Industry News | May 29, 2014 | QSR Exclusive Brief

Think of the Children: Kona Ice Meets New School Regulations

Quick service brands that partner with schools are facing stricter federal regulations thanks to the 2013 introduction of the Unites States Department of Agriculture’s Smart Snacks in School nutrition standards. As the guidelines swing into full effect on July 1, mobile truck brand Kona Ice will continue its support of nearly 2,500 schools as a fundraising partner with revamped products specifically designed to meet the new rules.

“We’ve always been involved with children because it’s a kid-based product. We raise so much money for schools, that they started having us more on school property during school hours,” says Tony Lamb, CEO and president of the flavored ice treat concept. “As a company, we’ve raised over $17 million to give back [to schools] nationwide in just a few years.”

As fundraising partners, Kona Ice franchisees sometimes sell products on school property during school hours, making the brand’s products susceptible to nutritional standards set for schools. The Smart Snacks in School rules set limits on calories, fats, sugars, and sodium, and non-compliant schools risk loosing their lunch assistant programs.

“Schools are caught in a no-win situation,” Lamb says. “It’s like an unfunded mandate—it’s not like they get money to make these changes.”

While the federal regulations make some exceptions for food sold specifically during a fundraising event, some states have put their own laws in place to limit those exceptions, he adds. In Kentucky, for example, state legislation allows for no exceptions—Kona Ice works with about 350 schools in the state.

Lamb says it was in the company’s best interest to reformulate some products to be Smart Snack compliant so franchisees could continue their relationships with schools. To do so, brand executives worked with their local suppliers and two flavor scientists to reduce sugar and fortify items with more vitamins. The challenge was maintaining the taste, Lamb says.

“You’re taking a dessert product and trying to pull sugar out of it then fortify it with vitamins, and that’s just a recipe for disaster,” he says. “We are a dessert product, but we also have a responsibility because we’re such a fundraising tool for so many schools and organizations. We felt obligated to go down the road to try to meet the federal guidelines.”

Kona Ice’s new Smart Snack product is high in both vitamin C and D and offers reduces sugar and calories. It will be available for franchisees to sell outside of school fundraisers to appeal to the brand’s more health-conscious consumers, Lamb says.

By Tamara Omazic