Vending - UK - May 2009

Table of Contents

• Issues in the Market
• Main issues
• Definition
• Abbreviations
• Market in Brief
• Vending market exhibiting signs of decline
• Efforts to increase value sales have some success
• Highly fragmented supply base despite some consolidation
• Driving consumers towards more profitable lines will require effort
• Long-term prospects rest with operators better understanding their market
• Internal Market Environment
• Key points
• Economic slowdown directly affects the vending sector
• Food and drink -- strong demand could be tempered by legislative developments
• Snacking remains popular with a hard core of adults
• Move towards healthy eating set to change market
• Cigarette market in long-term decline
  • Figure 1: UK retail sales of cigarettes, by volume, 2004-09
• Cigarette vending machines take a reduced profile
  • Figure 2: UK retail distribution of duty-paid cigarettes, by value, 2005 and 2007
• Further restrictions likely
• Technical developments
• Broader Market Environment
• Key points
• Slowdown in PDI growth set to impact on consumer expenditure
  • Figure 3: Trends in personal disposable income and consumer expenditure, 2004-14
• The age structure of the population
  • Figure 4: Trends in the age structure of the UK population, by gender, 2004-14
• Rising numbers of ABs may dent vending machine use
  • Figure 5: Forecast adult population trends, by socio-economic group, 2004-14
• Competitive Context
• Key points
• Water, juice and coffee all benefit from changing tastes
  • Figure 6: Performance in key markets, 2003-08
• Health issues dominate the cold drinks sector
• Crisps, chocolate and confectionery record sluggish performance
• Strengths and Weaknesses in the Market
• Strengths
• Weaknesses
• Market Size and Forecast
• Key points
• A saturated market under pressure
  • Figure 7: UK vending market, by volume and value, 2004-14
• Installed vending base is in decline
• Moves to add value are assisting the sector
• Vending sector to adapt to changing lifestyles
• Looking towards the high street for direction
• Factors used in the forecast
• Segment Performance
• Key points
• Coin-operated systems retain dominance
  • Figure 8: Vending payment systems, market share by volume, 2004-09
• Confectionery, snacks and meals see strongest growth
  • Figure 9: UK vending market, by sector, by value, 2004-08
• Market maturity hits volume sales
  • Figure 10: UK vending market, by sector, by number of machines, 2004-08
• Drinks market show signs of recession
  • Figure 11: UK drinks vending market, by volume and value, 2004-09
• Traditional vending is back
  • Figure 12: Number of UK drinks vending machines, by dispensing method, 2004-08
• Coffee and cold drinks benefit most
  • Figure 13: Vended drink cup sales, by product, 2004-08
• Confectionery, snacks and meals records strong value development
  • Figure 14: UK vended confectionery, snacks and meals market, by volume and value, 2004-09
• Confectionery and snacks dominate the market
  • Figure 15: Number of UK confectionery, snacks and meals vending machines, by type of food dispensed, 2004-08
• Cigarette vending suffering
  • Figure 16: UK vended cigarettes market, by volume and value, 2004-09
• Companies and Products
• Key points
• Three operators lead a highly fragmented market
  • Figure 17: UK vending operator market shares, by installed base of machines, 2007 and 2009
• Industry structure
  • Figure 18: Selected leading companies in the UK vending market, 2009
• Manufacturers and brands
• Autobar
• Bunzl Vending Services
• Cherwell Group
• Manchester Vending Services Ltd
• Selecta UK
• Buying Behaviour -- Existing and Potential
• Key points
• Drinks, confectionery and snacks dominate the market
  • Figure 19: Products bought from a vending machine, February 2009
• The vending profile
• Diversifying perceptions and the user base
• A bit of retail theatre
• Is there potential for high-value items?
  • Figure 20: Products consumers haven' t bought but would consider buying, and products consumers would never buy from a vending machine, February 2009
• Limited choice and the no-frills model
• The premium profile
• Exclusive + cutting edge + paying a premium = London baby!
• Could women' s intuition be wrong?
• Appendix -- Buyer Behaviour -- Existing and Potential
  • Figure 25: Products bought from a vending machine, by demographics, February 2009
  • Figure 26: Products bought from a vending machine, by demographics, February 2009
  • Figure 27: Products bought from a vending machine, by demographics, February 2009
  • Figure 28: Products haven' t bought but would consider buying from a vending machine, by demographics, February 2009
  • Figure 29: Products haven' t bought but would consider buying from a vending machine, by demographics, February 2009
  • Figure 30: Products haven' t bought but would consider buying from a vending machine, by demographics, February 2009
  • Figure 31: Products would never buy from a vending machine, by demographics, February 2009
  • Figure 32: Products would never buy from a vending machine, by demographics, February 2009
  • Figure 33: Products would never buy from a vending machine, by demographics, February 2009