The natural products niche in schools

There's a pressing need for healthy, natural alternatives to the highly processed foods served in schools, but there's a mountain of challenges for natural products companies looking to work their way into the federal school lunch program.

The school lunch debate is once again raging, thanks to recent efforts by House Republicans to provide schools temporary exemptions from more stringent nutritional standards established by the 2010 Healthy Hunger-Free Kids Act. Michelle Obama has joined healthy lunch advocates to rally the support of groups that include parents, educators and legislators to prevent such exemptions.

But the natural products industry should be on that list as well, says national school nutrition advocate and Expo East speaker Chef Ann Cooper.

The reason is simple, says Cooper, the director of nutrition services at Colorado’s Boulder Valley School District and the nationally-known Renegade Lunch Lady.

“If we allow this generation to grow up thinking junk food is real food, then there will be no natural products industry,” she said. Despite the natural products industry’s steady growth trajectory, inside the school cafeteria the likes of Pizza Hut, Sara Lee and PepsiCo still reign.

It’s not an easy world to break into, but a few of Boulder’s natural products companies have worked with Cooper to find ways to do some good in the tangled bureaucracy of the federal school lunch program. The Boulder-based superfood drink mix maker Skoop, for example, is dedicating 10 percent of its proceeds to Cooper’s nonprofit foundation. The money will go to the Mission Nutrition program to supply more fruits and vegetables to schools beyond what federal funding provides and educating children about nutrition and healthy eating.

“This is another way to provide fresh fruit and vegetables to Americans so they have an option to choose a healthier path” Skoop co-founder Greg Stroh said. “It feels more in-line with our mission. We’re hoping we can be a part of a solution.”

Frozen burrito maker EVOL has taken another route, working with Cooper to get healthy breakfast burritos onto the menu in Boulder’s schools. The concept of food service represents a new business frontier for the natural products industry, and getting such products into schools could be a boon to the health of America’s children, but EVOL founder Phil Anson said the task is a difficult one. His experience was riddled with everchanging nutritional guidelines, almost inconceivably slim budgets and a complicated proposal process, Anson said.   

Two years after EVOL started the project, the company continues to lose money on it. The partnership is more of a philanthropic project than a business venture, Anson said.  
“Some folks have made it work with staples like organic milk and as we scale it may get easier.” he said. “But there are pennies to be made.”

Greek yogurt maker Chobani provides one example of what kind of scale Anson is talking about. The company made headlines earlier this year when the USDA awarded it a one-year contract to supply school lunch programs in 12 states scattered across the country. The Greek yogurt company, which opened one of the world’s largest yogurt-processing plants in Idaho two years ago, offered the federal government a flat rate of $1.40 per pound of yogurt. During last year’s three-month pilot program alone, Chobani supplied 200,000 pounds of yogurt to schools.

For most natural products companies to get into schools however, and to do so in a way that makes business sense, the whole school lunch system needs to be scrapped, Anson said.

“In the end, it needs to be stripped down to the studs and rebuilt. The value chain in food is massively corrupted,” he said, adding that it’s impossible to feed children “EVOL burritos, Justin’s (peanut butter), KIND bars and Stonyfield yogurt for the dollars that are being given by the USDA.”

Cooper agrees that the system has a lot of downfalls. But for now, she's focused on not letting current school nutrition standards slip.

“Allowing schools to not serve fresh fruits and vegetables and whole grains in a sense is taking the healthy food away from kids,” Cooper says. “Because then what are you left with?”


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