SIC 5962

This industry consists of establishments primarily engaged in the retail sale of products by means of automatic merchandising units, also referred to as vending machines. This industry does not include the operation of coin-operated service machines, such as music machines, amusement and game machines, and lockers and scales. Insurance policies sold through vending machines are classified in SIC 6300: Insurance Carriers or SIC 6400: Insurance Agents, Brokers, and Service. Establishments primarily engaged in operating music machines, amusement and game machines, lockers and scales, and most other coin-operated service machines, are classified in services, Division I.

NAICS Code(s)

454210 (Vending Machine Operators)

The U.S. government issued the first vending machine patent in 1886, and in 1888 the Thomas Adams Company installed similar machines on the train platforms in New York City to sell gum. Less than 100 years later, the vending machine phenomenon had permeated American culture, becoming more commonplace than the corner mailbox. The number of vending machine operators declined during the 1980s, as larger companies—including food service and beverage suppliers—bought out smaller companies. Yet more than 8,000 vending machine operators maintained services in the United States in the late 1990s, and the industry dispensed $30 billion worth of products. By the turn of the century, ingenious entrepreneurs had transformed the machines into veritable mini-malls, vending everything from video games to underwear. Sales in this industry grew by 428 percent between 1995 and 1999.

Establishments in this retail industry typically rent space for their coin-operated machines in office buildings, large stores, subway and train stations, airports, and places of entertainment. At the turn of the twenty-first century, vending machines were located in every mainstream location, from office buildings to grade schools. An estimated 85 percent of vending machine sales involved food or beverage. Other common merchandise sold in vending machines includes toiletries and other personal items. Automatic merchandising machine retailers fill and service the machines regularly with products from a range of manufacturers and food packagers.

Important factors in the operation of these types of non-store retail businesses are vending machine locations, turnover of products at each location, and the quality of service personnel who fill and repair machines. Computerized systems monitor vending machine sales and usage and facilitate maintenance for the operator as well. By the end of the twentieth century, machines equipped with radio transmitters and small antennas allowed machine owners to count the money in the machines and take inventory from remote locations. Remote control systems could also alert operators to malfunctions such as coin jams and other mechanical problems. Larger companies in the industry used highly sophisticated inventory control systems and study market research data in order to optimize product inventory and machine placement. Additionally, the National Automatic Merchandising Association (NAMA), headquartered in Chicago, Illinois, assists vending machine operators by providing access to educational services, information, and technical support.

Innovations in vending machine technology and design developments improved the quality and scope of vending machine services during the 1900s, enabling a wider selection of products to be sold via the machines. Snack food machines were adapted to handle a greater variety of package shapes and sizes, and to support hot and cold food and beverage, including ice cream and freshly brewed Cappuccino. Electronic improvements contributed to the ability of modern machines to provide digital readings and push-button functionality and to accept credit cards, thus enhancing the convenience for consumers. In 1999, industry leader Canteen Service Company of the British Compass Group PLC expanded its vending machine operation through agreements with popular restaurant chains to sell name brand fast food. Canteen, founded in 1931, operates restaurants as well as automated merchandising apparatus.

Further Reading

"About Vending," 1999. Available from .

Ho, Rodney. "Vending Machines Make Change — Now They Sell Movie Soundtracks, Underwear — Even Art." Wall Street Journal, 7 July 1999.

McCright, John S. "To Order Coffee, Press 1." PC Week, 1 November 1999.

Richey, Warren. "It's Vendors' Turn to Try to Get Money Back." Christian Science Monitor, 3 February 2000.

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