Return on Investment Project

Tyler Leeman
AH 4415
Return on Investment Project

Introduction/Purpose/Need:
Supplying the children with sufficient servings of fruit and vegetable meal components

they will consume as a part of the National school lunch program can be a challenge. There is a

huge pattern of kids deciding against taking fruits or vegetables, or taking fruits and vegetables

to make their school lunch reimbursable, but just throwing the food away. Smoothies are a

healthy and delicious way for students to increase their fruit and vegetable consumption.

At Coventry High School, daily student participation is a slight issue with an average of

only 33% of students purchasing reimbursable lunches. While working with Beth Pratt at

Coventry Public Schools, it was discussed that one product that might be successful at

increasing the number of students purchasing reimbursable school lunches would be

smoothies. This would additionally increase revenue for the food service department, fruit

,vegetable and dairy consumption at Coventry High school. Smoothies are very popular drink

items that are nutritious and can contain multiple sub groups that make up a reimbursable

meal for the National school lunch program. Smoothies could be a healthy snack popular

among high school aged students in particular. This idea was further supported by the results

from an online survey emailed to the high school students. The results showed 90% of students

who completed the survey saying they would purchase a smoothie as a lunch item. During one

week I witnessed many students being asked to grab a fruit or vegetable in order to make their

lunch reimbursable. It seemed overall the kids didn’t like the fruits or vegetables, or at least the

items being offered at lunch. A new smoothie program could increase the amount of students
consuming fruits and vegetables with lunch, with hopes to expand to breakfast as well, and also

lead to an increase in sales. The smoothies are planned to be made to order which will prevent

any additional waste.

After discussing purchasing a commercial grade blender and initiating a smoothie

program with the Food service director and kitchen staff, it was determined this should be

pursued. The staff felt that this new program would be a great way to increase: the amount of

students participating in their lunch program, the number of students eating fruits and

vegetables as a part of their school meals and simultaneously increase the schools revenue.

Resources Expended:
The commercial grade blender we are planning on purchasing will not take up too much

counter space in the kitchen and will be large enough to produce up to 4 16 oz. smoothies per

recipe. These details will be considered in the purchasing of a new commercial grade blender

The main aspects of buying a new blender are cost and capability. The blender order will

be funded by money supplied from a smoothie grant by the New England Dairy and Food

Council. There is $2000 available from this grant that will be used to purchase a new blender.

This will prevent funds from the existing operating budget from being used. Labor cost was also

measured along with the blender purchase. The labor cost comes to $18.84, which is the cost

for an employee to mix and pour smoothies for one hour each day. This would be the salary of

a kitchen staff member in addition to their normal food prep for lunch waves.

Waring Commercial Products produces a variety of blenders and immersion blenders

which are used in a variety of foodservice establishments. The chosen blender, the

MX1100XTXAF, was selected due to its 64 oz. jar capacity for a reasonable price of $495. An
image with specifications of the blender can be found below in Appendix B. We will be

purchasing two blenders ($495 each) with 2 additional 64 oz. jars ($120 each) for a total of

$1230.00. The grant also includes funds for student engagement events at $0.20 per student.

The high school has an enrollment of 442 students This brings the final total to $1318.40. This

price includes shipping to the school and is within the budget provided from the NEDFC

smoothie grant. All additional expenses and revenue can be found in attached excel document.

Outcomes:
Calculations may be found in Appendix A & C.
Also found in attached Excel Document

As is indicated in Appendix C, for the Green monster if 20 smoothies are sold, sales are

expected to increase by $14.20 per day increasing annual sales by $2,556. If looking at the

sales increase, the ROI is 94% and the payback period is 6.18 months. If we base the ROI on the

Strawberry Banana smoothie being offered, for 20 smoothies sold per day smoothie sales are

expected to increase by $24.00 per day, increasing annual sales by $4,320. These sales would

provide a ROI of 228%, with a payback period of 3.66 months.

Part 4. Summary and conclusions:

In summary, the blender and smoothie program should be an excellent lunch item to

implement shown by the ROI and payback calculations. With a goal of selling 20 smoothies per

day at lunch, total smoothie sales would reach $2556 for the green monster smoothie, or $4320

for a strawberry banana smoothie.

I feel this program will be successful because we sent out a survey to the high school

students and asked if they would be interested in smoothies and what flavors they would want

offered. We also did a taste testing and were able to get more direct feedback from students
on what flavors they like and would purchase. This was helpful because as soon as we launch

the program, we will know what the student body is interested in purchasing. When the

smoothie program is initiated, it will be advertised with countertop and ceiling mounted

signage in the cafeteria in order to increase student participation. Overall, I feel there will be an

increase in revenue and improved staff and student satisfaction with the implementation of

smoothies as a reimbursable meal option.

 Appendix A
[All smoothies to be sold as reimbursable meal for $3.25, $3.62 with NSLP reimbursement]

Cost of Items for 1 Strawberry Banana smoothie:

1 C milk $0.24
½ C Yogurt $0.25
½ C Strawberries $0.33
½ Banana $0.11
Price per straw $0.01
Price per 16 oz. plastic cup $0.09
Price per plastic lid: $0.04

TOTAL: $1.07

Cost of Reimbursable meal with Labor: $2.42

Profit per smoothie= [$3.62 - $2.42] = $1.20

Cost of Items for 1 Green Monster smoothie:

1 C milk $0.24
1/2 C Yogurt $0.25
1 C Apple slices $0.50
½ Banana $0.11
½ C Spinach $0.32
Price per straw $0.01
Price per 16 oz. plastic cup $0.09
Price per plastic lid: $0.04

Total: $1.56

Cost of Reimbursable meal with Labor: $2.91

Profit Per Smoothie= [$3.62 – $2.91] = $0.71

Reimbursable Meal Factors:

Pretzel $0.22
String Cheese $0.19
Labor Per Smoothie $0.94
NSLP Reimbursement $0.37
 Appendix B

 Commercial Grade Blender, 64 oz. jar BPA free copolyester jar/lid and center cap.
o Circular design for easy cleaning
 3.5 HP motor, 120V, 13 Amp, cETLus, NSF
 Sleek Design taking up minimal counter space and easy storage: 16”(H) x 8.25” (W) x
8.5” (D)
 2-speed & PULSE operation with electronic membrane keypad
o 30-second countdown timer and instruction video enclosed
 Waring blenders come with repair service and a 1 year full replacement warranty.
 Appendix C

Green Monster Smoothie

Money available $ 2,000.00

Cost of Blender $ 1,318.40

Labor $ 1.00 $ 18.84 $18.84 no impact to labor

180 school days/yr

Sales- Daily
Waring $ 72.40
Cost $ 58.20
per
increase in sales $ 14.20 $ 2,556.00 year

ROI = (gain from investment - cost of investment) ÷ cost of investment

gain $ 2,556.00
cost $ 1,318.40

94%

[Investment ÷ expected yearly

Payback income] 12
0.51 of a year 6.19 months
Strawberry Banana Smoothie

Money available $ 2,000.00

Cost of Blender $ 1,318.40

Labor $ 1.00 $ 18.84 $18.84 no impact to labor

180 school days/yr

Sales- Daily
Waring $ 72.40
Cost $ 48.40
per
increase in sales $ 24.00 $ 4,320.00 year

ROI = (gain from investment - cost of investment) ÷ cost of investment

gain $ 4320.00
cost $ 1,318.40

228%

[Investment ÷ expected yearly

Payback income] 12
0.31 of a year 3.66 months