Watching the video from Discovery Science Channel of Stoelting’s frozen yogurt delivery technology brings to mind a question I have pondered before – why did VEND not use Stoelting to build their Robot Kiosks since Stoelting had built the robots used by Robofusion on whose performance VEND based their buyout of Robofusion (frozen yogurt technology and patents, not the company itself)?
I don’t have any input from anyone who might have the answer to that question so speculating on an answer is entirely speculative, but nonetheless interesting (to me, at least).
It’s difficult to know the size/capabilities of the Stoelting manufacturing facility because it is a privately owned subsidiary of The Vollrath Company, LLC. Based on VEND’s latest PR it appears that Stoelting will be supplying R&I with 600-800 robots over the last 6 months of this calendar year, about 100-130 per month, a sizeable number, which could maybe be increased in the future, possibly doubled to 200-250 per month(?).
However, as VEND was planning their original rollout of the robots, as presented in an investor information package from March 2018, they envisioned installing 2250 robots between April 2018 and the end of the year, and up to 8000 total installations by the end of 2019, targets that ultimately proved wildly optimistic, of course. Achieving those targets, though, would have required manufacturing on the order of 300 robots a month in 2018 and up to 500 per month in 2019. I expect that these levels exceeded Stoelting’s capabilities and may have been what caused VEND to seek out a larger company to manufacture the robots, ultimately selecting FLEX.
I don’t know what experience, if any, FLEX had in manufacturing machines of this type, as opposed to the Redbox units, but based on the Discovery Science video there appears to be a great deal of specialized technology required to maintain and deliver frozen yogurt properly. Additionally, FLEX apparently went through a difficult time in 2018 based on their stock declining from the level of nearly $20 per share in early 2018 to less than $7 per share in October of 2018. It’s probable that a small new customer like VEND would have no priority in having their problems addressed by FLEX in comparison to their larger long term clients, such as Nike, Google, Xerox, Ford and General Motors (who recognized FLEX as Supplier of the Year in 2017).
Now it appears to be full circle back to Stoelting in 2019 and I believe this will be a good partnership for R&I, its franchisees and investors. Just my speculative opinion.
