Online Exclusives

Vending machines looking at big label orders under US health plan

December 4, 2009

New regulations would require all food products to display nutritional information prior to purchase.

Owners of vending machines in the United States could be looking at a fairly hefty expense for labels in the near future, if language in the proposed healthcare reform bill makes it through Congress. Right now, the bill would require that nutritional information for each product be placed near "each item of food or the selection button."

The National Automatic Merchandising Association (NAMA), which represents owners of vending machines nationwide, is understandably unhappy with the language in the bill, which passed the US House of Representatives and is included in the version of the bill now before the US Senate.

Such a regulation, says NAMA, could affect 7.5 million vending machines, and could cost machine owners as much as $56 million in the first year alone. That's a lot of labels.

Here's what Section 2572 of the bill says: "In the case of an article of food sold from a vending machine that – (I) does not permit a prospective purchaser to examine the Nutritional Facts Panel before purchasing the article or does not otherwise provide visible nutrition information at the point of purchase; and (II) is operated by a person who is engaged in the business of owning or operating 20 or more vending machines, the vending machine operator shall provide a sign in close proximity to each article of food or the selection button that includes a clear and conspicuous statement disclosing the number of calories contained in the article."

Vendors with 20 or more machines would have an impact on 85 to 90 percent of the industry, says Ned Monroe, senior vice president of government affairs at NAMA, which is based in Chicago.

Products offered in vending machines already include calorie and other nutritional information on labels, wrappers, cans, bags and other forms of packaging. And, says Monroe, "Our customers are not typically buying the snack for the first time, according to industry research." Yet under the proposed regulation, if the nutritional information is not available prior to the point of purchase, a label of some type would be required.

NAMA is working with the US Congress, Monroe says, "to make technical corrections to the language to give us flexibility and legal protection." The association, he adds, is not attempting to remove the language from the bill.

Monroe explains that the language affecting vending machines is an outgrowth of a trend that began when the governments of New York City, Seattle, California and others started requiring restaurants to disclose calories. "Fast food restaurants decided that it would be better to have a federal standard rather than a patchwork of state and local regulations. They worked with consumer groups and Democrats in Congress to write this language."

Right now, he says, "The language is not very clear. Would we have to label every spiral in every machine in every factory in America? Or place one menu of nutritional information on a bank of machines? One flavor card can cost 75 cents. One menu on the front of a bank of machines might be a dollar or two. The costs are significant depending on the format. We are, in fact, trying to talk to Congress to allow us to put one label on a bank of machines, rather than on every spiral."

NAMA is at work on a variety of solutions to the potential problem, and welcomes input from label printers. "They would be working with vending machine owners to design effective labels," he says.

Consider the complexities. A vending machine would have to be re-labeled every time it was re-stocked with a change in product mix.

"We are discussing the creation of a data bank, which would contain the nutritional information of thousands of snacks," says Monroe. "The route driver could select the items and print out a label on the spot. That's one possibility."

The association is considering machine specifications to create uniformity and consistency among the labels. And it's also talking with software designers and looking into the possibility of digital LED displays for providing the required information.