Wall Street's newest romance is with the automatic vending-machine industry, which is changing the eating and buying habits of America. Shares in vending companies have suddenly been tagged with the magic phrase "growth stocks," have risen spectacularly in a declining market. In January, the stock of Universal Match, which rings up 40% of its sales in vending equipment, sold for 83, last week closed at 134¾. Vendo, the largest maker of automatic vending machines, has jumped from 23¾ to 66, while Automatic Canteen, biggest combined food-selling and machine-manufacturing company, rose from 21 to 31½.
Vending-machine sales rose from $600 million in 1946 to $2.3 billion last year. The industry's 125 manufacturers and 6,100 operators are confident that they can maintain an average yearly sales increase of 10%, hit $4 billion by 1965.
Underlying the industry's optimism are such changes in the U.S. economy as automation, high labor costs and increased leisure time. All have spurred an increase in money-in-the-slot automatic retail selling. Machines now dispense 15% of the nation's cigarettes. Last year vending machines sold 2 billion cups of coffee, 20% of the nation's candy bars and soft drinks. More than 4,000,000 robot vendors offer everything from onion soup and insurance to a spray of French perfume or a 30-second sniff of oxygen to ease hangovers. And if the coffee isn't quite like home, it's at least hot and close at hand.
No Servants. To woo the demanding U.S. consumer, at least to the point where the accessible substitute is preferable to a long walk, machine manufacturers have improved the quality and reliability of vending machines by employing the latest advances in refrigeration and electronics. Kansas City's Vendo Co. has set up completely automatic snack bars at the University of Kansas and the University of Wichita, offering sandwiches, milk, coffee, pastry and juices. Vendo, which expects 1960 sales of at least $50 million and profits of $2.50 per share, is setting up an automatic drive-in with a complete menu on Kansas City's South Side. Says Vendo's Board Chairman Elmer F. Pierson: "In America today nobody wants to be a servant, and vending machines free people from being servants." The service may not be gracious, but it also saves tipping.
But a real boost for the vending boom has come from the improvement in coin-handling devices. Unlike the bad old days in the '30s, today's vending machine is virtually slugproof, returns money if it is empty. The biggest maker of coin-handling devices is National Rejectors, Inc., a wholly owned subsidiary of Universal Match Corp., which is controlled by Frank J. Prince. When Prince took over in 1951, sales were $10.3 million. By acquiring vending companies, Prince brought Universal Match to the forefront of the industry with sales of $72 million, earnings of $3.01 per share.
Universal expects its growth to continue, thanks to a paper-money-changing machine which it will be ready to field test in July. The machine, which will open new retail sales outlets for vending, changes bills up to $5, will be improved to change $10 and $20 bills by year's end. Universal is currently installing a machine for Manhattan's Macy's that will sell undershirts and shorts, change up to $9.90 in coins and bills.