Why you're seeing these London-made propane vending machines outside stores

As Canada heads into peak grilling season, a company is using made-in-London technology to offer a different way for customers buy and exchange the propane tanks that fuel barbecues and other equipment. 

In recent months, kiosks branded 'My Propane Buddy' have been popping up outside retailers in London and surrounding areas, from Chatham to Hamilton. 

Despite the retro feel to their graphics, the kiosks are high-tech vending machines that allow customers to buy a full propane tank or exchange an empty one without going inside a store. 

The My Propane Buddy brand was launched last year by Sleegers Engineered Products, a London company that has been selling the kiosks to U.S. propane vendors since 2009. 

Sleegers has sold more than 4,000 machines to U.S. customers who operate the machines under their own brand. Last year, they decided to create their own propane distribution brand using their own automated vending kiosks. 

"We've been doing this for a long time, but the difference here is that now we're doing it ourselves in Canada," said company president Dan Granger. 

Sleegers has been operating in London for more than 60 years. They manufacture farm equipment, air compressors and custom-made propane tanks for vehicles, including tanks used in Blue Bird school buses. 

For years, propane tanks had to be refilled manually by a trained employee at a gas station or propane dealer. 

In recent years, a significant chunk of the propane market has moved toward an exchange model, where the customer drops off an empty tank at retail store or gas station and leaves with a pre-filled tank. 

Outdoor storage is necessary because safety rules don't allow propane tanks to come inside.

Though it typically costs more than refilling, tank exchange has become popular because it saves time. 

Exchange tanks are stored in locked cages outside retail locations. Tank Traders, owned by Manitoba-based Vomar Industries, is the dominant player in the Canadian propane exchange tank market. They have a long list of distribution partners including Petro Canada gas stations, 7 Eleven convenience stores and big box store such as Home Depot and Canadian Tire. 

Granger said Tank Traders is more of a partner than a competitor. The company uses Sleegers' machines at some of its Walmart locations, though most of Tank Traders business happens through cage exchange.

He sees the automated propane vending kiosks — which Sleegers builds in London — as offering a different customer experience. The wording on Sleegers' distribution trucks says: "Turn the page, ditch the cage." 

With the vending kiosks, the customer doesn't have to go inside a store and wait until an employee is free to come outside to do the exchange. Instead, the customer can transact outside, 24 hours a day. 

"There's no waiting for the attendant and that's key," said Granger. "It's the next iteration of tank exchange." 

Kiosks are high tech

Inside each My Propane Buddy kiosk is three carousels that can rotate to deliver full tanks and accept empties at one of the machine's three doors. The customer pays using their bank or credit card. Each kiosk can hold 24 standard-sized, 20-pound propane tanks and extra machines can be added in high-volume locations. 

The kiosks are also web-enabled and update their inventory in real time. Customers can see using the online location map the number of tanks available at each location.

"Our goal is to make sure a customer is not disappointed when they show up at a kiosk," said Granger. 

The kiosks also have sensors able to monitor for any gas leaks.

Retailers that host a kiosk earn a commission based on the volume of tanks sold or exchanged. Granger said the appeal for host locations owners is that the transactions no longer require staff to leave the store to unlock the cage.

There are still critics of the tank exchange model. This post on U-Haul's website argues customers end up paying more for less propane. Many U-Haul locations sell propane using the refill model. 

Granger says exchange will remain a big part of the propane market, whether it's cage exchange or using his company's kiosks. CBC News checked with a few retailers and found that pricing for both kiosk and tank exchange is similar. A full tank costs about $80, and it costs about $30 to exchange an empty one.

My Propane Buddy has 60 locations with plans to grow. "We'll add more locations as the market dictates," said Granger.