Clarion Group: Resident Studentsí Meal Plans Are a Source of Seemingly Endless Variation
Kingston, NH, March 06, 2013 --(PR.com
)-- Resident students’ meal plans are a source of seemingly endless variation as college food services try to adapt to students’ wishes and wants for convenience and economy, says Tom Mac Dermott, president of Clarion Group, a food service consulting firm.
“Back in the famous good old days, resident students had no choice: the college food service offered only 19, 20 or 21 meals a week,” Mac Dermott says. “If the student lived in a college residence, he or she belonged to the meal plan. Of course, that model is now as obsolete as penny loafers.”
“Students and their parents want to pay for no more meals than the student is actually going to eat, and then want it at the lowest possible price as they struggle to pay ever-increasing tuition bills,” he adds.
The result is that college food services have tried many versions of the meal plan configuration. At a minimum, they offer a choice of 10, 15 or 19 meals a week, usually with an allowance of some dollars for spending, debit card-style, at campus retail food outlets and for guest meals.
“The ultimate solution, especially at larger universities with a substantial number of resident students, is the no-restrictions debit card plan. A student purchases a debit card, usually incorporated into the all-campus ID card, that permits him or her to buy food at any food service location on campus – and sometimes, at nearby off-campus outlets as well,” Mac Dermott says.
But this solution isn’t always the right one, he adds. “Students, especially freshmen, often don’t pace their spending well and run out of funds before the end of a semester. Then the student or parents have to come up with more money to replenish the meal fund.”
On some campuses, where the residents’ dining hall is at a distance from the classroom buildings, there’s another problem. “Meal plan students, especially if they can’t use their meal card off campus, will come for lunch at the campus center food court and other retail food outlets, crowding out non-residents who would be cash customers. The cash customers don’t need to be crowded. They can take their lunch money off-campus, depriving the food service of important retail revenue,” Mac Dermott says.
The economics of a campus food service operation also comes into play. The operator has fixed costs – labor, supplies, operating overhead and, typically, a commission or rent payable to the institution. It must generate enough revenue to support all these costs as well as pay for the food and earn a profit. If the all-debit meal plan isn’t generating enough revenue, the food service operates at a loss – not something it can sustain for very long.
“Some colleges have made the meal plan entirely optional,” Mac Dermott noted, “No one has to join. The results are often disastrous for the food service operator. There aren’t enough sales to cover all the costs of the operation. Many colleges have found they’ve had to revert to some form of mandatory plan, at least for freshmen or those in some residence halls.”
The solution some colleges and universities with all-debit card meal plans have found is to reserve a portion of the payment to cover overhead. For example, if a meal plan costs $1,000, the student will have only $900 in spending power. The extra $100 goes to cover overhead expenses.
To protect their profits, most food service operators do not reimburse unspent meal plan credit balances at the end of the academic year. This can amount to between five and ten percent of the total debit plan revenue, college food service operators have told Clarion Group consultants. It also leads to frantic scenes in the dining center as the academic year nears it end and students buy up everything plausible, including cases of bottled drinks, to use up their credit balances.
“There’s no one-size-fits-all meal plan,” Mac Dermott adds, “Circumstances at each college and university are different. The food service has to adapt to the plan that works best at each campus, and be prepared to change as student preferences and the institution’s goals evolve.”
About Clarion Group
Clarion Group is a consulting firm that advises companies, professional firms, colleges and universities, independent schools and institutions in the management, operation and improvement of their in-house employee/student food services, catering, conference, lodging and related hospitality services throughout the U.S. and Canada.
For information, contact:
Tom Mac Dermott, FCSI, President
PO Box 158, Kingston, NH 03848-0158
603/642-8011 or TWM@clariongp.com