focus on » Cafeteria Finances Especially for school nutrition managers, assistant managers and employees STANDARDIZED RECIPES Make Dollars and Sense There are several benefits to using standardized recipes in school foodservice. For example, a standardized recipe improves product consistency . This means students know exactly what to expect when the item appears on the menu. For the cafeteria staff, this consistency provides for more accurate nutrient counts for menu-planning and compliance purposes. There are also important financial benefits to using standardized recipes, as these produce a predictable yield, preventing both shortages during service and food waste from overproduction. In turn, such recipes provide a manager with a greater ability to accurately project and control food costs, which can create more efficient purchasing procedures. Inventory control also is improved because standardized recipes allow you to quantify the food inventory needed anytime a particular recipe is produced. Check School Nutrition’s November 2016 issue, page 109, to read “What’s Standard About Standardized Recipes?” and learn more about why these are valuable tools, the different elements of such recipe formats and how to use them. CAFETERIA CONFIDENTIAL: Prioritize Production Records Using standardized recipes in school foodservice also can help reduce recordkeeping— another money-saver—by reducing the amount of information required on daily food production records. Creative managers might want to consider using production records to refine their menu planning, build student participation and minimize unnecessary expenditures. “I use my production records at breakfast to track trends so I know how much to prepare. For example, I have seen an uptick in pancakes from the beginning of the year—more than triple. Without looking at my production records and tracking how much I have been serving and preparing, I would have no idea that pancakes have become such a hot item. Last year, on any given day that hot dogs were on the menu, we sold maybe 10; this year it has been over 60. If we didn’t track that information on our production records, we would not have enough hot dogs in house, let alone prepared!”—Cory Talbott, RD, Foodservice Manager, Glen Burnie (Md.) High School THE SCOOP: SUCCESSFUL SAVING STRATEGIES When it comes to cost savings in the cafeteria, an extra scoop does make a difference! We reached out to two school foodservice directors to get their best tips for helping to teach site managers and employees how to control the cafeteria’s bottom line. ON MENU DEVELOPMENT: “Menu development is a critical step when it comes to controlling food cost—get this part wrong and you are doomed before you even get started. After you develop a menu that you know meets your students’ preferences and falls within the federal nutrition rules, it is imperative to cost the menu out to make sure it fits within your budget. School districts have between $1.50 and $1.65 to spend on food for a school meal; that includes all the components: protein, milk, fruits, vegetables and grains.”— Joe Urban, Director of Food & Nutrition Services, Greenville County (S.C.) Schools ON PORTION CONTROL: “Cost is important, as many of our meals are right at the break-even mark. An extra half-ounce of product may not seem like a lot, but multiply that number by the [frequency it is menued], the number of servings and the cost-per-ounce, and you may be losing tens of thousands of dollars without knowing it. That’s why scoops, spoodles, spoons and ladles are the most important tools a server can have.”—Chris Burkhardt, SNS, Director of Child Nutrition and Wellness, Lakota Local Schools, Ohio 10 Terms: A Financial Glossary Even if you’re not in charge of balancing the department budget, these handy terms will come in useful when discussing and managing your cafeteria’s finances! 1 A LA CARTE: Food or beverage items that are sold separately from the reimbursable meal. 2 ADMINISTRATIVE COSTS: Expenses not considered part of the direct service to the student customer, such as those related to staff training, utilities or waste disposal. 3 DIRECT COSTS: Expenses that can be identified as used solely by the foodservice operation for the production of school meals, such as food, labor and equipment costs. 4 FOOD COST PERCENTAGE: The percentage of total revenue expended for food cost. This factor is used to determine if expenditures for purchased food are in line with previously established expectations calculated in the budget. 5 FORECASTING: Estimating future use of ingredients, expected popularity of menu items or anticipated daily participation. 6 MEAL COST: The cost of producing a meal, which is determined by dividing total expenditures by total meal equivalents during the same period. Expenditures include food, labor and supply costs. 7 MEALS PER LABOR HOUR (MPLH): A measure of an operation’s productivity used to determine staffing needs at a particular serving site. The use of MPLH assists in labor cost controls. 8 MARK-UP: A method of pricing a la carte items consisting of a multiplier based on the desired food cost percentage of a product. 9 PROFIT-AND-LOSS (P&L) STATEMENT: A financial statement summarizing revenues, costs and expenses incurred during a specific time period; often a month, a fiscal quarter or a year. 10 REIMBURSEMENTS: School nutrition operations can claim payment from the government for meals served that met all the requirements. Reimbursement rates vary based on whether the student qualifies for a “paid,” “reduced-price” or “free” meal. Taking Stock: Inventory Can Save Money How you handle receipt, storage and tracking of food/beverage items and supplies can have a huge impact on your cafeteria’s bottom line. Proper procedures for everything from delivery to storage to record-keeping will translate into less waste and more savings. ● Detailed Delivery Check-in: No matter how hectic things may be when a delivery arrives, a proper check-in with the driver will ensure not only that foods are at the correct temperature, but also that they are damage-free. Check items against the order to ensure accuracy, and make sure foods are stored appropriately in your cooler, freezer or dry-storage/pantry. ● Storage Training: Proper inventory management ensures food safety, and loss prevention saves money. These are two important reasons to train your team about the “whys” and “hows” of proper storage, product rotation and food safety practices. Good inventory management also can detect losses due to theft. ● Organization & Visibility: Chaos breeds waste! Good lighting and visibility in storage areas will prevent poor product rotation. Use charts or maps for large storage areas and coolers/freezers to cut down search time and increase efficiency. Donna Myers SNA School Nutrition Employee/Manager Representative A Few Fundamentals of Financial Success THIS ISSUE’S FOCUS ON FINANCIAL MANAGEMENT may not be one you might expect for managers and employees. But we have important roles to play in the success of our individual cafeteria sites and the whole district. One of the most valuable lessons that I and my fellow managers in Osceola County (Fla.) School District have learned from our director, Rae Hollenbeck, is that we need to train our cashiers well! Cashiers are the heart of the business. We have taught our cashiers that missing one student who is eligible for a free meal each day is a loss of $3.39. Multiplied by 180 (school days) and that’s $610.20 in lost revenue. Multiply that by the 300 cashiers across the district, if each missed just one free meal each day of the year, and that equals $183,060 in lost revenue! Just imagine the amount the district can lose with worse errors. That’s why it’s critical not to let any student pass by without entering them into the system! Cashiers also are the ones who know the most about students whose accounts may be in negative balance. While we know that few of these children are directly responsible, student debt can grow into a very serious problem. If the money doesn’t get paid back, the district could have a huge loss at the end of the year. Cashiers should alert managers and supervisors so that we all work as a team to get money that is owed. It is a reality that every penny counts to keep a district out of the red. Being in the black means having the resources we need to offer the most variety in terms of meals and services to our kids. A fellow Osceola manager, Shelby Underwood, from Sunrise Elementary School in Kissimmee, shared with me that many schools in our district have become CEP (Community Eligibility Program) sites—this allows all students to eat breakfast and lunch for free, and it’s eliminated the bad debt at those sites. Wow! Unfortunately, CEP isn’t a program that every school can implement, but I encourage you to learn more; ask your supervisor to explain why CEP may or may not work for your site. The bottom line about the bottom line is that we remember that students are our customers. They should always be greeted by name and with a smile, no matter what kind of day we’re having. Students will appreciate this service and they will keep coming back! FINANCIAL WHIZ QUIZ Are you a school meals financial whiz? Do you know the latest numbers on the National School Lunch Program (NSLP) backward and forward? Take the quiz and find out! 1 The federal reimbursement rate for an NSLP lunch is the same for free, reduced-price and full-paying students. T F 2 School meal prices are set nationally, and they are standard across all school districts. T F 3 Food is the single largest expense for school nutrition operations. T F 4 The average price of a high school lunch in the United States is $2.60. T F 5 Nearly 90% of students who qualify for a free or reduced-price lunch are also eating school breakfast. T F Answers: (1) False. The current reimbursement rate is $3.16 for free students, $2.76 for reduced-price students, and $0.30 for a paid lunch. (2) False. Prices for school meals are set by local school boards and vary widely. (3) False. According to the School Lunch and Breakfast Cost Study-II, labor and benefits are the single largest expense for school nutrition programs, at 48% of total expenditures. Food comes in second (37%), other/indirect costs third (10%) and supplies (5%) last. (4) True. According to SNA’s School Nutrition Operations Report: The State of School Nutrition 2016, average lunch prices are $2.34 at the elementary level, $2.54 at middle schools and $2.60 at high schools. (5) False. Fewer than half of students who qualify for and eat a free or reduced lunch are taking advantage of school breakfast, leaving millions of federal reimbursement dollars on the table annually. This is one of the many reasons why it’s important to promote school breakfast to your students and their parents. The Extras With break-even margins for reimbursable meals so razor thin, a la carte sales can be an essential help to a cafeteria’s bottom line. Compliance with the federal Smart Snacks rule will ensure you aren’t sending mixed nutrition messages to students. The next step is to review the mix for items with the best profitability. “Before we add any items, we study the current menu mix and analyze the impact to the margin,” reports Ron Jones, culinary specialist, Greenville County (S.C.) Schools. “Why sell Beverage A if the profit is 50 cents, when you could be selling Beverage B for a 75-cent profit? We push items that are highly popular, as well as highly profitable, and delete the rest. The impact can be staggering.” Cory Talbott, RD, foodservice manager, Glen Burnie (Md.) High School, echoes that advice, adding, “Having a variety of healthy snacks available brings in the customers. Those customers in turn buy lunch, and tell their friends— win-win!”
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