The vending and automated retail sector is making a recovery after a difficult two-year period. Recent research by AVA: The Vending & Automated Retail Association shows that there was almost a 16% increase in growth from 2021 to 2022.
AVA’s 2022 annual Census, which gathered data from operators of numerous machines across the UK, highlights the growing use of cashless vending technology and micro-markets. These findings demonstrate how the industry has adapted to changing consumer needs.
While the industry’s revenue is still below the levels seen in 2019, the census reveals an overall growth of 16% from 2021 to 2022 in the UK Vending, OCS & Coffee-to-Go market. This expansion was because of higher revenues from cold beverages (up 23%), hot beverages (up 17%), as well as snacks and food (both up 21%).
This research from AVA is in line with the evolving work landscape. The rise of hybrid work models has led to a decrease in the use of traditional workplace cafeterias, resulting in an increased demand for micro-markets and ‘smart fridges’.
With hybrid work continuing post-pandemic, the conventional office canteen has become less viable due to fewer people working in the office on a daily basis. As a result, there is a growing trend towards self-service fresh food and high-quality coffee offerings. The UK has seen a 17% increase in micro-markets installed since 2021, totaling 480 installations. The census also points out a significant uptick in the adoption of ‘smart’ fridges, with a 125% rise in buildings since 2021.
Additionally, the use of cashless operations is on the rise. Over 65% of pay-vend machines now have cashless systems, and more than 85% of readers are set up for cashless transactions. Many operators are shifting towards cashless payments, with nearly three-quarters (72%) of sales being cashless—a considerable increase from 24% in 2017.
However, the census raises concerns about the impact of rapidly increasing inflation, including rising product costs, fuel and energy expenses, labor costs, and the potential for a recession in 2022. Operators reported a 19% rise in costs, leading to vending price increases of around 16% to compensate. As costs continue to rise, operators might need to raise prices even further, which could potentially affect consumption.
David Llewellyn, the Chief Executive of AVA, noted, “After facing challenging times, we are witnessing growth and significant transformations in the vending, coffee services, and automated retail industries. Technological advancements and operational adjustments have made our members more adaptable and responsive to changing economic conditions, leading to new approaches in work, monitoring, and business management.”
Llewellyn also emphasized, “Our focus at AVA remains on helping our members understand and navigate regulatory changes and their broader impact on the industry.”
