Install a vending machine

Technical articles - Diversification

Settling in agriculture Short supply chains

Automatic vending machine systems are beginning to emerge as a solution for direct selling. They offer the dual advantage of reducing the workload of producers and allowing flexibility for consumers, who are no longer constrained by sales hours.

Description

There are various types of vending machines with variable dimensions. These machines allow the sale of all kinds of products:

• Fresh eggs
• Fresh milk and dairy products such as yogurts and cheeses
• Seasonal fruits and vegetables
• Poultry
• Charcuterie
• Flour
• Processed products (jam, honey, preserves...)
• Oysters and other seafood

This type of device is placed next to a parking lot for easy access, in the village square or near a farm, thus becoming a meeting place that promotes exchanges and conviviality.

Vending machines operate like those for other products:

• They are quite large and divided into several compartments to accommodate different containers.

• Restocking is necessary; it can be daily, weekly, monthly... depending on the products offered and consumer demand.
• They can hold bags or other plastic packaging, cartons, trays, or bottles and jars. The smallest have 30 compartments but the average is around 60.

  

  Example of a "Drive" operation

• Sometimes, they are accompanied by a drive system: the customer places an order by phone or online, and the producer prepares the complete basket which is placed in a compartment.
  

Offering a range of products

To motivate the customer to travel to the vending machine, it is necessary to offer a varied product range. A single producer can rarely produce a sufficiently diversified range of products alone. The automatic vegetable vending machine can be supplied by several producers. Several solutions exist for this:

• When the vending machine does not allow money to be transferred to multiple bank accounts, some producers have chosen to engage in buying and reselling. They source foods not produced on their farm from other producers and then resell them in the vending machines. This takes time and the profits on these products are limited. Moreover, legislation limits the quantity of buying/reselling possible.
• When the vending machine allows the turnover generated by each compartment to be transferred to a different account, it is possible to create a collective of producers supplying the compartments. Thus, if a vending machine has 100 compartments, it is possible to transfer the money generated by this vending machine to 100 different bank accounts.

Before installing an automatic vending machine, it is essential to define the range of products offered throughout the year in order to size the compartments accordingly.

The various compartment sizes make it possible to sell a diverse range of pre-filled baskets. These can take the following forms:

• Mono-products (0.5 to 2 Kg apples, a cabbage, a lettuce, eggs, …)
• Associated products (a cabbage and two leeks, garlic and onions, …)
• Thematic products (vegetables for soup, ratatouille mix, …)
• Processed products (soup, vacuum-packed pre-cut vegetables, fruit juices, …)

Supply

It appears that the proper functioning and profitability of a vending machine are closely linked to appropriate restocking. Depending on demand and the number of compartments available, restocking can be 1 to 2 times per day on a just-in-time basis depending on the time of day. The typical operation involves 3 steps:

• Early morning: cleaning compartments, checking product freshness and sorting products
• Early morning: preparing products to meet the day's demand (product packaging saves time by dirtying compartments less)
• During the day: restocking compartments. Note that technical solutions exist to guarantee freshness or to more easily manage continuous restocking (locking refrigerated compartments if temperature exceeds critical threshold, SMS alerts when a certain number of compartments are empty or SMS consultation of stock status).

Payment methods

Today, most new vending machines have a card payment terminal (while also allowing cash payment), which seems more suitable because:

• The card is progressively becoming the dominant payment method,
• It avoids storing money in the machine and thus reduces the risk of vandalism,
• It saves time for the producer by sparing them from collecting and replenishing change daily.

However, this payment system involves an additional cost. Indeed, banks take a certain fee on each transaction (note, this fee varies depending on regions and banks).

Choosing a vending machine

According to the defined strategic key points and producers' needs, 4 solutions are currently offered on the market:

• Modular compartment vending machines,
• Rotating tray vending machines,
• Conveyor belt vending machines (product drops into a bin),
• Positive or negative refrigerated vending machines.

Automatic vending machine

The size of vending machines is adaptable according to production and estimated sales.

There are many manufacturers of automatic vending machines for farm products in France:

• Filbing Distribution : Based in Alsace, France, the company designs equipment with automation to serve farmers' and producers' products to consumers. These food vending machines come in various sizes. Products are packaged in non-refrigerated compartments (36 different sizes), refrigerated compartments (07 different sizes), and frozen containers (maximum capacity 200 liters). The company's network covers several French regions and its distribution adapts to customer needs.

• Providif : A company specialized in the design and manufacture of vending machines, Providif offers custom food boxes tailored to each commercial application. It provides users with the flexibility needed to integrate new technical distribution and sales solutions. These vending machines are easy to maintain and operate independently 24/7. Households better enjoy the freshness of harvests.

• The Alteor group: A modular sales space builder, the Alteor Group, with 30 years of experience, combines the ambitions of the specialist Nature O Frais. It creates a distribution network and a national brand marked by modernity. Its objective is to open a portal for producers and consumers, where the quality and value of local food is a reference. It offers food boxes in 5 and 20m² formats.

• Distri Dorr : The company Dorr et Fils, based in Francaltrof, is a dealer of metal-type food boxes. They are refrigerated and adapted for meats and charcuterie products.
• Les casiers du coin : Conceived by a farmer, this connected wooden and plexiglass vending machine can be built directly by the producer, allowing easy repair and modification. It is accompanied by an application that allows producers to manage it and customers to reserve the contents of a compartment in advance.

Some are even available in Belgium:

• Le Distrib Small Store : LeDistrib offers different types of vending machines: classic ones like LeDistrib Bread or LeDistrib Milk, but also customized vending machines both in terms of features and design. Most have a capacity of 40 to 120 products.
  

To watch a testimonial on the implementation of a meat vending machine, click here.

Building your own vending machine

The company Les casiers du coin offers a tutorial to self-build a vending machine:

Successful implantation

The location of the vending machine is highly strategic. Like other marketing methods (stores, markets), the location greatly defines sales potential. Therefore, it is important to study in advance any project:

• The site traffic, defined by the number of potential customers regularly passing near the machine. Certain infrastructures can be highly strategic for this type of installation such as major roads and highly frequented public places (stations, town squares).
• The accessibility of the location, especially for cars: parking, secure car access.
• The supply distance or storage area should not be neglected; the shorter the travel time for restocking, the less burden on the producer. Often, the supply distance does not exceed about ten kilometers.
• Vandalism is a real risk for the proper functioning of the installation. Various measures can be taken to reduce this risk: cameras, card payment, placing the machine in enclosed areas (automatic doors).
• Direct competition must be evaluated considering existing nearby businesses to capture a market not already taken.
• The target clientele defines the location strategy to reach potential interested actors in this type of distribution. It seems interesting to target one of these customer categories:
  • People wishing to buy quality farm products who travel to or near the farm. In this case, vending machines are installed directly on or very near the farm.
  • Families with children concerned about their diet by placing the machine near schools or on school routes.
  • People with irregular work hours by positioning it near hospitals, 24/7 businesses.
  • People short on time by placing it in stations and on routes home.

Advantages and disadvantages of different implantation sites

Location	Advantages	Points of caution
On the farm	Quick restocking Welcoming farm environment Proximity	Entrance congestion Location far from main roads
Village square	Living place Product range with local shops	Competition from nearby shops
By a road	High traffic Better visibility Tourist clientele	Higher risk of break-ins More difficult restocking

Investments

• Purchase cost between €10,000 for the smallest models (about thirty compartments) and €80,000 for the largest (250 compartments for example).
• The type of vending machine and the number of compartments are differentiating factors. For example, a vending machine with 69 refrigerated compartments can be purchased new for around €30,000, a 30-compartment machine around €20,000 new.
• Average basket between €5 and €10 depending on the product range.
• Relatively quick return on investment: in just one year for €150 daily turnover, in five years for €25 daily turnover.

Find a modeling of the investments to be made here.

Facilities

Beyond the investment in the vending machine itself, it is important to plan and budget ancillary investments, crucial for the project's success:

• The premises: it is necessary to provide a space to house the compartments (shelter from weather, cold and/or heat). Whether this space is closed (automatic door) or not, as well as possible air conditioning, can be considered but represent additional expenses. Using existing infrastructure can be a source of savings at this level.
• Securing the premises: In addition to a possible automatic door that can close after a certain hour, installing surveillance cameras helps limit vandalism risks and thus preserve the material investment. In high-traffic areas and in the absence of nearby presence (shop), this option should be considered.
• Access to electricity

Regulations

Automatic vending machines for fruits and vegetables do not require a building permit.

Regulatory elements must be respected depending on the products distributed and the location of installation:

• Complete CERFA form no. 13984 if selling animal or animal-origin foodstuffs,
• Complete CERFA form no. 14023 if occupying public road, or request a building permit if a structure is set up to protect the vending machine.

Advantages

• Flexibility of sale for the customer, thanks to a wide time range to be defined according to objectives: 24/7 or 7 a.m. to 11 p.m...
• Multiplication of sales points outside the farm.
• Diversification of clientele with buyers different from those of classic direct selling, seeking quick sales, local, fresh, "preserved" products...
• Ease of maintenance of a vending machine.
• Quick return on investment.
• Time saving.

Limitations

If the great advantage, and one of the main reasons for the development of this marketing mode, is the time saving for the producer during product sales, the daily 7/7 commitment should not be underestimated.

• It is therefore important that the producer plans time in their working hours to devote to the vending machine, especially outside conventional working hours during peak demand (evenings, weekends).

• Thus, contrary to its name, the automatic distribution system does not exempt from a daily workload of one to two hours for the producer every day of the week.

• As mentioned above, travel time between the farm and the site can quickly increase this duration. This is therefore a commitment to consider if the producer wants to exploit the full sales potential of this tool.
• Finally, additional time must be planned to resolve occasional malfunctions (responding to a customer's call in case of a compartment bug, consulting after-sales service in case of breakdown, resolving transaction problems with the bank, etc.)
• Ultimately, if the automatic aspect suggests a time saving for the producer, it must be measured with caution.
• A producer moving from a small sales point open 2 days a week for 8 hours to an automatic vending machine (maintained and restocked daily) will probably not notice a time saving. They may even spend more time on marketing. However, their opening hours (and thus potential turnover) will be significantly increased.

La technique est complémentaire des techniques suivantes

• Selling in short supply chains: regulations and labeling
• Selling products on the farm
• Selling products at a market