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Pizza Vending Machine Business

I just came back from a short trip and had a surprisingly delicious pizza from a pizza vending machine.

I may have been living under the rock because I didn’t know you could get a pizza this way.

The machine I went for was from PizzaForno, a Canadian company founded in 2018. The machine offers 6 different varieties, and each pizza is around 12″ in size. You can purchase their “take and baked” option and bake it at home, or the “hot” option to get it baked immediately.

The baking process only took 3 minutes.

My “business” brain immediately wonders — can you make money running a pizza vending machine?

To answer this question, let’s do a quick analysis. We will look at:

1. What is a pizza vending machine, and how can you get one?
2. What’s your investment?
3. Pros and Cons

And we will sum it up with the verdict — for those who want to skip to the end, it’s ok; I won’t get offended.

What is a pizza vending machine?

A pizza vending machine, as the name explains, it’s a vending machine that makes pizzas. But it looks a bit different from the normal vending machine you see around the corner of a convenience store, or at the airport lounge.

I would describe it looks similar to the food ordering machine at MacDonald’s; only this machine has a hidden oven inside to bake the pizzas.

You can either order the pizza through an app, or you can choose from the menu. Once you select your pizza, it will move robotically from the refrigerator to an oven and bake.

According to Howmuchisit.org, the concept of a pizza vending machine was created by a company called Let’s Pizza in Italy. Since then, a few other brands, such as Piestro, Pizza ATM and PizzaForno, also came to the market.

The idea of a pizza vending machine seems SO CONVENIENT:

• easy access and get your pizza in only a few minutes
• 24 hours so you can get your pizza anytime you have a craving
• hygienic as the whole baking process was operated by a robot and not touched by human

It sounds interesting, right? So how can you get one?

That’s what we are going to discuss next. Keep in mind that different companies have different business models; it’s important to do your own research and due diligence.

Cost of investment

According to the Daily Mail, the Let’s Pizza vending machine retails for $32,000.

Pizza ATM owns by a company called Paline and their machine is around $55,000.

Piestro’s machine costs about $75,000.

PizzaFrono offers a “licensing model.” Similar to franchising, you purchase a license from PizzaFrono in exchange for a branded machine, basic materials and territorial rights. The licensing costs between $115,000 — $125,000.

You will still need to negotiate with landlords for location space and handle maintenance, operational and logistic matters. So there are some additional costs to it.

Depending on location, your cost can be very different as you will need to pay rent for the location. Even though the vending machine only occupies a very small space.

As for ROI (Return on Investment), Pizza ATM reportedly offers an exceptional one-year ROI. Selling an average of 20 pizzas a day would yield approximately $73,000 a year.

With a profit margin of roughly 50% (according to Piestro), your net profit is $36,000 per year.

If you sell 40 pizzas a day, your net profit will double to $73,000.

Considering your initial investment, it will take you approximately a year to two to make your money back.

Pros and Cons

Now let’s look at the pros and cons you can take into consideration when you invest:

Let’s start with the pros

1. If you choose to purchase only the machine, you can choose to source your pizza ingredients and the type of pizza. If you can find high-quality, freshly made pizza, you can charge more which helps to increase your profit margin.
2. If you choose to be a licensee (for example PizzaForno), the brand and the materials have already been taken care of, so you can focus on driving traffic to the location and worry less about sourcing ingredients. It helps if you are new to the industry and not sure where to start.
3. Lower day-to-day expenses as you do not require any manual labor
4. The machine runs 24×7, so you can make money “in your sleep.”

The cons

1. High initial investment. Even with the cheapest option at $32,000 for a machine, you still need to source your own ingredients and handle all the other operational costs, such as maintenance, advertising, etc. It can turn out to be a very costly investment.
2. These are automated pizza ovens and run digitally. If there is any issue with the oven, the machine will lock, and you won’t be able to sell a single pizza. Depending on how long it will take to fix, you will miss out on sales.
3. As each machine can only hold between 70–90 pizzas, you may need another freezer to keep your inventory.
4. Short shelf life — pizza is refrigerated, and if you can’t sell them by the end of the day, you may need to trash the rest to make sure you always have a fresh batch.
5. It’s not 100% passive because you need to keep restocking your machine. You can hire someone to stock up for you but still need to manage the logistics.
6. You will likely be using the company’s licensed technician to help repair your machine. You are forced to pay a higher maintenance cost.
7. Location is crucial. If you don’t have enough traffic, your machine won’t be profitable.

Verdict

I haven’t touched on one of the other most important factors — Market Demand, as I don’t have a lot of data to go with.

It seems most people I have spoken to love this idea and concept but as in every new technology, it does take a little while for people to get used to it.

Looking at discussions on open forums like Reddit, it seems people are usually intrigued by the idea and love to try if they haven’t.

My 82-year-old dad tried it and was pretty impressed. He loved the pizza and wanted to get another one the next day.

So I would say there is definitely demand. However, in most countries, it’s still a relatively new concept, so it may take a little while for the market to normalize a pizza vending machine.

If it’s something you are interested in, you will need to conduct some market research in a specific location and perhaps do some in-person surveys to see if it’s something worth pursuing.

Money-wise, you should expect an initial capital investment of $50k and above. The amount may seem daunting, but if you are interested in having any food-related business, it can be similar to operating a food truck, and of course, it’s significantly less than a traditional brick-and-mortar cafe or restaurant.

So what’s the verdict?

If you love getting into the food business and want something a bit less hands-on, investing in a pizza vending machine is something worth considering, provided that your machine is in a prime location and has enough traffic.

However, if you are considering a business that can bring you “passive income,” the pizza vending machine is not the best option as not only do you need to replenish pizzas regularly, maintenance can happen more frequently than expected.