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An Evolving Change of Plans

An Evolving Change of Plans

Students line up at the Souper Deli, in Purdue University's Earhart Dining Court, one of a series of new board dining venues recently opened by the school.

In many ways, college and university dining remains at war with its own past. At the heart of the conflict is the meal plan.

It's a tradition with roots in a simpler time when students ate when, where and what they were told. But today's college meal plans are often contradictions in disfunctional kinship with that anachronism, ever seeking to live up to its ideal of operational simplicity, fiscal predictability and communal indispensability.

It's not getting any easier. Intensified competition for students has put increased emphasis on making "the campus experience" a key point of differentiation among institutions. That in turn has pushed dining departments to make onsite foodservice a positive selling point for the school even as mounting cost pressures pull in the opposite direction.

Combine those pressures with the sometimes unrealistic notions held by some students of what campus dining should be—branded food court variety and white tablecloth quality with Seven-11 hours at McDonald's prices—and add a healthy dollop of "they're profiting-off-us" outrage and you get student groups banging at your door demanding changes.

The result: questions with no easy answers. Among them:

  • Where do you draw the line in making meal plans mandatory,
  • how much retail equivalency do you offer,
  • how much flexibility do you allow and
  • how much do you charge?

It seems that each institution has come up with a different answer, to the point that the National Association of College & University Food Services (NACUFS) no longer surveys its members about what sort of meal plan they have "because if you ask 25 directors you'll get 25 different answers," laughs Art Korandatis, director of auxiliary services at Holy Cross College in Worcester, MA, and a member of the NACUFS Benchmarking Committee.

Change: a Double-Edged Sword
Unlike the past, when it was a fixed campus institution where the only thing that changed was the incremental upward creep of the fee, today's meal plans are perpetual works in progress.

"We change our meal plans every two years," declares Margie Bryant, associate vice president of auxiliary services at Georgetown University in Washington, DC. "We have a very active food committee and students also provide regular feedback through online comments."

The goal of the tinkering, Bryant says, is to "meet the needs of the middle of the bell curve. We won't satisfy the extremes, but if we capture the great middle, we'll get great participation."

That approach is especially crucial at a school like Georgetown, where the meal plan depends almost exclusively on voluntary compliance (it became mandatory for freshmen only last fall). The dining department's success in meeting student needs with its proactive approach is reflected in the fact that some 70 percent of students (and 90 percent of on-campus residents) buy meal plans.

Georgetown's positive experience in evolving its meal plan belies the experience of some other schools.

At Emory University in Atlanta this past spring, for example, the university's decision to eliminate the two least expensive sophomore meal plan options—while at the same time mandating that second-year students live on campus and purchase a meal plan—ran into fierce resistance from the Student Government Association. The resistance escalated to the point of a threatened boycott of campus catering.

A similar situation had embroiled the University of Connecticut campus where plans call for the introduction of an unlimited dining approach combined with limitations on grab 'n go and retail meal equivalencies and guest swipes. The imbroglio, in which thousands of U-Conn students signed protest petitions, was vociferous enough to make the New York Times in March.

How Mandatory?
Perhaps no issue is more important to meal plan strategizing than the strength of the mandatory component.

Ivy League universities, small, exclusive schools and a few institutions with strong traditions of communal dining retain full four-year board requirements for all students, but for most others it is a function of the competitive environment.

"Mandatory plans are really dependent on the strength of admissions," offers Tom MacDermott, president of the Clarion Group, a foodservice consulting organization based in Kingston, NH. "In the smaller to mid-range schools, if they don't fill those beds, they often start to make concessions on the meal plan."

Perhaps, but with the size of the college age population continuing to grow and the rates of enrollment projected to increase at a healthy clip, according to the U.S. Department of Education, schools may have a little more maneuvering room. So does an on-campus housing shortage at some schools, which makes requiring board participation to get a room easier to implement, notes Robin Porter, FCSI, president of the Porter Consulting Worldwide consulting firm.

Perhaps all these factors help explain why a number of major universities have recently announced or implemented stricter board dining requirements.

Carnegie-Mellon University in Pittsburgh, for example, changed its meal plan approach last year to require freshmen to eat at least one dinner a week in the freshman board dining hall (freshman participation had already been required in the meal plan, but not actual physical presence).

This fall, the University of Iowa in Cedar Rapids and Arizona State University in Tempe will be among schools with new policies requiring all students living in oncampus housing to purchase meal plans.

More ambitiously, in 2006, the University of Alabama in Tuscaloosa will begin requiring freshman to live on campus and purchase a meal plan of at least 160 meals a semester.

"Our move is part of a strategy by our top administrators to increase enrollment," says Gina Johnson, vice president for auxiliary services at Alabama. "We think ' building community' by offering more activities on campus—and food is a big part of any community activity—will help recruiting. And so far, our plans have been very well received by parents, prospective students and high school counselors alike."

"Parents are always worried whether their children will get enough to eat or eat right when they are away at school," adds Porter. "A board plan that guarantees meals each week is a great anxiety reducer."

Debit Debate
Whether the meal plan is mandatory or voluntary, service style remains a focus of great debate. Traditional all-you-can-eat programs remain defensive about how they can accommodate customer preferences for flexibility and extended hours.

"It's no secret that students generally are moving away from traditional board plans," notes James Bingham, director of food service at the Rochester Institute of Technology. "They want flexibility, late night meal options, cash and declining balance/debit options and off-campus spending opportunities where they can use debit dollars."

Of course, many schools have moved entirely to declining balance and debit systems.

"For our campus, all you can eat is not the best option," offers Richard Turnbull, associate director of university housing & dining services at Oregon State University in Corvallis. "We converted to our current debit system in 1997 because we felt it put the student in the drivers seat and has beneficial impacts in terms of making wiser choices and eliminating food waste."

McDermott notes that debit systems tend to work better in larger schools, where there is more flexibility. "The cost of running a college dining operation is beginning to exceed what conventional meal plans can support," he adds. "Using debit cards helps rope more customers in." He also notes that, on average, some five to 10 percent of debit account money is never spent, so it drops intact to a department's bottom line.

But strong arguments also exist for allyoucan-eat systems. Indeed, sometimes, student preferences for declining balance approaches are not all they seem, suggests Stuart Orefice, director of dining services at Princeton University.

"Earlier this year we conducted a series of four focus groups with students to find out what they were looking for in meal plans," he relates. "They said they preferred declining balance systems. But when we fleshed out the answers we found that a substantial number actually prefer all-youcaneat programs because, ultimately, they are concerned about value—they are after all the QSR generation—as well as the convenience of foods that are suitable for pickup or grab-and-go. Choice is also a big factor. They want a place where they can taste a little bit of everything, and that is the allyoucan-eat dining hall."

There's also a socio-economic aspect to the declining balance vs. all-you-can-eat dispute, Orefice adds.

"A declining balance program can emphasize different levels of income," he explains. "What does it do to campus community to have one student with a tray full of food that he can afford to get because of his greater financial means sitting next to one who has to be more frugal?"

Stanford University in Palo Alto, CA, is one of the schools newly committing to a universal all-you-can-eat approach. Through the recently concluded school year, the school had maintained a patchwork of all-youcaneat and a la carte dining plans, depending on which residence hall a student lived in. Now, there will be only three all-youcaneat options, all at the same price, with varying amounts of flex dollars.

Dining Services Director Rafi Taherian defends the change as beneficial to students. "Previously, students buying smaller meal plans were paying more per meal, and the 'choice' implied by the range of dining options across campus was largely illusory," he says. "It depended on which residence hall you were assigned to. If you were in an all-you-can-eat hall you couldn't use your plan in the a la carte locations."

Taherian also decries the "restaurant fallacy" he feels has compromised the mission of college dining, which is to provide the kind of variety needed in a place where customers have to eat day in and day out.

"Students think they want us to be more like commercial restaurants," he says, "but try living in a food court for three months and see how you like it!"

Though traditional all-you-can-eat board plans are easier to administer, block approaches have their adherents because they offer greater flexibility to students.

For example, this fall the University of Kentucky in Lexington will replace its declining balance system with a semester block plan, with seven options ranging from 123 to 336 meals, with all but the least and most expensive plans including $100 in flex dollars. All residents will be required to purchase at least a 123-meal plan.

Dining Services Director Brett Morris says he chose the block approach because he prefers giving students flexibility rather than "pigeonholing them into a certain number per week."

One variation on traditional board dining that seems to be getting a lot of interest among directors is "unlimited access, continuous service" dining initiated at schools like at the University of New Hampshire (see the March 2005 FM). In these operations, the board dining halls remain open from morning til night and meal plan holders can come and go as often as they want with no restrictions.

While "it's certainly not for every campus," says Porter, whose firm has advocated the approach at schools like UNH, the reviews have been positive at schools where it has a good fit.

"We're using the plan as a recruiting tool because of how unique it is," says Marc Braithwaite, dining services director at the University of Prince Edward Island in Canada. "Students now think, 'what's the point of take out?' and sales off campus have declined because students are rushing in at 10 p.m. to the dining hall to get snacks and pizza. For the first time in several years, we have more people staying on campus or signing up to stay next year. They are choosing housing with the mandatory meal plan instead of moving to apartments with a voluntary meal plan."

Small schools with a "landlocked situation" are the ones most likely to thrive on constant pass plans, Porter adds. "Students feel like they are getting a higher value for their money and it builds community."

She cites Northern Michigan University in Marquette as an example where campus cohesion has been highly affected by meal plan choices. When the school changed from its traditional board approach to an a la carte system, "it ended up destroying community because students didn't go to the dining hall any more," Porter notes.

That wasn't the only problem, adds Northern Michigan's Dining Services Director, Rich Wittman. "A la carte was popular with the students, but we found it wasn't financially feasible for us because the cost of goods was so high, and those costs were all assigned to dining services. It really put us in poor shape for a while."

NMU now has a constant pass plan combined with dining dollars as well as 14-and 5-meal plans with dining dollars, and block plans for non-residents.

The Retail Option
Of course, retail-style plans remain popular at many schools because they fit the needs of student living arrangements.

"Students don't mind living in high-rise dorms when they first get to college, but as soon as they can, they want to migrate to apartments," explains Bingham. "Schools recognize this so many are now busy building more apartment-style housing with suites. That kind of building works well with a cstore model and presents an opportunity to offer the c-store as a component of a meal plan."

However, using meal plan credits in cstore environments brings its own challenges, argues McDermott. If fully given the option,-students can spend as much as a third of their money in campus stores. In effect, this causes a "cannibalization" of dining hall finances, he believes.

McDermott also notes notes that colleges often don't get a decent profit from their cstore operations because they fail to account sufficiently for the food costs, which is around 65 percent in a store as opposed to about 35 percent in a board dining hall."

Building Boom
One phenomenon that cannot be dismissed from any discussion of current meal plan trends is the building boom that is occurring on campuses from coast to coast. In the dining area, the projects are driven by the need to make on-campus dining attractive enough to justify mandatory board policies in situations where the prospect of forced dining in a drab environment is a poison pill in recruiting. Complimentary to this factor is the need to attract more voluntary participants to board programs in order to boost up-front revenue generation and reduce dependence on discretionary retail sales.

For example, Alabama's plan to require freshmen to live on campus and purchase a meal plan will be accompanied by a new $9 million dining facility scheduled to open in fall 2006. It will include a 32,000-sq.ft dining hall with a c-store and coffee shop as well as a late-night (possibly 24-hour) diner.

At Purdue University in West Lafayette, IN, the school's $48 million Master Plan Project has already closed six traditional dining halls permanently (another will shut down in 2007), completed renovations on three others (with two more still under construction) and opened one entirely new one. At the end of the massive project in 2007, Purdue will have consolidated its scattering of antiquated residence dining halls into five brand new "dining courts" augmented by five retail operations.

Among the goals of the project, says Dining Services Director Sarah Johnson, is to "make it more attractive to stay in on-campus housing. We've seen evidence that this will entice more students to stay here."

Getting students to "stay here" is just one of many sometimes conflicting goals college foodservice directors must wrestle with as they tinker with their meal plan strategies. It may not be as simple as in the old days, but it certainly is an invitation to creativity and innovation that continues to challenge the segment's directors.

Upselling at Villanova

Villanova students congregate at the Belle Air Terrace, one of the Philadelphia campus's a la carte dining venues where students can use meal equivalencies. Providing such flexibility is a common way for dining departments to increase the attraction of meal plan purchases.

As at most schools, the dining department at Villanova University in Philadelphia must cope with justifying the price/value equation in its meal plans, which are mandatory for all students living in the traditional residence halls.

Director of Operations Tim Dietzler says one of his department's most successful initiatives has been its "Inflation Fighter" meal plan. The Inflation Fighter locks in a set meal plan price for four years, as long as the student remains on the plan. It has become the department's third-strongest meal plan offering, after the unlimited and block options.

"We were able to significantly drive revenues on the same meal plan base without dramatic price increases to our traditional plans," Dietzler says. "In fact over the past four years, our traditional plans have increased in price on average of only 1.5 percent per year."

Otherwise, Dietzler uses a three-tier approach that he says has been "an outstanding success" in terms of both customer satisfaction and financial return.

"It is very straightforward," he says. "Keep the traditional plans at a relative cost and then roll out new plans to try and drive sales. We offer the traditional plans that all parents identify with and benchmark them to other institutions that are middle-tier in price. Then we roll out new plans that offer more options and flexibility at the highest tier pricing."

Dietzler says parents see the highest tier as having more value and are therefore more inclined to choose it than might be assumed if one only judged meal plan popularity by price."In 1995 we had 50 percent of our meal plan participants on a middle-tier meal plan while the remainder were on the lower tiers," Dietzler notes."We now have over 70 percent on the highest tier plans." He also says he is selling over a thousand more plans than the mandated "traditional resident hall requirement," accounting in effect for 105% of the number of beds on campus.

Flexibility remains a popular feature in customer surveys, and Dietzler says he's "glad to see parents willing to upgrade to our higher-priced plan to get flexibility for their sons and daughters.

Dietzler is ever tinkering with his meal plan mix. One new component introduced last year was a food point option that can be used to make vending purchases. This was made more attractive through the introduction of frozen food merchandisers in a pair of classroom buildings and two dorms. The merchandisers offer branded gourmet meal options at all hours.

"They allow us to go into areas that would otherwise be too expensive, and could also be a way to cut our extended c-store hours," Dietzler says.

Transparency at Penn State

Dining at Penn State's Blue Spoon Tavern

Communicating cost information to students when justifying board plan prices is a tricky issue. Students are already suspicious about paying for 'missed meals' (in traditional board plans) or leaving 'money on the table' (in 'use it or lose it' declining balance and block plans), and overly prone to compare prices with the least expensive off-campus QSR chains.

So when a dining program sets out to explain why a premium board dining plan will cost in excess of $2,000 per semester, it has some hurdles to overcome.

At Pennsylvania State University, they've decided to lay it all out on the table.The school's "A La Board" meal plan sets out a "base cost" when tabulating its various meal options.This cost—$1,045 a semester in the 2005-06 school year—is defined as representing "the non-food costs for operating the food court (i.e., labor, supplies, maintenance and utilities)."The student is further informed that "when you purchase an A La Board meal plan, you pay this base cost up front for the entire semester."

Because the base cost is the same with each level of the plan, the variance in prices among different levels of the meal plan (the least costly is $1,435 and the most costly $1,815) reflects the varying amount of purchasing power each plan holds.

"Sometimes students will ask why they get only a few hundred dollars in dining points when they pay over a thousand for the plan," says Associate Director Lisa Wandel."Once we explain how the base cost covers the cost of keeping the facilities open and operating, they generally accept it."

The use-it-or-lose-it irritant is also minimized. Penn State doesn't get back much in terms of unused points since students are free to get refunds of unused funds up until nearly the end of the term. If students run down on points, they can add more without incurring additional "base cost" charges.

There are also deep discounts on the order of 65% off the cash price of most food and beverages purchased in the residential dining food court. Retail purchases realize a 10% discount and the points can be used in any campus retail food location (including the sports stadium, though there is no discount associated with purchases there because it is not operated by the campus housing & food services department).

An additional cash option, Lions Cash, was introduced a year ago to augment the A La Board plan. Lions Cash can be used to purchase non-food items like laundry and photocopying services and is also a "last resort" for on-campus food purchase (used only if no money remains in the A La Board account) and for purchases at about a hundred off-campus retail and service providers.

Penn State mandates that all 12,500 students living on campus purchase a meal plan. About a hundred off-campus residents have also jumped on board.

Balancing the Revenue Outflow at OSU

Students relax in the EBGB cafe, one of the locations where OSU students can use their declining balance meal plan dollars.

Oregon State University in Corvallis maintains a true all-declining-balance dining program in which residence hall students (for whom the purchase of a meal plan is mandatory) can spend their money in any campus venue, including the branded concepts (Carl's Jr., Blimpies, Panda Buffet, etc.) and coffee shops in the school's Memorial Student Union complex. Of OSU's 19,000 students, about 3,500-including about 600 nonresidentsare on meal plans.

"It works great for students," says Associate Director of University Housing & Dining (UHD) Services Richard Turnbull."However, we have a bifurcated program in which the Memorial Union is operated separately from UHD, and one thing that has happened is that a little over three-quarters of a million dollars a year is being transferred from UHD to the Union. We believe this artificially inflates the cost of providing room and board to students."

So starting this fall, OSU will use a modified system that limits the amounts transferred from one entity to the other through a two-part meal plan that includes a new declining balance component that can be used only at UHD locations. The other part—the traditional card cash component—can still be used in any place, as before.

"Our current system encouraged use of the meal plan with UHD operations by providing discounts in those locations but not in the branded leased operations at the Union," explains Turnbull."However, we found that that was not enough incentive to limit the amount of money flowing out, so under this new system, we simply cap the transfers and limit the liability to UHD."

Proposing such a change could have producedinterdepartmental friction, but Turnbull says the actual negotiation process with the Memorial Union was more than cordial. Rather than simply declaring that "Housing & Dining is transferring too much money to the Memorial Union, so we want a new system to address that issue," Turnbull says that UHD invited the management team of the Memorial Union, as well as residence hall students and other students, to form a Food Service Collaboration Group that could address not only the meal plan but other issues as well.

"In looking at the spiraling costs of room and board plans, we identified one factor as being the portability of the meal plan," he says."So we then looked at meal plan designs that could still permit residents to use their declining dollars where they want but would limit the amount of room and board dollars that were available to be spent at the Memorial Union, while at the same time protecting the income stream for the Memorial Union and its lessees. This was more of a balancing act than pure science."

Students shouldn't find the new system too disconcerting, Turnbull maintains.

"Since we are fully an la carte program, it essentially remains the same, except with two debit accounts. For residents, it's almost seamless since at the cashier point the system simply looks at where card is swiped and deduct from the appropriate account."

Reaching Off-Campus

One way some schools are trying to bolster meal plan participation is by designing options geared specifically to the needs of off-campus apartment dwellers and even commuters.

The University of Tennessee has had a commuter meal plan for the past year. It includes 25, 50 or 75 meals per semester with 300, 200 or 100 meal plan dollars, respectively. Each costs $500 and is available only to off-campus students. Currently, only a small fraction of the school's 19,000 commuters have taken advantage. Still, other schools, are looking at UT's program as a potential model.

The University of Maryland plans to introduce a series of four declining-balance meal plan options designed specifically for commuter and off-campus apartment dwellers.The options, which range from $250 to $1,000, roll over from fall to spring semester minus a $25 fee and can be used in any campus dining venue.

The new options are the result of a number of factors, says Dining Services Director Pat Higgins. "In the past couple of years, it's amazing how many commuters have expressed a desire for meal plans," she says."With clubs and other organization activities in the evening, more nonresidents are spending a lot more time on campus. Also, with their busy schedules, many simply don't want to take the time to do the shopping, cooking and cleaning

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