Nine years ago, the Food & Nutrition Services (FNS) department for the Orange County (FL) Public Schools (OCPS) wasn't so much orange as red from all the ink spilling from a cumulative program deficit of $7 million. The district's former, longtime foodservice director was long gone at that point, replaced by an interim committee of three veteran supervisors charged with holding down the fort while the search for a new director went on.
It was not an easy search because OCPS was a decentralized tangle where individual schools managed their own foodservices, all the way down to menus and procurement, and principals hired their own foodservice staff. With that centrifugal dynamic in place, any new director looking to impose fiscal discipline would face an uphill climb.
Yet today, not quite a decade later, OCPS is a model of how a large urban school system's dining services can be efficient while being responsive to its young customers and to public demands for more nutritious choices.
Furthermore, the FNS program deficit is not just long gone, but replaced by a tidy surplus of nearly $12 million in its fund balance (a two-month operating cost “cushion”) as participation escalates and cost efficiencies are implemented even as the program continues to innovate in menus, operations and nutritional integrity.
Sales of reimbursable meals have grown by 51 percent (or almost 12 million meals) since 2003 (including an increase of 19 percent — or three million meals — to students who qualify for free or reduced meals). Meanwhile, breakfast sales have shot up 78 percent.
It's not just the little kids, either. Sales to secondary school students are up 42 percent in the past four years, indicating real success in finding meal choices that legendarily finicky teenagers will voluntarily choose.
In recognition of all this, OCPS's director of food & nutrition services, Lora Gilbert, MS, RD, FADA, SNS, landed a rare double honor earlier this year when she was named winner of the School Nutrition Association's top honor, the Golden School Foodservice Director of the Year in the School Nutrition Association's FAME (Foodservice Achievement & Management Excellence) competition in January, followed in May by the IFMA Silver Plate award in the School Foodservice category.
Quite a turnaround! How on earth did it happen?
Well, here's the story…
A Totally Different Approach
One commonplace “solution” to OCPS's foodservice problem in 2002 would have been to turn the program over to an outside contractor, but the district didn't want to take that option. Instead, it decided on an outside consultant to help OCPS overhaul the foodservice operation without taking actual management control of it.
The firm hired in 2002 for this task was inTeam Associates, a consultancy headed by IFMA Silver Plate Award winners Dorothy Martin and Gertrude Applebaum. In its first year, inTeam initiated centralized purchasing and menu development and established the job description for a new, robust director position.
To fill that role, inTeam and the OCPS District Chief of Operations chose Gilbert, a former nutrition specialist for Schwan's Food Service who also had some management experience running a senior dining program a decade earlier. To ease the transition, inTeam continued its involvement with OCPS until 2007.
The major challenges awaiting Gilbert included…
- • put together a strong management team
- • continue to centralize menu planning and procurement
- • centralize control over foodservice staff and implement effective performance standards and measurement protocols for them
- • develop menus that would entice more participation, especially at the middle and high school levels, while increasing the menu's overall nutritional profile
- • find new revenue streams for the FNS Department
- • reduce food and labor costs to 40% of revenues for each
One major challenge Gilbert had to tackle was gaining control of staff at the field level. “We didn't centralize right away,” she recalls. “When you have a decentralized system with lots of processes, you can't just get rid of everything overnight. We worked hard to earn the schools' trust that we could manage effectively. For example, we brought in principals and managers at every point to help process and develop the decisions we were making would affect them.”
There was also the tricky process of negotiating the transition of authority. “Those staff evaluations in the first year were probably our hardest step,” Gilbert admits. “You really have to tread lightly, but at the same time make sure that your expectations are communicated.”
It was a slow and careful process that took five years of careful steps. Even now, FNS maintains a liaison to building managers at the school sites and only in the past year stopped having one for principals as well.
Putting a Team in Place
One major contributing factor to a successful transition was the management team Gilbert assembled. Some were internal promotions, but a surprising number came from outside the school foodservice world.
“I really wanted to compete with outside foodservice,” Gilbert explains. “The outside industry does such a great job of teaching customer service and financial responsibility and I wanted to bring that mindset here.”
Key managers are from Disney's park operations and Universal Studios as well as from healthcare, senior dining and contract management. One is a former nutrition director at the Florida Dept. of Education.
Making the Numbers Work
In 2003-04 (Gilbert's first year), FNS produced an operational surplus of $3 million. It is near $12 million today — impressive but short of the $18 million goal, which is the three months operating expenses recommended by the USDA.
“It wasn't until my third year that we were able to begin focusing on increasing the quality of the menu and to begin purchasing the equipment we needed to do that,” Gilbert recalls. “By that point we had the fund balance to proceed.”
Operating in the black means getting food and labor costs under control. The industry standard is 40% of revenues for each. A district-mandated wage increase escalated labor costs for a couple years, but starting in 2007 it has been coming back toward the 40% target. Significantly, over the past six years, the number of meals served have increased without increasing total labor costs.
One of the major reasons for the greater efficiency is the significant investment FNS has made into automating procurement, inventory control and POS, which not only allows more efficiency but accumulates data for the Key Performance Indicators (KPIs) that form the basis on which this vast enterprise is managed (see below).
The capital investment included constructing six central kitchens that cost-effectively produce high quality food for small population sites. This initiative saves the district about a million dollars a year. Currently, the kitchens produce only cold items for 47 smaller school sites, but plans call for the eventual addition of hot production as well. (Another milestone: the recent construction of a dedicated central kitchen at a new high school, a model for future construction.)
This fall, FNS will begin testing the production and transport of hot food to satellite sites, primarily charter schools with no onsite production capabilities.
By contrast with labor, food cost has hewed much closer to the 40% goal, helped by the use of commodities and OCPS's membership in the Power Buy Food Cooperative of over a dozen Florida districts that helps generate savings through volume discount pricing.
Eye on KPI
A key component of FNS' success is its effective use of operational data tracking and collection to manage for results. KPIs are developed for all eight senior managers, who not only oversee their specific areas of responsibility but each has direct oversight of some 30 school sites too. This, Gilbert believes, makes them more effective administrators because they get a ground-level view of how top-down decisions affect operations.
School site managers have their own KPIs, based on indicators like participation numbers and budget compliance. The KPIs are derived from benchmarks established by the Council of Great City Schools (see p. 20). Some are standard metrics (participation, food/labor costs, etc.). Others are more subjective factors that are quantified as much as possible.
For example, marketing may be evaluated by whether the site manager held the requisite number of Nutrition Month activities or whether they met for the required number of times with their Healthy School team or the PTA.
The senior administrative staff conducts some 200 site audits a year, where it evaluates areas such as equipment, staffing, marketing, sanitation and food safety.
The evaluations not only track performance but identify areas that need attention. For example, substandard scores in equipment maintenance or sanitation will trigger training sessions targeted to the specific problem.
The KPIs are also dissected so that each site has a realistic goal based on benchmarks for peer sites established by the CGCS, which break standard statistical indicators down into more meaningful subsets.
In the participation area, for example, “we start at some aggregate numbers: overall participation, elementary participation, middle school, high school,” explains Mike Eugene, OCPS's COO who also worked on CGCS's Performance Measurement & Benchmarking Project that developed these metrics. “But then we disaggregate a bit of that data to look at it strategically: separating out breakfast and lunch, for example, or noting the difference in participation between free/reduced and those not eligible because they are different types of customers.”
Revamping the Menu
In 2007 OCPS launched one of its most successful initiatives, a plunge into “give the people what they want,” school foodservice style. A couple years earlier, it had committed to rolling out an all-healthy menu, which meant removing some traditional favorites from serving lines.
“One thing I learned in the business world was that, when you take something away you have to give something back,” Gilbert observes. “So we decided it would be customer service. While nothing would go on the menu that wasn't nutritious or that we couldn't afford, at the same time it would have to have the approval of the students. I'm not a nutritionist who'll put collard greens or peas on the menu seven times so that kids will learn to like them. We don't have time for that. We don't have enough marketing dollars to do that.”
To get that “approval of the students,” OCPS has developed an elaborate system based on aggressive taste testing and focus group research to find items that meet nutritional and financial parameters while also appealing to students. The taste testing program eventually evolved its own signature event, an annual food show at which district suppliers get to test potential new products for the menu with real students.
The first round of new items selected from this process were piloted in select high schools in the spring of 2008 and then implemented at all 21 the following fall. Last year, 85 percent of the new menu items on OCPS menus were first introduced at the previous year's food show.
The food show was superceded this past year by the Chefs Move to Schools initiative (see p. 18), but Gilbert says she would like to hold the show again next year and have new menu items from that event as well as from the chefs in 2012.
Another one of Gilbert's goals was to grow breakfast participation. In 2007, the district committed to a program of offering morning meals to students at every school site, with 64 of them qualifying for universal free breakfast. Last spring, OCPS was selected by the School Nutrition Foundation (SNF) as one of six districts nationwide to receive a grant from the Wal-Mart Foundation to establish a pilot Breakfast in the Classroom program at 12 of its school sites, encompassing more than 9,600 students.
More recently, a breakfast cart program that brings morning meal choices outside, closer to bus loops for some intercept marketing, has helped boost sales, although of a la carte items. However, a new wireless POS system that can validate free/reduced eligibility will now allow the breakfast carts to begin serving qualified meals in the future.
Here Come the Chefs
Orange County Public Schools (OCPS) was a pioneer in an initiative called Chefs Move to Schools and helped kick off its pilot program last September. Chefs Move to Schools, a partnership involving the American Culinary Federation, the International Corporate Chefs Association, the Research Chefs Association and Women Chefs & Restaurateurs, seeks to implement Michelle Obama's call for the culinary community to get involved in helping promote nutrition and combat obesity in children.
OCPS volunteered to be the pilot site, so last September, chefs from the commercial and corporate world descended on 15 district schools to observe operations and make suggestions. In January, the results were rolled out in the county's schools.
The initiative has produced 11 new recipes that will be on OCPS school menus this fall. They include a fish wrap with tilapia and cole slaw, a crispy fish taco (fish was an area the chefs especially wanted to explore), a turkey taco crunch (commodity turkey and gravy with crumbled taco chips on top) and “stealth health” items like mac and cheese with ground carrots mixed in.
(For a video of White House Chef Sam Kass discussing the Chefs Move to Schools Program and urging chefs to participate, go to food-management.com/video/white-house-chef-sam-kass-0620/index.html)