Tech Revolution

Tech Revolution

Texas Tech has quadrupled its dining revenues since 1998 by building a program that keeps the commuter-heavy student population on campus to eat.

In 1998, Texas Tech University Hospitality Services (TTHS) had department revenues of around $8.2 million. Today, it's more than $32 million and is budgeted for $37 million next fiscal year.

That record was achieved while enrollment grew only about 25 percent, and the size of the residential population grew not at all. In other words, all that growth was real, achieved through identifying and then meeting the dining needs of 32,000 students — fourth-fifths of them non-resident — plus some 6,000 academic and support staff.

“We've grown by attracting other markets besides the core resident student population,” says longtime TTHS Director Dr. Samuel Bennett, who has been with Texas Tech dining for 36 years.

Key to TTHS's approach to capturing voluntary meal spending dollars is a series of conveniently located retail outlets, including two major food courts and 10 Sam's Place branded mini markets. The latter are hybrid retail concepts that sell c-store type packaged goods but emphasize foodservice.

Six of the Sam's Place locations are full size stores in or near residence halls, while the other four are Express units, minimal-footprint kiosks set in space-restricted academic buildings such as the law school and the library that intercept customers in high-traffic, otherwise-underserved environments.

If the Sam's Place units are the front line of TTHS's marketing arsenal, the heavy artillery is represented by the two food courts plus a separate set of foodservice outlets along a retail corridor in the Student Union building (which effectively function as a third food court given their compact spacing).

Together, these three multi-concept locations combine a mix of national brands like Chick-fil-A and Quizno's with proprietary brands developed in-house or by suppliers. Collectively, they post annual sales of around $8.5 million.

TTHS's attractive retail mix has spurred thousands of commuter students to take meals on campus despite a thriving commercial foodservice mix just outside the university's boundaries. This year, TTHS sold some 7,000 commuter meal plans, generating $2.7 million. That's on top of the $20.2 million in dining plan sales to resident students required to purchase a plan.

The Evolution of Retail at Tech

Until the late 1990s, Texas Tech had a very traditional, very minimal dining program that was a branch of the housing department (dining spun off to become an independent department in 2004). A series of traditional all-you-care-to-eat dining halls served the resident population, while retail was limited to a couple of snack bars.

“By the mid-90s we knew that we could do better,” says Bennett. “From what we were reading in the trade press and were hearing from colleagues, we knew that marché concepts, cooking in front of customers, was a growing trend.”

So the dining team started looking at putting in a food court that could provide that sort of dining experience. That dream was realized in January 1999 with the opening of the Market at Stangel/Murdough, a dozen-station food court that now generates some $3.9 million annually.

Six months before the Market at Stangel opened, though, another, quieter, development with even more far-reaching ramifications took place. This was the debut of the first Sam's Place in a new residential complex called Carpenter/Wells.

The small-footprint pilot site (about 1,100 sq.ft.) wasn't particularly successful, and is now gone, but it gave TTHS the first inklings of what might be possible with the hybrid mini market concept and soon led to further experimentation.

“I knew our campus would not support traditional c-stores,” Bennett says to explain why he didn't simply put in a standard retail store. “There was a small one that the Student Union ran, but it struggled. Also, at that time, our resident population was actually shrinking, so the traditional base for a campus c-store wasn't there. On the other hand, I thought there might be a market for a store with a strong food component. As it turns out, I didn't realize just how much of a market, because it just grew and grew.”

The second Sam's Place opened a year after the first one in a space previously occupied by a Town & Country store that had lost its lease in the Chitwood/Weymouth housing complex. Boasting a significantly larger footprint (around 3,500 sq.ft.) than Carpenter/Wells, and much more hot food (pizza, chicken strips and sandwiches, burgers, fries, etc.), it sat amidst three high-rises that were home to some 1,600 freshmen. Talk about location! This was the sweet spot.

“Instead of walking across the lot to eat at the old Wiggins Dining Hall, the students from the high rises began going to the Sam's and dining there,” recalls Bennett.

“Well, my motto is, ‘Customers vote with their feet,’ and they were voting for this style of dining. We had to adapt.”

So the retail boom began in earnest on the Texas Tech campus, though at that point it was confined mainly to resident students. The department sought to accommodate the trend in its meal plan, but it took a few years to get it right.

“In the first two years, we used an equivalency approach and that was a disaster,” Bennett recalls. “Eventually, we determined that the only way to make it work was through a ‘dining bucks’ declining balance approach.”

The declining balance plan that debuted in 2002 launched an era of transition and expansion, a time Bennett recalls as “non-stop city” for its frenetic activity.

“It was a five to six year period during which we continued to operate all our traditional dining halls while building and capitalizing on the mini markets, which was where our students were gravitating, along with the Market at Stangel.”

That problem was eased with the closing of several of the traditional halls as more Sam's Place locations came on line. Today, only two of the old all-you-care-to-eat venues remain open.

A third one, Fresh Plate at Bledsoe/Gordon, is of more recent vintage. Opened in 2007, it is an attempt to update the residential dining hall concept with a “food emporium” approach that offers a wide retail-food-court-style variety of choices (burgers, pizza, Asian, Mexican, etc.), but in an all-you-care-to-eat format.

It hosts a popular steak night special once a month (10-oz. ribeyes) as well as rotisserie chickens and fresh handcrafted burgers that were an immediate hit when they debuted in 2010. What helps Fresh Plate is its location near several male residence halls, a natural market for protein-heavy all-you-care-to-eat dining.

In the midst of the retail conversion boom, Bennett was tossed an additional challenge by the administration: grow the number of commuter meal plans sold to 5,000. “We had always had a commuter meal plan but never really pushed it,” he says. “At the time, we had about a hundred. It took us three years to meet the target of 5,000.”

Today, about 7,000 are sold annually and the program is very popular because of the discounts it offers. “In fact,” Bennett says, “the discount became so popular that I decided to lower it, and then raise the buy-in amount. Originally, the buy-in started with a $99 plan. Now, we have three, with a top end of $449, and that one sells like crazy because it has the highest discount at 12 percent. The discount's what students buy them for.”

Next Steps

It was also around 2005 that two more major steps in TTHS's retail revolution occurred. One was getting HHST operations into the bustling Student Union.

“The Student Union had started a major renovation and the director offered me a deal,” recalls Bennett. “They would give me space but they wanted the dining plans validated there.” Today, the Union Plaza Food Court and the retail corridor food outlets generate over $5 million in annual sales (see p. 26).

Later, Bennett was approached by the law school for foodservice in its building. This evolved into the Sam's Place Express concept.

“The original kiosk in the law school was only grab and go,” Bennett recalls. “After a couple years, they asked us for a hot food component, so we expanded it out. Soon, engineering approached us for one as well, then the Health Science Center and the library. The library was a challenge. At first it didn't work very well because we weren't offering enough. Once we expanded the footprint and added more options, it became our best seller.”

Sam's Express units also solved another problem — requests for small-time catering in academic buildings that aren't fiscally viable for the dining department but are part of its support mission. With an Express unit onsite, these requests can be accommodated much more efficiently.

A fifth Sam's Express will open next spring in the new Rawls College of Business Administration building, along with a branded Einstein's Bagels unit.

But the major new project in TTHS's pipeline is a 22,000-sq.ft. dining outlet in a residential facility to be opened next summer along Boston Ave. at the campus' eastern perimeter. It will feature dining service platforms on two stories.

Downstairs will be a typical multi-station servery — Mongolian grill, to-order salads, upscale Mexican, Angus burger grill, grilled cheese sandwich line, grab-and-go — with a common checkout. The upstairs, however, will house three self-contained “restaurants,” each with its own drink fountain and checkout.

One will be a chef's platform (carvery, hot sandwiches, etc.) that will also incorporate a mac and cheese bar. The second is a concept that offers flatbreads as well as chicken strips and wings. And the third will be an Italian/pizza concept with a woodstone oven that will serve pasta dishes and pizza.

Bennett expects the Boston Avenue venue to drive more retail business and prompt more dining plan sales. Growth is also expected to be driven by the school's goal of growing the enrollment to 40,000 students by 2020, which includes expanding the resident student counts.

Another area of growth is catering, already a booming enterprise with over $2.5 million in sales last year that has posted double digit increases since being rebranded as Top Tier Catering by Texas Tech University a year ago. It caters both official functions and social events like wedding receptions and private parties.

Top Tier's high-end offerings and expert service help spread the message about TTHS's capabilities. “We feel like we're the marketing arm of the department,” says David Deason, associate director for executive catering.

Ultimately, Bennett says he is looking to double TTHS revenues in the next 10 years, to around $65 million. “It's very doable,” he says confidently. Looking at the record so far, it's hard to argue.

At a Glance

NAME: Texas Tech Hospitality Services
BUDGET: $32 million ($20.3M-dining plans; $4.1M-cash sales; $2.7M-commuter plans; $2.7M-catering sales; $2.2M-other)
ENROLLMENT: 32,326 (6,430 resident)
OUTLETS: 3 all-you-care-to-eat (2 dining halls, 1 food emporium); 2 food courts; 4 free-standing units in the Student Union; 10 mini markets (6 full size, 4 Express); catering