YoNaturals has made a nationwide splash with its "healthy" vending program since its debut three years ago. The company now has adapted it for professional operators seeking a turnkey solution to the growing demand for vending services that address today's dietary and nutritional concerns. Through a new program called Healthy Vending Services, the San Diego, CA-based company notes that it can immediately establish an operator as "the Trader Joe's or Whole Foods of the industry" by providing branded equipment, products, customized planograms developed by nutritionists, location referrals and ongoing publicity.
YoNaturals began its rollout in 2006 and grew primarily by establishing entrepreneurs from outside the trade as YoNaturals operators. A network of distributors delivers and sets up the machines, and provides extensive training and support to startup vendors. Through this model, YoNaturals reported that it has placed more than 1,000 machines in schools, hospitals, health clubs and businesses from coast to coast.
In recent months, YoNaturals chief executive Mark Trotter has received many inquiries from established vending operators. He recognized the opportunity to adapt the program for the needs of the professional trade.
PHOTO: YoNaturals chief Mark Trotter (center) and team of healthy vending experts roll out new program designed to help established vending operators incorporate its turnkey business model into their operations. YoNaturals has placed 1,000 vending machines nationwide over the past three years primarily by establishing newcomers to the vending trade as operators.
Trotter explained that the majority of calls have been requests for advice in finding suitable locations for dedicated "healthy" vending machines, and inquiries from operators interested in procuring the wellness-oriented products offered through YoNaturals' online store. Other vendors have expressed interest in obtaining graphics they can use to merchandise "healthy" products more effectively in their existing equipment.
"Established operators see the value in going with a proven program rather than groping around with the limited variety of healthy products they can easily get their hands on through traditional sources," the industry veteran told VT. "It's a daunting process to figure out how to establish a healthy vending program and to know that it will be a success. They are relieved that we're now here to guide them.
"We can secure them contracts with A-level accounts, sell them the equipment and product and support and educate them every step of the way," Trotter explained.
Operators who participate in the new Healthy Vending Services program can opt to get referrals through YoNaturals' locating service, which guarantees one- to three-year contracts with locations whose types and population parameters have demonstrated the most potential over the past three years. These include schools, colleges and universities; corporate campuses; shopping malls; hospitals and other medical facilities; health clubs; boys' and girls' clubs; government offices and institutions; parks departments; community centers.
Trotter said YoNaturals is securing 20 to 30 accounts weekly for operators and has a database of more than 700 locations that have inquired about "healthy" vending machines.
The YoNaturals chief added that, since his Healthy Vending Services clients are already in the vending business, many may opt to find their own locations and to brand the equipment they already have. "We can still provide them with the winning planogram for each location type, and offer them more than 600 products," Trotter explained. "In many cases, they can put a machine right alongside existing equipment; we find that it's often incremental business."
THE YoZONE BRAND
The company's eye-catching YoZone-branded machine dynamically conveys the program's better-for-you offerings. This flagship vender is an Automated Merchandising Systems snack/food/cold drink combination model outfitted with coin, bill and cashless payment peripherals. The program also offers standalone YoThirsty beverage machines and YoHungry snack venders.
YoNaturals supplies a graphics package for combination machines manufactured by all the major factories, and its in-house graphic design department can work with operators to create healthy-image graphics for any equipment they operate.
YoNaturals offers its clients an online ordering system and has partnered with an independent national distributor of natural, organic and specialty foods. The distribution company can ship orders placed through the online system to operators in 47 states, from its 17 warehouses located throughout the U.S. All items, ranging from snack bars and kettle chips to upscale soft drinks and soups, are natural; 80% of the mix is organic. All are also top sellers at Trader Joe's and Whole Foods, two well-known retail chains that Trotter credits with bringing appealing "healthy" foods into the mainstream and making the patrons operators serve familiar with the leading brands in the better-for-you niche. The majority of items are shelf-stable, with 90- to 120-day shelf lives.
The company requires a minimum order of $550 and charges no freight costs, which has helped to keep retail prices down and is a key driver of its business model. Its in-house product-development team works with operators to create planograms with the best potential sellers for each location, with suggested vend prices to ensure optimal sell-through. Specialized school planograms for elementary, middle and high schools that meet the nutritional guidelines of every state are also available to operators.
YoNaturals assigns an account manager to each operator customer to schedule meetings with prospects, send out sample products to potential locations on the client's behalf and arrange for any necessary training and support. In addition to teaching operators about natural and organic products and how to sell the program, YoNaturals provides success stories, school testimonials and lists of existing locations to share with decision makers.
More than 70% of YoNaturals's machines are placed in schools, and health clubs are its second-biggest market; these are followed by white-collar businesses, Trotter told VT. "We're dedicated to helping schools overcome the problem of childhood obesity and early-onset diabetes and we've presented vending as a solution rather than as a problem for schools," he explained.
Schools are great locations, added Trotter, and their students constitute a recession-proof clientele. "Kids are always hungry, and they're not getting laid off," he said. "There are 150,000 public and private schools nationwide, and we have become very good at securing their business."
The company also is developing a merchandise concept with more youth-friendly selections at lower price points.
Most industry professionals who have begun participating in the program are smaller operators who have one to three machines on location, and who typically place the YoZone vender alongside them. Trotter added that operators are also gaining locations that want the "healthy" vending machines by replacing a conventional vender.
"It's a model that smaller operators have found works well with their infrastructure -- the guys with a route or route and a half that they service themselves, or with an employee or two," commented Trotter. "If a machine does 40 to 45 vends a day, it's worth their while to stop and fill it because they have less overhead than the bigger operations. It's a different model from the one that many operators, especially the real big ones, are used to, but our success has shown that it works."
CASHLESS FOR A NEW GENERATION
A cashless payment option is important to the program's acceptance by patrons, he added. This is true even in the youth market. Two years ago, cashless payment represented only 3% of sales in the high schools YoNaturals served; today, that number has increased to 18%.
"Our prices are higher than traditional vend prices; people expect that for a better quality, healthier product," the YoNaturals chief pointed out. "The machine is full of stuff priced at $1 to $3, and that doesn't stop people from buying. It's often double the cost of the items in the machine next to it, and still it sells a high volume. Our average cashless sale is $2.50 to $3.
"The Internet, and McDonald's, and the gas stations have changed things," he pointed out. "People are not afraid to swipe, and they expect to be able to do it wherever they go -- especially the younger generation. Another benefit is it takes away the 'sticker shock."
Trotter added that the company's long-term goal for 2010 is to develop its own private-label products that it can offer alongside current offerings at lower prices.
"Sampling is a very big part of disproving the misconception that 'healthy is birdseed.' There's nothing birdseed about items like Clif bars, Pirate's Booty and Stacy's pita chips, Horizon Organic milk and Apple & Eve's FizzEd sparkling juice," Trotter emphasized. "From sample baskets to leave for the decision maker, to cases of product for hosting sampling events at schools, health clubs and offices to promote our healthy offerings, we provide operators with free product so they can educate consumers that natural and organic drinks and snacks can be as appealing as the traditional offerings in vending machines."
More information on the new professional vending program may be had from YoNaturals by calling (858) 794-9955, or by visiting healthyvendingservices.com.