’s going to happen in the coming months. We’re in a COVID war of attrition.”