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Issue Date: Vol. 53, No. 3, March 2013, Posted On: 3/28/2013


Better For All: Vending Industry Steps Up To Address Public Dietary Concerns


Emily Jed
Emily@vendingtimes.net
TAGS: healthy vending, vending nutritional guidelines, vending machine food, health and wellness, better-for-you vending, Michelle Obama's "Let's Move, nutrition-minded vending consumers, food labels, calorie disclosure, PepsiCo, Coca-Cola, foodservice management, Compass Group, Sodexo, Aramark, vending menu items, NAMA Fit Pick, Jackie Clark, Clark Communications, Vendors Exchange International, MIND, AirVend, Crane Merchandising Solution, Paresh Patel, Courtesy Vending, VendScreen, vending machine nutritional screen, Canteen Choice Plus, vending operator


As belief in the health and wellness dimension of dietary choices becomes more widespread, many operators are taking their healthy vending programs to the next level by expanding the better-for-you range of products in their machines, and finding ways to make sure that their customers have the information they need to choose the items that conform to their preferences. High-profile public health initiatives like Michelle Obama's "Let's Move" campaign are increasing public awareness of nutrition and fitness. And the resulting laws and regulations, springing up at every level to modify the way America eats, have made "healthy vending" a merchandising and marketing approach that has become essential for every operation.

Today's nutrition-minded consumers are scrutinizing labels on packaged goods. They're also paying closer attention to calorie counts on chain restaurant menu boards nationwide, displayed under requirements included in the Obama administration's healthcare reform law. Still to come are the anxiously awaited federal nutrition labeling rules that must be followed by operators of 20 or more vending machines, as part of the same law.

The Food and Drug Administration, which was given the responsibility for drawing up those rules, has said that it intends to publish them during the 2013 calendar year, although there is no mandated deadline. Still, many operators and suppliers alike are taking a proactive approach to satisfy the expectations of customers who have access to increased nutrition information in many other places where they shop and dine.

Beverage giants including PepsiCo and Coca-Cola announced last fall that they would begin voluntarily posing calorie counts on vending machines, beginning early this year. And foodservice management leaders Compass Group, Sodexo and Aramark are all offering mobile apps to their customers that provide nutrition information for their menu items.


INFORMED CONSUMERS

One vending operator who's stepping up his efforts to foster his customers' healthy lifestyles -- and providing a new high-tech tool to help other operators do the same -- is Paresh Patel of Courtesy Vending. The Portland, OR, operator is also the founder of VendScreen, which has developed a multi-purpose touchscreen customer interface for vending machines that, among other things, can display the nutrition information for each product in the vender.

Other devices on the market that make nutritional content available to vending consumers include Cleveland, OH-based Vendors Exchange International's MIND (Make Informed Nutritional Decisions) touchscreen display and interface, and a new solution from Provo, UT-based AirVend. Crane Merchandising Solutions also offers patrons access to nutritional information on touchscreen displays on its Media machine series.

As the first operator to use VendScreen systemwide, Patel said he has found that providing nutritional information to his customers helps draw attention to the healthy product mix in his machines, which ultimately boosts business.

"Healthy vending is in high demand and the momentum is building. I've seen fads come and go, but it's different this time," said Patel. "It's a different generation using vending machines. Gen X, Gen Y and the Millennials are more health-conscious; they work out and they want to eat well, especially here on the West Coast. The 'green' aspect also ties in; they're looking at the broader picture of doing what's right for their bodies and the environment, and eating well is part of it."

Patel said that health awareness is especially acute because of the Obama administration's passage of the Affordable Care Act and the First Lady's focus on obesity. Many of the workplaces Courtesy Vending serves have developed wellness programs in order to receive discounts from their insurance companies for promoting healthy lifestyles among their employees. The contract vending service often is expected to play a role in this kind of program.


HEALTHY ATTRACTION

One of the biggest mistakes many operators make when it comes to healthy vending, in Patel's opinion, is focusing only on the turns of each spiral -- not on the percentage of people at a location who use the vending machines.

"Having more nutritious options brings more people to machines, which improves sales," he emphasized. "It's so often a chicken-and-egg scenario when it comes to healthy vending. Operators hesitate to put healthier choices in their machines because they're afraid no one will buy them, but if they don't put such products in, they have no way to gauge popularity. And if they do stock a variety of healthier items and don't tell anyone, people who don't now use the machine won't know that they're available to buy."


Canteen Vending, healthy vending

photo | NEED TO KNOW: Vendors Exchange International’s MIND (Make Informed Nutritional Decisions) is proving to be a popular addition to the company’s retrofittable Revision door for classic glassfront machines. The 7" full-color flat touchscreen module, available for a wide variety of venders, can store details of the nutritional content of everything on the machine’s menu for fast retrieval and review by patrons before purchase. The digital records are stored in onboard memory, and updated when necessary through the use of a readily available Micro SD (Secure Digital) memory card. Operators use VEII's Display Builder software to maintain their information libraries, and can use an online resource, nutritionaldatabase.org, to locate and download the necessary data for products from major suppliers. Click here for more information.


Patel said that, back in 2000, he made the decision to merchandise 20% of his machines with "healthier" products, knowing that a certain proportion of the customers at every location would respond favorably to them. Today, about a third of the products in most of Courtesy Vending's machines meet the nutritional demands of most wellness-focused customers.

"Most operators already feature a mix of products with nutritional profiles that meet 'healthy' guidelines, and many such products are already identified by machine markers as part of a 'healthy vending' program," said Patel. "Giving customers access to the nutritional information with VendScreen makes it even easier to know what those items are. They're still going to buy, but they might make a different choice if you provide them with the information that allows them to do what's right for them -- and you will certainly draw more customers to your machines."


SCHOOL RULES

Vending machines have been increasingly regulated in schools by states and municipalities, and federal rules are coming next. At the state level, Oregon took the lead as the first state in the nation to impose its own nutritional standards for school vending. Patel testified in favor of those statewide standards. He said he also sees the national nutritional rules for school vending recently proposed by the Department of Agriculture as a good thing, since the alternative is an increasingly complicated patchwork of regional rules that make compliance far more difficult.

"I testified that Oregon needed a universal standard in schools, so route drivers wouldn't have the burden of inspecting every package and flagging them as meeting the standards of each school or district, before they filled a machine," he told VT. "That is very impractical to do, but it is not an issue if you have an objective standard so you know exactly what products qualify. As manufacturers and operators, it would be hard to comply with different rules at every level, from counties to districts to individual schools. Ideally, it's best to have one set of standards at the state or federal level."

Oregon adopted the widely used "35-10-35" rule for school vending machines, which stipulates that no more than 35% of a snack's total calories can be from fat, no more than 10% can be from saturated fat, and no more than 35% of its weight can be from sugar. This is the same standard followed by the National Automatic Merchandising Association's Fit Pick program, which also offers a slightly stricter "35-10-35" standard with calorie and sodium caps that meet Alliance for a Healthier Generation guidelines. Fit Pick is also the healthy vending program that Courtesy Vending uses throughout the locations it serves.

"The schools respect the standard. They also respect our authority and expertise as their vending providers, so they don't tell us what to put in the machines; as long as it meets the standard, it's our choice as operators," said Patel. "It saves them the effort of becoming involved in the process, and it gives us more autonomy."

The USDA's proposal -- called "Smart Snacks in Schools" -- is set to take effect in 2014. It would ban many snacks and sugary beverages from school vending machines, snack bars and à la carte lunch lines under new nutrition standards for "competitive foods" (sold outside the federal school lunch program, which the national government already regulates). These standards specify permissible sodium, sugar, calorie and fat levels, and limit the types and sizes of beverages that can be sold on school grounds during school hours.

"From my experience with Oregon's state rules, as long as the standards are unified for all schools, a lot of confusion and room for error is eliminated, which is a good thing," Patel commented.

Courtesy Vending was one of the first operations to adopt the NAMA's Fit Pick program, which launched in 2007. Six years later, he believes the standard remains a good solution for the wide range of locations he serves.

"We actively encourage locations to make use of Fit Pick," the operator told VT. "If they try to adopt their own standards, it just complicates the matter, no matter whether they're offices, colleges or hospitals. Fit Pick has effectively become the de facto standard because it's a balanced approach to healthy eating. Most locations are happy to have a branded solution that's easy to understand and promote."


ENTER VENDSCREEN

Just as it pioneered school vending standards, Oregon set a precedent as the first state to create statewide calorie-disclosure rules for chain restaurants, ahead of the nationwide standards for foodservice and vending that are set to roll out this year.

"As an operator, when I saw restaurants posting calorie information, I thought someday vending will have to do this -- and it will be complex," recalled Patel. So he set out to create a solution. The result is VendScreen, which he now has up and running on all of his machines and began shipping to operators nationwide in October of last year.

vending, Cantaloupe


PHOTO: With federal nutrition-labeling rules for vending now in preparation, many operators are turning to state-of-the-art solutions like VendScreen (pictured here) to give consumers easy access to nutritional information before they make a selection.

The Android-based smart device, designed for easy retrofitting, can display the nutrition label for each product, which Patel said will enable operators to comply with the new federal nutrition information disclosure requirements, whatever they may be.

Once installed, Patel explained, VendScreen seamlessly synchronizes with their back-end database to maintain up-to-date nutrition facts for all the products the vendor carries, which frees drivers, technicians and office employees from the need to keep machine information current. VendScreen automatically keeps track of new products added, updating each machine with the necessary new nutritional information and other product details.


CUSTOMER AWARENESS

"A lot of shortsighted operators do not want to put nutrition information out to the customer, and are concerned about what the impact will be on sales once they have to," commented Patel. "What they don't realize is that people buying their favorite candy bar from the vending machine will still buy it. But providing nutrition information will open up the opportunity to sell to additional customers."

Courtesy Vending and other VendScreen users have seen incremental sales of healthier products since installing the device, according to Patel. "And the increase is from new customers who may have not realized that there are products that meet their dietary needs in the machines, until they could read the nutritional facts. Fifteen years ago, when Amazon thought of putting up user reviews, I'm sure they were concerned whether it would help sell products or hurt sales. What they found is that being transparent and creating trust helps sell. It's the same with nutrition information."

Patel emphasized that VendScreen provides the entire nutritional facts label, while the federal nutritional regulations may only require that operators post calorie information. "We're going above and beyond to provide all the information consumers may want, whether it's required in the final rules or not," he said. "We not only display the product label, but we input every field in our database, which allows operators to perform tasks like sorting products by calories and fat content. We own the whole database process. If operators want to sell a product that's not in the system, they can send us a sample; we'll take a photo and enter the nutritional information, with no hassle."

VendScreen can also display user-specific promotions and advertising, real-time product updates, cashless payment options and refunds. Additionally, it can deliver up-to-the-minute analytical information and DEX data uploads for third-party dynamic route scheduling and prekitting applications.


BREAKING BARRIERS

The need for vending consumers to have cash in hand has been one factor that has adversely impacted sales of a number of products regarded as more nutritious, like energy bars, Patel explained, since they're typically sold at a higher price point. "It makes it a hard sell when you're restricted to dollar bills, and people need to have two or three of them in their pocket," he observed. "As more and more machines become equipped for cashless sales, I think it will correlate to selling more healthy items because people will no longer be restricted to the cash they have on their person for relatively higher-priced products. Offering a cashless option means you sell to more people as you overcome the $1 bill barriers and dissociate price. It becomes a matter of: 'What do I want?' rather than 'What can I buy?' and you see an increase in sales and customer satisfaction."

Patel also credits cashless acceptance as a major contributor to the high volume of healthier items sold through the new micromarkets. "Micromarkets support the health movement because we can stock a bigger assortment of healthy items like premium sandwiches and salads. They cost more, but consumers don't need cash," he pointed out."Another reason for the huge appeal of micromarkets is that customers can see and touch the products, and read the labels.You have 80% of that functionality coming to vending by being able to see the nutrition information and pay without cash. Today's operators can bring much of the micromarket benefit to their vending machines, too."

Notwithstanding the huge strides Patel has seen in his own business by increasing his healthy vending focus, and the potential he sees for this to drive business for all operators, he continues to be concerned by the lack of availability of healthier products in the distribution pipeline. "I'm still not happy with the variety of choices," the industry veteran said.

"Government, schools and other organizations have programs, and want many products we can't get because they're not in vending distribution -- even products from big manufacturers are not available locally," he lamented. "But it's better than where we were three years ago, so slowly but surely, we'll get there."


MEETING THE MARKET

Nationwide vending giant Canteen (Charlotte, NC), a division of Compass Group, can also attest to the growing demand for healthy alternatives in all types of locations from coast to coast, and is evolving to meeting its customers' changing expectations. The company was in the forefront of the healthy vending movement with the launch of its Balanced Choice program in 2004. It revamped and rebranded the program a year ago, and has added other novel wellness-focused vending alternatives.

Called Choice Plus, Canteen's upgraded healthy vending program, easily adapted to suit each location, is based on a set of nutritional criteria that puts caps on calories, sugar, sodium and fat. It gives each client the flexibility to decide what portion of the planogram, if any, to devote to qualifying items. based on their desires and needs. Choice Plus offerings are identified by shelf markers, and nutritional criteria are displayed on point-of-sale clings. In March, the vending giant is launching new POS graphics to keep the program fresh, in conjunction with National Nutrition Month.

"We reevaluated the needs of our clients -- most of which see wellness as a growing priority -- and incorporated what they wanted, with the expertise of a Compass dietician," Betsy O'Brien, Canteen's communications director, told Vending Times. The biggest difference between Choice Plus and the original Balanced Choice program, she explained, is that the new program takes fat and sodium content more into account.

O'Brien told VT that Choice Plus is built into the initial planogram that Canteen recommends for each new client. "They can opt not to have the program at all, but most locations want it, and many want more products devoted to it than what we suggest right away. It's a good general program that's implemented in a lot of our machines," said O'Brien.

While the nutrition emphasis is evident across the board at all types of locations, two industry sectors that want the greatest number of better-for-you selections, as a general rule, are education and healthcare, according to O'Brien. "But it's also very prominent in B&I; many locations want internal wellness programs for their associates, and vending is part of that," she said. "It's certainly a growing trend that we continue to hear more about. As a vending operator today, you have to have wellness considerations to go to market."

For select locations, a second wellness-focused alternative from Canteen is the 2bU "socially responsible, premium and all-natural" branded venders. The dedicated beverage and snack glassfronts carry products that are locally sourced, organic, all-natural, vegan, gluten-free or kosher. The machines are equipped with touchscreens that provide consumers access to nutritional information and other product details.

"It's a dedicated machine with a distinctive look that provides each location flexibility in merchandising multiple options in the planogram that are healthier and socially responsible, which all ties together for a lot of consumers," explained O'Brien.

Rounding out Canteen's "wellness suite" are its "Avenue C" branded self-checkout micromarkets, which carry a well-rounded mix of fresh, premium and wellness items, many of which meet the Choice Plus criteria. O'Brien said the micromarket concept has been especially well-received by locations focused on delivering fresh and healthy options to their employees, and has proven its ability to attract a wider base of wellness-minded customers.


Canteen Vending, healthy vending

PHOTO: Canteen Vending clients are seeking more nutritious food and beverage choices for their employees, so the nationwide vending giant is stepping up to the plate with its recently revamped Choice Plus "healthy vending" program. Complementing this are Canteen's Avenue C-branded micromarkets and dedicated 2bU machines merchandised with a variety of all-natural, organic, vegan, gluten­-free and kosher products.


With "healthy" vending solutions in high demand, an increasing number of operators are turning to NAMA's Fit Pick program as a solution, according to NAMA public relations director Jackie Clark. To date, the vending association has shipped approximately 200,000 Fit Pick shelf-marker stickers around the world. "And we sold more in 2012 than in 2010 and 2011 combined," said Clark.

In addition to the many vending operators, like Courtesy's Patel, who are placing the turnkey program, it's included in many state, local and regional public health campaigns, as municipalities seek solutions to the health risks and costs associated with obesity.

Fit Pick is now the healthy vending program of choice for 175 government agencies and more than 100 universities and school systems, according to Clark. The U.S. Army and Air Force Exchange Service is the program's biggest user worldwide, and it has expanded to the other armed services, as well.

It also is implemented in machines in all government facilities in Tennessee, Mississippi and Utah. Hawaii's Department of Health is the latest organization to opt for Fit Pick, and the list continues to grow.

"One reason it's been so popular is that it's a turnkey program, developed with a dietician, with credible standards," noted Clark. "At first, it was extremely difficult to come to a consensus of what 'healthy' is, and there's still no one-size-fits-all definition. But with this standard so widely adopted, in one fell swoop, there's a solution for any location looking to incorporate a healthy vending program. Big companies have resources to create their own programs, but most operators don't, as small businesses are busy enough with their daily workloads."

The Fit Pick program includes a list of approximately 500 products that meet the criteria, and a 135-page handbook with tips on marketing it and how to best leverage it on location. "A lot of people have written off vending, and think there's only candy bars and nothing that fits in a balanced diet," explained Clark. "In some cases, sales increase 20% with Fit Pick, because more people in the location know there is something in the machine that they can eat."

Clark pointed out that another appealing feature of Fit Pick is the flexibility built into the program. "If it's a construction company, they may want to have only 5% or 10% of their products meet Fit Pick standards. But a hospital may devote 75% of the machine to healthier items," she instanced. "It also allows for movement as locations want to tweak up nutritional standards."


IMAGE BOOSTER

Fit Pick is not only providing a much-needed solution, but it's also making a making a big difference in boosting the perception of the industry, according to Clark.

"The first county to adopt Fit Pick was Clark County, WA," she instanced, "and I heard from the school board, the mayor and the local administration that vending had been viewed as evil and harming children, until the launch of Fit Pick. Every one of these people then talked about how wonderful the industry is and how it should be lauded. I've told NAMA members that, if they introduce Fit Pick to their local communities, they can be perceived as the heroes."

And that's just what has been happening. "Operators in communities from coast to coast continue to call me and say they put Fit Pick in, and the mayor and school officials call them up to praise them for providing healthier alternatives," reported Clark. "It's making a difference in the way people perceive the industry."


vending, healthy vending websites, NAMA fit pick PHOTOS: The National Automatic Merchandising Association's turnkey Fit Pick program is finding wider and wider use by operators from coast to coast, and also is included in many local and regional public health campaigns as municipalities seek solutions to help reduce the health risks and costs associated with obesity. Widely publicized and praised by participants, the program -- which adheres to the well-known 35-10-35 standard -- is receiving positive publicity and serving as a powerful image booster for the vending industry.


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