Japan's once-profitable beverage vending machines struggle as companies pull back

Once considered highly profitable "money makers," Japan's major beverage companies are increasingly reviewing and exiting their vending machine businesses. Pokka Sapporo Food & Beverage recently sold its vending machine division, which had shrunk from 100,000 machines to 40,000. The company cited sluggish demand due to rising prices and consumers' budget-conscious attitudes as primary reasons for the downturn.

DyDo Group also plans to remove 20,000 unprofitable machines from its extensive network. While vending machines traditionally offered high profit margins by selling products at list prices, their competitiveness has waned. A consumption tax increase in 2014 created price discrepancies with convenience stores, which can adjust prices more flexibly. This led consumers to favor retail outlets, contributing to a decline in vending machine sales and operations.

The trend of staying home during the COVID-19 pandemic further impacted sales. Compounded by soaring maintenance costs, including electricity and distribution, the profitability of the vending machine business has significantly deteriorated. Data from Inryo Soken shows a 20% drop in soft drink vending machines since their 2014 peak, with sales per machine falling nearly 40%. This challenging environment has led to financial losses for major players like Coca-Cola Bottlers Japan.

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Against a backdrop of rising sales prices and consumers’ belt-tightening, the demand has been sluggish. The business environment is getting increasingly harsh.