Bosman thinks the extended shelf life products offer the chance to serve milk in locations that aren't large enough for weekly service. His company sells fresh milk from a local dairy and Shamrock Farms' ESL milk. Shamrock Farms carries a variety of ultra pasteurized (ESL) milk that features 90-day shelf life and is one of the only suppliers whose line includes white milk in addition to flavors.
Bosman sees the sales moving more towards plastic bottles and away from traditional gable top cartons.
EXTENDED SHELF LIFE OFFERS NEW BENEFITS
The ESL costs more than the fresh milk, Bosman said, but the less frequent service more than compensates for it. "It enables you to go every two or three weeks," he said. He sells 12-ounce extended shelf life bottles for $1.00, 16-ounce fresh milk for $1.00, and 10.67-ounce fresh milk cartons for 65 cents.
Another factor favoring ESL, according to Bosman, is the marketing being done by some of the fast food restaurants in recent years. The new ESL milk is better tasting, and consumers are more familiar with it than they were three or four years ago.
Roosevelt Milk Vending welcomes the ESL products in light of some of the changes that vending has experienced in recent years, Bosman said. The market is moving away from the blue collar accounts, which were great milk consumers. The white collar accounts, by contrast prefer the plastic bottles, and many white collar accounts don't consume enough milk to justify weekly service.
Bosman said that despite the rising popularity of flavored milk, 2 percent fat white milk remains his leading seller. This is one reason that his company has opted to work with Shamrock Farms.
Roosevelt Milk Vending uses both closed-front and glassfront machines. Bosman said glassfronts typically do 20 percent more business. Not only do they showcase more variety, he said, but the glassfront machines allow the customer to see the code dates on the milk containers, which is important for many consumers.
"People like to see what they're getting," Bosman said. "If I could, I would do nothing but glassfronts."
Bosman said the shelf stable milk products, which offer an even longer shelf life than ESL ultra pasteurized milk, are too expensive.
He is aware of the milk competition promised by Coke and Pepsi, but he has yet to witness any.
SHELF STABLE EXTENDS SHELF LIFE
Several manufacturers have introduced shelf stable products, which make it easier for operators to transport milk. Since the products have longer shelf life, operators can also stock more variety in a machine.
"The avenues (for milk) are limitless now," observed Steve Richardson, vice president of DeMitri Chesapeake Sales Inc., a vend product broker based in Baltimore, Md. "It can be handled like every other shelf stable product. It's opened up milk to OCS."
Some operators view the shelf stable products as not being real milk, but they are in fact 100 percent milk.
"Many of these items seem more like milk-based drinks," said Jim Reed, director of sales at Derringer Co., a Cincinnati, Ohio-based operation that operates many cold food machines. "I don't put shelf stable chocolate milk in the same category as fresh chocolate milk."
Reed nevertheless said some of these products are pulling incremental sales. "We have a couple of generations now that are very attracted to milk-based drinks," he said.
Reed stated that shelf stable milk will be helpful to operators for whom refrigerated transport is an issue. The milk, even if it is delivered refrigerated to the operator, can be shipped in an ambient vehicle and refrigerated again in the machine, provided it isn't opened.
PRICE REMAINS A CHALLENGE FOR SHELF STABLE PRODUCTS
One issue that Reed and other operators raised is the higher price point that shelf stable products require. "I don't think that a shelf stable product is going to command an additional price," he said.
Royalle Dining Services Inc. in Owings, Md. found that lowering the Nesquik price from $1.50 to $1.25 resulted in a net sales increase of 32 percent, noted Ed Baddour, Jr., vice president. "The volume is what creates the profitability," he said. "It's helped my business tremendously."
Baddour has used Nesquik as a key part of his health initiative in school accounts. "You can't claim to be a healthy company and not carry milk," he said.