Venturing into the Cold Beverage Vending Machine Market: A Market Assessment Study for an International F&B Manufacturer

December 16, 2020


Target market: Beverage Vending machine market |Region under focus: Global | Focus Area: Cold beverage vending machine market

Engagement scope

In a span of 5 weeks, the client, an international F&B manufacturer, gained comprehensive data-backed insights to successfully action their plan to venture into the cold beverage vending machine market. Infiniti’s market assessment study for the F&B client included comprehensive insights including cold beverage vending machine market segmentation (based on region and application segment), critical market dynamics (market size, forecasted CAGR up to 2024, market trends, and challenges), competitive assessment of leading operators in the market, and key recommendations from industry experts.

Business challenge

The client, a prominent international F&B manufacturer, was evaluating the feasibility of promoting and selling their cold beverages through vending machines. Being a segment that they had no prior expertise in, the company partnered with Infiniti Research to support its market research efforts in the global cold beverage vending machine market. The F&B manufacturer wanted to understand the most lucrative markets to invest in and the target consumers, product descriptions and strategies used by key market competitors, and identify innovative practices that would give them a competitive edge in the market. Apart from this, the client also sought a detailed ROI forecasting analysis considering the cost of the initial investment in different markets, annual repair, maintenance cost, and the net profitability expected.

With the emergence of new technologies such as face and voice recognition systems, interactive display, and smart sensors, the additional costs associated with such beverage vending machines have also increased,” says an industry expert at Infiniti Research.

For comprehensive market insights on the beverage vending machine market

Market Overview: Global Cold Beverage Vending Machine Market

The demand for vending machines has increased as F& B companies increasingly focus on profits by eliminating middlemen and disinvesting on unprofitable sites while competing for suitable locations. The significant growth of the food and beverage industry, especially in terms of ready-to-drink packaged beverages, over the past decade has mostly fueled the demand in the beverage vending machines market. As a result, beverage vending machines are gradually becoming common in locations, including corporate offices, hotels, schools and colleges, airports, railway or metro stations, and quick service restaurants (QSR). Furthermore, instant service and innovations such as cashless payment options using smartphones increase the popularity of cold beverage vending machines among end-users.               

According to experts at Infiniti Research, APAC and the Americas are the lucrative markets for cold beverage vending machine suppliers/operators. The strong installed base of cold beverage vending machines across Japan and the US, together constituting over 60% of the global installed base, is expected to drive market demand, followed by Italy, France, and China.

Want market data on the country-wise breakup and region-specific insights of the global installed base of cold beverage vending machines?

Our Approach

Infiniti proposed a unique blend of rigorous secondary research and in-depth primary interviews to develop a complete understanding of the global cold beverage vending machine market. The primary research comprised of telephonic discussions and interviews using an unstructured questionnaire with 45 seasoned respondents holding strategic decision-making positions or extensive industry expertise. Research experts at Infiniti also conducted rigorous secondary market research through classified data sources.

The data gathered through these sources have been used for a detailed market assessment study with a region-wise and application segment-wise focus. Experts at Infiniti also conducted a competitor assessment and profiling study in the cold beverage machine markets in countries, including Japan, the US, China, Germany, and France, to name a few. This was done to provide the client with detailed insights on the competitors and their strategies in each of these markets. The client was also presented with specific data on the unique selling propositions, vending machine types, and innovations adopted by key competitors in various markets.

An ROI analysis was undertaken to help the F&B client understand the set-up costs in different regions. Details regarding the initial set up costs and the maintenance cost were calculated to determine the operating costs to be incurred every year. Further, the demand planning and forecasting analysis helped the client determine expected demand levels and the level of inventory required to meet them.

Key recommendations for the cold beverage vending machine market client

Phased implementation: Since the client was new to the cold beverages vending market, experts at Infiniti suggested a phased approach of implementation. The initial phase includes targeting countries and locations with high demand for ready-to-consume cold beverages and vending machines’ market popularity. Experts at Infiniti helped the client identify two specific regions and audiences that need to be targeted for the initial roll-out. As the client was already established in the F&B business, the company’s most profitable markets were also a significant factor influencing this decision.

Targeting educational institutions: In the client’s target market for initial roll-out, experts at Infiniti identified that schools and educational institutions are lucrative segments with high demand for healthy and nutritional cold beverages. The product portfolios that can be targeted through cold beverage vending machines for this audience include 100% juice products, unflavored/flavored low-fat milk products, low-calorie beverages (five calories per fluid ounce), and no-calorie beverages (less than five calories per eight fluid ounces).

Digital payment methods: Vending machines with cashless or digital payment methods are becoming highly prevalent globally. Infiniti recommended that the client invest in product portfolios with cold beverage vending machines that support payment gateways such as Alipay and GrabPay which are especially favored among the younger tech-savvy population. An in-depth list of product portfolio and a feasibility study was provided to the client, along with examples of similar competitors’ product portfolios to understand the investment requirements.

Business outcome

Based on the market assessment study and the detailed recommendations provided by Infiniti Research, the client ventured into the cold beverages vending machine market through a phased approach. Within seven months of entering the market, the company’s beverage sales per unit doubled. Other key benefits achieved by the client include:

  • Accurately targeted the audience in different locations and marketed the right cold beverage products in high demand. This helped the company increase the sales considerably and increased its market share by 20% within the first nine months.
  • The client initially rolled out Iced coffee vending machines in two vital commercial locations. This initiative became a huge success giving them an annual profit of $ 2.1 million; this prompted them to expand into the business and set up their iced coffee vending machines in 50+ locations across the target market within a year.
  • Although the initial set-up cost was higher, adopting vending machines with high-tech, self-servicing technologies helped the client gain high accessibility, low operation cost, and higher effectiveness.
  • Invested in R&D for diversification into premium healthy and nutritional drinks as the client identified this gap in competitor offerings. Although several competitors were offering healthy and nutritional beverages through vending machines, the demand for premium products in the category was high, with a limited number of players catering to this segment.
  • Identified and eliminated under-performing product categories in the vending machines through a location-based approach, helping them better inventory planning.

Gain access to the complete engagement, including strategic market insights, market trends, competitor analysis, and recommendations given to the client by industry experts at Infiniti Research

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