Vending machines: The next stop for specialty coffee and RTD?

vending machine climbs up mountain
  • Coffee brands are turning to vending machines as new market platforms
  • Vending machines are getting a makeover, with convenience services set to be worth $40 billion by 2028 
  • RTD and vending machines could the lynchpin the specialty segment needs to scale across new demographics

SPECIALTY COFFEE vending machines might seem like an oxymoron, but they have been popping up in high-traffic spots worldwide. Machines that dispense premium and specialty ready-to-drink (RTD) and hot coffees are becoming a thing.

Influential coffee companies like Romania’s 5 to go and Italy’s Lavazza have acquired vending machine networks in the past year, positioning them as an investment-worthy vehicle for commercialisation.

Japan is a pioneer in the development and consumption of canned coffee and RTD. There are some 2.5 million vending machines selling beverages in Japan, which has largely enabled the nation’s impressive RTD growth.

Despite their apparent ideological clash with specialty’s values, vending machines could represent a lynchpin for the expansion of specialty coffee to wider consumer segments, and are especially compatible with RTD coffees.    

“Food & drink vending is getting a lot of interest at the moment in the U.K.” says Gavin Rothwell, Director and Founder of Food Futures Insights. “But for coffee, over recent years, in my view the more interesting market has been Ireland. Convenience brand Centra has developed the Frank & Honest brand, while gas station chains Maxol and Applegreen have also developed their own brands, ROSA, and Braeburn.”

“Vended coffee often remains a functional rather than aspirational purchase overall, but Ireland stands out as a market where we’re seeing better quality coffee solutions coming through. These for now are mainstream rather than premium operations, developed by convenience retailers and gas station or forecourt operators looking to upgrade perceptions of what their coffee stands for.”

The first machines equipped to dispense cold soda were introduced in the 1930s, and within a decade, tens of thousands of machines could be found across the U.S. and the U.K. In the late 1940s, vending machines could dispense a palatable cup of coffee made from liquid coffee concentrate and hot water, and later with pods containing ground coffee in the 1960s.

The coffee industry has come a long way since then to produce not merely palatable, but premium specialty coffee.

“With technological advancements and a greater ability to fine-tune fully automatic machines, machine-brewed coffees are reaching exceptional results,” says David Sanchez, Co-Founder and Owner of the Swiss specialty coffee roaster Miró Manufactura de Café. “In the future, there will be almost no difference between a conventional espresso machine cup and a fully automatic one.” 

Convenience is driving consumer behaviour

Convenience has been important to consumers for some time, but after the COVID-19 pandemic, it really started to surge. In fact, the convenience services industry is set to reach a revenue of more than $40 billion by 2028, marked by a return to office and less time.

Global demand for specialty coffee is also growing meanwhile – signalling consumer expectations of convenience, but not at the cost of quality. In that context, vending machines and RTD products are promising solutions.

While still a relatively niche market, RTD coffee is one of the fastest-growing market segments in Europe. In 2022, the RTD coffee market was valued at $26 billion and is projected to maintain record growth for years to come. In 2024, RTD coffee continues to be instrumental to the evolution of the cold coffee sector

The market for RTD products is growing in parallel with that of coffee vending machines and micro markets, as each caters to consumer desire for convenience. The perceived health benefits of RTD coffee over soda give it a competitive edge against the longstanding vending machine star.  

“Vending machines can make specialty coffee more accessible to both its niche audience and new demographics by providing convenient access in various locations,” says Carina Schörgenhofer, Co-Founder of the vending technology company Boostbar

“They can cater to busy individuals who may not have time to visit traditional cafes or specialty coffee shops. They also have the advantage of introducing specialty coffee to new demographics in areas where it may not be readily available otherwise.”

In Switzerland, David says machines are strategically positioned in high-traffic areas where a full-scale espresso bar with baristas isn’t feasible.

Vending machines confront the specialty dilemma: To scale, or not to scale

The successful expansion of specialty coffee vending machines relies on convincing retailers and consumers that baristas aren’t the only ones who can make premium coffee.

“No machine will replace a strong barista,” says Carina. “However, the reality is that 80% of coffee is consumed in places where a staffed bar isn’t profitable, and where the coffee is often of questionable quality. Even at staffed locations, a trained barista is becoming increasingly rare. One could argue that today, a modern fully automatic machine would outperform the staff 80% of the time.”

Quality is now being prioritised by companies such as Miró and Boostbar, who collaboratively offer coffee in distinct blends and roasting profiles for machines. 

“Few have gone down the route of premium vended coffee. But expect that to change,” Gavin says. “The quality of vended solutions has improved significantly with better machines – sooner or later, more consumers will come to appreciate this.”  

When done right, scaling up RTD and vending machine coffee can maintain the specialty coffee industry’s values of exceptional quality, transparency, sustainability, and social impact. Imperatively, these values must be maintained and effectively communicated to consumers – which is being done already by companies like 7-Eleven.

However, according to Carina, machines aren’t the most popular – nor necessarily the best – scaling strategy for specialty companies. The sector still prioritises expanding online presence and in-store distribution channels, face-to-face interactions with consumers, and opening up additional brick-and-mortar shops. 

“Vending machines can benefit the entire coffee supply chain by allowing more consumers to support specialty brands that pay coffee producers fairly – as long as machine roast profiles are rigorously monitored,” says David. “ But ultimately, I don’t think they pose a threat to traditionally-brewed specialty coffee. They’ll just grow alongside it.”

Coffee Intelligence

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