SFM Meets on 'Critical Issues' at NYSE

While more than 1,000 stock traders tended to business on the floor of the New York Stock Exchange on April 14th, Society for Foodservice Management (SFM) members and guests were in attendance—seven floors above—for the association’s 2011 Critical Issues Conference (CIC). Most came to take stock of the economic trends impacting their foodservice operations as well as to trade applicable insider tips in regard to “How Innovation Can Be A Competitive Advantage.”

CIC chairman Margaret Stefanek, RD, LD, senior associate, Innovative Hospitality Solutions, Inc., had assembled an experienced cross-sector operator panel, fully aware that a good idea from the healthcare or college/university realms can often work just as well in the Business & Industry milieu.

Warren Solochek, v.p. for client development, NPD Group/Foodservice, the Port Washington, NY-based consumer research company, provided a solid backgrounder on the state of the industry with statistics from the CREST study (i.e., Consumer Reported Eating Share Trends).

Not wishing to be a messenger of doom and gloom, nevertheless Solochek, with a 25 year foodservice industry career to his credit, notes that unemployment remains high and food prices have been rising quite a bit recently leaving the consumer trying to figure out where best to buy food.

“Even though the recession is ‘over,’ consumer confidence is still low; when people are cautious, they don’t spend money,” he pointed out. “B&I cafeteria usage decreased by 56 million visits overall, so if you’re expecting it to grow, you’ll be way over budget.”

Since unemployment is highest among the 18-to-34 year-old age group, operators need to reassess menus in order to appeal to the remaining employee cohort, the Boomers. This group has greater concerns regarding health, portion size, cholesterol, sodium content, etc.

Looking at what business a non-commercial location can “steal” from street-side operations, Solochek suggests operators talk about value—and look closely at the benefits of adding more made-to-order breakfast offerings. (QSRs average morning meal sells for $4.38 vs. $2.95 in B&I, so that cost savings should be promoted.)

“On the street, there are a lot of promotions,” he pointed out. “Try to create combo meals to make it worth while—plus play up the convenience of not having to go out of the building.”

Zeroing in on the breakfast meal as fertile ground for expansion, Solochek’s research data clearly shows it’s all about “convenience and habit—and there’s a lot more about health these days.” He asserts that providing healthy options is a cost of doing business today. Hot cereal, snack bars and hand-held items (especially containers of Greek yogurt), salads, vegetarian entrees, meatless burgers and sandwiches, plus chicken and turkey sandwiches are all expected choices.

With that said, NPD research shows that consumers are not really eating more healthfully today. “Better-for-you product sales have not seen a big increase between 2005 and 2010; the percentage of people on diets is decreasing—people were more concerned about their diet in the 1980s and 1990s than today,” Solochek said. “We are an obese nation and that’s only growing!”

Based on NPD data, Solochek contended that price-driven motivation is top of the list. (He points to the Subway value proposition in marketing its $5 foot-long sub.) “On balance, non-commercial operators should tell people the cafeteria is an economical place to eat; focus on value plus good tasting food. You have to menu items people want—and value is also time! Let people know you have grab’n go options; also, you don’t need tons, but you do need to have healthy choices.”

Regenia Phillips, director of residential dining services at Yale University, provided a behind-the-scenes look at her campus program where approximately 4,700 students are served in 12 residential dining facilities. Just what constitutes a “trend” on this campus where retail sales are reportedly growing? “A ‘trend’ has to be relevant, improve our quality, and it has to create a buzz,” she said.

With more than 25 years in the hospitality industry to her credit (the last two at Yale), Phillips point to several undertakings on campus that have indeed created “buzz” for her operation.

• The Guest Chef Series, in which various noted chefs “come to teach and train our staff; during a Masters Tea, they talk with students about creating a better menu.”

• Student Culinary Competition in which Yale students compete against those from a dozen other colleges.

• “Uncommon,” a new market featuring all “sustainable” and additive-free produce and products.

• “Outdoor Uncommon Market” geared to sell fresh produce, at cost, to neighborhood residents in this urban area surrounding the campus that has no grocery store.

• “Rethinking the Salad Bar,” a project spearheaded at Yale by acclaimed chef Joyce Goldstein.

“Now the selections are healthier for students with a redesign that forces them to choose a salad, such as a composed grain salad, that makes sense,” Phillips explained. At the end of the day, “if we’re really going to be trendsetters, we have to look at all the elements that make the experience relevant.”

Tony Almeida, DHCFA, director of food and nutrition services, Robert Wood Johnson University Hospital, New Brunswick, NJ—a “Joisey Boy” who just happens to be an IFMA Silver Plate winner (2010) and has been in food service for 37 years, the past 19 as FSD at RWJ—underscored the point that most of what hospital foodservice directors provide is identical to the offering served in B&I locations.

“About 30% of meals we provide are for patients in this 606-bed facility, but we have 3,500 employees to feed as well,” he said.
In a wide ranging presentation that often elicited understanding chuckles and bursts of applause from his listeners, Almeida touched upon many of the diverse programs he’s put in place at his facility in order to cut operating costs as well as those that have proven to increase sales—and customer satisfaction.

On the “sustainability” front, he seeks to save energy usage. “If there’s an incentive, we’ll save energy costs, but [manufacturers need to] give us rebates,” he said.

In regard to buying local, Almeida said he’s teaming up with major distributors to buy “Jersey Fresh.” Purchasing “organic” is not an issue here, he finds. “We’re a major teaching hospital and not one person has asked for ‘organic’—but we are talking to local vendors and aim to buy ‘in season.’”

As to offering those “healthy options” that customers say they want, Almeida and his staff dietitians have designed and implemented a Traffic Light coding system with icons on each item in the cafeteria denoting whether it’s o.k. (green light), a no-no (red light) or o.k. in moderation (yellow light).

“But the grill is still the most popular area with our 6-oz. homemade burger the most popular item. Firmly convinced that knowing your competition is a “must” for beating them at their own game, Almeida has dined at all of the 27 restaurants in the RWJ neighborhood.

The “buzz” created around Theme Days generates an average sales increase of about 10% on those days, while Display Cooking, Live Entertainment (quarterly), plus in-house brands with labels bearing the likeness of the Master of Hospitality himself, Tony Almeida, have all generated interest and contributed to the bottom line.

Rounding out the panel of operator experts, Julienne Stewart, MS, RD, LDN, the 2003 Silver Plate winner in B&I and foodservice manager for SAS Institute, Cary, NC—the nation’s largest privately-held software company—presented her perspective on the B&I scene.
Even in a sluggish economy, breakfast sales have recently grown by 10%; meanwhile, sales of take-home evening meals (including whole pizzas and marinated steaks) have posted a 22% upswing.

How did SAS achieve such impressive numbers? Corroborating NPD’s Warren Solochek’s earlier comments, Stewart poined to her competitive prices. Aiming to “steal some breakfast and lunch traffic from competitors,” the breakfast average at SAS venues is about $1.35 (with no charge for beverages); although the lunch average is $4.85 (about 21¢ higher than the overall B&I average), increased snack options—and resultant sales—is conceivably the reason for the increased lunch ticket, she concludes.

Numerous promos have been mounted and nutrition labeling information has been expanded at customer request; labeling now also lists any of the top eight allergens if included in the product.

“We knew we had to grow breakfast sales,” Stewart explained. “Ten years ago we made it grab ‘n go, but now we’ve added to it with freshly made oatmeal and grits every morning as well as more whole grains—and we’ll be adding more gourmet coffee. We also offer a heart healthy option with a nutrition breakout, and smaller portions are available.”

--Karen Weisberg