Boycotts, viral videos, striking, protests, opt-out campaigns — all this brings to mind the Occupy Wall Street movement or even unrest in other countries. But that's not what we're discussing this time. No, in this instance we are talking school lunch here in the United States, specifically foodservice in schools participating in federally funded School Meal Programs (SMP).

Melanie-SmytheMelanie Smythe
President, Candacity
Richfield, Wis.
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These activities were unleashed at the beginning of this school year in reaction to district foodservice directors implementing the changes required by the Healthy, Hunger-Free Kids Act (HHFKA). The unintended consequences are numerous, and appear to be negatively affecting school districts' foodservice business months later. Students were surprised by menu changes that included more fresh fruits and vegetables and foodservice staffs had become unaccustomed to providing such fare.

Tracking stories from across the country we hear foodservice income is lower in some school districts due to fewer meals served, labor costs are higher as staffs adjust to the new requirements, food waste is up as fruits and vegetables forced on students are thrown out, customer satisfaction is lower due to reduced portions and students must spend more money to eat a similar amount as in previous years.

But how did we get here? It certainly did not happen overnight but the seemingly abrupt nature of the changes apparently has caught the industry somewhat off guard. So how can school foodservice operations smooth the transition? It starts with understanding the past and working from that point to embrace the future.

The Evolution of School Foodservice

Over decades food companies have changed their businesses, in part to adjust to how people say they want to eat. Consumers indicate they want more convenience due to their lifestyles and their tastes continue to change — think food trends and flavor preferences — likely due to increasing populations travelling and experiencing more of the world. Back in the 1960s more women entered the workforce and that meant less time at home. So recipes changed and food companies responded with pre-assembled boxes of ingredients ready to go. Eventually, supermarkets and restaurants followed suit by preparing whole meals and making them available for purchase at a moment's notice. School curricula may have contributed to the situation, offering fewer home economics and shop classes, pushing students toward college prep, providing fewer opportunities for people to learn how to cook or about nutrition, thus driving the demand for convenience food prepared outside the home.

Foodservice in schools participating in SMPs deal with meal reimbursement prices set by government and margins are low. Simply put it's a penny business and higher food or labor costs can throw the accounting quickly into the red. As a result, food companies responded by providing convenient menu items or ingredients for mass production. Staff could easily open, thaw and heat the food, oftentimes faster than preparing meals from scratch. Of course the food preparation process often included the use of preservatives, which could lead to higher fat, salt and processed ingredients.

In retrospect, there seems to have been a disconnect between menus produced and kitchens designed over time, because as kitchen staff produced less complicated meals brand new kitchens were equipped with sophisticated equipment such as steam-jacketed kettles, tilted braising skillets and rotisserie ovens that got no use. It is unfortunate that we too often find school foodservice kitchen staff lacking the skills to use this great equipment now, especially since cooking with real ingredients is required today. Of course, this assumes the equipment is in working order, which frequently is not the case.

While generalizing somewhat, it's not hard to see how, when factored in over time, these events contributed to a school foodservice community that's not in a position to deal with the changes the new laws require. This is not an indictment of the intent of the law because, really, who objects to good health? Nor is this a commentary on school foodservice staff across the country. Rather it is an indictment of the way the implementation of HHFKA is being handled. We will look at how HHFKA is affecting school foodservice systems and provide some ideas about how the industry may respond in support of our so-called lunch ladies.

It's All About the People

HHFKA impacts a variety of people — think students and parents, staff and foodservice management — in a very personal way. How would you like it if your meal and work habits underwent rapid transformation, overnight, without your input? Well, that's what happened here. And, their reaction and ability to cope with the changes in meal offerings affects the financial performance of the district's foodservice operation. Revenues appear to be reduced and food and labor costs have increased. Students who were boycotting at the beginning of the school year have now settled into new habits, bringing their lunch or accepting the meal but throwing out the menu items they do not like. In addition to learning new, or refreshing existing skills in the areas of menu production and service, staff must get up to speed on the new requirements for portions and nutrients for each age group they serve. Sharpening one's skills and learning new requirements takes time, which is something they don't have.

The average price charged for a school lunch across the Unites States is $2.46 (per USDA for the 2011-2012 school year). While meeting this cost benchmark is challenging under the best of circumstances, directors must also wrestle with higher food costs for fresh ingredients and higher labor costs that come with preparing these items. At the same time, foodservice management often find themselves addressing these issues with kitchen equipment and facilities that impede their efficiency. Many kitchens in schools were built 40 years ago or more, and bring with them such inherent barriers as poor traffic flow and the wrong combination of equipment, presuming the items even work. With scratch cooking now the norm, kitchen staff must diligently measure and portion food to comply with the government rules, and keep proper records to ensure financial success.

In 2011, a total of 31 million lunches were served daily as part of the USDA program. The harsh reality, though, is that even those districts in compliance with the program's guidelines find themselves on shaky financial footing as district and state funding are reduced due to the overall economy and costs are higher with the changes affecting their revenue. Never mind the fact that the funding school districts receive has traditionally lagged behind the actual cost of providing the meals. As many stories as we hear about technology in schools, most of it centers on improving access to the Internet in classrooms. One place it has not shown up is in the software school foodservice operators can use to better manage their businesses, according to in-person observations and surveys by the National Center for Education Statistics.

Even before the HHFKA, school foodservice software resembled a set of networked desktop computers that create individual spreadsheets of information for each day. The manual nature of the system may not allow the foodservice director to reconcile data from across the district, leaving little opportunity for comprehensive record keeping;nutrient, ingredient, and menu cycle analysis and inventory and purchasing or financial tracking that meet HHFKA's requirements in an efficient 21st century way.

Further, the current uncertain nature of the economy adds to school districts' reluctance to spend money on foodservice rather than educational programs. What is certain is that with a good system that leads to a well-managed administrative component, foodservice staff would have one less barrier to overcome as they strive to encourage students to eat more healthful diets. Perhaps HHFKA will change this?

There is also some good news, in that food product manufacturers are starting to change ingredients, packaging and messaging about their products. A portion of this change can be attributed to the "slow food" movement and people's desire to consume locally sourced food items.

But the next and more impactful changes to school foodservice will be due, in part, to this law. With municipalities regulating ingredients in food and beverages, food product manufacturers will need to re-formulate, re-package and re-label more clearly to be a trusted source. With the interest in the USDA's Gardens in Schools and Farm to School programs, districts' curricula could benefit from educational materials about the science of growing food, showing students where food comes from and letting them do it themselves. Out of necessity, companies in the food business will need to adjust to comply, or choose not to participate at all.

Managing the Transition

School foodservice operators will most likely need to leverage the expertise of operations consultants to aid in menu planning, scratch cooking training, fresh sourcing, and business management best practices. Expectations for the school kitchen staffs are higher, too. Foodservice staffs' ability to read menus is critical, knife and food safety skills need refreshing, and their customer service skills for coaxing reluctant students to try "just one bite" are needed more than ever. At the foodservice management level, better menu planning methods based on fresh produce will help directors run a compliant, financially sound program.

In addition, school foodservice operators may need to turn to design consultants to assess and address the existing conditions of a building and its foodservice equipment in order to develop a layout and a simplified equipment package that's more relevant to today's operating environment. Doing so can better position the kitchen and servery configurations to meet the new production flows. A secondary service could include developing equipment replacement and utility savings plans, which, if implemented over time, can be off-set by savings on a yearly basis.

Foodservice equipment manufacturers will definitely need to revise school offerings to match the updated cooking processes. Gone are the days when every kitchen needs two or three steam-jacketed kettles, a tilted braising pan and four types of ovens. Instead, today's school foodservice operator requires combinations of equipment that can be simpler and come in smaller packages. This includes multi-functioning pieces, with simple controls that are easy to maintain. And if the equipment meets Energy Star or other conservation standards, all the better.

Foodservice directors will need to be able to prove to their business managers that by implementing an equipment replacement plan, the new items will help off-set their initial costs in utility and labor savings. Their operations could also benefit by periodic in-service events and maintenance checks, offered as a courtesy or service, adding a deeper level of customer care, deepening the connection to the brand.

The dealers have a role in the in-service event and maintenance programs as well. By helping the districts' foodservice directors in similar ways as the manufacturers can, and locking into the idea of planned replacement and follow ups, their reputations will grow as problem solvers and time savers.

What if POS hardware companies and software developers worked with the food manufacturers to develop a workable suite of technology products for schools? Perhaps there are products in development; however, none available today provide a comprehensive technology solution.

As for the students, they appear to be coming to terms with the menu changes in one fashion or another. The videos have calmed down and boycotting is "so last month." As Nick Staniszewski, a high school senior, said, "They (food service staff) can't appease both sides, as basic teenage psychology will tell you the student body will disagree with anything being forced upon us. But I like the improvement they tried to make, and the additions of fruits and vegetables are getting out there for students and students are eating those foods."

Although, students are not eating all of these foods, as witnessed by the increased level of waste; in fact, one Florida school district estimated that students tossed $75,000 worth of produce into the garbage.

Despite the fact there are more than 100,000 public and private school districts participating in SMP, the program is clouded with uncertainty given it is not clear what our country's tax base will look like in the coming year and what impact that will have on businesses and consumers. This impacts consumers' ability to support school foodservice and the public funds made available to schools. For many consultants, though, this may represent the next opportunity for us to work collaboratively with our clients to help this important part of the industry continue to evolve to provide affordable, better-for-you meals to school children everywhere.

Summary of the Healthy, Hunger-Free Kids Act

Date: Enacted in 2010; took effect in July 2012

Goal: To provide a framework that will help school foodservice operators provide healthier meal options and better educate students on the importance of healthy eating.

Food: Each of the three age groups has a calorie cap, sodium and fat reduction levels, mandated portions by week (max) and day (min) in the categories of grains, fruit, vegetables, dairy, meat/meat alternatives. The lunch goals are in effect this school year and breakfast and a la carte menu nutrition changes will take effect next year. The plan also calls for greater sodium reduction over 10 years.

Administration: To help offset the anticipated higher costs of meeting HHFKA's requirements, the USDA made an additional six cents per meal available to participating school foodservice providers. To qualify for the additional funding, paperwork proving compliance submitted to the state for certification and program audits will occur every three years instead of every five years. Enrollment methods will change through technology, currently in development, provided from census data to the districts.

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