The UK’s vending and automated retail industry has always been a crucial part of the food and beverage sector, offering convenience, flexibility and innovation. Now, as we dive into the 2023 AVA Census results, it's evident that the industry is undergoing significant transformation. Product revenues are up 14%, and while challenges persist, the opportunities for business-to-business (B2B) collaboration are stronger than ever.

For businesses operating in food and beverage – whether suppliers, manufacturers or hospitality providers – understanding these shifts is key to staying competitive. Vending is no longer just a solution for offices or leisure spaces; it is now a dynamic ecosystem offering premium products, healthier options and integrated digital services that can help businesses meet modern consumer demands. David Llewellyn, CEO of The Vending and Automated Retail Association (AVA), provides further insights into the on-going transformation within the industry.

Coffee-to-go: Premiumisation and growth

The coffee sector, especially the coffee-to-go category, is booming, generating £758 million in product revenue in 2023 alone. This isn’t just a trend for vending operators – it’s an opportunity for coffee suppliers, equipment manufacturers and brands to tap into the growing demand for high-quality, barista-style coffee in non-traditional settings.

Over the past decade, bean-to-cup solutions have seen a 22% increase in market share, reflecting the evolving tastes of consumers who expect premium offerings, even in workplace and retail environments. With tabletop semi-automatic machines now outperforming free-standing machines, businesses that can offer flexible, compact coffee solutions stand to benefit from this shift. For food and beverage suppliers, there’s an opportunity to align with vending operators, providing premium coffee products that cater to both high street and workplace consumers.

Micro markets: A B2B game changer 

Micro markets and smart fridges are rapidly expanding across the UK, with 480 micro markets and over 1,200 smart fridges now installed. These self-serve retail solutions are revolutionising the way businesses – whether in corporate offices, hotels or even residential spaces – offer food and beverage options.

They allow operators to provide a range of fresh meals, snacks and drinks while minimising overheads.

For caterers, retailers and food manufacturers, micro markets open the door to new B2B opportunities. With the hybrid working model here to stay, businesses are seeking to provide convenient, high-quality meal options to employees and guests without the need for full on-site kitchens. By partnering with vending operators, food suppliers can integrate their products into micro market offerings, expanding distribution channels and driving new revenue streams.

Additionally, as premium self-serve coffee solutions grow, companies offering coffee-to-go set-ups can collaborate with office managers and caterers to create high-return, hassle-free alternatives to traditional barista-served setups.

The rise of cashless and data-driven vending

Digital transformation is reshaping the vending industry, with 85% of machines now offering cashless payment options, and 70% of machines equipped with telemetry or handheld devices for data collection. For B2B professionals, this presents significant advantages. Businesses that invest in vending solutions can benefit from real-time data insights – understanding consumer preferences, optimising stock levels and improving operational efficiency.

For payment solution providers, cashless systems are now a must-have, and there’s growing potential to expand partnerships with vending operators. At the same time, data-driven insights are increasingly valuable for food and beverage brands, allowing them to better understand consumption patterns and adjust product offerings accordingly.

Healthier products: The new standard

As consumer preferences shift towards healthier eating, the vending industry has embraced this demand. In 2023, 81% of cold drinks, 78% of confectionery and 36% of savoury snacks in vending machines met Commissioning for Quality and Innovation standards for healthier options. This shift isn’t just a compliance measure – it’s a growth area for businesses that supply healthy snacks, drinks and fresh food.

For manufacturers and distributors, there’s an increasing appetite for healthier products that can be integrated into vending solutions, particularly in corporate environments. By collaborating with vending operators, food and beverage companies can ensure their products are part of the growing portfolio of healthier options, which are now proven to drive the same, if not greater, revenue as traditional alternatives.

Navigating economic pressures

Inflation and rising operational costs continue to challenge the food and beverage sector, and vending is no exception. From product and fuel costs to labour shortages, businesses are feeling the pressure. However, by leveraging vending and automated retail solutions, companies can find ways to mitigate some of these challenges.

For businesses in hospitality, retail or the workplace, vending solutions offer an efficient and cost-effective way to maintain food and drink services. With hybrid working reducing footfall in traditional settings, the ability to provide on-demand, self-serve options with minimal staff requirements is becoming more attractive.

Additionally, the AVA is working closely with legislators to navigate upcoming changes, such as Deposit Return Schemes and mandatory cup take-back programmes, ensuring that businesses remain compliant without compromising service delivery.

Strategic collaboration: The way forward

The vending and automated retail industry is evolving rapidly, and its growth presents abundant opportunities for B2B collaboration. Whether you’re a food supplier looking to expand into new channels, a technology provider offering cashless systems or a hospitality operator seeking efficient, scalable solutions, the industry is ripe for partnerships.

At the AVA, we’re committed to supporting our members and partners as they navigate this exciting landscape. The key to future success lies in innovation, adaptability and collaboration across sectors. By working together, we can meet the demands of a changing market and drive the industry – and your business – forward.

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