7 tips for beating the street

With gourmet and exotic fare now widely available for delivery from restaurants with only a few taps on a smartphone, and an array of premium frozen or shelf-stable packaged foods available from just about any retail grocery store for consumers to bring to work or school, onsite operators are feeling the heat from external competitors.

So how do they respond to these encroachments onto their turf? Here are seven ways.

Charlotte-Mecklenburg Schools recently experimented with pre-orders at one of its high schools, because “that’s what our kids are used to in the real world,” says Executive Director Catherine Beam.

Co-opting the competition

Some colleges make peace with at least some of their competitors by incorporating them into their meal plans, but few schools have gone further to accommodate off-campus competitors than Duke University, where a rotation of independent food trucks and delivery options from off-campus commercial restaurants is allowed to operate during the evening and late-night hours and gets paid through Duke’s Merchant on Points program, which allows students to use their meal plan points for these purchases.

These options remain “a strong enhanced supplemental part of dining program,” says Robert Coffey, director of dining services. “With ongoing renovations with additional residential buildings, we are developing new locations for the food trucks to rotate and better serve the students,” he adds.

Delivering convenience

Related:Aramark partnership puts healthy and convenient meal kits on universities’ dining plans

As remote ordering and food delivery expands in the broad commercial restaurant market, they are also appearing in more onsite operations as a necessary competitive response. That’s true even in K-12, where remote ordering is seen not just as a way to capture business lost to nearby c-stores and QSRs but also as a way to efficiently offer customized meals within the narrow time windows imposed by school lunch schedules.

“I really feel like that’s the way retail is going—you can order your McDonald’s food online now and someone will bring it out to your car,” explains Catherine Beam, executive director of school nutrition services for Charlotte-Mecklenburg Schools in North Carolina. “That’s what our kids are used to in the real world, and we’re trying to see if we can make that work for us in school.”

Beam rolled out a remote order option at one of her district’s CEP high school sites last November as a pilot to test its impact on meal participation and is continuing it this fall. In fact, she says she plans to expand the service in October to a second district high school that isn’t CEP, “so we can work out payment issues with the software vendors.”

On the corporate dining side, a survey of 1,500 U.K. and U.S. employees earlier this year found that the vast majorities of respondents in both countries said they would substantially increase their patronage of onsite dining options if mobile ordering were available.

Related:C&U trends: Robot delivery, college foodservice predictions

That’s a strategy the Best Concept Award winning in-house dining operation at the Citi global headquarters in New York City (see the July/August issue) already offers at its deli, where remote-ordered meals can be picked up in a high-tech vending machine at any time, meeting the challenge of external competitors with longer operating hours.

“Smart” fridge units from vendor Byte Technology stock not only fresh meal solutions but even dinner meal kits that can help an operation capture some off-site as well as onsite meal business.

Welcome to the machines

Sophisticated vending machines or so-called “smart fridges” like the one at Citi allow onsite dining programs at both businesses and institutions to extend service hours cost-effectively while providing high-quality meal choices that rival external options. And unlike traditional 24-hour unmanned micromarkets, they require only minimal footprints and basic utility hookups and don’t need to be in secure, restricted-access locations.

They can also be more flexible. For instance, smart fridge units from West Coast-based vendor Byte Technology not only stock a widely diverse array of fresh meal solutions but also dinner meal kits of the type marketed by companies like Blue Apron and HelloFresh, which not only helps retain more in-house business during the day but can even capture some dinner business as well. Byte already has licensing deals with major contractors like Aramark, Sodexo and Canteen, which will help take the technology national.

Turnabout is fair play

Poaching on dinner business traditionally surrendered to commercial providers lets onsite operators compete with the street through a kind of behind-the-enemy-lines excursion. Others open their cafés to street business, hoping to offset—or better—the business their internal customers take to outside restaurants.

Some operators are even looking at branding their own products and selling them externally.

For example, the in-house dining program at Sam’s Club in Bentonville, Ark., markets a commercially available line of spice rubs developed by Executive Chef David Concepcion.

“I hooked up with a spice company called Spiceology,” he says. “I sent them recipes and they created a customized rub product for us that is now on the market and sold [both] independently here and on their website.”

The commercial product not only generates extra revenue but also elevates the status of the in-house dining program in customers’ eyes, Concepcion notes. “Part of my goal here is to change the way people thing of corporate dining, so that it’s not just grilled cheese and burgers.”

Remote ordering and delivery are other avenues that can extend an in-house foodservice to external customers.

For example, the Fresh Healthy Café (FHC) unit at St. Francis Medical Center in Missouri not only offers preorder and delivery internally but also has a growing offsite business through an external delivery service called CarGo, which is “booming,” reports FHC Co-owner Rick Hetzel. “CarGo delivery continues to grow and has become very popular with our customers, [so] we have recently added another delivery contractor, Waitr.”

Ohio State University Wexner Medical Center not only has these pre-order kiosk units in its retail café but has also deployed one in a surgical waiting area to capture potential additional business.

Delivery

Operators also continue to experiment with meal delivery as a way to reach more internal customers.

For example, Ohio State University Wexner Medical Center last year launched a remote order/delivery service in a surgical waiting area that allows families awaiting results of procedures order and get food without leaving. More recently, it opened a kiosk delivery site for one of its support buildings where customers can place a food order and self-shop for chips, beverages, etc., while their order is prepared. “Now that we have that up and running we will be working to launch [an] additional kiosk in the [Women and Infants unit] patient area with delivery,” Folino says. He estimates a December/January launch.

Food delivery is definitely a growing trend on college campuses as 39% of college students now expect delivery in under one hour, according to research cited by Chartwells Higher Education. Chartwells recently expanded the popular on-demand food delivery program it piloted early this year at the University of Houston (UH) to additional retail concepts and more delivery locations.

"We look forward to expanding this delivery concept to other campuses around the country," says Vice President of Marketing and Communications Salli Darden. "The model tested and created by the University of Houston dining team is flexible and nimble enough to execute on campuses of all sizes and needs."

Recognizable quality

Perhaps the simplest answer to external competition is to offer choices that equal or better what can be found on the street. That’s the approach used by Manhattan-based Citi, where an eye-popping food hall deploys concepts designed specifically to mirror the most popular venues located nearby, and often do them at least one better.

“If we wanted our colleagues to stay in the building, we had to compete—we had to beat these [nearby] restaurants at their own game,” explained Jessica Fink, marketing and hospitality manager for Citi’s dining contractor Restaurant Associates.

Of course, few organizations can afford the massive financial and infrastructure commitment Citi made to its in-house dining program, but there are alternatives. In the challenging downtown Chicago market, the management at the multi-enant AMA Plaza engaged a firm called Fooda to bring outside restaurant brands on a rotating basis to its hot food station to provide variety cost-effectively while leveraging the equity of established brands, especially local ones.

A similar strategy is pursued by FoodWorks, a division of Compass Group that now has several hundred partnerships with local restaurants, which it deploys into client sites on a rotating basis. FoodWorks’ clientele includes not just businesses but also institutions like Northwestern University and Lurie Children’s Hospital in Chicago.

FoodWorks launched last year in Chicago but “it’s growing so fast were just trying to keep up with the demand,” says Foodworks president James Kallas. “We’re in 20 markets now, but we’ll probably be in 30 by the end of our fiscal year.”

Of course, leveraging the market equity of recognized commercial restaurant concepts has long been a way for onsite dining providers to compete with the street, but today, these licensing liaisons are moving past broad-market QSRs to more specialized concepts.

For example, Sodexo has in recent years shifted its commercial brand portfolio from an emphasis on national brands to a mix of national and regional, up-and-coming brands in order to appeal to customer preferences for more challenging culinary adventures.

“Things that 20 years ago were exotic are now commonplace and we want to make sure we’re staying on top of those trends,” explains Don Wood, who heads up national brand partnerships for Sodexo.

Outside help?

Popular commercial restaurant brands may work in most onsite environments but, minus a few exceptions such as pizza chains that have modified their products to fit NSLP restrictions, they have limited application to the K-12 environment, at least those participating in federal meal programs—one reason why a few K-12 schools that can afford to do so have met the offsite competition challenge by freeing themselves of federal school meal regulations and withdrawing from the program.

But for the vast majority of schools, that’s not a viable option, so they work to produce dishes that meet both federal guidelines and student preferences (and financial limitations). To capture more high schoolers, some are turning to intercept strategies like kiosks and even food trucks in parking lots to waylay teens coming to school in the morning or heading to their cars at lunchtime if they have an open campus.

The School District of Palm Beach County in Florida has seen significant early success by renovating all its high school cafeterias into food courts filled with branded station concepts that mimic mall food courts.

Another possible solution for some districts is an emerging industry of external meal providers that work with parents and districts to deliver appealing but federal-compliant meals to schools. The most prominent is Revolution Foods, which has contracted with major districts like Oakland and Boston, but there are other smaller vendors offering this type of service in some local markets, such as Chefables in San Francisco and Red Rabbit in New York City. Both work with districts to allow parents to preorder National School Lunch program-compliant (and therefore reimbursable) lunches that are then delivered to the schools.