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How Will Distance Learning Impact Customer Counts and Revenue in Colleges?

Consultant Tom MacDermott says distance learning challenges college dining in the same way the untethering of workers from offices due to mobile technology has challenged B&I in its impact on customer counts and revenues.

Will college food service follow corporate food service down the path to fewer customers and declining revenue? That is a real possibility, says Tom Mac Dermott, President of Clarion Group, a consulting firm that advises client in the management, operation and improvement of their in-house employee/student food services.

“Mobile technology untethered employees from the office,” Mac Dermott said, “and the rise of internet-based education, called ‘distance learning,’ may do the same for college students.”

As employees were increasingly able to work from home beginning a decade ago and, more recently, from almost anywhere thanks to wireless capabilities, the number of people actually in the office and available as customers for the corporate food service has declined.

“In the early 2000s, corporate food service served lunch to more than 50% of a company’s employees every day. Now, the number is under 40%, according to a semi-annual survey by the Society for Foodservice Management,” Mac Dermott noted. “As distance learning increases at colleges and universities, the trend for the college food service operator is likely to be the same – down.”

The commuter college and colleges and universities with a high percentage of non-resident students are most likely to feel the pain, according to Mac Dermott. Colleges with primarily a resident population who depend on the college food service for meals will be less affected.

The University of Maine, serving a large geographic area with a sparse population outside a few urban centers like Portland, Augusta and Bangor, was among the first to offer courses over the internet more than a decade ago. Now, even Ivy League colleges and universities like Harvard and Princeton are offering both undergraduate and graduate courses over the internet.

“The educational value of remote class attendance is being debated by educators,” Mac Dermott said, “but no one is questioning that it’s a rapidly-growing phenomenon.”

The major impetus is the same for colleges as it is for corporations – economics. The more students are served remotely, the less demand there is for classroom and other facilities space. One professor can teach as many as thousands, rather than the 20 to 30 in a classroom. A remote student pays tuition, but takes up no space on campus and requires no services – including food service.

Retail college food services already have a difficult time breaking even or making a profit, Mac Dermott noted, because of the comparatively few days of operation. The typical college calendar is 32 weeks, spread over some 36 to 38 weeks from late August to early May. In between are the Christmas-New Years vacation and Spring break, when there’s no business.

In addition, business is typically half or less of a normal day’s business on Fridays, the days before holidays, reading days and exam weeks. That leaves only about 110 days of full business out of the 180 to 190 days from the start to end of the academic year. At best, the college retail food service is lucky to break even over the summer months because of light patronage.

The college food service operator will have to follow the lead of corporate food services in coping with the trend, Mac Dermott said.

“This means focusing on efficiencies, especially lowering labor costs to improve productivity,” he said. “Retail food service units will have to be planned and designed – or redesigned – to operate with fewer employees.”

The means are increasing self-service options and reducing food production labor by bringing as much as possible of meal preparation out to the serving line via “exhibition cooking.”

“Having a chef or cook preparing meals to the customer’s order from pre-prepared ingredients at the service station while the customer watches reduces the need to prepare meals in bulk back in the kitchen,” Mac Dermott said. Food cost is reduced, because nothing is cooked until the customer orders it. There’s an added, important bonus: the customer sees the meal as fresh, not something that has been laying in a steamtable pan for hours. Those customers still available will see the college food service as serving high quality, healthy meals, which will help business.”

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