The Snickers trick

by James Somers, September 7, 2009

Not counting beverages, the four most popular products sold in American vending machines are, in order: the Snickers, peanut M&Ms, Doritos, and Cheetos.

While nos. 2-4 may be unexpected, it sort of goes without saying that the number one bestselling vending machine product—and most popular chocolate bar of all time—would be the Snickers. That nutty, nougaty, pleasantly plenteous Snickers. Anyone could have guessed that.

So why, in spite its utter dominance among snack foods, do vending machine operators tend to—and I’m not making this up—under-stock that particular treat? That is, why do they supply their machines with fewer Snickers than consumers demand?

The Snickers bar drives people to vending machines like no other snack: thanks in large part to some truly excellent advertising by Masterfoods USA, hungry people who need food right now think Snickers. And they know where to find it.

But—and here’s the key to the whole operation—the Snickers bar actually has a relatively slim margin: for the operator, a Snickers brings in less profit than even the gum and mints that sit on the lowest shelves of the machine.

Hence the under-stocking. Hungry people who go to a vending machine in search of a Snickers won’t just leave if there are none left—they’ll buy something else. In particular, they’ll buy something with a higher margin, like the cookies. (Machine operators clean up on those cookies.)

Which means it’s actually in the operator’s interest to stock the machines with just enough Snickers to get people thinking they could find one there, but not so many that they always do. It’s their tricky way of driving sales to more profitable substitutes.

Update: see Sharon T.’s comment below for clarification. (Sharon was my source for this story.)