update on milk in schools & reimbursable vending

2275 Half Day Road, Bannockburn, IL 60015 847.945.1155 www.primeconsulting.biz

Update on Milk in Schools & Reimbursable Vending

Presented to:

Provided by:

Doug Adams, President

2

Agenda

“State of Union” on Milk in Schools• Recent Trends

• How Have New Standards Effected Milk

• Flavored Milk

Reimbursable Vending

Q&A / Discussion

ANNUAL SCHOOL SURVEY2012-2013 Results

Joint effort of:

4

Annual School Channel Survey: Scope

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.Suppliers

(1)

Processors

Performance MeasuresProcess MeasuresActivity & Milk

Program Participation Measures

MACRO

MICRO

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.

Schoolsn = 63% of schools (2)

n = 1,195 districts, 16% of students

5

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 ’09-’10 ’10-’11 ‘11-’12 ‘12-’13 Change

Flavor Gallons % Mix Gallon

s % Mix Gallons % Mix Gallon

s % Mix Gallons % Mix Gallon

s % YA

White 139.1 29.6 132.0 28.7% 139.8 30.6

% 143.3 31.7% 151.4 35.3

% +8.1 +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

470 100% 460 100

% 457 100% 452 100

% 429 100% -23 -

5.1%

Source: Processor based projection

MM MM MM MM MM MM

MM MM MM MM MM MM

Executive Summary: School Milk Declined 5.1%

6

• 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.

2011-12 2012-13

+0.3 +0.6+2.3 -7.9

-8.9

-8.4

-1.0

Enrollment BreakfastParticipation

LunchParticipatio

nFlavor

Pullback

Other Factors A La Carte

SummerFeeding

Total Change -23 MM-5.1%

Confluence of Factors• -25.2 MM

Gallons• -5.6%

Increases Due to:

Decreases Due to:

452MM

429MM

School Milk Volume Cause of Change

7

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.

8

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:

Potential for Milk

Servings Lunches per Week

Current Potential

+ =

Breakfast per Week

% Served

x5 5=

Milks Used in a Week=Weekly Milk Servings per

Student 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).

Definitions

Metrics: Weekly Milk Servings per Student & Potential

9

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.

Elementary Secondary All Respondents

4.5 (-6.2%)

2.9 (-3.3%)

3.69 (-5.4%)161 per year

103 per year

133 per year

Note: The average student has 6.34 meals per week at school.

Weekly Milk Usage per Student

10

Weekly Milk Servings per Student

National Average = 3.692.9*

3.3

3.5*3.8*

4.4

3.3

3.5

2.5*

2.9

3.7

4.43.2

3.04.4

4.34.8

4.0*

3.32.7

NOTE: Excludes summer feeding and larger size a la carte

(Dairy Council Geography)

* Small sample for that geography

11

How about in New York?

Weekly Servings 4.22 Potential 6.68 % of Potential 63%

Weekly Servings 2.47Potential 5.98% of Potential 41%



12

Selected District Milk Usage(Ranked within Region by Student Population)

Weekly Servings Student

% of Potential

6.45 77%6.013.45

6955

3.63 623.43 572.04 39


% of Potential

5.19 69%4.13 663.44 612.29 44


% of Potential

4.72 75%4.38 653.75 602.64 491.85 36

1.83 35


% of Potential

2.80 50%2.49 422.38 431.74 331.67 321.30 25


% of Potential

4.16 69%3.92 403.82 52

New Jersey/ East PA

13

What if … A Milk with Every Meal in NY

If a Milk was consumed with every meal, the nutrient intake

for the added 125 units amounts to:

38 days of Calcium31 Vitamin D14 Potassium16 Magnesium

Weekly Servings

per Student

2012-13 Current Potential

2.69

6.16

14

• The average flavored milk serving in schools was 121.8 calories, 10 calories less than last year.

• 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

166.1 160.4 156.2 154.0142.8

131.5121.8

Avg Calories in 8oz Serving of Flavored Milk

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 6 Yr Change

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%

Flavored Milk Averages 44 Fewer Calories than 6 Yrs Ago(Declined 22 calories in the past 2 years)

15

• 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).

Added Sugar Has Declined 45% (in School Chocolate Milk)

'12-'13

'11-'12

'06-'07

White Flavored

Grams of Sugar per 8oz Serving

4.0

2.4

2.2

Equivalent Teaspoons

12

12

12

16.7

10.1

9.2

16

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%)

National Per Child Per Child Per Day

Reduction in Calories -264.6 Billion -5,344* -29.7

Reduction in Sugar

Grams -37.4 Billion -756 -4.2

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.

Sweetener Usage Has Been Cut 45% Over The Past 6 Yrs

2012-13 School Year vs. 2006-07 School Year

17

New York Districts ( ) Appear to Offer More Competitive Choices

A La Carte Beverage Offerings: Total U.S. & New York

Organic Milk

Soy, Almond, Rice & Other Bevs

Tea/ Lemonade

Sports Drinks

Carbonated Juice

Juice Drink

Juice

Enhanced (Vitamin) Bottled Water

Bottled Water

1

5

6

8

5

6

83

4

72

1

16

14

7

7

81

8

81

ELEMENTARY(51% of Respondents)

SECONDARY(76% of Respondents)

+1+2

NCNC

+1-10

+1+4

NC-3

+2+7

+1+6

-8-2

vs. YA vs. YA

+4+6

-3-3

NC-3

+1-4

+3+2

NC-5

-2-3

-4-5

% of Districts Offering …

2

7

39

48

21

16

87

28

86

2

50

42

23

17

87

33

96

18

A La Carte Variety Adversely Effects MilkCompeting 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.

The combination of more types of beverages plus several flavors within each type overwhelms the 1 maybe 2 milk flavors.

Any Competing Beverage Choice(s)*

Loss of Milk Usage*Annual

Servings per Student

Secondary School Avg Weekly Milk Servings per Student

* 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.

Water & Juice Only

Se-ries1

3.45

2.64 29-23%

19

ADADC: New York & Northern New Jersey/ NE PA

3.053.91

6.14 6.29

2.693.69

6.16 6.34

NEW YORK TOTAL U.S.

Actual Potential

‘11-’12

‘12-’13

‘11-’12

‘12-’13

WEEKLY MILK SERVINGS PER STUDENT * % OF

POTENTIAL ‘12-’13

Change vs. YA

NEW YORK 44% -6 pts

TOTAL U.S. 58% -4

COMMENTS• 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.

'11-'12

'12-'13

31.7%

35.3%

61.6%

59.1%

6.7%

5.6%

White Chocolate Other

% OF MILK SALES

'11-'12

'12-'13

32.2%

42.3%

63.4%

54.5%

4.4%

3.2%

NEWYORK

TOTAL U.S.

ABOUT THE SAMPLEN = 160

Respondents4,005 Schools, 46% of StudentsNational Response Rate:

16% of 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.

MEAL PARTICIPATION IN RESPONDENT SCHOOLS

% of Students Breakfast Lunch Breakfast Lunch

Elementary 29% 67% 32% 67%

Secondary 13% 44% 16% 49%

TOTAL 23% 57% 27% 60%

20

Agenda

“State of Union” on Milk in Schools

• Recent Trends


• Flavored Milk


Q&A / Discussion

21

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.

22

BREAKFAST

LUNCH

SNACKS

Reimbursable Vending Can Support All Dayparts

23

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

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

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)

24

Serving Lunch: Broward County Public Schools

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.

Goal: To increase options available in the lunch program and serve students faster.

25

Sales Performance Has Been Strong

Broward

55.7

Daily lunch sales averaged 55.7 meals per school.

The top performing schools (1 out of every 4) regularly exceed 100 meals per day.

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.

26

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.

0

10

20

30

40

50

60

70

80

90% Free/Reduced

Vended Meals per Student (Annually)

AVG

Fewer Many

27

Serving Lunch: Miami-Dade Public Schools

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.

Goal: To increase options available in the lunch program and serve students faster.

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.

28

Successful with A Wide Variety of Products

• Significant publicity occurred around the chef created meals, leading to higher student trial.

• 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 andtogether 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.

• The average machine contained 4-5 different choices for students.

FRUIT & YOGURT PARFAITS

56%

SALADS21%

WRAPS10%

SANDWICHES13%

Chicken Chef 9%

Gr Buffalo Chicken 6%

Rosemary Chicken 2%Tuna 2%

Other 2%

Jul-Sep Oct-Dec Jan-Mar Apr-Jun

4047 45 45

Daily lunch sales have averaged 45 meals per school. Top performing schools regularly

exceed 100 per day.Avg Students

Served Daily per

School

2011-2012N = 49

29

Top Two Meals Represent 70-80% of sales

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.

Most schools had a strong “second meal”, after parfaits, representing roughly 30% of the meals.

Parfaits

Sandwiches

Wraps

Salads

DISTRICT AVERAGE

10

13

16

6

10

8

11

15

13

46

41

47

56 21 1310

33

28

31

73

Mix in Schools with Strong:

Fruit & Yogurt Parfaits Salads Wraps Sandwiches

Roughly 30% in their respective “strong” schools

% of machine sales

30

Miami-Dade County Public Schools Recap

Miami-Dade COUNTY PUBLIC SCHOOLS ARE PLANNING TO:• expand the vending use to include breakfast items.

• 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.

31

Breakfast Application: Cincinnati Public Schools

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.

Goal: To increase student participation in the universal breakfast program.

32

Breakfast Meals Grew 50% in First Year

Source: Cincinnati Public Schools & Prime Consulting Group

Aug-Sept Oct Nov Dec Jan Feb Mar Apr May Aug-Sept Oct Nov Dec

2011-2012 2012-2013

Avg Daily Breakfasts in Secondary Schools14 High Schools

Avg. Day 2,492

Avg. Day 3,112Incremental 620per Machine 32.6

Avg Day 3,718Incremental 1,226per Machine 64.5

Reim

burs

able

Ve

ndin

g In

trod

uced

The students responded immediately and their use of the machines continued to grow in the following school year.

33

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.

Aug-Sept Oct Nov Dec Jan Feb Mar Apr May Aug-Sept Oct Nov Dec

20.4 20.5 20.922.1 22.7

26.2 26.3 26.5

23.225.4

29.531.8

% Daily Participation

Reim

burs

able

Ve

ndin

g In

trod

uced

Average 21%

31.7

2011-2012 2012-2013

Source: Cincinnati Public Schools & Prime Consulting Group

34

Participation Increased in Every School

A B C D E F G H I J K L M N0

25

50

75

School

19 41 52 60 62 66 71 72 73 77 86 87 89 90Free/Reduced %

10 3 5 13 5 9 9 11 21 16 5 10 15 10Point Change

Daily Avg Breakfast Participation %

Average = +11 Points to 32%

Avg +8 pts Avg +13 pts

Increase was stronger in higher Free/Reduced schools.

% Free/Reduced

35

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.

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.

Fall '11 Fall '12

Meals per Labor Hour

+6.5%

21.4 22.8

36

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.

37

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.

38

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.

• 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.

Base Case w/ Labor Productivity

• Breakfast Only 1.8 years 1.4 years• Lunch Only 1.4 0.9• Breakfast & Lunch 0.8 0.5

39

Financial Payback Projection

Breakfast LunchBreakfast & Lunch

Incremental Meals - per day 65 45 Input 110

- annual per Machine 11,700 8,100 19,800

Incremental Revenue $18,135 $23,166 $41,301

$1.55 $2.86 Input

less Incremental Food & Labor Costs $10.881 $13,900 $24,781

60% 60% Input

= Variable Contribution $ 7,254 $ 9,266 $16,520

STAR FOOD Healthy Express Machine Cost* $12,445 $12,445 Input $12,445

Freight $500 $500 $500

Payback in Years 1.8 1.4 0.8

* 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.

(Illustration from Excel calculator model)

40

Executive Summary

• Reimbursable vending machines delivered strong sales and are liked by students.

• 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.

• 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.

Broward Miami-Dade Cincinnati

55.745.0

87.6Vended Meals Served per School

(average day)

41

Agenda

“State of Union” on Milk in Schools

• Recent Trends


• Flavored Milk


Q&A / Discussion

2275 Half Day Road, Bannockburn, IL 60015 847.945.1155 www.primeconsulting.biz

Update on Milk in Schools & Reimbursable Vending

Presented to:

Provided by:

Doug Adams, President

THANK YOU!

update on milk in schools & reimbursable vending

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