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Cantaloupe Helps Vendors Aid School Menu Changes, Maintain Revenues

Posted On: 9/1/2010

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Cantaloupe, Cantaloupe Seed, Mandeep Arora, Anant Agrawal, school vending, healthy vending, vending, vending machine, National Automatic Merchandising Association, Balanced for Life, Fit Pick, Rob Oughtred, Ryan Vending, Ryan Company Ltd., Jodie Glimpse, Camelback Vending, Marc Whitener, Refreshment Solutions, Gil Sanchez, Vend Naturals, Vending Natural Inc., vending machine operator, vending machine telemetry

SAN FRANCISCO -- Vending in schools, long a well-understood market niche, has undergone dramatic changes over the past five years, as "healthy" food initiatives launched by governments and school administrators have interacted with shifts in students' tastes and buying habits. These shifts have challenged operators who serve schools to find ways to maintain the sales that generate commission dollars to fund computers, sports programs and extracurricular activities.

Cantaloupe Systems reports that alert vendors are identifying menu items that conform to the various new requirements and deploying Cantaloupe's sales-monitoring technology to track the popularity of these offerings in order to stock the freshest selections of the items that sell best.

Among approaches taken by Cantaloupe-equipped operators is the introduction of new products from less well-known producers. Cantaloupe notes that Rob Oughtred, Ryan's Vending (Victoria, BC, Canada), uses the Cantaloupe Seed wireless monitoring system to determine rapidly, by actual trial, which "healthier" items appeal to schoolchildren. This method has enabled him to expand his product offerings with selections from nontraditional purveyors like Kernels Popcorn (Toronto). And in many cases, his possession of detailed sales information has enabled him to negotiate better pricing terms.

According to Cantaloupe, Oughtred estimates that 50% of his healthier merchandise now is procured from smaller suppliers, up from 20% five years ago.

Alert operators always have conducted taste tests when launching new products, and Cantaloupe reports that Gil Sanchez of Vend Natural Inc. (Ventura, CA) is using Seed technology to get the greatest benefit from this proven technique in the educational market. Introducing innovative healthy products to students by onsite sampling, Vend Naturals has been able to meet California's school nutrition guidelines with nearly all the products it offers -- and its revenues from machines in schools have increased steadily.

By the same token, the National Automatic Merchandising Association's Balanced for Life and Fit Pick campaigns include taste testing as a crucial element of any healthy-vending initiative. But taste tests do not necessarily translate into dollars; so Sanchez uses Seed to monitor unit sales volumes and determine which products sell best when introduced into the mix by means of taste tests and other traditional methods. Knowing exactly what is being sold as it is bought allows him to stock the machines with popular items before they lose their appeal, Cantaloupe added.

Targeted marketing is another capability. Cantaloupe explains that Marc Whitener of Refreshment Solutions (Norco, LA) uses Seed's sales-monitoring features to expand its business while conforming to Louisiana's requirements for healthy items in school vending machines. Refreshment Solutions is able to monitor specific sales trends in real time, down to the individual machine and coil levels, in order to identify the optimal mix of fresh, higher-priced items such as salads and lower-priced, but still high-margin, selections like popcorn.

Cantaloupe observed that Seed's tools for tracking sales in real time could enable operators to maximize sales during the school year. Jodie Glimpse of Camelback Vending Services (Phoenix) does this in order to maximize sales in the nine months during which school is in session. Cantaloupe pointed out that knowing which products sell best at any given point in that nine-month sales window enables Camelback to restock its machines with best-sellers, thus cushioning the much lower sales volumes when schools are not in regular session.

"There is a perception that kids aren't familiar with healthy brands or organic products, but that's simply not true," said Vend Naturals' Sanchez. "Ninety-five percent of our business comes from the education sector, so we rely heavily on student input when selecting suppliers. Every traditional market has a devoted organic aisle and we believe vending should, too."

Refreshment Solutions' Whitener said, "The vending industry is rapidly evolving with the advent of cashless, remote-monitoring, environmental concerns, calorie disclosure and more stringent health initiatives. Vending in schools is even more challenging due to seasonal sales schedules and the finicky tastes of youth that often are in conflict with healthy foods initiatives. Operators need to proactively find new solutions to adapt to the changing landscape of vending or risk becoming obsolete."

Cantaloupe's very existence is predicated on the fast-changing nature of the vending industry. The company's chief executive, Mandeep Arora, observed that operators need new technology to meet a wide array of challenges, including the changing buying patterns of their customers. "Nowhere are these changes more acute than in the education sector, where operators must find a balance among student preferences, school policies and government mandates -- all while growing revenues for themselves and the schools where their machines are placed," he emphasized.

"Cantaloupe is working with customers every day to leverage our technology in innovative ways to serve vending's customers better, and in the process boost revenues and profits for operators and schools," he continued.

Cantaloupe Systems was founded in 2002 by two engineers: Arora, a second-generation vending professional, and Anant Agrawal, whose goal was to automate the vending industry's merchandising function. Installed in individual vending machines, the Cantaloupe Seed device monitors all transactions and transmits data securely through cellular networks and the Internet Cloud. As a result, vending operators know the state of each machine's inventory without making a physical visit.

The company reports that vendors using Seed average $35,000 in annual savings per route, can replenish 80% more machines a week, and can reduce their carbon footprints by 40% by eliminating unnecessary truck travel and carrying smaller loads on each truck.