Don't mistake vending machine operators for big business, says this comment on the proposed rule regarding disclosure of nutrient content information/calories for operators of more than 20 machines. Could the nutrition labeling requirement lead to more fruits and veggies/healthy food in vending machines? Association says they already offer healthier options. Plus, want what they want and this regulation may bump up the cost of Butterfingers - and cost jobs. Solution? Allow one menu book for an entire bank of vending machines.
My view is that if you allow that, why have the reg in the first place?
National Automatic Merchandising Association (NAMA) - Comment
This is comment on PROPOSED RULE: Disclosure of Nutrient Content Information for Standard Menu Items Offered for Sale at Chain Restaurants, etc.
Serving the Vending, Coffee Service and Foodservice Management Industries
DEPARTMENT OF HEALTH AND HUMAN SERVICES
Food and Drug Administration
[Docket No. FDA-2010-N-0298]
Disclosure of Nutrient Content Information for Standard Menu
Items Offered for Sale at Chain Restaurants or Similar Retail Food
Establishments and for Articles of Food Sold From Vending Machines
AGENCY: Food and Drug Administration, HHS.
ACTION: Notice; establishment of docket; request for comments, data,
[Federal Register: July 7, 2010 (Volume 75, Number 129)]
[Notices] [Page 39026-39028]
The National Automatic Merchandising Association
The National Automatic Merchandising Association. www.vending.org
September 7, 2010
The Division of Dockets Management (HFA-305)
The Food and Drug Administration
5630 Fishers Lane, Room 1061
Rockville, MD 20852.
We appreciate the opportunity to offer comments on the FDA upcoming rule related to calorie disclosure in vending. The National Automatic Merchandising Association (NAMA) offers the following comments regarding the implementation of section 4205 of the Patient Protection and Affordable Care Act of 2010, which requires vending machine operators that own or operate 20 or more vending machines to disclose nutrient content information for certain articles of food sold from vending machines.
Statement of Interest:
The National Automatic Merchandising Association (NAMA) is the national trade association representing vending machine, coffee service and food service industries. NAMA has approximately 2,400 members who operate vending machines, sell or manufacture equipment, and distribute or manufacture food and beverage items for sale through vending machines and related outlets. The basic mission of the association, to collectively advance and promote the automatic merchandising and coffee service industries, still guides NAMA today as it did in 1936, the year of the organization?s founding.
We have 34 affiliated State Councils encompassing 36 states.
The vending industry is a $40 billion a year industry, employing approximately 700,000 people who work at an estimated 13,500 companies.
According to The Vending Times Census of the Industry 2009, there are approximately 5.3 million food and beverage vending machines in the United States. Other sources estimate that there are 7.4 million food and beverage vending machines, including bulk vending.
The NAMA 2010 Operating Ratio Report, which is produced by an independent outside organization shows that the vast majority of the industry will be impacted by this calorie disclosure requirement. The smallest business size which NAMA studied for this survey is those companies with less than $2 million in sales. In this smallest of categories, the typical vending company owns and operates 259 vending machines.
So the requirement that anyone who owns or operates 20 or more vending machines will reach an estimated 90 to 95 percent of the industry.
It is important to note that NAMA did not opposed the legislation which requires calorie disclosure in vending machines.
We have long recognized the problem of obesity and have worked to provide solutions for the industry and our customers. We share the administration?s concern about obesity, and are also working to try and solve this problem.
Our members understand that childhood obesity is a serious issue that must be addressed. It is a complicated problem and the solution requires better education about nutrition and increasing physical activity.
Vending machines can provide healthy options. For example, the Alliance for a Healthier Generation reports that a school district in Florida recently purchased 60 vending machines which are providing students and faculty with “organic items, nutrition and sports bars, fresh fruits and vegetables, low fat milk and dairy selections such as yogurt and cheese sticks, fresh sandwiches, soymilk, bottled beverages and more.” Vending can provide healthy “grab-and-go” solutions to meals through refrigerated vending machines which vend breakfast products such as low fat milk and single servings breakfast bars and breakfast cereals.
We have always supported the federal government?s “competitive foods” regulation requiring that foods of minimal nutritional value not be sold in school cafeterias when the lunch is being served.
Vending machines are retail locations which provide a variety of snacks and beverages. For example, in addition to standard snacking choices, vending machines are available which sell fresh fruit, fresh vegetables, salads, milks and a wide variety of healthy meal choices. They provide similar products which are found at other retail locations such as convenience stores, grocery stores and even in the al a carte line in school cafeterias. Like these other retail locations, vending machines can provide what customers want, whether it?s a traditional snack or a healthy alternative.
Vending provides a very valuable service to those who work irregular hours, or who may not have full-service meal alternatives. For example, federal workers in the White House and Eisenhower Executive Office Building in Washington, DC use vending for healthy between- meal snacks and for salads after hours. The 24 hour work cycle of these and other government facilities such as congressional office buildings necessitate innovative solutions which vending does provide.
To address the issue of obesity, NAMA developed the Balanced For Life and Fit Pick programs to assist in the issue of providing “healthier for you” choices in vending. Across the country, school and work vending accounts look to our industry and association to partner with them on health and wellness issues. Our voluntary program components help vending operators with tools to help and truly be part of the solution. In addition, because our nutritional programs are a stand-alone resource, each vending operator can easily implement the program he or she thinks is best suited to a particular location. More than 111 government agencies and 85 schools (includes school districts and universities) are currently registered participants in our Fit Pick vending programs.
We agree that childhood obesity is a serious problem that must be addressed and applaud the intent of those working so hard to protect our children. Our members are mothers and fathers ourselves, and certainly want to protect our children?s health and future well-being. When we help our children truly understand the elements of a balanced diet and the importance of being physically active, we can have a lasting impact on their lives, protecting and enhancing their futures.
We also recognize that obesity may be related to a lack of healthy options in geographic areas called food deserts. Our solution is to encourage our operators to place healthy choices in vending machines in under-served communities.
NAMA is working to try and test vending machines that will vend Supplemental Nutrition Assistance Program (SNAP) foods in machines which will accept Electronic Benefit Transfer (EBT) cards to help those with public assistance benefits. It is our hope that as convenient retailers, we can assist in solving the problem of food deserts and help reduce obesity.
But our industry is a retailer which provides shelf space to customers just like convenience stores, grocery stores and restaurants.
Our products have the required nutritional facts panel, and most consumers don?t purchase a particular brand of snack or beverage for the first time via a vending machine. They already have access to, and understand the nutritional information of our products, prior to purchase.
Solutions to Calorie Disclosure in Vending:
NAMA offers the following comments to the FDA regarding potential rules regarding Section 4205:
1. The FDA must allow maximum flexibility in how disclosure can take place, such as allowing one menu with calorie counts for an entire bank of machines,
2. The FDA must permit options for posting calorie information that allows multiple products to be placed in the same vending coils or stacks,
3. The FDA must allow vending operators to have the same technical allowances as chain restaurants,
4. The FDA must provide legal protection for minor and inadvertent mistakes in calorie disclosure,
5. The FDA must provide sufficient time to implement any new regulations, and
6. The FDA must take into consideration and reduce the economic impact of all such rules.
1. The FDA must allow flexibility in how disclosure can take place, such as one menu with calorie counts for an entire bank of machines. According to the Vending Times there are more than 5.3 million food and beverage vending machines in use today in the United States. Others in the industry believe there are at least 7.4 million machines in use. These machines have a life span of approximately 10-15 years, but many are in service for much greater than that time. It is not uncommon for refurbished vending machines to remain serviceable for 20 years.
These 5.3 million or more machines come in a variety of configurations. For example, not including water and ice vending machines, NAMA currently has almost 300 different models of food and beverage vending machines which comply with the NAMA "Standard for the Sanitary Design and Construction of Food and Beverage Vending Machines." This is a voluntary standard governing the sanitary design and construction of food and beverage vending machines and related dispensing equipment and incorporates the requirements of the FDA Model Food Code.
Vending machines dispense beverages, snacks and food from coils, spirals, stacks and drums. Some vending machines stand alone; others are aligned into a bank configuration.
We have machines located outside with security mesh covering glass front. We have antique machines that are refrigerator display cases.
There are fresh food vending machines which sell fresh salads, sandwiches and fruit. Vending machines produce and sell fresh popped popcorn, cotton candy and even live lobsters.
Bulk vending machines sell irregular “handfuls” of candy, nuts and gums. Crane type vending machines vend random scoops of hard candy. Attached to these comments is a PowerPoint presentation with photographs of the wide variety of food and beverage vending machines.
So the FDA must take into consideration the very wide variety of vending machine types to determine how calorie disclosure can take place and also provide meaningful information to consumers.
NAMA encourages the FDA to allow a wide variety of disclosure solutions, to allow vending operators options.
We recommend that the FDA does not define the method of how calorie counts should be displayed. Rather, it should write general rules that calories should be made available prior to the point of purchase. Vending operators can then determine a solution which will comply based on the vending equipment.
Another preferred solution would be to allow one menu of all food and beverages for an entire bank of vending machines. This menu would list all food and beverages which may be stocked in a vending machine and would disclose calories for all items in all vending machines in close proximity. Grouping menu items into categories such as “beverages,” “chips,” “candy,” or “gum” might help consumers select snacks by comparing similar snack or beverage categories. A bank of machines would include all vending machines which are aligned and touching side-by-side.
A third solution which should be allowed is electronic display of calories. Several vending machine manufacturers currently produce electronic devices which display the nutritional facts
panel for an item. This should be allowed, but due to the expense of such electronic equipment, should not be required.
A fourth solution is to allow calorie disclosure to take place in an electronic display associated with the bill or coin acceptor. For example, a customer could press the dispensing button to first display the calorie count of the item on a digital screen. The item would only be vended if the dispensing button was pressed a second time.
A fifth solution could be calorie information printed on the outside of a closed front machine in the vend strip or selection button. This graphic would be included in the snack or beverage brand graphic.
Calorie information should also be allowed to be posted at each individual coil, spiral or stack. For example, such labeling could be placed at each spiral near the price and selection item number. Some manufacturers already produce “calorie label rolls” designed to be used in the machine?s price holder.
For closed front machines, where product is not visible, then a label or “static cling” should be allowed to be placed on the outside of the machine. One label of all food or beverages for vending machines should be allowed. This menu could list all food and beverages which might be stocked in the machines. Grouping items into categories on the menu such as “beverages” “chips” “gums” might help consumers select snacks based on comparing comparable items. Since machines come with different exterior doors and frames, and machines are restocked regularly, the FDA should not regulate the size or design of such outside labels. The operator should be given flexibility to design and print a listing of products, which provides information, but will fit the unique needs of the specific machine.
For glass front vending machines where calorie information is printed on the product and is readable by customers, Section 4025 does not apply. So the FDA should allow front of pack labeling.
It is important that due to the very wide variety of machines in existence today, it is critical that a wide variety of solutions be allowed. Any limiting of potential calorie disclosure solutions, will limit the information that we might be able to provide to customers. If the goal is to provide information to customers prior to purchase, then vending companies must be allowed a variety of labeling solutions to meet the variety of machine configurations.
2. The FDA must permit options for posting calorie information that allows multiple products to be placed in the same vending coils or stacks. Vending machines are refilled or restocked in regular intervals ranging from several times a week, to once every 5 weeks. The restocking of the machine depends on the sales of products and product expiration dates. A route driver is the individual who refills the vending machines and generally is paid a salary in addition to a commission based on sales of the vending machines. To maximize sales and potential commission, a route driver wants to fully stock a vending machine. So a route driver will, on occasion, stock a particular coil with several different beverages or snacks, depending on what products are available. It is very possible that one vending machine coil or row could have two different types of chips or candy or pastries with very different calorie counts. It?s not unusual for a route driver, who wants to have a completely full and stocked machine to place chips in the front of a row and pastries in the back.
In addition, under the Randolph-Sheppard Act, blind and vision impaired individuals receive preference to operate vending on government properties. So a number of vending operators are blind or seeing impaired. For this reason, it is possible that a Randolph-Sheppard vending operator may place different snacks in the same row due to limited visual recognition of products and the similarity of product packaging.
Therefore, the FDA must not write regulations which will limit the way operators stock machines. Any rule which requires that all products in a row, column or stack have the same calorie count will not be practical. A menu for a bank of vending machines would allow different products to be stocked in the machine, would provide customer information, and would not harm blind vendors.
3. The FDA must allow vending operators to have the same technical allowances as chain restaurants. Section 4205 of the Patient Protection and Affordable Care Act of 2010, provides directions to “chain restaurants” on how they can operate under this legislative scheme. Unfortunately, vending operators may not have similar clarity. NAMA argues that there are sections of 4205 related to vending, and particular fresh food vending, which should be applied. For example, vending should be allowed to operate under „„(iv) REASONABLE BASIS.—For the purposes of this clause, a restaurant or similar retail food establishment shall have a reasonable basis for its nutrient content disclosures, including nutrient databases, cookbooks, laboratory analyses, and other reasonable means, as described in section 101.10 of title 21, Code of Federal Regulations (or any successor regulation) or in a related guidance of the Food and Drug Administration.” Many vending operators utilize fresh made sandwiches. In this case, those vending operators, commissaries or food producers should be allowed to calculate calorie content based on “nutrient databases, cookbooks, laboratory analyses, and other reasonable means.”
Vending should be allowed to operate under „„(v) MENU VARIABILITY AND COMBINATION MEALS.—The Secretary shall establish by regulation standards for determining and disclosing the nutrient content for standard menu items that come in different flavors, varieties, or combinations, but which are listed as a single menu item, such as soft drinks, ice cream, pizza, doughnuts, or children?s combination meals, through means determined by the Secretary, including ranges, averages, or other methods.” Vending operators often sell food and beverages which could fall under this section. For example, cold and hot “drop cup” vending machines are similar to fountain drinks. Hot oatmeal vending machines allow customers to add or subtract flavors and ingredients. Coffee vending machines allow customers a wide variety of flavors, brew strength, serving size and sweeteners. Such flexibility in vending regulations should be allowed to accommodate individual preferences, similar to that which will be allowed for restaurants.
Vending should be allowed to operate under „„(vii) NONAPPLICABILITY TO CERTAIN FOOD.—„„(I) IN GENERAL.—Subclauses (i) through (vi) do not apply to—„„(aa) items that are not listed on a menu or menu board (such as condiments and other items placed on the table or counter for general use);
„„(bb) daily specials, temporary menu items appearing on the menu for less than 60 days per calendar year, or custom orders; or „„(cc) such other food that is part of a customary market test appearing on the menu for less than 90 days, under terms and conditions established by the Secretary.”
Vending uses condiments which are often attached to vended sandwiches and salads. Vending machines often serve temporary menu items such as seasonal fruits, seasonal / regional favorites and snacks which may be used in test marketing. Vending should be allowed the same exemptions as restaurants.
And vending should be allowed to operate under „„(II) CONTENTS.—In promulgating regulations, the Secretary shall—„„(aa) consider standardization of recipes and methods of preparation, reasonable variation in serving size and formulation of menu items, space on menus and menu boards, inadvertent human error, training of food service workers, variations in ingredients, and other factors, as the Secretary determines;”
Vending operators are in the food service industry. They operate in a similar manner to restaurants, particularly when stocking fresh sandwiches, salads and fruits. Vending must be provided the same “reasonable variations” and “inadvertent human error” in the preparation or stocking of fresh food for vending machines.
4. The FDA must provide legal protection for minor and inadvertent mistakes in calorie disclosure, due to mistakes in stocking the machine. Many of the members of NAMA are blind or seeing impaired since we partner with many vending operators who are involved in vending through the federal Randolph-Sheppard program. In addition, our industry, as a retailer, understands the important need to accommodate all customers, including the visually impaired.
Section 4025 recognizes that there may be some “inadvertent human error” in chain restaurants when items are prepared, and calorie information is displayed. NAMA argues that this same allowance should be provided to vending operators. Human error will occur in the stocking of machines, where different snacks could be placed in the same coil or stack.
Section 4015 also recognizes that there will be some “variations of ingredients” for chain restaurants. Since some fresh food, such as fresh sandwiches, salads and fruit will have varying calorie counts, vending rules must be written to allow for such differences.
Vending operators should not be held legally liable for minor, inadvertent and incidental discrepancies in disclosure of calories. There should be no redress for labeling errors due to individual inadvertent negligence unless such negligence rises to the level of gross negligence.
As mentioned above, the industry also has a wide variety of machines including drop cup machines, machines that sell fresh produce and even machines which make fresh pizza, popcorn and cotton candy. Any rules written by the FDA must provide explicit exemptions for “reasonable variation in serving size,” “inadvertent human error” and “variations in ingredients.” All of these items will occur in vending.
5. The FDA must provide sufficient time to implement any new regulations. As has been previously commented upon, vending has more than 5.3 million machines, the majority of which will be forced to comply with these new regulations. There is a wide variety of machinery in the market today. At least 70% of the vending operators have 3 or fewer employees, and the profit margin is extremely low. Therefore, it is important that sufficient time be allowed for regulations to be implemented. Congress did not establish in the legislation a timeline for final regulations to be implemented or enforced.
We propose that the industry be allowed at least two years after rules are finalized to implement calorie disclosure.
Depending on how the rules are written, for example, the industry may have to create a data bank with product calorie counts which operators could access to print menus or labels that would fit the specific vending machines. Electronic devices or digital displays would have to be designed, programmed and installed.
NAMA also argues that vending machines manufactured prior to the implementation date of the regulations should be “grandfathered”, and should not be forced to disclose calories. This may help lessen the economic impact and reduce the extremely wide variety of machines on the market.
6. The FDA must take into consideration and reduce the economic impact of all such rules. We strongly object to the FDA?s categorizing those with 20 or more vending machines as “chain vending machine operators''. This is a grossly inaccurate and deliberately misleading inference of our industry which implies that owning 20 machines is a major chain type business. A business with 20 vending machines, for example, is likely a family owned business. It?s operated from a home. It is a part time job for one person, and may average an annual net profit of only $3,802.
The Vending Times Census of the industry reported that in 2008 approximately 70% of the vending machine operators had 3 or fewer full time employees. In fact, 35% of vending operator companies had the owner as the only employee.
The Vending Times also reported that in 2008, the average cold beverage vending machine made just over $617 in gross sales per month and a snack machine had just over $660 per month. So considering that the typical NAMA firm with sales of less than $2 million (the smallest economic category NAMA tracks) had an Operating Profit in 2009 of just 2.4%, the typical company made just $14.80 in profits a month on a cold beverage machine and $15.84 per snack vending machine.
The NAMA 2010 Operating Report shows that for vending operators with less than $2 million in sales (the smallest category which NAMA tracks) typically has 259 vending machines, significantly greater than the “20 or more vending machines” which fall under the scope of this new regulation. While “chain restaurants” with 20 or more locations, may represent just 35% of restaurants, 20 of the FDA defined “chain vending machine operators” represent greater than 90% of the industry.
A Wall Street Journal article of August 3, 2010, Restocking the Snack Machine, noted that food and beverage vending sales fell 10% last year “one of the largest in the industry's history.”
As an industry of small business operators, such increased cost could easily cause businesses to fail and jobs to be lost.
NAMA predicts that depending on how the rules are written, the first year cost to the vending industry will be approximately $56.4 million. The least expensive solution is a menu which would list the calories of all products which might be included in a bank of machines. Including installation design, printing, installation time, and travel time for a route driver, this could cost approximately $4 per vending machine. The most expensive solution would be requiring digital displays with costs exceeding $100 per machine.
NAMA also argues that vending machines manufactured prior to the implementation date of the regulations should be “grandfathered”, and should not be forced to disclose calories. This may help lessen the economic impact and reduce the extremely wide variety of machines on the market.
By requiring that very small vending businesses with 20 or more machines disclose calories, the FDA may impose expensive regulatory burdens on businesses which can least afford them. As stated above, an operator with 20 machines may be realizing just $3,802 a year in profits. The FDA must take this into consideration when any regulations are promulgated.
How can such industry burdens be minimized?
NAMA did not oppose the Congressional legislation requiring calorie disclosure. We recognize that our customers would like to have calorie information, and that there is a problem with obesity.
However, we did consistently argue that there must be technical corrections in how this legislation was written, and how rules are written and implemented.
Most food and beverages sold in vending machines already carry a full nutritional facts panel. Customers who purchase food and beverages from vending are already familiar with the products, and rarely purchased them for the first time from a vending machine. Our customers have already had access to the entire nutritional facts panel prior to purchasing the snack from a vending machine.
So we strongly encourage the FDA to minimize the economic impact of these new regulations.
To reiterate points made previously, we encourage the FDA to write no regulations related to how calorie disclosure must be displayed. The FDA should allow maximum flexibility for the industry in how individual vending companies disclose calories in specific settings. The FDA should not require specific new technology.
The FDA should allow one menu for an entire bank of vending machines. The FDA should give legal protection for minor and inadvertent human error which will occur in the stocking of a vending machine. Machines which are manufactured prior to this rule being written should not be required to comply. The FDA should allow, but not require digital electronic display of information.
We support allowing a menu which would list all products which could be in a machine. For example, a glass front vending machine might have 45 rows to hold different types of drinks. A snack machine might have spirals for 48 different snacks. A route driver may have 100 different food products on the truck. A vending company may have 200 different snacks in the warehouse. So a large variety of snacks may be placed into a particular vending machine.
A menu should be allowed to list any food or beverage which may potentially be stocked in the machine. This one menu would become a more permanent sign, and would reduce the need to print a new menu each time a vending machine is serviced.
As the FDA considers their potential nationwide regulations of the vending industry, the goal should be to provide options which help our customers receive information, but does not disadvantage our small business operators, over other retail operators which are selling the same snacks and beverages. If rules are not carefully considered, they could unfairly disadvantage the industry and will harm individual companies.
The FDA should not economically harm the industry. Most of the vending operators are small businesses with three or fewer employees. These calorie disclosure requirements will reach an estimated 90 to 95 percent of the vending machine owners or operators. A business with 20 vending machines, may average an annual net profit of only $3,802. If the FDA creates complicated and difficult to implement disclosure rules which could cost $100+ per machine, this would severely harm such small operators. When the FDA writes these regulations, it must do so in such a way that minimizes the economic impact and doesn?t cost jobs.
Thank you for the opportunity to comment on Disclosure of Nutrient Content Information for
Articles of Food Sold From Vending Machines. We are available and interested in providing additional information to assist in this ongoing process.
For additional information on these comments or as the FDA prepares rules and guidance please contact:
Senior Vice President of Government Affairs
National Automatic Merchandising Association
1600 Wilson Boulevard
Arlington VA 22209