Technology gives VTL the edge

By SIMON HENDERY retail writer

Sales through vending Machines in the United States have grown more than 150 per cent in 10 years to US$35 billion a year.

And sales through the 6 million machines continue increasing at 10 per cent a year.

Worldwide, there are 28 million vending machines waiting to take your money.

Auckland listed company Vending Technology (VTL) says it has about 35 per cent of the local vending market and is on a mission to increase its stake.

In Japan, there is one vending machine for every 23 people. The US figure is one machine for every 50 people, in Australia it is 150 and New Zealand lags behind with one machine for every 300.

VTL's growth strategy has involved the launch of a new brand, 24Seven, pushing the technology behind the company's machines and the diversity of their products.

The company has moved into the Australian market and intends licensing its system in the US and Britain.

VTL executive director and founding shareholder Mervyn Doolan said the company's PIN technology allowing signed-up users to buy from the machines without the need for cash had not been developed by any other machine manufacturer in the world.

The PIN technology is being tested at worksites in New Zealand and Australia.

The company is also developing a bolt-on eftpos unit.

Another technological advance is its patented wireless GPRS tracking system, which allows operators to download daily reports on sales through individual machines via the internet, meaning they know which products are selling fastest and what needs restocking.

The GPRS system also alerts operators to machine breakdowns via a text message.

That is an important development, Doolan says, because customers are put off using the technology when it is perceived to be unreliable.

Temperature controls mean the machines can stock a range of products from drinks to cut flowers.

Glass drinks can also be dispensed through moving platform technology which lowers products gently as opposed to the traditional dropping action.

Former VTL general manager Rob Seymour has taken over as master licensee for New Zealand, leaving the company to focus on developing its technology and selling the concept internationally. Seymour has 17 operators running about 1000 machines.

In Australia, the company has master licences and more than 1200 machines in New South Wales, Victoria and Queensland.

Doolan says it expects to have master licences in all Australia's states by March.

The company is confident its model will work in Britain and the US, and it is carrying out market research and feasibility studies before expanding into those territories.

While Coca-Cola and Bluebird are big vending machine operators in New Zealand, Doolan says VTL operators' independence and their lack of ties to stocking particular brands is one of their marketing strengths.

"We are offering a wide product choice. Being independent, we can offer all the leading brands, which is quite a competitive advantage for us.

"If you've only got a Coke machine but you want a [Frucor-manufactured] V, you can't get a V out of it.

"But we'll give you Coke, V, Pepsi, Mountain Dew, you name it.

"That's a huge advantage for us, because at the end of the day you don't really care who owns the machine as long as you get what you want from it."

Doolan and fellow executive director John Hotchin each own just under 32 per cent of VTL.

In June the company appointed former Sky TV chief financial officer Paul Smart to its board, which also includes former Dairy Board chief executive Warren Larsen and former Game Industry Board chief executive Richard James.

Vending Technologies

24seven