I've seen pizza vending machines pop up in local news over the past couple years. Is this a good passive income stream? Huge margins on pizzas as is, overheads - rent, COGS and maintenance. I've e-mailed a company about franchising their model already (they have four units). Thoughts, feelings?
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Okay I like it, Picasso!
"leading machines could make up to $90,000 a year selling 40+ pizzas per day.
According to the Daily Mail, the Let’s Pizza vending machine retails for $32,000."
https://www.howmuchisit.org/pizza-vending-machine-cost/
"could"...40 pizzas are a lot of pizzas day in and day out.
You have to find 40 people who like want pizza, but are also willing to have such low standards they would buy it from a vending machine.
would be great at an airport or train station, some transit nexus. However, for those specifically it'd be best to have it just by the slice.
https://www.apitech-solution.com/us/en/news/pizza/how-profitable-operat…
Smart Pizza Sales Projections
Let’s take the hypothesis that the average production cost of a regular 12 inches pizza is $2 and the average sales price is $11.50. Taking into account fixed and variable costs, such as:
> cost of financing
> production costs & packaging (pizza boxes and aluminum trays)
> bankcard fees & commissions
> insurance
> Internet connection & management software
> labor to refill Smart Pizza
> rent*
> waste of unsold pizzas
*If you don’t rent a location, or choose other options, the profit can be bigger.
Here is a quick look at the potential income when you own a Smart Pizza:
You sell 20 pizzas / day 30 pizzas / day 50 pizzas / day 100 pizzas / day You earn (monthly profit margin) $2 591 $5 157 $10 289 $22 962let's get a machine, 50/50
I'm down.
you should discount these cash flows - tons of innovation and disruptions are happening in the pizza market.
I think a key location would be a bar that doesn't serve food with an outdoor section where you could put the machine. Possibly could tell bar owners to split profits. Win/win.
definitely. beach/boardwalk etc too. generally anywhere with drunk young people.
Yup. The only one I've seen is at an outdoor bar that doesn't serve food late night. It's also accessible on the sidewalk for the drunk walk home from other bars. I'll have to ask how it's performing
there are some cheaper alternatives to lets pizza machine
ngl the pizza looks quite nasty
Yeah I have to be honest, quality control is an important aspect of selecting the right pizza machine. It better taste good.
Why would anyone buy this shit over a pizza at a shop?
I think the key is to place it in an area without many takeout options. Or in areas where the restaurants and food close at midnight or 2am and the bar is open till 4am etc.
maybe certain pockets of NYC (doubt it though, I'd think people there wouldn't tolerate that kind of pizza), but there are loads of cities across the country with nightlife neighborhoods but bad late night food options, at least ones that aren't geared to handle dudes and women blasted drunk falling over each other trying to order something that's not complicated.
To address this market, there's something similar in DC (jumbo slice)
Location, location, location.
There's a pizza vending machine near my cottage in a rural area beside a gas station that intersects a lot of roads towards popular lakes for other cottagers. It seems to be doing quite well in the summer when I'm there to see it.
Isn't the old VC joke about how everyone in Silicon Valley is just putting out the next great pizza delivery app?
I've got like 10 apps on my phone that can get me a fresh pizza here in under 45 minutes. What the fuck am I going to buy it from a vending machine for?
- Price
- Convenience
- 24/7 availability (another form of convenience)
Cos it takes 4 minutes to warm up, efficient market hypothesis states a rational individual would save the 41 minutes of anticipation by utilising a vending machine, and not bear the transportation costs. Secondly, can you get a delivery 24/7? i.e. when you're already out, after a night of drinking?
Are you new here? Uber Eats will delivery anywhere anytime now. Heck, they even incentivize you to do it by giving you more points when you order to a hotel on a trip. The time argument doesn't hold because no one would rank the quality of a pizza from a vending machine as being equal to something made - the wait is easily justified. Plus who is going to be able to handle customizations better, a vending machine or a restaurant?
Seems like a Peloton idea, something that would be hot off the start because people try it once, then never come back.
Pros: kind of what everyone mentioned above. I don't know the details of pizza delivery in the UK, might work there. Might be great at say a truck stop.
Cons: Most places this would seem to be a success probably has access to pizza late night already, i.e., most boardwalks have a late night pizza shop. I get someone will probably buy it at 4am if food places close at 2am, but I don't think thats a great business model (how many times will someone buy a pizza at that point)?
Ideas to improve solution in the future:
Immediate
- co-brand with an existing quick-service brand to increase uptake, guarantee quality of product/processes and find synergies in sourcing/supply chain/advertising
(consumers more willing to take up new channels if brand/product is known or quality is assumed higher)
- combine loyalty solutions
beta test
- Initially, work with existing delivery aggregators to pick up the product from the vending machine to doorstep for last mile use cases
- add chilled section of drinks and smaller desserts which the driver can add to the order with a QR code or something
Horizon 1
- automated delivery from machine to doorstep with 3rd party provider (robots); requires technical solution/dock so robot can pick it up
- combine digital travel disruption management solutions with these automated vending machines
(flight delayed/canceled and you are stuck in a middle of nowhere at night, but airline sends voucher for a warm pizza)
- great for disaster management ie hurricane, power outage, flooding, etc if machine can be converted for battery packs or downsized a bit (Waffle House have a "jump team" with lots of automation going on - so licensing the tech is another stream)
- Pizza is a great start for a product that can be made in a machine - it would be great if the machine (or another part of the machine) had more than just pizza though
Overall challenges/negotiations
- Malls, larger travel hubs (rail, bus, airports,etc) already have existing, long-term concessions for most food sectors
- This could be a great solution if above mentioned pizza brand would add this to their portfolio when their regular franchise are closed at these hubs. (happens a lot in Asia)
- Also great for small/boutique vending scenarios like drive-in movies during the summer, movies at the park, high footfall locations at night, etc
- Some outdoor events would take this up, but would require additional thoughts, like events on a boat that doesn't have a kitchen
They also need good sales teams to place as many machines as possible in dormitories, gyms, etc
I was approached by a sales team that distributes pizza vending solutions. They also work with a financial services firm that provides financing for prospective franchisees - that is an interesting business area as well.
This also made me think of airports. Not sure if anyone has been bumped from a late flight to the 6am flight, but from midnight to 6am not many places are open. Usually McDonalds and Starbucks open at 6am. This could be prime time to sell pizzas. Only downside would be high rent, but could pass on price to customer and have slightly more expensive pizzas.
Airports have exclusivity agreements with quick serve restaurants groups and the franchisees are only owners of these location. Due to the different legal requirements for hiring, managing and securing airport locations, the operators are often another group like HMS Host.
A McDonald's burger flipper may have a previous conviction in the Bronx, but he can't work for McDonalds at JFK. So the airline and terminal operators need to work with an equally large pizza chain to come up with a working trial. Airports and other travel hubs are also fairly complex when it comes to installing machines for fire/health/safety risks, etc (imagine if someone breaks into a machine and steals a sharp pizza cutting wheel airside).
Vending machines are a location play, so the franchise/operator groups that come up around it need locations and place as many machines as possible.
Good places would be also hospitals, exhibition/meeting centers, electric car charging hubs, busy highway stations, and so many more.
Maybe a UK thing but feels like the trend is going the other way.
I.e. seems to be a new "artisan" / "craft" pizza place popping up every month, so think the days of low quality pizza largely dying.
That’s basically what a Little Caesars is
on a similar topic, I was looking in to this robotic arm barista -
https://cafexapp.com/products/reservation-robotic-coffee-bar
are we bullish on the future of ai/robots replacing low skill food service workers? I want to say it's inevitable, but much like synthetic meat, it seems >10 years off to becoming mainstream. this machine costs $225k, and did have some issues with execution in 2020. would only really be workable in an airport/train station.
also found this while down the rabbit hole -
https://thespoon.tech/zume-unveils-its-new-pizza-robot-vincenzo/
https://thespoon.tech/report-zume-to-lay-off-80-percent-of-its-staff/
(owners had some issues with the cap stack amongst other things)
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Slightly off topic, but has anyone seen these cake boss vending machines? Who is buying cake from a vending machine?
I don't think it's profitable.
https://pizzaforno.com/licensing
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