Global growth is projected to expand at a moderate pace in 2025, according to the International Monetary and Financial Committee’s (IMFC) annual statement. However, rising economic policy uncertainty amid heightened geopolitical tensions have had a negative effect on household and business spending, with many still hesitant to consume and invest.

Global headline inflation has continued to recede, alongside falling energy prices and the normalisation of supply conditions.

“Looking ahead, we expect growth to strengthen over time,” stated the IMFC, “as rising real incomes support household consumption and the gradually fading effects of restrictive monetary policy should support consumption and investment”.

While automatic beverage machines remain a core market segment within vending, food vending machines are increasingly driving momentum and potential for the future of the sector.

Continuous innovation in vending technology in recent years has helped to raise the sector’s profile as a valid option for the retailing of chilled, hot or ambient snacks and meals, in both private and public settings. Furthermore, technological advancements have improved operational efficiency, with AI automation, the leveraging of real-time data and cashless payments all serving to enhance the user experience.

According to market research company, Euromonitor, “interactive touchscreens and personalised features are part of the conjunction of the digital and physical realms, which enhances user experience and aligns with the evolution of consumer behaviour”.

Refreshment speaks with David Irvine, communication and public affairs manager at the European Vending & Coffee Service Association (EVA), about what the industry can expect for vending in 2024 and beyond.

“The key drivers in vending will be similar to the last few years, including premium coffee and the increased roll-out of unattended retail solutions by more operators. Premiumisation of the refrigerated vending segment is another new trend, with machines providing more and more fresh food – they are sometimes used as a replacement for a staffed canteen – as well as cooler drinks.

“I see some interesting innovations becoming more popular, such as refrigerated, closed front machines with just a touchscreen to display the products. These types of machines are attractive, intriguing and intuitive for the consumer and can be quicker for quality fresh food than perhaps standing in a queue at the nearest sandwich shop. I think we will see more of these types of machines in 2025 in airports and other public locations.

Continued focus on sustainability

“In the EU, sustainability will be the continued and undoubted focus for the new Commission. Vending must understand its true environmental impact and then strive to make improvements. That is why the EVA is currently developing a Lifecycle Assessment methodology to help our members with these often complex calculations.

“Competitiveness is also a key new EU Commission priority, which means keeping jobs and resources in Europe and ensuring European companies are innovating to maintain our position as a global leader.

Smart technology

“IoT and smart technologies have already changed vending. This is good for the machine operator, but also for the consumer, who wants ever more convenient and tailored products. It has also brought new players into the industry: some of these are investing in our sector for the first time and with a fresh look, so it is an exciting period.

“However, while this is good for competition, and ultimately increases choice for operators, we have noticed that some players may not be fully up to speed with the regulatory requirements of placing equipment in the European market. It is, therefore, important for us as an industry association to ensure our members have the relevant guidance and interpretation, and to ensure that the regulatory authorities are doing their best to maintain an appropriate enforcement of legislation for all.

“I see the main challenge in 2025 being the continued fight to increase consumption in the industry. Since the pandemic, vending purchases have decreased significantly and although they have been increasing year-on year since then, the new EVA market report shows consumption is still down 18% compared to pre-pandemic levels. The main cause, of course, being hybrid working. That being said, a very positive statistic from the latest market report is that industry revenue is now higher than pre-pandemic levels, which is a testament to the hard work and resilience of operators and OCS players.”

David Llewellyn, chief executive at the Vending & Automated Retail Association (AVA), shares his insights on the challenges and opportunities ahead.

“Technology is likely to be a key driver in the vending industry next year. Operators will see continuous growth in the use of telemetry, cashless systems and vending management software. These advancements will enhance efficiency and cost-control, ultimately leading to better customer service. By leveraging these technologies, vending operators can streamline their processes, reduce downtime and ensure machines are consistently stocked.

Driven by data

“Sustainability is another major catalyst for innovation in the vending sector. Everything is becoming increasingly data-driven – from stock and ordering to planning machine fill and routing operators. This data-centric approach helps to make operations more efficient, reduces waste product from over ordering, decreases the number of delivery journeys and ensures accurate routing and logistics. All these factors contribute to a reduced carbon footprint.

“There is a growing demand for evidence of sustainability, whether through the energy efficiency of equipment or its longevity. The new ‘right to repair’ legislation currently being introduced in Europe has meant that vending clients and end users are more invested than ever in measuring their environmental impact. This emphasis on sustainability is also becoming a significant factor in tenders for new business, placing its importance even higher on the priorities list.

Transformative technology

“IoT and smart technologies will have a transformative impact on the vending industry over the next year. They will elevate the level of management across machines, sites and areas, improving operational logistics and cost-control. By integrating smart technology, operators can monitor and adjust their operations in real-time, offering a more responsive and efficient service to customers.

Regulations will pose challenges

“The biggest challenge is undoubtedly legislation. New regulations like the Extended Producer Responsibility in the UK will shift the costs of collection, recycling or reprocessing packaging to producers, manufacturers and distributors, escalating costs significantly – from £380 million to a projected £1.8 billion annually. The government has foolishly assumed these costs will simply be absorbed by the industry, but we all know this is not the case. These costs will likely be passed down through the supply chain to consumers, causing upset and dissatisfaction at a system that is needed to make better choices for the environment.

“We are working with Defra on legislation to introduce a UK-wide Deposit Return Scheme for cans and PET bottles and a Cup Takeback proposal for vendors that sell single-use cups for beverages, putting the onus on them to give customers a place to return said cup for recycling, and to submit data on the volume of cups recycled. Systems like this already exist, having been rolled out at universities and public buildings in trials over the last few years, so 2025 may well see plans for a nationwide rollout.”

Akos Petri, director of commercial consulting at Zenith Global, highlights three key market drivers in 2025: sustainability, retention and expansion.

“The market will be largely shaped by sustainability efforts, particularly in the B2B sector, including Horeca (hotels, restaurants, catering). Companies will focus on reducing their carbon footprint, utilising eco-friendly materials and implementing energy efficient technologies. As customers and stakeholders increasingly demand transparency and environmental responsibility, corporate communications will need to highlight these green initiatives.

“Retention strategies will be critical as companies look to consolidate their market position while expanding their customer base. This will involve innovative sales approaches, enhanced CRM systems, and a strong focus on service quality.

“With the market leader Culligan continuing to consolidate and optimise post-merger operations, the anticipated lower inflationary environment may present expansion opportunities for existing players. Predictable pricing models, coupled with a strong sustainability message, will open doors for growth. In my view, companies need to rethink how they communicate with their customers. For example, selling water may not sound exciting, but offering to “upgrade your tap water” feels much more engaging. This type of reverse thinking is what the industry needs to drive bigger breakthroughs.

The growth of IoT

“Technology will significantly influence the water dispense market in the near future. We’ll see more smart water dispensers equipped with IoT technology, providing real-time monitoring of water quality and usage. This will enhance user experience, operational efficiency and cost-effectiveness. However, the adoption of IoT-enabled devices will also introduce challenges, particularly regarding cybersecurity, data management, and ongoing maintenance. Smaller players may struggle to keep pace with these advancements due to costs and technical complexity, so the rollout of these technologies may be slower compared to other industries.

“In 2025, the bottled water dispense industry will continue to face sustainability challenges, especially regarding the carbon footprint of water delivery. Operators may also struggle with rising wages and difficulties in attracting and retaining qualified employees. Additionally, balancing price increases with customer expectations for affordability will be an ongoing challenge. In a highly competitive market, cost-sensitive customers may turn to cheaper alternatives, putting pressure on companies to innovate while keeping costs in check.”

To access the full digital edition of Refreshment for free, please subscribe here.

#Refreshmentmagazine #trends #2025