Vending - UK - June 2007

Table of Contents

• Issues in the MarketMain issues
• Definition
• Abbreviations
• Market in Brief
• Legislative changes upset the status quo
• Not all doom and gloom...
• ...but industry needs to get more in tune with consumer
• A fragmented supply structure with few national players
• Coffee retains position as most popular vended product
• Vending centred on leisure centres, workplace, hospitals
• Strong support for school vending controls
• Internal Market Environment
• Key points:
• The growth in snacking
• Increased discernment and expectations
• Technological advances
• Legislative changes
• Tighter nutritional standards call time on ' unhealthy' vending in schools
• Prevalence of smoking
  • Figure 1: Trends in the incidence of cigarette smoking, 1996-2006
• Retail sales of cigarettes
  • Figure 2: UK retail sales of cigarettes, by volume, 2002-07
  • Figure 3: UK retail distribution of duty-paid cigarettes, by value, 2003 and 2005
• Smoking bans to hit cigarette vending?
  • Figure 4: Cigarette smoking, by consumption of alcohol by location in the last 12 months, 2006
• Environmental issues
• Growth of ethical accreditation schemes
• Branding provides reassurance
• Broader Market Environment
• Key points:
• Trends in PDI and CONEXP
  • Figure 5: Trends in personal disposable income and consumer expenditure, 2002-12
• The age structure of the population
  • Figure 6: Trends in the age structure of the UK population, by gender, 2002-12
• The socio-economic structure of the population
  • Figure 7: Forecast adult* population trends, by socio-economic group, 2002-12
• Competitive Context
• Key points:
• Key market growth
  • Figure 8: Performance in key markets, 2002-06
• Healthy and speciality are the watchwords in drinks
• Biscuits and chilled meals lead the way in food
• Cigarettes dominate ' others' segment
• Strengths and Weaknesses in the Market
• Strengths
• Technology feeds efficiency
• 24/7 selling capability
• No staff = low overheads
• Software maximises performance
• Weaknesses
• Vending machines not suited to high transaction-value products
• Lack of cashless payment leaves potential for shrinkage
• Downtime = bad time
• Operators and manufacturers can be slow to respond to consumer trends
• Market Size and Forecast
• Key points:
  • Figure 9: UK vending market, by volume and value, 2002-12
• Past market performance
• Present market performance
• Future market performance
• Factors used in the forecast
• Segment Performance
• Key points:
• Payment type
  • Figure 10: Vending payment systems, market share by volume, 2002-07
• Product type
  • Figure 11: UK vending market, by sector, by value, 2002-06
  • Figure 12: UK vending market, by sector, by volume, 2002-06
• Drinks
  • Figure 13: UK drinks vending market, by volume and value, 2002-07
• Installed base flat but consumers trading up
• Ethical products play growing role
  • Figure 14: Number of UK drinks vending machines, by dispensing method, 2002-06
• Strong trend towards fresh-brew in traditional sector
• Table-top in-cup machines lose out to fresh-brew alternatives
• Trend towards bottles in cold drinks
• Coffee dominant cup-vended product
  • Figure 15: Vended drink cup sales, by product, 2002-06
• Confectionery/snacks/meals
  • Figure 16: UK vended confectionery, snacks and meals market, by volume and value, 2002-07
• Value growth does not keep pace with installed base increase
• School changes will result in sector restructure
• Confectionery has been driver behind sector growth
  • Figure 17: Number of UK confectionery, snacks and meals vending machines, by type of food dispensed, 2002-06
• Consumers lukewarm about vended hot food
• Cigarettes
  • Figure 18: UK vended cigarettes market, by volume and value, 2002-07
• Vending' s advantage has been eroded by longer opening hours
• Price rises prompt downtrading, erodes machine park
• Smoking ban piles further pressure on industry
• Range of vended product expanding all the time
• Companies and Products
• Key points:
  • Figure 19: UK vending operator market shares, by installed base of machines, 2007
• Industry structure
  • Figure 20: Selected leading companies in the UK vending market, 2007
• Vending operators
• Bunzl Vending Services Ltd (BVS)
  • Figure 21: Key financial data for Bunzl Vending Services Ltd, 2004 and 2005
• Cherwell Tobacco Ltd
  • Figure 22: Key financial data for Cherwell Tobacco Ltd, 2005 and 2006
• Coffee Point plc
  • Figure 23: Key financial data for Coffee Point plc, 2005 and 2006
• Manchester Vending Services Ltd
• Selecta UK Ltd
  • Figure 24: Key financial data for Selecta UK Ltd, 2004 and 2005
• Sinclair Collis Ltd
  • Figure 25: Key financial data for Sinclair Collis Ltd, 2004 and 2005
• Ingredient suppliers
• Cadbury Trebor Bassett
• Coca-Cola Enterprises Ltd (CCE)
• Del Monte Foodservice
• Kraft Foods UK Ltd
• Mars Snackfood UK/Mars Drinks UK
• Nestlé UK LtdWho Buys What?
• Key points:
• Items bought from vending machines
  • Figure 26: Items bought from a vending machine, 2005 and 2007
• Drinks dominate vending choices
• Items bought from vending machines -- Detailed demographics
  • Figure 27: Items bought from a vending machine, by gender, age, socio-economic group, marital status, presence of children, working status, region, ACORN category, media usage, supermarket usage and detailed lifestage groups, April 2007
• Buyers v non-buyers
  • Figure 28: Buyers and non-buyers of vended products, by gender, age, socio-economic group, marital status, presence of children, working status, region, ACORN category, media usage, supermarket usage and detailed lifestage groups, April 2007
• Items bought by other items bought
  • Figure 29: Types of food and drink purchased, by other vending products bought, April 2007
• Opportunity for meal-deal promotions?
• Location of Vending Machine Purchases
• Key points:
  • Figure 30: Location of vending machine purchase, 2005 and 2007
• Leisure/sports centres top the vending chart...
• ...while workplace vending keeps staff and guests happy
• Location of vending machine purchase -- Detailed demographics
  • Figure 31: Location of vending machine purchase, by gender, age, socio-economic group, marital status, presence of children, working status, region, ACORN category, media usage, supermarket usage and detailed lifestage groups, April 2007
• Importance of tailoring product mix to venue underlined
• Location of vending machine purchase by types of food and drink purchased
  • Figure 32: Location of vending machine purchase, by types of food and drink purchased, April 2007
• Vended products fulfil different roles depending on location
• The Consumer -- Attitudes Towards Vending Machines
• Key points:
  • Figure 33: Attitudes towards vending machines, April 2007
• Strong opposition to vending machines in schools
• Attitudes towards vending machines -- Detailed demographics
  • Figure 34: Most popular attitudes towards vending machines, by gender, age, socio-economic group, marital status, presence of children, working status, region, ACORN category, media usage, supermarket usage and detailed lifestage groups, April 2007
• Women strongest opponents of school vending
  • Figure 35: Next most popular attitudes towards vending machines, by gender, age, socio-economic group, marital status, presence of children, working status, region, ACORN category, media usage, supermarket usage and detailed lifestage groups, April 2007
• Vending: the parent trap?
• Not making the most of the snack market?
  • Figure 36: Attitudes towards vending machines, by items purchased, April 2007
• Attitudes towards vending machines by location of vending purchase
  • Figure 37: Attitudes towards vending machines, by location of vending machine purchased from, April 2007