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Produce Business

Deli Business

American Food & Ag Exporter

Cheese Connoisseur



Dole Introduces Unique
Vending Machine Concept

Jim Prevor’s Perishable Pundit, February 21, 2007

Many times we assume that to increase consumption of fresh produce and other healthy foods, the key is marketing. Far be it from us to underestimate the power of marketing, but substantive improvements in a product also can help build demand.

In the produce industry, people often don’t think this way because they perceive “new products” as “new varieties” and out of their control, but the product that the consumer buys is surrounded by services, and an improvement in those services can be as important and as substantive an improvement in the consumer offer as a new fruit or vegetable.

So we were excited when Dole sent us a release announcing a plan to make healthy food more accessible to children with a unique vending machine concept:

DOLE FOOD COMPANY, INC. LAUNCHES INITIATIVE TO PROVIDE HEALTHY FOODS FOR SCHOOL CHILDREN

Dole Food Company, Inc. today announced that it is partnering with national organizations to launch a pilot program that will introduce innovative new vending machines to schools featuring healthy food products. The new vending machines will supply DOLE brand healthy foods such as fresh fruits and Fruit Bowls®, in conjunction with cafeteria-prepared salads, sandwich wraps and milk, giving school children greater access to healthy and nutritious foods. These machines utilize School Link Technology software.

To launch the first phase of this program, vending machines will be placed in 15 schools across four states in February. The schools are located in Mesa, Arizona; Denver, Colorado; Shawnee Mission, Kansas; Corpus Christi, Texas and Conroe, Texas.

“The healthy school vending machine program is a natural extension of our company-wide commitment to promoting healthy food choices for overall well-being," said Richard Dahl, president and chief operating officer of Dole Food Company, Inc. “Statistics show that children do not eat enough balanced, nutritious meals. It is especially hard for kids in schools, where meal and snack options are usually limited. We are excited to be working with School Link Technologies to provide these vending machines to students.”

Studies show that while many Americans want healthier snacks, they often find such options are less available. Dahl spoke of the importance in providing healthier options to consumers, especially children, stating, “Dole’s duty as a responsible corporate citizen is to help educate children about the importance of a balanced diet, and make sure they have access to the healthy foods that are good for them,” said Dahl.

All of the snacks and meals chosen for the vending machines are USDA approved and reimbursable under its guidelines. The machines will allow students to skip long lunch lines, while also making breakfast and snack occasions available, all reimbursable by USDA National School Lunch and National School Breakfast Programs.

At present, healthy vending presents an opportunity to meet Dole’s long term goals: marketing meal and snack solutions that meet Child Nutrition Authorization Act requirements (and the subsequent changes in nutrition requirements in schools) and the Competitive Food Guidelines of the Alliance for a Healthier Generation; and assisting in the development of universal solutions to school health and wellness programs.

Dole is partnering with the National Dairy Board, Wurlitzer, in-Team consulting services and School Link Technologies to launch this program. The team expects to expand the program to additional schools later this year.

To learn more about the program, Pundit Investigator and Special Projects Editor Mira Slott spoke with several key players….

Marty Ordman
Vice President Marketing
and Communications
Dole Food Company
Westlake Village, California
Chip Goodman
Chief Executive Officer
School Link Technologies
(SL-Tech)
Santa Monica, California

Tami Cline, Registered Dietitian and Consultant for School Link Technologies, President, Cline Consulting, Alexandria, Virginia.

Q: How did the healthy school vending machine pilot come about?

A: Goodman: Several partners were involved in bringing this program to where it is today. Wurlitzer, manufacturer of a unique vending machine with very sophisticated on board electronics, worked with us two years to develop firmware/software protocols to drive the special functions necessary to deliver quality fresh fruit and other healthy perishable items. It’s the only machine on the market to carry soft delivery as opposed to typical spiral machines engineered with delivery systems at the bottom of the machine. The technology provides an opportunity to serve a broader menu, displacing less healthy choices.

We put a coalition together that goes back about three years. National Dairy Board was an early and important partner. It has a long presence in the schools and a pool of experience. It was interested in broadening product offerings to include more than just milk, so they helped plan initial menus encouraging dairy products like yogurts and salads and wraps with cheese for protein, built around the nutritional requirements of the federal program.


We brought Dole in because we were interested to vend fruits and vegetables, which presented real challenges. The first issue we tackled with Dole in June last year was how to vend a banana. Dole engineered a special cellophane sleeve to alleviate the problem of the skin sticking to the surfaces and creating friction.

A: Ordman: Many distinctive features of the program spurred our interest. The machine is ideally suited for fresh fruit. As opposed to a typical vending operation, it has an elevator that goes up to the item nestled in a bucket, spins it out but doesn’t drop it to the bottom. In this way the product doesn’t get bruised.

In terms of maintaining product quality, the machine can handle different product requirements. Temperature control can vary by the shelf level. The bananas don’t need to be refrigerated, and neither do the Dole Fruit Bowls, but they taste better when chilled. Part of the vending machine can be ambient and another part cool, allowing for flexibility in the selection of fresh produce offerings.

Q: How does the pilot link up to government health and nutrition programs? Are the machines built with devices that can accommodate requirements?

A: Ordman: The machine is designed with identification technology. Because of this, the program can work with the federally funded USDA national school lunch and breakfast programs. And it provides a way to keep track of product movement and have a daily record of who is using the machine and what they are choosing. For kids, this is advantageous because they don’t have to insert money to get their snack.

Q: Does the machine take money? What is the mechanism for use by kids who do not qualify for the various programs, or who want a snack beyond the limits of the programs? Is everyone in the school given a card that is like a pre-paid debit card?

A: Goodman: There are guidelines for free and reduced meals, but the federal government wants every student getting better nutrition. There is a public interest in kids eating and growing properly so there is federal money to help schools operate this program. One student puts his or her ID in and the machine doesn’t ask for any money, while another student might put his or her ID in and owes $1.50. That money could be inserted manually or debited from the card.

A: Cline: The ID program disguises which kids are eligible for the free lunches, eliminating any stigma. John is eligible for the free lunch program so he puts his card in and receives a free meal. The government regulated program is set up so that the school district gets federally reimbursement back on that meal. Sara, who isn’t eligible for that program, puts her card in and there are two scenarios; she could be asked to pay $1.50 or she may have deposited $50 in her account, so the machine’s software calculates the balance remaining.

Q: Who are you targeting for the pilot and why?

A: Cline: The program is starting with high school kids, who are hardest to capture in the school lunch program; it is often hard to keep the kids in the school building long enough to eat with today’s open campuses. We encourage schools to put the vending machine in the hallways because some kids don’t think it’s cool to step into the cafeteria. Eating habits are engrained at this age, so it presents a greater challenge. These machines can be operating 24 hours a day, accommodating snacks in between classes and after school programs.

Q: Won’t these vending machines be competing with other machines filled with sugary sodas and junk food for kids’ attentions?

A: Ordman: In many instances, the kids will have access to other machines, but they still need the change to use those. The healthy vending machines offer a unique incentive and motivation because the children get to choose snacks as part of an allowance through the federally-funded lunch program. All the snacks and meals chosen for the machines are USDA approved and reimbursable under its guidelines. We were drawn to it. We think it’s a wonderful medium to get healthy food products to kids in school, where meal and snack choices are usually limited. It’s always a challenge to find healthy food in vending machines. Also kids are often in a hurry. If they don’t want to go through the long lunch line, they have the option of getting a healthy snack choice quickly.

Q: What items will the machines carry?

A: Ordman: Dole initially is concentrating on bananas, single serve in cellophane wrappers, and the shelf-stable Dole Fruit Bowls. Our long term hope is to expand to single serve salads, oranges, apples, grapes and many other items. We’d have to develop a particular packaging for other produce items that would work in there. Right now, we are evaluating how the program works in the 15 schools being piloted, filling the machines and monitoring how that goes. A fair amount of learning will take place. Since it’s just a pilot, we’re using our bread and butter, which are bananas and fruit bowls. We hope to have the Dole name and nutrition messaging prominently placed.

Currently, healthy prepared salads and wraps are being done locally at the school cafeteria level and put in the machines.

Q: How are menus decided?

A: Cline: We’re trying to come up with menus where the majority of items will work in all school districts, with a strong push on fruits and vegetables. All menus are analyzed so they meet USDA guidelines, desired calories and fat content. Early on, we received input from an advisory group of students to find out their likes and dislikes as we work out the kinks.

Q: Who is responsible for loading the machines — a route jobber or local cafeteria staff?

A: Cline: The School Link software is set up so that it triggers messages back to cafeteria managers’ computers. It lets cafeteria employees know that the machine is running low on certain items and needs to be replenished. Product reloading is handled at the local school level.

Q: How does procurement work on these items? Many school boards put their purchases out for competitive bid — the local food distributor might not carry Dole bananas or not the SKU of these wrapped singles — how does it work?

A: Cline: In the pilot stages, every school district will be different depending on what distributor it is doing business with. They won’t be violating any of their purchasing contracts, but the school districts are very appreciative of the partners that helped develop this program. While we encourage schools to use certain items, at this stage it is not a requirement, but this is only a short-term issue. We are branding the machines as Deli Zone, which gives us more flexibility.

A: Goodman: We are looking further out than the pilots to a big, long-term plan, analogous to a franchise arrangement in the schools. The interested school district would commit to an RFP (Request for Proposal) procurement package that would address a variety of requirements including the vending machines, software, food and packaging components, and training, all in a single vendor contract.

Turnkey is not only about vending machines and software but how food is made, packaged, merchandised and promoted. We’re integrating all these components with a multi-faceted solution. This involves teaching schools about the program and training the foodservice employees through our subsidiary In-Team of expert consultants in foodservice operations. Earth Smart, a packaging consulting company is helping with food handling packaging solutions.

The goal is to take the fresh fruit that goes through retail channels and find a cost effective supply chain into the schools. The key is developing the ability to bulk handle whole fruit and repackage it in the schools for vending. The trick is to go to the mainstream distribution channels, but slice and package the products in the school kitchens. We’re developing those capabilities. If we try to put retail specialty items like value-added sliced apples into schools, it can be prohibitively expensive. The big difference in the models is leveraging the infrastructure of school cafeterias, and the strong labor force that is already there.

Q: Have you calculated the costs of the program? And are you finding any resistance because of the financial investments?

A: Cline: We are piloting in five districts: Mesa, Arizona; Denver, Colorado; Shawnee Mission, Kansas; Conroe, Texas; and Corpus Christi, Texas. Corpus Christi was the first last summer, with three more added in the past month, and the last one just getting underway. Vending machines aren’t inexpensive, but our best estimate is that within a year the school could recap the expense of the machine that is part of the pilot.

A: Goodman: The partners are each contributing financially to the program with varying investment levels. We’re working on turnkey solutions that involve branding. For example, the machine could technically vend milk cartons, but we have made it a requirement the schools use the Dairy Council’s New Look of Milk branding with the cool plastic bottles. We have a clear and distinct value-added product vision, specifying certain foods representing quality brands.

Q: What challenges do you face in building the program to more schools?

A: Ordman: This is a pilot program in its infancy. Throughout the school year, the challenge is to make it economically feasible for all involved. It will have to be gradually rolled out. The pilot gives us an opportunity to work out any bugs that arise. The machines are expensive, but if the schools are receptive and kids respond well to it, there will be a future.

This is a great example of using technology to expand access to fresh produce and healthy food. From a multi-temperature machine to a release mechanism that doesn’t damage produce to a payment system that allows many students to get free or reduced-cost healthy snacks but without being ostracized as “welfare kids,” a little pilot like this can be a major source of future business tomorrow.

Kudos to Dole and all involved for working to substantively solve real problems holding back access to healthy food.

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