ITS ON EVERYBODYS LIPS!

VENDED MILK IS A HIT WITH KIDS

KIDS LOVE MILK. SO ITS NO SURPRISE THAT A RECENT STUDY SHOWS THAT VENDED MILK IS A BIG HIT IN SCHOOLS.
SCHOOL PER CAPITA CONSUMPTION
0.25
0.25

Units Per Consumer Per Week

0.20
0.2

0.18

0.15

0.1
School Test Per Capita Consumption

0.05

0
All Weeks Installation Period
(3 WEEKS)

Base Line Period

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
Units Per Consumer Per Week
0.35 0.3 0.25

0.34

0.27

0.25

0.25

0.20
0.2 0.15 0.1 0.05 0 All Weeks Installation Period
(3 WEEKS)

0.18

School Test Per Capita Consumption B&I Per Capita Consumption

Base Line Period

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.

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

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).

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)

140

125.7

Units Per Week Per Vender

120 100 80 60 40 20 0
B&I
96.5

116.6

104.5
75.9 85.0

SALES WERE CONSISTENT WITH INDUSTRY STANDARDS!

All Vendors Excluding Poor Performing Labor

(1) Venders with sales lower than the estimated requirement for profitability.

Public

C&U

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

Multi Channel Test

Estimated Industry Average

0 % 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

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

Full Product
(7+ Varieties)

.32

Limited Product
(4 Varieties)

.18

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
White 27% Chocolate 47%

Flavor Totals
White
Chocolate Strawberry Other

27%
47% 15% 11% 100%

Significantly higher than 9% in School test

Other 11% Strawberry 15%

Total

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

THE SCHOOL VENDING TEST

VENUES
MIDDLE SCHOOLS HIGH SCHOOLS

SCOPE
86 VENDING MACHINES 5 DIVERSE MARKETS

VENDED MILK PASSES THE TEST IN SCHOOLS

ALMOST ONE-THIRD OF ALL STUDENTS PURCHASED MILK ONCE A WEEK.
AVERAGE WEEKLY SALES
Units Consumed During Test Period
450 400 350 300 250 200 150 100 50 0
174 263 213 307 321 280 238 415 388

SALES WERE CONSISTENT WITH INDUSTRY STANDARDS!

INSTALLATION PERIOD - FIRST THREE WEEKS BASELINE PERIOD - AFTER FIRST THREE WEEKS ALL WEEKS

High School

Middle School

Total

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
Units Consumed During School Year
10

7.9-8.6 7.2-7.9
8

7.2-7.9

Middle School

High School

Total

WHY KIDS PREFER VENDED MILK

AN ALTERNATIVE TO OTHER VENDED FARE

AVAILABLE THROUGHOUT THE SCHOOL DAY A WIDE VARIETY OF FLAVORS

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 %

*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.

Chocolate Milk 60%

TAKING ADVANTAGE OF MILKS 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

MILK IS NATURES BEST SOURCE OF CALCIUM

MILK IS A POWERFUL SOURCE OF CALCIUM, SOMETHING EXPERTS SAY AMERICAN KIDS NEED MORE OF.
MILK IS NATURES BEST SOURCE OF CALCIUM
35

30%
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.

25 20 15 10 5

SOURCE: US Dept. of Agriculture Nutrient Analysis

0%
0
Fat Free Chocolate Milk Milk Cola

0%
Fruit Punch

2%
Orange Juice

0%
Sports Drink

0%
Water

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.

WHY MILKS 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!

THE SWEET TASTE OF SUCCESS

ALMOST 1/3 OF MILKS 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

THE SWEET TASTE OF SUCCESS

NEW FLAVORS AND TRADITIONAL FAVORITES ARE ALL EXPERIENCING REMARKABLE GROWTH
THE GROWING POPULARITY OF FLAVORED MILK
Total Flavored Milk Chocolate Strawberry Banana Vanilla Coffee All other Flavors

MILK CONSUMPTION AMONG TEENAGERS IS UP TWO YEARS IN A ROW!

Source : IRI 52 Weeks ending

10/07/01 and total 2000

20

40

60

80

100

120

Percent growth

PLASTIC SINGLE-SERVES YOU CAN TAKE IT WITH YOU!

ANOTHER CONTRIBUTOR TO MILKS NEW SUCCESS IS SINGLE-SERVE PACKAGING. CONSUMERS PREFER IT BECAUSE:
IT TASTES BETTER IT KEEPS COLD LONGER ITS PORTABLE

MILK AND THE HEALTH CONSCIOUS CONSUMER

MILKS 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

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