1. Food Service Solvency What Can We Do Now? Bill Lauff Bill Lauff Food Service Director Avonworth School District Pittsburgh Regional Food Service Directors (PRFSD) Proactive Committee Chair Pittsburgh Regional Food Service Directors (PRFSD) Proactive Committee Chair Martin Lorenzo Martin Lorenzo Food Service Director West Greene School District

2. Mandates Without Funding Costs outpace funding Costs outpace funding Possible obstacles Possible obstacles Potential solutions Potential solutions Maintaining compliance with State & Federal Guidelines while satisfying our customers Maintaining compliance with State & Federal Guidelines while satisfying our customers

3. All School Districts are Unique. Student Markets Student Markets Demographics Demographics Social & Economic Backgrounds Social & Economic Backgrounds Labor Agreements Labor Agreements Facility Design Facility Design Building Size & Enrollment Building Size & Enrollment

4. Demographic Factor Rural Students Rural Students Used to home cooking Used to home cooking Affluent Suburban Students Affluent Suburban Students May be accustomed to convenience meals from restaurants or freezer @ home May be accustomed to convenience meals from restaurants or freezer @ home Impoverished Students Impoverished Students School meals may represent only meals of the day. School meals may represent only meals of the day.

5. Economic Factor Dictates how schools funded Dictates how schools funded Free & Reduced Eligibility % has a significant impact on meal programs Free & Reduced Eligibility % has a significant impact on meal programs Eligible students are most likely to eat school provided meals Eligible students are most likely to eat school provided meals Full pay students faced with daily decision to buy or not to buy. Full pay students faced with daily decision to buy or not to buy. Translation: Translation: Participation for said eligible patrons is much higher than paid Participation for said eligible patrons is much higher than paid

6. Meals Per Labor Hour (MPLH) High participation results in greater MPLH. High participation results in greater MPLH. Translates to lower labor costs as % of revenue Translates to lower labor costs as % of revenue More lunches served = more commodity allocations More lunches served = more commodity allocations Increasing participation is not always solution to financial solvency. Increasing participation is not always solution to financial solvency. If revenue per meal is less than cost per meal = financial loss If revenue per meal is less than cost per meal = financial loss Meaning: the more meals you serve, the more $ your operation will loose. Meaning: the more meals you serve, the more $ your operation will loose.

7. Analysis. Analysis. Analysis. How do you know whats best for you? How do you know whats best for you? Analysis. Analysis. Analysis. Analysis. Analysis. Analysis. Know your operation Know your operation What may be best practice for our unique district? What may be best practice for our unique district? Cookie Cutter approach Cookie Cutter approach Often does not apply in our world of school food service Often does not apply in our world of school food service

8. Reauthorization Adds many mandates that are perceived as being good Adds many mandates that are perceived as being good Some are however quite costly. Some are however quite costly. Meal price increase provision 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. 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 We cannot yet be certain if this is a blessing or a curse Keep a close eye on your figures. Keep a close eye on your figures.

9. Tiered Menu Pricing Ideal if you have a low Free & Reduced (F&R) population Ideal if you have a low Free & Reduced (F&R) population Often requires no added labor Often requires no added labor Recommend to all districts with F&R less than 25% 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. 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.

10. Purchasing Cooperative Opens the door for significant savings. Opens the door for significant savings. PRFSD is currently 151 school districts + strong in Western PA PRFSD is currently 151 school districts + strong in Western PA Buying power created extends to all members regardless of district size Buying power created extends to all members regardless of district size Other regions encouraged to network as well in own coop. Other regions encouraged to network as well in own coop. PRFSD has already done it. PRFSD has already done it. Therefore, the wheel does not need to be reinvented. Therefore, the wheel does not need to be reinvented.

11. Pouring Contracts Review contracts with major soft drink bottlers to determine financial impact on districts food service operations Review contracts with major soft drink bottlers to determine financial impact on districts food service operations Compare competitive pricing of items in agreement with other sources such as primary vendor. Compare competitive pricing of items in agreement with other sources such as primary vendor. Determine financial impact of competitive sales in vending Determine financial impact of competitive sales in vending If contract expiring, understand assoc. costs before resigning. If contract expiring, understand assoc. costs before resigning. Current contract- Maybe buy out? Current contract- Maybe buy out?

12. Menuing / Participation & Costs How we write menus can affect participation. How we write menus can affect participation. Although done with students first in mind, can be costly if dont also reflect perceived value for parents- catch 22 Although done with students first in mind, can be costly if dont also reflect perceived value for parents- catch 22 Menus also affect costs. Menus also affect costs. We must monitor market fluctuations in price. We must monitor market fluctuations in price. Provided handout w/ USDA Inflation Forecasts for 2011 -help one adjust menu cycles Provided handout w/ USDA Inflation Forecasts for 2011 -help one adjust menu cycles

13. Labor Costs Typically exceed Food Costs Typically exceed Food Costs Many schools have labor agreements that have been renegotiated upwards over years Many schools have labor agreements that have been renegotiated upwards over years Possible remedies include: Possible remedies include: Negotiate new tier of lower labor wages for new hires. 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 Seek agreement that allows for part-time labor to meet staffing needs during meal service times Consider satellite meal service Consider satellite meal service Explore shared services Explore shared services

14. 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 … 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

15. Chapter 12 Food Service Directors lobbied against the school food component understanding the potential consequences. Food Service Directors lobbied against the school food component understanding the potential consequences. How will it financially impact our districts? How will it financially impact our districts? Proposed regulations significantly limit districts a la carte revenue potential Proposed regulations significantly limit districts a la carte revenue potential Has potential to reduce revenue between 5 & 15% Has potential to reduce revenue between 5 & 15% Districts with low F&R Populations will suffer greater negative impact. Districts with low F&R Populations will suffer greater negative impact.

16. USDA Commodity Foods Can provide financial relief in school meal programs Can provide financial relief in school meal programs Consider Several Factors: Consider Several Factors: Process, ship direct, or do both? Process, ship direct, or do both? Adequate storage available? Adequate storage available? Proper equipment in place? Proper equipment in place? Staff have necessary skills? Staff have necessary skills? Strong HACCP Program in place? Strong HACCP Program in place? Appropriate daily hours available to handle additional labor involved with handling such food items Appropriate daily hours available to handle additional labor involved with handling such food items

17. More Commodity Foods More Commodity Foods Analyze your program to determine what best for you Analyze your program to determine what best for you All things equal, brown box is more cost efficient for $ All things equal, brown box is more cost efficient for $ Processing or the manufacturers convert of raw bulk commodity can add significant fees to the products food cost. Processing or the manufacturers convert of raw bulk commodity can add significant fees to the products food cost. This added step can mean an items final expense may not be a whole lot more than buying directly from wholesale vendor. This added step can mean an items final expense may not be a whole lot more than buying directly from wholesale vendor.

18. 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. 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… 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. 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.

19. Spending $ = Saving $ Incorporation of brown box items into menu cycle may require large investment. Incorporation of brown box items into menu cycle may require large investment. Wise Words: You must spend money to make money. Wise Words: You must spend money to make money. Titus Maccius Plautis, Roman Philosopher Titus Maccius Plautis, Roman Philosopher In other words, You must spend money to save money." In other words, You must spend money to save money." Initial investment in equipment, training, etc. will pay dividends to operations bottom line for many years to come… Initial investment in equipment, training, etc. will pay dividends to operations bottom line for many years to come…

20. QUESTIONS? THANK YOU!