KN29045

Keynote Market Report Automatic Vending : January 2005

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This report covers: vending machines, free standing drinks, table-top hot drinks, snacks & confectionery, combination snack and can machines, food,

Companies covered include: Automatic Products UK, Autonumis, Azkoyen UK, Crane Merchandising Systems, Darenth MJS, Deutsche Wurlitzer, ETNA Vending Technologies, FAS UK Interational, 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, Aramark, Associated Vending Services, Drinkmaster Holdings, Fags (Machines), The Midshires Group, RefreshU, Snack Point, Sodexho, Springbank Industries, SSL International, BT Redcare, G2 Integrated Solutions, Nichols Foods, Vianet, Huhtamaki, Nebrak, Veriplast International,

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

Text © 2005 Key Note

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Last updated by Amanda Porteous February 2005