Part One: Curriculum Upgrade

Colleges manage rising costs with efficiencies, innovation and flexible ways to pay

By Margaret Sheridan, Senior Editor -- Restaurants & Institutions, 6/1/2004

The challenges of managing a self-operated college or university foodservice department are many. High on foodservice directors’ lists of hurdles are coping with rising costs and shrinking budgets while serving students who want more for less.

The ways in which managers tackle these issues differ in details but not strategy. Almost all devise ways to increase revenues that can offset costs of food, labor and benefits. Popular approaches include maximizing opportunities in how and where to serve students through a variety of board plans, campus dollars, debit cards, cash or credit cards.

Fortunately, schools’ primary revenue streams—students—tend to be flush. “Students have the money.” says Bill Moloney, director of student dining at Miami University in Oxford, Ohio. “It’s up to us to provide opportunities [for them] to spend it.”

Boston College’s pricing structure allows students to dine anywhere on campus. Several off-campus venues also honor the meal plan.

To run a fiscally sound operation, campus directors must themselves become students, seeking to understand young-adult lifestyles, says David Porter, a Crofton, Md.-based consultant to college and university foodservice. “The clocks students live by aren’t like [those of most consumers],” he says. “They’re not ready for breakfast until 9:30 a.m., and if you end dinner service at 6:30 p.m., you’ve lost them. They want value, and get it through convenience, flexible hours and variety of payment systems.”

Ann Talley agrees. Successfully serving 6,680 students on board plans at Ball State University in Muncie, Ind., and ringing up $3.5 million in retail sales require approaching the job with an open mind. “You can’t dictate to customers,” says the director of residence-hall dining service and 40-year veteran of campus foodservice. “It’s a balancing act. Parents want us to be frugal with their money yet they want their kids to have lots to eat.”

Her solution is flexible offerings: Students have four ways to pay at 50 food concepts in 14 locations.

Opportunity Rises
Foodservice budgets are increasingly tight, with little extra room for maneuvering. Food costs skyrocket and tuition creeps upward. Finding new customers and increasing repeat business when enrollment is frozen are daunting, but these are the dilemmas Pat Bando and many of her colleagues face. “You can’t pass on higher costs to students,” says the director of dining services at Boston College (BC) in Chestnut Hill, Mass. “The last thing parents want is another call for more money.”

The à la carte pricing structure of BC’s board plan allows the greatest flexibility in spending. About 81% of sales come from the 9,828 students on the plan.

Bando has not increased the cost of BC’s meal plan for three years. Enrollment is 14,500 and fixed for the 2004-2005 school year. She looks for new customers among commuters and students on internships—the latter leave campus early for jobs in the city. This fall, she introduces a 6:30 a.m. continental breakfast for that population.

To encourage more spending, she will return to unit pricing of salads, yogurt and candy, replacing selling by weight. “Students go into shock when a 1-pound salad costs $5,” says Bando.

Rising healthcare costs for foodservice employees plus increasing costs for gas and transportation will have a severe impact on operating costs, says Ted Mayer, executive director of Harvard Dining Services, adding that rising costs are inevitable as the economy picks up.

Students at Ball State University have four methods of payment at 50 food concepts.

Though enrollment at Harvard University in Cambridge, Mass., will stay at 19,600 for the upcoming academic year, Mayer finds opportunities to increase retail sales to graduate students, staff and faculty, all of whom have spent less, collectively, over the past few years. His solution has been to create additional combination meals, which have greater value appeal. “People expect big portions and are willing to spend a little more,” says Mayer.

Complicated or restrictive meal plans thwart spending, says Moloney. Students at Miami University use a board plan based on declining-balance cards. They can augment the balance at any time. When the school year is over, remaining funds return to the student. Such convenience eliminates frenzied spending and panic, he says.

One result of a $48 million renovation at Purdue University in West Lafayette, Ind., was the creation of the Open Dining Card. Designed for visitors to campus, including families and friends of students, the pre- paid cards allow the bearer to dine anywhere on campus, seven days a week.

Students at Michigan State University (MSU) in East Lansing, can use Spartan Cash scrip at c-stores, small cafeterias and food courts, venues not covered under meal plans.

By 2005, Bruce Haskell, MSU foodservice coordinator, will introduce credit cards. “They slow up transactions by two minutes, but they’re convenient, especially for staff, faculty and visitors.”

Michael Floyd has been using a credit-card system for years at University of Georgia, Athens. “Our attitude is flexibility,” says the food services department head. “Forty percent of retail sales are credit-card transactions.”

Efficiency Demands
Trying to satisfy students who want dazzling variety on a 24/7 basis puts pressure on foodservice employees. “This is a generation of entitlement,’’ says MSU’s Bruce Haskell. “If students don’t get something, I hear from their parents.” That “something” can include serving hours that extend well into the small hours as well as greater diversity and better quality of menu offerings.

Rather than hiring more people or cutting hours of operation, Haskell increased efficiency and reduces waste by adding more cook-to-order stations in residence halls. Waste is eliminated because production never exceeds what will be consumed. The price he pays, though, is last-minute assembly of precooked proteins with starches and produce.

“Students perceive the food as better and fresher, plus they like the individual attention,” he says. Having direct contact with customers also improves staff morale.

Another efficiency comes from consolidating foodservice on weekends in some residence complexes, adds Haskell. One unit will serve 400 instead of four units each serving 100. “I save on utilities and staffing because fewer hands are needed on weekend rotation,” he says. “Plus, employees like having more time off. Students don’t mind either. They’ll walk an extra six or 10 minutes within a complex, but not outside.”

Leading Self-Operated Colleges & Universities

College/University	Total 2003 F&B purchases (millions)	Total retail sales (millions)	Daily board- plan meals	Enrollment
Pennsylvania State University, University Park	$23.1	$14.1	24,300	42,000
Michigan State University, East Lansing	18.1	15.9	30,000	44,000
Brigham Young University, Provo, Utah	15.8	10.1	12,600	33,000
University of Notre Dame, Notre Dame, Ind.	14.8	15.0	7,000	10,100
Harvard University, Cambridge, Mass.	11.8	5.1	14,415	19,600
University of Massachusetts, Amherst	11.0	10.0	40,000	25,200
University of Illinois, Urbana-Champaign	11.0	3.5	23,000	37,000
Purdue University, West Lafayette, Ind.	10.5	8.7	11,662	38,847
Rutgers, The State University of New Jersey, New Brunswick	10.4	3.0	25,000	49,236
Miami University, Oxford, Ohio	10.1	12.5	22,293	16,300
University of Southern California, Los Angeles	9.9	15.5	3,800	30,483
University of Maryland, College Park	9.8	9.0	10,456	35,000
University of Connecticut, Storrs	9.5	3.3	19,000	18,934
Boston College, Chestnut Hill, Mass.	8.9	NA	15,719	14,500
University of Washington, Seattle	8.4	22.3	NA	39,000
Syracuse University, Syracuse, N.Y.	8.2	13.0	6,937	15,598
Virginia Polytechnic Institute & State University, Blacksburg	8.0	18.0	19,650	27,755
University of California, Berkeley	7.0	4.0	11,000	33,000
Ball State University, Muncie, Ind.	6.5	3.5	4,510	18,310
University of Georgia, Athens	6.5	3.0	17,000	33,000
Villanova University, Villanova, Pa.	5.2	6.2	7,100	8,700
Ohio University, Athens	5.1	4.2	10,900	19,800
University of California-Los Angeles	4.3	NA	15,000	38,700
Iowa State University, Ames	4.1	4.3	15,000	27,000
University of Oklahoma, Norman	3.6	4.0	4,000	24,000
Oregon State University, Corvallis	3.2	8.6	7,800	19,000
University of Wisconsin-Platteville	2.1	2.8	2,200	5,600
University of Michigan, Ann Arbor	2.0	2.0	NA	38,000
Ashland University, Ashland, Ohio	1.8	1.6	2,500	6,831

Talent Scouts

Though challenging, the search for a chef with the necessary business acumen and culinary skills to run a major college operation has its rewards, says Sarah Johnson, director of dining services at Purdue University, West Lafayette, Ind.

Her hiring of Chef Tony Clampitt in January 2003 brought his 15 years’ experience in hotels and restaurants to Purdue’s foodservice operations. Clampitt says the benefits of campus life balance his reduced salary. “I work 50 hours instead of 80,” he says. “I have a home life, a discount on tuition and daily contact with students, which I find energizing.’’

Rich Turnbull travels up to three times a year to recruit chefs for Oregon State University in Corvallis. “It’s not about filling slots,” says the associate director of university housing and dining. “It’s finding the right skill set to advance your business.’’

To relieve workload pressure, Turnbull uses temp agencies until the right full-time person is found through chef associations and culinary schools.

Ted Mayer, executive director of Harvard University Dining Services, keeps in close contact with local hotels and restaurants and maintains ties to culinary school alumni associations. Offering internships helps. “It gets new faces in the kitchen and puts us in their career path.’’

Not every chef can make the transition to campus, says Mayer. A college chef “enters into a system. Restaurants are smaller, less sophisticated structures than institutions. Restaurants are free in terms of menu development and spontaneity. These chefs have to deal with contracts and vendors and ordering food three weeks in advance.’’

Jean-Michel Boulot made the switch in August 2000. The French-born executive chef, with stints at luxury hotels and restaurants, accepted a position at the University of Washington in Seattle. Within six months, Boulot had enticed four local chefs to join the university foodservice department. “A good chef who runs a quality program attracts quality. When I moved to campus, the chefs realized the school was serious about food,’’ says Boulot.

Special Report Part 2 of 2: Future Stakes > >