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Issue Date: Vol. 54, No. 4, April 2014, Posted On: 4/30/2014


U.S. Military's Healthy Vending Programs Advance On All Fronts


Emily Jed
Emily@vendingtimes.net
TAGS: healthy vending, military vending programs, vending machine trends, U.S. armed services, Michelle Obama healthy eating initiatives, anti-obesity push, U.S. Department of Defense's Military Health System, Fort Hood, Gerard Fantano, Navy Exchange Service Command, NEXCOM, Navy vending services, Cooper Clinic, Look Right to Snack Right, Dr. Alma Kay Nocchi, Bill Williams

The U.S. armed services have been stepping up their efforts to improve the health and fitness of their personnel, and vending is in the forefront of the tools being employed in this attempt. Two years ago, fueled by first lady Michelle Obama's anti-obesity push, the U.S. Department of Defense's Military Health System launched a campaign requiring all branches of the armed forces to encourage service-members to make more informed nutritional choices by making better options available to them everywhere they eat.

The program updated nutrition standards military-wide for the first time in 20 years, bringing more fruits, vegetables and whole grain foods to mess halls and cafeterias, and foods lower in fat and sugar to vending machines.

The Defense Department is hoping the changes will cut costs related to health care. It spends more than $1 billion a year on medical care for military personnel with weight-related problems. About a quarter of potential military candidates ages 17 to 24 can't qualify for enlistment because they're overweight. Additionally, the armed forces discharge about 1,200 entry-level candidates each year due to their inability to meet fitness and weight standards.

VENDING
PHOTOS: Vending machines at Fort Hood are widely used by military personnel. The military base in Killeen, TX, and other U.S. posts around the world are adopting "healthy" vending programs to offer troops better-for-you snacking options. (Machines pictured here use the H.U.M.A.N. healthy vending platform.)


The good news, say officials on the front lines of military vending, is that service men and women are seeking healthier choices in growing numbers, driving the demand for more choices.

"Our military personnel, whether sailors, Air Force personnel, soldiers or Marines, have become more educated and familiar with healthier food choices and they seek them out," said Gerard Fantano, vending branch manager for the Navy Exchange Service Command (NEXCOM), which provides vending services to the Navy.

"There's been a pronounced shift over the past four to six years and we're responding," Fantano told VT. "We are receiving customer suggestions, and we all have been watching customer behavior, so overall, I believe healthier product selections will continue to gradually increase."

EARLY ADOPTER

The Navy was at the forefront of the healthy vending movement when Fantano helped spearhead its Healthy Alternatives vending program in 1992. That initiative was based on the pioneering Heart Smart "heart-healthy" criteria publicized to the vending industry by Walter Reed, the former National Automatic Merchandising Association public relations director.

A few years later, the Navy recruited a registered dietician to promote nutrition and better dietary choices among its sailors and assist NEXCOM vending's transition to "healthy" vending standards developed by the Cooper Clinic in Dallas.

In 2010, the Exchange (formerly called the Army and Air Force Exchange Service) and the Marine Corps decided to institute NAMA's Fit Pick program, and the Navy determined that it would follow suit in order to further unity and collaboration across all branches of the armed services.

"There is close communication and a productive relationship among the three programs, as well as daily dialogue and interaction," Fantano said. "We have a common commitment to support military members, meet their needs and provide healthier product selections."

The NAMA Fit Pick system, launched in 2005, includes transparencies placed in front of products in glassfront machines that meet guidelines for fat and sugar content. It's used by nearly 14,000 businesses, schools and government agencies, in addition to all branches of the military.

(Editor's note: As VT goes to press, NAMA is unveiling a rebranded and refreshed Fit Pick, with updated guidelines and marketing materials, at its 2014 OneShow in Chicago.)

Fantano provides oversight on policy and operations to a field team that services some 15,000 machines worldwide. The Navy Exchange owns and operates the majority of its multi-line equipment and contracts with commercial operators for its beverage vending.

HEALTHIER AND HEALTHIEST

Every Navy snack machine has a "Look Right to Snack Right" sticker that points patrons to the selections in the right-hand column dedicated to Fit Pick-compliant products. NEXCOM takes it a step further by encouraging its vending managers to rotate items that fall just short of meeting Fit Pick guidelines into machines, in place of slower-selling traditional snacks and candies.

"If you have Fit Pick on the right side and traditional items on the left, it pays to look at the slower turns in the middle," Fantano said. "There may be better turns with something healthier that's nutritionally between Fit Pick and traditional chips and candy, but not quite at either extreme."

He tried this method at the suggestion of nutrition strategist Dr. Alma Kay Nocchi, who spoke at last year's NAMA OneShow, and has found it to be effective in broadening better-for-you variety.

Devoting 15% of machine menus to Fit Pick products is generally the most effective ratio, according to Fantano, but select locations like gyms can support planograms with as much as 25% of the facings devoted to healthier items. At greater percentages, stales have been an issue.

Just as in the civilian world, demographics vary widely among Navy bases and the buildings on each, so NEXCOM vending managers closely analyze sales in order to customize and manage planograms at each site.

CUSTOMER DRIVEN

"On our bases, we insist on 'management by walking around,'" Fantano said. "We visit the locations, talk to customers and learn what they want or might like. You can't satisfy everyone all the time, but in support of our personnel, we need to try all the products that are more beneficial for their health and be aware of product success and unit sales. It is our responsibility to identify, try and evaluate."

The Navy vending field team is adept at reacting quickly to customer requests, and continues to broaden and refine its healthier product portfolio by testing suggested products in a select number of machines, gauging customer response and adjusting accordingly.

"If it sells, we keep it and share it with managers around the world for them to consider," said Fantano. "If it dies, we take it out of the machine, and we share that information, as well."

NEXCOM's vending operation is centralized, with local oversight by district managers, who Fantano said are vital to making decisions ensuring consistency.

vending, fit pick


photo | RIGHT FIT, RIGHT PICK: Fit Pick clings are applied to Army, Air Force and Navy (pictured here) vending machines. The NAMA nutritional designation includes products that are less than 35% fat, less than 10% saturated fat and less than 35% total weight in sugar.
"We bounce ideas off the district vending managers; they bring suggestions to the table, and we go by their consensus in deciding whether or not to implement a change like a price increase," he explained.

100% HEALTHY

The latest implementation of the Navy's healthy vending program involves snack machines merchandised exclusively with healthier product selections. There currently are six "100% healthy" machines in the field, all of which are self-owned and operated. While they have been well-received by health-minded servicemembers, the venders are placed selectively, with a watchful eye on the product success and bottom line.

"In all of the sites where we add a dedicated machine, when we compare sales and gross profit before and after, we have seen no growth in total," said Fantano. "However, we are committed to supporting them as another way to deliver healthier product choices to servicemembers. If a location only has one snack machine, we will supplement that with a dedicated healthy selections machine if it's requested, but we will not remove it or replace it with one."

Fantano emphasized the role the military's beverage operator partners play in the success of its wellness efforts. In recent years, they've broadened the mix of options to include more water, juice and isotonic beverages.

"Overall -- and I'm sure the Army & Air Force Exchange, Marine Corps Exchange and the Navy Exchange see it the same way -- our operator business partners are well aware of the industry, the first lady's health and wellness focus, Fit Pick and our commitment to our men and women we serve," said Fantano. "We all want to be successful and support our customers; therefore it is a full team approach for us and our contractors."

He also credited vendible product manufacturers for improving the taste and variety of health-oriented snacks over the 14 years since NEXCOM first incorporated a wellness focus into its vending program.

Moving forward, Fantano emphasized that the supplier segment must take an active role in the industry's success by displaying nutritional information on the front of packages for easy viewing when placed in a glassfront machine. "Without the support of the product manufacturers, we can't have success and fully support the healthy initiative," said Fantano.

ALL ABOARD

The Army and Air Force formally launched its healthy vending program with its 2010 rollout of Fit Pick, and requires, like NEXCOM, that 15% of the products sold in snack machines meet those nutritional criteria. In select sites, like the facilities at which the Army conducts its rigorous Advanced Individual Training programs, Fit Pick choices make up half of the snack selections.

Currently the Exchange has over 27,000 vending machines in operation worldwide. U.S. locations are contracted for commercial vending services. Overseas locations in Europe and the Pacific are operated directly by the Exchange and in some locations by local commercial operators.

Bill Williams, vending business program specialist for the Exchange, said Exchange operators that serve their soldiers and airmen are well aware of changing consumer needs, and are adapting proactively. The majority of operators were in compliance with Fit Pick, or similar standards, before being mandated by the Exchange.

"The industry overall is moving toward a healthier mix of products, driven by customer demand," said Williams. "Fit Pick brings awareness and helps educate people, but customers ultimately decide what they'll buy. It's about providing better-for-you options and meeting customer demand."

NAMA's Fit Pick program encompasses a well-rounded balance of products that meet varied tastes and nutritional demands and has been well received by Army and Air Force personnel, Williams said. Many operators have similar, but not identical, programs in place that they prefer to use. The Exchange is reviewing the opportunity to adopt programs used by some of its providers as acceptable alternatives to Fit Pick.

"The goal is not only to have more healthy products for customers, but to provide as many options as we can," said Williams. "There are items that our operators sell which aren't listed as Fit Pick products, even though the criteria are met. We made our criteria stringent, but we want them to be flexible, as well, so as not to limit variety."

OPERATOR EXPERTISE

The military vending expert emphasized that the Exchange also relies on the expertise of its operators and must consider various impacts when requiring specific product offerings.

"They know the top-selling products in each region to maintain turns and minimize "stales," and they have successful business models," said Williams. "Technology has given our operators so much more ability to target what sells at specific locations, and to model product selection to demand."

The Exchange works closely with Coke, Pepsi and all Exchange beverage vendors to adapt beverage planograms to meet changing preferences and to educate customers about their choices.

With schools, states and government agencies implementing dedicated "healthful" machines, Williams reported that the Exchange has also followed suit. It developed a new contract that allows individual locations to establish contracts for such machines. All products sold in this type of machine must adhere to specific government-based nutritional criteria that go beyond Fit Pick. There are presently around a dozen Army and Air Force bases that have dedicated healthful vending machines.

SIDE BY SIDE

"These contracts are not intended to replace our current full-line snack vending contracts," Williams emphasized. "They can be established in addition to our full-line contract offerings that continue to be in place. It's a niche that's growing and we want to grow with it, but we have to do it hand in hand with traditional machines."

Williams said that going forward the Exchange intends to further develop contract methods on healthful vending.

Williams sees potential for growth of healthful vending as organic and other wellness-oriented products are more readily available to consumers in grocery and convenience stores and as they become more mainstream. However, the business model remains a work in progress.

"Many of our operators have dedicated healthful solutions that are very attractive to consumers," Williams said. "But there are also lower margins on many of these premium products, and they often require more effort and expense to provide."

Likewise, he added, revenue-sharing models might force some of the bigger healthy vending franchisors to rethink how they structure their service.

"Overall, with the success we're having with Fit Pick and dedicated healthy machines, and with Michelle Obama's emphasis, I think we will see healthy vending become mainstream," Williams said. "I think it will continue to grow in the military market, just as it will in schools and businesses and government locations, because it's being driven by consumer demand and supported by operators, which is the formula for success."

Fit Pick, Gerard Fantano, Bill Williams, Army, Navy, vending
photo | WELL, WELL, WELL: Vending is key component of U.S. military's heightened push to support healthy troops. Here, Gerard Fantano (l.) of the Navy Exchange Service Command and Bill Williams of the Army and Air Force Exchange, get first look at turnkey Fit Pick machine merchandised exclusively with better-for-you options, unveiled at NAMA OneShow.


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