Controlling costs

Cost of beef, fresh vegetables increased the most.

Schools say their costs for fresh fruits and vegetables have increased the most in the past two years (76% and 79%, respectively). Only 22% of schools indicated that their beef costs have increased, while the remainder of the non-commercial market chose beef (70%) as the product registering their highest cost increase

Schools

For schools, fresh fruits and vegetables are the two food categories in which costs have increased the most in the past two years, while beef cost increases had less of an impact than in other segments. “I think just food costs in general have gone up about 4%,” explains Amy Harkey, director of child nutrition operations for the Charlotte-Mecklenburg Schools, in North Carolina. But Harkey finds that as the new school meal regulations mandate the inclusion of more fruits and vegetables, these items are taking up a larger portion of budgets compared with previous years. “The costs are going up because we have to have enough [fruits and vegetables] available,” she says.

Retirement homes/senior living

In part due to higher costs of cattle feed and the impact of drought conditions, operators are seeing an increase in the cost of beef. Those in retirement homes/senior living were significantly more likely than other segments to report beef costs have risen the most in the past two years (92%). “Beef costs have gone up compared to other proteins,” explains David Kasper, director of dining services at Mallard Ridge, in North Carolina. “[But] having a cycle menu like we do, we still have to feed the residents, and all of the other items have gone up also,” he shares. “As a company, we are increasing our food costs to compensate for that.”

Colleges

Although eggs are not a large category for price increases, some colleges did note that the cost has increased. “I believe part is due to the cost of feed for the chicken industry,” observes John Filler, manager, dining and conference services for Harper College, in Palatine, Ill. With breakfast contributing to 18% of sales at Filler’s facility, he has had to cut some egg specials due to the cost increase but maintains the popular, freshly prepared favorites like egg sandwiches, omelets and breakfast burritos. This price increase may also be explained by the incorporation of more locally sourced and organic foods, including cage-free eggs, within college and university dining operations.

In which food categories have your food costs increased the most in the past two years?

Combatting Food Costs 

Overall, 95% of operators have made some adjustments in their operations due to rising food costs. The majority of operators (59%) have made changes in the items they purchase in response to these rising food costs. Colleges were the most likely to have made changes to the items they purchase, with 71% of these operators employing this tactic to combat rising food costs. Schools were the most likely segment to have increased their food budgets in response to rising food costs, with 44% of operators noting a bump in their food budgets in the past two years.

What menu item did you eliminate due to rising food costs?

  • Brisket plate
  • Solid-muscle animal proteins
  • Shrimp
  • Many beef specialty dishes
  • Flank steak
  • Fresh fruits and vegetables
  • Dropped from four entrée items every day to three
  • Salmon
  • Moved from a 6-ounce chicken breast to 5-ounce chicken breast 

Cutting Costs

The No. 1 tactic operators use to cut operational expenses is reducing staff hours/positions (48%). Colleges were the most likely segment to employ this tactic, at 64%. Self-operated locations were significantly more likely than contract-managed accounts to cut costs by making fewer items from scratch (19% versus 9%). Overall, 28% of respondents have not had to cut operational expenses.