The widespread introduction of school district wellness policies and increased regulation of food and beverage items sold there are having a distinct impact on what is sold and vended in the segment.
The biggest short term impact? A significant decline in vending sales over the past three years. It's a trend quantitively documented by data collected by NPD Group, a leading consumer research organization,
“Between 2005 and 2006, secondary school vend purchases declined 15 percent,” says Kyle Olund, senior product manager for NPD Group's CREST OnSite data service. “Last year, they declined another two percent. While the numbers may be stabilizing, the data for 2007 shows enough variance that we are closely watching to see if the trend holds.” (Fig .1).
Olund says a likely factor “is the increased vending of snacks that have a more healthful nutritional profile. These are not always as popular as traditional products, and the challenge is for manufacturers and operators to offer such items and still maintain the taste appeal teens want.”
Other secondary school “top-preferred” school food data provided by NPD “underscores that what teens prefer increasingly is a mix of two kinds of things — traditional taste favorites like pizza, and items with a better nutritional profile,” says Olund. “Fruit tends to fit both descriptions, and is a clear winner.”
The NPD data is collected from large consumer populations who report on their most recent meals. While the surveyed population includes some adults, like teachers and administrators, who consume meals at schools,“74 percent are students in the 13-17 year age group,” Olund says.
The NPD data shown here includes a mix of school meal and a la carte purchases, with vend purchases separated out. But looking at additional survey detail, “nearly half the non-vended salty snack volume is coming from a la carte sales,” says Olund. “Teens are regularly supplementing school meals with items from a la carte and vending machines. Our data show that one third of all purchases involving a vending machine are associated with a lunch meal.”
She adds: “if you were to look at only the top a la carte items, you'd see that one of them is bagels. They are convenient, portable, and effectively address a daypart need.”
To get a sense of how differences in state and local policies and other factors might bear on these observations, FM interviewed three large school system operators and asked them to contrast the data with their own experience.
Leo Lesh, executive director of enterprise management for Denver Public Schools, operates in a district where foodservice has had control over vending throughout the system for many years. “When we first eliminated candy bars and switched to offering more healthful vended options several years ago, before wellness policies were mandated, we did see an initial decline in sales, but over time the volume returned,” he says.
“We found one key was to have a regular program of rotating new products through the vending machines so that the variety is always changing. We know from tracking the results that this has increased consumption.”
Denver has also invested in some expderimental vending machines to let it offer reimbursable offer vs. serve meals. Getting the software and hardware running effectively has been a challenge, he says, “but since January, we believe we've got the problems solved.”
Students who use the machines enter their six-digit ID codes and select a combination of items to purchase. Software calculates the price based on whether it complies with reimbursable guidelines; it also interfaces with the school's POS system and knows if a customer is eligible for a reimbursable meal or has already obtained one on the line.
Students can only obtain reimbursable meals during specified periods; at other times of the day, pricing is a la carte. The system also accepts cash from a debit card system that parents can fund via a web-based program.
Lesh says his department “is picking up about 500 more reimbursable meals a month” from the machines and that these sales are not coming from the lunch line.
“This kind of approach has a lot of promise for districts like ours where we have a tough time finding and keeping workers, and where we are always trying to serve more students than time and space really allows,” he says. “We placed these machines outside of the cafeteria. They give us a new point of service we did not have before.”
For vended snacks, Lesh says his staff makes a concerted effort to identify new items that will prove popular and also meet the nutritional needs of the district's wellness policy.
“Finding new items that students like is going to get tougher as salt content becomes something that is regulated,” he observes. “We expect to see rules about salt coming soon.
“And cost is always an issue,” he adds. “We recently tested two new snack products — one was a dehydrated corn snack and the other was a one-oz. pack of dehydrated cherries. Both have promise, but both would represent a cost per pack to us of about 49 cents, which with even a modest markup to cover opertional costs is higher than what we would like.”
Lesh says fruit consumption is increasing steadily in the Denver schools, although it does not rank as high among students there as the NPD research indicates. Still, “a few years ago, we spent about $259,000 on fruits and vegetables over the school year, and that is now over a half million annually.”
Once a month, foodservice passes out free fruit samples to students as part of a program to introduce them to new fruit items like jicama. Both fresh and canned fruits are used “and in some cases we have increased our portion sizes from 1/2 to 3/4 cup,” he says. Cranberries, obtained through the commodities program, have become a popular ingredient in many of the school's salad offerings, he adds.
In contrast, School Foodservice Director Penny McConnell, R.D., says she has watched a decline in vending in her Fairfax County, VA, district. “Although we also control all of the vending here, we've seen a drop of about 10 percent that we attribute to changes in the product mix as we've eliminated trans fats and adopted the school food recommendations of the Institute of Medicine.
“Students tell us they don't like the more nutritious items as well, but they are slowly accepting them. That is the same experience we had when we shifted to whole grain products. In our case, I think vending sales will come back over time. But for schools where vending was heavily influenced by sales of soft drinks and candy, I believe their elimination has resulted in some lost sales that will never come back.”
In looking at the NPD ranking of snacks and beverages, McConnell notes that some items, like carbonated soft drinks, candy and some salty snacks are likely being purchased from vending machines and other outlets not controlled by school nutrition departments.
“Carbonated beverages are generally not permitted in school lunch programs, although many schools have long-term exclusive contracts with beverage companies with machines in other parts of the school. Wellness policies are having an impact on these, but most can only be re-negotiated over time.”
Referring to the NPD list of preferred foods, McConnell points out that schools have widely switched to baked fries and to not offering them every day. “That has tended to reduce their consumption,” she says.
In her district, baked fries might be offered more often at some schools, but “there are often constraints because of competition for limited oven resources. In our new high schools we are putting in extra ovens instead of fryers and that changes the equation.”
In Hillsborough County (FL) schools, Student Nutrition Services General Manager Mary Kate Harrison, R.D., reports there has been no decline in her school meal vending sales in the past two years. “One reason is probably that we have grouped our machines together and built kiosks to showcase them as an option in our cafeterias,” she says.
At one school, where participation had lagged, the introduction of the kiosk approach coincided with a nine percent participation increase. “While we can't attribute that boost just to vending, vend sales generate $1,000 a week there now,” she says.
Harrison says her vending program emphasizes “real food — items like Cuban sandwiches, yogurt, milk and juice,” and gets a lot of traffic in the afternoons and after school, when clubs and athletic groups often use the cafeteria space.
At Hillsborough, “principals have vending machines in other parts of the schools and do vend chips, candy and soft drinks. Their sales may be affected by the new policies — the district is still grappling with this as it plans for the next few years.”
Harrison had looked into vending reimbursable meals but says proposed Florida state regulations would be too difficult to implement practically (they would include, among other things, taking a photograph of each student buying such a meal).
Longer term, “I think there is a lot of potential for a reimbursable vended meal model,” she says. “We're constantly short of employees and the bottom line is that when lunch lines shut down, kids don't get served. They go to the lunch room to eat, but also to socialize. If vended meals give them more time for that, it will have benefits.”
Baked and reduced fat snacks have not experienced a sales fall-off in her district, Harrison says. “However, we tried to introduce a replacement low-fat cookie for one that had been very popular here and we nearly had a mutiny.” Instead, a smaller version of the original was brought back and is now sold in single cookie a la carte servings instead of packs of two's and three's. “Our messsage is — this is a treat, you only should be eating one.”
For informaton on the CREST OnSite data seervice, go to www.npd.com or contact Kyle Olund at kyle_olund@npd.com