At the end of May, Suntory Beverage & Food Ltd. announced it would buy Japan Tobacco Inc.'s drinks vending machine subsidiary in July. At a news conference to explain the deal, Suntory President Nobuhiro Torii said the purchase would help his company achieve its goal of becoming the biggest-selling beverage maker in Japan.
The acquisition would add 266,000 vending machines to Suntory's existing 490,000, thus bringing it closer to Coca-Cola (Japan) Co., the No. 1 company with 980,000 vending machines. According to the Japan Vending Machine Manufacturers Association, there are 2.5 million of the devices operating in Japan, most of which sell soft drinks.
Vending machines are considered the most effective means of selling soft drinks in Japan, which is why Suntory is so determined to increase its penetration. The problem is that, as with any sales distribution network, the effectiveness of vending machines is all about location, and almost all the good locations in Japan were taken years ago. JT's machines will provide Suntory with choice locations without having to go out and find new ones.