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KN29044

Keynote Market Report Automatic Vending : January 2004

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This report covers: automatic vending, refreshment machines, cigarette, tobacco, machines, hygiene, water coolers,

Companies covered include: Automatic Products, Autonurnis, Azkoyen, Crane Merchandising Systems, DarenthMJS, Duetsche Worlitzer, ETNA Vending Technologies, FAS UK International, Mars UK, N & W Global Vending Systems, The Vending Corporation, Westomatic Vending Services, 24seven Vending, Autobar Group, Bunzl Vending Services, Coffee Point, Selecta UK, Sinclair Collis, SSL INternational, Aramark, Associated Vending Services, Drinkmaster Holdings, Midshires Vending Services, Nestlé Vending, Sodexho UK, Springbank Industries, UK Vending, Eurogran International, Nichols Foods, BT redcare, G2 Integrated Solutions, Vianet, Huhtamaki UK, Nebrak, Veriplast International, Buendia, Cadbury Trebor Bassett, Choco Chili, Fairtrade Products, Hot Bite, Italian Pasta, Kevin Chin Noodles, Sielaff, Snacks and Desserts, Vittel Water, Westler Foods, Westomatic,

EXECUTIVE SUMMARY

Sales of products through vending machines in the UK increased by 3.8% at current prices during 2004, to produce a market value of £3.32bn. Growth in vending machine sales over the past 5 years (2000 to 2004) has outperformed sales growth in both the overall retail food and drink market, and the UK catering market as a whole. As vending sales have increased, so has the number of vending machines in use; by 2004, there were almost 1.2 million machines in the UK.

Vending sales have benefited from consumer demands for convenience when purchasing low-ticket items, as well as from the trend towards snacking and grazing-based eating patterns. Many purchases from vending machines are impulse purchases, and the siting of vending machines in a wider range of locations has also encouraged impulse spending.

A major concern for the vending industry is the increasing level of consumer concern regarding the unhealthy diets and obesity of children. Vending machines selling snacks and confectionery are now located in the overwhelming majority of secondary schools, although many are including healthier alternatives to traditional offerings. However, heavily branded machines may also be discouraged in educational locations. The Government's proposed smoking ban in public places poses a future threat for cigarette vending machines, especially in public houses (pubs).

The largest market sector is the vending of refreshments, and this includes hot and cold drinks, snacks, confectionery, sandwiches and meals. The second largest market segment is cigarette machines. The `other' vending market sector includes a wide range of non-food items sold via the vending channel such as condoms, sanitary protection and personal-care products.

Major suppliers to the vending sector are machine manufacturers, vending machine distributor and operator companies, and suppliers of merchandise for the machines. The UK market is increasingly dependent on overseas machine manufacturers for new machines. Distributors and operators are mainly UK companies, although some leading players are international businesses with expansion plans in Europe. Suppliers of merchandise include some of the main brand owners in the food and drink market.

Key Note forecasts steady growth for vending sales over the next 5 years (2005-2009) as the number of machines grows and a wider choice of products becomes available to consumers. Cashless payment systems — led by card-based purchases — will take an increasing share of sales, and mobile telephone and Internet-based technologies will be used more in vending transactions.

TABLE OF CONTENTS

Executive Summary	1
1. Market Definition	2
REPORT COVERAGE	2
MARKET SECTORS	2
Refreshment Machines	2
Cigarette/Tobacco Machines	3
Other Machines	3
MARKET TRENDS	4
Convenience	4
Vending as a Replacement
for Staffed Outlets	4
Hygiene	4
Increased Competition	4
Increasing Choice of Machines	4
Technological Developments	5
Additional Sales for
Consumer Brands	5
ECONOMIC TRENDS	5
Population	5
Table 1: UK Resident Population Estimates by Sex (000), Mid-Years 1998-2002	6
Gross Domestic Product	6
Table 2: UK Gross Domestic
Product at Current and
Constant 1995 Prices (£m),
1998-2002	6
Inflation	7
Table 3: UK Rate of Inflation (%), 1998-2002	7
Unemployment	7
Table 4: Actual Number of Unemployed Persons (million),
1998-2002	7

Household Disposable Income	8
Table 5: Household Disposable
Income (£), 1998-2002	8
MARKET POSITION	8
The UK	8
Table 6: Sales of Vended Products, Household Final Consumption Expenditure and Catering Sales at Current Prices (£bn at rsp),
1999-2003	9
Table 7: Sales of Vended Products and Total Retail Sales at Current Prices (£bn at rsp and % ), 1999-2003	10
Overseas	10
2. Market Size
INTRODUCTION	11
the total market	11
Table 8: The Total UK Automatic Vending Machine Market
by Value at Current Prices
(£bn at rsp and %), 1999-2003	11
by market sector	12
Refreshment Machines	12
Table 9: The UK Automatic Vending Machines Market by Sales
of Refreshment Products by
Value at Current Prices
(£m at rsp and %), 1999-2003	12
Cigarettes and Tobacco Machines	13
Table 10: The UK Automatic Vending Machine Market by Sales
of Cigarettes and Tobacco Products
by Value at Current Prices
(£m at rsp and %), 1999-2003	13
Other Machines	14


Table 11: The UK Automatic Vending Machines Market by Sales of Other Products by Value at Current Prices
(£m at rsp and %), 1999-2003	14
NUMBER OF MACHINES IN USE	14
Table 12: Estimated Number of Automatic Vending Machines
in Use in the UK, 1999-2003	15
WATER COOLERS	16
Table 13: Number of Water Coolers
in Use (000), Year to
December 1998-2002	17
overseas TRADE	17
Imports and Exports	17
Production	17
Foreign Trade	17
Table 14: UK Overseas Trade in Automatic Vending Machines
(£000, number and £),
2001 and 2002	18
Table 15: Imports and Exports of Automatic Vending Machines
by Type of Machine
(£000 and %), 2001 and 2002	19
Table 16: Imports of Automatic Vending Machines by Major
Countries by Value (£000),
2001 and 2002	20
Table 17: Exports and Imports of Automatic Vending Machine Parts
and Components by Value
(£000), 2001 and 2002	21
3. Industry Background	22
recent history	22
Industry Synopsis	23
Table 18: Financial Results for Other Non-Store Retail Sales
by Turnover and Pre-Tax Profit (£000,% and £)	23


Number of Companies	23
Table 19: Automatic Vending Association Member Companies
by Area of Activity (number of companies), 2001 and 2003	24
REGIONAL VARIATIONS IN THE MARKET	24
HOW ROBUST IS THE MARKET?	24
LEGISLATION	25
KEY TRADE ASSOCIATIONS	25
The Automatic Vending
Association	25
Bottled Water Cooler Association	26
European Vending Association	26
National Association of Cigarette Machine Operators	26
4. Competitor Analysis
THE MARKETPLACE	27
Leading MACHINE
MANUFACTURERS	27
Automatic Products (UK) Ltd	27
Autonumis Ltd	28
Azkoyen UK Ltd	29
Crane Merchandising Systems Ltd	29
DarenthMJS Ltd	31
Deutsche Wurlitzer UK	32
ETNA Vending Technologies BV	32
FAS UK International Ltd	33
Mars UK Ltd	33
N & W Global Vending
Systems Ltd	34
The Vending Corporation	34
Westomatic Vending Services Ltd	36
Leading MACHINE OPERATORS AND DISTRIBUTORS	36
24seven Vending Ltd	36
Autobar Group Ltd	37
Bunzl Vending Services Ltd	37
Coffee Point PLC	38
Selecta UK Ltd	38
Sinclair Collis Ltd	39
SSL International PLC	40
OTHER OPERATORS	40
Aramark PLC	40
Associated Vending Services Ltd	40
Drinkmaster Holdings Ltd	40
Midshires Vending Services Ltd	41
Nestlé Vending	41
Sodexho UK Ltd	41
Springbank Industries Ltd	41
UK Vending Ltd	41
Leading COMMODITY AND MERCHANDISE SUPPLIERS	42
Eurogran International Ltd	42
Nichols Foods Ltd	42
Table 20: Selected Food and Drink Companies in the Automatic
Vending Market by
Main Activity, 2001	43
OTHER SUPPLIERS	43
BT redcare	44
G2 Integrated Solutions	44
Vianet Ltd	44
DISPOSABLES AND
COMPONENTS	44
Huhtamaki UK Ltd	44
Nebrak	44
Veriplast International	45
OUTSIDE SUPPLIERS	45
5. Strengths,Weaknesses, Opportunities and Threats
STRENGTHS	46
WEAKNESSES	46
OPPORTUNITIES	47
THREATS	47
6. Buying Behaviour
INTRODUCTION	48
WORKPLACE AND
INSTITUTIONAL USERS	48
Education	48
CATERING MARKETS	49
Public Houses	49
Hotels	49
Other Catering Sectors	49
Table 21: Number of UK VAT-Based Catering Enterprises Engaged
in Selected Sectors, 1999-2003	50
7. Current Issues
CORPORATE CHANGES	51
Automatic Products International	51
Midland Vending Services	51
NEW VENDING PRODUCTS	51
Buendia	51
Cadbury Trebor Bassett	51
Choco Chili	51
Fairtrade Products	52
Hot Bite	52
Italian Pasta	52
Kevin Chin Noodles	52
Sielaff	52
Snacks and Desserts	52
Vittel Water	52
Westler Foods	53
Westomatic	53
VENDING BAN IN SCHOOLS	53
INDUSTRY AWARDS	53


8. The Global Market
INTERNATIONAL MARKETS	54
Japan	54
US	54
EU	54
www.eva.be	55
9. Forecasts
INTRODUCTION	56
FORECASTS 2004 to 2008	56
Total Vending Sales	56
Table 22: Forecast UK Automatic Vending Machine Market
by Value at Current Prices
(£bn at rsp), 2004-2008	56
by market sector	57
Refreshment Machines	57
Table 23: Forecast UK Automatic Vending Machines Market
by Sales of Refreshment Products by Value at Current Prices
(£m at rsp), 2004-2008	57
Cigarettes and Tobacco Machines	57
Table 24: Forecast UK Automatic Vending Machine Market by Sales
of Cigarettes and Tobacco Products
by Value at Current Prices
(£m at rsp), 2004-2008	58
Other Machines	58
Table 25: Forecast UK Automatic Vending Machines Market
by Sales of Other Products by
Value at Current Prices
(£m at rsp), 2004-2008	58
FUTURE TRENDS	59
Demographic and
Social Grade Trends	59
Public Vending	59
Product Diversification	59
Improving Public Perception	59
Technological Developments	59
Contract Caterers	60
Industry Consolidation	60
10. Company Profiles
24seven Vending Ltd	62
Autobar Group Ltd	64
Bunzl Vending Services Ltd	66
Crane Merchandising Systems Ltd	68
Selecta UK Ltd	70
Sinclair Collis Ltd	72
Westomatic Vending Services Ltd	74
11. Further Sources
Associations	76
General Sources	76
Government Sources	76
Bonnier Information Sources	77

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