Technology and convenience fuel growth

In 2024, vending and micro market sales increased by 30%, from $26.04 billion to $33.85 billion, according to our exclusive research in the State of the Vending and Micro Market Industry report, marking the continuation of the post-pandemic resurgence.

Many of the same drivers behind 2023’s gains carried into 2024:

• Growth of locations as workers return to the office.
• Revenue gains from new accounts.
• Increasing prices.
• Adding new services for existing customers.
• Implementing new equipment and technology.

At the same time, easing inflation and labor concerns have removed some pressures on operating costs.

New operator influx

Again in 2024, new operators entered the vending space, drawn by the promise of “passive income” touted by social media influencers. While small operators, which are defined as those with less than $1 million in annual revenue, account for 52% of the number of operators, they drove the smallest percentage of sales in 2024, at 7.4%. As small operators continue to scale up in future years, it is anticipated that they will account for a share.

Vending machines still dominate B&I locations

While modern vending solutions such as smart coolers are displacing both vending machines and micro markets in key locations, vending machines still serve numerous unattended business and industry locations. While manufacturing and offices still account for the largest segments of the bending machine location pie, gains in schools and universities, medical and long-term care facilities and correctional facilities were notable.

Operators had an estimated 2.3 million vending machines in locations, representing a 7% increase from 2023. Cold beverages and glass-front machines continue to dominate.

Micro market growth continues

As operators gain penetration in new locations, such as large residential complexes, and continue to convert vending locations to micro markets, the number of micro market locations increased in 2024 to 55,770, from 42,900 the previous year — a 30% increase. Operators pointed to the addition of new business, improved product offerings, and the use of technology as key drivers. At the same time, the introduction of smart coolers, which virtually eliminate the risk of shrinkage, allowed operators to create micro-stores in locations not secure enough for a traditional micro market.

Product introductions that will extend the use of smart markets were a key focus of the 2025 NAMA Show. It will be interesting to see whether smart coolers and micro stores substantially replace vending machines and micro markets by 2025.

Manufacturing locations claimed the largest share of micro market locations in 2024, with 28.6%, followed by office at 12.4%. Micro market locations at hospitality, medical facilities and schools and universities all increased again in 2024. As a result, for the first time, the combined manufacturing and office locations did not represent more than half of the convenience services demographic.

Overall, 60% of operators reported an increase in locations in 2024, while only 20% reported a decrease.

Loss prevention solutions

Micro market theft remains a concern for operators. Respondents to the State of the Vending and Micro Market Industry survey report 4% shrink on average.

Thin margins and operating cost pressures due to fuel and labor costs demand attention to product theft and losses. Regular market inventory counts remain a key technique for gauging the amount of market theft. Adding cameras to monitor the market and signage about theft in the micro market area serve as key on-site deterrent methods.

Technology investments

The influx of new operators is reflected in the technology trends. Key vending technologies such as prekitting tools using a vending management system declined vs. 2023. The largest drop was in VMS investment, with only 56% of respondents in 2024 viewing it as a “great investment with good ROI” vs 81% the previous year. Prekitting dropped from 69% in 2023 to 45% in 2024. Such changes are likely to be cyclical, however, as new operators become better established and seek productivity enhancements to scale their operations.

Consumers’ demand for the convenience of cashless payments continues to be felt, and operators responded. Accordingly, 96% of respondents said cashless payment technology is a great investment, and more than 70% of all machines are currently equipped to accept cashless payments.

Demand for healthy products

More than 75% of operators offer better-for-you products in their vending machines and micro markets, even as they grapple with consumers who seek better-for-you items but purchase sweet and salty indulgences in larger quantities. Demand for better-for-you options, particularly in the morning, presents opportunities for operators, said Nicholas Banke, director, marketing and insights, at Vistar, a PFG Co., at the NAMA Show. Operators should lean into daypart product selection to optimize sales in micro markets.

In vending, top-selling better-for-you products include nuts and trail mix, energy bars, jerky snacks and baked salty snacks.

Most operators (42%) refresh their product mix at least monthly (42%) or quarterly (28%), likely keeping assortments fresh with limited-time offers and seasonal flavors.  

Takeaways

In conclusion, with the overall industry revenue at 433.85 billion, it should come as no surprise that less than 5% of all respondents reported sales had decreased year over year. In fact, nearly 10% reported sales had increased by 100% year over year. Primary drivers for such gains included increased locations and marketing, growth with existing clients, eliminating poorly performing locations and their related costs, route consolidation and expansion, and price increases.

For more than 50% of respondents, the number of micro markets they operated remained the same, even as emerging market requests, return to work mandates and new clients presented opportunities to shift to more profitable locations. At the same time, more than 42% of operators said their micro market sales increased vs. 2023.