Hot potato in the school cafeteria: more districts outsource their food services, but some raise questions about personnel relations and savings

School Administrator, Sept, 2004 by Kate Beem

It's such a simple mandate: Prepare healthy, nutritious meals for the schoolchildren so they can go about the business of learning.

But operating a school district food service department is anything but simple. Even in the smallest districts, food service operations are businesses that must comply with many more rules than those in the private sector. School food service departments must operate as nonprofits, yet they need to make enough money to be self-sufficient. There are federal nutritional guidelines to follow, and the meals have to be attractive to hard-to-please consumers who are inclined to complain about "mystery meat."

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In fact, most people take the school food service department for granted, says Donna Wittrock, president of the American School Food Service Association and executive director of food and nutrition services for the 73,000-student Denver Public Schools. Few outside the food service operation understand the difficulty of balancing government regulations and nutritional worries against marketing and customer service.

"Most people in a school district don't have a clue how food service operates," Wittrock says.

Outsourcing Options

It's no wonder an increasing number of school districts across the nation are turning to food service contract management companies to take over some or all of the responsibility. It's a trend not without controversy. At stake are the reputations of the districts' own food service departments and the welfare of longtime employees, who fear they will get dismissed in the struggle to save money.

The K-12 school food service market is wide open today as far as contract management companies are concerned. Although the actual number of school districts using outside contractors to manage their food operations is sketchy because no agency tracks the practice, the figure pales in comparison with the saturated higher-education market. According to a 2000 study by the Centers for Disease Control and Prevention, food service management companies operate in almost 17 percent of U.S. schools.

Outsourcing food services comes in all shapes and sizes. Some districts completely turn over their operations, including hiring and firing employees, to contract management companies. Others might limit the arrangement to purchasing. Sometimes the management company can play only a consulting role.

"There may be some cost efficiencies associated with doing it one way or the other, but it is really a function of what's going on in the district," says David DeScenza, regional vice president of sales for Compass Group's Chartwells Division, which contracts with 519 school districts around the country.

The practice is more prevalent in some states than others. Figures from Chartwells show that 70 percent of New Jersey school districts outsource food services, and more than 20 percent of Michigan's districts do. Florida encourages school districts to investigate outsourcing opportunities as cost-savings measures, but other states are neutral about the practice.

Contract management companies expect their market share to expand as fiscal pressures on school districts increase. Those pressures are forcing school system leaders and their governing boards to examine every budget item for cost savings.

Purchasing Efficiency

Food service management companies say they can save school districts money through their purchasing power and other efficiencies, freeing up funds for the classroom.

"Food is what we do," says Jeff Wheatley, president of the schools division of Aramark Corp., which ranks as the nation's largest food management company in the K-12 market with 420 school district contracts in 20 states. "We're going to bring a better product to the table, allowing a district to focus on what it does best--educate kids."

That's what Kent Barnes, superintendent of the 4,300-student Holly Area School District in Michigan, finds attractive about his district's relationship with a food service management company.

On a typical day, Barnes has a lot on his plate. He spends much of his time dealing with test scores, the school board, employee relations and an ever-tightening budget. His district's school cafeteria operation is the last thing he wants to worry about.

And most of the time he doesn't, owing to the district's seven-year relationship with Chartwells. The Holly district's food service manager, a Chartweils employee, plans the menus, ensures the district complies with federal food service regulations and keeps tabs on whether the service breaks even.

Barnes is so pleased with how things are going that he's wondering whether the district should expand its partnership with Chartwells by allowing the company to assume control over the entire food service operation, including payroll and personnel relations. "It's a wonderful team effort," Barnes says. "Quite frankly, with [Chartwells] here, I don't worry about food service."

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Hot potato in the school cafeteria: more districts outsource their food services, but some raise questions about personnel relations and savings

School Administrator, Sept, 2004 by Kate Beem

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