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Vending - UK

Published by: Mintel International Group Ltd.

Published: Jun. 1, 2007 - 79 Pages


Table of Contents


Issues in the Market


Main 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 Ltd



Who 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

Abstract

After a period of relative stability during the past five years, the vending industry is set to experience considerable change during 2007, mainly as a result of legislative changes that will affect both the education distribution channel and also the cigarette-vending sector. These are likely to lead to a reduction in the overall installed base of machines and a dip in spending, but longer term the prospects for the industry remain good, as long as the industry capitalises on the clear opportunities that are currently presenting themselves.



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