As recently as five years ago, there was a common perception amongst consumers that vended coffee was sub-standard compared to what was offered on the high street. As cafes popped up across the country, vending lost out and operators suffered from decreasing sales and plummeting profits.
Paul Freeman, Marketing Director at Douwe Egberts Coffee Systems UK, explains how the vending sector has been grabbing back a share of the Out-of-Home hot beverage market.
The industry has undergone a remarkable transformation over the last few years, which has allowed it to once again compete with the high street when it comes to hot beverages. Change was essential, because if operators were still offering poor quality coffee today, demand would be so low that there would be no market for vending machines.
The beauty of vending is that it conveniently bridges the gap between what consumers purchase on the high street and what they brew at home. Unfortunately, for many years consumers were restricted to purchasing ‘warm and wet’ hot drinks and with thousands of coffee bars and cafes on the high street, all offering a better quality product, the convenience aspect of vending began to count for nothing.
Over the last few years, suppliers have begun introducing better ingredients and machines which have improved the overall offer. Today, consumers can purchase a high quality espresso-based drink at the touch of a button, whether they are in the office, at the hospital, in a train station or at the gym. Getting to where we are today has been a challenge, but operators are now seeing the fruits of their labour with better sales and increased margins.
As a company that has been roasting high quality espresso beans for over 250 years, we are hugely passionate about improving the quality and perceptions of coffee. In 2009, we entered the vending industry for the first time and since then we have invested significantly in developing new concepts and products to ensure that operators are able to continue competing with the high street.
Last year, we introduced the industry’s first gourmet vending option, Espresso Bar, which allowed operators to trade up from an instant coffee in a brown plastic cup and increase the price per cup to the range of £1 – £1.20. The industry received the new machine so well that it won the Auto Vending Brand Innovation Award at the Vendex awards dinner last November.
There has undoubtedly been a lot of progress, but to carry on moving forward and maintaining the remarkable growth the vending sector has seen over the last few years, it is essential for operators to continue to improve their offering through innovation. New milk granules and bigger and better cup sizes will help, but so too will the use of clever marketing strategies such as loyalty schemes which make use of QR codes.
With Smart Phone technology becoming part of our every day lives, introducing QR code technology into the vending industry will enable operators to offer initiatives never seen before. I believe it’s only a matter of time before we begin to see promotions such as ‘get a free coffee when you buy X cups’ or ‘buy one get one free’, which will help increase sales for the operator and benefit the consumer.
The next five years will see many positive changes to our industry. If we carry on innovating then the future is bright and we will undoubtedly see the vending sector thrive and continue increasing its share of the Out-of-Home coffee market.