Vending in Schools is an up and coming Vending Opportunity In this episode of the Vending Business Show, we interview Larry Towner, a successful vending operator, and vending business consultant. He shares valuable tips about Vending in Schools, .
Tom Shivers Vending in Schools I’m Tom with the Vending Business Show, and today, we’re here with Larry Towner, of course, who is a vending business consultant with Service Group International. We’ve got a interesting topic today, which is kind of unique for this particular year, about Vending in Schools so tell us what we’re going to talk about today, Larry.
Larry Towner: Well, today we’re going to talk about everybody favorite topic, that’s vending in schools. We all know that healthy vending in schools is coming, whether we want to believe it or not, there is now legislation. It’s early July here, and we are … Well, we originally were talking about impending events in our last video, and so we were discussing this concept, Tom and I were, and we decided we needed to do some impending events that’ll affect you right now that you can take out and use today, and that will be able to be used year after year and month after month, for that matter.
We came up with this concept of doing this, the healthy vending in schools, due to the recent legislation put into place by the Obama administration, saying that healthy vendors, there’s going to be certain healthy vending aspects that need to be done in school. The reason that we’re presenting it at this time is we know in the future that healthy vending is going to be an increasing part of our product mix as we go forward through time.
If we don’t get it legislated into our business, we’re going to end up … our customers are going to end up demanding it. Whether they really will eat it or not is another story, but they will demand it eventually, so you need to be preparing for that concept of healthy vending, and so we decided we would talk about … we would kind of wrap the school vending together with the healthy vending, and make it Healthy Vending in Schools because they really go hand in hand. That was one of the things that came out in our impending events. We know this is going to happen. Well, right now, you have to do it if you’re going to do vending in schools, and you know it’s going to be an increasing amount of our business as time goes on.
So, some of the challenge that we think are showing up in healthy vending really has a lot to do with product selection. It’s been difficult to identify the products that meet these requirements that the government has put down upon us, and so what we found is … I sort of had an idea that this might happen because we didn’t see a whole lot of push back from the various big companies like Frito Lay or Coca-Cola or Pepsi, and so what happened is, is they had products basically ready to go. They just didn’t launch them until this healthy vending initiative got passed through the legislation.
We wanted to give you a couple of resources, because we’re here about … At A&M Equipment Sales, and when we do these things, we want to give you the resources that you can go out and do the kind of work that you need to do. I’m going to take the screen that I have here and I’m just going to show you all some screen shots that we’ve taken off the internet. They give you a couple of resources that are available to you out there, as far as for healthy vending resources.
One of them is a website called HealthierGeneration.org. Actually, if you go to their home page, which I’ll scoot back to their home page, and I’ll show you how to kind of run through this program if I can find their home page. Well, I had it, anyway. Maybe it’s here. But they offer up a couple of products, or a couple of services, I want to say, that are really, really good services. I’m going to type in the HealthierGenerations.org. There it is right there. Let’s pull that up.
Yeah, this is the home page for the website, and what we wanted to do was kind of walk you through which screens, as it were, are really the important ones. We go to here to Eat to Live Healthier, and we click on Eat Healthier. In this Eat Healthier screen, as you can see, there’s a lot of information about making your diet better, but the things that really matter to us in the vending business are these two right here.
There’s product calculator and product navigator. The product calculator, if you click on that, will take you to this screen right here, and this screen is all about figuring out if your products actually meet the requirements for the school vending. It gives all kinds of different things, and it’s basically … It walks you through the things, and it’ll tell you if it works.
One of the other things that’s here on this website is the product navigator. What the product navigator does is it actually gives you lists of products that meet these requirements, so we click on that. We go down here to Smart Snacks, and of course, then you go back here to Snacks again, and it’ll give you a complete … Here’s a menu of items that it shows: bars, cereals, cookies, brownies, pastries, chips. If we just click on chips, it brings you up a whole bunch of things, and who makes them, and what the skews are, and all that kind of thing. This is a really tremendous website that you can use. It’s called HealthierGeneration.org. Really good one.
One of the other ones is, if you’re in the vending business, you already know about Vistar, but Vistar now has a whole series of products. As you can see on their home page, they have healthier snacks for a healthy life, and they have a whole section and a whole bunch of products dedicated to healthy vending, and getting you in the products that you need in school.
These are the kinds of things that we wanted to give to you out there so that y’all know what you’ve got coming up, because adding healthy products into your mix is going to be important as we go forward.
Tom, anything that you have to add?
Tom Shivers: That’s great stuff there, Larry. Now, we’ll have links to both of those resources below the video, so anything else we’re going to be talking about later?
Larry Towner: Well, we always have lots to talk about on the Vending Show, but we’re going to do, coming up is impending … Any of these impending events, we’re going to start doing a series on what we’re calling impending events. These aren’t necessarily doom and gloom things, but they’re things that are going to happen to you as you run your business, and we know, just because we’ve done this for a long time, there’s going to be certain things that we know we’re going to do.
We’re going to try to leave the seasons a little bit, which means we’re going to start into a fall program, because it’s dead of summer right now, but these things happen year after year after year at this time, so we’re going to do a series of events that are going to come up that you can do a little pre-planning for, get yourself prepared for it, and be ready to go. All of that’s going to come up in future Vending Shows.
Tom Shivers: Awesome. And of course, subscribe to get in on all these new shows that are coming, and you’ve been watching the Vending Business Show, a publication of A&M Equipment Sales.
Whether you are doing school vending or not, healthy vending is going to be an increasing part of your product mix in the future because customers are going to begin demanding it. So you need to begin preparing for it if you haven’t already.
Some of the challenges with vending in schoolsg are identifying products that meet the government requirements. Here are resources that will help in this area: We have AMS Healthy Vending Machines
In this episode of the Vending Business Show, we interview Larry Towner, a successful vending operator, and vending business consultant. He shares valuable tips about healthy vending, .
Tom Shivers: Hi. I’m Tom with the Vending Business Show and I’m here with Larry Towner, who is a vending business consultant, been in the vending business for a number of years and sold his business in 2012. Thanks for being here, Larry.
Larry Towner: How are you, Tom?
Tom Shivers: Good, good. Today, we’re talking about healthy vending. Earlier this year, Fresh Healthy Vending, which is a brand of vending company, had an IPO. It makes you wonder, wow, is healthy vending really hot now and if so, what does that mean?
Larry Towner: Well, healthy vending is a hot subject right now. There’s a lot of talk in the media about snack food. New York City just had that size restriction on sugary drinks and things like that. So the topic itself is very hot. The IPO that you’re seeing that came out is certainly an interesting development in the vending business. There are a number of public vending companies that are out there in the world and they are actually quite large corporations. The interest is that this particular company specializes in healthy vending alone. That’s what I find so intriguing. What’s your take on it, Tom?
Tom Shivers: Yeah. I think it is a … You hear about healthy snacks and healthy from the USDA and all these things coming down from the USDA lately affecting schools and things like that. I think that’s kind of … Vending in schools is almost game over really. You do it the government’s way or you don’t do it at all. I’m not sure what the solution is for school vending, but healthy vending I think is interesting and it can work in some places. I don’t know if it works everywhere though.
Larry Towner : Well, that’s always been kind of my position. In our companies, we always had a section of our machines that we dedicated to, I’m going to say healthier type snacks. I mean I’m kind of loving right now, I don’t watch a whole lot of TV, but I have watched, and I have seen that Nature Valley granola bars is showing off how healthy their products are and things like that and how it’s nature and this and that. I kind of laugh because if you actually look at the packaging, it’s pretty much about the same as eating a Snickers candy bar from a total calorie intake and fat content and things like that. It just has products that are actually a little bit better.
In our machines, we always had a section of our machines that were dedicated to healthier type snacks. When I have approached the healthy vending side, one of the things about the so called companies that specialize in healthy vending is that once you’re into that particular subset of the market, you’re not going to be able to do anything without compromising the integrity of what your … because their whole machine is fronted with this healthy vending concept and all of that. So you go and put it what would be a traditional bag of potato chips or a traditional candy bar and people are going to kind of look at you like you’re a little bit strange.
We always kind of went in the reverse way. We promoted sections of the machines as being healthy or if somebody wanted a whole healthy machine, we just put in a regular vending machine with all healthy items in the machine. It’s easy enough to do because you’re just changing product selections out. You’re not actually changing out the fronts of machines.
Fortunately, we all work with A&M Equipment and if you do want your machines fronted with healthy vending selections, Joe at A&M Equipment Sales will front your machines however you like them. So you don’t need to get tied up into a big franchise agreement or into anything like that. You can go out and compete with the so called healthy vending companies and present machines that offer up healthy selections at a fraction of the cost. That’s really the only difference I see is that vending is vending is vending. If someone puts money or slides a credit card in and a machine pushes the product out, at the end of the day, that’s what vending is.
Tom Shivers: Very well said. Yeah. Tell us a little bit more about your business and what you do.
Larry Towner: Well, my business, I’m in the consulting business. Like I said, we were in the vending business since the mid-80s and it makes me feel old. Been in the vending business since the mid-80s. We sold off our vending operation in 2012. We took up the marketing side. We help companies solve their vending problems, particularly smaller operators that need help in sales and marketing and operations and things like that. We help to make people more efficient so that they can make more money, help them with their maintenance issues. Across the board, we’ve done it all. We are available at ServiceGroupInternational.com and send us an email and we’ll get back with you.
Tom Shivers: You’ve been watching the Vending Business Show,on our topic Healthy Vending a publication of A&M Equipment Sales.
You’ve been keeping up with the Federal legislation as it relates to Government Regulations School Vending, what are you learning?
A couple months ago the USDA came out with a stringent ruling with a 60-day open opinion on it. The ruling is basically highly controlling of the content on the snacks and drinks served in schools. They are proposing tohave Government Regulations School Vending and regulate school stores, ala-carte lines, vending; they say they aren’t touching the fundraising, but the wording says:
“If there are too many fundraisers selling the traditional items, that will be regulated as well.”
It should be about choice, not regulation.
The USDA is focused on the childhood obesity issue in schools and vending seems to be an easy bulls eye. But there are so many other ways students get these items that it seems the wrong approach and too much regulation. The schools don’t want it either and are in favor of choice; they make money on the commissions; they are struggling with many cut backs. They don’t want the regulations to deal with and they don’t want to lose the funds.
Are there places that are benefiting from healthy vending?
I know from personal experience and from the corporate side, people want the choice. It’s good to have the option vs. “I’m told this is all you can have.” When the Government Regulations School Vending, I tend to find what I want elsewhere.
The government regulations school vending has also made a big push to get the calorie disclosure for all products and this might be a good compromise. Most people already know what’s what in terms of nutrition, but if you still don’t know what to pick, here’s all the calorie and nutrition info for each product. All vending machines are moving toward calorie and nutrition disclosure in 2014.
Do we want to be completely 100% healthy vending in a location? Absolutely not. Do we want to provide the choice? Yes.
There are many places where 100% healthy vending has gone into a government location and a year later you read the report that shows sales have plummeted and things aren’t doing that well. What happens to us vendors? It requires us to raise the prices and they don’t sell as fast so we’re dealing with expired product and a loss.
It seems like the government is saying “if you really don’t have other options as a child, you learn to chose what is more healthy.” What do you say about that?
In theory yes, your starving and trapped on an island that has nothing but bananas and coconuts, yeah you’re going to choose the healthy items. But these kids, and I have kids of my own who are teenagers. We are preparing them to go out into the world, especially high school kids, get jobs, join the military, become self sufficient, do you really believe that if you tell them “you can’t have this” that they’re not going to find a way around it?
We’ve already seen this with the American Beverage Association agreement that Coca Cola and Pepsi made. They agreed they would only stock certain types of drinks with less sugar. Sales plummeted, but what happened… kids stopped by QuikTrip before and during school. They find ways to circumvent it.
On top of that you aren’t teaching them anything, the forbidden is always more enticing. When you ban it, they want it even more.
What is the ABA?
The American Beverage Association (a trade organization representing the nonalcoholic beverage industry in the US) worked with Coca Cola and Pepsi to come up with a plan to meet these so-called healthy requirements and in the schools they agreed on the drinks that they will stock.
When this happened, sales went down, the kids found ways around it. And when some kids can’t find a coke classic, they do buy a diet coke – but it’s not solving the problem of obesity. It should be about doing things in moderation.
It’s my job as a parent to deal with obesity, not the government’s and not the school’s job either.
On a federal level, what can a vending operator do to let their voice be heard?
1. Look at the USDA website, especially when they are open for comments on policy from the public.
2. Contact your local representative, their job is to listen to you.
3. NAMA has been very helpful. Eric Dell, senior VP of government affairs, has been right there on the front lines. They can help with communicating with the government. The more operators we have contacting them, the more ammunition that they have at the ground level.
It’s almost understandable to regulate the elementary level students, but high school students? Really?
I have accurate records of sales in the schools we operate in showing what students are purchasing per capita between healthy vs. traditional items and it is not what you think.
When you aren’t in the vending industry it’s not obvious that there’s a business behind a vending machine. Healthy items are more expensive and when a customer asks to stock only healthy items, they often act like they are being price gouged when in reality the costs are higher for those items.
Episode Transcript: Tom Shivers: This is Tom Shivers with the Vending Business Show, here with Seden Harrison of Smart Source Vending. Today we’re talking about Government Regulations School Vending. How are you today, Seden?
Seden Harrison: I’m good, Tom, how are you.
Tom Shivers: I’m doing good. And I know you’ve been involved in keeping up with some of federal legislation and what’s going on there, especially as it relates Government Regulations School Vending. You’re doing vending here in the state of Georgia, what are you learning in that area?
Seden Harrison: I do know that, there’s different things going on different states as far as regulation that’s pending and out there, but the big thing that happened a couple of months ago is the USDA came out with a ruling of very, very stringent, and they came out with this ruling, and it had a 60 day open time for people to come in and to make their opinions known, whether they were for it or against it, and the ruling is, and I don’t have the details of what it is. But basically it’s pretty much very highly controlled as far as what the fat, the sugar, the salt and all these contents on all these snacks and on the drinks and everything.
Seden Harrison: What they’re proposing is not only to the vending, but in these schools, they want to regulate the school stores, they want to regulate any of the a la carte lines, they want to regulate vending, they say they are not touching any of the fundraisers, but when you read the ruling like the following paragraph says that if there are too many fundraisers that are selling the traditional items, that that will also be controlled. It’s, for me as an operator, and we are in a lot of schools, it’s very scary because the reality is the students, adults, everybody, it’s about choice, and when you tell someone, not to pick on granola bars, but, here’s a vending machine and it’s all granola bars and carrots and whatever that somebody has deemed as healthy, it doesn’t work that way. If somebody wants to get their Snickers bar, they’re going to find a way to get their Snickers bar.
Seden Harrison: Right not the USDA is focusing on this obesity issue and they’re focusing on the schools. Vending seems to be an easy bullseye because you’ve got this box with all these items that are deemed as unhealthy, and it’s just a very, very easy target. There’re so many other ways that these students can get these items, and they do get these items, that I think the approach is incorrect, and it’s just too much government control.
Seden Harrison: The schools don’t want it either. The schools aren’t looking for this either. The schools want to provide the choice. The schools make money on commissions from all these services, and that they utilize for things they need. All these schools are struggling with so many cutbacks and so many hurdles. They don’t need the regulation to have to deal with, and they don’t need to lose the funds.
Tom Shivers: It sounds like there’s a lot of fear about this issue. Are there some places that are really benefiting from healthy vending?
Seden Harrison: I think again, I don’t claim to know everything, but I know from our experience from the corporate side and from the school side, and things that I read, people just want a choice. I don’t know that there’s any operators out there … well, I shouldn’t say that. I think there are definitely some companies that are franchise sort of situation, and they market only the healthy aspect of things. That may be working great for them. I don’t even pretend to speak for them. I just know from personal experience, even on the corporate side of things, you go into a company and they want to have the choice. Me as an individual, myself as an adult, anybody walking up to a machine, if you go to that machine and you want to purchase a snack, it’s good to have the options versus I’m being told this is all I’m allowed to buy. And I’m not going to do it. If I don’t want it, I’m going to find another way to get the product.
Seden Harrison: This is the way in everything out there. Whether you drive to a restaurant that has healthier options or you choose to drive to a restaurant that has less healthy options, again it’s about personal choice, making that choice. I know the government too has made a big push about the calorie disclosure and trying to get all that. As much as that is a difficult thing for all of us as vendors to do, and I know they haven’t even figured out quite how that’s going to happen, that may be the compromise. That might be the middle ground that says, “Here’s a way to present the nutritional information on the products in a machine, and if you really have no clue still what to pick, guess what you can read the calorie information and the nutrition information.
Seden Harrison: The pointless side of that is I think most people still know whether they read what’s on the packaging, what’s good for them and what’s not good for them. I don’t know if I’ve answered your question. Do we want to be completely, 100% healthy vending in a location? Absolutely not. Do we want to provide the choice for whether it’s to students or to adults? Yes. The government is trying so hard, even … and I don’t know exactly which states, but I’ve read articles about different control in government buildings where they’re removing, it’s a county building or whatever, and they’re removing all their traditional items. And they’re only going to stock healthy items. And a year later you read the report that sales have plummeted and that things are not doing that well.
Seden Harrison: Unfortunately what happens to us in the industry is we go and we try to put all these healthier items in a machine. One, you have to raise the price on everything, and two, they just don’t sell as fast. Us as an operator, we’re dealing with expired product and a loss on everything. Nobody thinks past that point. They just say, “Oh, yes, stock it with all this stuff that’s supposed to be healthier for you.” It’s just not …
Tom Shivers: It seems like one of the government points is, “Hey, if you really don’t have other options, then you start, if you’re a child, you start learning to choose what’s more healthy?” What do you say about that?
Seden Harrison: All right, you want to hear my opinion about that? In theory, yes. You’re starving, you’re trapped on an island. It’s the only vending machine on the island has bananas and coconuts, nothing else. Yeah, that’s the only way you’re going to be forced to buy that situation. But these kids, without a doubt, and I have kids of my own that are teenagers, that I am constantly trying to get them to eat the right things and be healthy in their choices and everything. These kids, especially high school kids, that we are supposedly preparing to go out into the world, whether it’s go off to college, join the military, get jobs, become self-sufficient. Do you really believe that if they want to have a Coke, and I’m not trying to pick up one product, a sugar drink. Or if they’re trying to have a chocolate bar or candy or whatever.
Tom Shivers: Or sports drink.
Seden Harrison: Or Doritos or sports drink. Do you really, really think that if you tell them, “You can’t have this,” they’re not going to find a way around it? It’s already happening in schools. Schools where a few years back the American beverage association made an agreement with Coke and Pepsi that they were only going to stock these certain types of drinks, whether it’s Coke Zeros and Diet Cokes and waters, and not put the sugar drinks it. Sales plummeted.
Seden Harrison: But what’s happening? I have kids that are high school kids in these schools. These kids stop at Quick Trip in the morning before school, or they run across, if there happens to be a Quick Trip close to the school, they leave between breaks, even though they’re not supposed to leave campus. They leave campus, they go get their drinks. Kids bring it from home. They find ways to circumvent it. And that’s exactly what’s going to happen.
Seden Harrison: And on top of that, the forbidden is always more enticing. You’re not teaching anything. You’re not teaching anybody anything other than when you tell them, “ban it, ban it, ban it, ban it,” they want it even more. All of this … see you got me mad and started now.
Tom Shivers: You mentioned the ABA. What is that exactly?
Seden Harrison: The ABA is the American Beverage Association. Coke and Pepsi, and I don’t remember how many years ago, Coke and Pepsi made, on a push to move forward on this initiative to show basically the world, the industry, that they are all about concern for the health and well being of children. They said, “Look, we’re going to come into this agreement with the American Beverage Association and come up with a plan of which drinks meet these so called healthier requirements. When we go into any of the schools, these are the only types of drinks we’re going to stock.”
Seden Harrison: That’s what’s going on. What I’m not sure about is, I’m don’t know if that’s in all the states. I know that’s here in Georgia, and I’m guessing it’s across the country. Anyway, that’s kind of what’s going on with the schools, but like I said, we’ve seen in action what’s happened. The sales went down, kids find a way around it. Yes, the occasional kids, when they can’t find anything else they go and they buy their Diet Coke instead of a regular Coke. They do all that, but it again is not solving the problem. The problem, truly, there is an obesity problem. There’s a health problem from adults to kids to everything. But it’s about being educated, it’s about knowing the right choices. It’s about doing things in moderation. There’s nothing wrong with having a couple of snacks a week. If you have a Coke or you have a candy bar. There is nothing wrong with that as long as it is balanced with healthy activity too.
Seden Harrison: Are there people that abuse it? There’s absolutely. I have to stop my kids from coming home and popping open a Cokes a day. I have question how many they had, and I try to limit them to one a day. Do they get around it? Of course they do, and I have to watch what they’re doing? Of course I have to. It’s my job as a parent. It’s not the government’s job. And it’s not the school’s job either. They have plenty on their plate.
Tom Shivers: On a federal level what kind of things can a vending operator do let their voice be heard?
Seden Harrison: I know when the ruling came out there was an open period where you could comment on the ruling. If you go to the USDA website, you can actually look up the ruling, you can read all the comments. They’re open for public view. What I have done, personally, there’s a couple of things. Contact your local representative for one. Their job is to listen to what you have to say, and if they can do anything to assist, they are your representative, they need to hear how businesses are affected in the area.
Seden Harrison: Above and beyond that, the biggest support and the biggest help I’ve received is through our association NAMA. They have been so great, and Erik Dell who is the senior VP, I believe, of Government Affairs. He is right there on the front lines. He has been so responsive, so amazing, so informative, guiding me through this. Not only him, but his staff too. I’ve written letters to different people, and I can send it to them. They read it, they proof it, they make sure I don’t sound like I’m just angry and spewing a bunch of stuff. They point me in the right direction, and they help me draft these letters so that they sound very good and I make very valid points.
Seden Harrison: The more operators that we have contacting them, the more ammunition that they have from the ground level to go, “look, you’re picking on an industry that is not going to solve this problem that exists out there. It has nothing to do with this industry. The schools too, the same thing.” The problem isn’t in the schools, it all starts at home, it starts at habits with home and what’s going, and what these kids are learning. The most ironic thing I go back to is trying to regulate high school kids who have mobility. They have jobs. They have money in their pockets. They have cars. To ban them, it’s almost understandable to say to the little ones that are very … even at home I’m sure not allowed to eat as much of the traditional items and have free access to the pantry. You control all that a lot more. I can even understand even on that level. But high school students? It’s so counterproductive to make the government to come in and control what they’re eating.
Seden Harrison: And another point I have to make is, without divulging all the details on sales, if you … I have accurate records on what the sales are in each of the schools that we are a part of. The quantity purchased from these kids is not as high as you would think. The reason it seems so high is when you deal with student populations of these big schools of 2,000-3,000 students, you’ve got a lot of students versus an office of 100 employees. 2,000 kids in a week, of course they’re going to purchase items and the numbers seem high. But when you break it down as to what they’re spending per week, per student, and you take an average, the number is very, very low. It’s not near what they seem to be thinking is going on.
Tom Shivers: In terms of the traditional versus healthy?
Seden Harrison: In terms of traditional versus healthy. For example, the way … some of the things I’ve read, they make it sound like each student is spending $10 a day on snacks and drinks. Their whole meal consumption is unhealthy, unhealthy, unhealthy, unhealthy. Are there some students that do that? There is no doubt there are some students that do that. And are there some students that don’t even go near any of this stuff? There’s some students that don’t even touch any of that stuff. It’s all about averages. It’s all about the balance. If you look at the balance. The usage is not the way people think. That’s my two cents.
Tom Shivers: That’s what I mean. If somebody wanted to get a breakdown on the numbers from the government without crossing the-
Seden Harrison: I’ve already volunteered all my sales information to these parties. To the USDA. To NAMA and everybody. I’ve said I have absolutely no problem showing this to you to prove to you that it’s not what you think. Unfortunately, I also get it. In theory I get what this is. I get it. But, as always when you’re on the other side of it and you’re a part of it and you’re in the industry, and you learn, I mean, I had a different view of the vending industry too. One of the things with vending, you almost don’t even think about it being a whole business behind it when you’re not in the industry. Everyone thinks that a vending machine, “Why aren’t things super cheap in here? Why is this much? Why is that much?”
Seden Harrison: No one thinks past the fact that there’s a whole business running behind it with all the operations and overhead and everything else. I’m going off on a different tangent, but it goes to the healthy when companies say, “I want you to stock only healthy products in here,” and then you tell them, “I’m sorry I can’t sell this product for less than $2 or $1.50. And they’re upset over that. They think you’re price gouging them, but you’re not. Your cost is high and the items are more expensive for those items.
Tom Shivers: Right. They can work in some environments. I’ve read where they do in certain areas. But across the board-
Seden Harrison: Well they do work. But again it’s choice. We have Avanti Markets in place too that have a wide variety of stuff. But both items sell. The healthier stuff sells and the maybe not-so-healthy sells. Inconsistent. I can see purchases on different people and one day somebody’s deciding they want to buy something healthier, and the next day they want that candy bar. It’s again choice. Provide choice for everybody.
Tom Shivers: Thanks Seden for sharing with us. Tell us a little more about your business.
Seden Harrison: We’ve been in the business not super long. Over four years. It’s growing. We love it and we’re learning a lot. This whole new USDA regulation or potential regulation is definitely caused a huge concern because we’re growing as I said, and we’re growing by word of mouth, which is wonderful, but you just don’t know if the government’s going to shut things done and pull the rug out from under us, and what exactly is going to happen. But we’re hoping for the best and just plowing for the best and moving forward. We love it. It’s been a great learning experience. Growing and learning every day basically.
Tom Shivers: You’ve been listening to the Vending Business Show, a publication of A&M Equipment Sales.
Is There Money to Make in Healthy Vending An interview with Larry Towner
Excerpts from the interview: Is There Money to Make In Healthy Vending
“Healthy vending products are hot, they constitute a growing market segment that needs to be capitalized on,but the business opportunities,…Is There Money to Make in Healthy Vending you need to do serious research on any business opportunity before investing in that opportunity.”
Are there ways to offer Healthy vending solutions besides these Business opportunities?
“A business opportunity wants to sell you machines fronted with a healthy promotional sign. They promise to place the machines. They promise fabulous profits.” Is There Money to Make in Healthy Vending?
“I always suggest to my clients that they partner with a reputable equipment supplier, someone that has many years of experience in the vending industry, a company that has a reputation of providing excellent equipment at a fair price and provides outstanding customer service after the sale. My choice was Joe Nichols and his staff at A&M Equipment.”
“In regards to Healthy product promotion, he has many options available, from machines fully with Healthy Vend logos, to individual column selections promoted as healthy selections.”
“The opportunities abound, just be smart. Get help from experienced people. I can consult, Joe Nichols can consult, talk to other business people, network. Be wary of someone promising the world.”
Listen to the interview:
Tom Shivers: Is There Money to Make in Healthy Vending Hi, this is Tom Shivers with the Vending Business Show and Larry Towner is on the call here as well. Thanks for joining us, Larry.
Larry Towner,: How are you, Tom?
Tom Shivers: I’m hanging in there. Today we’re going to talk about healthy vending and I know that’s a very hot topic right now. All kinds of things even up in Congress are talking about it. So is there a business opportunity in vending healthy items?
Larry Towner,: Boy, Tom, you’re not kidding. Healthy vending products are hot right now. They really do constitute a growing market segment that needs to be capitalized on. But the business opportunities, I think you need to do some serious research on any business opportunity before investing into that opportunity.
Tom Shivers: Why do you say that?
Larry Towner,: Well, business is business and there’s several ways to approach business. But one thing all businesses have in common is a desire to make profit. Any business opportunity that offers something of value that you cannot get elsewhere, you now, the offering company wants to make a profit too. So if a guy comes to you and says, “You can make a million dollars in healthy vending,” why wouldn’t he be doing it himself? So I guess the question always is, is what are these opportunities offering? What makes them unique and valuable? If you’re going to spend some money on a business opportunity, what makes it unique? What makes it valuable?
Tom Shivers: Well, are there ways to offer healthy vending solutions besides these business opportunities?
Larry Towner,: Well, there’s always alternatives. The first place to start is with the business plan. Write down your business idea, conceptualize it on paper. Be very specific, run numbers, go in and see how many things you have to sell, do a break-even, things like that. It’s very, very important to write a business plan for any business that you get into. This exercise in writing a business plan can either save you or make you thousands and thousands and thousands of dollars.
Tom Shivers: Get more specific.
Larry Towner,: Well, let’s just say a business opportunity wants to sell you machines fronted with healthy promotional signs and they promise to place the machine, and they promise fabulous profits and what alternatives might be out there? Well, vending companies invest large amounts of money into their equipment. Vending is a very capital intensive business. I suggest to my clients that they partner with a reputable equipment supplier, someone that’s got lots of years of experience in the vending industry, has a great reputation of providing excellent equipment at fair prices and providing outstanding customer service after the sale. I’m going to tell you, if you don’t have customer service after the sale on your vending equipment, you are really going to be left out in trouble because equipment is equipment and I don’t care what business you’re in, if you have equipment, things are going to happen to it, you’re going to need either a repair source or somebody to help you troubleshoot these things. My choice has always been Joe Nichols and his staff at A&M Equipment. Joe started in the vending businesses and actually his family has been in the vending business for 35 years. He intrinsically understands the wants and needs of vending operators because he’s been one.
Larry Towner,: In regards to healthy product promotion, he has a bunch of options to choose from. You can get a machine that’s fully logoed, that has healthy signs on the front and you can customize those signs, you can do whatever you’d like as far as your own branding concept is on healthy vending. Or it can take you right down the column level, meaning if you just want to vend one or two items, he can do a promotional item up inside the machine that says, “These items are healthy” or whatever it is. But my goal always is, is if you can stay flexible with your promotions, it’s almost a better way to do it. You can promote your healthy selections as a part of your total product instead of the whole machine. But that takes you back to your business plan. You want that whole machine to be healthy products or do you want to mix those product selections? Have you even thought about it? A couple of words of caution, a typical snack machine costs around a thousand to 35 hundred dollars used, and 25 hundred to 5 thousand dollars new, depending on options and your customizations.
Larry Towner,: This snack machine should be fully electronic and have the ability to take credit cards and debit cards, as well as coin and paper currency, as it were, to take actual money. These are all things that, again, a reputable equipment supplier will be able to discuss your options and to give you the kind of information that you need as to whether or not this is going to be valuable to you. That’s always been my take. It’s just stay flexible and understand exactly what you’re trying to do.
Tom Shivers: You didn’t address the placement of machines.
Larry Towner,: Well, machine placement, it’s real common for people to promise they’ll place a machine out there for you and one of the things that we always say in that is is that sales basically is a … Or machine placement, if you want to call it that is a sales prop. It’s just a numbers game. If you call in enough people, you’re going to be able to place your equipment. In vending, placement is relatively easy. My numbers ran, and I’m not a stupendous sales person, but if I called on 10 businesses, I would end up placing one machine. And again, that’s a general average. It always seemed to work out this way. I had to make 50 calls before I got that one placement, but then I got 5 in a row. So when I took my long-term statistics, I knew if I knocked on enough doors, I would get the business.
Larry Towner,: But it depends on a bunch of factors and things like that. But that’s the kind of thing that if you think about it as it’s just a sales process, you need to do it. A lot of these business opportunities promise placement, but usually they provide you with locations that you could obtain by yourself with minimal efforts. I wouldn’t be paying a premium for placement of machines if they’re in marginally profitable locations. If there was so much profit to be made in these accounts, why would you be giving them away? That’s what I always say when it comes to the placement issues.
Tom Shivers: What else can you tell us about healthy vending?
Larry Towner,: Well, opportunities abound right now. As you said, we’ve got legislation going on in congress, we’ve got … It’s really a hot button right now. The big thing is just be smart. Get help from experienced people. I can consult, Joe Nichols can consult the vein of equipment. Talk to other people in the business, network. Just be wary of somebody promising you the world and talking about net profits and how you can place these and make tons and tons and tons of money. So that’s just always my words of advice to anybody that’s considering starting a new business is just be smart. Be patient. The opportunity will be there. The healthy vending opportunities are here now and they’ll continue to be here as our society gets more and more health conscious. And so be smart.
Tom Shivers: Well, thanks for sharing, Larry. Tell us about your business and what you do.
Larry Towner,: Well, we do consulting for the vending industry and we do videos and podcasts just like this. We can be reached at email@example.com. That’s S-E-R-V-I-C-E-G-R-O-U-P-I-N-T-E-R-N-A-T-I-O-N-A-L. I don’t know my own spelling. @earthlink.net. Anyway, that’s how you reach us. We would love to consult with you on any of your leads and things like that. We’re extremely reasonably priced and things like that. Or contact Joe at A&M Equipment.
Tom Shivers: You’ve been listening to Is There Money to Make in Healthy Vending at the Vending Business Show, a production of A&M Equipment sales.
Should Schools Have Vending Machines As many of you know, Congress has been debating legislature to regulate vending machines in all K-12 schools to require that vending machines provide only healthy options. The debate is rather interesting…
Should Schools Have Vending Machines Those in support of this bill argue that:
There’s an obesity epidemic among America’s youth and vending machines are aggravating the problem.
The market for healthy snacks will improve if this action is taken.
Sugar and caffeine often cause students to lose attention and focus.
Should Schools Have Vending Machines Those who oppose the bill argue that:
It’s not up to the schools to decide the eating habits of students or teachers.
Revenue from vending machines is used to pay for all kinds of school expenses like football uniforms, band trips, etc. Healthy snacks aren’t expected to bring in as much revenue.
In banning these machines, schools are saying that some foods are “bad.” Instead schools should provide educations on healthy eating and exercise habits.
Banning these foods on campus will cause some students to leave in search of their desired snack, increasing tardiness, etc.
Over at debate.org, a site that promotes open discussion between all members of the community on a wide range of topics, people have weighed in on this issue. As of today:
81% say “Yes, schools should have vending machines” and
19% say “No, schools should not have vending machines.”
In addition to the above arguments, there are a number of other arguments or opinions on this issue. On the “Yes” side of the debate:
Chele72 says “There is no reason a vending machine HAS to be filled with garbage they can just as easily be filled with fairly healthy choices like granola bars or 100 calorie packs or perhaps nuts and trail mixes.”
Kurta234 says, “IF the parent teaches the child the good and bad foods early on kids would know that its okay to have a snack every once in a while without overstuffing.”
alyssaa says, “There is nothing wrong with giving students choices about what they will consume.”
On the “No” side of the debate:
Anonymous says, “Putting vending machines in school is putting temptation in school for our kids – a poor choice on our part as adults.”
Anonymous says, “It wouldn’t be fair to have vending machines in school because the children that don’t have money to get vending food would feel left out and if a friend gave them money for vending foods they might not have the money they need and go after the kid who he has given the money to”
What’s your opinion on this debate? Should Schools Have Vending Machines More Vending Business Blogs Gym Vending Machine
The winners of the Automatic Merchandiser’s Readers Choice Awards for “Products of the Year” were recently announced in a number of categories. Winners for new products of the year include:
Cookie category – LLC’s RUGER® Strawberry Wafers
Candy category – DOVE® Silky Smooth Cookies and Creme bar
Food category – Pierre Drive Thru™ Deluxe sandwich
Snack category – Kellogg’s Special K® Cracker Chips
Cold beverage category – Nestlé Sweet Leaf Tea
Hot beverage category – Barista Prima Coffeehouse® Vanilla Latte Café Beverage
Pastry category – Mrs. Freshley’s Cinnabon® Honey Bun
Learn the winners of micro markets, all-natural healthy, and OCS categories at VendingMarketWatch
Best Vending Machine Products are the cookie category winner, RUGER®, LLC’s RUGER® Strawberry Wafers, is served in multi-functional pouches perfect for traditional vending or micro markets, as is the Best Vending Machine Products diverse packaging sizes of the candy category winner Mars Chocolate North America DOVE® Brand Silky Smooth Cookies and Crème bar. The Best Vending Machine Products in food category winner, AdvancePierre Foods Pierre Drive Thru™ Deluxe sandwich, fits the growing micro market trend by offering restaurant-style food.
Wellness focused, the Best Vending Machine Products snack category winner, Kellogg’s® Special K® Cracker Chips is regarded as a healthy choice snack low in sodium and calories. In addition, the cold beverage category winner, Nestlé Sweet Leaf Tea, is viewed as a healthy beverage alternative, made with pure cane sugar and no high-fructose corn syrup.
Consistent with the demand for café-quality office coffee, the Best Vending Machine Products is Barista Prima Coffeehouse® Vanilla Latte Café Beverage for the Keurig® Vue® system, has won the hot beverage category.
The last category is representative of a consumer favorite Best Vending Machine Products — Mrs. Freshley’s® Cinnabon® Honey Bunwhich won in this year’s pastry category.
“We started in the vending industry interested in promoting the healthy vending options to the schools… and we learned very quickly that all healthy vending is not necessarily the way to go. People like choices – some of the products are healthy, but then there’s your traditional, not so healthy stuff, that’s also available in the machines.”
“Our biggest thing with the schools is… we make sure they are very well taken care of. So if that school needs something, we are there that day to take care of the problem… It’s a priority to take care of those kids that day and to make sure the administrators are happy.”
“There’s talk about all sorts of regulation that really is in the pipeline (regarding healthy)… to regulate the vending in schools… it’s going to become problematic because students will figure out how to circumvent the system.”
“Why can’t you marry the two together, why can’t that choice be there?”
Seden shares more experiences, opinions on regulation (quite humorous) with healthy vending and school vending or School and Healthy Vending integration in the podcast:
School and Healthy Vending integration Tom: I’m Tom Shivers with The Vending Business Show, here with Seden Harrison of Smart Source Vending. Today we’re going to be talking about a few topics: healthy vending and school vending. Thanks for being here, Seden.
Seden: Thank you, Tom.
Tom: Now, tell me, how did you get into school vending?
Seden: A little bit of an accident, actually, but it turned out to be a good accident. We had originally started into the vending industry really interested in promoting healthy vending options to the schools. That was the key approach when we first started in with the school. We learned very, very quickly that all healthy vending is not necessarily the way to go. People like choices. People like choices. We provide … Some of the products are healthy, they can definitely choose those products, but then there’s your traditional not quite so healthy stuff that’s also available in the machine.
Seden: The thing about the schools is they’re a very hard group to get into, but if you do well with one, they will definitely refer you to the next, and onto the next, and onto the next. Our biggest thing with the schools is … We have our own kids in the Gwinnett County School System. We’re very active in sports, in schools, and everything else, so there’s that connection we naturally have to the schools. We wanted to definitely give back and take care of … We just make sure that they are very, very well taken care of in the sense of, if that school needs something, we’re there that day to take care of the problem.
Seden: If anybody tells you that a vending machine is never gonna jam, or a vending machine is not going to have a problem, they’re not telling you the truth. The key is, what does the operator do to resolve that? If we get a call that says there’s a problem with a machine, we are out there that day to take care of it. We don’t push it off. It’s a priority to make sure those kids are taken care of and the administrators are happy, because another thing you don’t want is mad kids in the school. Those machines, if something jams, they love to rock it and shake it and try to get their product out and do different wonderful things to it, so you’ve gotta stay on top of it.
Seden: As far as the healthy goes, it comes down to choices. There’s talk about all sorts of regulation that really is in the pipeline. Whoever gets elected is going to depend on what happens, but there’s a lot of talk about regulating the vending in the schools. It’s happening in a lot of other states and could very well happen in Georgia. It’s gonna become problematic because students will figure out a way to circumvent the system, and that’s the bottom line. I’m a strong proponent on choice, just put part healthy, part junk, if I can say that, but part not so healthy, and let the person choose. These kids are old enough to make these decisions. We’re not talking about elementary school kids. These are high school kids that are driving and are working, and they have money. If they don’t buy it at school, they’re gonna buy it somewhere else. They are past that point of forced decision, making them to make the right choice. They know right from wrong and what they should do.
Tom: So regulation ain’t gonna help them, huh?
Seden: Regulation’s not going to help them. I would say it’s like prohibition, it didn’t work. The kids are going to black market sell the candy. They are going to figure out ways to get around it, and ultimately that hurts the schools. The schools do get commissions from these machines, and if sales drop, those are funds that the schools use for multiple things. If sales drop, it does, it affects the schools, and they already have a tough time with the budget cuts and everything else. I don’t know.
Seden: I read the different vending articles that come out across the country that such-and-such parks and recreation has decided to only provide healthy products in their machines. I think having the healthy option is great, and I think it’s absolutely necessary, but I really don’t believe in it needs to be all or one or the other. Why can’t you marry the two together? Why can’t that choice be there? Why does somebody have to tell me, if I’m craving a Snickers bar and I walk up to that machine and all I’m looking at is granola bars, and I don’t want that granola bar, I want a Snickers bar, you know? Give me that choice. It makes me mad.
Tom: You’re gonna go somewhere, you’re gonna pay somewhere to go get you a Snickers bar.
Seden: You’re gonna figure out … That’s exactly right, you’re gonna figure out a way to get it. Same thing with the drinks. If I walk up to a machine, and I’m a Coke, a Diet Coke, or a water person, if I want that Coke, and the machine is only filled water, well I am not gonna buy the water. I’m not. And that’s exactly what happens. People don’t get forced into making the right choice, they just don’t make the choice. They walk away from it. It is going to hurt a lot of operators. It almost sounds like we’re saying, “Eat junk, eat junk, eat junk, eat junk,” but you know, it’s not that. Provide the choice, provide the options. It goes with everything. There’s good restaurants and bad restaurants. There’s restaurants that have healthier food, there’s restaurants that have worse food. If you-
Tom: The problem is a little deeper than just regulation, if there’s a problem at all. It’s something that has to be … Your kids aren’t eating right, then-
Seden: I’m the first one, I mean … We have teenagers that eat horrible. They eat horrible, and I’m constantly battling that, but I don’t think that it’s because the government hasn’t done their job, it’s probably ’cause I haven’t done my job. They’re my taste-testers, I bring home samples all the time. Try this, try that, try this, does this pass the test? Okay, then I’ll put it in the machine.
Tom: Very smart.
Seden: They’re the garbage disposals.
Tom: Only violence sells, right?
Seden: But the thing is, it is up to me. It is up to me, from a young age, to teach them. I’m sure everybody’s like this. You have kids that one kid gets it and eats right, the other one doesn’t, and me telling them that when they … I just know for a fact anybody who has teenage kids know that they are going to make the choices in some … They’re gonna find a way to get what they want when we’re talking about the food and doing what they … Where they’re gonna go and find the product they want at the place they want to buy it.
Tom: Well thanks a million. Tell us more about Smart Source Vending.
Seden: We are in the area in Gwinnett County, Forsyth County, primarily what we service. We work in a lot of the high schools. We have a lot of micromarkets and the corporate accounts. Growing and working hard, and keep … One day at a time, you know?
Tom: You’ve been listening to School and Healthy Vending Integration atThe Vending Business Show, a publication of A&M Equipment Sales. More Vending Business Blogs New To The Vending Business?