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The Survivor

At a Glance

Name: Anthem Blue Cross and Blue Shield

Annual Cafeteria Revenues: $1.265 million (includes approx. $250,000 in catering revenues)

Check Avg.: $4.10

Staffing: 15.5 FTEs

Avg. Daily Participation: 50%

Onsite Employees: 1,800

Paul Caron's voice carries the gruff, crusty residue of more than a quarter century in the corporate dining arena. It is the voice of experience. It is the voice of confidence. It is the voice of perseverance.

It is the voice of a survivor.

Caron has headed the in-house dining operation at Anthem Blue Cross and Blue Shield and its predecessor companies in North Haven, CT, since 1980. In all that time, the facility has remained stubbornly self-operated, bucking the tide of outsourcing that has swamped all but a few corporate dining operations.

Caron will be the first to admit that he has been lucky—lucky in having a supportive senior executive team all those years. In fact, he has only had to sweat out two occasions in which outside companies were asked to make bids on the business (both bids were eventually shot down by senior management).

But as the old saying goes, you also make your own luck. Caron would hardly have enjoyed such support if he hadn't been a) very good at what he does, and b) very efficient at doing it.

Along the way, he has had to endure a fair share of adversity. Perhaps his greatest challenge came in 1998, when he was required to end his department's subsidy.

"We went from $152,000 in subsidy to $3,000 in the black in seven months," he says with a mixture of pride and rue.

How he dealt with the challenge is typical of how he has managed to survive and even thrive through more than two decades worth of the industry's ups and downs.

Caron is not just a self-op B&I dinosaur. He is also unusual in a wider cultural aspect: he will probably retire after essentially spending his whole career with one company. In today's job-hopping environment, that is truly an achievement.

Young Paul Caron earned his culinary and management skills the hard way. He was a grill and bakery cook in a restaurant as a teenager and then for the U.S. Navy in the late 60s on the troop carrier USS Fremont (actually, he hated baking, but "I was repeatedly assigned there once they found out I had experience," he chuckles in retrospect).

After seeing some of the world ( fortunately, the Fremont operated in the Mediterranean and off the European coast, so it managed to avoid Southeast Asia at a time when the Vietnam War was raging), Caron settled in the American Northeast. He worked for a while at the Waverly Inn in Cheshire, CT, and then briefly in the dining room of the local May Company department store.

Caron's big break—the one that would place him at the company he has never left—came when his manager at the Waverly got a job with Blue Cross and Blue Shield of Connecticut and hired Caron to work in the in-house cafeteria.

Caron still remembers the day—June 4, 1973. "I said to him, 'Frank, I'm going to be here for the rest of my career,'" he recalls.

The reason: the cafeteria gave Caron "the autonomy to do my thing."

When that manager retired in 1980, Caron was made head of the company's four dining locations and its staff of 44.

Today, that's down to a single location and 16 staffers serving 1,800 onsite employees (with a satellite cafÈ not far away in Anthem's North Haven headquarters complex). But the core philosophy remains.

Caron has always survived by a simple principle: give the people what they want.

"We don't do liver and onions because very few people want liver and onions," he says. "In a perfect world, we could provide liver and onions for those few people, but this is not a perfect world."

What people do want is ever changing, and Caron works hard to keep up with culinary trends, visiting commercial operations in the area to see what's selling. "I go to malls and see what they're serving in the food court," he notes.

That leads to innovations like the cafeteria's white bean and chicken chili, a lighter (or at least perceived to be lighter) version of standard chili that has been a big hit. "People were looking for lighter, healthier alternatives outside the salad bar," explains Caron. To accommodate the growing number of high-protein dieters, meanwhile, he is offering low-carb wraps. Currently, he sells about 150 a week, he says.

To garner continued customer loyalty, Caron works hard to provide an appealing and varied range of choices. He emphasizes tried-and-true favorites combined with a steady stream of new options to tempt new customers in and keep regulars coming back. Pizzazz, novelty and perceived value are the key factors in getting customers to pay the higher prices that are an important part of keeping the operation solvent.

"I look for new items a lot so I can introduce-a new price," Caron says. Despite the strain on the curtailed staff, demonstration cooking and to-order prep are regular features. "People like to see their food being prepared just for them," he notes.

Ingredient quality is also a must.

"I don't believe in cutting corners on buying," he says. "I buy high-quality product and keep a sharp eye on waste and production costs. Customers notice the difference in lower-quality product and they'll go elsewhere, but they'll come back if they see you're serving good quality at a fair price."

"I look for new items a lot so I can introduce a new price."—

The main Anthem cafeteria features the usual deli, grill, pizza and salad bar stations. Other than the standards implied by these generic outlets, customers can choose a hot deli sandwich, a specialty salad, an entrÈe of the day, a soup of the day, a pasta special and an International wrap sandwich (or a made-to-order omelet on Fridays).

That's a heck of a lot of choice given the operational restrictions, but Caron says variety is a must to get people coming back day after day. So is value.

Prices range from under $4 for the pasta specials to more than $5 for some of the specialty hot deli plates (without beverages).

A hot deli meat is served every day. Some of them repeat regularly each week, while others come and go intermittently. For example, while every Monday is turkey day, Tuesday varies from the routine to special treats like the cafeteria's famous barbecued brisket of beef, one of the special " highvalue" options Caron counts on to keep customers coming back.

"We use fresh briskets," Caron says proudly. "We cook them ourselves with smoke in the oven, real slow for like three and a half hours and then sauce them and carve them by hand. Right now I have one person just carving the meat while another is making sandwiches because the line gets so long. We sell 150-160 a day."

The beef is served every three or four weeks. Caron says he refrains from offering even the most popular choices too often to keep them from stagnating.

"I really feel that just because it sold so well today, they don't want it every week," he explains. "What happens is, people come down and see the same things and they say, 'Oh, look, the same thing every day, every week.'"

Besides, he notes, a popular dish served occasionally can predictably boost sales for the day, providing a reliable way to give business a shot in the arm when needed.

The entree station, "Main Stay," offers some of the best values: choices like Broiled Salmon with Lemon Dill Sauce, Chicken Francese and Southern Fried Chicken going for under $5, including two sides.

Another weekly special offers assembleit-yourself alternatives like a taco bar, a fajita bar, a build-your-own-sub sandwich bar or an assorted appetizer bar, featuring standard bar appetizer choices like barbecued wings, chicken fingers, stuffed potato skins and mozzarella sticks. Pricing for these specials is generally by the ounce.

The operation also has its own bakery where it turns out a series of specialty breads highly popular with the customers. "We make our own pizza dough as well as zucchini to cherry nut breads," says Caron. "We also make home-made chocolate chip cookies and brownies to spur dessert sales."

The Anthem cafeteria operation serves breakfast as well as lunch. About half the 200 to 250 breakfast customers on a given day opt for the day's hot option, which changes each week.

Learning to Live Without a Subsidy

In 1998, Paul Caron heard the words that many corporate dining foodservice directors dread— "no more subsidy." While hardly unexpected, the company's decision to expect the in-house dining operation to break even threatened Caron's carefully designed foodservice operation, where the watchword was always "give the people what they want." That, of course, is easier done when you have a revenue cushion.

Nevertheless, Caron didn't argue."When you've spent as long as I have in this business, you learn to roll with the punches," he says.

So he rolled up his sleeves and came up with a plan to operate on a balanced budget. The move prompted significant adjustments, including

  • a drastic staff reduction that cut his workforce in half,
  • a completely different menu that minimizes production,
  • combining stations to consolidate staffing needs
  • eliminating permanentware, and
  • raising prices across the board. The changes are muted but noticeable. The pizza and pasta stations are now consolidated for example, and employees now dine with disposable dishes and utensils rather than the china they enjoyed previously.

The most sensitive change—raising prices—was done in the context of overhauling the menu. In this way, Caron avoided presenting his customers with direct price increases on familiar dishes. Rather, the increased price structure was presented as part of a move to higher quality and better value choices.

So far, the strategy seems to have paid off. The check average has jumped from around $3.00 in the subsidized days to $4.10 today. Customer counts are down, but in line with staffing levels. The average daily participation rate remains at around 50 percent of population.

In the first seven months of operating under the new financial structure, Caron not only eliminated the $152,000 subsidy he had been getting but actually posted a $3,000 surplus.

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