More prepared foods in vending: the right time?

July 02, 2012

Will the Starbucks-Coinstar deal bring new impetus to salads, sandwiches and more in convenient automatic merchandisers?

Will the new coffee distribution deal between Starbucks and Coinstar provide the jolt to rejuvenate food vending? Will food marketers go beyond earlier vending-machine offers of popcorn and French fries to include arrays of perishable prepared foods?

The Lempert Report has seen recent efforts to sell pizza this way. But we wonder if the blend of the Starbucks and Coinstar brands will bring a new impetus to salads, sandwiches and other prepared dishes that people may want conveniently outside of typical store hours.

Consider the rise of single-person households, the eating needs of shift workers, and the time crunch of chief household shoppers who may hold down two part-time jobs because they lost one good one in this economy. How about people who are hungry after leaving clubs and bars in the wee hours? These are some reasons why The Lempert Report thinks a market exists for 24-hour vending food that could be filled with the right location strategies.

The coffee deal stretches both partners. It will put the premium Seattle’s Best Coffee brand into 500 kiosks in 2012 in northeastern and western-state grocery, drug and mass merchandiser stores, and “thousands [elsewhere in the U.S.] in the next several years,” Starbucks announced. It is the first food offering for Coinstar, which is known for its coin-counting machines and Redbox DVD and video-game rental units.

The Rubi kiosk grinds and brews fresh whole beans in a single-cup process on demand, around the clock. It serves brewed coffee, mochas and vanilla lattes starting at $1—a key price point popularized by McDonald’s. Bloomberg reported that the parties tested the kiosk for more than a year, and they expect to sell approximately 10,000 cups of coffee per year per kiosk.

While we wonder if these units might eventually replace some staffed Starbucks-owned outlets, we also acknowledge that success with these kiosks will bring deserved new trade attention to their potential with prepared foods.