Americans consume 75 acres of pizza a day and spend $28 billion dollars a year doing so, but that doesn't guarantee that every pizza business will be a success.
Washington-based Edgewater Foods, however, believes it is going to capture a piece of the pie -- with a vending machine.
It may not be so easy. Edgewater faces not only an acrimonious competitor, but also a block in the minds of vending company executives and consumers against hot food from vending machines.
The basic concept is not new: There are vending machines that sell packaged pizzas alongside Fritos and Twinkies, but the pies must then be microwaved. Edgewater's Presto Pizzeria, which is about the same size and shape as an average soda vending machine, takes care of the microwaving.
In goes for $2.50 (Edgewater's suggested retail price for a cheese pizza; pepperoni costs slightly more), and out comes a seven-inch pizza in a box, which is retrieved from a freezer by a robotic arm and zapped in a specially designed microwave oven in less than a minute.
At the National Automatic Merchandisers Association (NAMA) convention last October, Edgewater and three other companies exhibited pizza-dedicated vending machines. The founders of three of these four pizza-vending companies used to be in business together, but it's difficult to get an accurate picture of how.
Gary Black, the founder of Nouveau Vend International Inc. of Palm, Pa., said the founders of two of those companies -- John Allen of Edgewater and Tom Konidaris of Philadelphia-based Konidaris Foods International Inc. -- used to work for him.
When his company developed a pizza vending machine in the summer of 1988 and exhibited at the NAMA convention that fall, Black said, Allen and Konidaris worked with him.
A few months later, he said, they left Nouveau to start their own pizza vending companies, and took with them the technology he had developed.
Black has filed for patents on various components of his pizza vending machine, he said, and is closely watching Allen and Konidaris to see that they do not infringe his patents.
Konidaris said his pizza vending product, which he hopes to begin test marketing next month, is "totally different" from Black's. Konidaris said his machine dispenses other foods as well as pizza. Allen also contends that Black's story is "absolutely not true." Both Allen and Konidaris have filed for their own patents.
Allen said he was working as a consultant for Black, with the idea that he would be offered something in return, such as a small stake in the company. Allen said Black never paid him for his consulting services, so he left.
Konidaris, who according to Allen developed the formula for the pizza Black used, also left. "We didn't take anything out of his company at all," he said. Both Konidaris and Allen said they "started over from scratch."
Black said there are 100 Nouveau vending machines in Pennsylvania and New York, but he said he can't say where they are "until this legal problem is settled." Black said he has not filed suit against either Edgewater or Konidaris.
The three principals of Edgewater are not too upset about this competition, which also includes a Vancouver-based company that has introduced a vending machine that serves a fresh, not frozen, pizza cooked with infrared technology rather than by microwave.
"We're in such an early stage in this that competition actually should benefit all of us," said Jack Carpenter, vice president for marketing at Edgewater. "Educating the public to receiving good, hot, prepared food out of a machine will be a good thing."
Carpenter said Edgewater is trying to sell the machines, which cost about $8,900 each, to vending companies and institutions such as schools, hospitals, factories and bowling alleys.
The company has found resistance in the vending industry, Carpenter said, where the initial cost of the machine has been a stumbling block. The most expensive vending machines now cost $6,000 to $7,000, but the industry average is $3,000 to $4,000. Edgewater has tried to overcome this problem by stressing to vendors that profit margins are as much as $1.50 per pizza, which means that a machine selling 500 pizzas a week could pay for itself after a few months.
Any machine not selling that much, he said, is in the wrong location.
Edgewater is placing several machines in the Boston area later this month. Last week, the firm signed its seventh regional distributor, this one in Virginia, Carpenter said.
No Maryland or Washington distributors have been added.
Carpenter would not disclose how much investors' money has gone into the development of Presto Pizzeria.
But he is so confident about its progress that he said Edgewater "is five months away from being profitable."