Japan's soda vending machines reel as people stay indoors

Vending machines in busy locations are the hardest hit.

Japan’s soft drink manufacturers have been recording a sharp fall in sales for their vending machine channels as people stayed indoors and worked from home, according to a Nomura report.

The pandemic is particularly expected to have more impact on vending machines in the best locations, such as those inside offices and on busy shopping streets.

Even once the virus has been contained, people are expected to go out less frequently, and changes in working patterns could result in an even harder hit to the shrinking vending machine channel.

The vending machine channel is considered to be more lucrative than the supermarket and convenience store channels, with Coca-Cola Bottlers Japan and Suntory Beverage & Food generating around 25% of their sales through vending machines in December 2019.

“As the vending machine business is a labor-intensive model, many companies have been pursuing operational reforms, but we think they will now face calls to come up with results sooner rather than later,” Nomura analyst Satoshi Fujiwara said.