Why Wow Bao is betting on vending machines for expansion

Nov 17, 2023

With less square footage and easy setup, Wow Bao President and CEO Geoff Alexander told Restaurant Dive the potential for growth with heat-and-eat kiosks could be endless.

Editor's note: This story has been updated to include details about the vending machines' operations.

Vending machines have long been associated with snack food and a last resort for hungry workers and college students. But Wow Bao is hoping to change that perception with its move into hot-food vending machines, which serve a variety of bao and dumpling options.

Chicago-based Wow Bao, a fast casual Asian food chain, said on Tuesday it will launch 50 vending machine kiosks in 24 cities through a partnership with Automated Retail Technologies and its Just Baked Food kiosks. The potential to add more such kiosks could be limitless, according to the company.

"I have a goal of how many units I want to see, but I don't know if you can put a number on it because I do believe this could be literally everywhere," Wow Bao President and CEO Geoff Alexander said.

Wow Bao's menu items need to be heated up in the vending machines, not freshly prepared, so servicing these units is easy, he added. The kiosks also are primed for hospitals, military bases, police stations, college dorms and 24-hour facilities where getting hot food during some parts of the day may be difficult, Alexander said.

"You see [hot vending machines] in Japan and other parts of the world, but you don't see them in the United States," the CEO said, adding that Automated Retail Technologies is very optimistic about the volume that Wow Bao and other types of food can drive through its Just Baked machines.

"I do believe that we are the only Asian [food] that is available inside the hot vending machines," Alexander said. "We think both of those [aspects] are going to do very well for us."

Automated Technologies/Just Baked will provide the kiosks to vending machine operators, who would install the units wherever they have access, Alexander noted. Those operators would be responsible for filling the machines with Wow Bao's product.

In addition, the fast casual chain's menu could provide an opportunity for these vending machine partners, many of whom operate machines for video games or major soda brands like Pepsi and Coke, to diversify,according to Alexander.

Just Baked machines have videos on the front that show the food being cooked and various menu items that can better attract customers versus traditional vending machines, Alexander said.

Just Baked also will have an app available for customers to pre-order their Wow Bao menu items from their phone so their food will be ready when they approach the kiosk, he said. Orders take 45 seconds to heat, and pre-orders are queued up and then released once the person arrives and links to the system.

While Wow Bao is still looking to expand its brick-and-mortar locations in areas like airports, vending machines allow it to grow its footprint faster, use a lot less square footage and reach more people, Alexander said. As of May, the company had more than 600 locations in the U.S., which include units in grocery stores, airports and virtual kitchens. Hypothetically, it could open a location in O’Hare Airport in one terminal and then scatter vending machines throughout other terminals, he added. This would allow one operator to fill multiple machines as needed in one location.

"[Vending machines] really grow your footprint and your availability to customers," Alexander said.

Wow Bao also has been growing aggressively through its dark kitchens program, in which it uses restaurant partners’ existing kitchen space to prepare and facilitate the delivery of its menu items. Still, vending machines will give Wow Bao access to consumer hubs that many restaurants don't have access to such as hospitals and military bases, Alexander said.

"I think to some degree the vending machines became a little bit of a taboo," the CEO added. "The way that vending machines have moved forward and evolved and the innovation with technology and the hot food coming out of it, you’re going to see more people and more cuisines becoming available. We are thrilled to be one of the pioneers in that hot food space."