Veni, Vidi, Vending

While you could always grab a soda from from your local vending machine, the industry is suddenly expanding the concept of retail. 

Wile a bizarre vending-machine culture has been prevalent in Japan for years, with machines dispensing everything from toilet paper to milk, they've never really become ubiquitous Stateside in quite the same way. But in 2006, Apple's (AAPL) new line of iPod vending machines slowly began to change all that.

The vending machines quickly popped up in the nation’s airports; last year, the company installed them in Macy’s (M). Best Buy (BBY) quickly followed suit, installing similar vending machines in 8 airports, starting with electronics but eventually expanding to Nintendo (NTDOY) video games.

And the 2 companies that first brought us the dollar-a-pop dispenser are engaged in a vending-machine war. In March, Pepsi (PEP) introduced a pilot program for the country’s first climate-friendly machines. Starting with 30 machines in Washington, DC, the new machines use carbon dioxide to cool the cans instead of the harsher hydrofluorocarbons (HFCs) often used.

Rival Coca Cola (KO) responded with its own program, introducing new machines at Simon Property Group (SPG) shopping malls in the southeastern US. The new Coke machines -- designed with Samsung and interactive marketing agency Sapient (SAPE) -- feature an interactive touchscreen display that will eventually also offer mobile phone downloads.

While Let’s Pizza -- a series of machines that make and deliver pizzas in 3 minutes flat -- is still only available in Italy, the US can console itself with Redbox (CSTR) kiosks, which dispense DVDs for 24-hour rental. With almost 13,000 kiosks to date and plans to install another 7,100 by year’s end, Redbox estimates that each machine earns roughly $50,000 annually.

In the UK and Australia, Novel Idea -- a series of vending machines selling books -- feature an LCD display for advertising, making ad revenue as crucial to the venture as book sales. U*tique, a new luxury start-up, has even installed machines dispensing high-end lotions and beauty products. But don’t worry - you’ll still be able to buy snacks, too.

One of the biggest announcements of the year so far in the automatic merchandise sphere has been a partnership between Kraft Foods (KFT), Crane Merchandising, Samsung, and Digitas to install a series of vending machines featuring touchscreen panels. The newfangled machines are expected to be unveiled at the upcoming National Automatic Merchandising Association expo in Las Vegas. Popular online grocery delivery company, FreshDirect, is also busy installing its FreshVending machines in New York.

As an industry, 2007 saw vending operators post a 3% increase in revenue for the third straight year. While the gains aren’t huge and 2008 figures aren’t yet available, this sudden and rapid expansion could make vending machines synonymous with something other than buying corn chips at the bus station.



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