5 Reflections on Another School Year’s Closing

June has arrived and with it comes the end of another school year. For students, it is a time for fun and relaxation. For school food service professionals, it is a time to review, re-evaluate, and re-tool for next year. For me, it has been a year of discovery. This year has presented me the opportunity to discover several self-evident truths, within our industry, that if over looked, as they often are, cause food programs to fail. I have seen the same recurring sequences of events at many school food programs we visited this year. All are deep in red ink, with no idea how they got there. Administrators, boards, and food service directors are all asking each other the same question, why isn’t this working, we have done everything we were supposed to? We have instituted the new guidelines and we are compliant. We have joined a purchasing consortium and have great pricing. We have upgraded our equipment and remodeled our cafes, why are we still seeing six figure losses? Perhaps your answer lies buried in the self-evident truths we discovered over and over this year. Hopefully, your answer lies in the paragraphs below.

1. New Products Don’t Fit in Old Packaging
Changing tastes and trends require re-thinking how products must be presented to meet student needs and expectations. Yesterday’s sandwich is today’s wrap or flatbread. Yesterday’s sit down meal is today’s grab n go breakfast or lunch. Cultures and times have changed and many school food operators have failed to keep pace, with these changes. New healthier whole grain products require different methods of preparation and handling to produce acceptable results. Programs who fail to make the leap to meeting today’s student expectations, soon find their participation has dwindled.

2. A House Out of Plumb Will Soon Fall Down
All things shift over time. Needs change and what once was a necessity is now a stumbling block. Structures sag, frameworks bend, and sand shifts. Labor contracts, job descriptions, and labor models are much the same, as they are the frame work of the operation. Over time operational needs change and costs increase. Many operations, we visited this year had a labor model from another age when more actual hands on cooking was required. Most of their staff worked 6-7.5 hours per day, received full benefits and retirement, and followed job descriptions that were no longer relevant to the work being performed. Time had moved on, needs had changed, costs increased, but the framework remained the same and was showing signs of wear from the shifting demands placed on it. This was resulting in low productivity, a lack of understanding of the necessary work expected, and astronomical labor costs. Staff had no real understanding of what was expected of them, levels of service had declined, and labor costs, in many cases were above 65%. When asked why workers were performing tasks in a specific manner the answer was consistent from administrators, food service directors, and staff, “that is how we have always done it.” If this sounds like your operation and you do not have an HR professional on staff, seek help from an HR consultant soon. This can be the cause of huge losses for your organization unless they are fixed.

3. Computer Software and Calculators Only Work if You Know What Information You Want
Visiting school food operations throughout the year, we found most if not all, equipped with great Point of Sale (POS), Free and Reduced Eligibility tracking, and accounting software. Operators had their numbers at their fingertips. The major

issue here was that most of these high-tech operators didn’t know basic numbers that are crucial to the success and sustainability of their programs. They knew their participation numbers, labor percentage, food cost, Free and Reduced Meal percentage, and their food cost percentage. These are great things to know when you understand how these numbers relate to the success or failure of your program’s sustainability, but these numbers don’t tell you why you are losing money. Even knowing the minimum price increase required (by the use of state and federally supplied calculators) to maintain compliance with the Equity in School Lunch Act, was a number known to most of these operators. When asked if this increase was enough to cover their costs and keep them self-sustaining most replied, “It’s the amount we are required to increase prices so it must be.” Armed with all of this data and still no answers, what a shame. When asked what their average spend per student per day for labor and their average spend per student per day on food and supplies might be all replied they had no idea. Asked what the average student spend per day was in their operations all again had no idea. Once we showed these operators that the sum of spend per student per day on labor and food subtracted from student spend per day was the true indicator of how the program was doing it brought clarity to all of the other numbers they had at their fingertips. In most cases student spend per day exceeded the sum of the cost numbers by at least $1.00 per student per day. In these cases, if I were the operator, I would hope to sell no lunches each day because each sale was costing my program money! Understanding these three simple numbers can save a program. If this sounds like you, obtain these numbers and use them to manage all of the others. If you are in need of assistance call me, I will be happy to help.

4. An Unfriendly and Uninviting House is Always Empty
“If I cook it they will come”, is a philosophy long dead. It died somewhere in the 1950’s with the emergence of “Fast Food”, the two (2) income family, and increased choices. School Food has lagged behind this culture shift for well over fifty (50) years. Many operators and their staff still expect to treat their customers like mushrooms, “keep students in the dark and feed them whatever the operator wants them to have.” These are marketing and customer service issues and need to be incorporated into daily operating procedures. If student customers don’t know the great things we are doing for them why would they visit us? If when they do visit they are treated like inmates rather than invited guests, why would they return again? In every school operation we visited this year marketing and customer service were lacking. Participation covers a multitude of sins, but lack of participation is a sin. Where does your operation fit into this picture? Think about it and take the appropriate actions. Again, seek help if you need it don’t wait.

5. Knowledge is Power, Providing Needed Knowledge is Life Saving
“Give a man a fish and he will eat for a day. Teach a man to fish and he will eat for a lifetime.” This is much like saying, “Food Safety Training is politically correct, but enhanced cooking skills and improved customer service will save your program.” The safest food in the world if poorly prepared and served in an uninviting, unfriendly manner will never be eaten or enjoyed. With the opportunities provided by the Professional Standards for School Food Professionals guidelines, many times we repeat the same training over and over because we are accustomed to it and it is required to be reviewed each year. In every operation we visited HACCP manuals and ServeSafe certifications were plainly visible and current. All operations had food handling, service delivery model, and customer service issues. Food Safety is crucial, but review means review, not dwell on. Other skills drive participation and self-sustainability, maybe dwell on these a bit until they become second nature? Look carefully as you plan next year’s training, being safe but empty is not in your program’s best interests.

Reflecting on the past school year as we race through June and into July, I am amazed at the common issues we have found in the schools we visited. Many of these programs were plagued by several if not all of them. I liken the struggle for self-sustainability in school food to the struggle for independence of the original thirteen (13) colonies. All of them were plagued by the same abuses of power by a tyrannical king, while all school food is plagued by the struggles to stay in the black. Like the Founding Fathers in their struggles, we found the above truths to be self-evident in ours. What do you think? Happy Independence Day and best wishes for a successful new school year.

Milt Miller is VP of K-12 Operations at Food Service Solutions, Inc. Throughout his 32 years in the food service industry he has managed, operated and assisted food service programs to become successful. For more information on this and other topics, contact Milt at www.foodserve.com/school-food-program-assessment.html.

Please Don’t Come through the Lunch Line, You Are Costing Us Money

Sadly, worrying about meal equity, participation, compliance, food cost, labor cost, meal reimbursements, and the myriad of other school lunch issues, has resulted in some school food operators feeling this way. Many operations we have assessed this year have this problem and don’t even realize what is happening. They know all of their important numbers, labor cost, cost of goods (food cost), participation percentage, plate cost, and required price increase, but fail to realize what is their “Optimum Per Student Spend”.

Optimum Per Student Spend (OPSS) is what must be received daily from every student for the operation to break even. This information is obtained by adding labor cost per day, with benefits, and total food cost per day and dividing the sum by enrollment. This is the total amount needed per student per day to cover costs of operations. Knowing this number breaks total operational costs and needs down to a more immediate level of understanding. I call this “the hundred penny theory of operations.” The theory goes, if food and labor per student per day cost one hundred pennies, then spend per student per day must equal one hundred pennies to achieve breakeven. Knowing all other numbers but this one many times leaves operators wondering why they are losing so much money by the end of a week, month, or year.

Several areas that affect OPSS are participation, cost of goods, and impulse purchases. Lower costs of goods or improved pricing strategies proportionally lower OPSS. Costing at 40% instead of 50% will lower OPSS by 10%. Many operators lose sight of best practice pricing strategies and set food costs above the national average of 40-42%. This causes higher breakeven points and lowers chances for program self-sustainability. Add on buys or impulse purchases increase student spend and facilitate breakeven. Too many times this strategy, of increasing ala carte’ sales, takes away from meals participation by making meals look less desirable. True add on buys are second entrees or ala carte items purchased with a reimbursable meal. These are purchases that add to student spend without detracting from it in anyway. When setting meal and ala carte pricing operators should set prices to encourage reimbursable meal sales and provide accessory items, with perceived value, that add on to the meal purchase. A few operators chafe at the thought of enticing students to spend more, but let’s face it, this is a business and if they don’t spend it with you they’ll spend it on less healthy items at the local convenience store.

Increased participation hides a multitude of sins. It also lowers OPSS rates. Once you have costs in line and OPSS is equal to or greater than cost/student/day, target students who currently are not dining with you and bring them into the fold. Participation insures sustainability. Keep this in the front of your mind at all times. It may never reach 100%, but it should always be in the upper 80%’s.

Breaking operations down to the hundred penny theory and understanding that daily student spend rates must be equal to or greater than daily cost/student rates, is crucial to maintaining a successful school food operation. Not knowing what your OPSS is and efficiently managing it, can lead to catastrophic losses to your program. Without knowing these numbers, it could be you saying, “Please don’t come through my lunch line, you are costing us money.”

Milt Miller is VP of K-12 Operations at Food Service Solutions, Inc. Throughout his 32 years in the food service industry he has managed, operated and assisted food service programs to become successful. For more information on this and other topics, contact Milt at www.foodserve.com/school-food-program-assessment.html.

It’s time to invest in schools – and food service programs

More than half the schools in the United States are spending less per pupil this year than they were in 2008 when the last Great Recession hit. While there are many reasons for these spending cuts, the fact that the country as a whole is more than $46 billion behind in infrastructure support and improvement is hard to ignore.

As experts all over the country begin to discuss how important it is that we return to funding our children’s education, we also know that it’s important that we spend money more efficiently than we have in the past. Too many administrators still look at food service programs as a frustrating part of their day to day operations, instead of the exciting opportunity to influence our kids to make healthy lunch choices while providing the district with valuable data about what is and is not working in the school nutrition program.

Get teachers back to what they should be doing

Many teachers express frustration with the amount of paperwork they need to do around school lunches. Between placing lunch orders, communicating with parents about what their children should be getting, and trying to orchestrate the free and reduced meals programs, teachers have the right to be frustrated.

Whereas many lunch programs offer the ability for parents to pay ahead and online, MySchoolAccount also gives kids and parents the ability to pre-order their meals. This saves paperwork time for teachers, and helps kids make healthier choices.

Reduce waste by planning ahead

Schools provide meals to the vast majority of American kids during the school year. There is an obligation for schools to provide healthy choices to kids, but the struggle can be getting kids to choose healthier items.

Studies have shown, however, that when kids place their orders early in the day instead of needing to make a choice in the lunch line, they’re more likely to experiment with new foods, and are more likely to choose healthier options.

Let the food service program lead the charge in improving the school’s infrastructure

Schools that have happy, healthful, efficient nutrition programs have happier, more involved parents and healthier kids with fewer behavior problems. There’s a lot more about our schools that needs to be revamped and revitalized to get them back up to the standard our children deserve, but serving healthy meals without breaking the school’s budget is a great way to take a big step forward.

USDA to Fine School Food Programs for Non-Compliance: 5 Important Things to Remember

Written by Milt Miller – Over the past few weeks I’ve listened to the fears of food service professionals concerning news of plans the USDA and FNS have for punishing non-compliant school food programs with fines. The thought of these monetary punishments have many school food professionals worrying what other bad consequences can emerge from the loins of the Healthy Hunger Free Kids Act.

“First they punish us with un-wanted cost increases based on compliance, then increased waste involving mandatory fruits and vegetables, little or no additional moneys to cover the higher cost of compliance, decreased participation due to students not accepting the new changes, loss of ala carte’ sales from the Smart Snacks in Schools guidelines, and now fines imposed for non-compliance of these financial-sustainability crushing rules. What could be more unfair?”

I remember a story of just such acts from an uncaring and uncompromising king, which resulted in some rebellious individuals (later called patriots) throwing crates of tea into the Boston harbor. While these acts over the past several years appear as unfair as the Tea Act and the Stamp Act, I wouldn’t go tossing commodities overboard to draw government attention to my displeasure with current legislation. Petitions, compromise, or the threat of open revolt tends to accomplish as much with the current administration as it did with the court of King George.

Although many feel these acts infringe on school food operator’s inalienable rights of the sustainability of program life, the liberty to offer meals that do not needlessly increase waste, and the pursuit of student acceptable products, there are five (5) key points to remember before working one’s self into a lather.

1. Most of this is not new: Schools found to be out of compliance by a certain dollar amount (greater than $6,000 in PA) for improper Free and Reduced Application calculations and/or improper recognition of reimbursable meals were required to refund a certain amount of their federal reimbursements. This has been for at least the past fifteen (15) years. I know because I know operators who had to pay them back. If this practice continued to be an issue over the next few audits, without being corrected, USDA could require 1%-5% pay back of reimbursements for that school for the year. If after several reviews the issue was still not corrected it became an egregious miss conduct and the school could lose its sponsorship in the National School Lunch Program. This is the same or similar policy mentioned this time around. If it hasn’t hurt you up to this point you will be fine.

2. If you are not sure you are compliant seek help: Pre-audit assessments are available and are inexpensive to insure peace of mind and pin-point where you need to correct areas of your program. These assessments will show where your weak areas are and will give you the information necessary to correct them before crunch time. Accurate calculations of Free and Reduced Meal eligibility, accurate reporting of meal counts, accurate reimbursable meal identification, menu compliance, and accurate production records are the key areas to worry about. Make sure you understand what is involved in all of these areas and seek training for where you believe you are weak.

3. Use the audit findings as an opportunity to improve: USDA is not actively seeking to take money back. They are asking for a demonstration of “Good Faith” efforts to comply. Don’t define your program by a low audit finding, it is a lesson and a chance to improve, not a life sentence. In most cases your state auditor will work with you and provide information on how to fix the problem (Corrective Action). These situations, most times, are painless and point you toward the training or improved processes you need so you don’t lose money. If findings exceed the dollar parameters and you have to give some money back, again it happens and it’s not a life sentence. Fix the issues, seek necessary training, and make sure it never happens again. Call us we can and will help.

4. If you are concerned you will fail an audit badly, you will, because you know you aren’t in compliance: I have had operators tell me, I made it through so now I can relax and do what I want for the next two (2) years. Compliance is an ongoing thing. If you don’t follow through you will fail because you knowingly choose not to follow the rules. You can’t look the other way for two years and expect to be compliant when you want to, you have developed a non-compliance habit, which will rear its head at precisely the worst time. Insure your staff is trained and ready at all times. A staff left to run amok will perform badly at crunch time, out of habit and fear of making a mistake. Keep training and staff development at the forefront of your operational goals. If everyone knows they are doing the right thing and compliance is the norm you will be fine. If staff know they are doing things properly they usually perform better and don’t make silly mistakes. When they are ill prepared mistakes WILL happen. Count on it.

5. Perfect Practices and Preparation Produce Perfect Performance: Use all of your available tools to insure compliance. POS reports and records, production records, free and reduced software programs, meal identification training for your staff, and finally and most important know the rules and follow them. Seek the knowledge and training necessary to optimize the use of all of your tools. There are specialists available, in all of these areas, to provide you with the knowledge and training necessary to succeed. Several times during the year audit you program for compliance. Take what you find, develop strategies to eliminate weak areas, and provide the necessary training. Sometimes a second set of fresh eyes helps to find opportunities for improvement you may take for granted. Seek help. Support is a great tool if used effectively. Set up a support system for your program for constant program growth.

The school food version of the Intolerable Acts of 2010 show no signs of going away any time soon. You are not being set-up to fail by some government ploy to take back their money. Agree or disagree as you see fit, but complying and succeeding is really your only choice for program financial stability. Know the rules and follow them and your audit experience will be a good one. Actively seek the knowledge and support to insure growth. If you don’t fear the audit you have already passed.

Milt Miller is VP of K-12 Operations at Food Service Solutions, Inc. Throughout his 32 years in the food service industry he has managed, operated and assisted food service programs to become successful. For more information on this and other topics, contact Milt at www.foodserve.com/school-food-program-assessment.html.

The Top 3 Training Topics for School Food Programs

Written by Milt Miller – The Final Rule on Professional Standards for School Food Professionals, has brought many needed training reforms for school food management and staff. These guidelines provide a benchmark for keeping food professionals up to date and growing in the knowledge areas necessary to perform their jobs within the new NSLP guidelines. The new guidelines mandate a prescribed number of training hours yearly for both management and staff. To comply with these guidelines the ruling provides many options for training; the three most requested programs, by our past and present clients, are Effectively Marketing Your Food Program, Purchasing and Procurement Techniques, and Understanding How to Use Production Records.

 

1. Effectively Marketing Your Food Program

Based on what we have seen while visiting schools, Marketing is the number one concern. School food professionals are very humble people, which is an admirable quality, but if they fail to let their student customers know what they are doing in their operations it can create a problem. Marketing a school food program is the weakest skill set we have observed. School food operators need direction in how to identify and reach their target markets in the manner they prefer to be reached. They also need to find the many free or inexpensive medias surrounding them in their schools that will effectively reach their students. Too often parents are not seen as a target market, but they make the final decision, most times, whether to buy at school or pack a lunch. We have shown many operators how to effectively reach and keep parents informed of the great things happening in their cafés.

Understanding and shaping the perceptions about your program is a critical piece of any marketing plan. Sending the proper message, by using the right medias to effectively reach students, parents, and the academic community within your school is key. Understanding and delivering menu items that meet today’s food trends and meet student needs, is also a key element of effective marketing for school food. Utilization of student focus groups, representation at parent gatherings, and keeping educators and administrators informed of program goals and offerings, are important factors in obtaining and sharing this information. The school cafés with whom we’ve worked have increased participation by as much as 15% in the first two weeks of implementing the skills illustrated and discussed in our training program.

 

2. How to effectively use Production Records

The second most requested topic for training is how to effectively use Production Records. This simple form has become an enigma to school food workers. The reason? An unclear understanding of the true purpose and value of this instrument. Production Records are not just a means of directing the work force or recording food usage, as is usually perceived by most café workers. This document is also a daily consolidation of necessary information for kitchen staff involving line set-up, HACCP processes and controls, meal item acceptability, cooking and holding temperature charts, portion control, and waste control. From the management side it is a great record of menu acceptability, meal identification verification, inventory control, commodity usage, per student nutrient analysis, actual cost per meal per day, and provides most of the dietary information necessary for on-site audits.

After raising the awareness of staff on the importance of this document and how simple it is to use properly, the results that usually occur are a 3-5% decrease in food cost, 10% decrease in waste, and a 10% increase in productivity. The training is about four hours, but the results in schools where we have conducted the training have been robust. Once an understanding of the purpose of this document is attained the procedures take no more than a calculator a POS items report and a pencil to complete.

 

3. Procurement and Ordering Techniques

The third most requested training is Procurement and Ordering Techniques. This has come to the forefront recently with the implementation of Policy 2 CFR 200, the policy on procurement for school nutrition operations. The regulations have always been there, but now the current administration, FNS, and USDA has decided it is time to enforce them and tie them to the administrative audit every three years. Though the regulations have changed very little, the enforcement piece is causing every SFA to be much more aware of them. We expect this training program to soar right to the top of the most wanted list in the next few months.

Basically all procurement is broken down to three types. Micro-Purchases, meaning less than $3,500, Informal Purchases, which is greater than $3,500 but less than $10,500 for non-perishables or greater than $10,500 but less than $150.000 For perishable items, meaning food. And last but not least, Formal Purchases, equal to or more than $150,000, which require either an IFB or RFP bidding process. Regulations and necessary forms can be obtained at www.ecfr.gov, or by contacting your local state Department of Education. Every food program must have its own Food Service Account that provides a clear audit trail of all revenues and expenditures. Coupled with each type of expenditure must be a procurement explanation as to why this purchase was made and how it fits with the School Codes for Procurement. The entire process is not difficult, but it is cumbersome and can be confusing. Many of our clients are frantically seeking clarity and a condensed, more understandable version of the guidelines. Most states are conducting mass webinars to explain the new procurement processes and the audits that will follow. I would suggest attending these for the overview, then conducting small group sessions with a credible trainer for the major details. We have geared our programs to assist in gaining a better understanding of the process.

As you can readily see, the face of school food is rapidly changing and a much higher level of administrative proficiency is required than in past years. If training in these top three areas is available, it is well worth the investment to seek it. Do not be left in the wake of these new rules wondering, “What can I do now?”.

Milt Miller is the Principal and Chief Innovator at Milton Miller Consulting. Throughout his 32 years in the food service industry he has managed, operated and assisted food service programs to become successful. For more information on this and other topics, contact Milt at; www.miltonmillerconsultant.com. 

Improving Child Nutrition and Integrity Act of 2016

Has the Last Apple been Thrown in this Food Fight?

Written by Milt Miller – The Senate Agriculture Committee has agreed to roll back some issues in the National School Lunch Program’s Healthy Hunger Free Kids Act of 2010 guidelines, on Wednesday, January 20, 2016, in a show of true bi-partisan politics and compromise. The changes in the proposed re-authorization of the National School Lunch Act, that will provide some increased flexibility for schools to plan menus that will be more acceptable to our nation’s students, are the result of the School Nutrition Association’s (SNA) continued lobbying on behalf of its member schools nationwide. Without the continued efforts of the SNA to present common sense concerns and rational solutions, on behalf of its constituents, I fear no improvements would have come about.

By pointing out the flaws in this needed but over regulated act, SNA provided actual facts and first hand observations from within the industry, to show what wasn’t working as well as providing workable solutions without greatly hampering the Act’s intent and purpose. Though hotly criticized by the medical professionals, child nutrition activists, and the White House, SNA held fast to its position and the position of its members. Aligning with the newly elected Republican Congress allowed for necessary leverage to achieve this compromise, without which no change would have been affected.

The SNA position, stated unwaveringly over the past five years, has been one of softening issues hampering school food operation’s self-sustainability and one of improving the wellbeing of America’s school children. Never once had they lobbied for the repeal or rollback of the entire program, as they have been accused by their critics. Again, thank you SNA.

As everyone is aware, the true sense of compromise is everyone wins and everyone loses. In the case of this bi-partisan compromise, it appears that one side has maintained more of the original Act and the other side has gotten some small, but necessary changes. Looking at the proposed legislation going before the Senate and the House in the near future, there appears to be some needed roll backs in the percentage of whole grains that must be offered and a hold on the sodium restrictions for at least two more years. These changes are definitely a step in the right direction and do provide some needed flexibility, but in no way do they ease the burden of increased cost and increased waste created by the implementation of the original act and its continued additional restrictions over the past five years. This compromise appears to be more of an offer of an olive branch rather than an attempt to fix the inequities in the program for the sustainability of school lunch operations.

Granted the roll back of the requirement on whole grains from 100% to 80% provides added flexibility in menu development and the provision of products students find more acceptable. Pushing back the sodium restrictions for at least another two years will allow many favorite items to remain on the menu, but nothing really has been done to address the increased cost of compliance, increased waste, or acceptable revisions to the Smart Snacks in Schools regulations.

An olive branch again has been offered in the waste situation, as the Secretary of Agriculture is directed by this act, to conduct studies to eliminate waste of fruits and vegetables through the increased use of salad bars and share tables. Both of these service models are deemed by the health departments of some states as unsafe food handling practices. Salad bars can create waste due to overproduction, poor rotation of product, and contamination, and share tables are collection areas for unwanted products that can be taken and consumed by individuals desiring extra portions of those products during the meal period. What if no one wants them? What if these foods become contaminated or are tampered with and a food borne illness is contracted from consuming them? Where does the liability lie? I do not believe this is an adequate solution to the waste issue. Addressing the increased cost issue was totally passed over as expected. The Secretary has been directed to appoint a committee to assess the Smart Snack guidelines and make recommendations for acceptable products to be allowed. This is a step in the right direction.

Increased funding for Summer Food Programs, facility upgrades, increased technology, and staff development have remained intact, the CRE or every three year state review of school food programs has been moved back to every five years, and the words “Buy American” have been added to the development of future procurement and purchasing requirements. Outside of a few other changes in language the act has remained intact.

Please do not interpret my comments as unappreciative or ungrateful. I am grateful for what changes and revisions have been made. They were necessary. I am thankful for SNA”s diligence in pushing for the flexibility and improvements that have been penned into this proposed bi-partisan legislation. I know that SNA will be supportive of these improvements and keep working to influence further improvements in the future. I just hope that this is not the last apple thrown in the food fight to improve child nutrition regulations.

Milt Miller is the Principal and Chief Innovator at Milton Miller Consulting. Throughout his 32 years in the food service industry he has managed, operated and assisted food service programs to become successful. For more information on this and other topics, contact Milt at; www.miltonmillerconsultant.com