A Watershed Year for Child Nutrition

As we note in the K-12 Power Players Special Report package elsewhere in this issue, the 2013-14 school year represents a once-in-a-generation shift in the operating models of child nutrition programs across the country.     

Dramatic changes in USDA meal pattern regulations have already taken hold, with more to come next year. The costs of production—food, labor and overhead—are increasing, putting more pressure on budgets that are supposed to be self sustaining, but which are seeing traditional revenue sources like a la carte programs drying up. Cash meal price elasticity has been compromised by economic pressures on household budgets. Free and reduced percentages are rising across the country, making nutrition programs more dependent on reimbursable meal funding.

Our report looks at the nation’s 50 largest districts, representing meal programs offered to one in six of all public school students. In one sense, that would seem to overlook the thousands of other smaller districts. But the forces at work in smaller districts are much the same as in their larger counterparts. And the ways school foodservice directors deal with them are going to be similar, albeit reflecting production and management strategies that are adapted to smaller scale operations.  

Here are some of the trends I think are especially worth noting:
A la carte programs are in slow decline and increasingly or exclusively offer items that can qualify for school meal reimbursement. With the right marketing and encouragement, that can produce more reimburseable meal income and more healthful meals for students. More districts will consider strategies like the one used by JEFFCO’s Linda Stoll in Colorado.

Directors are re-thinking their production models. Often this is being driven by pressure to do more “from scratch” cooking (or often, as a best alternative, more onsite finishing). In some cases it will mean more component cooking/assembly. In others, the addition of CACFP supper programs are adding volume that change production economics.

The very largest districts are more often considering custom specifications for product. This can be part of a bid, cost-reduction or co-op purchasing strategy. It also can address issues like a need to avoid antibiotic-fed animals or to eliminate certain additives from school foods.

More schools are choosing to cross subsidize “reduced price” student meals. For some years, child nutrition advocates have recommended that the School Lunch program eliminate this partial reimbursement category by modifying qualification rules so there is only a single “free lunch.” Some districts are taking this into their own hands, deciding to absorb the extra unreimbursed cost of reduced price meals in order to speed up lines, deal with unpaid charge issues and provide stronger nutrition support to economically challenged communities. The cost to do this can still be significant, and directors will sometimes be saddled with just “making it happen” whether the financial way forward is clear or not.

Districts with large free and reduced populations are considering the new “Community Eligibility” option. While only available in some states now, it will be available in all states by next year. If adopted widely, it could have major implications for school programs.

New competitive food regulations mean many more FSDs will oversee school store and vending programs. The era in which school principals could operate these as part of their own fiefdoms is ending. Directors will sometimes have to develop new skills sets or staff expertise to take on these programs and also use this opportunity to develop more productive a relationships with individual school principals.

Supper programs are taking off. While these are not funded by USDA’s school nutrition program (they fall under its Child and Adult Care Food Program—CACFP), they are proving quite viable in those districts having large free and reduced populations. For many, they make more sense than an after-school snack program and in some cases are replacing these. They also help cover program overhead costs and in this way can help balance nutrition program budgets.