Showing posts with label new food service ideas. Show all posts
Showing posts with label new food service ideas. Show all posts
Saturday, January 19, 2019
Minimum Wage Myths and Realities
Minimum Wage Myths and Realities
January 19, 2019
Twenty-nine states and some cities have minimum hourly wage rates above the federal $7.25 minimum. Twenty states are raising their minimums again in 2019; some already are at the $15.00 widely-proclaimed living wage; other minimums are raised to $12.00 as part of annual step-ups to $15.00 by 2023.
Some minimum wage increase advocates say a person working full-time at the minimum wage should be able to support a family. At $15.00 an hour, a full-time worker would earn $31,200 a year. At $12.00, it would be $24,960.
According to the U.S. Department of Health and Human Services (www.healthcare.gov), the current “poverty line” for a family of three is $20,780; for a family of four, $25,100 and for five (mom, dad, three kids), $30,170.
Could a family of three to five people survive, let alone thrive, on $25,000 to $31,000 in New York, Chicago, Los Angeles or any other major metropolitan area?
However well-intentioned, the minimum wage increase is – and has been since it went up from 75 cents to a dollar in 1954 – a temporary bandaid. Necessary for folks at the bottom of the ladder, but still a short-lived benefit.
When the minimum wage increases, it has a ripple effect upwards, at least for the next four or five wage levels. Since labor cost is a component of a company’s, a college’s, a non-profit’s and a government’s total costs, prices, tuition and institutional and government revenues must rise to cover higher costs – or organizations must be willing to absorb reduced profits or even losses – or take other steps to compensate for higher labor costs.
As these steps are taken, up the line from the local shop to the giant corporation, there are two effects: prices rise and organizations, especially businesses, strive to increase productivity – achieve the same -- or higher -- output with fewer labor hours.
Rising prices is the definition of inflation, eroding the value of the higher minimum wage until, in three or so years, it’s time to raise the minimum again. That’s been going on since the federal minimum wage law went into effect in 1938 at 25 cents an hour, $10.00 a week. (As a point of reference, my grandfather was a trolley car driver in Brooklyn in the late 1800s-early 1900s for $7.00 a week. Thirty years later, $10.00 wasn’t much of an advance)
The other effect of rising labor costs is increased automation, driving up productivity but reducing work opportunities for the less-skilled people at the bottom of the ladder, those the minimum wage increase was intended to benefit.
Nothing I’ve said here is a novel insight; it’s been said over and over every time the topic of increasing the minimum wage comes up. The problem is the stance of the two sides: The proponents talk persuasively about the needs of people to earn a decent living; the opponents warn persuasively about the costs – high prices, fewer jobs for the un- and marginally-skilled worker.
Both are more-or-less right. Higher wages help poor people. Higher costs force prices up and/or efficiencies that reduce the need for labor. Since nothing is done to adjust cause and effect, the cycle starts up again.
If the cost of the basics of life – food, clothing, shelter and an internet connection – somehow stays flat or rises less than the minimum wage rises, it’s likely the increased wage would provide a greater benefit to more people and last longer. If more and more people emerge above the poverty line, however it’s defined, the benefit to the nation as a whole would be enormous.
Imagine what it would be like if the poorest people in the country had enough to eat, decent clothes, a non-leaky roof and an electronic link to the rest of the world (and of course, a good education) so they could climb from the bottom rungs up a few so the next cohort filling in below also could climb the ladder, following upward behind them -- paying higher taxes on increasing income, reducing the need for government aid and contributing to the nation's well-being.
How could that happen? It would take a collection of wiser heads than mine, especially heads attached to the movers and shakers of government, labor, social movements and business – the people with most skin in the game – to put aside their self-interests to work it out.
Could that, would that ever, happen? I hope so. It’s the only answer I can see.
- Tom Mac Dermott
You can receive Clarion Group's newsletter, Dining Insights, in your postal mail box or via e-mail. Send your contact info to us at info@clariongp.com. To learn about the services we offer, visit our website, www.clariongp.com or call Tom Mac Dermott, 603/642-8011 or Ted Mayer, 617/875-7882.
Thursday, June 5, 2014
Ensure Your Food Service Operating Contract Protects Your Interests
The managers of corporate and campus food services and related hospitality services often make a mistake when they outsource these services by accepting the vendor’s "standard contract." Based on our experience, we recommend that you don’t accept this contract. It’s one-sided and not in your favor.
This isn’t the same situation as renting a car or buying a computer program where your options are take it or leave it. A food service contract, worth from several hundred thousand to many millions of dollars in sales, is much more important to the vendor than an individual customer is to a car rental company.
When we’re helping a Clarion Group client select a food service operator, we turn the tables and present the vendor with our "standard contract." We draft the contract in collaboration with our client’s attorney to ensure it’s fair to the vendor, but clearly delineates the vendor’s responsibilities and fully protects our client’s interests.
We’ve developed our contract format over two decades of food service consulting and adapt it to each client’s specific circumstances. Then we negotiate the final terms and conditions with the vendor, with our client’s participation and final approval.
Food service operating agreements used to be simple two- or three-page documents, but changing times and circumstances in the food service industry, government regulations and other factors have dictated that these agreements be much more detailed.
Important points to be included in a food service management contract, often omitted in the contractor’s proposed form:
To learn how Clarion Group can ensure the operating agreement with your current or future food service contractor can be both fair to both you and the operator and fully protect your interests, contact us at info@clariongp.com or call Tom Mac Dermott, president, at 603/642-8011.
This isn’t the same situation as renting a car or buying a computer program where your options are take it or leave it. A food service contract, worth from several hundred thousand to many millions of dollars in sales, is much more important to the vendor than an individual customer is to a car rental company.
When we’re helping a Clarion Group client select a food service operator, we turn the tables and present the vendor with our "standard contract." We draft the contract in collaboration with our client’s attorney to ensure it’s fair to the vendor, but clearly delineates the vendor’s responsibilities and fully protects our client’s interests.
We’ve developed our contract format over two decades of food service consulting and adapt it to each client’s specific circumstances. Then we negotiate the final terms and conditions with the vendor, with our client’s participation and final approval.
Food service operating agreements used to be simple two- or three-page documents, but changing times and circumstances in the food service industry, government regulations and other factors have dictated that these agreements be much more detailed.
Important points to be included in a food service management contract, often omitted in the contractor’s proposed form:
- The vendor’s responsibilities should be clearly defined and the vendor should agree to perform its services to a high standard, defined as clearly as possible.
- The vendor should be an independent contractor, solely responsible for its employees and for its actions and not able to act as an agent for the client company. (If the vendor makes purchases or other commitments as the client’s agent, the client can be held liable for the vendor’s unpaid debts or other commitments.)
- The vendor has sole responsibility for the food it serves, from the farm field to the diner’s plate. Its program for ensuring the food it serves is wholesome, healthy and safe for consumption should be clearly described in the operating contract.
- Financial terms should be unambiguous, including the contractor’s responsibility for producing accurate operating statements promptly and providing satisfactory supporting material for its claims for reimbursement of costs. A contractor can produce financial statements within 10 days of an accounting period’s end date.
- Contractors receive rebate payments from their vendors, which they keep as additional income and do not disclose to clients. We have negotiated for our clients to receive a share of these rebates.
- The contract should be enforceable in your home state, not the vendor’s.
To learn how Clarion Group can ensure the operating agreement with your current or future food service contractor can be both fair to both you and the operator and fully protect your interests, contact us at info@clariongp.com or call Tom Mac Dermott, president, at 603/642-8011.
Monday, April 14, 2014
Latest Dining Insights Issue Published
The Spring issue of Dining Insights is at the printer and ready to go, featuring . . .
Trends to watch, from sales and food cost to distributor mergers, technology and greener greenness.
Proposed OT regs will hit food services, changing the rules for lower-paid managers.
Fresh, local foods, how they get from farm to your fork.
Miss Dancing Waters' diamond toenail and your food service vendor.
. . . and more
For the current issue and a complimentary subscription, send your name, position and address for the paper edition or your name, position and e-mail address for the electronic edition to: info@clariongp.com
Trends to watch, from sales and food cost to distributor mergers, technology and greener greenness.
Proposed OT regs will hit food services, changing the rules for lower-paid managers.
Fresh, local foods, how they get from farm to your fork.
Miss Dancing Waters' diamond toenail and your food service vendor.
. . . and more
For the current issue and a complimentary subscription, send your name, position and address for the paper edition or your name, position and e-mail address for the electronic edition to: info@clariongp.com
Sunday, December 1, 2013
How to Increase Sales and Profits in Corporate Food Service
The signs are pointing upward for corporate food services, according to two recent surveys of the industry, but not for everyone. The story’s a little different at every company.
Overall, customer counts and the average sales per customers increased in 2012, compared to 2009 at the depth of the recession, according to the 2013 Industry Standards and Benchmark Comparison study conduced by the Society for Hospitality and Foodservice Management. The study found customer counts increased by10.6% and customers were spending 16.5% more for breakfast and 9% more for lunch than in 2009.
The unevenness of the improvement is illustrated in the findings of a separate survey by FoodService Director magazine, where 59% of corporate food service operators reported a 10% increase in sales this year over last, but 29% reported a 10% decrease in sales.
The results reflected the findings of a survey of corporate food service managers conducted earlier in the year by Clarion Group and Food Management magazine, where half of respondents reported sales increased by 5% or more in 2012 over 2011. The other half said sales were flat or declined.
Corporate food service operators have to work harder to achieve these favorable results. Increased employment and price increases alone won’t do it. Operators have to do more to entice recession-conditioned customers back to purchasing their meals in the company café. Every survey on the subject says people are more attuned to the value of their purchases than to just price.
Here are a few suggestions corporate food service operators can use to increase sales and the bottom line:
• Sell the sizzle. Active marketing and promotions via the company intranet, posters and fliers can emphasize periodic "specials." They needn’t be reduced prices, just greater perceived value.
• Special events, promoting a holiday or a new food offering every few weeks will help bring in customers who usually go out for lunch or bring their own to work. If you get them once, you may be able to convert them to regulars.
• Make good use of social media to promote the café. A small restaurant chain in California is using an app to communicate with customers in its limited territory. The same would work for a corporate food service operation.
• A visiting chef from a popular local restaurant almost always attracts a bigger crowd. You can keep them coming by offering your version of the restaurant’s most popular dishes on succeeding days.
• An "action station" where a chef prepares meals to order at the counter as the customer watches is the surest way to convey "fresh" and "healthy" to you customers.
Above all make sure the food you offer is good, service is warm, friendly and prompt and the café is clean and attractive. Combine all these elements and sales and profitability are bound to rise.
About Clarion Group
Clarion Group is an 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
Overall, customer counts and the average sales per customers increased in 2012, compared to 2009 at the depth of the recession, according to the 2013 Industry Standards and Benchmark Comparison study conduced by the Society for Hospitality and Foodservice Management. The study found customer counts increased by10.6% and customers were spending 16.5% more for breakfast and 9% more for lunch than in 2009.
The unevenness of the improvement is illustrated in the findings of a separate survey by FoodService Director magazine, where 59% of corporate food service operators reported a 10% increase in sales this year over last, but 29% reported a 10% decrease in sales.
The results reflected the findings of a survey of corporate food service managers conducted earlier in the year by Clarion Group and Food Management magazine, where half of respondents reported sales increased by 5% or more in 2012 over 2011. The other half said sales were flat or declined.
Corporate food service operators have to work harder to achieve these favorable results. Increased employment and price increases alone won’t do it. Operators have to do more to entice recession-conditioned customers back to purchasing their meals in the company café. Every survey on the subject says people are more attuned to the value of their purchases than to just price.
Here are a few suggestions corporate food service operators can use to increase sales and the bottom line:
• Sell the sizzle. Active marketing and promotions via the company intranet, posters and fliers can emphasize periodic "specials." They needn’t be reduced prices, just greater perceived value.
• Special events, promoting a holiday or a new food offering every few weeks will help bring in customers who usually go out for lunch or bring their own to work. If you get them once, you may be able to convert them to regulars.
• Make good use of social media to promote the café. A small restaurant chain in California is using an app to communicate with customers in its limited territory. The same would work for a corporate food service operation.
• A visiting chef from a popular local restaurant almost always attracts a bigger crowd. You can keep them coming by offering your version of the restaurant’s most popular dishes on succeeding days.
• An "action station" where a chef prepares meals to order at the counter as the customer watches is the surest way to convey "fresh" and "healthy" to you customers.
Above all make sure the food you offer is good, service is warm, friendly and prompt and the café is clean and attractive. Combine all these elements and sales and profitability are bound to rise.
About Clarion Group
Clarion Group is an 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
Tuesday, October 15, 2013
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,
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,
Tuesday, July 9, 2013
College Food Services Face New Challenge
By Clarion Group Food Service Consultants
www.clariongp.com
College food service operators are finding a new competitor for their voluntary meal plans. In addition to the usual off-campus restaurants, fast food, pizza and deli outlets, there now are a growing number of off-campus student residences, some of which have an in-house dining operation.
"Student housing development has remained robust [and] continues to boom, and analysts predict growth in the coming years," The New York Timers reported recently. The growth in off-campus housing has appeared in such diverse place as Columbia, MO, home to the University of Missouri, and Manchester, NH.
In Columbia, private developers have opened student residences with more than 3,800 beds since 2011 with more under construction, the Times reports. In Manchester, NH, a developer is building a residence for students of the local campuses of the University of New Hampshire, Southern New Hampshire University, Saint Anselm College and Hesser College.
The dining service operator at one large eastern university faces a special dilemma – a developer is building a new residence and dining hall on campus and plans to use a separate food service contractor. The new dining center is likely to lure some student meal plan members from the main campus food service, Mac Dermott notes.
At a college that is struggling to keep its on-campus residence halls full, the off-campus competitor, such as the ones in Columbia and Manchester, can be a challenge.
The University of Missouri in Columbia, with an enrollment of 35,000, probably doesn’t need to worry too much about off-campus competition. But the option of living near but off campus may lure some students away from the dorms and meal plans of the nearby, much smaller Columbia and Stevens Colleges.
The colleges in and near Manchester may feel a pinch when the new private residence hall opens there next year.
College food service operators have a few weapons to meet the new competition. The off-campus food service facility isn’t convenient when the student on campus. The food service can actively promote its commuter meal plan or a low-cost "block-meal" plan – a plan proving a fixed number of meals per semester – to capture some of the optional dollars.
The college food service also can extend its meal plan to incorporate some local restaurants, a popular option at some campuses. While this type of plan does drain some revenue from the on-campus food services, it has proven valuable in attracting participants to a meal plan.
A good example is Iona College in New Rochelle, NY. The all-declining balance meal plan includes an allowance for spending at local restaurants in addition to the four on-campus food service locations, but the service is still profitable for the operator and the college.
But the most important element in competing with the off-campus residence operator and it food services is having a really good, imaginative and responsive operation that will attract students on its merits.
Clarion Group can help your campus dining service meet its long-standing and new challenges. For information, contact Tom Mac Dermott, president, 603/642-8011, or Angela Phelan, senior vice president, 201/305-8653, or Ernie Wilder, 703/282-4040, or e-mail us at info@clariongp.com.
Visit our website, www.clariongp.com
www.clariongp.com
College food service operators are finding a new competitor for their voluntary meal plans. In addition to the usual off-campus restaurants, fast food, pizza and deli outlets, there now are a growing number of off-campus student residences, some of which have an in-house dining operation.
"Student housing development has remained robust [and] continues to boom, and analysts predict growth in the coming years," The New York Timers reported recently. The growth in off-campus housing has appeared in such diverse place as Columbia, MO, home to the University of Missouri, and Manchester, NH.
In Columbia, private developers have opened student residences with more than 3,800 beds since 2011 with more under construction, the Times reports. In Manchester, NH, a developer is building a residence for students of the local campuses of the University of New Hampshire, Southern New Hampshire University, Saint Anselm College and Hesser College.
The dining service operator at one large eastern university faces a special dilemma – a developer is building a new residence and dining hall on campus and plans to use a separate food service contractor. The new dining center is likely to lure some student meal plan members from the main campus food service, Mac Dermott notes.
At a college that is struggling to keep its on-campus residence halls full, the off-campus competitor, such as the ones in Columbia and Manchester, can be a challenge.
The University of Missouri in Columbia, with an enrollment of 35,000, probably doesn’t need to worry too much about off-campus competition. But the option of living near but off campus may lure some students away from the dorms and meal plans of the nearby, much smaller Columbia and Stevens Colleges.
The colleges in and near Manchester may feel a pinch when the new private residence hall opens there next year.
College food service operators have a few weapons to meet the new competition. The off-campus food service facility isn’t convenient when the student on campus. The food service can actively promote its commuter meal plan or a low-cost "block-meal" plan – a plan proving a fixed number of meals per semester – to capture some of the optional dollars.
The college food service also can extend its meal plan to incorporate some local restaurants, a popular option at some campuses. While this type of plan does drain some revenue from the on-campus food services, it has proven valuable in attracting participants to a meal plan.
A good example is Iona College in New Rochelle, NY. The all-declining balance meal plan includes an allowance for spending at local restaurants in addition to the four on-campus food service locations, but the service is still profitable for the operator and the college.
But the most important element in competing with the off-campus residence operator and it food services is having a really good, imaginative and responsive operation that will attract students on its merits.
Clarion Group can help your campus dining service meet its long-standing and new challenges. For information, contact Tom Mac Dermott, president, 603/642-8011, or Angela Phelan, senior vice president, 201/305-8653, or Ernie Wilder, 703/282-4040, or e-mail us at info@clariongp.com.
Visit our website, www.clariongp.com
Sunday, June 2, 2013
Corporate Food Service: A Benefit or a Convenience?
Companies that once considered low cost meals an employee benefit sometimes now are revising their attitude and thinking of food service as a convenience that should be self-sustaining.
The conversion can be tricky because it inevitably means higher prices and maybe fewer services when the food service has to pay its own way. In working with corporate clients, Clarion Group consultants have seen the conversions completed with minimal disruption and customer acceptance – and disastrously.
The worst way to convert from subsidized to "P&L" (the operator has the risk of profit-or-loss) is all at once. Customers come in one morning and the price of everything is higher.
In one instance we witnessed, customers in a central city corporate headquarters almost completely boycotted the food service. Sales dropped by two-thirds overnight when prices were increased by 20%. Nobody protested, they just began bringing their own meals to work or went out to the dozen or so nearby restaurants, delis and fast food outlets.
The losses were so severe that within a month, the food service operator was threatening to terminate its contract. Two months later, a new operator was in place. Clarion prepared the Request for Proposals and managed the selection process.
The new food service contractor had some advantages. The dirty work – price increases and service reductions – had been done by the predecessor. The new operator gave the café a modest facelift, restored some services, introduced a new menu and rejuvenated what had been a mediocre operation into a model food service program.
Customers returned and sales rose to their former level, although prices hadn’t been reduced; they saw greater value in the new operation and meals offered for the prices.
The most effective way to eliminate or reduce the subsidy is gradually. In cooperation with the food service contractor, a conversion can be made gradually, over a period of two years with minimal, or no, customer backlash.
Companies use long-range planning for the management of their businesses, development of new products or services, advertising and marketing, equipment purchases and the like. They should do the same when they want to eliminate the food service subsidy.
When you want to shift the burden of profit or loss in your company's or organization's food services, we can help plan a successful conversion. For information, contact Tom Mac Dermott, president, 603/642-8011, or Angela Phelan, senior vice president, 201/306-8613 or Ernie Wilder, vice president, 703/282-4040, or e-mail us at info@clariongp.com. Visit our website, www.clariongp.com.
The conversion can be tricky because it inevitably means higher prices and maybe fewer services when the food service has to pay its own way. In working with corporate clients, Clarion Group consultants have seen the conversions completed with minimal disruption and customer acceptance – and disastrously.
The worst way to convert from subsidized to "P&L" (the operator has the risk of profit-or-loss) is all at once. Customers come in one morning and the price of everything is higher.
In one instance we witnessed, customers in a central city corporate headquarters almost completely boycotted the food service. Sales dropped by two-thirds overnight when prices were increased by 20%. Nobody protested, they just began bringing their own meals to work or went out to the dozen or so nearby restaurants, delis and fast food outlets.
The losses were so severe that within a month, the food service operator was threatening to terminate its contract. Two months later, a new operator was in place. Clarion prepared the Request for Proposals and managed the selection process.
The new food service contractor had some advantages. The dirty work – price increases and service reductions – had been done by the predecessor. The new operator gave the café a modest facelift, restored some services, introduced a new menu and rejuvenated what had been a mediocre operation into a model food service program.
Customers returned and sales rose to their former level, although prices hadn’t been reduced; they saw greater value in the new operation and meals offered for the prices.
The most effective way to eliminate or reduce the subsidy is gradually. In cooperation with the food service contractor, a conversion can be made gradually, over a period of two years with minimal, or no, customer backlash.
Companies use long-range planning for the management of their businesses, development of new products or services, advertising and marketing, equipment purchases and the like. They should do the same when they want to eliminate the food service subsidy.
When you want to shift the burden of profit or loss in your company's or organization's food services, we can help plan a successful conversion. For information, contact Tom Mac Dermott, president, 603/642-8011, or Angela Phelan, senior vice president, 201/306-8613 or Ernie Wilder, vice president, 703/282-4040, or e-mail us at info@clariongp.com. Visit our website, www.clariongp.com.
News from Clarion Group Food Service Consultants
The Spring issue of Clarion Group's newsletter is published. Articles include:
Corporate food service operators see improvements in sales.
The coming health care law may not bite too hard.
What do food service customers want? "Food quality" tops the list.
.. . and much more.
To obtain your copy and a complimentary subscription send your contact info (mailing address or e-mail address) to info@clariongp.com
Corporate food service operators see improvements in sales.
The coming health care law may not bite too hard.
What do food service customers want? "Food quality" tops the list.
.. . and much more.
To obtain your copy and a complimentary subscription send your contact info (mailing address or e-mail address) to info@clariongp.com
Tuesday, January 29, 2013
Food Service Operators Face Diminishing Customer Base
Food service contractors and employed operators of corporate food services may face further diminishment of their customer bases in 2013.
As rapidly-advancing technology has disrupted other industries, it is now food service management's turn. Corporate food service operators have to rethink their business models to stay relevant in this new environment.
In addition to the slow economic recovery, companies now have new ways to outsource even highly skilled work to freelance workers all over the world, reducing the need for -- and cost of -- on-site employees. Of course, fewer employees on-site means fewer food service customers.
"A third generation sourcing system . . . the 'human cloud,' is centered on an online middleman that engages a pool of virtual workers that can be tapped on demand to provide a wide range of services to any interested buyer," according to Evgeny Kaganer, an assistant professor at the University of Navarra in Barcelona, Spain, writing in MIT Sloan Management Review.
The commercial real estate market also provides a gloomy clue to the pace of corporate hiring. "U.S. businesses took on new office space at a sluggish pace in the fourth quarter [of 2012] as employers remained cautious about adding jobs," The Wall Street Jouranl reported.
The impact of the sharp and still evolving change in the way businesses operate has an impact on both the food service operator and the company it serves. Formerly profitable food services may become unprofitable for the operator, and the company may find it has a choice of either subsidizing its employee food services or reducing their scope.
Solutions will vary from company to company, but all will involve the way the food service operator looks at, and manages the business. Companies will have to cooperate with their food service operators as they both adapt to the new reality.
Some potential solutions:
Companies with multiple buildings on a large campus might close food service outlets in all but the highest-population buildings (about 1,000 employees). The other buildings could be serviced by the type of food truck that has become popular on college campuses.
At small sites (500 employees) a mini-cafe, supported by an off-site commissary could be practical.
Companies that find their food service has light breakfast business could close the employee cafe in the morning and replace it with a kiosk near the main employee entrance, serving coffee, cold beverages, muffins and the like. The kiosk could remain open through mid-morning to serve employees who want a morning snack. The cafe would be open only for lunch and maybe afternoon snack business.
Vending operators and some of the major contractors have begun installing "micromarkets," a c-store type, compact facility with no attendant. The customer selects foods and beverages from refrigerated display cases and shelves and pays for the purchases at a self-checkout kiosk -- the sort of "reverse ATM" now common at Home Depot and some supermarkets. This option only works in a closed environment with a small population, about 250 employees.
Changes in the way employee food services are provided are inevitable. Operators will have tto use technology to counteract the changes technology is forcing on their traditional ways of doing business.
As rapidly-advancing technology has disrupted other industries, it is now food service management's turn. Corporate food service operators have to rethink their business models to stay relevant in this new environment.
In addition to the slow economic recovery, companies now have new ways to outsource even highly skilled work to freelance workers all over the world, reducing the need for -- and cost of -- on-site employees. Of course, fewer employees on-site means fewer food service customers.
"A third generation sourcing system . . . the 'human cloud,' is centered on an online middleman that engages a pool of virtual workers that can be tapped on demand to provide a wide range of services to any interested buyer," according to Evgeny Kaganer, an assistant professor at the University of Navarra in Barcelona, Spain, writing in MIT Sloan Management Review.
The commercial real estate market also provides a gloomy clue to the pace of corporate hiring. "U.S. businesses took on new office space at a sluggish pace in the fourth quarter [of 2012] as employers remained cautious about adding jobs," The Wall Street Jouranl reported.
The impact of the sharp and still evolving change in the way businesses operate has an impact on both the food service operator and the company it serves. Formerly profitable food services may become unprofitable for the operator, and the company may find it has a choice of either subsidizing its employee food services or reducing their scope.
Solutions will vary from company to company, but all will involve the way the food service operator looks at, and manages the business. Companies will have to cooperate with their food service operators as they both adapt to the new reality.
Some potential solutions:
Companies with multiple buildings on a large campus might close food service outlets in all but the highest-population buildings (about 1,000 employees). The other buildings could be serviced by the type of food truck that has become popular on college campuses.
At small sites (500 employees) a mini-cafe, supported by an off-site commissary could be practical.
Companies that find their food service has light breakfast business could close the employee cafe in the morning and replace it with a kiosk near the main employee entrance, serving coffee, cold beverages, muffins and the like. The kiosk could remain open through mid-morning to serve employees who want a morning snack. The cafe would be open only for lunch and maybe afternoon snack business.
Vending operators and some of the major contractors have begun installing "micromarkets," a c-store type, compact facility with no attendant. The customer selects foods and beverages from refrigerated display cases and shelves and pays for the purchases at a self-checkout kiosk -- the sort of "reverse ATM" now common at Home Depot and some supermarkets. This option only works in a closed environment with a small population, about 250 employees.
Changes in the way employee food services are provided are inevitable. Operators will have tto use technology to counteract the changes technology is forcing on their traditional ways of doing business.
Wednesday, February 10, 2010
The Dining Center as an Oasis
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.
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.
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