Rapid Fill Mug Program Fails (at more ways than you might think)

[RSoxNo1]

You still sound mad about Test Track...

I was mad about that because they were being irresponsible with the safety of their guests. Aside from increasing diabetes, this isn't going to endanger guest safety one way or another.

 

[Clamman73]

I was mad about that because they were being irresponsible with the safety of their guests. Aside from increasing diabetes, this isn't going to endanger guest safety one way or another.

I know...and for them not take you seriously about your concerns isn't cool...but somewhat on this thread topic, I'm still trying to recoup my $2.50 cost for water in the Parks since I didn't have a chance to buy water bottles beforehand on my past trip.

 

[John]

What is funny is that Disney isn't even acknowledging the fact that there was a Lifetime mug program. As far as getting my return in "value" of the mug...no I did not. The value of buying the mug was to get soda for free for life as long as I had the mug. Free soda isn't worth having a hissy fit over. When I bought the mug I could have filled it a hundred times a day, poured it down the drain and refill it again and Disney knew this. So why sell the mug to begin with? Because soda isn't that expensive and the perception of value and experience the guest received was worth every penny to Disney. Now it isn't as important to Disney.

 

[GenerationX]

I know Disney doesn't want their CMs to have to chastise guests for using illegal cups/mugs, but they do want to reduce theft, increase sales of refillable mugs, and go high-tech. The answer is not Rapidfill, but Rancidfill.

Under my Rancidfill plan, CMs would quietly watch the drink stations. If they see a bad mug, they surreptitiously click a remote that alters the formula of the dispensing drink. Reduce the CO2 so it comes out flat. Increase the water so there's less flavor. Add a new, incompatible taste. As the scofflaw drinks and grimaces, the CM can "come to the guest's rescue" by explaining that the darned beverage stations don't seem to work quite right unless you've got a mug with one of these new, all-knowing, all-powerful RFID chips in them.

 

[englanddg]

I know Disney doesn't want their CMs to have to chastise guests for using illegal cups/mugs, but they do want to reduce theft, increase sales of refillable mugs, and go high-tech. The answer is not Rapidfill, but Rancidfill.

Under my Rancidfill plan, CMs would quietly watch the drink stations. If they see a bad mug, they surreptitiously click a remote that alters the formula of the dispensing drink. Reduce the CO2 so it comes out flat. Increase the water so there's less flavor. Add a new, incompatible taste. As the scofflaw drinks and grimaces, the CM can "come to the guest's rescue" by explaining that the darned beverage stations don't seem to work quite right unless you've got a mug with one of these new, all-knowing, all-powerful RFID chips in them.

Machiavelli would be proud!

 

[jlsHouston]

It's the same thinking that justifies bypassing parking fees... condiment sandwiches... etc.

People abuse leeways and then get upset when the freedoms get taken away.

Maybe, partially. But people also don't always like having a problem getting soda to dispense after they just spent 18 bucks for a cup and unlimited refills.
Also you can put locks on the doors and you know the old saying...
I know some restaurants here in Texas on the honor system still...They make so much freaking money in profits, the owners and management shrug off the customers that are always forgetting the beer or the half a dozen when they go up to pay. There is something inherently Walt Disney about trusting people to do the right thing, even those that don't it's kind of like the ones that do make up for the the soda stealers.....
Anyways Rapid Refill sucks too. Go back to resort specific mugs, change the design a bit more often and and sell me a usable souvenir. I will happily pay for new mugs twice a year whether I am on the dp and the price is built in or I am winging it with a TIW card.

 

[jlsHouston]

To those who think that the issue is a result of poor guest behavior, you would be correct. This is an effort to control F&B costs. Lets do some math.

Lets start with the components that make up these Bev systems.

1) Water. This is pushed through a carbon based filtration system. The filters may or may not cost Disney anything. Generally, Coke will provide the filter replacement for free, and I have no reason to doubt Disney would be any different. But, if not, the cost for a 20" filter (the big boy, they sell smaller) is around $40. In addition, Ice Machines are generally filtered (any good operator would want to, it keeps your ice machine cleaner and in better condition, therefore operating more efficiently and longer). I have no doubt Disney filters their ice machines as well.

These replacement filters cost closer to $60. These filters should be replaced a minimum of once every 6 months (there actually should be a PSI indicator that the manager can look at to see if the system needs a new filter, but most of the time it's just easier to put it on a regular replacement schedule. So, lets assume Disney, due to volume and the incoming (poor) water quality decides to change out the filtration once a month. That means approx $200 a month for filtration for a 4 unit beverage bar, as you'll find at most of the resorts. This comes out to $200 / $30 = ~$7 a day per 4 unit bar. Divide this by the average number of drinks dispensed per day and you come out with a very...very small number. So, we can safely discount these costs from any equation.

Then there is the cost of the water itself. For giggles, lets just assume filtration + water + system maintenance parts and general labor adds 2 cents of cost per drink (this is very high).

2) Carbonation. I have little doubt that Disney is using something like NUCO2's service, with large 750 lb containers. It just makes operational sense. These units add less than 1 cent per drink of cost...but, again, I will round up to be overly generous, and say it's 1 cent. Also note, not all products require infusion of CO2 (like Poweraid, Hi-C, etc.) But, we'll stick with 1 cent.

3) Syrup. BIB (Bag in Box) syrups generally come in 1 gal, 2.5 gal or 5 gal boxes. With an average ratio of 5 oz of water for every 1 oz of syrup, each 5 gal BIB should use 25 gals of water, and therefore 30 gals of mixed product. The 5 to 1 ratio is an average. Some sodas use a 5.0 ratio, some a 5.5 and some a 4.5 ratio. If you've ever seen the little fronts of a soda machine where the flavor is indicated lifted up, behind them you'll find two little dials. These adjust the ratio, one for syrup, one for water. You use a tool called a Brix cup to calibrate your machine for best taste. If you are curious, it looks like this.

Even when it's fully calibrated, it is very rare you'll use all of the syrup in your BIB. I'd estimate 98% usage. So, at 100% usage, that's 30 gallons of product. 128 oz in a gallon, so 30 gal x 128 = 3840 oz. 3840 * .98 = 3763 oz of finished product per BIB.

BIB box costs vary based on various factors (popularity of the product, pricing agreement with Coke, etc...etc...), but lets assume an average cost of around $60 per BIB (this is a bit steep for Disney, I suspect...but it works).

So, with all this information (granted rather dry info) in place, now we can start to estimate cost.

First, lets consider the Disney Mugs, and lets assume (because I don't have one handy) that they hold 12 oz of soda. So, $60 / 3763 = 1.6 cents per oz. $0.016 * 12 oz = $0.192.

So, 19.2 cents per fill is your cost per mug. But, what about ice? If we assume that the average person fills their cup halfway with ice, this means the average mug will contain between 6 and 8 oz of soda. We'll go with 8, for this estimate. So, the initial fill is really closer to $0.016 * 8 oz = $0.128 per initial fill. Add to this the generous 2 cent overhead costs I described above and round and you end up with 15 cents per fill.

Refills, however, are a different story.

People tend not to add more ice to their refill, and the ice melts. Therefore, the actual amount of product distributed is probably closer to 10oz (again being generous) per refill. Using our tried and true cost formula, this means a per refill cost of $0.016 * 10 = $0.16. Add the 2 cent overhead, and you have 18 cents per refill.

So:
Fills with no ice equal ~22 cents
Fills with fresh ice equal ~15 cents
Fills with melted ice or low ice equal ~18 cents

For giggles then, lets say that every drink distributed costs ~19 cents of product.

Now you add in your paper cost (cost of the mug, cost of straws, cost of lids, etc. Generously estimating numbers (especially to account for straw waste), I'd estimate something like this. Cup is around 15 cents, lid is 1 cent, straw (with waste) costs around 2 cents.

Total cost per drink is around 37 cents.

This, if you are every curious, how you can come up with your drink pricing at a restaurant, as you manage a business like that by percents, not by dollar amounts per se.

Anyhow, now lets get creative with the theft issue. Lets take POFQ, which has around 1000 rooms. Lets assume full occupancy and an average occupancy rate of 3 people. So, 3000 people. Now lets assume that 1/5 of them are stealing an average of 4 sodas a day (one for each meal plus one to sip by the pool). So, 2400 sodas are being stolen a day.

These are all very generous numbers, but that's aside the point.

Lets take the highest cost scenario (no ice). 2400 x $0.22 = $528. That's $528 dollars of loss per day, or $192,720 per annum. And, that's only ONE resort, and the smallest one at that.

Disney has what, around 30,000 rooms? Take that same formula with the same assumptions of theft and occupancy rate, and you end up with a very large number.

30,000 rooms * avg. occupancy of 3 people = 90,000 guests
90,000 guests / 5 = 18,000 people who steal drinks daily
18,000 * 4 drinks per day = 72,000 stolen drinks per day
72,000 * $0.22 cents per drink = $15,840 loss per day

Or, $5.78 million dollars of loss per annum.

Note, in every case I skewed the costs up to benefit Disney's mindset. And, that doesn't get into lost potential revenue (say, people reusing the 20oz paper cups or room cups because they don't have mugs. Add this in and not only do you see millions of dollars of cost, but you also see millions in lost revenue.

Lets say each of those people stealing bought an $18 dollar mug, that makes the model a bit more complex as you'd have to factor in average length of stay, etc., to come up with any potential revenue. However, if we just assume they purchased a paper cup for each meal, the math gets easier. For this, we'll assume that of the 4 drinks stolen per day, 2 are refills.

72,000 drinks stolen per day / 2 = 36,000 * $3 per cup = $108,000 in new revenue a DAY. Or $36,420,000 per annum.

Or, likewise, if we assume that they each buy one day allotments on mugs (again, so I don't have to get into average length of stay, etc...). This means that every drink outside of the first would be "free", so we would divide by 4.

72,000 drinks stolen per day / 4 = 18,000 * $9 per mug = $162,000 in new revenue a DAY. Or $59,130,000 per annum.

Now, think like a person being presented this in a meeting room who has never operated a restaurant day to day. It seems like an excellent business decision, don't you think? Current shrink is costing $5.78 million AND we have the potential to make another $36 to $50 million a year in added revenue?

Someone is getting a BONUS this year!

Anyhow, I am deeply against this system, but I wanted to run through some of the numbers and considerations Disney certainly looked at as a matter of information for anyone unaware of the details of F&B costing.

Sorry so long!

Well this is impressive but I still vote with @luv to just tack a buck a night on per room. I think that would give then 10 million more in revenue assuming 30000 rooms times 350 days per year...

 

[jlsHouston]

Size certainly is a consideration. I remember reading a very interesting article in the Restaurant News that detailed a study that was done about cup sizes in relation to consumption / number of refills. This was over 15 years ago, so I doubt I'll be able to dig it up, but what it found was very interesting.

When restaurants used smaller glasses (say, 10 or 12 oz), consumption actually increased. It wasn't real consumption, per se, but rather distribution. It wasn't enough to satiate the consumer, so they would ask for or otherwise obtain a refill.

When you put a price constraint on that (no refills), people were less likely to get one. However, they were also more likely to ask for water, which is all cost, or in the case of fast food, not order a drink to go, and get a can or bottle from somewhere else.

The sweet spot the study found was 20 oz. cups. When lower than 20 oz, people were more likely to get a refill. So, say your cup is 16 oz...now you have distributed 32 oz of product for no gain. At the time, this proved perfect for quick service, and if you watch cup sizes at fast food restaurants during this period, there is little doubt this was a factor at the time.

I'd be curious to read a more modern study, because I believe consumption behaviors have changed. And, restaurants increasing their standard sizes to 20 oz portions certainly helped that.

Now I want to go dig up that article.

Yah there is probably a reason why MCD'S sells there big drink size for 99 cents. I mean how could McDonalds have more snap than WDW about selling drinks ?
MCD's makes changes all the time to their menu and price structure too. I never feel ripped off when we fast food it there.

 

[jlsHouston]

The motivation behind this is to get an additional $10 from each of their otherwise loyal guests. It comes off as remarkably petty, and considering the annual increases on resort rates and tickets would it have been so difficult to role these costs in with the annual increases?

We all love Disney on here, but they have spent billions on "infrastructure" in the last decade that has done more to decrease the guest experience than increase it. Can someone please explain to me how that makes any sense.

OMG I so love the last two sentences you wrote, EXACTLY my feelings...

 

[jlsHouston]

I know Disney doesn't want their CMs to have to chastise guests for using illegal cups/mugs, but they do want to reduce theft, increase sales of refillable mugs, and go high-tech. The answer is not Rapidfill, but Rancidfill.

Under my Rancidfill plan, CMs would quietly watch the drink stations. If they see a bad mug, they surreptitiously click a remote that alters the formula of the dispensing drink. Reduce the CO2 so it comes out flat. Increase the water so there's less flavor. Add a new, incompatible taste. As the scofflaw drinks and grimaces, the CM can "come to the guest's rescue" by explaining that the darned beverage stations don't seem to work quite right unless you've got a mug with one of these new, all-knowing, all-powerful RFID chips in them.

OMG this is hilarious...

 

[jlsHouston]

MM+ isn't a flawed concept; it's just a flawed execution with an over-reliance on planning. No normal person wants to plan every second of every vacation. Mommy bloggers and Disney Commandos aren't normal.

Yah I been trying to articulate this unsuccessfully and you just did very eloquently...

 

[jlsHouston]

No...I still blame Disney for bad implementation.

like like like like like X 10000

 

[tissandtully]

Maybe it's just me, but I find the whole Freestyle system overrated.

I've tried them in Atlanta when they first came out and now they seem to everywhere they probably should not be.

It would be neat if there was more choices in your BASE drink....but who really cares if you can get a raspberry Diet Barq's Rootbeer or an Strawberry flavored Orange Fanta.

You just haven't had a Vanilla Sprite!

 

[SirOinksALot]

First, Disney is paying an extra 5 cents per cup for an RFID sticker to be pre-attached to most cups going to the resorts. So, the cup cost went up, not just for the mugs, but for all cups. You'd think that they'd be able to re-coup the cost through the additional mug sales. Unfortunately, that's wrong too. You see, a lot of the mugs "sold" are already paid for via the Disney Dining Plan, (If you get any Dining Plan, it includes mugs for your family) so they really aren't loosing anything if the guests staying have a meal plan and want to reuse old mugs, but they have to get new ones now, which only costs the company money. (The average person wouldn't factor in the value of the mugs into the dining plan, I know I wouldn't.)

You've conveniently forgotten that they jacked prices up on paper cup drinks by more than 5 cents. Really basic oversight there.

I agree with two and four, three you must be kidding.

 

[disney4life2008]

My observations at Sports today -

This new program is ridiculous. The 3 minute time limit is a joke - as others have mentioned - the system takes a lot to get adjusted to. It is not as simple as putting your cup on the black level - even that is done and you press the soda button - it is no guarentee it will work. Tonight, a long line developed because people could not figure out how to work the machine. I just think it is downright silly

 

[Cmdr_Crimson]

I find it ridiculous that you have to pay nearly $20 for the length of stay to use the mug when it was just $14 for the mug & unlimited soda...They better go back to normal..

 

[John]

My parents have forever mugs but people around here don't believe that ever existed???? Resort logoed as well.

Oh they exist all right. In their defense I cant remember ever seeing any advertising for it either.

 

[Millionaire2K]

I don't want to read 7 pages about Soda. But has it been talked about that almost everywhere you go in the country where the Soda machine is out in public and not behind the counter they expect you to get free refills. Why does Disney not expect people to think this way?

Also when Disney sold the mugs what did they expect people to do, toss the mugs?

If Disney wants to solve the Soda problem once and for all they need to put the Soda behind a counter where a $7hr worker can refill the cups. They can then do away with all the rfid bs and get back to making a killin on a product that cost them almost nothing. (Coke exchanges ads for free/cheap soda)

 

[Cmdr_Crimson]

Leave the machine there for all to use and you need to be happy with good enough revenue. Disney can't have it both ways butt some master mind thinks he/she can. Real world people......

They at least have those self serve machines at Restaurantosaurous, Backlot Express, Electric Umbrella, Sunshine Seasons and it's non stop refills..

 

[Gabe1]

No some accountant has run the numbers and I'm sure Disney according to him is losing millions of dollars in beverage sales. If you charge $3 for a coke, you are losing $3 for each coke that doesn't get paid for. Easy way to figure that out, how much syrup do you go through a day/week/month divide by how much syrup it takes to make a coke and bam there is your accounting number that you use. Multiple by $3 a coke and there is the revenue you should be making. Then you figure in people with meal plans and account for beverages as part of the plan and mug sales. Any way you do it I bet over all of WDW some accountant has said that they can squeeze out at least a million a year with the new system.

Biggest problem is an accountant does numbers and has no knowledge of field operations. GM had a problem with that, believe it or not??? Story I heard. Lutz sent out a memo saying the next person who says "We can save money by taking sound insulation out of the Buick's will be fired on the spot.". Lutz understands the auto business, accountants do not. I have a few friends in various upper level positions in the corporate world and accountants are needed but they are always terrible in real life situations. Go work for Larry Ellison his business is not run by accountants for sure. Side fact, more CEO's have come from Oracle then any other company.

Problem two is no real management in F&B. I've seen corporate restaurants that do all the checks and balances, nickel and dime people for everything. The big thing lately seems to be pushing an over priced glass of wine with dinner or craft beer. I rarely go to corporate restaurants in fact the only reason I go to them is so I'm not complete out of touch with average person. My usual places to eat are owner operated and everything is looser but there is an active manager who know what they are doing and do it. As they say always assume your bartender is stealing from you, just make sure you make it hard for him to do so. There are old school ways to keep track of everything and in the big picture a free drink here and there is not going to make a difference. Those owner operator restaurants are almost always better at managing time and money. When your talking a wait staff that pulls down $60-70K a year you're are talking about people who do understand the big picture and it's in their interest to make sure everything is running as well as possible. Red neck comes in who thinks good service is fast service??? Blow him out of his seat as fast as possible, he's happy, restaurant has a table to seat again, waiter is happy, everyone is happy. Get a table that wants to "dine", do it up with all the touches, they spend a long time there but the bill is probably high and the tip will be high. again works for everyone. Corporate restaurants just aren't set up to handle that, everything is averages and costs etc. etc.

In the end some businesses just need a more personal touches and skills. Just out of college I worked at a 4 star 5 diamond resort and money was always the bottom line but how you got there made the difference. Make the guest feel good about whatever and don't them off. If Disney wants to max their beverage sales they need to bring back workers and people like to interact as long as you don't put the employee in a position to be overwhelmed. The reality is people are use to huge drinks and free refills everywhere, that Genie is out of the bottle and Disney won't be able to get the Genie back in the bottle. Give it up, soft drinks have a ridiculous mark up any ways. It costs pennies to fill a mug. Goes back to my training years ago can it be done and will people go with it without much resistance??? I think the answer to those two questions is no and no.

Back several years ago I was at Applebee's and I asked for some more cocktail sauce, the pod they gave me was tiny. When the check came there was a $.50 charge for the extra condiment. We questioned that and asked for the manager. You could see the waiter cringe as the manager supported the corporate directive but said he would 'wave' the charge this time.

My DH was ticked by his obnoxious patronizing tenor and told him no it was fine, we will pay the $.50 but we would not be back. And we were not. The three Applebees by us are now gone. Gee wonder why. People don't put up with this kinda crud.