SAUNDERTON, England -- The Automatic Vending Association reported that its annual vending and coffee service industry census shows a 2% upswing in annual topline revenue to £1.53 billion (about $1.98 billion), with more operators expecting growth in 2017 than experiencing it in 2016.
This growth, together with increased prices across the board occasioned by inflation and the introduction of more premium lines, has helped compensate for declining consumption levels.
According to AVA, the "coffee shop boom" shows no sign of slowing down and continues to provide a platform enabling the industry to offer enhanced value by means of increasing the premium selections on hot-beverage menus. This trend is supported by the ongoing growth in bean-to-cup brewers, along with paper cup use, a move toward larger cups and the increasing number of machines using fresh liquid milk.
Cashless payments are finding increased favor in UK vending. "In 2016, we have seen a dramatic increase in the overall value of cashless transactions within vending," the association said, "and within that, an ongoing steady rise in contactless card and mobile phone payments."
The AVA report also identified key challenges confronting the industry, including a tax on sugar-sweetened soft drinks set to take effect in spring 2018. In 2016, 39% of cold drinks vended were low-sugar or diet alternatives.
"It is very positive to see that industry turnover has increased to £1.53 billion in 2016," said AVA chief executive Jonathan Hart. "Although the industry faces challenges in the shape of the rising National Living Wage and the soft drinks levy, the innovations being made within the industry -- resulting in vending becoming more visibly healthy and convenient for consumers -- will ensure that UK vending faces these challenges head on."
AVA's 2016 study was compiled by Martin Colston, the former global strategic insight director for Mars Drinks, who has more than 30 years' experience in the vending industry.
"It's great to see growth in overall vending turnover for the first time in many years, and the positive outlook for 2017 from so many members," Martin said. "'Premiumisation' is really starting to bear fruit with some real innovation coming through. My thanks go to all those who took the time to meet with me and to provide data."
To compile the latest census, AVA contacted its operator members, suppliers and industry experts between January and March 2017. The sample represents 12,000 more than 25% of the total installed UK machine base. The industry's £1.53 billion in annual sales represents about 4.54 billion vends a year.
Established in 1929, the AVA works to develop, promote and protect the British vending industry. It has 154 members comprised of vending operators, machine manufacturers and suppliers.