Why Cheap Cuisine Needs a Vending Machine

When we combine new yen with old vending machines, the recipe for selling ramen changes.

This is the story.

Ramen Prices

Entering a typical Japanese ramen shop, customers feed orders and money to a vending machine. Then, for just 785 yen ($5.00), they get a bowl of broth, vegetables, pork fat, and noodles. Similarly, a nearby shop sells soba, vegetables, and seafood tempura for just 470 yen ($3.00).

You can see the vending machine at the shop’s entrance:

Vending machines are a crucial part of the ramen recipe. Because they eliminate the need for expensive labor, the machines keep production costs down. Soon though, because the Japanese government is modifying some of its money, the old machines won’t work. To prevent counterfeit copies of its banknotes, the new designs include 3D holograms and a high-definition watermark, changes that the old machines cannot read. According to one soba shop owner, a new $19,000 vending machine is the equivalent of 6,000 meals.

Vending machine protests are not unusual. In the United States, when the American Council for the Blind sued the US Treasury, they said disabilities legislation guaranteed currency that let blind people distinguish among denominations. Responding with a list of concerns, opponents said the vending machine industry would experience “undue hardship.”

Our Bottom Line: Supply

Defined as how much producers are willing and able to provide at different prices, the supply side of markets cares about cost. With ramen supply we go directly to production costs for land, labor, and capital. As a key driver of cost, labor stands out as the reason a vending machine tugs ramen prices down to E2, after shifting our supply curve to the right:

We could even say that a vending machine is a part of the recipe for ramen (and all else that it dispenses):

My sources and more: Thanks to the NY Times for alerting me to the connection among ramen prices, currency changes, and Japan’s vending machines. From there, I found similar issues in the United States. Then, completing the story, you might enjoy (as did I) reading about Japan’s July 2024 currency changes.