June/July 2010 News

NAMA profit report: 2009 brought improvement

»During 2009, the typical National Automatic Merchandising Association (NAMA) member firm continued to struggle because of poor economic conditions, according to the recently released 2010 NAMA profit report. However, unlike 2008, profitability improved in 2009 as firms began to take serious financial actions to offset lower sales.

Results were based on data provided by 121 participants. The tables and graphs in the 45-page report present a comprehensive guide for analyzing profitability.

For analysis, results are divided by firm size. Results are analyzed for companies with less than $2 million in sales and for those with more than $2 million. Financial operating ratios are also broken out for typical firms and high profit firms, as indicated in the chart above.

Gross margin results did not follow the normal pattern for a declining sales year and improved for the second straight year, the report notes. This ability to maintain margins in the face of declining sales was the major reason firms were able to improve profits. What is more remarkable, the report notes, is that operating expenses actually declined in the face of a sales decline — from 51.2 percent of sales in 2008 to 50.5 percent in 2009. As the modest sales decline of 2008 turned into a serious decline in 2009, firms took strong actions to get expenses in line with sales. For information, contact NAMA at 312-346-0370.

Coca-Cola Co. and Dr Pepper Snapple Group sign pact on Dr Pepper brands

»?The Coca-Cola Co. has entered into an agreement with Dr Pepper Snapple Group, Inc. (DPS) to distribute certain DPS brands, subject to the completion of The Coca-Cola Co.’s acquisition of Coca Cola Enterprise (CCE) North American bottling business. In addition,
Dr Pepper and Diet Dr Pepper will be made available on the Coca-Cola Co.’s new proprietary touchscreen Coca-Cola Freestyle™ fountain dispenser, a device used in commercial foodservice outlets.

Under the terms of its new agreements with DPS, the Coca-Cola Co. will make a one-time cash payment of $715 million to distribute Dr Pepper and certain other DPS brands in U.S. and Canada territories where they are currently distributed by CCE. The new license agreement will have an initial term of 20 years, with 20-year renewal periods. This license agreement will replace the existing agreements between DPS and CCE upon the completion of the Coca-Cola Co.’s acquisition of CCE’s North American bottling business.

The Coca-Cola Co. will distribute Dr Pepper trademark brands in the U.S., and Canada Dry in the Northeast U.S. where they are currently distributed by CCE. The company will distribute Canada Dry, C’Plus and Schweppes in Canada.

Florida requires new vending machine labels by July 1

»The Automatic Merchandising Association of Florida has advised members that the state of Florida recently enacted new vending machine labeling requirements. All food and beverage vending machines must have new labels effective July 1, 2010. This change is designed to protect vending operators from competitors who were stealing business and tax information from current vending machine labels.

Oklahoma bill will triple vending sales tax decal

»A proposed Oklahoma house bill that has the governor’s support will increase the cost of a vending machine sales tax decal from $50 to $150, according to news reports. The price increase will take effect July 1, and some vendors said that cost increase will be passed on to consumers.

USI names Sunstate as Florida distributor

»U-Select-It has selected Sunstate Vending Equipment Co., Apopka, Fla., owned by 38-year industry veteran Fred Bentley, as its new

Florida distributorship. Originally from the Orlando, Fla. area, Bentley was a distributor for U-Select-It in Georgia and Alabama during the 1990s and founded and operated several vending companies in Florida and Alabama. The new distributorship, Sunstate Vending Equipment Co., is located at 2158 S. Orange Blossom Trail, Suite 103, Apopka, Fla. 32703.

Honeybake Farms halts operations

»Honeybake Farms Inc., the Kansas City, Kan.-based supplier of food to vending operators in 14 Midwest states, has discontinued operations after 38 years due to market conditions. Neil Sloman, the founder and owner, recently sent a letter to customers advising them of his decision. He said the company employed about 120 people. The company manufactured fresh sandwiches, breakfast sandwiches, sandwich platters, salads, snacks, milk, desserts and gourmet cinnamon rolls. It also distributed frozen prepared food products for most major manufacturers.

Sloman said he may continue producing his best selling products frozen on a limited basis using private labels.

Wright Vending buys Premier Vending

»Wright Vending Inc., based in Madison, Wis., recently acquired the assets of Premier Vending Inc. in Janesville, Wis. from owner Dave Biggerstaff for an undisclosed sum. Wright Vending will fold Premier Vending’s four routes into its existing Madison operation, noted Randy Wright, company president. The transaction was facilitated by Marc Rosset, president of Chicago-based Professional Vending Consultants Inc.

J & J Snack Foods buys California Churros

»J & J Snack Foods Corp. has acquired the assets of California Churros, a premium manufacturer of churros located in Colton, Calif. California Churros had sales of approximately $11 million in 2009. The founding Martinez family will remain in a managerial role.

Sara Lee reorganizes specialty coffee

»Sara Lee Corp. has reorganized its specialty coffee division and is marketing its coffee under the Douwe Egberts® brand. Steve Krisel has rejoined Sara Lee from Javo Beverage Co. where he was vice president of sales, to oversee the program.

The specialty coffee division was reorganized following Sara Lee Corp.’s sale of its direct store delivery foodservice coffee business to Farmer Bros. Co.

ConAgra Foods to buy American Pie, LLC

»ConAgra Foods, Inc. has agreed to acquire the assets of American Pie, LLC, based in Woodbury, N.Y. American Pie manufactures frozen fruit pies, thaw-and-serve pies, fruit cobblers and pie crusts under the licensed Marie Callender’s and Claim Jumper trade names, as well as frozen dinners, pot pies and appetizers under the Claim Jumper trade name. Financial terms of the transaction, expected to close within 30 days, were not disclosed.