"It was a fad for a while," said Bryan Touchstone, president of Universal Vending Solutions Inc., based in Rochester, N.Y. Now, milk has been overshadowed by other categories. "There's still so much competition among the various (cold drink) machines in the schools."
OPERATORS SEEK MORE SUPPLIER SUPPORT
More support from product manufacturers would make some difference, the MilkPEP survey found. The percentage of machines leased by operators doubled from 15.3 percent in 2004 to 30.6 percent in 2005. The percent who said national brand vending programs influenced them rose from 15.3 percent to 23.7 percent, although a larger number (33.9 percent) said they were not influenced by these programs.
The majority (55 percent) reported they believe milk vending will increase. Growth expectations were slightly less enthusiastic in 2005 than in 2004.
The MilkPEP survey also addressed size preferences, which influence both nutrition and profitability issues.
In regards to nutrition, smaller size packages sometimes allow operators to meet nutrition restrictions since smaller bottles have less fat and/or sugar content. This concern is usually confined to school accounts.
MILK SEEN AS PROVIDING NUTRITION
The push to sell flavored milk comes amid growing concerns about obesity and unhealthy eating, particularly in the case of children, where the incidence of obesity has more than doubled since 1970. For the past two years, health officials have been pressing schools to replace soft drinks sold in vending machines with more healthful options, such as water, fruit juice and milk.
Many nutritionists say flavored milk is a good alternative to soda, even if it contains more sugar than regular white milk. An 8-ounce glass of milk contains about 12 grams of sugar; flavored milk drinks can have 15 to 31 grams. Rachel Brandeis, a registered dietician who serves as a spokeswoman for the American Dietetic Association, often recommends flavored milk.
Some nutritionists are concerned about the high sugar and saturated fat content in some of the flavored varieties, especially since many come in 14- and 16-ounce bottles and are likely to be consumed in one sitting.
In terms of profitability, vending operators have found that some of the larger packages require too high of a price point.
The MilkPEP survey found that 14 ounces, the size that the big cold drink bottlers are now promoting in milk, gained in 2005. The survey reported that 14-ounce packages jumped from 15 percent to 29 percent of all milk vended in 2005, while 12-ounce packages held steady at 23 percent and all other sizes lost market share.
Pricing continues to be a challenging issue.
One California operator who did not want to be identified for publication said he found that 12-ounce bottles at $1.00 sold better than 16-ounce bottles at $1.25. This company has opted to work with Shamrock Farms, which produces extended shelf life (ESL) milk.
This operator noted that the ESL was a definite benefit, since it eliminated spoilage.
HELP MEETING NUTRITION REQUIREMENTS
Operators serving schools have found milk to be an important product, given school nutritional requirements. Meeting nutritional requirements has proven challenging since different school systems have different rules.
Answer Vending in Bellerose, N.Y. had to remove its 14-ounce Nesquik milk in one school system this past year, noted Tom Murn, company president. Fortunately, Nesquik recently introduced an 8-ounce package, which will allow Murn to meet that district's requirements.
Murn will have to retrofit his dedicated Nesquik machines to hold the new package.
He has found the Nesquik a good seller in his non-school accounts as well. Besides the 14-ounce Nesquik product, he carries a 10-ounce milk provided by a local dairy.
Some vending operators see the nutrition rules as helping more than hurting milk sales.
NEW USES FOR EXTENDED SHELF LIFE OFFERINGS
Rich Bosman, president of Roosevelt Milk Vending in Paramount, Calif., serves Southern California, where nutrition restrictions are among the strictest in the nation. The company operates dedicated milk machines and also sells milk to vending operators. "Kids like chocolate milk," he said. "If they can't get a Coke, they'll get chocolate milk."