Healthy Vending Machine, the start of vending machine revolution.

1. Vending Business Strategy
Presented by:
Tannis Huang
Bruce Kaabipour
Catherine Suh
Patrick Yen

2. Summer Is Here!
Problem Solution
Industry
Overview
Trends Compass Strategy Financials

3. Speaking Of Diets…
Problem Solution
Industry
Overview
Trends Compass Strategy Financials

4. The “Problem”
Why is it so difficult to find healthy and convenient food
and beverage products???
Problem Solution
Industry
Overview
Trends Compass Strategy Financials

5. Right Outside These Very
Doors…
Problem Solution
Industry
Overview
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6. How Vending Can Make A
Difference

7. Solution
...so we will empower consumers to make good decisions,
elevating our vending platform with technology
Problem Solution
Industry
Overview
Trends Compass Strategy Financials

8. The $11.9B Vending Services
Industry
Cold Beverages
49%
Candies &
Snacks
33%
Hot
Food
7%
Fresh Food
10%
Hot Beverages
1%
Problem Solution
Industry
Overview
Trends Compass Strategy Financials

9. Industry Trends
 Sales of candy, snacks and confections declined by
1.5% in 2011
 Vending sales bottomed out in 2012/2013 and have
been on the rise

10. The Truth
The industry has not adapted to consumer preferences
Problem Solution
Industry
Overview
Trends Compass Strategy Financials

11. “Millennials describe their food and beverage brands as
more healthy, organic, and natural than those of their
parents. They also report that their [preferred] foods are
more expensive.”
--The Hartman Group
Problem Solution
Industry
Overview
Trends Compass Strategy Financials

12. How does Compass fit in?
Problem Solution
Industry
Overview
Trends Compass Strategy Financials

13. Let’s Look At Compass
 We offer a wide variety of foodservices,
vending services, and ancillary support
services
 2012 Worldwide Revenue - $27.33B
 US Vending Revenue – $1.4B with 11.7% of US
vending market share
Problem Solution
Industry
Overview
Trends Compass Strategy Financials

14. Compass: 2bU
 Vending machine line catering to the healthy,
eco-conscious consumer
 Introduced in 2009 and as of 2011, 400 machines
are in operation
Problem Solution
Industry
Overview
Trends Compass Strategy Financials

15. Our New Direction
 We want to leverage our purchasing scale, existing
relationships with clients and suppliers, and existing
infrastructure to better meet the emerging food needs
for today’s consumer
Impulse
Purchases out
of Need
Preference-
driven
purchases
Problem Solution
Industry
Overview
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16. How Do We Do This?
1. Healthy lifestyle ecosystem
2. Mobile payments
3. Dense locations with healthy preferences
 Educational institutions, offices, gyms, airports
4. Giving consumers what they want
Without making them drive to:
Problem Solution
Industry
Overview
Trends Compass Strategy Financials

17. Engaging Customers Through A
Healthy Lifestyle Ecosystem
 App to help customers track and count the calories they
consume at 2bU machines
 Integration with other apps like MyFitnessPal and
FatSecret
 Helping consumers make choices that are in-line with
dietary restrictions/preferences
 Geofencing: Send consumers pop-up messages when
they are near machines
 Social vending – mobile payments, rewards
programs, voting for new product lineups
Problem Solution
Industry
Overview
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18. Mobile Freedom
Problem Solution
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19. Strategic Location
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20. Sample Product Offerings
Healthy snacks Frozen prepared
foods
Healthy
beverages
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21. Financial Projection
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22. Financial Projection
Problem Solution
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Overview
Trends Compass Strategy Financials

23. Our Vision
 Use Vending as a platform to make the world healthier
and greener

24. Thank You!

25. Key
Partnerships:
Purpose driven
organizations ie.
1% foundation
Social Media:
Local Vendors
Weight
management/cal
orie counting
app
Customer
Segments:
*Gen Y/Millenials
*Office Populations
Value
Proposition:
*Empower
consumer to make
informed snacking
choices
*Personalization
*Reducing carbon
foot print
*Healthy food as
accessible as junk
food
Key Activities:
*Maintenance/S
vc Contracts
*Tracking/Monit
oring
inventory levels
*Active sourcing
*Relationships
Revenue Streams:
*Small premium over current vending options
*Cashless pymt -> mobile wallet
*Additional advertising from product suppliers
*Majority revenue to come from vending sales
Cost Structure:
Location, marketing, replenishment, equipmen
t, energy, IT, purchasing
Key Resources:
*3rd party logistics
*Cash
*Product suppliers
*IT infrastructure
mgmt
Distribution
Channels:
*Social Media
*Groupon
*2bU app
*Vending
machines
Customer
Relationships:
*Personalized diet
assistance
*Co-creation of
product offerings
*Reward programs
*Geo-fencing

26. Financial Projection
 Fixed Cost:
 Equipment Depreciation Cost
 Variable Cost:
 Purchasing Cost
 Electronic Costs
 Replenishment Cost and stock Cost
 Location Cost
 Overhead Cost:
 IT and Marketing Cost

27. Assumption- Financial Projection
 Assume the initial number of machine is 500
 Assume the number of machine will grow 100% in the
first two years and then 50% in the following years
 Assume the quantity of unit sold is 4000 and the
average unit price is $3.5

28. Current Strategy – North America
 Vending relies heavily on blue collar manufacturing
sites, but manufacturing facilities are on the decline
 Compass’s size allows for EOS in cost saving large
purchases
 Canteen Vending focus on serving office coffee in
single cup brewers and pots.

29. Response to changing tastes
 2009 – Introduces 2BU, healthy and socially
responsible vending on college campuses…not
everywhere yet
 Micromarket – fresh food and beverage selection with
remote security and automated payments. No need for
an attendant. Best for office dining spaces

30. Strategy
 Increase 2BU line
 Offer hot/cold food options in machines
 Incorporate technology into machines – make it a
platform to gain sales and as a first option for
consumers
 Bottle-less hot/cold eco-vending

31. Compass Vending Services
 Canteen Vending Group and Best Vendors
 Provide vending brokerage and management
services
 20,000 Vending Operators in US
 Canteen currently has a healthy vending line
called 2bU
 Introduced in 2009 and as of 2011, 400
machines are in operation
Problem Solution
Industry
Overview
Trends Compass Strategy Financials