Vending Machines

The presence of a vending machine(s) in a school dining area can be a very controversial topic for some school food service programs.  We call them Child Nutrition Programs, and the words "vending machine" can seem contradictory at times.  Unfortunately in these days of "wellness", many districts have removed vending machines from the cafeteria dining area, but have allowed them to remain in teacher lounges, near the gymnasium, or out side in the area of the sport fields.  Often vending machines that are located outside the cafeteria are justified because the "team" needs the money, or the senior class needs the money to fund their class trip.  In one district, the justification was that the money goes to a principal's fund that is used to treat well behaved students to a "pizza lunch" or it's put toward the senior class trip.

Essentially vending machines are money makers.  They will always be pushed by a management company, and most companies will want the revenue from the vending machines to be outside their contract with the district to provide meals.  Districts cannot and should not allow this to happen.

With all that said, vending machines make money, and all of my clients and most self supporting programs need the revenues that vending generates.  Consider that even if you program serves 60% or 70% of a building's enrollment, there remains 1/3 of the enrollment that doesn't eat your lunch.  Each of these students will have money to spend and without vending, where will they spend it?  At the convenient mart on the way home from school?

I think that when program revenues are dropping, and expenses are increasing, or participation is declining, you have no choice but to seek new sources of revenue.  In these instances, I recommend a snack vending machine, a beverage/water vending machine, and a milk vending machine.  Remember we can have a healthy line of snack foods, and beverages that are allowed by program regulations.  In some instances your wellness plan may have to be modified, but that may be better than putting staff out of  work or cutting their hours.  

I must point out here that there is a contradiction in a district, and its wellness plan, when a program is asked to operate on a self-supporting basis then has large “arrears” attached to its “bottom line”, or asked to pay for their share of indirect costs.  then to make matters worse, the ability to generate vending revenue is curtailed because others (athletic teams, teacher lounges, student clubs) want the revenue.  The district cannot “have it both ways”.  If the food services program is to operate without a General Fund Subsidy, then it cannot have its “hands tied” by limiting its access to food and beverage revenue sources.  

Now if you do have a vending machine or plan on getting one or more -- never, never allow a local distributor to place the machine and pay you a percentage.  There is a lot of money in these machines and why settle for 10% and allow the distributor to take 90%?  That is insane, especially if you have had to cut hours or are planning to cut hours.  Put these "extra" hours to work filling and servicing your machine.

Purchasing a machine can be expensive, but most companies Coke, Pepsi, Frito Lay, etc will place a machine for free if you fill it with their product, and service it yourself.  Now all these companies have products that will meet your nutritional goals, if you seek them out.  Obviously you need storage for the product, but if you can overcome that problem and find healthy items, juices, water, pretzels, etc. to put in the machines there is money to be made.

Points of information if you have your own machines:

1.  Ensure that they are filled each morning.  No exception.

2.  Ensure that the glass is always cleaned each morning.  No exception

3.  Never allow a spiral or slot to be empty.  These are the favorite items and must always be available.

4.  Always take a deposit 1X a week, have the staff member taking the deposit complete a cash report, date, and sign it.  Then have the vending sale amount "rung" into your register or POS system.

5.  Ensure that every delivery of product is thoroughly checked in before it is signed for and placed in a secure location.  These items are favorites for "walking out" the back door.

Points of Information if you (have to) use a distributor:

1.  Negotiate a 1 year contract, not one that is longer.  Keep your options open to move your business each year.

2.  Negotiate at least a 20% return.

3.  Insist on a commission check once a month.

4.  Insist the the monthly statement provides ALL of the following:  date the machine was filled, the amount of money removed, AND (IMPORTANT) the digital read out when the money was removed.  Every machine has a non resettable counter that the driver must provide to the company.  That is what keeps them honest.  You need the same information, so you can subtract this week's reading from last week's, and know how many transactions have taken place, times the sell price, and you can audit their statement.  DO NOT ACCEPT A "We can't provide that information".  If they tell you that "RUN" to another company, they are ripping you off.

5.  Insist that your distributor give you the best machines.  The ones with the full glass front, lots of color, etc.  They will try to keep them for their "best customers", insist on the newer "glitzy" machines.

6.  Do not allow them to not send you a monthly statement or commission check.

Contact me privately if you need more information.

My Consulting Business

This week, I  unexpectedly received 4 emails from "Mealtalkers" asking me if I would be willing to sell my consulting business, or franchise it out.  I never thought about this. But when I retire fully, I am gone, no more involvement.  I have done this for almost 40 years, and need to move on soon.

I guess I would be willing to sell it, if I could train the buyer to do things my way.  I don't have much experience with selling a small business.  If you have any information, advice, or an interest in my business, email me privately.

frank@slantconsultants.com

Photos from my travels #2

The quality of this lunch was wonderful, but it does need some color.

 Fresh and canned fruit

Not the way that I want my pasta served.  Note the hand in the pasta

Elementary school breakfast.  Participation in this building was very high (60%) for Breakfast.

Where is the food? Two fruits of the same color (applesauce & pears). 

Compare to others that I have posted.

Hot foods hot, cold foods cold?  Not here.

Can you say Yuck?  At what cost, saving money on this product?

Eye Appeal?

Small elementary school.  Proves that it doesn't have to be "fancy" 

to be nice and have  eye appeal

More Photos from my travels

I was asked to post more photos, and I will do so below.  I do want to say that I have hundreds, maybe thousands of photos taken in programs that I have visited.  For me, I put about 100 of them in a Power Point Presentation that I call "Go For The Gold".  It is intended for the food service team.  Since you cannot take your staff out to visit other programs, a PP Presentation is one way of taking other programs to them.  I have tried to offer my presentation to some (who offered to pay), but I refused because each photo has a story and is not always as it appears.  Although some speak for themselves.  If I have some time this Spring I will try to include "speaker notes" with my presentation that tell "the story" of the photo.  If I do get it completed I will make it available at a cost that will cover duplicating and shipping.  If I forget, someone remind me in April.

Breakfast in an Elementary School.  Note 5 different entrees.  Forget the Bacon

 Pizza, burgers, and chicken sandwiches wrapped for self-service

 Yogurt Parfait in an elementary school 

 Pasta, garlic bread, done correctly

This and next two photos = Sample entree set out on the line with description

Colorful assortment of fruit choices in an elementary school

Are any words necessary?

Salad plates, and sandwich choices in a Middle/High School

 Cambro cart turned into deli bar with sandwiches to order.  Located in dining room.

Each of these photos say one thing to me, "someone cares".  Someone cared about the "eye appeal", and the student as a customer.  My point here is that you may not be able to do what another program or manager does, but you should not limit your thinking.  It's all about eye appeal, and the student as a customer.  Sometimes we have to spend a little to make money.  Do what you can, try new things, and encourage your staff to offer ideas.

From time to time take a photo of your lines and then look at them from your customer's view point.  You may be surprised at what you see.

I will post some more photos next week.

The Cost of Wellness in Schools

For the last seven years, I have watched nutritionists, politicians, and local state agencies walk a politically correct line, in which they push and promote over zealous nutrition programs, with reduced snack sales for schools.  After all, to these folks, not supporting or pushing forward a nutrition, or health issue for children would be political suicide.  So, they push the politically correct agenda in the name of wellness.  State Agency CN Offices have done the same - Everyone protective of their job, but none speaking of the financial pitfalls.   And so, many directors/managers, and school boards "climbed aboard" the wellness wagon, with very stringent wellness plans, blaming the school cafeteria for obese and overweight children.  God forbid that they would hold the (voting) parent responsible.

I have watched as many of these  programs, began to lose much needed revenue, all while the cost of food labor, and labor benefits was and continues to increase at an alarming rate.  As a result, these programs begin a downward financial spiral, using up cash reserve balances that accumulated years ago.   At the same time, I have seen this economy generate an increase in the number of students eligible for free and reduced price meals.  Add to this the number of schools and directors/managers who have no idea what it is costing them to prepare and serve a school lunch or breakfast.  For many of these programs, the cost of preparing and serving that lunch now exceeds the revenue that is generates from free and reduced price rates of reimbursement.  The end result is a road map to failure.  To make matters even worse, many of these same schools have virtually eliminated snack, Ala Carte, and vending revenues that previously helped close the disparity between operational costs and revenue.

Eventually they call me asking for help to keep the Food Service Management Company (FSMC) out.  Only a few months ago, I received a phone call from a director in the mid-West who said her Board was voting to turn the program over to a Management Company, asking me what she should do.  My reply, "you should have called me a year ago".  Her response, "I had no idea the program was in financial trouble".  As incredible as that may be, I receive those calls and emails all the time.  "I didn't know we were losing money; no one in the business office told me".

There is no magic here.  Like government, we cannot afford to spend more than we "take in".  Success today, means that we can no longer simply plan nutritious menus.  We must know the cost per serving of every item, utilize a food budget, take an accurate monthly inventory, ensure that every delivery is carefully checked in, and run a fully accrued P&L every month.  That P&L must, must, must be compared to a monthly operational budget and every item (revenue or expense).  Then every item that is off budget for the month, must become the subject of a plan of corrective action.  Today, we cannot afford to rely on the business office for an accurate P&L - you have to prepare your own every month.  I have seen to many that are not correct, misrepresent (unintentionally) the bottom line, or are simply non existent.

My concern is that there are few out there who do what I do, who know how the FSMC operates, and who are not afraid to tell it like it is.  Like it or not, the cost of wellness, and labor contracts is turning more and more programs over to a FSMC.  And that should not be happening.

We need to know where we stand every month financially - fully accrued, no nonsense, no value of commodities included, with an accurate cost of food used (not purchased) presented in a P&L.  Then we need to evaluate whether we have a revenue problem, or a spending problem.  We then need to put together a realistic action plan, with goals and time lines, submit it to the Board for approval, and "get it done".  If this means cutting labor, reduce it, if it means food costs must be lowered to account for no more than 35% of revenue, do it.  If you need to fight to negotiate your food service contract separate from the other non-instructional employees do it.  And, if you need help get someone who knows, in there.  Don't  be afraid of what a consultant (like me) might say.  We are there to help and to save you staff and program from the FSMC.

Good luck and never hesitate to contact me for help.  Although this is my last school year as a consultant, I will continue to take on selected programs, if I know that it really needs my help.