Vista, CA Unified School District Healthy Vending
Source File: http://www.vusd.k12.ca.us/cns/healthyvending.htm
The Vending Challenge
Enid Hohn, R.D., Director of Child Nutrition Services
What do competitive food sales, Senate Bill 19, student stores, vending machines, and exclusive beverage contracts mean to you? If you are like many Food Service Professionals they mean problems, conflict and loss of revenues.
Remember the saying "If you can't beat em, join em? At Vista Unified School District we did just that and we have created a successful partnership within our district community.
Looking through the eyes of our competition, we thought how could we do this and do it bigger, better, and with more profits. How can we share the profits with the schools and offer better choices, better nutrition, and better prices? We were looking for ways to recapture business that our nutrition programs had lost over the years as more and more campus groups were trying to raise money for various needs through food. How could we create a "partnership" with the high school population that had come to view Child Nutrition Services (CNS) as "the enemy"? We had to enforce competitive food sales regulations and we had to limit what they sold, when they sold it, and where they sold it.
The pivotal point in making this concept work was the wholehearted support of the Superintendent. Without his support and his constant backing, this partnership would not have succeeded. The Superintendent directed the secondary principals to work with the Child Nutrition department.
The principals were very reluctant to change how they were doing business. They were accustom to working with the bottling companies or outside third party vendors and they had a certain comfort level with them. One of my challenges was to convince them that they would make more money and be able to fund more programs. The financial implication was their bottom line. I was more interested in providing better foods, throughout the day, that would benefit the students and help at the overcrowded lunch period. We only have 33 minutes to feed 3,500 students.
Once I had the go ahead, I started to conduct market research. I visited locations near the school that were selling foods and beverages. I noted the portion size, the selling price and the nutritional information. I held focus groups with various student groups; athletes, club members, ASB, vegetarian club, friends of friends. I brought in all different foods and beverages that met my criterion for healthier choices and surveyed the students asking "If this were available in a vending machine would you buy it and would you pay xxxx amount?". Based on the results of the focus groups, I moved forward with the program.
The first hurdle I needed to tackle was convincing the principals they were not going to lose anything. In fact, it was necessary to convince them that working with my department would be better for them. I obtained copies of existing contracts and designed one that read just like them, only better. I offered a bigger signing bonus and an annual renewing bonus. I offered a higher commission. Other items in the contract included: CNS would be responsible for the machines including all costs associated with installing, operating, cleaning and securing the machines, we would handle the refund bank, and the machines would be open from 7 am to 6 pm.
The high school agreed to assign their security people the added duty of monitoring the machines to insure student access and report any problems or vandalism to CNS. It was also agreed that CNS would be the sole provider of vending services on the campus.
It was now time to purchase the machines. I contacted a school district that had recently purchased machines. I talked to my contacts at various distributors, I visited other operations that had vending machines, such as: car dealerships, hospitals, colleges, and hotels. I met with vending machine distributors and I even received input from the bottling companies.
The machines were purchased and installed during the slower summer school months. I sent staff to the vending machine distributor for training on the operation and repair of the machines. The machines were filled, announcements were made over the school's public speakers and in the daily bulletin: we were in business. The machines were so attractive and brand new that we had lines the very first day. Everyone was talking about the new machines. Teachers were visiting the machines to see what the kids were talking about. There were no cages on the machines. People thought I was crazy not to have the machines locked up inside of cages. They were sure the machines would be vandalized and ruined within weeks. If a student lost money we were right there to give them a refund or the product. We received constant feedback on what they liked about the program. There were absolutely no complaints. The selection was good, the prices were fair and the service was fast. We were generating so much business that when the busy school year started we were filling the machines three times per day. Even the custodial staff and campus security helped to make the partnership a win-win venture. They knew that the school was receiving money from another department within the district and they did their part to help the program succeed.
Because this was a partnership with the school, the machines were allowed to be open all day. The students could grab something healthy through out the entire school day: before school, during passing time, at nutrition break, lunch, after school and after practice. Even adults attending night classes had access to the machines before classes began.
In the first full year of business the vending operation grossed $187,000.00. Sales in all other food service operations on the campus were up as well. I believe we captured new sales. Students who had made the choice not to eat all day and students who did not want to stand in long lunch lines. The school received over $20,000.00 in commissions and bonuses. That amount was over double what they had received in the prior year, before CNS took over the vending operation.
The initial investment to the CNS department was $100,000.00. It will take the department two and one half years to recoup the initial investment. The long range effect is that the students have healthier choices throughout their school day which contributes to their overall good health and readiness to learn.
At this point in time I can confidently say that all goals have been met. The school has more money for programs, the students have access to healthier foods all day and the nutrition integrity of the Child Nutrition program has been restored.
In the Spring of 2004 it was time to contact the outside vendor who had the vending contract at our second comprehensive high school, Rancho Buena Vista, and inform him that we would not be renewing their contract. This is a very important step. Most vending contracts simply roll over unless there is written communication terminating the agreement 60 days before the end of the existing contract.
The Principal was not very enthusiastic about this change. He indicated that he had been receiving $600.00 per month ($7,200.00 per year) in vending commission and was not interested in losing it. CNS gave him a $10,000.00 signing bonus to offset his fears.
Once that was done it was important to set up focus groups with various students and student groups to involve them in the decision making process and obtain their buy in to the Healthy Alternative vending program. We had difficulty getting students interested in signing up to try all the free food and beverages so we set up sample tables in a room close to the eating area and coerced students to come in and help us. We conducted food testing for three days and involved about 100 students. Over the summer we installed security enclosures and 10 machines. They were all placed in areas that had housed previous vending machines therefore we did not need to run electricity. Once school started we determined there was a need for additional machines due to the popularity of the Healthy Alternative Vending Program and the volume of items students were purchasing.
Icon Enclosures had developed a new program called ServeSmart and we decided to take advantage of the benefits it had to offer:
- 1. No upfront costs to buy vending machines.
- 2. No upfront costs to buy security enclosures.
- 3. Trained personnel to set up and program machines.
- 4. Real time, web based wireless monitoring program for tracking sales, purchasing trends, and inventory.
With the help of ServeSmart,,we selected new locations, installed electricity, placed security enclosures, added 12 machines and opened for business. The first year brought in $157,000.00 in total vending sales, with net profits of $42,000.00. CNS gave the school site 50 per cent of the net profit or $21,000.00 We were able to start with a 50% split in profits because we didn’t have a large capital outlay to repay. This commission along with the $10,000.00 signing bonus netted the school $31,000.00. A far cry over the $7,200.00 they had earned prior to the CNS contract.
In the Spring of 2005, Switch Juice, one of SeveSmart preferred manufacturers, sponsored a campus wide wellness day. Switch brought in a DJ, bungee jumper, free product, and ……more. It was a great success and a perfect way to introduce a new healthy product.
Another great happening in the Spring of 2005, CNS installed ServeSmart speedlines on both the Vista High and Rancho Buena Vista campuses. The goal was to create retail type kiosks that would attract and encourage students to purchase more reimbursable meals.
With the right packaging and the right merchandising we increased the number of reimbursable meals students were purchasing by 25%, on each campus. We have been able to sustain this increase since the beginning of the program.
One year later, Winter 2006, we are beta testing the vended reimbursable meal program. Initial feedback from the students has been very positive and enthusiastic.
Stay tuned for the next update.
Remember: A journey of a thousand miles begins with one step.