Vending Times Pic
Vending Times

ST. LOUIS — Over the past decade, the coin-op amusement industry’s prize merchandising segment has been transformed by the proliferation of traditional crane machines and innovative variations. Driving the successful deployment and lasting earnings capability of these machines is the merchandise they showcase and award. It was 14 years ago, when cranes were in a slump, that S&B Candy and Toy Co. envisioned the unlimited potential of vending merchandise through amusement machines.

According to the company’s president, Brian Riggles, S&B today is moving enough merchandise volume to buy full containers at a time, and has now earned a credit rating that allows it entry into some of the nation’s most influential merchandise closeout shows. The supplier recently purchased a property next to its headquarters here, expanding its warehouse space to 42,000 sq.ft.

“We’ve got a solid reputation and more credibility among the country’s largest retailers who are looking to resell their unwanted inventories,” Riggles told VT. “Every year we’re invited to more close-out shows, and some of these events are invitation-only.”

Unlike many of its competitors, S&B sources the vast majority of its merchandise domestically rather than from China or India, although the companies from which it buys may manufacture overseas or import their goods. The company’s senior purchasing gent, Marty Luepker, negotiates and closes all deals. The items he procures for the company’ standard toy mixes might have wholesaled between $1 and $1.50. But to resell these items through the amusement merchandising channel, Luepker must get the unit prices down to 15¢ or lower. S&B continues to sell
toy kits for as low as 3.9¢ per piece (packs are assembled and sold according to piece count, not weight).

S&B’s wholesale purchasing model has proven to be successful even as the company’s shipments grow. Its strategy dates back to 1991, when the company was founded by Riggles and his partner Steve Tini, both former
employees of Edison Bros., an early sitebased entertainment operation. (Tini’s interest in the company was acquired several years ago.) Realizing the potential of combining amusements and vending, Riggles saw an opportunity with the emerging “winner-everytime” candy crane and began operating them in the St. Louis area. Stocking each machine with a wide variety of candy, however, required finding suitable product from a variety
of sources. So he began to pre-pack custom candy combinations for his own route, and soon after began to market them to other operators nationwide.

According to Riggles, it was geography that propelled S&B’s candy distribution business. Centrally located, St. Louis is ideal for shipping pre-packs to all points in the continental U.S. and Canada. It also is situated near some
of the nation’s best-known candy makers; Nestlé and its Wonka division, Russell Stover Candies, Ferrara Pan Candy Co., Tootsie Roll Industries and William Wrigley Jr. Co. are a fewof the Midwest’s confectionary titans. Geography, therefore, allowed S&B to pass on savings to its customers in the form of free freight, a perk it continues to offer.

Today, S&B estimates that candy mixes represent 60% of its product sales, with the remainder going to toys, plush and hard goods. The St. Louis company turns its confectionary inventory nine times annually, which Riggles
said is the fastest turnover of any candy distributor operating in Missouri. “Nothing in our warehouse is older than one and half months,” he said.

As the “winner-every-time” cranes evolved to include more product types and with consumer preferences changing, S&B’s mixes began to include toys and novelties. And as
cranes and other types of amusement merchandisers became more versatile to accommodate a growing array of prize formats, S&B adapted. Still, it’s S&B’s ability to keep pace with what’s fashionable that has perpetuated
its ascent.

“We find opportunities in which a trend has already been spotted and sourced,” Riggles said, referring to Wal-Mart’s expulsion of “Homies” products, based on the fictional Chicano buddies created by comic strip artist
Dave Gonzales.

“We also believe that while trends may die, they are often reborn,” the S&B president added. “We came out with more than a dozen ‘Star Wars’mixes. Sometimes retail just can’t move the items, but when it’s in a crane you’re
also selling the experience.”

S&B Candy and Toy Co. has distinguished itself from other suppliers by offering products for new amusement merchandising concepts. In one case, the company created a solution to deliver a perishable and temperature-
sensitive product to crane operators.

About five years ago, refrigerated chocolate cranes arrived on the American amusement scene. These machines displayed and vended chocolate bars, but were games of skill unlike their “winner-every-time” candy crane predecessors. (Most models employed a standard claw that lifted a bar and placed it on a pusher table where it resided with bars that may or may not be pushed off.) To support the new machine entry, S&B created a 1,000-piece chocolate mix that shipped in a box lined with Styrofoam pieces and ice. “We essentially built a cooler,” Riggles recalled.

The S&B president noted the chocolate mix’s high labor and overhead costs. One experienced assembler and packer can build only10 kits in one day. And a climate-controlled room is required for storage. Today, the company ships about 100 chocolate mixes per month and will continue to offer them as long as there’s a need.

Seasonal merchandise is another area in which S&B has taken a leadership position. The company’s extended warehouse space allows it to buy and stock Halloween, Christmas, St. Valentine’s Day and Fourth of July products far in advance. This year, inventory for Halloween mixes was available for prepacking as early August.

More recently, S&B Candy and Toy Co. has been exploring new opportunities in equipment distribution. After opening its doors just two years ago, the St. Louis Game Co., a unit of S&B, has enjoyed success in Missouri and Illinois markets.

The new division represents a wide array of new equipment, including touchscreen video games from JVL Corp., along with cranes and redemption equipment from Coast To Coast Entertainment, OK Manufacturing, Benchmark Games, Smart Industries and Skee-Ball. Also available are simulators
from Triotech and bulk vending machines from Impulse Industries. The new distributor also represents “Regatta” jukeboxes and Teamplay’s video and redemption lines.

St. Louis Game Co. is the exclusive distributor of the “Mini Razor,” a low-cost, compact hockey table made by Innovative Concepts in Entertainment. Pool and foosball tables, along with “Valley” electronic dartboards from Shelti, are some of the company’s best sellers. It also represents money-handling equipment from American Changer Corp., Hamilton Manufacturing and Pyramid.

As an incentive for operators to do business with St. Louis Game Co., the company offers a consignment program that enables them to turn in their old equipment. A resale value is assigned to older equipment and when a piece is sold, credit is applied to an operator’s account so he can purchase new equipment. Most consignment products target the home recreation market.

“We come to an agreement with the operator,” Riggles explained. “What’s the price? We establish a high-low range and it’s our job to get a fair market price.” The company advertises used equipment sales in newspapers nationwide.

Operators participating in the program are expected to deliver their equipment in clean, working order. Riggles reported that the company can move most equipment in six months, particularly such classic videos as “Centipede,” “Defender,” “Star Castle” and other games from the late 1970s and early '80s. Not surprisingly, used soft-tip, electronic dart boards and foosball tables are the
fastest sellers. To date, more than 500 consignment pieces have been sold.

St. Louis Game’s Co.’s mantra is “get rid of the dead wood.” “I believe operators need to step up the pace at which they are recycling older equipment,” the S&B president said. “It reflects poorly on the entire industry when older, low-earning machines are kept operating in the field.”

The new division also offers consulting and design services for gamerooms and family entertainment centers. According to Riggles, it completed a half dozen significant projects over the past two years, including recreation areas at three Burger Kings in Texas.

Also available from the St. Louis Game Co. are S&B’s own cranes, the “Candy Depot” and “Prize Rocket,” which rolled out in March.

The “Candy Depot” is an all-new candy crane incorporating state-of-the-art solidstate microprocessor technology. Features include electronic coin acceptors, a high-security hasp, small 24-in. footprint and locking wheels for ease of movement. “Prize Rocket” supports a variety of novelty products and features NASA rocket graphics and actual voices from the Apollo Mission, as well as space sound effects.

S&B’s direct delivery program can deliver a “Candy Depot” straight to a location with 5,000 pieces of candy. Once the candy is sold through, Riggles said, more than half the initial investment will be returned. “I still believe that a candy crane is one of the best investments an operator can make,”
Riggles declared.