Friday, August 18, 2017 | Today's Vending Industry News
Eternal Vigilance The Price Of Peace

Posted On: 5/15/2006

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As we've often observed, these industries undergo long cycles of expansion and consolidation. The present consolidation has been underway since early in the last decade. Earlier ones took place in the late '50s and mid-'70s.

The usual movement is that a number of smaller companies, founded by people who have no heirs interested in taking over the business and who are ready to reap the reward of their efforts, are acquired by a larger company. While the total number of operating entities decreases, the same amount of vending or coffee service is being provided.

Over time, however, the larger acquiring companies tend to drop their lower-volume locations, and don't make the effort that a smaller operation might make to gain new business of that size. This opens the way for start-up operators who can serve smaller clients profitably, and those operators duly appear. Some of their small locations get bigger, and they get bigger, too. This kicks off the next expansion phase.

That phase seems to have begun some years ago. There are a lot of new operators out there, as is apparent from attendance at the industry's trade shows. They will confront -- some already have confronted -- the need to decide whether to pursue an opportunity that will involve their buying another truck and hiring their first employee, or remaining small and easily managed. Of those who opt for growth, some will go on to become the large, long-lived companies that will acquire their smaller competitors, a decade or two from now.

Along the way, however, they are likely to encounter problems that previous generations of operators met and mastered. And some of those problems will have a new dimension. We were reminded forcefully of this by a letter from Safer Systems, a United Kingdom-based manufacturer and distributor of locks and a wide range of security systems in the European Union. A British vending magazine had run an editorial warning operators that lock-picking tools are readily available on the Internet, and urging the Automatic Vending Association (Great Britain and Ireland) to develop a security forum for its operator members to alert them to the threat, and to propose countermeasures. Safer Systems observed that the National Automatic Merchandising Association has excellent educational programs in place, and endorsed the call for AVA to develop something similar.

We remembered the late 1960s, when many aspects of the U.S. economy (and society in general) were undergoing the effects of the long postwar readjustment. Operators who had started as mom-and-pop businesses running machines with cheap locks (all keyed alike, all supplied with the machines) were finding that these machines were easy to break into -- and people were breaking into them. It became evident, too, that honest route drivers were getting harder and harder to find.

As vending grew, the attraction of vending machines -- from the criminal's viewpoint, large vertical metal boxes filled with money -- increased. "Key gangs" formed, moving annually along well-traveled paths and "skimming" from machines that they compromised all along the way. The accounting systems of the period (such as they were) were too slow to catch something like this, if the thieves moved on to the next town after a couple of days.

During the 1970s, NAMA led in the development of standards for locks and locking enclosures, and organized effective communication programs to bring security "best practices" to operators. Efforts were made at the state association level to persuade law enforcement agencies and the courts to take vending theft seriously, with considerable success. Key control systems were put into place, and development began of computer management systems which, today, can provide same-day cash settlement.

And now, we are confronted by the Internet. Operators have long complained about advertising in locksmithing magazines for tools that burglars can use to attack vending machines. There's not much that can be done about that; most legitimate tools can be put to evil use. Nowadays, even less can be done; there's nothing to prevent someone, anywhere in the world, from selling these things.

What operators can do is be vigilant, and it's important that growing operations make security a high priority as they expand.