Wholesome Tummies leads charge to rule at school
Wholesome Tummies brings healthy lunches straight to the schoolkids.
Larger players, too, aim to profit from mandates to make school meals healthier. From Domino’s to Jamba Juice, the challenge is to offer nutritious food that kids will actually eat.
When it comes to making sure kids eat healthy, Debbie Blacher is a franchising pioneer with aggressive growth plans. Two moms frustrated with some of the processed food in their kids’ schools, Blacher and Samantha Gotlib in 2007 started Wholesome Tummies, a first-of-its-kind franchise concept.
The franchisor’s existing model provides fresh and nutritious lunches mainly to kids in private schools from preschool to high school. Meals are made at a local off-site commissary and delivered to schools without kitchens. Orlando, Florida-based Wholesome Tummies has 25 franchise locations serving 100 schools, on its way to 40 units by year’s end. Blacher projects 2014 sales of $6 million, doubling sales over last year.
Now, Blacher has bigger dreams. This year, Wholesome Tummies launched a second franchise concept that offers kid lunches to private and public schools and school systems with on-site kitchens. Under this new model, the company awards franchises to schools that either self-operate an on-site dining program or outsource to a third-party provider.
With this dual franchise strategy, Blacher says her company now provides a turnkey solution for all schools looking to elevate the quality of their lunch program.
Blacher’s growth strategy may be apt. A batch of franchises including Domino’s Pizza, Jamba Juice, Fresh Healthy Vending and others are expanding into the $40 billion-plus national school food service market, with several targeting the child nutrition sector.
Federal rules imposed in 2012 which set new nutrition standards for school meals is prompting some businesses to enter the market. Changes included reducing sodium, limiting calories and offering students a broader variety and larger portions of fruits and vegetables. The moves are geared to improve the health of nearly 32 million kids who eat lunch at school daily and almost 11 million who eat breakfast. All told, kids eat roughly 30 percent to 50 percent of their calories while at school.
Other factors include First Lady Michelle Obama’s Let’s Move initiative to fight childhood obesity, which includes an effort to offer healthier food in schools, and parents putting more pressure on schools.
Longtime food suppliers like Tyson and Schwan have changed products to meet the new standards, says Diane Pratt-Heavner, spokeswoman for the School Nutrition Association in National Harbor, Maryland. She says Domino’s and Pizza Hut offer school lunch programs with nutritious pizza for kids. Other businesses including Sketter Nut Free, Van’s Natural Foods and Buddy’s Fruits are offering more healthy snacks to comply with new food rules.
Another rule will require schools to exchange junk food vending machines for healthy snack vending machines, creating a huge opportunity for Fresh Healthy Vending to place its machines in schools nationwide. The San Diego-based company has more than 200 franchises with machines offering natural, organic and healthy snacks and beverages, and wants to be in at least 25 new schools per month over the next year.
Fresh Healthy Vending CEO Alex Kennedy says schools or youth-oriented businesses can customize the snacks in the machines, based on popular products or even more specific nutrition guidelines. “This new standard is escalating the demand for healthy vending machines in schools across America and offering a prime example for other locations to follow,” she says.
Emeryville, California-based Jamba Juice now offers its JambaGO smoothie beverages in roughly 500 K-12 U.S. schools after launching in 2012. The number of JambaGo locations has exploded, rising to 404 in the fourth quarter of 2012 from 35 the year before.
JambaGO is a potential growth vehicle for Jamba Juice and K-12 schools fall into that category. In January 2013, Jamba Juice launched a new line of kids’ meals that includes two- and-a-half servings of fruits and/or vegetables, some whole grains and protein. Franchisees can potentially profit from these meals as parents become more concerned with providing healthy meals on the go for children.
Ann Arbor, Michigan-based Domino’s Pizza boosted the number of schools in its Domino’s Smart Slice school lunch program to 3,129, up 45 percent from 2,165 in 2012. Domino’s reported in September the program was available in 33 new districts in 14 states. Some 582 stores and 255 franchisees of the giant pizza chain offer the product that was initially rolled out in 2009.
Still, tapping into the school-lunch marketplace is not an easy duty.
Technomic Executive Vice President Darren Tristano says while there’s clearly a need for more nutritious food to be offered to kids in schools, the demand is coming from parents and not from children.
“If you’re supplying food to kids who are in elementary schools that are not eating it, then that’s not making it easier for the brands to accomplish their goals,” he says.
The School Nutrition Association’s Pratt-Heavner says school meal programs have struggled with student acceptance since the new rules went into effect, something the SNA is working on. “It’s a challenge to get kids to make healthier choices,” she says. “We’re seeking help from parents to help kids make healthier eating choices at home so they can be applied at schools.”
Further, Tristano says the demand for child-nutrition franchises could be stemming from school systems trying to differentiate themselves with higher-quality food, possibly leading to higher prices for meals. In turn, the franchises may have to target more affluent consumers.
Players in the market also must compete with big-time foodservice providers such as Aramark and Revolution Foods, among the nation’s largest providers of healthy food for kids.