Laura Thompson (00:41):
Welcome everybody! We are excited to get started and we are thrilled you are here today to join us for this webinar. Today we are covering profitable programs, how to reinvest in your program in 2023 and today our guest is Ron Jones at Spartanburg District 6 in South Carolina. My name is Laura Thompson. I am the Marketing Manager here at Health-e Pro, where we do Menu Planning and Nutrient Analysis Software. As far as covering a little bit of housekeeping and the agenda for today, we are recording this session. If you have to step out or if you want to pass this along to a colleague or a friend, this will be recorded and will be sent out to all registrants. Please know that it’s recorded and you can access it later if you would like to. We’re going to do introductions and then we are going to get into the program, profitable programs and how to run a program profitably.
Laura Thompson (01:33):
So much of what we hear from directors is, “I am a little scared of the numbers. I don’t know what numbers to look for, where do I start, what do I tackle first?” And as we have had conversations with Ron over the last while, we see that he has excellent insight and analysis into this, and so we thought he would be the perfect person to talk about this. We are going to leave some time at the end as well for a Q&A. So if you have any questions, please put them in the Q&A at the bottom of your Zoom webinar chat, not the chat section, but the Q&A. Sometimes chat can get a little unwieldy, and so we like to have the Q&A where we can keep any questions straight. From there we will wrap up.
Laura Thompson (02:12):
As far as introductions, Ron is the director of Food Nutrition Services at Spartanburg County Schools in South Carolina. Formerly the director of Office and Health of Nutrition at the South Carolina Department of Education, and the former Culinary Specialist at Greenville County Schools, also in South Carolina. So that is a fun picture where he was in the kitchen, I believe last week, and we love to see Ron in action. Thank you Ron, so much for being here. We are thrilled to be able to learn a little bit from your wisdom and your expertise as we have this conversation today. So we are going to be covering KPIs. I know when we have talked about KPIs in some previous webinars, we’ve had some people ask, “Okay, what are KPIs?” And they are key performance indicators, and Ron will be going over what some of them are and how he looks at them, how he weights them and how he values them.
Laura Thompson (03:04):
A key one is Meals per Labor Hour, which is one I’m sure many of you are very familiar with. And then we’re going to cover the importance of profit and what happens then once you get that profit, where do you put it? Where are the places where there’s a positive impact from that profit that will help increase participation in your program? And then we will have the Q&A from there. So thank you Ron, for joining us. And we’d like to start with the conversation around when you were at the South Carolina Department of Education and you were bringing on tools to help districts understand the numbers you were bringing on software that helped understand KPIs. What did you look at? What did you start with and how did you help those districts to try and turn their programs around?
Ron Jones (03:51):
Thank you for the invitation to join you all today. I appreciate this. I was the director over at the office of Health and Nutrition and Phil Trusdale, a colleague of mine and myself noticed that districts were having a difficult time financially. A lot of that was driven by the fact that they did not really understand their numbers and how they worked. So we partnered with a company called ActPoint KPI which has a national database on key performance indicators for school food service. We could say in the system, “Show me a school district in South Carolina with 30,000 students, 45% free and reduced,” and single out some schools. And then say, “Show me what the average food cost was.”
Ron Jones (04:48):
We would get a printout of where those schools were falling and where your individual unit was performing in relation to the rest of that sector. And we could look at those numbers statewide or nationally. Then at the bottom of all of the reports in ActPoint KPI there was a methodology to correct or to hone in on those numbers. It would tell you how to respond. And so we were really extremely proud of the tool and rolled it out free to every school district in the state and charter school in the state to be able to analyze their numbers and get directions with their KPIs. And what we found is that nobody used it. We were paying a good sum of money for the contract, which we ran for two years. Everybody said the system was nice and they liked it, but they all turned their back on it. In short, they knew their numbers. All it did was remind them that their numbers were bad and then they were still confused as to what to do next.
Laura Thompson (05:58):
When you were helping a district try and turn things around because they were afraid of the numbers (as many of us are) you look at the numbers, you’re thinking, where do I start? What do I do? You’d mentioned something about a two-week inventory cycle versus a four-week inventory cycle. How would that help?
Ron Jones (06:14):
Yeah. Well, at the State Department in the office, we used the KPI software and we identified districts that needed support with these numbers. We reached out to those districts and came alongside them and helped them understand their numbers and come up with a plan for moving forward using the KPIs. So now that system isn’t around, but the key performance indicators that we’re really looking at are quite simple. We’re looking at the cost of food, the cost of labor, or the cost of supplies, and then your participation numbers in your revenue. So those would be your main key performance indicators. So if you understand where they need to be, it drives your business.
Laura Thompson (07:00):
Very cool. Then once you left the Department of Education, you went to Spartanburg District 6, which had been eight years in the red. You’ve talked about how you were able to turn that around. There were 13 points that you were going to tackle. Just like how you mentioned labor cost, food cost, cost of supplies, where did you start and how quickly can things change?
Ron Jones (07:24):
If you have the data at your fingertips, things can start to change very, very quickly. It’s why we really, really like Health-e Pro here in Spartanburg 6, because we’re looking at KPIs that are live. I’m looking at yesterday’s information today, and it’s driving the businesses and decisions that we’re making on hiring and training and scheduling and pushing us towards profitability. We do get our key performance indicators from a couple of different sources, and I think we’re going to show everybody that here in the next slide. That will show basically the numbers that we are tracking very, very carefully.
Laura Thompson (08:11):
So in this next slide are some of the KPIs that you’re talking about. When you look at this, what do you see and what does that tell you as far as what you want to do?
Ron Jones (08:19):
Okay, so the very first advice that we had in coming here was to be able to develop an accounting system where we could report out the numbers very, very quickly. So we close a month end, and by the end of the next week I get a report district-wide. This is a screenshot of one of the dashboard tools for me. And it shows the meal counts, the participation rates for breakfast and lunch (on the far right hand side). It shows us what our goal was and how we’re actually performing. Those numbers on the right hand side are annualized. So as the month changes, those change as well. Then you’ll see that we’ve got cost as a percentage of the revenue. We’ve got food costs, labor costs and supplies.
Ron Jones (09:11):
Then down the bottom we’re looking at the inventory turnover ratio so we can find out how efficiently people are running their operation. Those are really the numbers for us that enable us to drive our business. And basically what we say is “We want to save 80% of our revenue to take care of the cost of food and the cost of labor combined.” So after we pay for our food and labor, for every dollar we bring in, we would have 20 cents left and then five or six cents for supply. So you’re down to 15 cents for profit or other related costs. And that becomes sort of a business plan. You need to get your head wrapped around how you’re going to run your business. You want to run a really high food cost because you want to buy above ordinary food and serve excellent food to kids. In the case of doing that, if you’re going to stay below your 80%, you might have to tuck it in on your labor, increase your training and become really, really efficient. Some school districts may take the other path, they may say, I’m going to pay more for labor and reduce what I’m spending on my food. But if you get much more than that 80%, then it’s very hard to return your profit.
Laura Thompson (10:35):
Very interesting. Thank you for walking us through that and how you look at those numbers.
Ron Jones (10:43):
Something else that we drive, as we look at the inventory turnover ratio down there (you can see that this school’s running a 1.79), the way we look at that is, they get major deliveries every week and you really want those deliveries to last you into the next week. So they’re taking four deliveries, so that if you were emptying out your inventory every week, you’d have a four-time inventory turnover ratio. So we’re looking at around two for an inventory turnover ratio. If we get really, really slow where they’re turning their inventories at one, 1.25, then we know that people are over ordering and stuff is on the shelves and we’re setting ourselves up for failure. So we do manage our inventory turnover ratio as well.
Laura Thompson (11:36):
Very interesting. We can now start to talk about labor costs and Meals per Labor Hour. What do you look at here and what does it tell you? Where do you know which action to take based on that?
Ron Jones (11:53):
Perfect. Well thank you. This is why we really like Health-e Pro. In the last slide we showed you that we were looking at a percentage of cost to revenue, and that tells us, financially, whether we are making money or losing money. But we sort of triangulate that not only do we look at the cost of revenue as a cost of labor, as a percentage of our revenue, we also look at Meals per Labor Hour. And we feel, or I have found in my experience, that most school districts are really comfortable with Meals per Labor Hour because it’s easy to understand. So if you say, “For every Labor hour we buy, we’re going to do 18 meals.” We’re at 18 meals per labor hour. We may be hitting that goal, but we may not know if we are profitable.
Ron Jones (12:45):
That’s why we look at both numbers. We look at the cost as a percentage of revenue, and we look at the Meals per Labor Hour, but the Meals per Labor Hour is instant, right? We can look at it right now and make a decision. So we go into Health-e Pro, which is driven through our production records. And when our managers complete their production record every day, they put in how many labor hours they used. So at the end of the day, looking at the numbers in our production records and the hours that were entered we know exactly how we were performing on Meals per Labor Hour that day. And once again, that doesn’t tell me whether I’m profitable, but it tells me if I’m in the area that I need to be. So therefore you can go into Health-e Pro and pull up your Meals per Labor Hour report and look at every location as to where you were yesterday or today.
Ron Jones (13:41):
Here in Spartanburg, we make all of our personnel decisions on those meals per labor hour. Do we need to add bodies or do we need to move people around? We had a manager a couple of weeks ago who wasn’t getting her some of her paperwork in on time. And when we asked her why she wasn’t getting her paperwork in on time, she said she was too busy and she had too much to do, and there wasn’t enough time in the day. And we said, “Well, you’re at 12 Meals Per Labor Hour, and everybody else is at 18 or 19 and they’re getting theirs in. So, what can we do to help you and support you, in being more efficient in the way that you’re working?” It also gives us the opportunity to decide where we may have some flexibility to do some training. If we have a school that’s running really, really well and they can absorb the payroll there or the Meals per Labor Hour, we would put training people into that school. But we don’t make any decisions on hiring or scheduling until we look at our Meals per Labor Hour, basically on a daily basis.
Laura Thompson (14:48):
So when things are making changes on a day-to-day basis, how much data do you need to see before you start making a decision?
Ron Jones (14:57):
As far as we respond to the Meals per Labor Hour. The Meals per Labor Hour, we can see every day in Health-e Pro, the financial report that I showed you comes out every month, and then there’s a one week lag time. So the data in Health-e Pro on Meals per Labor Hour is instant, where if I wait for my accounting department, I could be four or five weeks out and the information becomes stale. So we have found that looking at labor, we quickly test Meals per Labor Hour before we make our decisions, and then we always monthly are looking at our financials and our cost as a percentage of the revenue.
Laura Thompson (15:38):
Very cool. Another thing I know you’d mentioned when we talked about Meals per Labor Hour before was it helps you understand where you might need to introduce, like some revenue increasing possibilities, whether it’s after school snacks or breakfast in the classroom. How do you kind of gauge that based on Meals per Labor Hour? What are you looking for to help you know which levers to pull to try and increase revenue?
Ron Jones (16:01):
Thank you. A good point, so thank you. When we look at our Meals per Labor Hour, and if it’s running high, if we’re not efficient, there’s two ways to solve that. The best way to solve that is to increase your revenue and increase your meal counts. So at that point, we’ll say to the schools, are you doing your a la carte sales? Are you doing after school snacks? Are we doing anything to increase our breakfast participation rates? What is it that we can do to drive revenue there? Because driving revenue has the same effect as cutting hours. If you can’t drive your revenue then we might have to pull some hours back.
Laura Thompson (16:43):
We’ve got a couple questions that are coming through on Meals for Labor, if you’re game to tackle some right now versus at the end (since we’re in the middle of this topic and I think these are good questions). So one is, what are your typical Meals per Labor Hour goals for scratch cooking, speed, scratch versus heat and serve? Do you adjust that based on how you’re cooking?
Ron Jones (17:01):
Yeah, we’re doing mostly speed scratch throughout the district, and we have our benchmarks set at 18 Meals per Labor Hour. You know, some others may have different theories on that, but we found that that works for us, and that’s very attainable.
Laura Thompson (17:15):
Ron Jones (17:16):
We don’t differentiate between high schools, middle schools, and elementary. We just have that standard 18 meals per labor hour that we’re looking to hit. If you go to ICN and you look at the KPI training that’s available at ICN there’s some really detailed training there on tracking your Meals for Labor Hour and the subtle differences between running a 16 and a 19. We just use 18.
Laura Thompson (17:43):
Okay, cool. Another question is, what if a high school, for example, has very high a la carte sales, but lower meal sales? Do you use any a la carte profits in these equations or only meals?
Ron Jones (17:55):
No, we use meal equivalencies. So all of the a la carte revenue is rolled into a formula to become equal to a meal. We do the same thing for breakfast: two breakfast for one lunch, four snacks for one lunch. I’d have to go back and look and see what we scheduled for our equivalency for a la carte cost. For rough numbers if you took a la carte sales at about the cost of your reimbursement plus your commodity food rate then you would just turn those a la carte sales into a meal equivalent. So that way we’re comparing apples and apples. Obviously we want to do all the reimbursement meals we can and we want to push that but the a la carte revenue was really important in helping us control these numbers.
Laura Thompson (18:59):
So when you start to look at food costs, where do you start when the food costs are high?
Ron Jones (19:04):
We obviously measure, we know what the budget is, we know what the numbers are, and the first thing that we’ll do is we will look to see where we are hemorrhaging the most. What’s our largest loss? So if we’ve got a high food cost and a little teeny school, that may not be nearly as devastating as a slightly higher food cost in a huge school. So we look at the dollar value of the losses, and we attack the larger ones first. Very quickly we jump into Health-e Pro because the production records are cloud-based and live. From any point I can go on my phone and start looking at the production records of anybody.
Ron Jones (19:55):
And of course, we start to look at all the things that you would typically look for, you look for waste. We look to make sure that forecasting is done appropriately and that we’re reacting to the forecasts and that we’re not just forecasting the same number week after week after week. One of the things that we do in our production records is we analyze how many components were served for the amount of reimbursable meals that we served. Basically you have to offer five components and it takes three to make a reimbursable meal. So we measure that threshold and we say, “Hey, how come it took you 6.7 components per meal?” Or “how come you came in at 2.6 components per meal? You didn’t serve enough components to be compliant.” So we use the production records to make sure that we’re serving a good, comfortable number.
Ron Jones (20:58):
Doing that will very quickly show you where your offer versus serve program is falling short. Okay. So, you know, if you look at a school and all of a sudden, you know, 98% of the kids are taking milk at an elementary school there’s a reason for that. You know, do they really want that milk? Probably not. And there’s probably a great deal of it in the trash can or on a shared table. By analyzing your production record, you can say, “Oh, look here, every kid got a fruit, every kid got a milk”, and we’re doing offer versus serve. So maybe the staff doesn’t understand offer versus serve, or maybe the teachers are a little aggressive in helping because they think it’s the right thing to do, but it can very quickly draw our attention to some really easy cleanups on milk or vegetables or fruit.
Ron Jones (21:50):
Vegetables are a little tougher because we serve as many vegetables as the child would like in our district. Some of the other things that it’ll do is it’ll show you, for instance, we first got here, it would be really, really common that a kid would take a slice of pizza with whole grain crust and we credited the crust and then they’d take a dinner roll, which was the second grain. And so at that point we’re training them, “Hey, if a child wants a roll, let ’em take the roll, but we’re going to charge them for the roll, just like we would if they took a second milk.” But analyzing the production records in Health-e Pro gives us more of a laser light to look and see where the problems are.
Laura Thompson (22:35):
Awesome. Can you talk a little bit more about when you look at the number of meals served by components, I know you touched on it, and I’d love to hear you go a little bit more deeply into that, like you were saying with the dinner roll or two milks. Talk a little bit more about that if you could.
Ron Jones (22:50):
Sure. I mean it’s not rocket science. What we do is take a post-it note and put it on the side of the production record, and we write meat, meat alternate, fruit, vegetable, grain, and milk. And then we just tally. We take that tally and then we add it up. We take the amount of meals that we served, and we multiply that times five, and that’s the high threshold. You shouldn’t have to, unless you’re serving extra vegetables, you shouldn’t have to serve more than five components per meal. So if you’re hitting that, you know, 5.5, 6, 6.5 components per meal, then it shows you where it is, it’s right there. The information right out of your production record shows you that we’re serving too many milks, we’re serving too many grains, we’re serving too much fruit. Typically some of that could be inefficiency in the kitchen. They’re not properly recording, they’re not properly portion controlling. But at least we know “Hey, let’s go look at the fruit because look at all the fruit that we’re using here.” Did that help, Laura?
Laura Thompson (23:59):
That did. Thank you. Can you talk a little bit about how you forecast to help control food costs and how you scale recipes to make sure that you’re not overproducing and then creating waste?
Ron Jones (24:11):
Yeah. Thank you. You know, forecasting, our managers have gotten really, really good at driving the forecast knowing, “Hey, if today’s the day that we’re going to do a big penny dish, the last two times I ran this, I did X amount of portions.” And so they’re going to go ahead and they’re going to forecast that number. And, you know, through constant training and reinforcement, they get really, really good at that. But one of the really cool things about Health-e Pro is that when you forecast your production records, you can print your shopping list from your production forecast. And so you don’t have managers making huge, huge mistakes in ordering, whether under ordering or way over ordering just by simply going into your tools and saying print shopping list.
Laura Thompson (25:06):
Cool. Another one of my favorite topics is, you and I have talked about this, if you were talking about having fresh fruit on the line versus canned fruit and how that was able to help you cut food costs. Can you talk about that for a little bit?
Ron Jones (25:18):
Sure. Well, we really first of all, we spend a lot of money on fruit and vegetables and you know, we want to serve as much fruit and vegetables as we can. And it is our core belief here that serving fresh whole, whenever possible, or slightly processed products with fruits and vegetables, really elevates our line presentation because the natural fruit is beautiful. The colors pop, the textures pop, and the subliminal message there is that we’re serving really, really healthy fresh food. And so, that helps us drive our business capitalize it on the beauty of the food in the lines. The other thing is when we start to put out a lot, we believe when we start to put out a lot of canned fruit, it has the opposite effect. You know, people don’t equate canned fruit as being as healthy or as colorful.
Ron Jones (26:14):
Kids take it, yes, they will. But subliminally we don’t get that, that nutritional message that goes with it. And canned fruit can be very, very, very expensive. Using DoD, you know, we can buy whole fruit for 23 to 26, 27 cents a portion when we start opening a number 10 can and spending the labor to dip into a cup, paying for the cup, paying for the lid, and then paying for the value of the product. And then, you know, looking at the effect on the line, we just think we’re better off to take beautiful, fresh, whole fruit, wash it and lay it out. It’s cheaper proportion and it doesn’t affect our labor cost nearly as drastically as all that coming. So there’s a lot of districts out there that don’t agree with that philosophy, but that’s the philosophy that we use here in Spartanburg 6.
Laura Thompson (27:11):
I just know that really stood out to me when you were first telling me about that. That does make sense, because we often eat with our eyes, and so if we see something beautiful on the line, of course you’re going to want to eat that, and it’s going to have that halo effect around the other food that you’re serving that you, you care about the health and nutrition of it.
Ron Jones (27:27):
I think some of the other things is, if we put whole fruit out on the line and at the end of the day when our food policy says if anything is cut we can’t reuse it. But if we put whole fruit on the line and we don’t use it, it can come back off the line and be re-washed and then used again for another meal service. Once we open a number 10 can of fruit cocktail or pears or peaches or whatever that is, and that pan goes into the line we don’t allow that to be used. And a can of fruit is expensive. So if we open a can of fruit at the end of a meal service on two different lines, and we serve five or six portions of fruit we just threw away a lot of money that could have been saved. So we tend to stay away from it. Now we do use individual applesauce cups. We use those for breakfast in the classroom. We use those for field trips. We use those for after school snack. But on our lunch lines and our breakfast line, we try to keep it as fresh and whole as we can.
Laura Thompson (28:29):
Wonderful. You’ve also talked about in the past batch cooking and how that’s something that you preach and how when you are taking the data and practicing with it and batch cooking properly, you can adjust and taper up and down as needed. Can you talk about that for a little bit?
Ron Jones (28:45):
Yeah, thank you. And that’s where we employ our has records to help us ensure that we’re doing a good job of batch cooking, because every time we pull something out of a cooking device steamer or an oven, and we temp it to make sure we’ve met the minimum temperature and that’s then a written record of, of basically food quality. And if we walk into a school and we’ve got broccoli on the menu today, steamed, what we want to see is broccoli coming outta the steamer every 20 minutes at 140 degrees, not twice a day at 190 degrees. You know, that’s when you walk in the back door and you smell funky broccoli, and, and you look at the line, the line is drab and blurry because we’ve overcooked the product and the kids aren’t going to pick it up. So by using our has documentation, if you follow through, you can make sure that food is being prepared in small batches, that we’re keeping the freshness up and we’re cooking to the proper desired temperature for maximum color maximum quality.
Laura Thompson (29:56):
Thank you. We had a couple more questions come through around this topic. As we’re discussing this right now, one of the questions is, do you use commodity? And if not, how do you divert those funds to DoD fresh?
Ron Jones (30:08):
Yeah. Well last year we had $460,000 in our commodity allotment. We dropped $400,000 of that into DoD fruits and vegetables. We like that because there’s no delivery charge associated with that, and dollar for dollar, it works out about the same as buying it from my vendor. I think one of the things, and it’s a really good point, is that we need to look at our commodity value, our commodity usage, commodity entitlement as a blessing. Some people don’t look at it as such, but we look at it as basically a gift card. And if you think about using, we didn’t have to pay for the gift card, somebody gave it for us to use, but it certainly has value. And we want to maximize the value.
Ron Jones (31:06):
So, you know, Laura, you and I could go into the supermarket with a hundred dollars gift cards and you could walk out with some brown rice and some dried beans and some fresh grains and vegetables, and you could sell half of your cart for your a hundred dollars, and I guarantee you I could buy one bottle of wine and two steaks and spend the same a hundred dollars. So we look at our commodities the same way. How are we going to maximize the value of that commodity dollar? And we feel that DoD does that really well for us. And again, there’s no delivery charges associated with it. The rest of that right now, we did not do any processing. This year. We diverted the rest into brown box and just basic staples. We did some grain beans, we did some broccoli, corn, mixed vegetables, raisins, and craisins, and that was our $460,000 spent.
Laura Thompson (32:02):
Wow. Very cool to kind of hear a little bit of how that breakdown works. Thank you. What about some other costs? I know you’ve found some unique places where you can cut costs that maybe some people might not think of. So can you walk us through a couple of those examples? I know one was a fork example where you realize there’s a way to cut some costs and make some savings here.
Ron Jones (32:22):
Sure, sure. I mean, at our supply cost and when you went back to our key performance indicators, we like to keep it, this year we’re shooting for around 6%, but y’all know out there, man, it’s tough. Prices are going through the roof and trays, we started this year with our vendor charging 8.40 cents or 8.60 cents per tray which was a styro tray. The vendor immediately started substituting it, and the substitute compressed product was coming in at 11.60 cents a tray. We’re using two trays per day per child, and that really adds up. So we found some trays on state contract in South Carolina and made the switch, and now we’re paying 6 cents a tray. We noticed some of our elementary schools was a bad habit from the past was buying spoons and forks for a dispenser, and they were up to 6 cents per unit.
Ron Jones (33:28):
And what we realized is not only was the child taking a spoon, they were always taking a fork, so now you’re up to 12 cents, and they were doing that twice a day and puts you up to 24 cents when for a spork kit or a spork in a package, we can do that for 2 cents. So we went in the order guide and stopped them from buying those other expensive items chemical costs for us. We liked to watch those as well. We had a consultant tell us that every time we run a rack of dishes through our dish machine and that it was costing us 40 cents to run a rack. So, we’re constantly on operators to make sure that they’re waiting till they have a full rack before they slide it through the dish machine because it adds up with 16 locations pushing dishes all day long.
Ron Jones (34:24):
It adds up very, very quickly. So we do train for that and we look for that. Some of the other things that we noticed is we signed a new contract with a new chemical company, and the chemical distribution system is not a one button or a package. So what happens is when you open the faucet, the chemicals dispense along with the water and it takes a long time to fill a sink. So we would have operators turn on the hot water with detergent, turn on the water with the sanitizer, and then walk away from the sink and then get busy. Because we’re busy and there’s a lot happening, the truck driver comes to the back door and we start receiving groceries, and while that’s happening, we’re running chemicals right down the drain that we’ll never see again. We have to build processes to make sure that we’re not just walking away from sinks, running chemicals down the drain.
Laura Thompson (35:24):
What about the printed menus? I know that’s something I’ve heard you talk about before as well.
Ron Jones (35:28):
Yeah, when we were spending about $30,000 a year in printed menus and with Health-e Pro and My School Menus, we just now do everything online and if parents want to print menus at home, it’s an easy functionality through Health-e Pro. And just by cutting printed menus off, we saved ourselves $30,000 a year. And man, we would much rather spend that $30,000 buying better food for kids than we would sending home paper that’s going in the trash can.
Laura Thompson (36:01):
Good point. I know we’re going to talk about that a little bit more of where do you reinvest these profits? What about menu mix? How do food costs affect menu mix, and how do you kind of pair maybe a more popular item with one that is profitable? How do you plan that and make that work?
Ron Jones (36:19):
Sure. Well you know, menu mix is what the kids actually take. When we plan a menu, what is it that they’re actually purchasing versus what’s being prepared for the day? And there’s a real art to menu engineering saying, okay how are we going to make sure that what we’re serving, we’re making the most money on? And then how can we conversely, how can we show off and sell some flashy items and not take a bath? So you saw it in my bio that I was once with, with Greenville County Schools, with the incredible team over there and we were serving St. Louis style, Memphis ribs on the menu. And, you know, the food cost on that, on paper was devastating. You, you know, everybody would look at that and say, how can you do that with this reimbursement rate?
Ron Jones (37:13):
Well, it was easy because, you know, any given day, a certain percentage of kids are going to take the ribs, but you’re always going to have that same kids that take pizza, the same kids that take burgers, the same kids that take chicken sandwiches, the same kids that take a yogurt plate. And so we’re able to menu appropriately. The other thing that we do here in the district is as the second entree, we always offer in the elementary schools, we’re always offering a toasted cheese sandwich or a yogurt plate. And we know the days that those numbers are going to peak. And believe it or not, it really helps your food cost. It helps you say, okay, we can put X, Y, Z products on the menu today because so many kids are going to take a yogurt plate with fresh fruit and vegetable that it’s going to pull my cost down.
Ron Jones (38:09):
And it allows us just to add some other things to the menus if we pay attention to the menu mix. And it’s really easy in Health-e Pro because in the live dashboard, if you go to the menu analysis tab, it’s very clearly shows you in, in bubbles, which items you’re serving, how popular they are, and how profitable they are. Okay? Then what we do is we take that data and we move it around the menu. So we’ve got a four week cycle menu. We do pizza every Friday, but it’s very popular, it’s very profitable. So then you’ll see we worked it into a Wednesday, we’re doing a chicken tender product again, it’s very profitable and it’s very popular. So over a four week cycle, we’ve worked that in four times. The items that kids like that drive our profitability, we menu them more often, we find ways to get them into the menu.
Laura Thompson (39:08):
Fascinating. Even just hearing you call it menu engineering, I feel gives it the weight of really how challenging but also very powerful it can be. It’s not an easy task, but the way that you put the thought and the data behind it makes it.
Ron Jones (39:23):
You know, Laura, we do that for everything. We do it for all of our a la carte products as well, and we had a sales rep in the other day, and he was showing us a new fruit juice product that he wanted us to bring in. And our answer was, well, we’ll consider it, but we want to see the margin because if it’s going to sell, if we’re going to sell it for a dollar and we’re only going to make 40 cents, and we’re selling something else for a dollar and we’re making 50 cents, we don’t need your product. We don’t need it. We’re selling enough as it is. So we look at the margins on everything that we sell to make sure that our margins are high and tighten.
Laura Thompson (40:06):
All right. So we talked about some different levers that you pull based on where meals per labor hour is. Can you talk a little bit more about cost of labor as a percentage of revenue and, and how you figure out the right numbers and what’s the most powerful number when you’re looking at those numbers? And then once you have that profitability, then we can start going into the discussion of where do you reinvest, where are the opportunities and where do you put that money?
Ron Jones (40:31):
Okay, so I told you earlier that we try to keep our cost of food and cost at labor together no higher than 80%, and then we have 6 or 7% in supplies. And then we determine how we want that to look. And, in this district we’re spending a little bit more money on food, and we’re trying to become very efficient with our payroll and we want to buy better quality food. We want to present healthier, better quality food, and so, we’ll take the hit on the food cost, but if we’re going to do that, we have to really monitor the meals per Labor hour in that the amount of money that we spend in relationship to our revenue on payroll. So I think we covered that pretty thoroughly in this.
Ron Jones (41:17):
There’s other direct questions we can take them but if we do a really good job, I think that there’s also a tendency out there for people to be really nervous to talk about profit and school food. Like there’s something wrong with it. There isn’t anything wrong with profit. I mean we pay our bills, and if we have that profit, then we get to do good things for our kids. We get to buy better quality food, we get to do better training for our staff, we get to get more money for our staff. After our first year of operations here in District 6 we increased our starting salary by 14%, and everybody along the scale basically went accordingly. But that couldn’t be done until we started paying attention to the numbers. So what we did after our first year is continue to look at, and we’ll look at our own fruits and vegetables in a minute but funneling some of that money where it needed to go and right back into the pockets of our very, very, very hardworking team.
Laura Thompson (42:25):
Powerful concept right there where, where you can reinvest. And so I know we’ve talked already about eliminating canned fruit as much as you were able to. And so where to reinvest, and you’ve talked about this multiple times along the way of investing in higher quality food. Talk a little bit about, if you could, the organic farm that you guys have and the local beef you’re able to bring into your district. It’s just really cool where you’ve been able to put this profit and bring it back into higher quality ingredients for your kids.
Ron Jones (42:54):
Well, the district has had for several years now a farm. We have 50 acres or so, and we keep 15 or 18 acres planted year round. We have a great growing season in South Carolina. We are able to and it’s organic certified organic and it’s GAP certified. So if you’re going to go to the market and you’re going to buy certified organic produce, you’re going to pay extra for it. I mean, as for our district, running a certified organic farm is an expensive venture. So we set ourselves up. I actually in my 600 account in my Food for non-profit food service account, I buy fruits and vegetables from the school district. I am the customer therefore they plant what we are going to use and whatever we don’t, can’t use, we sell on the open market or we share with our neighboring districts.
Ron Jones (43:51):
We’ve sold to several of our neighboring districts and then we have at our fingertips absolutely gorgeous local GAP certified organic produce, and we are proud to put that on the plates. Mother Nature has placed some dirty tricks on us because those big beautiful buckets of squash that you’re looking at, you know, they come on, they come on really strong about the week after all the kids leave for the summer, and we wish we had ’em two weeks earlier, but, you know, mother nature does what she does. So we take those back. We converted a middle school kitchen to a processing center, and they get washed diced flash frozen and boxed up in 20 pound boxes IQF and we ship those out to the schools from the processing center all year, and we use them in a vegetable casserole. We use ’em in a vegetable soup, Italian vegetable soup, and we’re rolling out a chicken vegetable soup. So we’re able to menu fresh squash, although it’s frozen all year. And it’s a wonderful thing. And again, we sell what we can’t use.
Laura Thompson (45:05):
That is incredible. Just looking at these pictures, and I know before you’ve walked me through where it goes, how it goes, how you process it, it’s just such an incredible operation that you are helping to manage from beginning to end, and it ends up with more nutritious food for the kids, which I think is just incredible.
Ron Jones (45:20):
Sure. We menu pizza, you know, frequently in the district, as I’ve told you about, and we plant 5,000 tomato plants every spring. And all of those roman tomato plants that we can use, we cook into organic pizza sauce, and that’s what we serve district wide is our pizza sauce. We also have three greenhouses in one of the greenhouses. We keep slicing tomatoes and cherry tomatoes going for 10 months. So right now we’re making pizza sauce in the middle of the wintertime with greenhouse tomatoes. We also do our own lettuces. A couple of weeks ago, when the rest of the world couldn’t buy lettuce in school food service because of the problems in the marketplace, we still had a steady supply of lettuce coming into our schools from our greenhouse.
Ron Jones (46:08):
Now it wasn’t enough. We weren’t able to grow all that we needed, but we certainly were able to minimize the impact of that little hiccup in the market. And we, again, we can’t grow nearly enough to support the district. I already told you that we shifted $400,000 into DoD produce. But this is surely a wonderful opportunity for the district. All of our first graders can go to the organic farm for a field trip. They learn about soil, they learn about bees, they learn about equipment, they learn about weather and it’s part of the first grade curriculum and we feed ’em over at the farm and it’s a great day.
Laura Thompson (46:52):
That’s incredible. What about the relationship with the rancher so that you’re able to get local beef?
Ron Jones (46:58):
Yeah, our farm is a mile and a half from our high school and our district office. And then right down the road from there, we have Walnut Grove Farms and they are trying to market a high-end steak product under a new breed, a new type of beef called Certified Angus, which is a cross between hereford and an Angus. And as a result of that they have a lot of beef that needs to be ground and in trying to grow steaks that the ground beef was almost, they had more ground beef than they knew what to do with. And so we put out a RFP looking for pasture-raised, local beef and they responded and came in at a very, very aggressive price. So we partnered with the farm now and Walnut Grove Farm, all of our ground beef for meatloaf and for tacos and for nachos comes in from Walnut Grove Farm. We take it over to the same processing center and we cook it into beef crumb balls or taco meat, and some of it we ship out for meatloaf in the schools. And so we have a wonderful relationship with Walnut Grove and our commitment to local is strong.
Laura Thompson (48:19):
That is wonderful. I absolutely love it. Makes me also hungry hearing about steak and ground beef. I know we’ve talked about, already like the number of components per meal. Talk a little bit about how offer versus serve has to be a culture. How do you help instill that in your staff?
Ron Jones (48:38):
Well, I think we mentioned before, a lot of times when we see that our food cost is off it’s because everybody has looked at offer versus serve as a rule. And districts will only really concentrate on offer versus serve when they think they have a state audit. And workers to make sure that they’re serving enough have a tendency to serve more. So they’re putting too much food on the plate which basically causes waste. So our offer versus serve training is repetitive. We do it every summer and then when we see food cost going up at a school, we deploy with a hands-on offer versus serve training. And we in 45 minutes in an afternoon, retrain offer versus serve. So that they understand that, that it’s a complete understanding and they can serve food with confidence rather than not understand and waste our food.
Ron Jones (49:44):
And again, when we are over preparing food, not only do we have an increase in food cost, we have an increase in labor cost. So monitoring offer versus serve, making everybody very, very comfortable. Because we tell our people, “Hey, it’s three components at lunch and one of them has to be a fruit and vegetable.” If a child gets to the point of service and they have a whole grain roll and they have a milk and they have an apple that doesn’t look like lunch to a lot of people, but under those federal guidelines, that’s a lunch and we tell them, be comfortable, ring them up, ring them up. That’s what they want, that’s what they’ll get and we’ll ring them up. All too often, people may say, well go back and get a piece of pizza or go back and get a chicken sandwich and we don’t have to do that. They just need to be confident that the meal meets the standards and they’re taught to ring it up.
Laura Thompson (50:42):
I love it. When we’re talking also about training people and how that’s one of the areas in which you can reinvest. What else might that training of staff look like?
Ron Jones (50:52):
We’re just finishing up our first year, going into our second year. So most of our training is done in the summer, and so we’ve been able to use some of those funds to take care of those three days at the beginning of school and make sure we’re bringing in some speakers that have some work to offer for us and that we can feed staff and start the year off on the right foot. So we will develop out our training more as we go forward. But, you know, looking at our goals, I mean, first of all we want to reinvest in food and then on top of that we’ve got a real gentle balance because we’ve got a lot of equipment in the district that’s going to need some attention as well. So we’ll have to plan that out carefully.
Laura Thompson (51:38):
Hmm, very interesting. So just to kind of wrap it all up, what has been the results of looking at the data and using the data to drive your decisions? And we’ve covered this already, but I would love for you to just summarize what has been the results with looking at the data and using the data from production records, using the data from the mini popularity report. How has all of that resulted in this that we see here on this slide?
Ron Jones (52:07):
And there’s a couple things we need to remember too. And the first thing is, we were just post-Covid and all kids were eating for free. And so that was a strong wind at our back. Reimbursement rates under the summer feeding program were higher and that was a strong wind at our back. But we were happy to take that. But with those two factors at play and then by monitoring our numbers and our performance, we were able to have a really, really strong financial year. So again, I told you we were able to go back to our very, very dedicated, hardworking people and increase their wages. We have greatly increased the amount of organic food that we buy from our own district and that we plant at the farm. Again, we’re moving away from any canned products and using all fresh fruits and vegetables and we are always looking to increase the quality of what we’re buying. Because we can push that food cost threshold a little higher. And you know, we shouldn’t be embarrassed about our numbers. We should be empowered to look at them, interpret them, and make our actions and then reinvest in our, in our kids.
Laura Thompson (53:23):
I love it. One of the things we talked about in the beginning, one of the things we do here is a lot of people are kind of afraid of the numbers, not wanting to look at them. And I love how you say looking at the numbers can be empowering because then you know where to make some changes, where to make a few adjustments and you can see the results and the impact of that which is powerful.
Laura Thompson (53:42):
All right. So I know we’ve answered some questions along the way. We’ve had a couple other questions coming in. Carrie, I know you mentioned that you love Greenville’s recipes. We do too. And when you were talking about Greenville, Ron, I think that’s when that question came in, somebody else asked, are these recipes available? We do have quite a few Greenville recipes in Health-e Pro. We have, I believe, 5,000 or 6,000 recipes now that are available in the global database. So a lot of those recipes are available for Health-e Pro users.
Ron Jones (54:09):
And Greenville’s is always willing to help any district that they can. We’re blessed to have them as a neighbor and a really strong business partner. And if you reach out to Greenville County Schools, they’ll send any resources that you ask for. They help us all the time.
Laura Thompson (54:27):
Mm, nice. All right. Let’s see what other questions came through. Yes, there will be a copy of this PowerPoint made along with a copy of the recording as well. So I know that question came through. Any other questions? Let’s see. Do you charge for a second fruit at the elementary school level?
Ron Jones (54:46):
Laura Thompson (54:51):
All right. And then somebody else asked, will this video…? Yes. This recording will be made available, so if you’ve registered, if you’re on the webinar now or if you’re watching the, the recording, yes, this will be all made available to you. If you’re registered, we will email that out to you. Any other questions coming through? It’s so fun just because Ron has so much great information in his head. I have had so much fun asking him questions over the last several weeks because every time I ask more questions, there are more insights in these golden nuggets that come out that I just think are absolutely fascinating. So thank you, Ron, for being willing to take the time today and to talk about your program and how you’ve been able to help turn it around with the work of so many others as well. It’s been inspiring to hear about the great work that you’re able to do in reinvesting in high quality food for the students and reinvesting in your staff and giving them a raise. I just think all of that is powerful, what you’re able to do because of looking at data and using the data to drive your decisions.
Ron Jones (55:45):
And we are very, very fortunate to have Health-e Pro at our fingertips. The state of South Carolina makes it available to us at no charge, and we capitalize on it. So we love it. It’s a great program and it helps us do the job that we’re doing.
Laura Thompson (56:05):
We love to hear that. Thank you. Thank you so much everyone, for joining us today. Thank you again, Ron, for your generosity and for sharing the great knowledge and wisdom that you have. If you have any other questions, please let us know and we will do our best to answer them and get back to you. Thank you so much, everyone, and we’ll see you again soon.