Japan Runs on Vending Machines. It’s About to Break Millions of Them.

Japan Runs on Vending Machines. It’s About to Break Millions of Them.

The vending machine at Hiroshi Nishitani’s Tokyo ramen restaurant has been reliable for a decade. Customers feed it money, and it prints out their orders while he makes fresh noodles in the kitchen. The food is served within minutes once the customer delivers the order to the pair of cooks at the counter.

But the machine’s days are numbered. Japan is set to introduce a new set of bank notes this summer, something it does every 20 years or so to thwart counterfeiters. The machine, already too old to accept recent coin designs, won’t accept the new bills, Mr. Nishitani said.

“There’s nothing wrong with the vending machine,” he said, expressing frustration with the need to buy an expensive new unit compatible with the new notes.

All over Japan, restaurants, cafeterias, bathhouses and other businesses are facing a similar prospect. The country has 4.1 million vending machines, according to Nikkei Compass, a database for industry reports. Many of them will be obsolete once the new 1,000-, 5,000- and 10,000-yen bills roll out in July featuring hologram technology.

In Japan, where the work force is shrinking, the machines reduce the need for cashiers and servers. Among the most reliant on the machines are ramen shops, which serve one of the Japanese working class’s favorite, most affordable meals.

Ramen, wheat noodles in a richly flavored broth, became an integral part of Japanese cuisine after being popularized in the 1980s as the country’s economy took off. Restaurants spread as people clamored for the quick and filling meal and as chefs experimented with new ingredients. Many chefs now dedicate their lives to perfecting the dish. Mr. Nishitani, who is 42, began making ramen at 17.

The noodles are a staple among construction and factory workers, salarymen, and students in search of inexpensive meals. Many ramen shops are clustered around train stations, catering to commuters.

On a recent Tuesday afternoon, students from a nearby university filed in for a late lunch at Mr. Nishitani’s nine-seat shop, Goumen Maruko.

He and his three employees sell about 100 dishes a day. Each is priced under 1,000 yen, or roughly $6.50. The most popular dish is a $5 Jiro-style bowl: noodles with a mountain of vegetables and clumps of pork fat soaked in a steaming broth of pork and chicken. The most expensive meals, which come in larger portions, cost about $6.20.

To defray the cost of upgrading or replacing vending machines, some municipalities offer subsidies, but most of the cost will fall on shop owners. A new machine can cost two million yen, or about $13,000, said Masahiro Kawamura, a sales manager at Elcom, a Tokyo company that sells vending machines that dispense tickets.

Yoshihiro Serizawa, who runs a soba shop in Tokyo, said he spent about $19,000 on his new machine, which also accepts cashless payment — “a huge financial burden.” The amount is equivalent to more than 6,000 orders of his most popular dish: soba with mixed vegetables and seafood tempura, which costs just over $3.

“You have to constantly think about how you will make back the money,” Mr. Serizawa said.

The new bank notes are heightening the pressures on Japan’s small businesses. Recently, inflation has sped up after staying low for years, and the country slipped into a recession.

Increased flour and electricity prices have added to the expenses for ramen shops in particular. Analysts at Tokyo Shoko Research said that 45 ramen restaurants nationwide had filed for bankruptcy last year, the highest number since 2009. With customers unaccustomed to rising prices, businesses have struggled to increase theirs.

Among ramen chefs, the widely accepted limit for a bowl of ramen is known as the “1,000-yen wall.”

“I really don’t want to raise the price any further,” Mr. Nishitani said.

When Japan released its last set of bills in 2004, modifying the vending machines and issuing 10 billion new bank notes cost hundreds of millions of dollars. Demand was so high that one manufacturer near Osaka, called Glory, saw its net income triple, according to an annual report.

Transitioning to new machines could take years. By the summer of 2023, only about 30 percent of drink vending machines could accept the 500 yen coins introduced in 2021, according to the Sankei Shimbun, a Japanese newspaper.

Mr. Nishitani’s vending machine does not work with those coins, either. His Tokyo ward is subsidizing up to $1,900 toward new machines, a city official said. Mr. Nishitani laughed at the notion that it was nearly enough.

With two months to go before the new bills are issued, he had still not placed an order for a new machine. He recently began accepting payments through a credit card reader for the first time. But that has come with more administrative fees and more work.

“I can’t get used to it at all,” he said.

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