Vending machines have always been a convenient delivery mechanism for everything from food to coffee. That’s because these machines enable the sale of products at a relatively low cost and in more locations than traditional brick-and-mortar stores.
This unique level of flexibility and affordability is paving the way for a bright future despite a decline in revenue during the early months of the pandemic. Vending machine profit statistics and forecasts show that the coming few years are going to be more lucrative for the industry. We’ve compiled a list of the most relevant statistics about the profit potential for owners and operators of vending machines.
(Research and Markets)
Although vending machine sales took a hit due to the economic downturn caused by the pandemic, the industry is projected to enjoy a compound annual growth rate of 1.3% between 2020 and 2027. Research on the average vending machine profit potential for the coming years shows that the sale of both food and beverages is expected to grow by 1% and 1.7%, respectively, by 2027.
(Research and Markets)
In the era of connectivity when almost all devices are connected to the internet and goods are bought online via wholesale suppliers, vending machines are keeping up with global trends. Online vendors are much more convenient, faster, easy-to-repair, and more accurate than their offline counterparts. Recent forecasts put the compound annual growth rate of connected vending machines at 16.3% between 2019 and 2024. Naturally, this will have a positive impact on vending machine profit stats as the number of units grows and the penetration rate reaches 52%.
For some, the first country that comes to mind when thinking of vending machines is Japan and its crowded urban areas. But the stats tell a different story. Out of more than 15 million vending machines worldwide, the United States hosts more than 6.9 million coin machines. That’s not to say that the vending machine business isn’t booming in Japan, which still has the highest number of vending machines per capita in the world.
Cold drinks are among the most popular products sold from vending machines in 2020 and accounted for 30% of all sales. Snacks ($1.2 billion), confections ($900 million), and candy ($1.2 billion) jointly accounted for 40% of sales. Vended ice cream was lower on the list, with $100 million in sales. The available data also reveals that the most operated machine types in 2020 are packaged cold drink vendors and glass front merchandisers.
The pandemic had an impact on all vendors. And while some enjoyed record sales by turning to e-commerce platforms, others weren’t so lucky. A recent survey conducted by Automatic Merchandiser shows a 45% decline in revenue generated by vending machines – from $24.2 billion in 2019 to $13.3 billion in 2020. This is the most severe financial hit the industry endured following its rapid growth since the Great Recession in 2009.
The same survey offers deeper insight into the aforementioned financial losses, with vending machine owners experiencing sales declines ranging between 10% and 70%. A mere 6% of respondents reported sales increases. In 2019, the situation was very different. 64% of respondents said their sales increased that year, while only 38% reported decreases.
The annual amount spent by an average consumer at vending machines is less than $30. That translates into an average transaction of around $1.70. These figures may lead many to ask a fundamental question: is the vending machine business profitable? The simple answer is yes. This is a multi-billion dollar industry, and growth projections are impressive.
So, how much do vending machines make? On a monthly basis, an individual vending machine can make more than $300. That’s a pretty decent business for those who invest in several machines over the long term. Of course, there are many different factors that determine the level of income, including more obvious things like location. The most lucrative locations are manufacturing and distribution facilities, offices, apartment complexes, and hospitals.
If you’re an office worker, chances are you’re probably drinking a couple of cups of coffee per day. According to data gathered by the National Coffee Association or NCA, the prevailing method in 49% of workplaces is a drip coffee maker. Almost 40% use a single-cup brewer system, and 13% rely on coffee vending machines. An overview of vending machine profit statistics reveals that coffee isn’t always the biggest moneymaker because these machines are among the most expensive to purchase and maintain.
(The Vending People)
Data compiled by The Vending People reveals a notable increase in sales of zero-sugar canned drinks across the UK between 2018 and 2019. Aside from the fact that zero-sugar beverages have become the most popular choice among UK consumers, the data also shows a drop of 19.8% in sales of high-sugar drinks. As expected, the most popular vending machine products among snacks were low-calorie snacks, with sales skyrocketing by 169% compared to 2018.
Although a growing number of vending machines are now carrying healthy foods, consumers aren’t always buying their snacks there. A 2021 survey shows that 46% of respondents in the US purchase snack foods in fast-food restaurants. Grocery stores, cafes, and convenience stores are also more popular than vending machines for snack purchases. If you’re planning on starting a vending machine business, profits may not necessarily come from snacks but vended cold beverages.
A May 2020 survey that examined the behavior of consumers during the early days of the COVID-19 pandemic in the US recorded changes in shopping preferences. Perhaps unsurprisingly, contactless deliveries saw the biggest increase, and 37% of respondents said they used it more than before. Meanwhile, only 8% of respondents increased purchases at vending machines, while 24% used the machines less frequently. This is reflected in the industry’s earnings throughout the whole of 2020.
Before trying to calculate potential profits, most people will ask one simple question: how much does a vending machine cost? The exact price depends on numerous factors, but if you’re starting a new business and you’re on a tight budget, you’ll be glad to hear that a machine can be bought for as little as $1,500. Even when coupled with other expenses like small business insurance costs, you can still start a basic vending business with relatively little money. However, new vending machines tend to be more expensive and cost anywhere between $3,000 and $10,000, depending on the type, features, and size.
(Research and Markets) (IBISWorld)
That’s a sizable chunk of the $134.4 billion that the industry generated globally that same year. The Americans are closely followed by their number one economic competitor, China, where the market size is projected to hit $27.7 billion by 2027. Nevertheless, the vending machine profit potential in the US will be hard to ignore in the coming years, especially for the country’s top four vending machine operators: Compass Group PLC, Aramark Corporation, Wittern Group, and ZoomSystems.
(Vending Market Watch)
A joint study by Cantaloupe Inc. and Michigan State University found that in April 2020, the digital sales at vending machines were higher than those involving cash payments. Vending machine profit statistics reveal that this was a consistent trend throughout the year - in November 2020, cash payments decreased to 40% compared to November 2019. As digital payments became the preferred option, industrial, health, education, retail, and military sites became some of the most profitable locations.
The vending machine industry was hard-hit by the COVID19 pandemic, and 75% of cash machine owners reported that their sales dropped between 10% and 70% in 2020. Many vending machine company owners suffered significant losses, and statistics show an overall revenue decline of 45% – from $24.2 billion in 2019 to $13.3 billion in 2020. But the industry has since bounced back, and the market is expected to be worth $146.6 billion by 2027, which marks a compound annual growth rate of 1.3%.
This looks like a promising year for the vending machine business, with positive market growth projections. In the coming five years, both food and beverage sales are expected to grow by 1% and 1.7%, respectively. Starting a vending machine business is a great way to earn passive profits with relatively low start-up costs.
Location is a critical factor in this business. Well-placed machines will boost your profits. Some of the best locations include manufacturing and distribution facilities, offices, apartment complexes, and hospitals. It’s also important to stock your machines with the right products. Cold drinks accounted for 30% of all sales in 2020, while snacks, confections, and candy jointly accounted for 40%.
Before you can plot your next business move, you need to ask a few basic questions: how much is a vending machine, and is it a good investment? The short answer is yes. Vending machines are affordable items, which start at around $1,500. For a new device, you’ll have to pay anywhere between $3,000 and $10,000, depending on the type, features, and size. Don’t forget to add some funds for the stock items. Altogether, you should be able to kick-start your vending business with as little as $2,000.
Cold beverages are some of the best-selling items, accounting for 30% of all vending machine sales in 2020. According to the vending machine profit statistics, zero-sugar drinks and low-calorie snacks are also enjoying a spike in sales.
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