Should a College Operate Its Own Food Services?

Should a college or university operate its campus food services on its own, or turn the role over to a food service contractor? That’s a question with an ambiguous answer, according to Tom Mac Dermott, FCSI, president of the food service consultant firm Clarion Group.

 It depends on a number of factors primarily, how important food services is considered to be to the institution’s core mission and how competently the service is being managed.

Some 90 percent of all colleges and universities (from community colleges through graduate schools) now outsource their food services to a contractor; the exceptions being the largest campuses of state universities and a small number of state and independent colleges.

The big state universities’ dining services with budgets of $20 million or more are larger than many regional food service companies and have the resources to employ professional staffs and operate successfully.

 Among smaller institutions, the decision to remain self-managed is based on the value the college sees in its dining services and a desire to keep it as an integral part of the campus community.  Over the past 30 or so years, colleges have increasingly outsourced food service operations almost invariably for economic reasons.  The decision usually was made when the food service operation was losing money or a competent manager retired and the successor was not competent.

 In recent years, colleges have converted to contractor management because the contractor offered a substantial financial investment to upgrade – or even build – the food service’s facilities. Some of these investments have been in the millions of dollars, even for relatively small institutions.  Of course, the investments do not come without strings in the form of a long-term contract, sometimes for more than ten years.

Some medium-sized and smaller colleges have a long history of self-management and have been successful. Davidson College in North Carolina, Saint Anselm College in New Hampshire, Bowden and Bates Colleges in Maine and Middlebury College in Vermont are examples.  Many of these regularly appear on the Princeton Review’s annual "Best Campus Food" list, indicating the importance food service plays in their campus' lives.

 At one time, colleges would outsource their food services because the contractor claimed its buying power would enable it to reduce the operation’s food costs, but that’s no longer the case (if it ever was true). Food service companies now retain all the advantages gained by their purchasing volume and promise no more than to match local market prices – the same prices a competent independent operator could get on his or her own.

"Competent" is the key word.   The self-managed food service operation is only as good as its manager, and purchasing food economically is only a part of the picture. The manager’s skills in creating imaginative menus that reflect the tastes and preferences of the campus community; adaptability in meeting the needs of the college and students, and leading a well-motivated, well-trained staff are more important.

The college or university that is considering outsourcing its self-managed food services should be aware that, while it’s comparatively easy to convert to contractor management, its far more difficult to do the reverse, revert back to self-management. The infrastructure to support the operation has to be reassembled and a competent manager found and hired.

Only one Clarion client in 18 years, New York Institute of Technology, Westbury NY, made the switch and has been successfully self-managing its multi-unit campus food service operations for the past five years.

About Clarion Group

We are a consulting firm that advises companies, professional firms, colleges and universities, independent schools and institutions in the management, operation and improvement of their in-house employee/student food services, catering, conference, lodging and related hospitality services throughout the U.S. and Canada.

For information, contact:
Tom Mac Dermott, FCSI, President
Clarion Group
PO Box 158, Kingston, NH 03848-0158
603/642-8011 or TWM@clariongp.com
Website: www.clariongp.com

Micromarts Merge Food Service and Vending

Convergence is a term usually associated with communications, the blurring of lines between television, the internet, smart phones and the like.

Now convergence has come to corporate food service. The line between staffed employee cafes and vending is being blurred with the emergence of the unattended food service option called micromarkets.

The new concept provides fresh and packaged foods in a compact convenience store-style setting, but requires no attendant or cashier. Customers select their products from glass-front refrigerated display cases, shelves and racks, then pay for the purchases at a touchscreen kiosk, similar to those found at Home Depot and some supermarkets.

A surveillance camera monitors the space, discouraging pilferage. Current operators say their pilferage loss is about 2%.

The micromarket concept is designed for workplaces that are too small to support a staffed café and where vending is an inadequate solution, generally between 150 and 500 population.

The concept can supplement the corporate food service’s central dining center for a company whose population spread among several buildings on a campus. The compact units can be installed in buildings that are too far from the central dining center to be convenient to employees. It also would work for a company in a high rise where the employee café isn’t convenient to some floors.

It could be useful in a company that has a population in evenings, overnight or on weekends, when the dining center is closed. It also can replace the staffed company store or c-store, selling sundries and company-logo products in addition to light foods, snacks and beverages. These units usually are losers, because low sales can’t support the attendant’s wages.

Space requirements are minimal,. As little as a 20x20-foot semi-enclosed room or alcove is all that’s needed, enough for a two- or three-door refrigerated display case, shelving and racks for non-refrigerated products, a payment kiosk and surveillance camera.

The concept is gaining a niche in corporate food service. There were a total of 2,642 micromarkets in operation at the end of 2012, up by 170% from 2011, according to industry reports.

So far, independent vending companies that have fresh food commissaries and the national Canteen division of Compass Group are the ones promoting micromarkets. Vendors say sales double when a micromarket replaces a bank of vending machines. The low cost and ease of installation makes the option especially attractive.

There’s nothing to prevent a company or its food service operator from installing a micromarket, supported from the central kitchen instead of an outside commissary.

The key for anyone who wants to include a micromarket in its corporate food service portfolio is to ensure the food offered is fresh, appealing and well packaged. That means daily restocking and strict rotation of product. Just a few customers having a bad experience will be enough to destroy acceptance and sales. That’s why fresh food vending often is unsuccessful. Customers don’t believe the food is fresh.

Micromarkets are only one of many creative solutions Clarion Group can bring to your employee dining, executive dining, catering and other hospitality services.  To learn how we can improve value, increase sales and crate a more cost-effective food service program, contact Tom Mac Dermott, 603/642-8011 or Angela Phelan, 609/619-3295 or e-mail us at info@clariongp.com.  Take a look at our website, www.clariongp.com,