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IT’S ON EVERYBODY’S LIPS!

IT’S ON EVERYBODY’S LIPS!. VENDED MILK IS A HIT WITH KIDS…. KIDS LOVE MILK. SO IT’S NO SURPRISE THAT A RECENT STUDY SHOWS THAT VENDED MILK IS A BIG HIT IN SCHOOLS. SCHOOL PER CAPITA CONSUMPTION. 0.25. 0.20. 0.18. Units Per Consumer Per Week. (3 WEEKS). …AND WITH ADULTS!.

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IT’S ON EVERYBODY’S LIPS!

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  1. IT’S ON EVERYBODY’S LIPS!

  2. VENDED MILK IS A HIT WITH KIDS… KIDS LOVE MILK. SO IT’S NO SURPRISE THAT A RECENT STUDY SHOWS THAT VENDED MILK IS A BIG HIT IN SCHOOLS. SCHOOL PER CAPITA CONSUMPTION 0.25 0.20 0.18 Units Per Consumer Per Week (3 WEEKS)

  3. …AND WITH ADULTS! WHAT IS SURPRISING IS THAT A SIMILAR STUDY SHOWS THAT ADULTS LIKE VENDED MILK JUST AS MUCH. SCHOOL AND B & I PER CAPITA CONSUMPTION 0.34 0.27 0.25 0.25 0.20 0.18 Units Per Consumer Per Week (3 WEEKS)

  4. THE SOURCE THE STUDIES WERE CONDUCTED BY FMSTI - THE FLUID MILK STRATEGIC THINKING INITIATIVE. THE OBJECTIVE WAS TO EVALUATE THE OPPORTUNITY FOR MILK VENDING IN TERMS OF: • • SALES POTENTIAL • • OPERATING DYNAMICS • • OPTIMAL PRODUCT MIX THE RESULTS - GIVEN THE RIGHT PLACEMENT AND PRODUCT MIX, VENDED MILK REPRESENTS A HUGE SALES OPPORTUNITY ACROSS ALL VENDING CHANNELS.

  5. THE MULTI-CHANNEL VENDING TEST • VENUES • BUSINESS AND INDUSTRY • COLLEGES AND UNIVERSITIES • PUBLIC LOCATIONS • SCOPE • FOUR MARKETS • 2 IN THE SOUTHWEST • ONE EACH IN THE MIDWEST AND SOUTHEAST

  6. VENDER AND PRODUCT MIX VENDER TYPES INCLUDED LIVE- DISPLAY, CLOSED-FRONT, AND GLASS FRONT VENDORS. PRODUCT OFFERINGS RANGED FROM A WIDE VARIETY (7+) TO A MORE LIMITED SELECTION (4).

  7. THE DEMAND FOR VENDED MILK WAS STRONG… THE TEST SHOWED THAT THE DEMAND FOR VENDED MILK AMONG ADULT POPULATIONS WAS STRONG. AVERAGE WEEKLY SALES PER VENDER EXCLUDING POOR PERFORMING VENDERS(1) SALES WERE CONSISTENT WITH INDUSTRY STANDARDS! 125.7 116.6 104.5 96.5 85.0 75.9 Units Per Week Per Vender (1) Venders with sales lower than the estimated requirement for profitability.

  8. …AND STEADY! POST-INSTALLATION SALES WERE BETTER THAN INDUSTRY AVERAGE. SALES RETENTION FOLLOWING INSTALLATION PERIOD INSTALLATION PERIOD EQUALS THREE WEEKS % % % % % % % % % % %

  9. VARIETY DRIVES SALES VENDERS THAT CARRIED MORE SKUS (7+) SOLD ALMOST TWICE AS MUCH AS THOSE THAT CARRIED ONLY LIMITED (4) MILK PRODUCTS. AVERAGE WEEKLY PER CAPITA CONSUMPTION FULL VS. LIMITED PRODUCT LINE .32 (7+ Varieties) .18 (4 Varieties)

  10. WHITE MILK AND FLAVORS BOTH SOLD WELL FLAVORED MILK SALES WERE SURPRISINGLY STRONG, WHILE WHITE MILK SOLD THREE TIMES AS WELL AS IT DID IN THE SCHOOL TEST. FLAVOR VARIETY ANALYSIS Flavor Totals White 27% Chocolate 47% Strawberry 15% Other 11% Total 100% Significantly higher than 9% in School test White 27% Chocolate 47% Other 11% Strawberry 15%

  11. OPERATORS LIKED THEIR FIRST TASTE OF MILK EVERY VEND OPERATOR WHO PARTICIPATED IN THE TEST SAYS MILK WILL LIKELY BECOME A PROFITABLE COMPONENT OF THEIR VENDING BUSINESS! BEST PRACTICE • FULL VARIETY OF MILK PRODUCT OFFERINGS • PLACED NEXT TO SNACK AND/OR FOOD MACHINES • PLACE MILK AND HEALTHY BEVERAGE PRODUCTS TOGETHER OPTIMAL PLACEMENT • PUBLIC VENUES WITH EXTENDED HOURS OF ACCESS/OPERATION • B&I WITH 300+ POPULATION • C&U LOCATIONS WITH HEAVY FOOT TRAFFIC

  12. THE SCHOOL VENDING TEST VENUES • MIDDLE SCHOOLS • HIGH SCHOOLS SCOPE 86 VENDING MACHINES 5 DIVERSE MARKETS

  13. VENDED MILK PASSES THE TEST IN SCHOOLS ALMOST ONE-THIRD OF ALL STUDENTS PURCHASED MILK ONCE A WEEK. SALES WERE CONSISTENT WITH INDUSTRY STANDARDS! AVERAGE WEEKLY SALES 415 388 321 307 280 263 Units Consumed During Test Period 238 213 174 High School Middle School Total

  14. THE POTENTIAL MARKET FOR VENDED MILK IS HUGE PROJECTING THE RESULTS OVER A SCHOOL YEAR, EACH STUDENT WOULD CONSUME ON AVERAGE AN ADDITIONAL ONE GALLON! VENDED MILK PROJECTED ANNUAL PER CAPITA CONSUMPTION 7.9-8.6 7.2-7.9 7.2-7.9 Units Consumed During School Year Middle School High School Total

  15. WHY KIDS PREFER VENDED MILK • • AN ALTERNATIVE TO OTHER VENDED FARE • • AVAILABLE THROUGHOUT THE SCHOOL DAY • • A WIDE VARIETY OF FLAVORS

  16. FLAVOR VARIETY DRIVES SCHOOL SALES IN SCHOOLS, FLAVORED MILK OUTSOLD WHITE MILK 9 TO 1! FLAVOR VARIETY ANALYSIS Other 1% * White Milk 10% Strawberry Milk 27 % Chocolate Milk 60% *Flavors beyond chocolate and strawberry sold well where they were offered. During the test, coffee made up 29% of all flavors sold at Boston schools. In Omaha, orange made up 10% of all flavors sold.

  17. TAKING ADVANTAGE OF MILK’S ‘HEALTH HALO’ OPERATORS ARE COMING UNDER INCREASING PRESSURE TO IMPROVE THE NUTRITIONAL VALUE OF VENDED FARE IN SCHOOLS. MILK CAN HELP! 72% OF MOMS WITH KIDS 2-14 SAID THEY ENCOURAGE THEIR CHILDREN TO DRINK MILK*. *Source: 4Q 2002 Knowledge Networks Milk Consumption & Attitude Tracker

  18. MILK IS NATURE’S BEST SOURCE OF CALCIUM MILK IS A POWERFUL SOURCE OF CALCIUM, SOMETHING EXPERTS SAY AMERICAN KIDS NEED MORE OF. MILK IS NATURE’S BEST SOURCE OF CALCIUM 30% 30% % Daily Calcium Requirement % of daily values is based on a 2,000- calorie diet. The daily requirement is based on an 8 oz. serving. SOURCE: US Dept. of Agriculture Nutrient Analysis 2% 0% 0% 0% 0%

  19. MILK AND THE FIGHT AGAINST OBESITY RESEARCH SUGGESTS THAT 3-4 SERVINGS OF DAIRY A DAY AS PART OF A REDUCED-CALORIE DIET CAN ALSO HELP PROMOTE WEIGHT LOSS. PROVIDING MILK AS A HEALTHY ALTERNATIVE WILL HELP ENSURE THE LONG -TERM VIABILITY OF SCHOOL VENDING.

  20. WHY MILK’S POPULARITY IS GROWING NATIONWIDE MILK HAS BEEN EXPERIENCING A SURGE OF POPULARITY AMONG ALL CONSUMERS. CONTRIBUTING FACTORS INCLUDE: • • NEW FLAVORS • • NEW PRODUCTS • • INTEREST IN HEALTHIER EATING MILK IS THE SECOND MOST POPULAR BEVERAGE IN AMERICA AND #1 IN AMERICAN HOMES!

  21. THE SWEET TASTE OF SUCCESS ALMOST 1/3 OF MILK’S GROWTH WAS DUE TO THE POPULARITY OF FLAVORS. FLAVORED MILK SHARE GROWTH Flavored Milk 27% White Milk 72% Eggnog 1% SOURCE: IRI 52 weeks ending 10/07/01 and total 2000

  22. THE SWEET TASTE OF SUCCESS NEW FLAVORS AND TRADITIONAL FAVORITES ARE ALL EXPERIENCING REMARKABLE GROWTH MILK CONSUMPTION AMONG TEENAGERS IS UP TWO YEARS IN A ROW! THE GROWING POPULARITY OF FLAVORED MILK Source :IRI 52 Weeks ending 10/07/01 and total 2000 Percent growth

  23. PLASTIC SINGLE-SERVES – YOU CAN TAKE IT WITH YOU! ANOTHER CONTRIBUTOR TO MILK’S NEW SUCCESS IS SINGLE-SERVE PACKAGING. CONSUMERS PREFER IT BECAUSE: • • IT TASTES BETTER • • IT KEEPS COLD LONGER • • IT’S PORTABLE

  24. MILK AND THE HEALTH CONSCIOUS CONSUMER MILK’S LONG ASSOCIATION WITH GOOD HEALTH MAKES IT A PERFECT MATCH FOR BUSY FAMILIES LOOKING FOR NUTRITIOUS ALTERNATIVES. MILK IS THE ULTIMATE BEVERAGE ! MILK IS AN IMPORTANT SOURCE OF NINE ESSENTIAL NUTRIENTS

  25. LEVERAGING THE POWER OF ‘GOT MILK?’ THE NATIONAL "Milk Mustache got milk?" CAMPAIGN, ONE OF THE MOST SUCCESSFUL MARKETING CAMPAIGNS IN HISTORY, CAN HELP YOU PROMOTE MILK TO YOUR CUSTOMERS. CONTACT YOUR MILK SUPPLIER TO SEE HOW THE CAMPAIGN CAN HELP YOUR BUSINESS. OR VISIT WWW.MILKDELIVERS.ORG

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