The hot drinks gap

Currently, vending prices for hot drinks are well below the selling price of hot drinks in cafes, restaurants, petrol stations, etc. In comparison, however, soft drinks prices in vending are some 20 per cent higher than in traditional retail outlets. This is the hot drinks' gap. At a time when the value of sales from UK coffee shops continues to grow by nearly nine per cent per annum, premium vending products represent an excellent opportunity for operators to extend their cash margins.

Cost versus value

Vending operators have often perceived that the best margins are to be achieved solely by driving the cost of ingredients down. Aimia strongly believes that this is unsustainable - there are only finite gains to be made by reducing the cost of vending ingredients. The real margins are to be made by investing in quality ingredients and in vending systems which yield premium drinks which people are willing to pay more for.

Importance of presentation

We believe that it is not enough just to make a great cup of coffee. Quality ingredients are important, but how the drink is presented is also key. An eye-catching and inviting machine, coupled with an attractive vending cup can make the difference between a good cash margin and a great cash margin. Even a premium cup of coffee, made with quality ingredients, will be perceived as low value if it is not presented properly.

Capturing the high street experience

Pour Moi from Aimia Foods is a revolutionary concept developed to bring coffee shop quality to hot drink vending. Marrying quality products with coffee shop styled cup design and an optional sip-through lid, Pour Moi delivers a coffee shop experience from a vending machine. The machines simply shout great coffee - taking style cues from the high street, with a chalkboard-style menu, coffee beans and colours!

When Pour Moi was launched just over a year ago, it was estimated that operator profit margins on offer would be in the region of 200 per cent. In fact, additional throughput generated by the machines has led to an average profit margin of double this: 400 per cent!

Proof of concept

Independent research1 comparing Pour Moi with a standard vending system demonstrated that...

• 80 per cent of people said they are more likely to buy a Pour Moi vended drink than a standard vended drink
• 94 per cent found the machine easier to use (the chalkboard menu was particularly well-received - respondents thought it was intuitive and stylish)
• 96 per cent of people preferred the Pour Moi coffee shop style cups than the standard plastic vending cup
• Every single Pour Moi drink was rated to taste at least 30 per cent better than the drinks from a standard vending machine
• 75 per cent of people would plan a repeat purchase drink (in comparison to only 40 per cent for standard vended drink)
• The majority of people were satisfied to pay 80p for Pour Moi - this figure was reduced to 40p for the corresponding standard alternative.

Ethically-sourced ingredients

Research also suggests that people are willing to pay more for Fairtrade and ethically-sourced products, giving vending operators additional options for increasing margins. At Aimia Foods, we put a great deal of value on ensuring that our products are from sources with unquestionable ethical credentials. Whereas many companies offer limited options in such products, at present, approximately 80 per cent of Aimia Foods' coffee falls within this category.

Innovation

In what is a difficult market, the operating companies that have done really well in the last 12 months are those that have embraced innovation and looked for new mechanisms, business models, concepts and products that develop added value (i.e. enhanced revenue streams). Aimia Foods has always gone to great lengths to remain at the forefront of vending innovation, both to improve the offer for the consumer and the return for the operator, and has been recognised by regular industry awards.

1 QSR Hall Tests, December 2007

www.aimiafoods.com

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