The recession had just hit and Lisa Towne was searching for ways to improve her restaurant’s cash flow. Towne, owner of Mama Lisa’s Little Italy in Castle Rock, Colorado, registered with her state’s Web site that listed government jobs and saw an opportunity to bid on providing school lunches. “I decided to go for it,” says Towne. “The process was incredibly time consuming; the bid document was 62 pages long.”
Most of the paperwork was focused on nutrition. Towne had to provide a complete nutritional analysis of every product she proposed supplying to the schools. She also had to create a HACCP booklet (Hazard Analysis and Critical Control Points) and undergo several inspections. Her first bid attempt failed. She tried again in 2008 and won the contract.
Towne initially serviced eight schools –– four every day and four on Thursdays only. But as the economy constricted, more students began brown-bagging it and the schools started baking pizzas on-site to reduce costs. She’s currently providing 130 pizzas every Thursday to four charter schools. Towne recently cut ties with a fifth school to which she had provided lunches daily, developing a total turnkey operation. When the PTA began dramatically reducing the scope of work (for example purchasing many of the supplies at Costco) it became unprofitable to continue.
Towne describes her lunch-program involvement as a mixed bag.On the one hand it has improved cash flow and has given her restaurant greater exposure to a broader customer base. On the other, the “incredibly tight” profit margins leave scant room for miscalculations.
“You must have very strong control over labor and food costs,” says Towne, adding that she’s constantly checking commodity prices and negotiating with suppliers (but the fact that her order volume tripled does give her more bargaining power).
Unsurprisingly, Towne’s operations became more complicated, requiring additional cooks and delivery staff, earlier and longer hours and greater organization.
Pamela Culores, founder of orderlunches.com, says there are key elements to consider when deploying a school lunch program. Located in Foster City, California, orderlunches. com consults with restaurants and provides web-based solutions that help manage the organizational aspects of school lunch programs. These elements include:
The ordering process and payment. Will this happen manually or online? Manually typically involves several people from both the school and restaurant side and chews up a fair amount of time.
Menu options. You want to provide choices but too many options can prove problematic, says Culores, adding that they help restaurants develop their menus.
Food preparation. Pre-ordering is the ideal, says Culores. Providing a “walk-up” solution where no preordering is involved risks wasting both product and dollars.
Angela Dominick, owner of Dom’s Trattoria in Beverly Farms, Massachusetts, relies on the Internet to help manage her school lunch program. For the last three years she has provided school lunches to four private schools, delivering to each Monday through Thursday (she opted out of Fridays because of high customer traffic during that time in her restaurant). There are 368 students registered in the program; on an average day she serves from 120 to 150 students. The schools provide this program to parents as a service. Without it, the students would have to take lunches from home.
Ordering and payment are handled through her Web site (using a webbased ordering system). Orders must be in by midnight Friday for the next week. She offers a variety of options including pizza, macaroni and cheese, spaghetti, sandwiches, salads and wraps. She created the menu herself and while dishes offered vary somewhat from those in the restaurant, they use the same ingredients, simplifying ordering and preparation; however, staff does start the school lunch prep about 90 minutes earlier than that of the restaurant’s lunch prep.
Dominick didn’t have to jump through the same hoops as Towne when it came to providing nutritional information— unlike public schools, the private sector doesn’t require nutritional sheets or additional inspections, at least in her area. But like Towne, Dominick has realized several benefits from the school lunch program. The biggest one? Catering. “I cater almost every event that goes on in the schools. I’ve gained so much catering business,” says Dominick. She’s also noticed that when schools hold half-day sessions, kids will often drag their parents into the restaurant for lunch.
However, Towne’s experience has been different. An unexpected downside she encountered as a result of her participation in the school lunch programs was a drop in business at her restaurant, particularly for their promotional days.
“If kids were eating pizza for lunch, they were unlikely to want to come in at night with their families to eat pizza,” she explains. “We didn’t anticipate how much this would affect retail on promotional days; we saw an eightpercent drop in business.”
Now, although Towne is still enthusiastic about school lunches, she’s concentrating more on her retail business. “When all is said and done, weighing the money brought in from the school lunch program against the costs, it makes more sense to focus on retail,” she says. “It could bring better profits with less effort.”
Before reaching out to the school lunch market, Pamela Culores, founder of orderlunches.com, suggests restaurants consider:
- Number of days you can offer the service and consistently deliver the product on time.
- Can you offer a good mix of healthy, nutritious meals kids will like and want to order?
- The order cut-off time; how much lead time do you need?
- Can you distribute meals if parents aren’t available?
- Number of students and projected meals. The goal is 50 percent minimum adoption or better to maximize ROI.
How communication between restaurant and the parents and school will be handled. Culores says restaurants should know the distribution process and number of lunch sessions. For example, if there are three sessions and the school instructs the restaurant to make just a single delivery dropping everything off at once, quality can be compromised; negatively impacting the students’ perception of the restaurant.
Pamela Mills-Senn is a freelancer specializing in writing on topics of interest to all manner of businesses. She is based in Long Beach, California.