Presenters: H. David Porter, FCSI President & CEO Porter Khouw Consulting, Inc. Jeff Pauley Senior Director, Retail Services Spartan Shops, Inc. San Jose State University

 Jeff Pauley, Senior Director of Retail Services for Spartan Shops at SJSU  Significant experience in the restaurant & non-profit sector  Overseen the decade-long campus dining facility overhaul at SJSU  Previous campus dining experience at University of Michigan & University of Maine  H. David Porter, FCSI, CEO & President Porter Khouw Consulting, Inc.  Active member of Foodservice Consultants Society International.  More than 35 years of hands-on foodservice operation, market research, programming, design & consulting experience Your Hosts  Jeff – need headshot here

DC: Dining Commons: All-you-care-to-eat service in the heart of the residential community. Retail venues: – The Market Café – On Fourth – Just Below – Student Union Food Court – Subway –The Village Market – Current enrollment: 26,000, residential students: 3,000 – Current meal plan participation: 2,000 – Current revenue: $12 million SJSU Dining Snapshot

PKC was hired to create a campus-wide dining services master plan with a focus on upcoming renovations to the student center (not residential dining). – PKC looked at the entire campus dining program during this project but the focus was mainly on the Student Union. But…in the course of market research, PKC discovered some hidden opportunities with residential dining to grow meal plan sales and significantly improve customer satisfaction with the Dining Commons. HAPPY MEAL PLAN HOLDERS = HIGHER PARTICIPATION! SJSU planned to close the cafeteria building (self contained food court) adjacent to the Student Union, renovate/expand the student union and consolidate all Union foodservice operations in one building. Project Background

Scope of work included: Qualitative Market Research – Campus visit (focus groups & personal interviews) Quantitative Market Research – Web-based survey Master Plan Development – Meal plan review – Confirmation and/or development of foodservice concepts – Preliminary Design for MacQuarrie Hall c-store Final Report Development Concurrent with this project, PKC was also hired to provide recommendations regarding a minor facelift to the Dining Commons Project Background

Dining Commons – Dated facility with poor sight lines & customer throughput. Spartan Shops was considering minor facelift – Great proximity to the on-campus residence halls/challenging location for the remainder of campus. Several non-resident students, faculty & staff said that they didn’t realize that they could eat at the DC and some of them didn’t know where it was. – Challenges with ownership Owned & managed by University Housing, not Spartan Shops. – Challenges with equipment maintenance/willingness to invest in this building – Poor first impression for all students but especially incoming freshmen. Impacts meal plan holders’ willingness to continue on the meal plan program. – “I cook my own food because I just won’t eat at the DC. I wish I didn’t have to cook but I’m not going to eat there because I don’t like the food quality & the ambiance.”—On campus student –“I’m not going to pay $10 a meal to eat there.” - On campus student Residential Dining - What Were The Challenges?

Hours of Operation: Dining hours in both the DC and some of the retail dining venues didn’t correspond with students’ lifestyles/class schedules Limited hour everyday, but especially troublesome on weekends. “The DC should be open 24/7…The food at SJSU strongly favors those who are off-campus residents or who can easily go home on weekends while the on-campus residents suffer to due to lack of food venues available except for the DC which is open only a few hours and with little or no variety over the weekend compared with weekdays.” “The issues are odd hours. I work and go to school on campus. When taking night classes, there are limited food options, once class is out, and there is no place on campus to grab a bite with classmates.” “Off campus students don’t have many choices at night after night classes and resort to off- campus dining.” Many students said they simply cannot get to the DC during the current hours of operation because of class schedules or lifestyle choices. Residential Dining – What Were The Challenges? (cont/)

Dining Commons – Menu Variety & Selection & Food Quality: “I feel that there are not enough healthy, low-fat, well-balanced meal options on campus, especially in the DC…the DC food is almost always high in fat, low quality and most of the time the main courses have too many carbs.” “The DC puts eggplant & bell pepper into everything that is vegetarian. It’s hard to find options in the DC that don’t have these ingredients.” “The current food quality & hours in the DC are the biggest concerns for me. As long as the food is edible (which it is not right now) and I can eat at reasonable hours (which I consider to be lunch/dinner and a late night meal), I will be satisfied.” The food in the DC is difficult to eat at times and the selection, although improving slightly— is very limited. Residential Dining – What Were The Challenges? (cont/)

Opportunity to increase participation among residents students not required to purchase a meal plan. 85% of on-campus freshmen & 73.4% of on-campus sophomores said that they often have unused meals at the end of each semester. Meal plan holders also appear to run out of Dining Dollars quickly. Interestingly, 21.2% of overall survey respondents said that the primary reason they don’t purchase a meal plan is because they didn’t know SJSU offered meal plans. “If any student can buy a meal plan that they can use in the DC, then that should be advertised more.” CHALLENGE: How can the residential dining program be enhanced to encourage students to stay on a meal plan program? What changes can/should be made to the residential dining program in addition to enhancements to the retail dining program? Meal Plans

Hours of Operation  Offer anytime dining (unlimited access, continuous service with extended hours of operation) in the Dining Commons from 7 a.m.-10 p.m. seven days a week.  A full selection of choices should be available until at least 9 p.m. (limited choices could be available from 2 p.m.- 4 p.m. and from 9 p.m. to closing). Menu Variety & Selection Improve menu variety & selection along with food presentation. Offer pizza every day if possible. Offer a wider variety of vegetarian, vegan and organic food options. Offer more healthful choices (less focus on fried food). Identify ways to offer more made-to-order foods like deli sandwiches, made-to- order stir fry, carved meats, tossed-to-order salads and pasta, etc. Offer sushi more often. Offer theme nights & other monotony breakers on a regular basis. Added (and unexpected) Offerings Full service coffee bar or other value-added offering PKC Recommendations for Residential Dining

Servery Enhancements New pizza & pasta station – Contemporary & inviting – Very popular with students – Added new life to a tired venue Jamba Juice – Full service Jamba Juice inside the Dining Commons – Included in anytime dining offerings – No registers – Students LOVE this! – SJSU had a lot of positive feedback about this and saw meal plan participation increase as a result. New & Improved Residential Dining

Collaboration Value Proposition Consumption Driven Promotes more food consumption/waste/ unnecessary spending & less gross profitability A La Carte: Declining Balance Block meals/Meals per week/semester Finite # of meals/dollars Access Driven Promotes less food consumption/waste & higher gross profitability Anytime Dining – Unlimited access – Students consume less food/Reduce food waste – Lower food cost (21-28%) Infinite # of meals/access to food Voluntary meal plan participation increases

New SJSU Value-Added Meal Plans & Perks Meal Plans Offer Anytime Dining meal plans. Current meal plans (Club DC “membership”): - Unlimited Gold: Unlimited access (anytime dining) to all-you-care-to-eat dining in the DC five days a week during operating hours plus three guest meal passes & $100 Gold Points per semester. Cost: $1,750/semester - Unlimited Platinum: Same privileges as Unlimited Silver plus eight guest meal passes & $150 in Gold Points per semester. Cost: $2,050 per semester Gold Points can be used in all bookstore and dining locations. Additional meal plans: - Community 25: 25 block meals that can be used at the DC anytime Monday-Friday. Cost: $225 - Community 50: 50 block meals that can be used at the DC anytime Monday-Friday. Cost: $450 - Centennial: 100 block meals plus $100 Gold Points. Can be used any day of the week. Cost: $900 Additional perks for Club DC meal plan holders: - Free WiFi in the DC - Invitations to special member-only events - Monthly specials in campus retail dining venues - Bookstore specials

A value-added program that: Can significantly boost customer satisfaction Allows meal plan holders to eat what and when they want Provides the ultimate flexibility in dining options Eliminates missed meals Appeals to parents Provides an easy transition from home for incoming freshmen Enhances social interaction & community bonding What Is Anytime Dining?

Increased Food CostIncreased Food Cost –Perception: “The students will eat us out of house & home.” Reality: Most students still eat between meals per week.Reality: Most students still eat between meals per week. Reality: Food costs remain stable or decreaseReality: Food costs remain stable or decrease –Less waste Increased Labor CostIncreased Labor Cost –Perception: “Our labor costs will skyrocket.” Reality: Service can be throttled up or down depending on daypartReality: Service can be throttled up or down depending on daypart Reality: A mix of served and self-serve stations help keep labor cost low.Reality: A mix of served and self-serve stations help keep labor cost low. Meal plan price increase?Meal plan price increase? –Perception: We will have to charge more for meal plans. Reality: In most cases, meal plan prices do not increase.Reality: In most cases, meal plan prices do not increase. Anytime Dining – But What About???

Extended hours of operation  Tailored to the student clock  Generally doesn’t conflict with class schedules  Continuous service Food is always accessible (just like home) Current Hours at the DC: Anytime Dining Meal Plans (for all customer groups)  Provides unlimited access to residential dining venues during operating hours Extras: Guest meals & dining dollars  Encourages residential students to stay on plan & commuters to buy higher priced plans. Wide variety of food & services  Menu options that appeal to students  Added benefits: special theme dinners, etc.  Unlimited Jamba Juice Elements Of A Value Added/Enhanced Program

Results Increased customer satisfaction –Students have access to food nearly all day –Students want to eat in the DC now instead of avoiding it! Boost in meal plan participation –Meal plan retention rates increased – Meal plan participation before/after changes: XXXX vs. 2,000 Enhanced dining & social experiences for customers Enhanced community gathering opportunities –Meaningful freshmen experience Increased capacity in retail venues by encouraging meal plan students to eat in the DC vs. every meal in the retail venues spending dining dollars. New student center is scheduled to open in Fall 2012.

It is critical to consider the ENTIRE dining program when looking for solutions to challenges associated with various dining components & ALWAYS look for opportunities in unexpected places!