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Thursday, October 21, 2010

The Great Banana Challenge

The Wall Street Journal

How to Dispense Healthy Snacks From A Vending Machine: Design a Fruit Elevator

 
 
The big push for vending machines to sell healthier snacks has overlooked something: It isn't easy for a machine to deliver an unbruised banana.

The Wittern Group Inc., one of the biggest makers of vending machines, and fruit and vegetable marketer Fresh Del Monte Produce Inc. say they are tackling this problem with a new machine specifically designed to dispense whole bananas and fresh-cut fruits and vegetables.

At Wittern's headquarters in a suburb of Des Moines, refrigeration engineer Jerry Parle shows off the new device, its red and orange exterior festooned with Del Monte logos and pictures of whole pineapples and other fruit. The machine—which went on the market earlier this year—has two temperature zones. The top is loaded with bananas kept at about 57 degrees. The bottom zone—kept at about 34 degrees—holds packages of fresh-cut fruit and vegetables. Wittern says having the two zones helps more than double the shelf-life of bananas, from two or three days to five days or a week.

"This is a total new era for vending," said Mr. Parle. "Getting rid of the stigma of junk food in vending machines is a good thing."

New school regulations and workplace initiatives are targeting vending machines amid larger efforts to combat obesity and reduce health-care costs and absenteeism.

But dispensing fresh produce comes with a particular set of challenges. Fruits and vegetables spoil a lot more quickly than a bag of pretzels. They cost more to stock and carry a higher price tag. Getting the temperature right is tricky, too: Bananas need to be stored at a higher temperature than cantaloupe to stay fresh. And then there's the bruising issue: A banana can easily get squished from the 4-foot fall from a machine's top shelf.

Wittern engineers designed the machine to maintain two temperature zones by tightly controlling air flow. A fan near the refrigerating system at the bottom of the machine blows cold air into a duct at the back. The cold air gets pushed up until it reaches a padded sheet in the middle of the machine, which guides it into the bottom compartment. To keep the top compartment warmer, a heated foil beneath one of the trays turns on every so often. If the temperature of either compartment drops below their ideal settings for more than 15 minutes, the machine will lock itself, preventing more sales. The new machine—which is already in some schools—sells for more than $5,000 compared to about $3,000 for a typical machine.

Del Monte also developed a special packaging for bananas that keeps them fresher longer. Plastic loosely encases the banana, which is relatively green at first, and helps control the mix of gases in its atmosphere that drives ripening.

To handle the issue of bananas bruised in their tumble to the bottom, Del Monte managers asked that the retrieval bin include a padded lining and angled side walls. The next generation of fresh-produce machines—likely available for sale early next year—will eliminate banana free-falls altogether. Wittern engineers have developed an elevator tray that retrieves products from their spirals and gently deposits them in the bin.

Fresh fruit and vegetable vending machines are only a tiny fraction of sales at closely-held Wittern. The vast majority of the machines the company makes dispense soda, chips and other more traditional vending-machine snacks.

Vending machine operators are also experimenting with selling fresh fruits and vegetables in their regular refrigerated machines in the hopes that the move will boost sales. Last month, the country's largest vending-machine wholesaler, Vistar, a unit of Performance Food Group, said it would begin distributing fresh produce to its customers, thousands of mostly smaller vending-machine operators. (Refrigerated machines often sell items like burritos, sandwiches, yogurt, and frozen pizzas. Snack foods like chips and candy are usually sold in non-refrigerated machines.)

High unemployment and thrifty consumers combined to push down sales of food and beverages from vending machines 10% to $19.85 billion in 2009 from $22.05 billion in 2008, according to the trade magazine Automatic Merchandiser.

But even if vending machine companies have ironed out the technical issues involved in selling fruits and vegetables, they can have a hard time convincing people to buy the healthy stuff. In 2007, Spencer Cox, president of Vending Services Inc., started stocking a box of carrots, celery sticks and broccoli (with a tub of light ranch dressing) in the refrigerated machine at a telecommunications company. The human resources manager had requested it. Mr. Cox also replaced doughnuts and some other junk foods in another machine with 100-calorie packs of Oreo cookies and Chips Ahoy cookie crisps, Rold Gold pretzels and Wheat Thins crackers.

"It went over like a turd in a punch bowl," says Mr. Cox, whose company has about 450 vending machines in the Des Moines area. About 80% of the new products went unsold and had to be thrown away. "The truth is, people ask for this, but just because they ask for this doesn't mean they're going to buy it."

Today, he's removed the vegetable package from the vending machine and replaced it with a cheeseburger: the Landshire Big Daddy Charbroil Cheese. Now Mr. Cox will only stock healthier fare if the client has a marketing campaign or wellness initiative to support it.

In the break room of one such client, an insurance company near Des Moines, Mr. Cox placed a transparent sticker on the front of the vending machine that prods customers to "eat right" and "be healthy." Each week or so, his route driver also drops off brochures with tips on how to "be a smart snacker."

On a recent Thursday afternoon, dozens of people passed the machine. Many stopped to buy packages of doughnuts or candy, but no one selected any of the trays of pineapple chunks and grapes or celery, broccoli and carrot sticks that Mr. Cox sells in the machine for $2.50 each.

Josie Wetzler, a graphic designer, picked up a package of M&M's for 90 cents. Since she participates in the Weight Watchers diet program, she says she usually avoids the vending machine and its temptations, except for one day a week.

"I eat healthy every day except for Thursdays. Today's my free day," she said. She had not even noticed the fruit and vegetable trays until that day, and said they caused her "internal guilt" to kick in.

Nicole Quidort, a bank specialist, purchased a six-pack of powdered doughnuts and a cherry-flavored Coke. "Honestly, I just don't eat a lot of fruits and vegetables. I just don't crave them," she said. She says she doesn't worry about her health because her three young children keep her active at home.

Despite the apparent lack of interest in the fresh produce employees displayed that afternoon, Mr. Cox says he typically sells 10 of the 12 packages of fresh fruit and vegetables stocked in that machine each week.