Vending machines, once seen as a symbol of Japanese streets, are disappearing. Beverage corporations, unable to withstand the double blow of chronic labor shortages and rising prices, are slashing the number of machines they operate and moving to restructure.
According to the Japan Vending System Manufacturers Association, Japan currently has about 2.2 million beverage vending machines. That is down about 23% from the peak during the bubble economy in 1985. In fact, DyDo, the industry's No. 3 player, recently posted a record annual loss and said it will remove more than 20,000 machines, about 7.5% of its total. DyDo President Takamatsu Tomiya said, "The vending machine business has entered a far more difficult phase than expected," adding, "The top priority now is to stop the bleeding." Ito En, Japan's largest green tea corporations known for "Oi Ocha," has also begun restructuring its vending machine business, citing a deteriorating operating environment.
The Financial Times (FT) cited the loss of price competitiveness as a main reason vending machines are being shunned. In the past, Japanese consumers accepted higher prices for convenience, but analysts say consumers have started to close their wallets amid three straight years of high inflation.
In practice, drinks from vending machines are about 20% more expensive than at nearby convenience stores. On top of that, supermarkets and convenience stores have rapidly absorbed demand with instant drip coffee services and low-priced private-label products. According to beverage research firm Inryosoken, vending machine drink sales in 2024 are 42 million cases, down to nearly half from the 1997 peak of 72 million cases.
Severe labor shortages are also hampering operators. Only the sales step is automated; restocking and inventory management require in-person visits. In particular, after overtime restrictions for truck drivers took effect in 2024, it has become harder to secure logistics workers in Japan, pushing truck drivers' wages up 7.1%.
Experts say Japan's vending machine industry is also lagging in adopting technology to solve labor shortages. Distribution analyst Nakai Akihito said, "The problem is the analog system where you can't know inventory status until someone goes and checks," adding, "With sales falling, efforts to belatedly build digital monitoring systems have created a vicious cycle where the investment expense is burdensome."
Sensing a crisis, beverage companies are shifting toward improving profitability. They are pulling machines from low-traffic outskirts and placing large units in high-yield areas such as office buildings to reduce restocking frequency. An industry official said, "With sales already declining, it's not easy to make large investments in new technology," adding, "The shrinking trend in the vending machine market is likely to continue for the time being."