1. Vending Machines
May 2009

2. Issues in the market
How can the industry respond to the impact of legislative changes?
How can it more closely reflect changes in the demands of consumers (such as demand for healthier food and drink)?
How can operators increase average volume and value sales?
How can operators increase the range of payment options?
How can those in the sector ensure that they engage with the most profitable segments in the consumer market?

3. Summary Suffering from changing consumer tastes
The number of vending machines offering food, drink or cigarettes amounts to an estimated 565,000 in 2009, with sales equivalent to just under £1.7 billion.
Despite the size of the market, both the installed base and value sales are in decline, with the former falling back by 5.2% between
Focussing on trading up
Despite the fall in the number of installed vending units, the value of the sector has performed somewhat better. Much of the explanation behind this has been a focus on trading up by operators.
Both food and drink markets have sought to benefit from this development, although it has been drink that has succeeded the most.

4. Internal Market Environment
As a consumer-facing sector, the vending market is not immune to the recession, although at present it is affecting suppliers of units the most.
Snacking remains an especially popular activity, although recent moves by the UK government have sought to change eating habits to focus on healthier foods.
Such legal restrictions are even more evident in the cigarette-vending sector, where volumes have fallen markedly as the wider consumption of cigarettes has dropped back.
The impact of the current recession cannot be overlooked, with the number of installed units falling during the latter part of 2008.
Base: April ,231 adults aged 16+, July 08 -1,964 adults aged 16+, Oct 08 – 1,290 adults aged 16+, Jan - 1,413 adults aged 16+

5. Broader Market Environment
Although the amount of money spent by individuals in vending machines remain small in comparison to wider expenditure, the current recession is set to restrict the activities of some consumers in this market.
Adding to the difficulties faced by manufacturers are the current age and socio-economic profiles of vending machine users.
Many purchasers are under 35 and thus with the coming decade set to see a growth in those aged 50+, work is needed to attract such users.
Equally, vending machines are currently most popular with those in C1C2D socio-economic groups. With an increasing percentage of the population belonging to higher groups, attention is again needed to ensure their continued use.
Base: April - 1,231 adults aged 16+, Jan - 1,413 adults aged 16+

6. Strengths and Weaknesses

7. Market Size and Forecast
Key points
Despite the overall decline in vending units, market value is still expected to outperform volume sales in the food, drink and tobacco sectors. This is because machines can charge a premium based on their location, and 24-7 availability.

8. Existing Buying Behaviours
Key points
Almost three quarters of the consumer base have purchased traditional vending machine items such as an HFSS snack, drink or hot drink. The lower uptake of non-edible products is likely to reflect their relative lack of availability.

9. Attitudes Towards Vending

10. Attitudes Towards Vending
Key points
At present the vending category suffers from its position as a retail option of the last resort. In areas where perceptions of quality are an issue, the sector needs to inject greater brand appeal (such as Starbucks or Costa branded coffee machines).
Older consumers are unlikely to experience a complete u-turn on their attitudes to vending machines. But these attitudes may be influenced other factors. For example, perhaps the inclination to lump all distaste for convenience food - and not forgetting obesity fears - into a generic ‘idea’ of what a vending machine is.

11. Technology Consumers Own or Would Like To Own
Around one in three internet users are Silent Progressives when it comes to vending machines, with little to identify them in terms of a strong representation across any of the attitudinal statements. They are only really categorised by their under-representation within many of the more negative statements.
These people have used vending machines; however they do have a negative perception of them.
For example, they are the most likely to claim that food and drink sold in vending machines cost more than those sold in shops/supermarkets (89%), and that they would rather buy from actual stores (81%).
Almost all claim that vending machines provide a quick and easy way of getting what they need. However these consumers appear to have something of a wish list when it comes to their attitudes toward vending machines.
They are the most likely to want to see healthier snacks/meals (66%), and the most likely to want to see more that accept credit/debit cards (39%) and use vending machines that sell hot food (32%).

12. oxygen
.mintel.com
Your guide for future success 12