The little vending machine that could

Let's make a deal: 'Shark Tank' hosts Lori Greiner (left) and Kevin O'Leary buy into Team Vengo.
By GREGORY ZELLER //

A “Shark Tank” success story that’s rewriting point-of-purchase logistics is coming home to Long Island.

Brainstormed and birthed in Bethpage, Vengo – a wall-hugging dispenser packed with products and patents – is already redefining “vending machine” in hundreds of university corridors, health clubs and hotel lobbies. Now, Long Island City-based Vengo Labs LLC is narrowing its search for a Long Island home, and expects to announce a move soon.

It will maintain a “software and business presence” in Manhattan and Queens, but the 2011 startup will relocate its headquarters – including prototyping and other engineering operations – to the Island, according to cofounder and chief designer Steven Bofill.

Like father...: Brian (left) and Steven Bofill, and Vengo, at the Nassau County Inventors and Entrepreneurs Club.

Like father…: Brian (left) and Steven Bofill, and Vengo, at the Nassau County Inventors and Entrepreneurs Club.

Bofill and his partners – cofounder and CEO Brian Shimmerlik and chief engineer Brian Bofill, Steven’s father, a former Northrop Grumman systems engineer – know what they want: about 5,000 square feet, Bofill noted, with 3,500 square feet for warehousing and the remainder for operations.

“We’re looking at a few spaces in Nassau County,” he told Innovate LI. “We hope to have one of those spaces locked down in a week or so.”

It will be a homecoming in more ways than one for Bofill, a former Bethpage resident who earned a mechanical engineering degree at the University of Massachusetts and also worked at Northrop Grumman, along with stints at Lockheed Martin and nuclear physics-focused defense contractor General Atomics.

An aerospace designer by trade, Bofill was recruited by Shimmerlik to build a better vending machine, and with Brian Bofill’s help the team created the first Vengo prototype in the Bofills’ Bethpage basement.

Less about candy bars and colas than soap bars and chargers, the machines are designed to vend headphones, smartphone batteries and personal products that might be required in a locker room or hotel room – need-it-now gadgets and hygiene for an on-the-go generation.

Your cash is no good here – Vengo accepts debit and credit cards and Apple Pay, and will soon work with chip cards, according to Bofill. That missing coin slot may bum out some, but embracing 21st century payment methods is key in a machine with small ambitions.

Stocking state-of-the-art tech – including motion sensors, a 21 1/2-inch high-definition touchscreen and patented product-delivery cartridges – Vengo’s real hook is its diminutive dimensions. It’s just 2 1/2 feet tall by 2 feet wide by 6 inches deep, but Bofill warns doubters to judge it not by its size.

“Some people look at it and think you can’t fit anything in there,” the designer noted. “But you can actually fit quite a bit.”

Thanks to that “patented cartridge-based restocking system” – one of four U.S. patents earned by its design and software – Vengo carries six different products and up to 84 individual units at a time.

Actual stocking levels may vary – “If we’re selling a cellphone charger,” Bofill noted, “that takes up more space than a pack of gum” – but the unique cartridge system allows for a healthy stock of key products, inside a noninvasive machine with virtually no footprint.

“The standard vending machine really hasn’t changed in the last 20 years,” Bofill said. “It’s huge. Because of its massive size, it goes in the back of the room, in positions that aren’t really desirable.

“And it’s unreliable – it gets jammed, and the guy restocking the machine has to sit there for hours with a bunch of boxes.”

Which leads to another benefit of that proprietary cartridge system: The cartridges are preloaded at a vending facility, allowing the re-stocker to remove empty cartridges and pop in fresh ones “in a minute-and-a-half max,” according to Bofill.

Vengo, meanwhile, digitally tracks its wares and beams out real-time analytics that help operators monitor stock levels and fine-tune inventory to specific market preferences.

“We can also count how many people have walked by the machine,” Bofill said. “That information is very valuable to many brands.”

Important not only for stocking purposes, but for Vengo’s other key vertical: advertising on that sizeable hi-def screen, including commercials that kick on when the machine senses a passerby.

“It’s an attractive model for media companies, because now we have a 21 1/2-inch screen in high-traffic areas,” Bofill said. “You can be walking by, and for those 10 seconds you’ll see a car commercial.”

All that upside is getting Vengo Labs a lot of attention. Shimmerlik and Bofill killed it on ABC Network’s “Shark Tank” in March, earning a $2 million stake from hosts Kevin O’Leary and Lori Greiner, and the company has already forged high-profile partnerships – spanning advertising, product placement and machine location – with major-leaguers including Hershey Co., Revlon and Hyatt Hotels Corp.

“We did put some Reese’s in some of our machines,” Bofill noted. “But Hershey is one of the examples where we put media on the screen. We’ve found that tech products are really what sell best, especially in these high-traffic locations.”

Wall crawler: Vengo in action at the Fashion Institue of Technology.

Wall crawler: Vengo in action at the Fashion Institue of Technology.

All told, the company has placed roughly 400 machines in the field, mostly in colleges, gyms and hotels. California-based contract manufacturer D&K Engineering produces about 30 Vengos a week and “can scale up at any time,” according to Bofill.

Placements have mostly occurred in New York City’s five boroughs, he said, but the company is rapidly developing markets in Boston, North Carolina, Florida and Colorado, where a “well-known gym” is stocking Vengo machines with locks for lockers and an array of female and male hygiene products.

“We’ve got it down to a science,” Bofilled noted. “If it’s going into a female locker room, we know the best products to put in. If it’s going into a hotel lobby, we know the best products to put in.”

With the Nassau County Industrial Development Agency assisting its search, the company expects to bring its headquarters east before the holidays, though maintaining a city presence is critical, according to Bofill.

“It’s beneficial to be in Manhattan, when you’re essentially a software and media company,” the cofounder said. “Having our software guys maintaining access to talent and be able to meet with our clients in the city is important.”

Long Island, he added, will be where the magic happens: not only company administration, but creation of the next generation of Vengo machines.

“We are always prototyping new concepts and making improvements to the machines,” Bofill noted. “We have a few cool concepts in the pipeline for new products.

“This is going to be a big year for growth,” he added. “We’re looking to scale up and expand our network exponentially.”