How is Vending Machines an important stream of revenue for beverages company in Japan?

One of the standout feature of Japan lies in its vending machines or 自動販売機 (Jidō hanbaiki).
自動 (Jidō) – automatic, 販売 (hanbai) – sales, 機 (ki) – machine. Japan is home to 5 million+ vending machines ranging from beverages, automated services, food, daily necessities to cigarettes (and some really weirder ones).

Most common is the beverages one, occupying approx. 56-60% of the total vending machines. These vending machines are mostly owned by larger beverage companies such as Coca Coca Japan, Suntory, and DyDo, etc. 

In a research it was found out that a vending machine in a busy area might yield as much as ¥500,000 per month while others might yield as less as ¥10,000 per month. It mostly depends on the location of the machine. 

The national average of vending machines in Japan (for beverages) is around ¥40,000 per month, making this industry as big as ¥120 billion (US$ 1 billion) revenue per year.

This is also a side business/passive source of income for citizens. A lot of people also lease their lands to establish VM for the same.  Beverages range from ¥80-¥150 giving an average profit of ¥50 per bottle to the people having the VM business. 

Why is vending machine a successful phenomenon in Japan?

  • Vending machines are safe from being stolen in Japan. 
  • The buyout is instant. Busy lifestyle needs an instant solution. There is no need to wait in the queue when you have vending machines.
  •  The management and operations of vending machines are very efficient. You will always end up drinking what you prefer. 
  • Product diversification is the key. There are variety of drinks you can choose from any vending machine. 
  • The machine itself works fine and there are no issues while using it.

The ¥100 yen coin reason

Most of the drinks in Japan were of ¥100 till 2014 when the consumption tax was at 5%. ¥100 coin made it very easy, by 1967 there were 800 million ¥100 coins circulated in Japan until the government recasted the silver ¥100 coins to cheaper nickel coins.

Within 2 years of time, the number of ¥100 coins increased from 800 million to 1.6 billion and currently it is more than 10 billion of them, being circulated in the economy. This system actually helped people to make the transaction very easy, more frequently between them and the VMs.

Vending machines in the beverages industry is used as a means of long-term marketing tool. They have special types of vending machines such as a vending machine with buttons for wheelchair users or a vending machine which would give out free drinks in case a disaster occurs. While these machines are more expensive to make and set-up compared to the regular ones, they have the added benefit of raising the firm’s brand awareness and instilling trust in the community for 10+ years. 

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