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Food Service Solvency What Can We Do Now?. Bill Lauff Food Service Director Avonworth School District Pittsburgh Regional Food Service Directors (PRFSD) Proactive Committee Chair Martin Lorenzo Food Service Director West Greene School District. “Mandates Without Funding”.

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Food service solvency what can we do now
Food Service Solvency What Can We Do Now?

  • Bill Lauff

    Food Service Director

    Avonworth School District

    • Pittsburgh Regional Food Service Directors (PRFSD) Proactive Committee Chair

  • Martin Lorenzo

    Food Service Director

    West Greene School District


  • Mandates without funding
    “Mandates Without Funding”

    • Costs outpace funding

    • Possible obstacles

    • Potential solutions

    • Maintaining compliance with State & Federal Guidelines while satisfying our customers


    All school districts are unique
    All School Districts are Unique.

    • Student Markets

      • Demographics

      • Social & Economic Backgrounds

    • Labor Agreements

    • Facility Design

    • Building Size & Enrollment


    Demographic factor
    Demographic Factor

    • Rural Students

      • Used to “home cooking”

    • Affluent Suburban Students

      • May be accustomed to convenience meals from restaurants or freezer @ home

    • Impoverished Students

      • School meals may represent only meals of the day.


    Economic factor
    Economic Factor

    • Dictates how schools funded

    • Free & Reduced Eligibility % has a significant impact on meal programs

      • Eligible students are most likely to eat school provided meals

      • “Full pay” students faced with daily decision to buy or not to buy.

    • Translation:

      • Participation for said eligible patrons is much higher than “paid”


    Meals per labor hour mplh
    Meals Per Labor Hour (MPLH)

    • High participation results in greater MPLH.

      • Translates to lower labor costs as % of revenue

      • More lunches served = more commodity allocations

    • Increasing participation is not always solution to financial solvency.

      • If revenue per meal is less than cost per meal = financial loss

        • Meaning: the more meals you serve, the more $ your operation will loose.


    Analysis analysis analysis
    Analysis. Analysis. Analysis.

    • How do you know what’s best for you?

      • Analysis. Analysis. Analysis.

    • Know your operation

      • What may be best practice for our unique district?

    • “Cookie Cutter” approach

      • Often does not apply in our world of school food service


    Reauthorization
    Reauthorization

    • Adds many mandates that are perceived as being good

      • Some are however quite costly.

    • Meal price increase provision

      • It requires an increase in the price for “paid” meals so that they are slowly moving toward the reimbursement cost figure.

      • We cannot yet be certain if this is a blessing or a curse

        • Keep a close eye on your figures.


    Tiered menu pricing
    Tiered Menu Pricing

    • Ideal if you have a low Free & Reduced (F&R) population

    • Often requires no added labor

    • Recommend to all districts with F&R less than 25%

    • When number approaches 30%, financial benefit may become less evident, but student satisfaction with added food offerings results in higher participation & a healthier bottom line.


    Purchasing cooperative
    Purchasing Cooperative

    • Opens the door for significant savings.

    • PRFSD is currently 151 school districts + strong in Western PA

    • Buying power created extends to all members regardless of district size

    • Other regions encouraged to network as well in own coop.

      • PRFSD has already done it.

      • Therefore, the wheel does not need to be reinvented.


    Pouring contracts
    Pouring Contracts

    • Review contracts with major soft drink bottlers to determine financial impact on district’s food service operations

    • Compare competitive pricing of items in agreement with other sources such as primary vendor.

    • Determine financial impact of competitive sales in vending

    • If contract expiring, understand assoc. costs before resigning.

      • Current contract- Maybe buy out?


    Menuing participation costs
    Menuing / Participation & Costs

    • How we write menus can affect participation.

      • Although done with students first in mind, can be costly if don’t also reflect perceived value for parents- “catch 22”

    • Menus also affect costs.

      • We must monitor market fluctuations in price.

      • Provided handout w/ USDA Inflation Forecasts for 2011 -help one adjust menu cycles


    Labor costs
    Labor Costs

    • Typically exceed Food Costs

      • Many schools have labor agreements that have been renegotiated upwards over years

    • Possible remedies include:

      • Negotiate new tier of lower labor wages for new hires.

      • Seek agreement that allows for part-time labor to meet staffing needs during meal service times

      • Consider satellite meal service

      • Explore shared services


    Hot topics
    HOT TOPICS

    • School Consultant Quote, “As we have our federal and state governments imposing new mandates at an unprecedented rate and at same time intergrating food service as …”

    • Chapter 12


    Chapter 12
    Chapter 12

    • Food Service Directors lobbied against the school food component understanding the potential consequences.

    • How will it financially impact our districts?

      • Proposed regulations significantly limit district’s a la carte revenue potential

      • Has potential to reduce revenue between 5 & 15%

      • Districts with low F&R Populations will suffer greater negative impact.


    Usda commodity foods
    USDA Commodity Foods

    • Can provide financial relief in school meal programs

    • Consider Several Factors:

      • Process, ship direct, or do both?

      • Adequate storage available?

      • Proper equipment in place?

      • Staff have necessary skills?

      • Strong HACCP Program in place?

      • Appropriate daily hours available to handle additional labor involved with handling such food items


    More commodity foods
    More Commodity Foods

    • Analyze your program to determine what best for you

    • All things equal, “brown box” is more cost efficient for $

      • Processing or the manufacturer’s convert of raw bulk commodity can add significant fees to the product’s food cost.

      • This added step can mean an item’s final expense may not be a whole lot more than buying directly from wholesale vendor.


    Whole foods are the future
    “Whole Foods” are the Future

    • Healthy, Hunger-Free Kids Act will inevitably push schools from sodium-rich processed foods in exchange for more “whole foods.”

    • USDA Commodity Subsidy is a great place to start…

      • Versatile items such as cut-up chicken can easily become Oven-Baked Honey Dijon Chicken or Savory Sicilian Chicken Cacciatore. Pork roasts become Texas-smoked BBQ Pork Wraps or Creamed Pork.


    Spending saving
    Spending $ = Saving $

    • Incorporation of “brown box” items into menu cycle may require large investment.

    • Wise Words: “You must spend money to make money.”

      • Titus MacciusPlautis, Roman Philosopher

    • In other words, “You must spend money to save money."

    • Initial investment in equipment, training, etc. will pay dividends to operation’s bottom line for many years to come…


    Questions
    QUESTIONS?

    THANK YOU!


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