Talk to foodservice directors at self-operated facilities, and the same words echo time and again: flexibility, collaboration and communication. Without the established models, economies of scale and purchasing power of contract-managed operations, self-ops must find their own ways to keep revenues high and costs low. We talked to directors at long-time self-operated facilities to discover how they stay independent. Their secrets boil down to creative, common-sense management practices instead of a magic formula.
1. Think like a restaurateur
For Shawn LaPean, executive director of Cal Dining at the University of California, Berkeley, the secret to running a successful self-op is thinking like an independent restaurateur—even at a high-volume operation with annual sales north of $60 million, 11,000 students on meal plans and 16 operations, plus foodservice management for the school’s stadium and arena. “Whether that’s marketing ... following trends or surveying staff, we have to do the same thing a small restaurateur does,” he says.
An operation the size of UC Berkeley’s has one key advantage: purchasing power. “Because we’re big, people want to sell to us,” he admits. But when it comes to marketing and the menu, he says he borrows the mentality of a full-service restaurateur.
One example of this is getting and using feedback. “We do 30,000 focus groups a day,” LaPean says, explaining that cashiers cull feedback from every transaction and send that information to management. He also meets monthly with a student dining committee to keep current on generational trends. Insights gleaned from those sources led LaPean to offer two full days of almost entirely locally sourced foods. The events, billed as hyperlocal dinners, were so popular that he is creating an on-campus restaurant that will source 90 percent of its food from California.
2. Practice agility
In the fall of 2013, Dean Wright faced a $12 million revenue gap when 3,000 first-year students failed to materialize on campus at Brigham Young University in Provo, Utah. That year, the Mormon church lowered the age that young men serve their missions to 18 (from 19). The change meant that Wright, director of dining services at BYU, lost his entire class of freshman males. Forced to make up the loss, he launched a heavy marketing push to target off-campus students, including returning missionaries. Wright offered them a 50 percent discount on meal plans; for other students, he provided free milk in exchange for buying a meal plan. By June 2015, Wright had sold an additional 900 meal plans to off-campus students for the upcoming fall semester. His department still will take a hit, but the new plans will help soften the blow by $7 million.
3. Focus in real time on the bottom line
BYU’s foodservice program currently serves 5,000 students, two-thirds of whom live off campus. It has an annual budget of $44 million and 44 different foodservice operations. To keep business healthy, Wright keeps a constant eye on numbers. He has developed a program that calculates the optimal selling price of each menu item, particularly popular foods such as french fries that also are available at off-campus restaurants. Wright targets the foods that make up 51 percent of his sales and concentrates marketing on those items. “The customer is saying ‘We like this,’ so our marketing [approach] is, ‘Let’s get more people to try that item,’” Wright says.
LaPean uses a perpetual inventory-management system at UC Berkeley that tracks product from ordering to receiving to when it’s served. Such tracking not only enables him to order according to need, thereby reducing waste, it also lets him track sales per square foot. “We have become data freaks,” LaPean says of his management team.
4. Listen to the audience
When Lee Memorial Health System in Fort Myers, Fla., converted to a cook-chill model from cook-serve to produce meals more efficiently, the move saved between $650,000 and $850,000 a year. But it also vexed seasoned employees. “There was a big learning curve to overcome and a new job and the anxiety and frustration that goes with that,” says Larry Altier, system director of food and nutrition services for the hospital system. Listening to employees and acting on their concerns helped the department deal with the changes. For example, when one chef, a self-taught cook, expressed anxiety about the technology involved in the cook-chill process, Altier and Lee Memorial arranged for her to take a class at The Culinary Institute of America.
5. Build a consensus
Paula Angelucci won’t force anyone to do anything. “I am very much a collaborator,” says the nutrition services supervisor at Delaware’s Colonial School District, which has 10,000 students at 14 schools and a budget of $7.1 million.
Under the USDA’s Community Eligibility Provision, Angelucci’s schools provide free meals to all elementary-level students. While breakfast could be served in the cafeteria, Angelucci realized it would save time to have students eat a grab-and-go meal at their desks. Through collaboration, she persuaded all but one school in her district to begin serving grab-and-go, overcoming concerns that food eaten in the classroom would be a distraction and cause a mess.
Before launching the program, Angelucci talked to teachers, principals and custodians— pretty much everyone who would have to deal with breakfast-munching children—in order to drum up support.
To demonstrate to the administration the importance of making sure kids indeed eat their breakfast, she worked with the Delaware Food Bank to produce a video on how breakfast aids learning. Then she piloted the program at one school, Kathleen H. Wilbur Elementary School in Bear, Del., and invited administration from other schools to witness it in action.
The pilot allowed her to listen to and offer solutions for other schools’ unique issues. One school, for instance, worried that breakfast detritus would litter and stink up the classroom all morning. For that school, Angelucci bought each classroom a 20-gallon trash can for students to use for breakfast waste. After breakfast, the teacher rolls the can into the hallway for the custodian to remove. “All it cost me was a $10 trash can, and it won everybody over,” Angelucci says. Today, all eight elementary schools offer grab-and-go carts; only one middle school is hanging on to its traditional cafeteria breakfast.
That same spirit of transparency and engagement extends to parents and the community as well. Angelucci’s district maintains a detailed website and has a Twitter account. “Marketing and social media is of utmost importance,” she says. “You can’t just assume that people know what you’re doing.”
6. Adopt internal transparency
At Beaumont Health System in suburban Detroit, communication keeps foodservice at the three-hospital, 1,800-bed hospital system healthy. The foodservice directors at each facility “think of ourselves as a mini company and work together as a team,” says Ann Kovl, director of nutrition services at Beaumont Troy, an acute-care hospital in the network licensed for 458 beds. Kovl’s facility has a main kitchen providing meals for patients and the cafeteria, a licensed Starbucks operation, a coffee cart and a pizza cafe. It has a foodservice budget of $7 million and saw revenue of about $4 million in 2014.
Each quarter, Kovl and the other directors present benchmarking information and scorecards to administration to show the costs of meals, labor and more. Kovl and her colleagues developed the benchmarking process, which follows the Association for Healthcare Foodservice format. That open display of information persuaded the administration to allow one of the hospitals, in Grosse Pointe, Mich., to become self-operated after its management contract expired.
Kovl and the other directors also collaborated on a revamp of patient menus. The three hospitals’ menus “were similar, but not the same,” she says, and they saw the opportunity to save money and labor by developing one set of recipes and one menu. Administration supported the idea, even though it initially required extra labor.
Once a month, Kovl meets with her administrator to discuss staffing, operations, equipment needs and finances. The administrator also rounds through the kitchen regularly, and Kovl and the directors at the other two hospitals send constant “FYI” emails. “There’s a lot of back-and-forth,” she says. “We can learn from each other.”
7. Keep up with the competition
The 5,200 employees at Hallmark Cards, located in a busy office park in Kansas City, Mo., could grab breakfast or lunch at a fast-casual place near headquarters. But the food, prices and convenience of the company cafeteria keep them at the office during lunchtime, says Christine Rankin, corporate services manager at Hallmark. Rankin says participation is “solid,” and she credits her operation’s focus on customer service.
“We are an employee-centric operation focused on quality and service,” she says. “We talk about ourselves as a ‘never say no’ operation.”
To meet a need for quality, off-hours meals, Hallmark added two micromarts to its manufacturing facilities in January. “That was a huge transition for us,” says Rankin, whose staff had to figure out bar coding and software upgrades to launch the self-service operations.
To keep menus and service fresh at the main cafeteria, Rankin and her staff constantly scout for ideas on trips to conferences and elsewhere and regularly tinker with the menu. That legwork has resulted in the launch of a popular panini station to meet customer demand. Two years ago, she added a build-your-own flatbread station after seeing flatbreads on local restaurant menus. Capitalizing on other trends, the cafeteria also added a four-week cycle of items with fewer than 300 calories.
A snapshot of self-ops
| Self-contracted | Contract-managed | Both | |
|---|---|---|---|
| K-12 schools | 90% | 8% | 2% |
| Colleges and universities | 60% | 36% | 4% |
| Business and industry | 15% | 80% | 5% |
| Hospitals | 90% | 8% | 2% |
| Senior living and long-term care | 83% | 14% | 3% |