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How Do Coffee Vending Machines Work?


Coffee vending machines are incredibly popular additions to the work environment: almost everyone needs a pick-me-up occasionally, and they allow employees to stay on site to get their caffeine fix. You’ll also commonly find coffee vending machines in hospitals and on university campuses. Almost all businesses can benefit from a coffee machine, but most people don’t know how coffee vending machines work. If you’re interested in finding out how does a coffee vending machine work, you’ve come to the right place.

How Does a Coffee Vending Machine Read Money, Cards, and Coins?

Depending on its style, a coffee vending machine works with dimes, paper money, credit cards or EBT cards, and mobile payments such as Cash App or Apple Pay, just like all other vending machine types that are filled with food and beverages.

Coffee machines are equipped with light sensors and electromagnets that help them read coins and differentiate between the different denominations. These machines will read the size of the coin in both diameter and thickness, the number of ridges around the circumference of the coin, and the type of metal it is made of. Each type of coin is unique in the size and ridge count, so these machines can easily identify when the required amount of money is provided.  

Coffee machines also have a system that allows them to read, validate, and accept paper money. Every bill denomination has a unique signature of physical characteristics, and the machines are equipped with cameras or photocells to read them. The machine will examine the bill material, the ink type, its conductivity, and how it casts shadows to test for counterfeit bills. We explain this in more detail in our recent piece on how all vending machines work in general.

Most modern vending machines also accepts debit and credit cards as a payment type. These systems work exactly the same as ATM machines and every card reader at a retailer. A record of transactions will be kept that will allow the coffee vending machine owner to receive their payments.

Types of Coffee Beverages Served at the Machines

Coffee vending machine at a metro station

There are three main types of coffee beverages dispensed from coffee vending machines: instant coffee, freeze-dried coffee, and specialty pod coffee.

Instant Coffee Vending Machines

Instant coffee vending machines make coffee from ground coffee beans and hot water; the user will select their beverage size and the ground drip coffee machine will dispense the appropriate amount of powder and water from the water tank to produce the perfect coffee. Machines that serve instant coffee have the highest serving potential: more than 500 cups of hot coffee with each refill.

Freeze-Dried Coffee

Freeze-dried coffee follows a similar process as instant coffee. Freeze-dried coffee bean granules will be combined with hot water in the mixing bowl (and a specified amount of milk or sugar if desired to improve the taste) to create the ideal drink.

Specialty Pod Coffee

Specialty pod coffees don’t use loose coffee grounds at all. Instead, the right type of ground coffee is contained in a pod, the contents of which will be mixed with water when the machine is activated. This type of hot coffee can produce specialty drinks such as lattes, cappuccinos, and more.

Types of Coffee Vending Machines

Coffee brewed at a vending machine

There are a number of different types of coffee vending machines out there, and they can be categorized based on their coffee-making process, their payment system, or their size/placement. Aside from researching your potential office coffee suppliers, you should think carefully about different types of coffee machines you could treat your employees with. Let’s investigate.

Free Coffee Vending Machines

Free coffee vending machine is a popular choice for work environments such as office buildings, factories, and warehouses. As their name suggests, these office coffee machines don’t require any payment in order to dispense coffee. Although employers will have to cover the costs of the beverages, it can be a great boost to employee morale and is often a worthwhile investment. Coffee vending machine works long-term if employees don’t take advantage of it, though. It goes without saying, you likely won’t find free coffee vending machine in any public space.

Coin-Operated Coffee Vending Machines

Coin-operated coffee vending machine is exactly what it sounds like: the exchange coffee for coins and usually also paper money. Some machines will require exact change, but others will be more sophisticated and equipped with a change-dispensing system. Since people often don’t carry exact change for vending machines, the latter model is more user-friendly and will generate more business.

Cashless Coffee Vending Machines

Cashless coffee vending machine is the most modern form when it comes to categorizing by payment system. Rather than slots for coins and bills, these machines are equipped with card readers. Card readers come in two forms: they may accept standard debit and credit cards, but they can also be compatible with specialized forms of e-payment such as a student meal card, Cash App, and Apple Pay.

Floor-Standing Coffee Vending Machine

Floor-standing coffee vending machine is a large, typically coin-operated machine, and the ideal choice for high-traffic areas such as airports, lobbies, schools, and college/university campuses. These machines are the most expensive type of vending machine as they are material-heavy, but they also have the greatest serving potential. In almost all cases, these machines will also be outfitted with anti-theft systems.

Table-Top Coffee Vending Machine

Table-top coffee machines are the most common type for office spaces and employee break rooms. They are typically cost-effective and easy to install. They offer multiple water connection systems (large water bottle or direct water line, for example) and are highly portable.

In-Cup Coffee Vending Machines

In-cup machines are fairly unique. Rather than requiring the user to place a paper cup under a nozzle where the coffee will be poured, in-cup machines prepare a cup of coffee inside the machine and then deliver it to the individual. Cups will be prepped with either instant or freeze-dried coffee grounds, mixed with hot water, and then delivered as a steaming cup of coffee.

Bean to Cup Vending Machines

Bean to cup vending equipment is a good option for vending/company owners that want to provide great tasting coffee to their employees or customers. They grind full coffee beans for each fresh cup of coffee, providing a delicious taste and the typical coffee smell that caffeine addicts love. This type of coffee machine is ideal for lower volume use, as it can only accommodate a certain number of coffee beans at a time.

Pod Coffee Machines

This coffee shop is compatible with pods will require refilling the most: they are the smallest units and are better suited to small offices or break rooms rather than high-traffic areas. However, they also offer the most diverse range of hot drinks and can cater to the widest range of people. They can provide hot chocolate, standard coffee, and specialty coffee drinks.

How to Start a Coffee Vending Machine Business

A laptop, notebook, and a cup of coffee signaling starting a business

If you’re keen on getting started in the vending industry and you have a soft spot for coffee machines, we have good news for you. There is essentially no location in a city where a coffee machine will not be profitable unless you set up directly next to cafes or coffee shops. In today’s busy world, everyone loves a convenient cup of hot coffee, tea, or hot chocolate.

To get started with a coffee vending machine business, there are a few fundamental steps you should follow to increase your chance of success.

1.     Create a business plan

2.     Form an LLC

2.     Acquire funding

3.     Find and choose your location(s)

4.     Purchase the coffee machine(s) you need

5.     Fill the coffee machines with stock (coffee beans, pods, or powder; milk; sugar; don’t forget the cups!)

6.     Regularly monitor and maintain your equipment to keep the machines operating at their full potential

For more information about starting a coffee vending machine business, click here.

Wrapping Up

Overall, coffee machines occupy a popular niche in the vending industry. With flexibility in their payment systems, size, and coffee-brewing style, they can be adapted to every environment big or small. If you’re interested in getting started with a vending machine business, a coffee line is a reliable option. They also make great additions to well-established vending businesses. Enjoy your brew!

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