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JVMA's 2002 Census Portrays Vending Industry Consolidating To Meet Changing Market Demand

Posted On: 7/1/2003

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JAPAN- The Japanese Vending Machine Manufacturers Association has published its 2002 Census of Vending Industry in Japan. It shows vending equipment and product sales curtailed by the ongoing global economic slump that also has affected workplace services in the United States and Western Europe.

For the year, vending sales in Japan totaled ¥6,979,883,900,000 (approximately  $58,697,000,000 US, at a mid-July, 2003 rate of exchange). These include not only vended beverage, snack and food items but also such things as stamps and tickets, periodicals and sundries, and service equipment, which includes coin lockers and parking meters.

Beverage equipment, broadly subdivided into machines dispensing shelf-stable nonalcoholic cold (and often hot) packaged drinks; beer and sake; milk; and hot drinks in cups make up the lion's share of vending machines in Japan. In all, there were 2,589,700 beverage venders in the field last year, down 0.9% from 2001. Total 2002 vended beverage sales were ¥2,765,215,200,000 (over $23.25 billion US), or 98.1% of prior-year volume.

Soft drinks and other shelf-stable packaged beverages represent the lion's share of Japanese vending sales, and this segment was least affected by the economic downturn. Total sales were ¥2,225,272,900,000 (more than $18.7 billion US), down 1.5% from 2001. The number of machines in the field inched downward 0.5%, to 2,144,800.

Milk vending's performance was similar, with machine placements in 2002 dipping 0.6% to 180,000 pieces and total sales sliding 1.6% to ¥174,992,400,000 (over $1.47 billion US).

Hot drinks in cups fared worse, with sales down 5.2% to ¥193,712,400,000 (almost $1.63 billion US) and the installed base down 3.3% to 172,700 machines. So did beer and sake venders, which have been declining for years. The alcoholic beverage segment's sales fell 3.4%, to ¥171,237,500,000 (nearly $1.44 billion US) last year, and machine placements slipped 2.7%, to 92,200 venders.

In the food categories, machines designed to meet lunchtime demand for noodles, sandwiches and the like were the most resistant to contraction. The 47,400 machines of this type deployed in 2001 were down just 0.2% from the prior year, and their total sales of ¥75,175,500,000  (more than $632 million US) dipped 1.2% from their 2001 level.

Ice cream vending also held up well in 2002. The number of machines in the field slipped 1.4% to 42,500, and product sales totaled ¥18,849,600,000 (nearly $158.47 million US), 97.6% of prior-year volume.

Machines vending pastry, popcorn and other snacks, and bread experienced a 2.9% decrease in the installed base. Sales totaled ¥3,276,700,000 (almost $27.55 million), a 3.9% dip.

Hardest hit were machines dispensing candy, gum, chocolate and other confections. There were 48,100 of these in the field in 2001, down 6.1%, and sales slid 7%, to ¥8,190,000,000 (over $68.85 million US).

Tobacco vending machine placements actually increased marginally, up 0.1% to 629,100, although sales dipped 0.5% from 2001, to ¥1,976,653,000,000 (about $16.62 billion US) last year.

Also more holding their own were machines vending a wide range of sundry merchandise, from stamps and postcards through razors, socks and tissue paper to sanitary and prophylactic items, and including newspaper and magazine venders as well as machines dispensing prepaid cards, batteries, toys and the like. While the installed base dipped 0.4% in 2002 to 907,600 venders, sales increased by 0.1%, to ¥349,648,000,000 (more than $2.94 billion US).

In 2002, beverages generated 39.6% of total Japanese vending sales revenues, tobacco accounted for 28.3%, and a category that the United States does not regard as part of the vending industry , train, platform entry, meal and other sorts of ticket dispensers , produced 24.2% of gross sales. All other merchandise venders yielded 5%, and service machines, 1.4% of the total.

Worth noting is that Japan, with a population of 127,000,000 in 2002, racked up vending machine sales of approximately $40.8 billion in categories comparable to those of the United States vending industry. The latest VENDING TIMES Census of the Industry reported U.S. vending sales of $41.1 billion in 2002, in a country whose population was over 280,500,000.

Vending industry historian Tsutomu Washizu, writing in Anritsu News (June, 2003) observed that Japan and the United States are the only nations in the world with more than five million vending machines in the field. There is one vender for every 38 people in the U.S., and one for every 23 people in Japan.

Washizu calculated that Japanese per capita vending purchases are more than three times as great as the U.S. average. Even if ticket sales are not figured in (U.S. railroads, regional and local transit operating authorities, and bus lines deploy substantial numbers of ticket vending machines, but total sales through these are hard to come by), the Japanese clearly have come to rely on vended retailing to an extent that the rest of the world has yet to match.