Dining Insights

Dining Insights Winter Issue

2012-01-13T15:43:00.000-08:00

The Winter 2012 issue of Dining Insights, Clarion's newsletter about on-site dining, catering, conference and hospitality services, will be published soon. Among the features:

2012: New Challenges, New Oppportunities for Hospitality Services

Changing Workplace's Challenge to Dining Services

How Safe Is the Food in Your Dining Service?

Part 2 of our series, Managing On-Site Contractors

If you'd like to receive this and future issues, send your name, title and snail mail address to us at info@clariongp.com.

You can see articles from current and prior issues of Dining Insights at our website, www.clariongp.com/newsletter .

How Do You React When Customers Say They See No Value?

2012-01-13T15:20:00.000-08:00

If you're lucky, the customers and guests of your dining, catering and conference services will tell you candidly what they like and don't like; what they'd like to see on the menu; whether your hours of service are convenient; whether your staff is courteous and efficient, and much else.

It's something to encourage, because it's your best tool for ensuring your operation is satisfying employees or students and learning what you need to do to ensure your service is of greater value to them than their other alternatives.

Here are some comments from among 214 in a customer satisfaction survey we're currently running for a corporate client.

"Prices are too high. Too few choice [sic]."

"I am quite dissatisfied with the food quality, variety [and] vegetarian options. The price is quite high for what we receive."

"Clear deterioration in the price/value ratio."

"Staff are nice and very efficient. Managers are useless."

There were more than 100 comments along these lines (as well as some saying the opposite about food quality). Clearly, the dining service has a problem with its customers' perception of value.

How would you respond to this type of complaint? Send us your suggestions at info@clariongp.com and we'll publish them here and in the Spring issue of Dining Insights.

'I have no problems, only complicated situations.'

2012-01-01T14:25:00.000-08:00

That's what George Kuzmich, then VP of Operations for my former food service company, T J Mac Dermott Corp., told me many years ago when I asked, "What's the problem?"

George, a Ukranian whom the Soviets sent to Siberia for something at the outbreak of World War II, escaped to Afganistan, joined and fought with the British Army and was among the last British soldiers to leave Palestine as their mandate expired and the Israeli War of Independence started, certainly knew something about complicated situations.

It seemed to me then - and still seems - a pretty good way to deal with difficulties. Problems can be thorny and knotty. Complicated situations can be unraveled, simplified and settled.

Virtually anything that can go wrong in a food service operation - except equipment or power failures - involve people. Someone didn't show up, someone did the wrong thing or nothing, folks working at cross-purposes, quareling, grumbling, offending customers, you name it. Even equipment and power failures require human beings to fix them.

This means anything from poor food to high cost to customer dissatisfaction can only be solved by dealing with the individuals involved: complicated situtations.

Your solution can be a blunt-instrument command: "Don't do that again, or else."

Or, you can start to find out by using the magic word, Why. "Why did that happen?" The answer you get may be unsatisfying. Asked why something went wrong, most people become defensive and blame dark forces outside their control. There are an infinite variety of versions of "the dog ate my homework."

But, if you press on a little further to ask about how those dark forces affected the work or spoiled the soup or insulted the customer or caused the big discrepancy in the cash drawer, you'll eventually find the answer, unravel the complicated situation and see the solution. That works better than just, "Don't do that again," which usually causes fear or resentment and reluctant compliance, but doesn't really solve anything.

Your solution can be a simple change in work procedures or schedules, training or retraining or shifting an employee out of a job he/she can't perform well, up to, if necessary as a last resort, termination.

Sometimes, it's hard not to get angry or blow up in frustration when things go wrong or folks are obstinate or seem obtuse. That's human, but not productive and may create more difficulties for you, and certainly solves nothing.

If saintly patience isn't your style, try the old "count to ten" remedy and then, in as calm a voice as possible, ask "why." It will work.

This article also appears in the Consultants Corner section of the Society for Food Service Management's website, sfm-online.org.

The Penalty Zone . . . Where Good Ideas Go Bad

2011-12-14T03:58:00.000-08:00

By Angela Phelan
Senior Vice President, Clarion Group
http://www.clariongp.com/

In response to the article in Food Management, announcing the loss of revenue in the Ontario, Canada, schools because of resistance to "healthy food," I ask that the food police on school boards everywhere us a modicum of common sense when revising the school menus.

To the kind of knee-jerk response to the notion that "kids won't eat healthy food," I offer the following:
Roasted chicken mashed potatoes, broccoli-cheddar soup made with fresh chicken or vegetable stock, pasta dressed with lightly cooked, fresh tomato sauce, crisp roasted potato spears, baked sweet potatoes, corn on the cob, blueberries, strawberries, bananas, apples, lemonade made with fresh lemons and sweetened with honey, hamburgers made with fresh-ground, hormone-free, lean beef broiled and served on a bun (whole wheat) with a side of lettuce (mixed spring greens) and tomato (vine-ripened, pesticide-free).

Are these "healthy foods"? Yes -- if they are prepared from fresh ingredients, free of hormones, pesticides, trans fats and other "fillers," so often the silent ingredients in convenience foods. Homemade food, prepared by people who believe that we are on a mission to feed healthy children and keep them that way. That's what makes food "healthy," not overcooked brussel sprouts.

This is a tiny, very basic list. But this is healthy and delicious food. The idea should be to add to the nutritious enjoyment of food and not create a penalty zone for healthy eating. Simply removing candy bars is a good idea turned on its head. Seventy percent dark chocolate is good food. Can we offer real chocolate instead of a mound of chemically treated fillers and seduce a child into a mouth-watering snack attack? Adults make choices based on price and quality. Children make choices based on simple gratification. It is our job to offer children choices that reflect the quality we ourselves feel we deserve. This requires research and not a blind obedience to a health initiative that means well and at the same time turns children into involuntary gatekeepers.

We could withdraw the fryers by offering alternatives that re really good. Baked sweet potato "fries," sweet and slightly salty fresh potato "fries" baked in the oven. If anyone cares to source it, there's a new perforated, heavy metal roasting pan designed especially to create a crisp surface on the hallowed "french fry." It is a simple marvel. It is widely available. Shouldn't the operators try it? Potatoes are a great source of vitamin C and potassium. No reason not to make them a part of a student's diet. But not if the potato is coated with chemicals to keep it from moulding during packing and shipping and then it is dropped into a few gallons of very murky hot fat.

Do those fatty potatoes sell? Of course. It's all about conditioning a child from pre-toddler days to pick up a "french fry" as one of his very first non-baby foods. This conditioning can be changed by creating new habits at home. Schools can -- and must -- follow through and add to new normal. Bake potatoes in their skins, or peeled and mashed, roasted with rosemary, or cut into batons and oven-fried on the baking sheet mentioned above. It could be a brave new world! A healthy alternative to the hot dog? Maybe it's a freshly made meatball (oven baked) hero, using homemade ingredients, dressed with some fresh sauce and served with a sprinkling of low-fat cheese.

The planners of student menus need to consider the fact that these students have even more highly-tuned palates than their parents. Taste buds die off as one ages, but the healthy child and teenager still has the very heightened olfactory and sensory monitors that signal "yes" or "no," with little room for "maybe." Why is it that "Mom's fabulous roast chicken" works? It smells wonderful and tastes even better. When food in school cafeterias is made fresh and smells wonderful, children will eat it.

We are on a national mission to snatch our children back from the looming medical crisis they face -- overweight, obesity, diabetes and heart disease. In the very young. It is simply not acceptable. So, reeling off negative sales figures as a justification, possibly, to revert to menus "designed to sell," is a disservice to the entire community -- but most especially to the students -- who are blissfully unaware of their own vulnerability.

Why not treat the student at school as you would treat yourself? Make changes slowly, but keep moving forward. Offer high quality alternatives and most important: Remember that school feeding is about nourishing children so they will be in optimum condition to learn and live. Finding the best way to healthy and delicious eating for students will not be found in the penalty zone.

News About Dining and Hospitality Services

2011-11-06T09:24:00.000-08:00

The Fall issue of Dining Insights is published, with articles about the future of on-site dining and hospitality services, food safety, managing outsourced services and more. For a complimentary subscription to Dining Insights, send your name and snail mail address to info@clariongp.com. You can see articles from the current and prior issues at www.clariongp.com/newsletter.

Food Safety Roulette

2011-10-29T14:38:00.000-07:00

Two recent events have caused my thoughts to turn to food safery and the absence of effective protections in most dining service operations:

The recent, multi-state cantelope-listeria outbreak that caused several hundred illnesses and some deaths.

A survey of restaurant managers and food handlers that found many didn't know basisc precautions to keep food safe for consumption, like where to store raw meat in a refrigerator or why hambrugers should be cooked thoroughly. (You can see the article about this survey at www.clariongp.com/newsletter , "Food Handlers Flunk Food Safety Quiz")

The contaminated cantelopes traced back to a single, very large, farm, where processing practices were lax. That was the cause, but isn't an excuse for the thousands of food handlers (in restaurants, campus and corporate kitichens and homes) who didn't take a normal, simple and quite routine precaution -- washing all fresh fruits and vegetables. In the case of a rough-skin fruit like cantelope, this means scrubbing with a brush to get into all those little crevices. This might have prevented many of the illnesses that resulted from this outbreak.

You need to cut open a melon in order to eat it, whether you're eating a wedge or cutting it into cubes. When your knife cuts through the contaminated skin, it brings the microbes that were on the skin into the flesh. If the same knife is used for other tasks without being sanitized, it becomes a miniature Typhoid Mary, spreading the contamination to everything it touches.

So, why aren't this and the many other food safety prepcautions taken? They should be as automatic as a chef garnishing each plate he/she sends out of the kitchen, but it's not.

The fact is, food safety is ignored routinely, without consequence. If the penalty for failing to take these precautions were as sure and certain as the penalty for sticking a finger in a live light socket, there would be no problem with compliance.

What does your dining service staff know about food safety? We've developed a 10-question, multiple choice quiz that you can use to find the answer. For a copy, please e-mail me at TWM@clariongp.com and I'll forward it to you (with an answer sheet).

Green up Your Campus Dining Service

2010-08-05T11:05:00.000-07:00

With the start of the fall semester nearly on us, college dining service directors need to look to "greening" their healthy dining and sustainability credentials. Students, far more than other groups, are keenly aware of environmental issues and expect their college or university -- especially the dining services -- to be at the leading edge of sustainability and wellness trends.

Independently-managed and contractor-operated campus dining services generally reflect the most popular environmental trends: fresh food, recycling and waste reduction. But students, as well as faculty members and administrators, will expect more this academic year.

In the past, many dining services provided organic and/or vegetarian foods is a separate ghetto-like section of the dining facility's servery, saving the best locations for the more popular pizza, sub sandwiches, burgers and the like. Today, however, students expect environmentally-favorable foods and features to be center stage, including pizzas with whole-grain crusts, vegetarian subs and burgers made from hormone-free beef, as well as other healthy and meat-free options that are organic and locally-sourced.

One of the most successful ways to say "fresh," "wholesome" and "nutritious" to diners is the "action station." Here a chef prepares the diner's meal to order on a countertop cooking unit on the serving line, adding or omitting ingredients to the customer's order.

To-order cooking is cost-effective as well as customer-pleasing. Ingredients are cooked only when the customer orders a dish. The only leftover are raw products that, if properly kept at a safe temperature (40 to 35 degrees F) will remain fresh and safe for reuse in another, different dish at the next meal or the next day. Food cost is significantly lower than for food prepared in large batches that may not all be served right away, creating leftovers of minimal or no value.

Students and many other people are aware of the nutrition and environmental values of locally-sourced foods and now expect to see them in the dining center. Buying from local farmers may take more effort than calling a wholesale distributor, but the end product, delivered just a day or a few days after being harvested is worth the effort.

Many states now have programs to support institutional purchasing from local farms, making it easier than traveling the countryside to search out farmer-suppliers. Many distributors now also offer local farm products as par of their lines.

The other half of an environmentally-friendly dining service, a sustainable operation, requires more thought and effort and it includes waster reduction (helped by to-order cooking) and the conservation of water, electrical and other utilities.

Waste reduction begins with more careful menu and purchasing planning to reduce over- production and a plan to properly dispose of the waste that does occur. Food waste can be composted and used to enrich a campus vegetable garden -- which can sell fresh product back to the dining service.

Paper products made from recycled materials and plastic eating utensils from corn- or soy-based materials that degrade more quickly than conventional plastics in a landfill can be used. A better option is to reduce or eliminate disposable tableware, replacing it with real china, glasses and stainless steel knives, forks and spoons.

Reducing water and utility consumption takes a two-pronged approach: Turning off equipment, like ventilation systems, ovens and electrical appliances when not in use is one important approach that costs nothing and saves a lot. The second prong is the replacement of old, inefficient equipment with new units, such as dishwashing machines that use less water amid cooking equipment that requires less power.

A good resources for the improvement of a dining service's sustainability is the Green Restaurant Association, whose website, www.dinegreen.com, offers a comprehensive listing of steps any restaurant or on-sit dining service operator can take to improve its environmental standards.

The GRA also offers a Green Restaurant Certification program, similar to the LEED certification for buildings. There's no better way to show the campus community that you are doing your best for the planet than to gain this certification.

Bringing Healthy Meals and Sustainability to Food Service

2010-05-23T05:16:00.000-07:00

For far too long, the operators of company and campus dining services have focused on the popularity of the foods they offer, with no concern for their nutritional value," says Angela Phelan, senior vice president of Clarion Group. "Now it's time to reverse that trend. Customers are asking for better, healthier foods and expect their at-work or on-campus cafes will provide it."

Under the new federal health care legislation, all food service operators of 20 or more locations will be required to post calorie counts next to food items on their menus. The U.S. Department of Health and Human Services will determine whether more information will be required.

Operators also must make written data about dishes' nutritional content available to diners on request. The U.S. Food and Drung Administration is empowered to determine whether the information was developed "on a reasonable basis." The requirements will be expanded in the future, Ms Phelan predicts.

The increasing demand for healthier foods dovetails with the need to improve the sustainability of our environment, according to Ms Phelan. "The use of fresh, organic foods, grown locally, and efficient food preparation and operating practices are key elements of an effective sustainability program, she said.

Clarion Group's Fresh & Natural program may be a solution for companies and institutions seeking to improve the value of their on-site food services. The program was developed by Clarion Group under Ms Phelan's leadership to constructively respond to these issues for on-site food service operations. The program includes imaginative, nutritious meals prepared "from scratch" using fresh, locally-sourced ingredients; elimination of junk foods; promotion of nutrition information and education, complementing the company's or college's own wellness initiatives.

The Fresh & Natural approach includes enhancing sustainability and reducing operating costs by incorporating efficient operating practices; employing energy-efficient "Energy Star" equipment; conservation of utilities, water and energy, and waste reduction through recycling, pulping, composting and other ecologically-beneficial practices.

Fresh & Natural currently is in development or under discussion at three Clarion clients, Ms Phelan reports.

The Dining Center as an Oasis

2010-02-10T16:50:00.000-08:00

By Angela Phelan
Senior Vice President
Clarion Group

The business of hospitality, running a food service operation, rests on its core mandate: To offer good, healthy food to customers, whether they are students in a large university or the staff of a high-powered law or financial firm -- or to the very youngest customers trying to get through their day in fifth grade.

But hospitality connotes food and rest.

This central goal of providing good, healthy food costs time, money and above all, the good will of the team designated to run it. But note that I suggest food and rest. This is a novel concept. I rarely hear anyone talking about rest when discussing what food service has to offer its customers.

Interestingly, the only client I ever had that considered the rest that its dining service could offer to its customers was one of the Swiss banks who, from their main headquarters abroad carefully guided the U.S. designers in the art and science of caring for its employees. They insisted on a separate area for dessert and coffee, a few yards away from the main servery and seating area. Chairs are softer, lower, set around coffee tables (literally). The floors in that area are carpeted, the lighting lower.

The Swiss concept was that the downtime offered by dessert and coffee was a better way to transition back to work at a desk, telephone and any number of competing computer screens. This novel concept -- at least for the hard-charging Americans -- seemed almost quaint. To consider the psychological as well as the basic nutritional needs of employees (or students) was partically off the scale.

Restaurateurs, of course, are well aware that the time devoted to dessert and coffee can add many dollars to their bottom line. To be sure, one must make a choice between "turning the table" and the benefits of adding dollars to the check by selling the customer another hour's worth of food and drink. The downtime tends to enhance the customer's mood; tips are more generous.

Now we should consider the news reported in The New York Times recently. There is new data being assembled in some school districts in Texas and other states. Educators have discovered that simply by reversing the order of lunch with recess, the students were more relaxed, ate their meals more slowly, drank more milk or water and were generally in a better frame of mind to resume their classes and focus more readilly on their work.

This uptick in productivity, arrived at by such a simple and "old fashioned" notion of allowing students to take a full half-hour for lunch after their recess period was enormously revealing. All those time-and-motion studies designed to increase productivity have been turned on their heads by this simple, timeless notion. Let them rest before taking up the balance of their workday.

This could be an important way to give the employee a quiet time to "reset and recharge."

For those of us who design dining facilities for our clients, this is a very interesting and satisfying study. Americans traveling to Italy and France return with newfound respect for the leisurely meal, noting that the temperment of the diners appears to be more relaxed.

This is an extraordinarily difficult time in the world. Stress is the word on the lips of just about everyone over the age of seven: Too much homework, too much overtime, too much and too little of everything.

Serving the needs of one's employees, stressed as they are, requires some thought. Perhaps we should think about providing not only excellent food, but offering a quarter-hour of restful time before returning to work. Suppose we consider carpeting a quarter of the seating space, taking out the lunch tables and arranging some comfortable chairs and coffee tables. Sounds a little familiar? A little like your neighborhood Starbucks?

This could clear the dining area for others and subtly move them to the coffee and conversation area fo a little rest and recharge. A lawyer at one of our client firms, where we were in the throes of redesigning the cafe made this suggestion. Clearly, his travels abroad or a good deal of time in a Starbucks influenced his thinking.

So the firm created an "Oasis" for their associates, complete with foosball tables, a big coffee bar and some comfortable armchairs. It's actually on another floor from the cafe and it's a great success.

We would like to see the good will that could come from giving employees a restful, healthy break at lunch, encourage the R&R concept by moving some tables out and bringing in some comfortable chairs.

Do you have some room in your cafe or in an adjacent space? If you would like some help in putting it together, give us a call. Clarion can make it work.

After all, an Oasis shouldn't be a mirage.

Contact Angela Phelan at 973/544-6223 or e-mail us at info@clariongp.com.

PS: Do you have an arrangement like this that works for you? Write and let us know, either by leaving a comment or by e-mail to info@clariongp.com.

Survey Finds Opportunities for Campus Dining Services

2010-01-03T11:31:00.000-08:00

"On the whole, [college] students exhibit relatively erratic dining behavior and tend to include a fair amount of snacks in their diet each day," says Technomic, a consumer research company, in reporting the results of its 2009 survey of college students.

While this observation may not be news to college dining service managers, the details of Technomic's survey results are worth noting. Ignoring these data may result in reduced patronage and meal plan participation as students find more satisfying off-campus alternatives.

The survey confirms that today's students have a casual approach to meals and consider them occasions to be as much social occasions as necessary "refueling" activities. They want to eat, or at least nibble, whenever and where ever the mood strikes them, typically while studying, with friends in a social setting or in their dorms.

Some key findings reported by Technomic:

More than a third of men and 48% of women surveyed said they replace one or more meals per day with snacks.
Thirty-seven percent of respondents said they eat three meals a day and snack in between.
Fifty-one percent of men and 35% of women said they want later dining hours on campusand 32% of men and 22% of women would like to have campus delivery service.

"These findings, paired with the high importance students place on convenience, can lead to a number of opportunities for college dining programs," Technomic said.

Students have cars to reach off-campus eating spots and telephones to order from off-campus delis, Chinese restaurants and pizza parlors that deliver. They are providing services and conveniences that the campus dining service can offer and are taking in dollars that could be in the dining service's coffers.

Actions campus dining service operators can take to increase customer counts and revenue include:

Increase the choice of snack-type foods in the dining center, including packaged "grab-and-go" items.
Make meal plans more flexible to accomodate the new, more casual meal preferences.
Extend dining center hours.
Keep at least one campus coffee bar, deli or similar facility open into the wee hours, at least Monday through Thursaday and Sunday night. Only one or two attendants would be needed.
Offer snack options that reflect the tastes and preferences of the campus. Pizza isn't the only food students like.
Offer dorm delivery service at night. Weekend days also may be a profitable time to offer this service for those who don't feel like coming to the dining hall.
Adapt the meal plan so that meal cards can be used at any campus dining facility and to pay for deliveries.

Technomic surveyed 1,500 students who are "representative of the current college population as defined by the U.S. Department of Education, the firm said. Survey results were distributed to members by the National Association of College and University Food Services.

Viewpoint

2009-10-10T22:43:00.000-07:00

Adapting to Changing Times
Dining Insights, Fall 2009

The times they are a-changing
Bob Dylan wrote and sung that back in 1964 in a time of ferment and change. It would have been just as timely if he had introduced it in 2009.

At Clarion Group, we've been changing to keep up with - and get a step or two ahead of - the changes in the economy, in companies, on campuses and in life that have been going on around us, for the benefit of our clients.

Over the course of 2009, we have . . .

Redesigned our website, clariongp.com, to provide more information about campus and corporate dining and our organization's capabilities.

Launched this blog to provide a forum for everyone interested in on-site food services and opened new pages in Linkedin, Facebook and Plaxo.

Developed a Six Sigma-based system for operational and financial evaluations of dining services to more effectively analyze systems, services and financials and create imaginative, effective solutions.

Created the "Fresh & Natural" program to bring healthy and sustainable dining to campuses and companies.

Now we've taken a new, big step to broaden our horizons to encompass all the other facilitiees services that interact with dining services. These include conference and event services and management, space and servies reservation systems, audio/visual services and lodging.

Ernie Wilder, who managed all these services at the International Monetary Fund, has joine Clarion to add the expertise we need to effectively consult on these specialties - either as an integrated project covering all dining and facilities servicesor for the separate components.

We worked with Ernie at the IMF and know his capabilities and his potential to add value to clients' facilitiess services.

We're still focused on our traditional capabilities, including outsourcing, vendor negotiations and maagement, systems, operating systems, food quality and service improvements, feasibility studies, concept development and facility design.

What changes will come in 2010? Stay tuned.

- Tom Mac Dermott

Clarion Expands to Facilities Services Consulting

2009-09-06T08:11:00.000-07:00

Clarion Group has expanded the scope of its consulting practice to include facilities services in addition to dining services, Tom Mac Dermott, Clarion's president, has announced.

The firm has also added an office in Saint Augustine, FL to its existing offices in Kingston, NH and Maplewood, NJ.

Ernest W. Wilder, former Chief of Hospitality Services at the International Monetary Fund (IMF), has joined Clarion Group as vice president to lead consulting projects that encompass corporate and university/college support services.

"The addition of Ernie to our team expands the scope of our services to such areas related to dining servics as conference management, audio/visual services and lodging services," Tom said. "His unique experience as a manager of hospitality services and facilities provides our clients the opportunity to improve and integrate their food, meeting, lodging and other support services."

As Chief of the IMF's Hospitality Services, Ernie integrated management of the Fund's dining and catering services, conference and events management, audio/visual services and the IMF's 177-room hotel into a "one-stop shop" to support the highly specialized requirements of this multi-national organization.

Ernie joined the IMF in 1990 as a capital project manager after a 13-year career with several architectural and engineering firms. He later became Chief of Facilities and, in 1997, Chief of Hospitality Services.

He will head the Saint Augustine, FL office. Angela Phelan, Senior Vice President, heads the New York City metro area office in Maplewood, NJ. The firm's headquarters is in Kingston, NH.

Established in 1995, Clarion Group is a consulting firm that helps, companies, universities/colleges, schools and institution to improve operations, reduce costs and plan new facilities for their dining and facilities services.

2009-07-18T14:41:00.000-07:00

Viewpoint
The unseen financial side of the journey from farm to fork
Dining Insights, Summer 2009

The fate of CIT Group, the financial firm that supports some one million small and mid-sized businesses and isn't too big to fail, is still hanging in the balance as of this writing. But its misadventures brought to mind the little-known role similar companies, called "factors," play in getting food from the farm to your fork.

Farmers, both corporate and family, have nothing to sell, and no income, until harvest time. They get by on the profits from the last year's crop and loans, typically from banks, using their land and equipment as security. Food processors, the companies that make sausages and corn flakes, have year 'round income from a steady flow of products.

But what about the folks in the middle, the distributors who deliver the products to your kitchen? They sell to you or your food service contractor on credit. At the end of the month, they send a statement and get paid, hopefully within 30 days. But 30 days end-of-month is 60 days from the first delivery. They have to pay cash on delivery for the products they buy to resell to you and, in some cases, even before their supplier will ship to them.

How do they meet their payrolls, pay overhead costs and buy more products in the meantime? Enter the factor.

When your cafe manager signs for a delivery, the invoice is sold to a factor for immediate cash, usually about 80% of face value. When you pay the invoice, the factor pays the balance to the distributor, minus its fee. The later you pay the bill, the less the distributor receives.

The factor, in turn, borrows from banks and other sources to keep up its cash flow, so it can keep sending that 80% to your distributor. (That's where CIT ran into trouble. Its lenders stopped lending.)

Complications arise along the financial chain when more customers pay late, or don't pay at all. The cost is passed back up the chain, ending up in higher prices to you.

So, when you pay the cashier for lunch in the cafe today, you're not only paying for the food and the labor of the farmer, trucker, chef and other folks who brought you the meal, you're also paying for the complex web of financing that lubricates the whole system.

When Will Happy Days Be Here Again?

2009-06-11T05:19:00.000-07:00

Happy days are here again, the skies above are blue again . . .

That was Al Smith's campaign song when he ran for president in 1928. He lost to Herbert Hoover and happy days departed for quite a while.

When will we see happy days again? Not for some time, I fear - at least three and maybe five years before we get back to a reasonable level of prosperity and probably eight to 10 years before our next burst of irrational exuberance.

Now, my advanced economics degree is a masters in hard knocks (I'm working on my doctorate) at the University of Trial and Error, but I've been in business through every boom and bust since the 1960s. That's taught me a few things that the academics and professional economists won't get from their computer models.

The wise seers are saying the stock market or the housing market or unemployment "appears to be near or reached a bottom." That's the good news. Well, the Titanic reached bottom too.

During each boom and bubble, the promotors of the stock market or the dot-coms or subprime mortgages were saying "this time it's different," meaning prosperity will now grow forever.

It appears this time it really is different. The entire structure of the financial world has shrunk and altered and is now a virtual ward of the government. Two of our largest manufacturing (and job-generating) companies have just collapsed into bankruptcy. The entire auto market has shrunk by about 40% from a peak of 12 million cars a year to seven million, debilitating their entire chain of suppliers and the suppliers' suppliers and all the businesses that depend on them. Unemployment has passed the three million mark, over 9% of the workforce, and is expected to reach 10%.

The optimists say the lost jobs in automotive and other industries will be replaced by new, better "green" jobs, like making windmills and solar panels. Is it realistic to believe we'll be churning out 10 to 12 million windmills a year? And be doing it by next year?

Folks who don't have jobs, or have had their pay cut, are not likely to generate a consumer spending-led recovery - or pay much in taxes to support the government's stimulus efforts. Neither will companies that are not making profits.

So, how will the economy turn around? New growth is likely to come from innovations, probably in the high tech arena. But that, like solar panel manufacturing, will take a few years before it can have a significant effect on the economy or generate new jobs. And jobs, at wages that support a family, are the key to recovery.

We'll climb out of this hole, but slowly, with the initial stages suported by the government's stimulus spending, then by new innovations and/or by some other causes, including recovery in other parts of the world, that are not apparent now.

When we get there, our economics and our world will be different and will depend in large part on the size, shape and health of the financial sector. It will surely be a while before credit flows smoothly again - to us through our credit cards and mortgages and to busines for new plant, equipment and expansion. And jobs will have to await the regrowth of business.

As happens after every good party, we'll have a collective hangover: stupendous federal debt and unfunded or underfunded Social Security, Medicare and other programs. Hopefully, we won't face a new, or continued, war.

The need to get the government's fiscal house back in order will dominate everything. How? that's 'way beyond my ability to foresee. But it will have to be done, and sooner rather than later. The hard decisions have been postponed for too long to be ignored now.

So, as individuals, we'll have to tighen up (which won't help the economy but is necessary for survival) and sweat it out.

At your job, I hope you're thinking about and planning new ways to grow, through innovative, new products and services that add real value, so that people and companies will want to buy and invest and get the happy days rolling again.

- Tom Mac Dermott

Fresh & Natural: Clarion's New Plan for Healthy Dining

2009-06-09T17:40:00.000-07:00

Dining Insights, Spring 2009

Twenty years ago, college students' favorite meals included fruit and cottage cheese plates, chicken nuggets and chicken chop suey. Today, it's locally-grown fruits and vegetables, crispy garlic-ginger chicken wings and Vietnamese Pho, according to research by national food service contractor Sodexo.

"The biggest change we've seen is in the demand for locally-grown produce and authentic international cuisine that's made to order," says Chef Rob Morasco, Sodexo's senior director of culinary support in the education market.

The idea that healthy dining, combined with their other wellness initiatives, can help employees become more productive has penetrated the corporate world as well.

In 2008, Clarion was asked by a large corporate client to develop a program that "offers menu variety and nutritional food choices that [are] fundamental components of any best-in-class wellness initiative."

The project was the genesis of our new Fresh & Natural approach to planning on-site dining operations. We began with the premise that healthy food promotes healthy people and that healthy people work or study more productively, enjoy life more fully and find their connection to their campus or employer more enjoyable. While a healthy eating program by itself won't guarantee a healthier population, science has shown that when a third or more of daily caloric intake is in unhealthy calories, there is a significant negative impact on the individual.

Fresh & Natural incorporates elements of the Mediterranean Diet, based primarily on vegetables, fruits, fish and meat. We adapt each specific menu to the tastes, customs and preferences of the group for whom we plan the program.

It includes:

Developing and implementing imaginative, nutritious meals, prepared from "scratch" using fresh ingredients, locally sourced as possible.
Eliminating or minimizing junk food.
Using organic and hormone-free foods to the extent practical.
Providing nutrition information and education.
Reinforcing your initiatives to encourage wellness and a healthy lifestyle.

$1.65 for a Dollar

Highmark Blue Cross Blue Shield in western Pennsylvania studied worksite healthy foods and wellness initiatives at companies with a total of 12,000 employees. They said they found a savings of $1.65 for every $1.00 spent on the programs, FoodService Director, an industry magazine reports.

Dining Ini

Sustainability and Food Service

2009-05-03T07:00:00.000-07:00

Sustainability in all its many iterations has been embraced enthusiastically by nearly all, if not all, university, college and school communities. It's been less obviously adopted in the corporate world, if only because companies don't have students eager to promote the concept and practice.

In addition to its ecological benefits, sustainability has the potential to reduce costs for those who adopt its procedures. Energy-conserving equipment, utility-usage reduction, more efficient work practices and waste control are all good business, no matter what business you're in.

We're exploring the expanding and evolving world of sustainability and introduced our new "Fresh & Natural" approach to green, healthy dining in the Spring issue of Dining Insights. There also are articles about attracting and retaining customers and other topics involving the world of employee and student dining.

If you don't receive Dining Insights, you can join the 3,000-plus managers, administrators and executives who learn about the workings of on-site food service, outsourcing or "insourcing" their food services, dealing with food service contractors and more.

Just e-mail your name, title and mailing address to info@clariongp.com. We'll be glad to hear from you.

Tom Mac Dermott, FCSI
Clarion Group
www.clariongp.com

Thinking out loud . . .

2009-03-01T06:46:00.000-08:00

Are contractors' investments still available?

What with companies, colleges, universities and institutions feeling the pinch of the recession, it's unlikely that food service contractors are faring any better. Every layoff or company closing means less revenue and profit for their food service operator. So, are the contractors still in the mood to provide big investments to current and prospective clients?

Just a short while ago, that would be a silly question. Unable to really differentiate themselves from each other, the "Big Three" contractors, Aramark Corp., Compass Group and Soxexo, Inc., lavished money on clients and prospects in exchange for long-term contracts. Smaller regional companies found they had to offer investments as well, just to stay in the game. Local operators were pretty much shut out, except in instances where the investment was small, or no investment was needed.

How big can investments be? In 2006, a Big Three contractor committed more than $3 million to secure a contract with a large company. The contractor has to amortize the investment over six years, meaning it has to earn $500,000 (about 7% to 9% of total revenue) above operating expenses each year before it can turn a profit -- which may be tough to do in 2009.

That kind of largess may not be available today.

What has been your experience with contractor investments? Let us know, and we'll post your comments right here.

Tom Mac Dermott
Clarion Group

2009-01-11T19:03:00.000-08:00

Trends
Ecology, Economy Shape On-Site Dining in 2009
But culinary trends, innovations have their place in the new year
Dining Insights, Winter 2009

Layoffs and uncertainty among customers are having an effect on corporate dining services and, to a lesser extent, on campus operations as well.

But all is not gloom and doom. While the recession has focused operators' minds on ways to reduce costs and avoid loss of customers and sales, industry experts see some bright spots in the year ahead. Some trends are in health, nutrition and ecological areas, while new food, taste and preparation trends are emerging.

Making Lemonade

If customers are reducing purchases and bringing food from home -- a trend that began several years ago and shows no sign of relenting -- operators are looking for ways to capture the available dollars. "Value" is the buzzword for accomplishing this.

"To be successful during the present economic downturn and prepare for an eventual recovery, restaurant operators are offering the value customers desire in conjunction with operational improvements that cut costs, without detracting from the dining experience," The National Restaurant Assn. says on its website. The comment applies equally to in-house dining services.

Five dollars (or $4.99) seems to be the magic number in defining "value meals." At Chrysler auto plants, which have seen major layoffs, operator Aramark Corp. "is trying to adjust to economic realities [with] more budget items, such as a meal and a drink for $4.99," company liaison Len Bonner told FoodService Director. A Clarion client that introduced a substantial price incrase in the fall and saw a 25% drop in customer counts is offering a $5.00 daily special to lure back the defectors. Subway, Boston Market and Pizza Hut are offering $5.00 meals, according to Mintel Menu Insights, a market research firm, Food Institute Reports says.

Bold New Flavors

"In the'80s and '90s, we took flavor out of foods to make it low-fat," Nick Carmody, vice president of Parkhurst Dining Services, Pittsburgh, told FSD. "Now, we're putting it back with herbs, spices and oils. The menu mix . . . has lots of vegetables and plant-based foods that allow you to give a lot at value prices."

A concept called "stealth health" has been developed by the Culinary Institute of America, according to Dr. Tim Ryan, president. More ingredients and flavors from Asia, Latin America and the Mediterranean that deliver on both taste and health" are incorporated, he said. "These bold flavors offer both health and increased satiety, so we think the trend will only grow in strength."

"Smoking is the new frying," says Epicurious.com. "Expect to see comfort food stage a comeback."

Eco/Healthy Trends

"In 2009, we will see healthier menu options with an emphasis on produce and fruit, smaller dishes and fish, and an increase in . . . local and sustainable ingredients," the National Restaurant Assn. said in releasing an October 2008 survey of chefs. "Menus will continue to expand options for health-conscious diners.

"The hottest trends in culinary themes include nutrition/health . . . umami (the fifth taste [actually, MSG] and the slow food movement," the NRA reported. "In preparation techniques, braising tops the list, followed by smoking and sous vide."

The issue of disposable dishes, utensils and containers is being addressed with some new, innovative products that help resolve the problem of overflowing landfills. Vegeware, a fiber-based line of disposable tableware that breaks down naturally, manufactured in Scotland, is being introduced to the U.S. Reverte, a bio-degradable beverage bottle, also is being introduced by Planet Green Bottle Corp. and Northland International.