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MILK VENDING SESSION November 5, 2003 Kathy Belcher, Program Coordinator, Southeast Dairy Association AGENDA Welcome& Samples Why Vended Milk? Machine Options National Vended Milk Test Results Milk, Cheese & Yogurt Test Results Local Results SUDIA Milk Vending Grants

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milk vending session november 5 2003
MILK VENDING SESSIONNovember 5, 2003

Kathy Belcher, Program Coordinator,

Southeast Dairy Association

agenda
AGENDA
  • Welcome& Samples
  • Why Vended Milk?
  • Machine Options
  • National Vended Milk Test Results
  • Milk, Cheese & Yogurt Test Results
  • Local Results
  • SUDIA Milk Vending Grants
  • Questions & Answers
why milk vending
WHY MILK VENDING?
  • Milk vending offers students a healthy and “cool” alternative to soft drinks and juice drinks
  • In the appropriate setting, milk vending can deliver a profit to schools
research has shown
Research Has Shown…
  • 90% of teen girls and 70% of teen boys do not get enough calcium
  • Children who followed a diet rich in dairy foods hadlower body fat than children with lower calcium intakes
  • Each additional serving of sugar-sweetened beverages such as soft drinks increased the risk for obesity
research has shown5
Research Has Shown…
  • Students prefer plastic, re-sealable containers to traditional paper cartons of milk
  • Secondary students prefer larger servings of milk
  • When given flavored milk options, milk and calcium consumption increased
  • Adding a 3rd flavor of milk increased in-school milk consumption
setting the record straight on flavored milk
Setting the Record Straight on Flavored Milk
  • Children who drink flavored milk drink more milk and have higher calcium intakes than those who don’t.
  • Children who drink flavored milk consume fewer

nutrient- void soft drinks and fruit drinks.

  • Children who drink flavored milk do not consume more fat and sugar than those who drink unflavored milk.

Johnson ,R.K. et al. The nutritional consequences of flavored milk consumption

in U.S. school –aged children. JADA 2002; 102,2: 853-856.

ideas for funding support
Ideas for Funding Support?
  • Community Health Organizations
  • School Health Advisory Committees
  • PTA’s or other school organization
  • Community Ag-related Businesses
  • SUDIA Grants
sudia grant process
SUDIA Grant Process
  • School Foodservice Director or Principal may apply for $1000 SUDIA grant (10 still available)
  • May be used for purchase or lease of a milk vending machine
  • Up to 2 grants per school district
  • Purchase or lease by December 15, 2003
  • Submit copy of purchase order or lease agreement for funds to be released.
slide9
Milk Vending Machine OptionsClyde Paschal, The Vending CenterDavid Pisacane, Shaffer Distributing Co.

Why special milk machines?

  • Constant temperature of 37° ensures freshness and great taste
  • Typical soft drink machines chill only the bottom 1/3 of the cabinet
  • Health guard renders machine inoperable if the temperature goes above 40° for 15+ minutes
machine features
Machine Features

What to look for…

  • Front of machine
  • Capacity
  • Stocking method
  • First-in, first-out function
  • Storage - vertical or horizontal?
  • Currency mechanism
  • Ease of adding different size products
dixie narco
Dixie Narco
  • 360 16 oz bottle capacity
  • New, smaller capacity now available
  • Glass front with celebrity graphics on sides
  • Health guard
  • Coin, bill or card system
  • Warranty
  • Anti-theft system
  • Price: $3900 / $4500
ams automated merchandising systems
AMSAutomated Merchandising Systems
  • Up to 288 16 oz bottle capacity
  • Drawer-like, pull-out trays make rotating product easy
  • Can accommodate yogurt & string cheese
  • Glass front with graphics
  • Health guard
  • Coin, bill changer system
  • Warranty
  • Price: $3900
slide13

School Milk Vending Test :

  • Evaluating Opportunities
  • for School Milk Vending
  • September 5, 2001
  • Funded By:
  • Milk Processor Education Program (MilkPEP)
  • Dairy Management Inc. (DMI)
  • Managed By:
    • Research and Consulting
    • For the Global Beverage Industry
slide14

Test Objectives and Methodology

Primary Test Objective

  • To evaluate the opportunity for milk vending in schools
  • To quantify the profit potential
  • To understand the operating dynamics
  • To identify optimal products, placement and merchandising
  • To build vending economic models for schools, processors and vending operators

Supporting Objective

slide15

Test Objectives and Methodology

  • Omaha, NE
  • Roberts Dairy
  • Dahl Vending
  • 2 Middle/6 High Schools
  • 4 Dual Placements
  • Avg. School Population: 1,080
  • Boston, MA
  • HP Hood, Inc.
  • A&B Vending Co.
  • 5 Middle/12 High Schools
  • 1 Dual Placement
  • Avg. School Population: 1,180
  • Southern California
  • Alta Dena Dairy
  • Venders Service - Orange Cty.
  • Roosevelt Milk Vending - LA
  • 6 Middle/9 High Schools
  • 4 Dual Placements
  • Avg. School Population: 1,785
  • Miami, FL
  • Velda Farms Dairy
  • Great American Vending
  • 0 Middle/12 High Schools
  • 4 Dual Placements
  • Average School Pop: 3,060
  • Austin, TX
  • Oak Farms Dairy
  • Accent Food Service
  • 11 Middle/10 High Schools
  • Avg. School Population: 1,190
  • The five test markets were selected based on processor capabilities/interest, third-party vend operator capabilities and geographic representation
    • Vending machines were placed in middle and high schools,
    • with dual machine placements in 13 high schools
slide16

Test Objectives and Methodology

The vended milk was priced at $1.00 across all test markets, which was in line with competitive vended products in similar serving sizes

Typical Beverage Vending Prices in Schools

ItemOmahaBostonAustinLos AngelesMiami

20-oz. Plastic Soda $1.00 $1.05 $1.00 $1.00 $1.00

Bottled Water $1.00 $1.00 $1.00 $1.00 $0.85

Bottled Juice $1.00 $1.25 $1.25 $1.25 $1.25

Canned Juice $0.85 $0.85 $0.80 $0.75 $0.75

Isotonics $1.25 $1.25 $1.25 $1.25 $1.00

Bottled Tea N/A $1.25 $1.25 $1.25 $1.00

Milk Test $1.00 $1.00 $1.00 $1.00 $1.00

slide17

Test Objectives and Methodology

  • The flavors offered varied by market, depending on processor product line
    • Test parameters required at least three flavors, and each market also offered a variety of fat levels

Vend Test Product Variety

by Market

SKUsOmahaBostonAustinLos AngelesMiami

Whole White     

Low Fat White     

Skim White 

Chocolate Whole     

Chocolate Low Fat  

Strawberry Low Fat    

Orange 

Coffee 

Total SKUs 5 5 4 6 4

slide18

Key Learnings/Messages from the Vending Test

What We Learned from the School Milk Vending Test *

  • Kids will eagerly buy milk from vending machines in schools
  • Vending will be the preferred venue for kids to buy flavored milk, especially products they can’t get on the lunch or a la carte lines
  • The greatest vending sales opportunity comes from large middle and high schools
  • Flavors out-sell white milk nearly 10 to 1
  • Milk vending can be a profitable business, given the right product mix, pricing and operational components
  • Commissions to schools are usual if vending is not school-operated
  • There is no single approach to school milk vending
  • Not all schools are appropriate for milk vending
  • There may be significant competitive response by the soft drink players
  • There was no significant lunch line cannibalization
  • Spoilage was not a significant issue/expense *See full report at www.idfa.org/mktg/gotmilk.htm
slide19

Test Results – The Data

  • Average weekly sales per machine during the test were $280 for all schools
    • High schools achieved higher velocities, primarily due to the larger school populations compared to middle schools

Average Milk Vender Sales

Sales Per Machine Per Week

Installation Period – 1st 3 weeks

Base Line Period – After 1st 3 weeks

All Weeks

slide20

Test Results – Student Reaction

  • Students were generally satisfied with the milk serving size of 16-ounce – they definitely did not want smaller portions
    • A number of students would have liked more milk per vended serving

Students’ Reaction to 16-ounce Serving Size

Share of Total Respondents

Source: Beverage Marketing Corporation; Student Survey

slide21

Test Results – Student Reaction

  • Overall, students had very good things to say about the got milk?® vending machines
    • 84% of the comments from both middle school and high school students were positive

Straight From the Students’ Mouths

  • “I think that it’s a very creative idea to influence our students into buying milk”
  • “I like it, I wish it was closer to the cafeteria because I would buy it more”
  • “It’s beautiful and I love it so much; Yea for got milk?® vending machine”
  • “It’s great and it’s very nutritious for those with calcium deficiencies”
  • “Handy; Don’t have to stand in line”
  • “I like it, especially the Dixie Chicks; it gives us something else to drink”
  • “It’s a great way to call kid’s attention to drinking milk”
  • “I like it; sometimes me and my dad get strawberry milk after school because it’s our favorite”
  • “I like it; it gives us a choice besides soda”
  • “I like it because it gives us more variety and more milk”
slide22

Test Results – Student Reaction

  • Negative comments focused on the cost and the machine itself

Straight From the Students’ Mouths

  • “It costs too much for too little; better deal through lunch line”
  • “All the milk has too much fat in it”
  • “I think it’s easy to flip over and get free milk”
  • “Sometimes there is milk in the machine and after you press the button, it says sold out, even though there’s still milk in there”
  • “I don’t think many kids are into buying milk from it; also, you can get free milk in the lunch line”
  • “Milk in the machine for extended period of time scares me”
  • “It needs a new picture on the side”
  • “It’s good, but I don’t use it very much because it’s too expensive”
  • “It’s kinda cool, but dumb too because milk is in lunch line for 50 cents”
dairy vending test in iowa illinois final report

Dairy Vending TestinIowa/Illinois:Final Report

Prepared for:Swiss Valley, Midwest Dairy Association & Dairy Management Inc.

Prepared by: MarketectureJune 19, 2003

dairy vending machine plan o gram
Dairy Vending Machine Plan-O-Gram

Yoplait

GoGurt

Schreiber

String Cheese

Nestle VanillaNesQuik

Nestle BananaNesQuik

Swiss Valley

Whole Chocolate Milk

Swiss Valley

StrawberryMilk

SV/LFChocolateMilk

SV/LFChocolateMilk

SV/Whole

Chocolate Milk or Yogurt

SV/SkimWhiteMilk

SV/2%WhiteMilk

SV/WholeWhite Milk

units sold
Units Sold

Total Yogurt:

12,738School/Week

29.7

GoGurt Strawberry: 47%

GoGurt Berry Blue: 39%

Raspberry Cup*: 7%

Strawberry Cup*:7%

100%

16%

Total Units Sold:

77,951

Total Cheese:

18,443

School/Week:

43.1

24%

4,585 Units Sold/School

4.2 Units Sold/Student

Chocolate Whole: 42%

Chocolate 1%: 19%

Strawberry 2%: 23%

White FF: 3%

White 2%: 4%

White Whole: 3%

NesQuik Vanilla*: 8%

NesQuik Banana*:3%

100%

182 Units Sold/School/Week

Total Milk:

46,770School/Week

109.2

60%

.17 Units/Student/Week

* Products not available in all schools and during all weeks.

units per week
Units Per Week
  • Sales volume differed significantly from low to high
vending machine
Vending Machine
  • AMS machines were used because of their ability to dispense a variety of different products –milk, cheese & yogurt
school milk vending in kentucky
School Milk Vending in Kentucky
  • At least 49 Machines in place
    • 3 in Elementary Schools
    • 14 in Middle Schools
    • 32 in High Schools
  • School Food Service – Administration Partnership in at least 3 districts (Barren, Hardin & Muhlenberg)
  • School Food Service – Athletic Dept. Partnership in Monroe Co.
barren county schools sarah vincent sfs director
Barren County SchoolsSarah Vincent, SFS Director

Barren County High School – 1200 students, 2 machines

Barren County Middle School – 600 students, 2 machines

(1st machine paid for in less than 2 months)

  • Where: Commons area, just outside cafeteria
  • What: Milk
  • Price: $1.00 Processor milk; $1.50 Nesquik
  • Stocking Time: 15-60 minutes a day
  • Milk Sales: 150-430 units per day
  • Milk Variety: Strawberry, chocolate, banana, vanilla,white
warren county schools doris pruitt sfs director
Warren County SchoolsDoris Pruitt, SFS Director

5 machines in middle and high schools, 1 in elementary

(1st machine paid for itself in 2-1/2 months)

  • Where: Cafeteria – access before, during and after school (In elem., is in hallway outside cafeteria)
  • What: Milk, water (w/ school logo) and 100% juice
  • Price: $1 for local product; $1.50 for NesQuik products
  • Sales: From 100 to 350 units per week, per machine

Elem. school includes daily “milk break” opportunity

  • Variety: 1% chocolate and 1% strawberry from local dairy

FF choc, RF banana, NesQuik

  • Stocking Time: 10-15 minutes per day

*Note from Doris: Be sure to set up dual control for money collection

ohio county high school shirley dockery
Ohio County High SchoolShirley Dockery
  • Student population: 1100
  • Where: Lobby of HS....available at all times
  • What: Milk products only
  • Cost: $1
  • Sales: 350-375 units per week
  • Variety: Chocolate, Strawberry, white
  • Stocking time: Zero....milk vendor stocks
hart county high school martha taylor sfs director
Hart County High SchoolMartha Taylor, SFS Director
  • Student Population: 800
  • Where: Cafeteria, access anytime
  • What: Milk only
  • Price: $1.00 for local product, $1.50 for Nesquik p
  • Sales: 175 per week
  • Milk Variety: 1% Chocolate, local dairy; 4 flavors Nesquik
  • Stocking Time: Approx. 10-15 minutes per day
mercer county high school sylvia moore sfs director
Mercer County High SchoolSylvia Moore, SFS Director
  • Student Population: 650
  • Where: Foyer, access anytime
  • What: Milk, Water & Juice
  • Price: $1.00 for processor milk, $1.50 for Nesquik; $1.00 Juice; $.75 water
  • Sales: 420 units per week (ave. of 16 weeks)
  • Milk Variety: White & Chocolate + 4 flavors Nesquik
  • Stocking Time: Approx. 10-15 minutes per day
butler county high school jane smith sfs director
Butler County High SchoolJane Smith, SFS Director
  • Student Population: 600
  • Where: Access all day
  • What: Milk, Water and Juice
  • Price: $1.00 and $1.50 for Nesquik products
  • Sales: 150 per week average, more sales the beginning of the year and when weather is warm.
  • Milk Variety: 1% choc.;1% strawberry; Whole Choc.; Orange Juice; Water; 5 Nesquik flavors.
  • Stocking Time:  Approx 1 hr per week.
two examples of school milk vending operation
School Self Operation

Pros

School retains all revenue

Full control over contents and quality control

Control over vend price

Fund raising mechanism

Availability of on-site labor

Leasing allows for immediate operating profitability

If purchasing the vender, the payback is short

Cons

Machine purchase price

Added responsibilities for staff

Maintenance infrastructure

Costs for product spoilage

Machine service costs

Vending Operator

Pros

School can have vending program for little or no money

Machine filling, maintenance and service provided by vend-op

Benefit from expertise and experience of vend-op

School receives percentage of profits

Cons

School shares profit with vend op

School forfeits some control over what goes into the venders

School depends on operator for quality control

Not viable for smaller schools

School forfeits control over vend price

Two Examples of School Milk Vending Operation
considerations
Considerations
  • Location
    • High traffic area with all day access is key
      • Consider location outside cafeteria to capitalize on before & after school and weekend events
    • Be flexible & willing to change location if needed
  • Training
    • “learning curve” to become proficient in operation
considerations37
Considerations
  • Operation
    • Insure continuous source of power
      • Not shut off at night or on weekends
      • Use tag or lock to insure plug is never disconnected
    • Plan for stocking & rotation
    • Routine maintenance of machine
    • Try a variety of products
      • Different flavors & fat levels
      • String cheese & yogurt
considerations38
Considerations
  • Partnerships
    • Food Service, Administration, Athletics, Student groups, PTA
    • Dairy Processor
    • Vend Operator
  • SUDIA grants still available
increase sales with vending promotion
Increase Sales With Vending Promotion
  • Sampling
  • Introduce new flavors
  • Rotate products for variety
    • Flavor-of-the-Month
  • Vending-specific promotions
    • SUDIA materials
      • poster, floor decals, banner, mobile, tip sheets, public address announcements
  • Mark products for free merchandise (posters, hats, t-shirts, key chains)
  • Try new products
    • String cheese
    • Yogurt
promotions ideas
Promotions Ideas
  • Press Your Luck
    • “Got Milk?” stickers were placed on bottom of select milk bottles in machine. Student who got a sticker won a prize.
  • Lotto – Free Vend
    • Machine was set to dispense a free product every 25th purchase. Student received the product plus his money back.
vended milk delivers a healthy alternative
Vended Milk Delivers a Healthy Alternative!

Questions?

Thank you for coming!