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Food and Beverage Operations

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1 Food and Beverage Operations
Introduction to Hospitality, Lodging and Food Services Operations John R. Walker Food and Beverage Operations Chapter 4

2 Chapter Contents Introducing the Foodservices Industry
Decribe the duties and responsibilities of a food and beverage director and other key department heads Describe a typical food and beverage director’s day State the functions and responsibilities of the food and beverage departments Perform computations using key food and beverage operating ratios

3 The Foodservice Industry
Foodservice operations commonly are categorized as either commercial or onsite foodservices. Foodservice Operations Commercial Foodservice Onsite Foodservice Foodservice operations commonly are categorized as either commercial or onsite foodservices. The commercial segment includes foodservices in which selling food for profit is the primary activity of the business (See Slides 1-15 to 1-17) The onsite (sometimes referred to as noncommercial or institutional) segment provides foodservice as a secondary activity for the business in which the foodservice is located (See Slides 1-18 to 1-19) The commercial segment includes foodservices in which selling food for profit is the primary activity of the business The onsite (noncommercial or institutional) segment provides foodservice as a secondary activity for the business in which the foodservice is located

4 Commercial Foodservice
Limited-Service, Limited-Menu Restaurants Full-Service Restaurants Airport Restaurants Cruise Ship Dining Zoos The commercial foodservice segment includes a broad range of restaurants (from limited-service to fine dining), lodging, food and beverage, recreation and sports, and convenience stores. Limited-service, limited-menu restaurants (sometimes referred to as quick-service or fast-food) were designed to provide a limited number of food items to a customer in a relatively short period of time. Often the customer orders food at a counter and pays for it before eating. These restaurants are targeting working professionals and parents who want to have a meal served quickly at a low price. Full-service restaurants provide waited table service for customers (See Slide 1-16). Guests are greeted and seated by a host/hostess and orders taken and delivered by waitstaff. Payment occurs after the meal is completed and tip is typically given for the service provided by the waitstaff member. Airport restaurants: Airlines are decreasing onboard foodservice by serving snacks such as pretzels and peanuts and cans of cold beverages and cups of hot coffee. Each airport operates differently - operators either bid on their own or enter into a franchising arrangement with a major concession operator. Restaurants rely on the airlines to attract people to their concourse. Most airports require foodservice providers to cover all day, from early morning to late at night, and offer a takeout option primarily for airline crews. Cruise Ship Dining: Cruise ships have a reputation for service of excellent food. No limit is set on what you choose or how much you eat - the cost of the food is included in the price of the cruise. Some ships have theme restaurants, such as Italian, Chinese, Japanese, or Southwestern, in addition to the main dining area. Zoos: Foodservice is becoming a profit center in several zoos across the country, and operators are upgrading the food eaten by visitors. Some zoos self-operate their restaurants and others use contract foodservice companies to provide the food options in their facilities. Museums: Fine dining foodservice operations are becoming more prevalent in large museums. Sports Events: Americans are spending more of their leisure time close to home visiting theme parks, sports events, and national parks. Hot dogs, popcorn, peanuts in the shell, ice cream, soda, and beer have long been the items sold most often at ballparks. Today, however, fans can leave work and go straight to the ballpark to eat dinner that could include deli sandwiches, pizza, fajitas, frozen yogurt, and cheesecake. Convenience Stores. Retail businesses with a primary emphasis placed on providing the public a convenient location to purchase quickly from a wide array of consumable products (predominantly food) and gasoline. [See Slide 1-17] Museums Sports Events Convenience Stores

5 Commercial Foodservice
The commercial foodservice segment includes a broad range of restaurants (from limited-service to fine dining), lodging, food and beverage, recreation and sports, and convenience stores. Limited-service, limited-menu restaurants (sometimes referred to as quick-service or fast-food) were designed to provide a limited number of food items to a customer in a relatively short period of time.

6 Commercial Foodservice
Limited-service, limited-menu restaurants Often the customer orders food at a counter and pays for it before eating. These restaurants are targeting working professionals and parents who want to have a meal served quickly at a low price. Full-service restaurants provide waited table service for customers. Guests are greeted and seated by a host/hostess and orders taken and delivered by waitstaff. Payment occurs after the meal is completed and tip is typically given for the service provided by the waitstaff member.

7 Commercial Foodservice
Airport restaurants: Airlines are decreasing onboard foodservice by serving snacks such as pretzels and peanuts and cans of cold beverages and cups of hot coffee. Each airport operates differently - operators either bid on their own or enter into a franchising arrangement with a major concession operator. Restaurants rely on the airlines to attract people to their concourse (crowd). Most airports require foodservice providers to cover all day, from early morning to late at night, and offer a takeout option primarily for airline crews.

8 Commercial Foodservice
Cruise Ship Dining: Cruise ships have a reputation for service of excellent food. No limit is set on what you choose or how much you eat - the cost of the food is included in the price of the cruise. Some ships have theme restaurants, such as Italian, Chinese, Japanese, or Southwestern, in addition to the main dining area.

9 Full-Service Restaurants
Casual Dining Fine Dining The style and ambiance of full-service restaurants varies greatly from casual to fine dining. Casual dining restaurants are designed to attract middle-income individuals who enjoy dining out but do not want the formal atmosphere and high price found in a fine dining restaurant. The atmosphere is casual, the mood relaxed, and the price midrange at these restaurants. Fine dining restaurants, often referred to as “white tablecloth” restaurants, are characterized by a high level of attentive table service, expensive-looking furnishings and décor, and fine cuisine. Staff members in these restaurants work to create a memorable dining experience that communicates elegance and attention to every need of the guest. Fine dining restaurants also include: Hotel and motel restaurants Country club restaurants

10 Full-Service Restaurants
The style and ambiance of full-service restaurants varies greatly from casual to fine dining. Casual dining restaurants are designed to attract middle-income individuals who enjoy dining out but do not want the formal atmosphere and high price found in a fine dining restaurant. The atmosphere is casual, the mood relaxed, and the price midrange at these restaurants.

11 Full-Service Restaurants
Fine dining restaurants, often referred to as “white tablecloth” restaurants, are characterized by a high level of attentive table service, expensive-looking furnishings and décor, and fine cuisine. Staff members in these restaurants work to create a memorable dining experience that communicates elegance and attention to every need of the guest. Fine dining restaurants also include: Hotel and motel restaurants Country club restaurants

12 Convenience Stores Convenience Stores
Mini Limited Selection Kiosk Traditional Expanded Hyper Convenience Stores A convenience store is a retail business with primary emphasis placed on providing the public a convenient location to purchase quickly from a wide array of consumable products (predominantly food) and gasoline. Kiosk. Less than 800 square feet intended to provide additional revenue beyond gasoline sales. Sells only tobacco, beverages, snacks, and confectioneries, no groceries; parking only at the gas pumps. Typical customers are transients and locals stopping in to buy gasoline. Mini. Usually 800 to 1,200 square feet in size, with emphasis on gasoline sales. Grocery selection is usually sparse and the only food is prepared sandwiches; parking is often only at the pumps; usually open from 18 to 24 hours and customers usually only buy gas. Limited selection. Range from 1,500 to 2,200 square feet and are becoming more numerous. Gasoline and store sales are profitable - they have a broader product mix and grocery offering; gasoline buyers are normally the biggest customer base; striped parking and extended hours are common. Traditional. About 2,400 to 2,500 square feet, offering a product mix that includes dairy, bakery, snack foods, beverages, tobacco, grocery, health and beauty aids, confectionery, as well as gasoline sales. Other possible items are prepared foods to go, fresh or frozen meats, various products, and limited produce items; usually have 6 to 12 striped parking spaces and are open 24 hours a day. Expanded. The number of stores that have 2,800 to 3,600 square feet is growing fast. Stores have more shelving for grocery products and more room for fast-food operations and seating; parking is important, with most having about 10 to 20 spaces; hours are extended. Hyper. These are very large stores, 4,000 to 5,000 square feet, and usually offer many products and services arranged in departments. For example, such stores may offer a bakery, a sit-down restaurant area, and a pharmacy; many sell gas; the number of parking spaces is substantial and hours are extended.

13 Colleges & Universities Correctional Facilities
Onsite Foodservice Hospitals Schools Colleges & Universities Child Care Senior Care The onsite foodservice segment includes hospitals; schools, colleges, and universities; correctional facilities; and military operations. These foodservice operations provide meals primarily for those directly involved with the facility such as patients, students, prisoners, and employees; some visitors to these facilities also may be served. Hospitals. Hospital foodservice operations provide food for both inpatients and outpatients and their family and friends. Managed care, providing care under a fixed budget, has put pressure on hospitals to control costs - many hospital foodservice operators are changing and expanding the retail options they provide to staff and visitors. Patient census counts are declining and foodservice managers are streamlining menus, staffing only one or two shifts, and relying on more convenience foods. Schools. The National School Lunch Program (NSLP) is a federally assisted meal program operating in more than 101,000 public and nonprofit private schools and residential child care institutions. The NSLP provides nutritionally balanced, low-cost, or free lunches to more than 31 million children each school day. Colleges and Universities. College and university foodservice operations provide a variety of food options to students at more than 3,700 colleges and universities across the United States. Foodservice operations in this segment have grown from the traditional straight-line cafeteria in each dormitory to multiple retail venues including food courts, deli, kiosks, and convenience stores. Traditional board plans often are being replaced with declining-balance food accounts, which allow students to pay for only those foods eaten each day. Child Care. Increasing numbers of American children are enrolled in child care outside their homes as more mothers are working. The position of the Academy of Nutrition and Dietetics (formerly the American Dietetic Association, ADA) is that all child care programs should achieve recommended benchmarks for meeting children’s nutrition and nutrition education needs in a safe, sanitary, and supportive environment that promotes healthy growth and development. Senior Care. Many older people do not want to lose their independence by going to a nursing home, but they need assistance in preparing meals. [See Slide 1-19] Military. Military foodservice operations include dining hall and food court meal service for troops, hospital feeding for patients and employees, club dining for commissioned and noncommissioned officers, and mobile foodservice units for troops deployed to off-base locations. The Army & Air Force Exchange Service is adding more national chains, such as Taco Bell and Manhattan Bagel Co., to food courts on military bases. Food is also being sold in on-base convenience stores or gas stations. Correctional Facilities. Until 1960, prison foodservice offered only the basics; during this time, prison foodservice directors banded together to form the American Correctional Food Service Association (ACFSA). A major goal of ACFSA was to improve foodservice and reduce food riots started by prisoners unhappy with the quality of food served to them. Today, many facilities have self-serve salad, pasta, and dessert bars and serve favorites like pizza, chicken nuggets, and homemade baked goods. Foods served to inmates must meet standard dietary guidelines, and all menus must be approved by registered dietitians and are evaluated quarterly. Employee Feeding. Employee feeding has undergone many changes because of the rising cost of labor and the decrease in corporate subsidies. Managers are realizing that these operations must be self-supporting and revenue generating. Menus have been updated and facilities renovated to make the foodservice more like a commercial restaurant operation. Instead of a straight-line cafeteria with an employee serving the food, customers serve themselves from individually themed stations, such as salad, soup, pasta, grill, deli, desserts, and beverages. Military Correctional Facilities Employee Feeding

14 Senior Care Independent Living Congregate Care Assisted Living
Intermediate Care Skilled Nursing The purpose of the Nutrition Services Program for Older Americans, as authorized by Title III of the Older Americans Act, is to provide nutritious, low-cost meals to homebound persons and congregate meals in senior centers. Many organizations also sponsor home-delivered meals, including the Visiting Nurse Service and the National Association of Meal Programs, which is subsidized partially by the USDA and the United Way. Many housing and meal options exist for seniors - the options differ based on the amount of care given: Independent living. For people who can take care of themselves in their own homes or apartments, a retirement community, or independent living apartment. Congregate care. A community environment with one or more meals a day served in a community dining room. Many services are provided, such as transportation, a pool, convenience store, bank, barber/beauty shop, laundry, housekeeping, and security. Assisted living. Apartment-style accommodations where assistance with daily living activities is provided. Fills the gap between independent living and nursing home care. Services include meals, housekeeping, medication assistance, laundry, and regular check-ins by staff. Intermediate care. Nursing home care for residents needing assistance with activities but not significant nursing requirements. Skilled nursing. Traditional state-licensed nursing facilities that provide 24-hour medical nursing care for people with serious illnesses or disabilities. Care provided by registered nurses, licensed practical nurses, and certified nurse aides.

15 A Foodservice Systems Model
A foodservice systems model in this slide (Figure 1-4) was developed to illustrate applications of systems theory to a foodservice organization and elaborates on the components from Figure 1-2 (Slide 1-5). Arrows in the model represent the flow of materials, energy, and information throughout the foodservice system. Gaps in the arrows from output to input on the periphery of the model represent the permeability of the boundaries of the foodservice system and reflect the environmental interaction inherent in the effectiveness of the system. The bidirectional arrows represent environmental interactions, both internal and external to the system.

16 Inputs of the Foodservice System
Human Resources Materials Facilities Operational Resources Inputs of the Foodservice System The inputs of the foodservice system are the human and physical resources that are transformed to produce the output. Traditionally, these resources have been referred to as men, materials, money, and minutes. This traditional definition has been expanded by defining the following four types of resources: Human: labor and skills Materials: food and supplies Facilities: space and equipment Operational: money, time, utilities, and information Input requirements are dependent upon and specified by the objectives and plans of the organization. For example, the decision to open a full-service restaurant serving fine cuisine rather than a limited-menu operation with carryout service would have a major impact on type and skill of staff, food and supplies for production of menu items, capital investment, and type of foodservice facility and layout. Human: labor and skills Materials: food and supplies Facilities: space and equipment

17 Foodservice Industry Operating Practices
Self-Operation Partnering Contracting Franchising Multidepartment Management Customers are spending more than half of their food dollars on food prepared outside the home - foodservice operators who deliver high-quality, ready-to-eat foods at reasonable prices will succeed. The foodservice industry includes a variety of operating practices, including self-operation, partnering, contracting, franchising, and multidepartment management. Self-Operation. Self-operation means that the foodservice operation is managed by an employee of the company in which that foodservice operation is located. This manager has full responsibility and authority for all functions within the department and reports to an administrator employed by this same company. Partnering. Partnering is a mutual commitment by two parties on how they will interact during a contract with the primary objective of improving performance through communications. It is primarily a relationship of teamwork, cooperation, and good faith performance through communications. Contracting. A contract is defined as an agreement between two or more persons to do or not to do something. A partnership between the two is necessary to make the contract work the focus must be long term. There are many companies who will contract with an organization to run the foodservice operations in that organization. The largest contracting companies are Compass Group, ARAMARK Corporation, and Sodexho, Inc. Franchising. Franchising is defined as the right granted to an individual or group to market a company’s concepts. The International Franchise Association (IFA) suggests that the biggest advantage of becoming a franchisee is that it solves the two biggest expansion problems: people and money. A franchisee is a person who is granted a franchise A franchisor is a person who grants a franchise. Multidepartment, Multisite Management. Multidepartment management is coming back into the picture for many foodservice operations. Reasons for becoming a multidepartment manager: professional development, value to the employer, a higher position within the organization, job security and simple survival. Many foodservice managers are responsible for multiple sites as well [Eliana Schultz example].

18 Outputs of the Foodservice System
customer and employee satisfaction and financial accountability meals in proper quantity and quality Meal Quantity & Quality Financial Accountability Customer & Employee Satisfaction The outputs are the goods and services that result from transforming the inputs of the system; they express how objectives are achieved. The primary output in the foodservice system is meals in proper quantity and quality. In addition, customer and employee satisfaction and financial accountability are desired outcomes. The objective of production of food is to satisfy the expectations, desires, and needs of customers, clients, or patients. A customer at an office snack bar, for example, might be content with a grilled cheese sandwich and tomato soup; that evening at an upscale restaurant, however, the customer will have quite different expectations of the cuisine. Customer satisfaction is closely related to the types and quality of food and services provided and to customer expectations. For example, a college student, pleased with pizza on the luncheon menu of a college residence hall, would be unhappy if that same item were served at a special function of a social fraternity at a country club, even though in both instances the product may be of high quality. Employee satisfaction is another important output of the foodservice system. Management should be concerned about the satisfaction of their employees. Managers also should be concerned about assisting employees in achieving and coordinating personal and organizational objectives. Financial accountability is an output applicable to either a for-profit or not-for-profit foodservice organization. A foodservice manager must control costs in relation to revenues regardless of the type of operation. Financial accountability is an output applicable to either a for-profit or not-for-profit foodservice organizat assisting employees in achieving and coordinating personal and organizational objectives

19 Advantages & Disadvantages of Different Forms of Small Business Ownership in Foodservices
Small Business Ownership. Owning a food or nutrition service business is an attractive option for many students. Approximately 98% of all businesses are considered “small” business, that is, have less than 100 employees. Those starting these businesses are commonly referred to as an entrepreneur. There are several forms of small business ownership, each with advantages and disadvantages as shown on this slide (Table 1-3). The type of ownership chosen is influenced by: Amount of control desired by owners Management ability of owner Capital needs and availability Liability exposure Tax issues

20 Environmental Threats for Foodservices Business
Environmental threats can reduce a firm’s competitive advantage. These forces, often termed the five forces framework, are detailed above (Table 1-1) and include individuals, groups, or organizations outside of the firm that can reduce the firm’s competitiveness.

21 Food and Beverage Management
In the hospitality industry the food and beverage division is led by the director of food and beverage The director of food and beverage reports to the general manager and is responsible for the efficient and effective operation of the following departments: Kitchen/catering/banquet Restaurants/room service/minibars Lounges/bars/stewarding

22 Food and Beverage Management
The skills needed by a food and beverage director: Exceeding guests’ expectations in food and beverage offerings and service Leadership Identifying trends Finding and keeping outstanding employees Training Motivation Budgeting Cost control Finding profit from all outlets Having a detailed working knowledge of the front-of- the-house operations

23 Food & Beverage Organization Chart

24 Kitchen A hotel kitchen is under the charge of the executive chef, or chef in smaller and medium-sized properties Some executive chefs are called kitchen managers Controlling costs is an essential part of operations; as labor costs represent the most significant variable costs, staffing becomes an important factor Financial results are generally expressed in ratios, such as food cost percentage and labor cost percentage

25 Kitchen Labor cost benchmarks are measured by covers-per-person-hour or how many covers one person can produce/handle in one hour Food cost percentage is expressed by dividing the food cost by food sales Labor cost is measured by dividing the cost of labor by food sales.

26 Food Operations Restaurant managers are generally responsible for the followings: Exceeding guest service expectations Hiring, training, and developing employees Setting and maintaining quality standards Marketing Banquets Coffee service In-room dining, minibars, or the cocktail lounge Presenting annual, monthly, and weekly forecasts and budgets to the food and beverage director

27 Food Operations The number (house count) and type of hotel guest (e.g., the number of conference attendees who may have separate dining arrangements) should also be considered in estimating the number of expected restaurant guests for any meal. This figure is known as the capture rate When coupled with historic and banquet activity and hotel occupancy, will be the restaurant’s basis for forecasting the number of expected guests.

28 Bars The profit percentage on beverages is higher than it is on food items, making bars an important revenue source The responsibilities of a bar manager include : Supervising the ordering process and storage of wines Preparing a wine list Overseeing the staff Maintaining cost control Assisting guests with their wine selection Proper service of wine Knowledge of beers and liquors and their service

29 Bars Hotel bars are susceptible to the same problems as other bars
Bar efficiency is measured by the pour/cost percentage Pour cost is obtained by dividing the cost of depleted inventory by sales over a period of time Food and beverage directors expect a pour cost between 16–24% Hotel bars are susceptible to the same problems as other bars All beverage service staff should receive training in responsible alcoholic beverage service Another risk bars encounter is pilferage (steal) The best way to prevent these occurrences is to have a good control system—which should include shoppers

30 Bars In a large hotel there are several kinds of bars: Lobby bars
Restaurant bar Service bar Pool bars Minibars Night clubs Sports bars Casino bars Catering and banquet bar

31 Stewarding Department
Responsibilities of Chief Steward: Cleanliness of back of house Cleanliness of glassware, china, and cutlery Maintaining strict inventory control and monthly stock check Maintenance of dishwashing machines Inventory of chemical stock Sanitation Pest control Forecasting labor and cleaning supply needs

32 Terms are used interchangeably
Catering Department Catering: Includes a variety of occasions when people may eat at varying times Banquets: Refers to groups of people who eat together at one time and in one place Terms are used interchangeably

33 Organization Chart for the Catering Department

34 Catering Department The director of catering (DOC) reports to the food and beverage director, and is responsible for selling, servicing, catering, banquets, meetings, and exhibitions The director of catering must be able to: Sell conventions, banquets, and functions. Lead a team of employees. Make up departmental goals and objectives.

35 Catering Department Set individual and department sales and cost budgets. Set service standards. Ensure that the catering department is properly maintained. Be creative and knowledgeable about food, wine, and service. Be very well versed in the likes, dislikes, and dietary restrictions of various ethnic groups.

36 the most frequently selected meeting room setups are:
Catering Department For meetings, a variety of room setups are available depending on a client’s needs the most frequently selected meeting room setups are: Theater style Classroom style Horseshoe style

37 Seating Styles

38 Also know as the banquet event order
Catering Event Order Also know as the banquet event order Prepared for each function to inform the client and hotel personnel about essential information to ensure a successful event Prepared based on correspondence with the client and notes taken during the property visits

39 Catering Event Order The Catering Event Order also mentions the guaranteed-number policy. This is the number of guests the hotel will prepare to serve and will charge accordingly. The guaranteed number is given about seven days prior to the event. The hotel will usually prepare about 3 – 5% additional meals to cover extra attendees

40 Catering Coordinator Manages the office and controlling the function diary (now on the computer) Must see that the contracts are correctly prepared and checks on numerous last-minute details Operates web-enabled technology tools, such as Newmarket International’s Delphi System

41 Catering Services Manager (CSM)
Duties include: Directing the service of all functions Supervising the catering house persons Scheduling the banquet captains and approving staffing Cooperating with the banquet chef to check menus and service arrangements Checking that the client is satisfied

42 Catering Services Manager (CSM)
Checking last-minute details Making out client bills immediately after the function Adhering to all hotel policies and procedures Calculating and distributing the gratuity and service charges Coordinating the special requirements with the DOC and catering coordinator

43 Room Service / In-Room Dining
56 % of all properties offer room service and 75 % of airport properties provide room service Generally, the larger the hotel and higher the room rate, the more likely they will offer room service Challenges include: Delivering orders on time - especially breakfast Making room service profitable/forecasting demand Avoiding complaints of excessive charges Having well-trained and competent employees

44 Sustainability Ecologically Sound Economically Viable Socially
Acceptable Sustainability, the ability to meet the needs of today without compromising the ability of future generations to meet their needs, is becoming increasingly important to foodservice operations. According to ADA, a sustainable food system is one that is: Ecologically sound (inputs used in ways that conserve, regenerate, or enhance natural resources); Socially acceptable (resources are distributed equitably; people working in the food system are treated justly; and foods that are produced benefit human health, are culturally acceptable, and economically and geographically available); and Economically viable (provides livelihood that supports families; economic control of production, distribution, and access equally shared).

45 Sustainable Food and Beverage Operations
Practicing sustainable food and beverage operations can and does lead to a better bottom line. When operators save water and electricity, recycle, and purchase local produce, they help lessen the footprint of the operation. Guests are increasingly aware of the importance of sustainable operations of a food and

46 Sustainability Efforts in Foodservice Operations
The U.S. Environmental Protection Agency categorizes sustainability efforts into four areas: Built environment Water, ecosystems, and agriculture Energy and the environment Materials and toxins The use of sustainable practices by an organization often is termed “green” to designate the environment-protective focus of sustainability efforts. A relatively new term, greenwash, is being used to denote the distribution of misleading or inaccurate claims by a company about its environmental efforts in an attempt to create a positive public image for the company. Robbins and Coulter (2007) described a four-stage model of the shades of green of an organization: Stage 1, Legal Approach (light green): company only does what is legally required Stage 2, Market Approach: company initiates some green initiatives in response to customer preferences Stage 3, Stakeholder Approach: company works to meet the environmental demands of multiple stakeholders (employees, suppliers, customers, community) Stage 4, Activist Approach (dark green): company actively pursues ways to respect and preserve the earth and its natural resources

47 Trends The use of branded restaurants instead of hotels operating their own restaurants Hotels opting not to offer food and beverage outlets Making outlets more casual Using themes for a restaurant Standardized menus Converting one beverage outlet into a sports-themed bar Technology being used to enhance guest services and control costs More low-fat, low-carb menu items

48 The End


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