1. European Vending Association Vending in Europe Today 1 Vending in Europe Today: Opportunities and Challenges Catherine Piana EVA Director-General

2. European Vending Association Vending in Europe Today 2

3. European Vending Association Vending in Europe Today 3 Some facts and figures 3.7 Million machines on Location Turnover: 20-25 Billion € (estimate) 10,000 operating companies  Mostly SMEs, family business

4. European Vending Association Vending in Europe Today 4 Some facts and figures (2004 data used)

5. European Vending Association Vending in Europe Today 5 Some facts and figures

6. European Vending Association Vending in Europe Today 6 Some facts and figures

7. European Vending Association Vending in Europe Today 7 Some facts and figures

8. European Vending Association Vending in Europe Today 8 Some facts and figures Sales of Vending Machines

9. European Vending Association Vending in Europe Today 9 Some facts and figures Sales of Vending Machines

10. European Vending Association Vending in Europe Today 10 Vending in Europe Today External factors  Macro-economic  Business environment  Consumer trends Internal indications  Growth, density Challenges  Legislative  Cost-Efficiency  Image / Positioning

11. European Vending Association Vending in Europe Today 11 External Factors Macro-economic: real Gross Domestic Product  Real GDP growth EU 27: +3.0% in 2006  Forecast EU 27: +2.9% in 2007 −More mature markets: around 2% −Newer markets up to 11% (Baltic countries) Consequences  Some markets are no longer growing (UK)  Growth perspectives: −Central and Eastern European Countries, −Baltic Countries, −South East Europe (Greece, Turkey)

12. European Vending Association Vending in Europe Today 12 External Factors Changing workplace  Less manufacturing plants  Decreasing workforce  Workforce typology changing −Blue collar / white collar −Women  Smaller unit Consequences  More machines  Smaller machines  Wider choice

13. European Vending Association Vending in Europe Today 13 External Factors Consumer Trends  On-the-go / Convenience  Diet-conscious consumers  Fair trade products  Organic products  Coffee and chocolate specialties (latte, macchiato, etc)  Increasing acceptance of automated transactions Consequences  Need to be more aware of consumers’ requests  Widen the range and change it regularly

14. European Vending Association Vending in Europe Today 14 The Vending Market A maturing business  Moderate growth since 2000  Slow down around 2001-2002 −Introduction of the Euro −Recession  Growth mainly in new markets  Consolidation Consequences  Fierce competition  Need to reduce costs  Need to increase efficiency  Widening the service portfolio?

15. European Vending Association Vending in Europe Today 15 Machine-related  CE-Mark Directives: Machine safety, magnetic compatibility, low voltage, etc  Environmental Directives: waste of end-of-life machines, use of hazardous substances, eco-efficiency  Hygiene: materials in contact with foodstuffs (plastics) Product-related  Hygiene  Traceability  Labelling of ingredients, allergens Challenges: EU Legislation

16. European Vending Association Vending in Europe Today 16 Diet and nutrition  Schools  Next targets:  Workplace  Hospitals, leisure centres  Vending must remain proactive Environment  Energy consumption and eco-efficiency  Sustainability  Packaging and recycling targets Vending is an easy target  Diet and nutrition, the environment, employment, and in general Challenges: EU Legislation

17. European Vending Association Vending in Europe Today 17 Challenges: A more efficient Vending Business Reduce costs: examples  Transportation costs  Lost sales / Stock outages  Wasted time and energy  Shrinkage (cash that disappears) Improve the potential of each machine Improve the inventory planning and control Improve route planning Make appropriate use of IT and support systems

18. European Vending Association Vending in Europe Today 18 Opportunity: What technology can do DATA: real time monitoring  EVA-DTS: − Data reporting: sales, cash collection, individual products sold, price of products − Allows for remote control of machine  GIS: Geographical Information Systems − Using digital maps to identify location of company and competitors’  GSM/GPRS: − Allows to transport data from a distance

19. European Vending Association Vending in Europe Today 19 Opportunity: What technology can do Payment systems  Improved reliability and security  Coin validators have become cash management devices  Bank note validators much more reliable and less subject to jams  Cashless systems −Proprietary −Global banking systems, e.g. PayPass

20. European Vending Association Vending in Europe Today 20 Challenges: Image and Positioning Last resort / distress channel  Poor image of vending −Low quality −Low reliability −Low design Blamed (partly) for the obesity epidemic  Vending = junk food = fat kids Challenged on environmental impact  Machines vs kettles  Plastic cups vs china or paper cups  Eco-efficiency (lights at night, etc)

21. European Vending Association Vending in Europe Today 21 Positioning Vending Make vending all pervasive Seek new locations Seek new meal occasions Create a “vending experience” Vary range on offer  “Healthier”, fair trade, organic  Specialties (latte, macchiato)  Non Food Provide information  Screens Better public image Turning vending into automated retail

22. European Vending Association Vending in Europe Today 22 Conclusions Vending is mutating  Business environment  Vending is coming to maturity  Operators more professional  Consumers expect more  Consumers acceptance of automation Vending, automated retail, self- or assisted retail checkouts, kiosks, etc are converging New opportunities are arising for operators and suppliers alike  Widening the product and service portfolio We should seize these opportunities and not view them as threats

23. European Vending Association Vending in Europe Today 23 Thank you! European Vending Association aisbl 44, rue van Eyck – 1000 Brussels Tel: +32 2 512 00 75 Fax: + 32 2 502 23 42 E-mail: cp@vending-europe.eu www.vending-europe.eu Questions