Update on Milk in Schools
& Reimbursable Vending
Presented to:
Provided by:
Doug Adams, President
2275 Half Day Road, Bannockburn, IL 60015  847.945.1155  www.primeconsulting.biz
Agenda
“State of Union” on Milk in Schools
• Recent Trends
• How Have New Standards Effected Milk
• Flavored Milk
Reimbursable Vending
Q&A / Discussion
2
ANNUAL SCHOOL SURVEY
2012-2013 Results
Joint effort of:
PAGE 3
Annual School Channel Survey: Scope
M
A
C
R
O
Suppliers (1)
Annual survey designed to gather various performance,
process and activity measures from throughout the school
channel supply chain. 2012-13 was the 8th consecutive year.
Processors
n = 63% of schools (2)
Schools
n = 1,195 districts, 16% of students
M
I
C
R
O
Performance Measures
Process Measures
Activity & Milk Program
Participation Measures
1 Flavor houses & packaging providers were surveyed informally this year.
2 Served directly. An additional 20-30% comes from these Processors but delivered by independent dairy distributors.
4
Executive Summary: School Milk Declined 5.1%
Loss of 23 MM gallons in current year brings four year decline to 41 MM gallons.
White grew 5.7%, or 8 MM gallons, but did not offset 31MM loss of flavored.
Chocolate declined 25 MM gallons, compared to losing 2-5 MM per year in each of the prior three
years. Strawberry lost 4.7 MM gallons, while “All Other” flavors lost nearly 1.6 MM gallons (-32%).
So for every 1 gallon gained in white milk, 4 gallons of flavored milk were lost.
’08-’09
Flavor
White
Gallons
’09-’10
% Mix
Gallons
’10-’11
% Mix
Gallons
‘11-’12
% Mix
Gallons
‘12-’13
% Mix
Gallons
Change
% Mix
Gallons
% YA
139.1MM 29.6
132.0 MM 28.7%
139.8 MM 30.6%
143.3MM 31.7%
151.4 MM 35.3%
+8.1 MM +5.7%
Chocolate
288.6
61.4
286.6
62.3
284.3
62.2
278.4
61.6
253.6
59.1
-24.8
-9.0
Strawberry
32.9
7.0
35.0
7.6
27.0
5.9
25.3
5.6
20.6
4.8
-4.7
-18.6
All Other
9.4
2.0
6.4
1.4
5.9
1.3
5.0
1.1
3.4
0.8
-1.6
-32.0
470 MM 100%
460 MM 100%
457MM
100%
Source: Processor based projection
5
452 MM 100%
429 MM 100%
-23 MM -5.1%
School Milk Volume Cause of Change
•
Milk volume declined 5.1%, or 23 MM gallons in the 2012-13 year compared to a year ago.
•
Increases in enrollment, breakfast participation and summer feeding contributed an
incremental 3.2 MM gallons.
•
Decreases: The combination of declining lunch participation and structural changes in the
school feeding programs (meal standards, lowing of milk fat levels, fruit and vegetable priority, etc.),
resulted in a loss of 25.2 MM gallons (8 servings per student), an unprecedented loss for a single
year.
452
+0.3
+0.6
Enrollment
Summer
Feeding
MM
+2.3
-7.9
Breakfast
Participation
-8.9
Lunch
Participation
Total Change
-23 MM
-5.1%
Flavor
Pullback
-8.4
-1.0
Other
Factors
A La Carte
429
MM
Confluence of Factors
• -25.2 MM Gallons
• -5.6%
2011-12
Increases Due to:
Decreases Due to:
6
2012-13
School Milk Trend Highlights
1. Milk volume declined 5.1%, or 23 MM gallons. The decline is of significant concern and the
result of a series of factors (headwinds)that compounded together:
• Implementation of the new meal standards generated controversy, a 10% decline in paid
meals and a 3% drop overall.
• The new meal standards require a fruit or vegetable as part of every meal. As a result,
processors report that many schools were required to “push” those items at the register to
complete meals for reimbursement. Previously, milk was the “push” item.
• A number of districts have begun merchandising water next to milk more often and appear
happy financially with that substitution as long as the meal qualifies for reimbursement.
• Slowing of breakfast participation growth (smaller increase than in recent years).
• Reduced programming supporting milk consumption in schools.
• Continued, though reduced, efforts to curtail milk flavors.
• Remaining conversion of flavored milk to fat free, further widening the taste gap between
school and retail chocolate milk.
Together, these factors caused sizeable declines in milk volume across three-fourths of the
Dairy Council areas, and a similar portion of processors.
7
Metrics: Weekly Milk Servings per Student & Potential
Definitions
During the Capturing the School Milk Opportunity workshops, school districts and processors are
encouraged to evaluate milk development. Weekly milk servings per student is taught as the simplest and
most comprehensive measure of milk development. The calculation is as follows:
Weekly Milk Servings
per Student
Milks Used in a Week
=
Students at the School/ District
Schools are encouraged to compare their current performance against calculated
“current potential.” A school’s/ district’s potential is defined as the number of potential milk
servings at lunch (5 per week), plus breakfast (adjusted for participation).
Potential for
Milk Servings
=
5
Lunches
per Week
+
5
x
Breakfast
per Week
8
=
%
Served
Current
Potential
Weekly Milk Usage per Student
The average student used 3.69 milks (8 oz) per week, a decrease of 5.4% vs. YA.
3.69 milks across 6.34 meals – so only 58% of meals had a milk.
This equates to 133 milks per school year across the 229 meals (breakfast and lunch) eaten at school.
The decline was greatest amongst elementary students.
The four year decline translates into the average student using 12 fewer milks each school year.
4.5 (-6.2%)
161 per year
3.69 (-5.4%)
2.9 (-3.3%)
133 per year
103 per year
Elementary
Secondary
Note: The average student has 6.34 meals per week at school.
9
All Respondents
Weekly Milk Servings per Student
(Dairy Council Geography)
National Average = 3.69
2.9*
4.0*
3.5*
3.8*
2.7
4.4
3.0
3.7
3.2
4.4
2.9
4.8
4.3
3.3
2.5*
4.4
3.5
NOTE: Excludes summer feeding
and larger size a la carte
3.3
* Small sample for that geography
10
3.3
How about in New York?
Weekly Servings 4.22
Potential
6.68
% of Potential
63%
Weekly Servings 2.71
Potential
5.62
% of Potential
48%
Weekly Servings 4.77
Potential
6.90
% of Potential
69%
Weekly Servings
Potential
% of Potential
11
2.47
5.98
41%
Selected District Milk Usage
(Ranked within Region by Student Population)
Weekly Servings
Student
Weekly Servings
Student
6.45
6.01
3.45
3.63
3.43
2.04
New Jersey/ East PA
Weekly Servings
Student
4.16
3.92
3.82
% of
Potential
69%
40
52
% of
Potential
77%
69
55
62
57
39
Weekly Servings
Student
5.19
4.13
3.44
2.29
% of
Potential
69%
66
61
44
12
% of
Potential
4.72
75%
4.38
65
3.75
60
2.64
49
1.85
36
1.83
35
Weekly Servings
Student
% of
Potential
2.80
2.49
2.38
1.74
1.67
1.30
50%
42
43
33
32
25
What if … A Milk with Every Meal in NY
6.16
Weekly
Servings
per Student
If a Milk was consumed with
every meal, the nutrient
intake for the added 125 units
amounts to:
2.69
38 days of Calcium
31
Vitamin D
14
Potassium
16
Magnesium
2012-13
Current Potential
13
Flavored Milk Averages 44 Fewer Calories than 6 Yrs Ago
(Declined 22 calories in the past 2 years)
Avg Calories in 8oz Serving of Flavored Milk
• The average flavored milk serving in
schools was 121.8 calories, 10 calories
less than last year.
166.1
160.4
156.2
154.0
142.8
131.5
121.8
• Flavored milk was only 24 calories
more than the white milk in schools.
'06-'07
'07-'08
'08-'09
'09-'10
'10-'11
'11-'12
'11-'12
AVERAGE CALORIES PER 8 OZ OF MILK IN SCHOOLS by School Year
’06-’07
‘07-’08
‘08-’09
’09-’10
’10-’11
‘11-’12
’12-’13
White
110.8
107.8
106.2
105.8
104.3
97.9
97.4
-13.5 calories
-12%
Flavored
166.1
160.4
156.2
154.0
142.8
131.5
121.8
-44.3 calories
-27%
TOTAL
150.0
144.1
141.2
140.0
131.0
120.9
113.3
-36.7 calories
-25%
14
6 Yr Change
Added Sugar Has Declined 45%
(in School Chocolate Milk)
•
The sugar level in Chocolate milk has declined by 7.5 grams per serving over six years.
•
Added sugar has declined 45% (from 16.7g to 9.2g), while the sugar from cow’s milk (lactose)
has not changed (~12g per serving).
Grams of Sugar per 8oz Serving
'06-'07
12
'11-'12
12
'12-'13
12
Equivalent Teaspoons
4.0
16.7
10.1
2.4
9.2
White
2.2
Flavored
15
Sweetener Usage Has Been Cut 45% Over The Past 6 Yrs
Milk dairies have eliminated 265 Billion calories (a year) from student diets by lowering fat levels
and reducing the sweetener level in flavored milk.
– 17% from lower fat levels in white milk
– 83% from lowering sweetener(57%) and fat content in flavored milk (26%)
2012-13 School Year vs. 2006-07 School Year
Reduction in Calories
National
Per Child
Per Child Per Day
-264.6 Billion
-5,344*
-29.7
-37.4 Billion
-756
-4.2
Reduction in Sugar
Grams
Tons
-41,277
*The calorie reduction is equivalent to each child shedding 1.53 pounds.
Since not all students drink milk, it’s closer to 2 pounds per milk drinker.
16
A La Carte Beverage Offerings: Total U.S. & New York
New York Districts (
) Appear
to Offer More Competitive Choices
ELEMENTARY
SECONDARY
(51% of Respondents)
72
81
4
8
vs. YA
+1
+2
NC
NC
83 +1
81 -10
6
7
5
7
8
14
6
16
5
1
1
+1
+4
NC
-3
(76% of Respondents)
% of Districts Offering …
vs. YA
86
Bottled Water
96
-3
-3
28
33
Enhanced (Vitamin) Bottled Water
87
87
Juice
16
17
Juice Drink
+2
+7
Sports Drinks
+1
+6
Tea/ Lemonade
-8
-2
Soy, Almond, Rice & Other Bevs
+3
+2
48
42
39
50
7
2
2
Organic Milk
17
NC
-3
+1
-4
21
23
Carbonated Juice
+4
+6
NC
-5
-2
-3
-4
-5
A La Carte Variety Adversely Effects Milk
Competing beverage choices have a direct effect on milk usage by students.
When schools provide more options and variety, milk loses 23% or 29 servings per year, almost
1 serving a week.
Secondary School Avg Weekly Milk Servings per Student
Loss of Milk Usage*
Annual Servings
per Student
3.45
Water & Juice Only
2.64
Any Competing Beverage Choice(s)*
-23%
29
* Analysis conducted using the responses from the last two years. Competing beverage choices are defined as sports drinks, iced
tea/ lemonade, vitamin water and carbonated juice.
The combination of more types of beverages plus several flavors within each type overwhelms
the 1 maybe 2 milk flavors.
18
ADADC:
New York & Northern New Jersey/ NE PA
WEEKLY MILK SERVINGS PER STUDENT *
Actual
44%
-6 pts
TOTAL U.S.
58%
-4
‘12-’13
NEW YORK
42.3%
‘11-’12
‘12-’13
% of Students
TOTAL U.S.
54.5%
32.2%
35.3%
63.4%
Chocolate
59.1%
4.4%
Other
5.6%
TOTAL U.S.
'11-'12
16% of Students
Lunch
Breakfast
Lunch
Elementary
29%
67%
32%
67%
Secondary
13%
44%
16%
49%
TOTAL
23%
57%
27%
60%
COMMENTS
White
'12-'13
National Response Rate:
Breakfast
3.2%
NEWYORK
'11-'12
4,005 Schools, 46% of Students
MEAL PARTICIPATION IN RESPONDENT SCHOOLS
% OF MILK SALES
'12-'13
N = 160 Respondents
3.69
2.69
‘11-’12
ABOUT THE SAMPLE
6.34
6.29
3.91
3.05
NEW YORK
% OF POTENTIAL
Potential
6.16
6.14
‘12-’13
Change
vs. YA
31.7%
61.6%
6.7%
• Students averaged 2.69 servings of milk each week, down from just
over 3 servings last year. This translates to 44% of the meals vs. 58%
achieved nationally.
• Flavor mix continues to move toward White which is now 42% of the
milks served. The level of flavored milk challenges reported by the
Directors declined to roughly the national average.
• A wider variety of competitive beverages (a la carte) are available
to students than in the past (elementary and secondary). These
have been found to reduce milk consumption by students.
* Weekly milk serving per student = Milks used in a week ÷ students at the school or district, excludes summer feeding and a la carte.
Potential is defined as 5 lunches + current breakfast participation x 5 breakfasts. This measure (both years) was revised to exclude
summer feeding and a la carte.
19
Agenda
“State of Union” on Milk in Schools
• Recent Trends
• How Have New Standards Effected Milk
• Flavored Milk
Reimbursable Vending
Q&A / Discussion
20
Preface
Prime Consulting Group, Inc. was engaged by VE South to independently quantify and evaluate the
performance of the STAR FOOD Healthy Express Reimbursable Meal Vending machine.
Three of the largest installed base customers were invited to participate in the evaluation.
Miami-Dade, FL
Broward County, FL
Cincinnati, OH
Prime worked directly with the districts to secure agreed to data and performed all analysis
without involvement of VE South. All data about vending meal sales, overall sales in the cafeteria
and school population metrics were obtained directly from the districts or from the National
Center for Educational Statistics.
Prime performed the analysis at the school level to identify the range of performance, and then
develop appropriate averages, roll-ups and ranges for each measure.
Prime Consulting Group, Inc., is based in Bannockburn, Illinois, a Chicago suburb. Prime serves clients by
making a measurable difference through actionable results that maximize a client’s return on investment. The
firm’s practice spans in-market optimization, measurement and evaluation, and consumer research. Prime has
15 years of continuous experience in the School channel. The firm has conducted numerous in-school tests,
taught workshops at over 25 national and state SNA conferences and is the consultant responsible for the joint
SNA, got milk? and National Dairy Council Annual School Survey that involves data and analysis covering all K-12
public schools in the US. For more information please visit www.primeconsulting.biz.
21
Reimbursable Vending Can Support All Dayparts
BREAKFAST
LUNCH
SNACKS
22
Approach: Districts Evaluated
Results were evaluated using three districts who collectively operate nearly 150 STAR FOOD
Healthy Express machines in Senior High and Middle schools.
Broward County, FL (Ft. Lauderdale)
•
•
•
•
6th largest district; 259,000 students; 66,900 in Sr. High
Lunch service – 50 vending machines in 29 Sr. Highs
January 2012 – 2 unit pilot
Two waves of placements: May and then in November 2012
Miami-Dade, FL
•
•
•
•
3rd largest district; 350,000 students; 84,900 in Sr. High
Lunch service – 77 vending machines in 43 Sr. Highs, 7 Middle
First wave – 28 machines installed March-May 2011
49 more machines installed the following year (‘11-’12)
Cincinnati, OH
• Urban district; 32,500 students; 12,400 in Sr. High
• Breakfast service – 19 vending machines in 14 Sr. Highs
• January 2012 – placed in 14 high schools
23
Serving Lunch: Broward County Public Schools
Goal: To increase options available in the lunch program and serve students faster.
Beginning in January 2012, Broward County Public Schools in Florida piloted machines in 2 high
schools.
After only two months, the district began installing additional machines into the senior high
schools. By May, there were 39 machines across the high schools in the district.
An additional 11 machines were installed in the middle schools by November 2012.
This analysis evaluates the 39 machines in the High Schools.
24
Sales Performance Has Been Strong
Daily lunch sales averaged 55.7 meals per school.
55.7
The top performing schools (1 out of every 4) regularly exceed
100 meals per day.
Broward
Key Benefits reported by Staff & Students
•
Students avoid waiting in long lines – it only takes 17 seconds to serve a vended meal.
•
Located near cafeteria entrances for quick access.
•
Students like technology interface and independence.
•
Provided additional variety and choices beyond what is offered on the lunch line.
– Different types of wraps and 16-ounce yogurt parfaits.
– Alternate for traditional meals.
•
Reduced labor required to serve students.
25
Vending Usage Appears Connected to F/R Rate
On the surface daily volume did not seem related to the Free/Reduced level of the school.
However … when you account for different school sizes, the use of Vending was noticeably
stronger in higher Free/Reduced schools.
% Free/
Reduced
90
80
70
60
AVG
50
40
30
20
10
0
Fewer
Vended Meals per Student (Annually)
26
Many
Serving Lunch: Miami-Dade Public Schools
Goal: To increase options available in the lunch program and serve students faster.
Beginning in Spring 2011 Miami-Dade Public Schools in Florida began offering reimbursable lunches
through STAR FOOD Healthy Express vending machines.
An additional 49 machines were added between Sept. 2011 and May 2012 for a total of 77 machines.
Many of the meals were created by a team of award winning local South Florida chefs working
within the USDA guidelines.
A portion of the machines were funded with grant money
from the Florida Dairy Council as well as from Community
Putting Prevention to Work, a federal stimulus program,
in conjunction with the Miami-Dade Health Department.
Pictured at left with Miami-Dade Superintendent Alberto Carvalho are Chef
Frank Jeannetti, The Palms Hotel & Spa; Chef Kris Wessel, Red Light Miami; and
Chef Michelle Bernstein, Michy’s and Sra. Martinez.
27
Successful with A Wide Variety of Products
Chicken Chef 9%
•
•
SALADS
21%
56% of all the meals have been fruit and yogurt
parfaits, offering 2-3 different types of fruit.
•
Salads represent 21% of vended meals.
– Chicken is the most frequent protein,
usually offered two different ways.
•
Sandwiches tend to be turkey or ham and
together represent 13% of vended meals.
•
Wraps have strong sales in about 10% of the
schools and acceptable sales in nearly half of
the High Schools.
•
Gr Buffalo Chicken 6%
Significant publicity occurred around the chef
created meals, leading to higher student trial.
FRUIT & YOGURT
PARFAITS
56%
Rosemary Chicken 2%
Tuna 2%
Other 2%
WRAPS
10%
SANDWICHES
13%
Daily lunch sales have averaged 45 meals per
school. Top performing schools regularly
exceed 100 per day.
Avg Students
Served
Daily per
School
The average machine contained 4-5 different
choices for students.
40
Jul-Sep
47
Oct-Dec
45
45
Jan-Mar
Apr-Jun
2011-2012
28
N = 49
Top Two Meals Represent 70-80% of sales
Most schools had a strong “second meal”, after parfaits, representing roughly 30% of the meals.
Fruit & Yogurt Parfaits
Salads
56
21
DISTRICT AVERAGE
Wraps Sandwiches
10
13
8
13
% of
machine sales
Mix in Schools with Strong:
Salads
Wraps
Sandwiches
Parfaits
47
33
41
28
16
46
13
73
15
Roughly 30% in
their respective
“strong” schools
31
10
10
6
11
Parfaits ranged from 35% to 89% of the mix depending upon the school. In a quarter of the
schools, the parfaits amounts for more than 70% of the vended meals. Maximizing mix at each
school led to stronger overall meal sales.
29
Miami-Dade County Public Schools Recap
•
STAR FOOD Healthy Express served lunch to 45 students each day during the measurement
period (2011-2012 school year).
•
Miami-Dade worked to create excitement and unique offerings by engaging local renowned
chefs in developing the vended meal offerings. This resulted in a stronger overall sales mix
across the different meal types: salads, sandwiches and wraps.
•
Top performing schools regularly exceed 100 meals per day, calling for restocking or multiple
machines in the school.
•
Middle schools, while new to the program, show strong signs of promise. Their early
performance suggests nearly twice the vended meal volume per 100 students.
Miami-Dade COUNTY PUBLIC SCHOOLS ARE PLANNING TO:
• expand the vending use to include breakfast items.
30
Breakfast Application: Cincinnati Public Schools
Goal: To increase student participation in the universal breakfast program.
Beginning in January 2012 Cincinnati Public Schools (CPS) placed vending machines in 14 high
schools.
CPS conducted a survey to learn why their students weren’t eating breakfast and discovered the
two main reasons:
1. Never have time to get to cafeteria.
2. Campus is too large – Distance to lunchroom is too far for grab-n-go.
To overcome this, the district placed 19 vending machines near the primary entrances to the 14
high schools, rather than in the cafeterias. Students could easily access breakfast on their way to
class.
• 19 machines in 14 high schools with nearly 12,400 students.
• 12 schools have 1 machine each – 1 has 2 machines and 1 has 5 machines.
• 65% Free/Reduced rate.
• “No other changes were made beyond introducing vending machines for breakfast”
according to Jessica Shelly, Director of Foodservices.
31
Breakfast Meals Grew 50% in First Year
The students responded immediately and their use of the machines continued to grow in the
following school year.
Avg Daily Breakfasts in Secondary Schools
14 High Schools
Avg Day 3,718
Incremental 1,226
per Machine 64.5
Avg. Day 3,112
Incremental 620
per Machine 32.6
Reimbursable
Vending Introduced
Avg. Day 2,492
Aug-Sept
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
2011-2012
Aug-Sept
Oct
2012-2013
Source: Cincinnati Public Schools & Prime Consulting Group
32
Nov
Dec
Breakfast Participation Rose from 21% to 32% of Students
Translates into an incremental 1,226 breakfasts each day, or 88 per school.
Essentially every machine was nearly empty every day.
% Daily Participation
31.8
29.5
Average 21%
20.5
Aug-Sept
Oct
20.9
26.2
22.1
26.3
26.5
23.2
22.7
25.4
Reimbursable
Vending Introduced
20.4
31.7
Nov
Dec
Jan
Feb
Mar
Apr
May
2011-2012
Aug-Sept
Oct
2012-2013
Source: Cincinnati Public Schools & Prime Consulting Group
33
Nov
Dec
Participation Increased in Every School
Increase was stronger in higher Free/Reduced schools.
Daily Avg Breakfast Participation %
% Free/ 75
Reduced
Average = +11 Points to 32%
50
25
0
School A
B
C
D
E
F
G
H
I
J
K
L
M
N
Free/Reduced % 19
41
52
60
62
66
71
72
73
77
86
87
89
90
Point Change 10
3
5
13
5
9
9
11
21
16
5
10
15
10
Avg +8 pts
Avg +13 pts
34
Vending Drove Labor Productivity
Traditional grab-n-go breakfast carts had also been tried near the vending machines. Students
preferred to use the vending machines instead of the traditional carts because they like the
tech interaction – easily keying in their birth date and student ID for access.
CPS observed that “the students would stand in line to use the vending machines, even when
there was no line for the grab-n-go carts” according to Jessica Shelly, Director of Foodservices.
CPS decided to save the labor and rely solely on the vending machines.
The work associated with preparing vended meals and
stocking the machine was found to be more efficient
than the traditional service line.
Meals per Labor Hour
+6.5%
The high schools experienced a 6.5% increase in their
labor productivity, measured as the number of meals
served per labor hour (Aug-Dec ‘12 vs. YA).
Given no other significant process changes, the
improvement was attributable to the vending program
by the district.
35
21.4
22.8
Fall '11
Fall '12
Cincinnati Public School Recap
CPS, using the STAR FOOD Healthy Express vending machine, developed an innovative solution to
increasing breakfast participation. The program not only delivered an immediate increase in
Breakfast participation but that participation increase has continued for a full year without yet
leveling off.
Placement of the machines near the school entrances was the key component of the breakfast
participation success. That success is delivering over 1,200 incremental breakfasts each day
(across 14 High Schools) and now one-third of CPS high school students eat breakfast on the way
to their first class, a 50% increase in just one year.
The vending program has also resulted in foodservice labor productivity. The incremental meals
have been prepared and served with little or no incremental labor hours.
CINCINNATI PUBLIC SCHOOLS ARE PLANNING TO:
• purchase additional machines for next year.
• expand the vending to include lunch items.
36
Ways to Further Optimize Results
•
In the course of our evaluation we came across several areas to further optimize the
performance of a reimbursable vending program. These may apply in some or all school
environments. Taken together they could easily improve a schools results by 15-25% beyond
those achieved in the districts studied.
•
Recommendations to Improve Performance
– Very little marketing of the vending option occurred beyond some informational posters.
Student curiosity and word-of-mouth were responsible for the volumes being reported.
More awareness building and marketing of the reimbursable vending option may
translate into even larger volumes. Examples include prizes (sticker on bottom of 1 in 30
wins an a la carte item, etc.), introducing new items through vending before the line, etc.
– Some districts needed help developing recipes that fulfill NSLP and SBP requirements.
– Mix of product sales will vary by school, though patterns emerge, such as strong salad
schools vs. strong sandwich schools. Districts that focus on optimizing the ‘strong second’
meal, behind parfaits, experienced higher overall sales.
– Machine placement in accessible high traffic areas is critical.
– Vending can deliver labor productivity improvements. Establishing those expectations
from the start will improve realization and speed payback.
37
Financial Payback Projection
•
The final portion of the evaluation included a look at the financial payback associated with
investing in a reimbursable vending machine.
•
The machines were found to deliver a payback, based on variable contribution after food and
labor costs, in 1-2 years when used for only a single daypart.
Base Case
• Breakfast Only
• Lunch Only
• Breakfast & Lunch
1.8 years
1.4
0.8
w/ Labor Productivity
1.4 years
0.9
0.5
•
If a district incurred some employee training time and a charge to connect to their POS, the
payback period is only extended by a couple of months.
•
These projections did not include a Snack or third daypart, which would likely improve the
economics even further.
38
Financial Payback Projection
(Illustration from Excel calculator model)
Incremental Meals - per day
Breakfast
Lunch
65
45
Breakfast
& Lunch
Input
110
- annual per Machine
11,700
8,100
19,800
Incremental Revenue
$18,135
$23,166
$41,301
$1.55
$2.86
$10.881
$13,900
60%
60%
= Variable Contribution
$ 7,254
$ 9,266
STAR FOOD Healthy Express Machine Cost*
$12,445
$12,445
$500
$500
$500
1.8
1.4
0.8
less Incremental Food & Labor Costs
Freight
Payback in Years
Input
$24,781
Input
$16,520
Input
$12,445
* Some of the cost may be offset by grants from organizations such as the Dairy Council and various Foundations (especially those
focused on hunger and breakfast). Some software providers may request a fee to connect machines into the POS system.
39
Executive Summary
•
•
Reimbursable vending machines delivered strong sales
and are liked by students.
Vended Meals Served per School
(average day)
87.6
55.7
In the 3 districts studied, results exceeded expectations
and each district has continued to add more machines
and expects to add a second meal to the program.
Broward
45.0
Miami-Dade
Cincinnati
•
Key Benefits
– Students like the technology, self-service, speed and feeling of independence.
– Satellite locations don’t require staffing, yet deliver the same nutrition as the line.
– Breakfast volume and participation grew 50% in Cincinnati in just one year.
– Vending adds a service line at much lower capital cost.
– Vending lowers labor cost to serve (meals per labor hour increased 6.5%).
•
Variable contribution from incremental meal revenue can fund the machine in under 2 years,
using the machine for only one meal. If used for both breakfast and lunch, payback is less
than one year.
40
Agenda
“State of Union” on Milk in Schools
• Recent Trends
• How Have New Standards Effected Milk
• Flavored Milk
Reimbursable Vending
Q&A / Discussion
41
THANK YOU!
Update on Milk in Schools
& Reimbursable Vending
Presented to:
Provided by:
Doug Adams, President
2275 Half Day Road, Bannockburn, IL 60015  847.945.1155  www.primeconsulting.biz