AUTOMATIC ADVANCEMENT

David Llewellyn, the Chief Executive of the Automatic Vending Association (AVA) explains why the vending and automated retail sector has not only survived the disruption of the pandemic but now looks set to thrive

In 2021, the Automatic Vending Association (AVA), the trade body of the vending industry in the UK, changed its name to AVA: The Vending & Automated Retail Association. This was to reflect a growth in popularity of micro-markets, basically self-serve stores o ering a range of food and drink, which saw an increase of 25 per cent between 2020 and 2021.

The AVA is a not-for-profit organisation that aims to support its members with government lobbying, best practice guidance and collaboration opportunities. It has seen many changes since its inception in 1929, but arguably the most challenging has been the impact of the pandemic which initially resulted in a massive fall in demand - followed by a surge of interest in vending solutions which help clients manage hybrid working patterns.

The AVA is headed up by Chief Executive, David Llewellyn, who joined in 2018, bringing over 25 years of experience in the sector; as a supplier of ingredients and equipment for Nestlé Vending’s MultiSnack; as a national operator through his own vending company Boxlogix and as a vending equipment manufacturer and supplier at Seaga Manufacturing.

He says the o icial wording for the AVA, ‘the trade body and voice for the automated 24-hour food and beverage industry in the UK’ covers a multitude of areas: “Including training, guidance, quality standards and to ensure that for clients, they know that if they’re working with an AVA member they are guaranteed a certain quality of service.”

But he adds: “Increasingly we have become more and more involved in lobbying and the representation of the industry, not just vending as shown in our name change.”

He cites as just one example plans by the Scottish Single Use Disposable Cup group, who were piloting a 20 to 25p levy for every single use cup. While you can expect to pay at least £3.00 in a co ee shop, in vending the average charge is 36p, so the negative impact of that on an industry where over two thirds of the income comes through co ee would be devastating. The AVA’s role is to monitor this and help people understand how these kinds of proposals could a ect an entire industry.

He warns: “This is just one in dozens of pieces of legislation, all of which could have an impact on vending. When we moved out of the EU, our assumption was that the regulations would move towards Westminster, but that’s not been the case. If you look at what went on with COVID, each of the home nations, Northern Ireland, Scotland, Wales and England all had di erent view on how things were meant to be handled.

“The same goes for vending related regulations, so now we might be dealing with legislation covering one item – say plastic waste, but each of the home countries as well as the EU and ROI [Republic of Ireland] all have di erent consultation processes. This means for one item we might be dealing with five or six di erent approaches.”

Vending Postpandemic

According to AVA figures, prepandemic turnover for vending was £2.2 billion, which dropped by nearly 40 per cent during COVID, but the sector has bounced back, with figures showing 16 per cent growth from 2020 to 2021. According to Llewellyn this year’s AVA’s annual census, which went out in January and looks at turnover for 2022, is likely to show the industry is back to 2019 levels or above.

He explains: “Given that 70 to 75 per cent of our machines are in business and industry, the business bit was the hardest hit by the pandemic, while the industry bit actually grew, because that included logistics, wholesale, warehousing, distribution and retail – all of which went through the roof.

“There are still some di iculties, for instance smaller companies which were o ering co ee in central London o ices where there isn’t the throughput anymore have been struggling, but in larger o ices and industrial units that’s less of an issue.”

Post-pandemic work patterns have also had a huge impact on the sector. Llewellyn explains that in large o ices where there is o en a fraction of the people it may not be practical to run a full-service canteen, especially when people are extending their working time when in the workplace, so no longer require a traditional nine to five service.

He says: “What we have seen is that the caterers and FM companies may have four or five sites and may service local sites with automated retail units, fridges and microwaves. These micro markets can be anything from room sized to the provision of a smart fridge and a microwave.

“Where you can’t have catering sta on site all the time, vending and automated retail is a great cost e ective alternative where it’s more practical and convenient.”

Maintenance Promise

For FMs looking for a vending supplier, many of which are regionally based SMEs, membership of the AVA has long been an important means of ensuring reliability, and as Llewellyn explains, an important part of AVA membership is guaranteed levels of service.

He says: “Our members are experts at looking a er vending machines, storing and distributing fresh food and the extension into micro markets is just another way of o ering an automated solution.

“What we’ve seen increasingly is technology aiding this process. Things moved slowly up to 2017/18 but we’ve now seen a surge in connected machines with now more than 80 per cent of the equipment out there, be it co ee, drinks or snacks connected one way or another.

“What that means in practice is that people are able to see when products are low and if there is a machine fault or vandalism, reaction times are much faster. In the past, maintenance was based on ‘we’ll go on a Tuesday’ but it’s not like that anymore. The routes are more economic, fuel is better used, which brings both cost and environmental savings, and this gives clients that service they need now, rather than how it suits the [supplier’s] route.”

He says technology is bringing many advantages to end users as well, for instance the growth in cashless vending over the past few years. Nearly 70 per cent of transactions in 2021 were cashless – versus 34 per cent in 2017 (AVA 2021 Census). Much of this driven by the pandemic, but also as a way of addressing costs and control.

Says Llewellyn: “Over half (55 per cent) of machines can now take cashless though most still have coin options, as around a third of transactions are still cash. But we’re seeing more and more use of tap and go payments using ID cards etc. which means a lot less cash in the machine that help keep costs and security issues down.

“Apps are also being o ered to give the consumer more interactivity, whether with data learning or special o ers. With data learning the app knows you like strong black co ee for instance, and with the introduction of touch screen panels the machine can provide all the calorific, ingredient and allergen information on products.

“And with automated retail units that utilise smart fridges and micro markets, plus internet connected machines, you now have machines which allow you to do a whole shop at work.”

Environmental Issues

As outlined above, a huge area of importance for the AVA and its members are monitoring the ra of environmental proposals in the pipeline – many of which pertain to vending related products such as paper cups and plastic containers.

“Vending has always been a green industry but we’re being driven too by legislation,” says Llewellyn. “If we look at cups, when DEFRA launch the next stage of their Extended Producer Responsibility for Packaging there are proposals in there for a mandatory take back scheme for cups which encourages recycling. All paper cups are recyclable and reprocessing centres could recycle every paper cup that has ever been used, but the issue is in retrieving the used cups; which is why a mandatory takeback scheme would work well. Clients would be able to use their existing waste stream or access recycling or reclaim facilities.”

With bottles and cans the Scottish Deposit Return Scheme is being driven ahead for implementation in August of this year which will require consumers to pay a 20p deposit when they buy a glass bottle, can or plastic container. The money is then reimbursed when the empty containers are returned to a nominated return point.

Explains Llewellyn: “From a practical point of view it would be sensible for this scheme to be UK wide but such is the nature of the home nations’ Governments it’s not going to happen, which is a shame because this approach involves so much complexity. There’s a lot of activity going on, and we’re hoping we can get that these hurdles and move forward.”

He points out there have also been huge innovations in energy management, with vending equipment becoming ever more environmentally friendly, with for example, a large chilled vending machine now using less electricity than a home fridge. Within the sector around 60 per cent of machines in 2019 were refurbished or remanufactured for example.

Vending Future

Llewellyn believes that despite the rise in the cost of living, the vending and automated retail sector will continue to grow.

“There will be challenges ahead,” he says, “as the rate of inflation within foodservice and vending is nearly at 23 per cent, as there are a lot of cost pressures, including labour, logistics, fuel, energy, while co ee and cocoa prices are going up. However, most of our members are SMEs and have always been agile and nimble in making the best of a situation.

“So, while the greatest challenges will be getting through the cost pressures, the opportunities are still there. While vending has traditionally been driven by co ee and so drinks, now we’re providing more fresh food via micro markets, adopting the latest technologies, as well as getting involved in distribution - including home deliveries.

“The growth is in di erent areas now and there’s an opportunity for those in the sector who want to do much more than o er co ee.”

For more info on the work of the AVA visit: www.the-ava.com

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