Los Angeles, CA (PRWEB) November 02, 2013
The Vending Machine Operators industry suffered recessionary losses and failed to keep pace with shifting consumer tastes. As a result, the industry's revenue has fallen at an annualized rate of 1.5% since 2008. During this time, consumers cut discretionary spending on many foods traditionally sold in vending machines. These include candy and chocolate, for which overall demand fell at annualized rates of 1.6% and 0.7%, respectively, over the past five years. Consumers that did not eliminate spending on these goods, however, were likely to purchase such items from less expensive outlets, like grocery or big box stores. “Consumers' heightened price sensitivity persisted in the aftermath of the Great Recession, limiting impulse purchases at vending machines,” according to IBISWorld Industry Analyst Hayden Shipp. In 2010, the industry recorded its steepest annual revenue drop of 8.4% for the period.
Consequently, a number of operators reevaluated their product offerings to capitalize on growing markets for healthier snacks and beverages other than soft drinks. During the past five years, snack food demand, which includes relatively healthy foods such as nuts, granola bars and pretzels, has increased. The recent growth of industry player Canadian Healthy Vending illustrates the strong potential of this vending market. Also, although most operators generate more revenue from soft drinks than any other product, per capita soft drink consumption has dropped every year over the past decade. Operators have thus begun devoting a greater share of machine space to other popular beverages, such as teas and energy drinks. As a result of these trends, and the post-recessionary recovery in disposable incomes, revenue has inched upward since 2011. In 2013, revenue is expected to grow 1.3% to about $650.3 million.
Looking ahead, IBISWorld expects the industry to build on these recent successes during the next five years. For example, growing per capita disposable incomes and rising consumer confidence will drive impulse purchases of sugary foods, which traditionally generate a large share of revenue. Moreover, demand for candy and chocolate is also expected to rise moderately during the period. “However, while much work remains to be done with regard to tailoring the nation's fleet of machines to accept cashless payments, greater consolidation and increasing dominance of major players will hasten this process,” says Shipp. As a result, revenue is expected to rise during the next five years.
For more information, visit IBISWorld’s Vending Machine Operators in Canada industry report page.
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IBISWorld industry Report Key Topics
This industry comprises establishments that own, stock and service automated machines that retail merchandise, primarily confectionery, snack foods and soft drinks, but also cigarettes, newspapers and other goods. This industry does not include revenue from soft drink producers that operate their own vending machines.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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