www.SmartSnacksInSchool.org © 2014 Sean Kelly

The School Administrator’s Official Guide to Avoiding Fines, Boosting Revenue, and Improving Student Nutrition

Dear School Administrator,

You’ve come to the right place…

If you’re looking for the most complete and concise information on the USDA’s landmark new competitive foods rules, “Smart Snacks In School,” this is the most important guide you’ll ever read.

In fact, after reading this guide, you’ll have a full understanding of what the new USDA rules are, what they mean for your school or district, and how you can very simply comply with the

stricter regulations without added effort, hassle, time or risk of fines.

In addition, if your school or district doesn’t comply with the USDA’s Smart Snacks In School rules when they go into effect on July 1, 2014, you may risk being fined by the state agency governing the National School Lunch Program.

So, you have until July 2014 to figure out how you’re going to comply with the new rules and ensure that your school doesn’t lose competitive food sales.

On top of that, concerned parents and health-minded adults are demanding change everywhere.

Existing vending operators are being made to comply or leave.

Schools are scrambling to make up millions of dollars of lost vending, fundraising and student store revenue.

The USDA has finally clamped down on the junk food that has been available to your students and this is a monumental ruling. Here’s why…

Superintendents, Principals, and School Administrators in thousands of schools nationwide are scrambling to find a profitable “healthy vending” and com-petitive foods solution before incurring steep fines and a 100% loss in much-needed revenue. We’ve worked with thousands of schools to comply with federal nutrition rules and can help your school, too. - Sean Kelly, CEO, SmartSnacksInSchool.org

www.SmartSnacksInSchool.org © 2014 Sean Kelly

• Potential severe drops in competitive foods revenue • FINES or loss of federal funding if you don’t meet the guidelines in time • Increased policing and enforcement of the new standards (annoying, too) • Far less food options for your students • A hassle for you to figure out the right competitive foods solution to replace your current program.

But, these tighter restrictions are also A GOOD THING if you handle them the right way.

By offering your students healthier options through a 100% USDA-compliant competitive foods and healthy vending program, you can now:

1) Generate MORE revenue than your current program 2) Avoid big fines for non-compliance with the new rules 3) Avoid the hassle of policing and enforcing the new standards 4) Improve the health and performance of your students 5) Reduce instances of bad behavior 6) Keep parents happy, and… 7) Become a hero in your school and community

Last spring, the Texas Department of Agriculture got serious and imposed fines totaling $73,000 on eight Houston high schools for non-compliant competitive food sales. Those eye-popping fines made headlines and local TV news.

Another example: Last year, two high schools were fined $16-20k for competitive food violations by the Utah State Office of Education. According to The Salt Lake Tribune, Davis High in Kaysville, UT and Box Elder High in Brigham City, UT faced $15,000-$20,000 fines for violating competitive food rules.

Davis High earned two fines for selling foods such as diet soda and certain candies from the school store and vending machines in the hallway during lunch.

Box Elder High was fined $20,167 for selling diet carbonated drinks, lifesavers and cough drops during lunch in a hallway vending machine near where kids eat.

The USDA’s Restrictive “Smart Snacks In School” Rule Means:

If you don’t meet the guidelines, there are serious repercussions.

www.SmartSnacksInSchool.org © 2014 Sean Kelly

The fact is…

As part of the Healthy, Hunger-Free Kids Act of 2010, the USDA has published its interim final nutrition standards for “competitive foods,” which are all foods and beverages sold to students on campus during the school day, typically through vending machines, a la carte lunch lines, fundraisers and in student stores, other than those meals reimbursable under federal meal programs.

The USDA established these standards under the “Smart Snacks In School” Rule, which goes into effect July 1, 2014.

In short, starting July 1st of 2014, all “junk food” in vending machines, student stores, fundraising and a la carte is banned and you have to figure out how to recoup that lost revenue somehow.

Baked Flaming Hot Cheetos and Doritos? – GONE!Low Fat Pop Tarts? – SEE YA LATER!Fruit Snacks? – I DON’T THINK SO!

Cheez It? – GET OUT OF HERE!If you’re not prepared when this rule goes into effect…

How much more stress would that put on your already tight budget?

There is no need to throw away your competitive foods revenue now that the Smart Snacks In School rules have been finalized.

All you have to do is “figure out” how to best navigate these rules so your school and your district comes out ahead.

There is powerful legislation that will FORCE you to “go healthy” in 2014.

You will lose MOST or ALL of your competitive foods revenue overnight

In fact, almost 90% of what’s sold in vending machines will no longer be allowed

www.SmartSnacksInSchool.org © 2014 Sean Kelly

Or if you don’t feel like figuring it out on your own, you can consult with a Smart Snacks In School Expert to answer your questions and get guidance on next steps. We’re happy to conduct a competitive foods and vending audit and to work with your student council (or whomever runs the student store) to ensure the items sold meet the new standards.

Either way, you’re required to make a significant change to your school’s competitive foods, and in a very small amount of time.

Right now, roughly 100,000 schools nationwide are scrambling to get their traditional vending machines out and new healthy vending machines in.

If you wait until the law is enforced in July 2014, you might have to wait 6 to 9 months (or longer) to get your new healthy vending machines. That’s 9 months of potential lost vending commissions and possible fines to boot.

But if you act now, you can have bright, clean healthy vending machines in your school or district in a matter of WEEKS.

A Massive Healthy Vending Backlog Is Coming

Don’t forget!

SmartSnacksInSchool.org is conducting a limited number of free “Smart Snacks In School Competitive Foods Audits” for School Administrators that need guidance on how to comply with the new USDA rules.

Go to www.SmartSnacksInSchool.org/Audit to schedule your free 15-minute Audit.

www.SmartSnacksInSchool.org © 2014 Sean Kelly

Summary of the Smart Snacks In School Guidelines Ingredient Rules Any competitive food sold must be a: a. Fruit b. Vegetable c. Dairy product d. Protein-rich food (meat, beans, poultry, seafood, eggs, nuts, seeds) e. Whole-grain rich food (first ingredient is a whole grain or product is 50% whole grains by weight) f. Combo food that has at least ¼ cup fruit and/or vegetable * Exception until July 1, 2016 – A food is allowed if it contains a minimum of 10% of the Daily Value of calcium, potassium, Vitamin D or fiber

Nutrient Standards All competitive foods must meet each of the following nutrient limits: a. Calories • Max 200 calories for snacks and sides

• Max 350 calories for entrees (outside the school lunch program) b. Sugar • Max 35% sugar by weight (some fruit exceptions) c. Sodium • Max 230mg sodium for snacks (200mg after July 1, 2016) d. Fat • Fat: Max 35% calories from fat (as packaged or served; some exceptions for reduced fat cheese and nuts apply)

• Sat fat: Less than 10% calories from fat (as packaged or served; some exceptions for reduced fat cheese and nuts apply)

• Trans fat - Zero grams of trans fat as served (≤0.5 g per portion)

www.SmartSnacksInSchool.org © 2014 Sean Kelly

Summary of the Smart Snacks In School Guidelines

Beverage Rules All schools may sell:

• Plain water (with or without carbonation)• Unflavored low fat milk• Unflavored or flavored fat free milk and milk alternatives permitted by NSLP/SBP• 100% fruit or vegetable juice and 100% fruit or vegetable juice diluted with water (with or without carbonation), and no added sweeteners.

Elementary schools may sell up to 8-ounce portions, while middle schools and high schools may sell up to 12-ounce portions of milk and juice. There is no portion size limit for plain water.

High Schools may sell additional “no calorie” and “lower calorie” beverage options that meet the following portion / calorie restrictions:

• No more than 20-ounce portions of Calorie-free, flavored water (with or without carbonation)• Other flavored and/or carbonated beverages that contain: Less than 5 calories per 8 fluid ounces Less than or equal to 10 calories per 20 fluid ounces• No more than 12-ounce portions of Beverages with ≤ 40 calories per 8 fluid ounces,• No more than 12-ounce portions of Beverages with ≤ 60 calories per 12 fluid ounces.

The bottom line: These new guidelines are much stricter than current guidelines and if your current competitive foods programs are like most programs in the country, you will have to almost entirely replace all products from your vending machines, student store and a la carte rotation by July 1, 2014.

I’ve included an example of a USDA-compliant product mix for your vending machines. If you don’t recognize these products, it’s because your vending operator likely doesn’t have access to all of them.

www.SmartSnacksInSchool.org © 2014 Sean Kelly

Large Snacks 1 2 3 4 5 6

Brand Pop Corners Pop Corners Pop Chips Super Human Snacks

Super Human Snacks

Mary's Gone Crackers

Name & FlavorPop Corner's

Popped, Sweet Cinnamon

Pop Corner's Popped, Mem-phis Barbeque

Katy's Kettle Corn Hot Fries White Cheddar

Pop Corn

Gluten-free organic Hot 'N Spicy Jalapeno

Bars & More 11 12 13 14 15 16

Brand GoGo squeeZ Monkey Brains Emerald Annie's Clif Larabar

NameApple Apple Squeezable

Fruit

Monkey Bars Chocolate Chip

Emerald 100 Calorie Packs

Natural Al-monds

Organic Cin-namon Graham

Crackers

ZBar - Full Moon Brownie

Blueberry Muffin

Small Drinks 22 23 24 25 26 27

Brand Sambazon Izze Izze Izze Izze Blue Sky Free

Name Orange Sparkling Clem-entine

Sparkling Pomegranate Sparkling Apple Sparkling

Grapefruit Cola

Small Drinks 28 29 30 31 32 33

Brand R.W. Knudsen Steaz Steaz Steaz The Switch Apple & Eve

Name Razzleberry Unsweetened Lemon Black Cherry Zero Berry Fruit Punch Strawberry Kiwi

Large Drink 17 18 19 20 21

Brand Hint Hint Dasani Hint Hint

Name Hint Fizz, Black-berry Hint Fizz, Peach Water Hint Water,

WatermelonHint Water,

Strawberry-Kiwi

Medium Snacks 7 8 9 10

Brand Mediterranean Snacks Sensible Foods Buzz Strong

Whole Grain

Bare Fruit Crunchy Apple

Chips

Name & Flavor Rosemary Roasted Eda-mame

Chocolate Chip Cookie

Cinnamon Apple

Sample Vending Planogram

www.SmartSnacksInSchool.org © 2014 Sean Kelly

Smart Snacks In School Frequently Asked Questions

What are the USDA’s “Smart Snacks In School” rules? On June 27, 2013, the USDA passed its interim final rules for competitive foods called, “Smart Snacks In School” (you can read them in their entirety here). “Competitive foods” are snacks and beverages that are sold outside of the National School Lunch Program (“NSLP”) and thus “compete” with breakfast and lunch for student spending.

Smart Snacks In School set lim-its on what can be sold in school vending machines, a la carte lunch lines, in student stores and fund-raisers. There are two components for snacks — one is a restriction on the ingredients of the snacks, which requires whole grains, dairy, fruit, vegetables and other protein sources (like beans); the other component sets specific limits on calories, sugar, fat, and sodium.

What is the Healthy Hunger-Free Kids Act of 2010? The Healthy Hunger-Free Kids Act of 2010 is a federal statute signed into law by President Barack Obama on December 13, 2010 as part of the reauthorization of funding for the Child Nutri-tion Act. The legislation sets funding and policy for USDA programs, including the National School Lunch Program, the School Breakfast Program, the Special Supplemental Nutrition Program for Women, Infants and Children (WIC), the Summer Food Service Program, and the Child and Adult Care Food Program. Part of the act called for the USDA to make changes to school nutrition that were aligned with the Dietary Guidelines for Americans. This is why the NSLP recently changed its standards and why we now have Smart Snacks In School. You can read more about the Healthy Hunger-Free Kids Act of 2010 here.

What is the National School Lunch Program? The National School Lunch Program (“NSLP”) provides funding to both public and non-profit private schools so that they may, in return, provide free or reduced-cost lunches to stu-dents. The majority of the nation’s schools — about 94% — are participating in this program. Schools in the program must follow new criteria required by the 2010 Healthy Hunger-Free Kids Act, which includes adding more grains, fresh fruits and vegetables to lunches. To read a fact-sheet on the NSLP, please click here.

If you want to ensure your competitive foods offerings comply with the new USDA rules, schedule your free “Smart Snacks In School Competitive Foods Audit” and find out how to get USDA-compliant items into your school or district before the deadline. Go to www.SmartSnacksInSchool.org/Audit to schedule your free 15-minute audit.

www.SmartSnacksInSchool.org © 2014 Sean Kelly

Why is the NSLP so important? Over 16 million American kids are presently food-insecure. Over 31 million children rely on the National School Lunch program for needed nutrition, and most of them live sufficiently close to the poverty line that they qualify for free lunches or meals offered at a reduced price.

When Do Schools Need to Comply with Smart Snacks In School? July 1, 2014.

Are there any fines for non-compliance? Yes. According to the USDA’s 54-page document: “The Department would like to assure commenters that we see technical assistance and training as the first approach to non- compliance, however, we recognize that egregious, repeated cases of non-compliance may require a more aggressive approach. In this regard, section 303 of the HHFKA amended section 22 of the NSLA (42 U.S.C. 1769c) to provide the Department with the authority to impose fines against any school or school food authority failing to comply with program regulations. This authority will be addressed in a forthcoming pro-posed rule ad-dressing a num-ber of integrity issues related to local educational agencies admin-istering the Child Nutrition Pro-grams. As with the proposed administrative rule, interested parties will have an opportunity to address these issues during a public comment period following publication of that pro-posed integrity rule.”

As an example, last year, two high schools were fined $16-20k for USDA violations. According to The Salt Lake Tribune, Davis High in Kaysville, UT and Box Elder High in Brigham City, UT faced $15,000-$20,000 fines for violating competitive food rules.

Davis High earned two fines for selling foods such as diet soda and certain candies from the school store and vending machines in the hallway during lunch (this rule will not be the same come July 1, 2014, as there are no time and place restrictions). Box Elder High was fined $20,167 for selling diet carbonated drinks, lifesavers and cough drops during lunch in a hallway vending machine near where kids eat. You can read more here and here.

To learn how schools can ensure their competitive foods sales comply with the Smart Snacks In School rules without losing much-needed revenues and student loyalty, please schedule a free, 15-minute “Smart Snacks In School Competitive Foods Audit” at www.SmartsnacksInSchool.org/Audit.

www.SmartSnacksInSchool.org © 2014 Sean Kelly

Is it true that schools can request a waiver so that they don’t have to be in compliance by the July 1, 2014 deadline? No. While the 2014 Consolidated Appropriations Act directed the USDA to provide a waiver for the 2014-2015 school year to any school district that certified it could not operate a food service program without incurring increased costs when attempting to comply with the Smart Snacks In School rules, U.S. Department of Agriculture Secretary Tom Vilsack ultimately testi-fied that the USDA does not have the authority to do so. Thus, all schools will need to meet the new standards as of July 1, 2014.

Do Schools Need to Get Rid of their Vending Machines, a la Cart Lunch Lines, or Student Stores? Not necessarily. They just need to “comply.” If your current vending program and student store comply, you may keep them. Many schools rely on competitive food sales to fund underfunded school programs and to ensure students, especially athletes, have access to snacks when they need an energy boost or meal after school hours. The Smart Snacks In School rules just ensure that snacks and beverages sold outside of school meals are whole-some and setting a positive example. If your current vending/a la cart lunch line/student store operator does not want to, or is unable to, supply your school or district with USDA-compliant vending items, you will need to replace that vendor with someone who can or else you risk incurring fines or permanent loss of vending revenue.

Are Vegetable Ingredients Considered a “Vegetable” Under the Rules? When the first ingredient for a product is “potato” or “potato flakes” this does get the prod-uct in the door, and then the product has to meet all the other requirements. One thing that I should point out, though, is that if a school has a question about this, they would ask their state agency and there might be different interpretations among state agencies (some may say it’s okay, others may say it’s not).

Will Foods with “Soy Protein Isolate” Count as a Protein-Rich Food Under the Ingredi-ents Section of the Rules? Having soy protein isolate as the first ingredient will most likely qualify the food as protein-rich though it would be up to each state agency. Another reason soy-based products may pass would be if they contain 10% DV of calcium, potassium, vitamin D, or fiber (at least, this would allow them to meet the ingredients rule until July 1, 2016).

Do the Rules Apply to Teachers’ Lounges? The rule applies to anywhere on the school campus that students have access to. So, if students are able to get into the teacher’s lounge, then the rules apply. If students are not permitted in the teacher’s lounge, then the rules don’t apply.

If a State Does Not Set a # of Fundraising Exemptions, How Many Will Be Allowed? None.

www.SmartSnacksInSchool.org © 2014 Sean Kelly

Can Schools Make their Own Rules? Schools may keep their current rules if they are stricter than the Smart Snacks In School rules. Additionally, they may enhance the Smart Snacks In School rules to make them even more stringent. For example, California has sugar limits for its drinks and Smart Snacks In School rules do not, so CA schools could keep their own beverage standards. Ultimately, it would be up to the California Department of Education.

What are the Time Restrictions? Do the Old Ones Still Apply? Smart Snacks In School do not have “time and place” restrictions. These new standards apply up until 30 minutes after the end of the school day. Smart-Snacks-In-School-compliant foods can be sold any time. Foods that do not meet the standards can be sold 30 min after the school day ends.

How will the Smart Snacks In School Rules be Enforced? State agencies will monitor compli-ance with the USDA’s standards through a review of local educational agency records as part of the State agency administrative review. If violations have occurred, technical assistance and corrective action plans will be required. After these initial corrections, fines may ensue.

Will the USDA make more changes to the rules before July 1st? It’s possible, but we don’t know. There was a comment period that ended in October. USDA is reviewing those comments. We know that they won’t issue a final rule until after implementation begins so that they can take into account feedback during implementation. Therefore, we would expect some tweaks/changes in the final rule but not necessarily before July 1.

Will state agencies be adding their own amendments/clarifications before or after July 1st? We can’t say for sure. This rule isn’t pre-emptive, meaning that states can strengthen the standards, but this rule serves as a baseline.

Can districts have say over their state agency? Districts can (and should) talk to their state agencies. Districts can’t override the state agency.

If you don’t want the added hassle of enforcing a USDA-Compliant healthy vending program, schedule your free “Smart Snacks In School Competi-tive Foods Audit” to see how you can easily maintain a USDA-Compliant healthy vending and competitive foods program without any added time or hassle. Go to www.Smart-SnacksInSchool.org/Audit to schedule your free 15-minute Audit.

www.SmartSnacksInSchool.org © 2014 Sean Kelly

Here’s What To Do Next:

If you’re interested in… • Learning how you can very simply comply with the stricter regulations without added effort, hassle, time or risk of fines

• Getting a comprehensive audit on your current vending program and competitive foods sales and what you need to change

• Having a complete understanding of what the new USDA rules mean for your school or district

• Ensuring a healthier, happier, and more productive student body

• Creating a better future for our nation’s youth

• Boosting your school’s test scores across the board

• Reducing disciplinary problems

• Keeping parents & nutrition advocates happy

• Being a HERO in your community…

…then you should schedule your free “Smart Snacks In School Competitive Foods Audit” today. Schedule Your Free 15-Minute Audit: www.SmartSnacksInSchool.org/Audit

After your audit, you’ll know exactly how to get your school or district to transition smoothly over to the new USDA Smart Snacks In School rules without incurring fines, losing competitive food sales, or adding hassle to your life.

IMPORTANT WARNING: This will not be available for long…

We’re only able to conduct 25 competitive foods audits per week and we’re speaking to schools and school districts across the country. With the extensive resources we allocate to each school, we can only conduct a limited number of free audits at any one time.

Once our audit spots are filled, it could be months before this free service is available again in your area. Why risk losing vending and competitive foods revenue and incurring fines if you wait?

www.SmartSnacksInSchool.org © 2014 Sean Kelly

Sean Kelly - CEO – SmartSnacksInSchool.org Free Vending Audit: www.SmartSnacksInSchool.org/Audit Talk to a Smart Snacks In School Expert: 877-455-0067

P.S. The USDA’s new “Smart Snacks In School” rules can be confusing and they pose a threat to your current competitive foods income. In fact, they even mean potential fines if you’re not compliant by July 1, 2014. If you don’t take action now, your school or district could end up being in violation of the USDA’s new rules. That’s not only costly, it’s also embarrassing.

Schedule your free Smart Snacks In School Competitive Foods Audit today and discover how to completely avoid all the pitfalls of the new USDA rules.

This is your chance to do a LOT of good for your school with very little effort on your part. It may be the best use of your time this year: www.SmartSnacksInSchool.org/Audit

It has been our experience – after conducting these audits all across the country – that all of our available spots usually fill up within 30 days. If you don’t act now, there is a good chance that you will NOT be able to secure your spot in time for the implementation of the USDA’s new Smart Snacks In School rules.

I urge you to schedule your free audit now, while you still can, or call us to speak with a Smart Snacks In School expert right away.

Sincerely,