Chapter Nine
Managed Services
Overview
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310
Object.
1
310
2
Page
Object.
Food has become a major competitive factor among airlines. Airlines
may provide meals from their own in-flight business or have the food
provided by a contractor.
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1, 2, 5
In-flight foodservice is a complex process. All airlines have a limited
menu. The food must be able to withstand transportation conditions
and extended holding times (hot or cold). The meal must also be
appealing and able to fit in the limited passenger eating space.
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2
Gate Gourmet International is the largest in-flight foodservice
provider in terms of sales. Sky Chef is another company in the field.
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1, 2, 5
In-flight foodservice management operators plan the menus, develop
the product specifications, and arrange the purchasing contracts.
Many airlines place a high priority on controlling meal costs. Some
limit the cost for an in-flight meal to $6.00, some limit the menu
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1, 2, 5
Managed services consists of all foodservice operations as follows:
airlines, military, elementary and secondary schools, colleges and
universities, healthcare facilities, and business and industry, leisure
and recreation, conference centers, airports, and travel plazas.
Managed services are different from commercial operations in several
ways:
1) Managed service operators must meet the needs of both the
guest and the client. In a restaurant, the challenge is to please
the guest.
2) Often, they have “captive” audiences.
3) Many managed service operations are housed in “host”
organizations that do not have foodservice as their primary
business.
4) Most managed service operations prepare food in large
quantities to be served during specific hours. This is called
batch cooking.
5) The volume of business is more consistent and easier to
forecast.
Airlines
In-flight Foodservice
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choices, while others offer snacks rather than meals on many flights.
International flights tend to have better food and beverage service.
Airport Foodservice
As airlines have decreased their in-flight foodservice, airport
restaurants such as popular chain restaurants, along with quickservice restaurants have picked up the business.
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1, 2, 5
Military
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314
Object.
1, 2, 5
Services and concepts are being redesigned to better serve the needs
of personnel. Efforts are being made to address problems with
service delays, inferior products, and inventory controls.
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1, 2, 5
In many cases, officers’ clubs have been contracted out to
foodservice management companies. The clubs have moved
emphasis from fine dining to a more casual atmosphere. Menu
management strategies have also been implemented.
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1, 2, 5
Another trend is the testing of prepared foods that can be reheated
and served without much labor. MREs (meals ready to eat) are
standard for troops in the field. Today, a mobile kitchen can be run
by only two people.
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1, 2, 5
One problem of privatization of military foodservice operations may
arise in the need to provide foodservice in combat situations. In such
cases, the military must be able to provide its own foodservice.
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1, 2, 5
Elementary and Secondary Schools
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315
Object.
3
Today, approximately 26 million children are fed breakfast, lunch, or
both each day, at a cost of about $7 billion dollars a year, by the
National School Lunch Program.
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3
A major challenge for the program is to balance nutrition with foods
the students like. Many are concerned about the food that young
students are eating. Studies show that the food served in many
school cafeterias exceeds recommended dietary guidelines for fat and
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1, 3
Military foodservice is a large and important component of managed
foodservice. Even with military downsizing, military foodservice
sales are estimated at over $6 billion.
In 1946, the United States Government enacted the National School
Lunch Act in response to concerns about malnourishment in military
recruits. The rationale was that if students received good meals, the
military would have healthier recruits.
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sodium content.
Some schools have on-site kitchens, where the food is prepared, and
dining rooms, where the food is served. Large food districts may
prepare foods in a central commissary and then distribute them to
schools in the area. Alternatively, some schools purchase ready-toserve meals that are assembled at the meal site.
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1, 3
The government National School Lunch Program (NSLP) is a huge
market for fast food chains. Although entering this market does
mean a decrease in revenues, future benefits, such as building brand
loyalty, can be extremely valuable.
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1, 2, 3
There has been much debate over the suitability of allowing chain
foodservice operations in the school lunch programs. Many parents
feel that fast food is not sound nutrition.
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3
Nutrition education is now required in the nation’s school lunch
program. The food pyramid was developed as a part of this effort.
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3
Colleges and Universities
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320
Object.
4
On-campus dining can be a challenge because the clientele lives on
campus and eats most of its meals at the campus facilities. Students,
faculty, and staff often become bored with the surroundings and the
menu offerings.
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4
Budgeting, in such operations, is simplified because the on-campus
students have already paid for their meals and, therefore, numbers are
easier to forecast.
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4
College foodservice operations tend to offer students a variety of
meal plans. Rather than the old “board plan,” where students paid
one fee for all meals – whether they ate them or not, many schools
have adopted a pre-paid credit plan, where students pay a dollar
amount up front, and as they eat meals over the course of the term or
school year, the dollar amount of each meal is subtracted from the
student’s account.
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4
Nutrition Education Programs
College and university foodservice operations are complex and
diverse. Residence halls, cafeterias/student unions, faculty clubs,
sports concessions, conferences, convenience stores, administrative
catering, and outside catering are the major components of this
segment of non-commercial foodservice.
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Student Unions
The college student union offers a variety of managed services that
cater to the needs of a diverse student body. Among services offered
are cafeteria foodservices, beverage foodservices, branded quickservice restaurants, and take-out foodservices.
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4
Offering a diverse menu at a good price is very important to the
success of campus operations. Like public schools, some college
campuses have opted to allow restaurant chains to open on campus.
The restaurant pays fees, either to the contract food company directly
or to the college. Offering take-out service is another trend
developing in college foodservice.
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4
A foodservice manager’s responsibilities in a small or midsize
operation are more extensive than those of managers of larger
operations. In addition to foodservice, key areas of responsibility
include: Employee Relations, Human Resource Management,
Financial/Budgeting, Safety Administration, Safety Budgeting, Food
Production/Service, Sanitation/Food Borne Illness Prevention,
Purchasing/Recruiting, and Staff Training/Development. (See lists on
text pp. 326 & 328.)
326,
328
4
Health Care Facilities
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330
Object.
5
The needs and desires of both the patients and the health care workers
must be provided for. Meals must be consumed in a short period of
time (30 minutes usually) and must have a varied menu.
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5
Health care foodservice is very labor intensive. Labor accounts for
55% to 66% of operating dollars. For example, the main focus of a
hospital foodservice operation is the tray line. In the tray line, meals
are assembled through a color-coding system to meet requirements
specified by the dietitian. These trays must be double and triplechecked to be sure each patient gets his/her correct meal.
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5
Hospital foodservice has evolved to the point where the need for new
revenue sources has changed the traditional patient and non-patient
meal-service ratios at many institutions. Often the cafeteria is the
greatest revenue generated for the health care foodservice operation.
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Responsibilities in Managed Services
Healthcare foodservice operations are very complex because they
must meet the needs of clientele with special needs. Service is
provided by tray, in the cafeteria, dining room, coffee shop, catering,
and vending.
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Cash sales to patients, their families, and staff have become important
contributors to the bottom line in many operations. Some operations
have branched out into retail bakeries and catering.
Innovations in preparation, such as sous vide and cook-chill, have
allowed for labor savings. Additional savings can be realized through
the quantity purchasing, menu management, and the use of operating
systems to reduce food and labor costs.
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5
Quick-service chains have also entered this segment of the industry.
These chains benefit from long-term leases at very attractive rates
compared with a restaurant site.
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5
Business and Industry (B&I)
Page Object.
333
5
Important terms to understand in regard to this segment are:
Contractors (companies that operate foodservice for the client on a
contractual basis), Self- operators (companies that operate their own
foodservice operations), and Liaison personnel (responsible for
translating corporate philosophy to the contractor and overseeing the
contractor).
Contractors have about 80% of the B&I market. The remainder is
self-operated. A new trend is for one operator to serve several
tenants in a building through a central facility.
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5
B&I operators have begun to offer more diverse menu options. By
offering more healthful meal options, operators are meeting the
evolving needs of their clients.
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5
The resources largely determine the type of service offered by B&I
operators: money, time, space, and expertise. Typical manners of
service include: full-service cafeterias with straight, line scatter, or
mobile systems, or limited service cafeterias offering parts of the fullservice cafeteria, fast-food service, cart and mobile service, and
executive dining rooms.
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5
Leisure and Recreation
Page Object.
336
5
Leisure and recreation is probably the most fun area of the
foodservice industry to work in: stadiums, arenas, national parks,
state parks, zoos, aquariums, and other venues where food and
beverage are provided for large numbers of people, are leisure and
recreation operations.
Stadium Points of Service
Points of service include vendors, concession stands, and restaurants.
A major point of service is the food and beverage offered in the
premium seating areas known as superboxes, suites, and skyboxes.
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336
5
337
5
337
5
Advantages of a foodservice career in this segment include the unique
opportunity to see professional and amateur sporting events as much
as you please, to be in rural, scenic areas and enjoy the great
outdoors, to provide a diverse set of services for the guests or fans,
and to have a set work schedule. With recent growth in this segment,
many new career openings are now being offered.
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5
Disadvantages include large amounts of people to serve in short
periods of time; a work schedule of weekends, holidays, nights;
impersonal service, less creativity with food, seasonal employees, and
an on/off season work schedule.
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5
Trends in Managed Services
Page Object.
338
4
It is possible for all of these points of service to go on all at once
serving upwards of 60,000 to 70,000 fans. To feed all these people
many foodservice companies have contracts with the stadiums and
arenas.
Other Facilities
The same managed services companies that serve the stadiums and
arenas contract most U.S national parks. These parks have hotels,
restaurants, snack bars, gift shops and myriad other service outlets.
Other venues that require food and beverage service are golf and
tennis tournaments.
Advantages and Disadvantages
College and university foodservice managers face increasing
challenges. There is an ever-present problem of trying to balance
rising costs with decreased revenues.
Some of the challenges have come directly from changes like ending
blanket board charges in favor of “pay as you go” systems. Food and
utilities costs have continued to rise. Employing students has helped
to reduce labor costs. The use of food-to-go, campus cards, 24-hour
service, business in health care and nursing homes, and carts at
vantage points has increased (see full list of trends on text p. 338).
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Check Your Knowledge, p. 314
1) Question: What are managed services?
Answer: Managed services are services that can be leased to professional
management companies.
2) Question: Why would companies use contract management?
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4
Answer: financial, quality of program, recruitment, expertise, resources, labor
relations & other support, outsourcing. (See box on p. 310).
Check Your Knowledge, p. 329
1) Question: In your own words, define in-flight foodservice.
Answer: In-flight foodservice is a complex logistical operation. The food must
be able to withstand the transport conditions and the extended hot or cold holding
period from the time of preparation to the time of service. If a food item is to be
served hot, it must be able to re-thermalize well on the plate. Other complications
involve time, space, and appearance (p. 311).
2) Question: What are some of the challenges faced by in-flight foodservice
operators? What can be done to solve these problems?
Answer: As mentioned in the previous question, challenges such as time,
transportation, re-thermalization, lack of space, and so on, are overcome by the
expertise and specialized services of an in-flight caterer. The logistical operations
are so complex that most airlines choose to contract out their in-flight catering
services (p. 311).
3) Question: Name the foodservice operations that constitute managed services.
Answer: These include: airlines, military, elementary and secondary schools,
colleges, healthcare facilities, business and industry, leisure and recreation,
conference centers, airports, travel plazas (p. 310).
4) Question: How is each foodservice operation characterized?
Answer: Features that distinguish managed services from commercial
foodservices include:
a. Managed service operators must meet needs of both the guest and the client
(i.e., the institution). In a restaurant, the goal is to please the guest.
b. Managed services guests may or may not have alternate dining options
available.
c. Many managed operations are housed in host organizations that do not have
foodservice as their primary business.
d. Most managed services operations produce food in large quantity batches for
consumption within fixed time periods.
e. Volume of business in managed services is more consistent and easier to
forecast (p. 310).
5) Question: In small groups, share the differences between the foodservice
operations; then share with the class.
Answer: Note to instructor: This is a group activity designed to promote
interactive learning.
Check Your Knowledge, p. 336
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1) Question: What roles other than those strictly related to foodservice does the
foodservice manager perform?
Answer: These roles include: (pp. 326-28)
Employee Relations
Human Resource Management
Financial Budgeting
Safety Administration and Budget
Food Production/Service
Sanitation/FBI (food-borne illness) Prevention
Purchasing/Recruiting
Staff Training/Development
2) Question: Briefly explain some of the tasks the foodservice manager performs.
What makes each task so important?
Answer: Looking at the previous question’s response we will discuss three tasks
and their importance. (pp. 326-28).
a. Employee Relations: It is important for the manager to maintain
employee relations in order to keep the organization running efficiently
and effectively. Employee relations involve discussing and establishing:
Business vs. personal need
Rewards and recognition
Substance abuse guidelines and programs
Positive work environment
Coaching/facilitating vs. directing
b. Human Resource Management: Although a position or separate human
resources department may exist, management at all levels and departments
plays a significant role in human resources. The importance can be
illustrated by the following tasks:
Recruiting/training/evaluating
Wage/salary administration
Compliance with Federal/State Laws/EEO/Senate Bill 198
Disciplinary actions/termination/unemployment
c. Food Production/Service: The foodservice manager oversees production
and service to ensure quality performance and efficient production.
Management is involved with:
Menu/recipe development
Menu mix vs. competition
Food waste/leftover utilization
Production records/Control/Merchandising
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Presentation
Answers to Chapter 9 Review Questions
1) Managed services operate on a non-profit-oriented basis. Foodservice operations that
are classified as non-profit include airlines, military, elementary schools, universities,
health care, and business.
2) There are several features that distinguish non-commercial and commercial foodservice
operations. Managed services need to satisfy the guest as well as the client and usually
produce food in large quantities. They deal with a volume of business that is more
consistent and easier to cater to because the number of meals and portion sizes are preplanned. As a result of this, hours and benefits are better than those of commercial
restaurants, particularly since weekends tend to be quieter than weekdays.
3) School foodservice programs face the challenge of providing good nutrition, but at the
same time maintaining sales. Another issue is whether or not to provide free meals to
students. Proponents of the program maintain that better nourished children have a
better span of attention and are less likely to be absent from school.
4) The National School Lunch Program (NSLP) provides federal funding for school
foodservice. Under NSLP regulations, schools must meet dietary guidelines in order to
receive funding. Under these regulations, students must select three to five meal
components from a commonly called “Type A” menu, which has limited amounts of fat
and saturated fat.
5) A recent trend in college foodservice management is the requirement of nutrition
education. On-campus dining is a challenge for foodservice managers because the
students eat all their meals on-campus and may quickly become bored with the menu.
As an alternative, college food operations offer a variety of meal plans, such as offering
students a prepaid credit card that allows them to use the card at various campus outlets
and have the value deducted from their credit balance. Recently, many campuses have
welcomed fast-food restaurants on campus and the opportunity for take-out foodservice.
College foodservice managers need to balance rising costs with declining enrollment
and a reduction in state funding. One solution is to fill positions with student employees
and make more use of scratch cooking and convenience food, in addition to efficient
labor scheduling.
6) With the modern trend of health and nutrition consciousness, fast-food chains on
campus may attract more customers than the cafeteria, which offers more healthy
choices. On the other hand, fast-food chains offer a win-win situation because they are
more convenient in satisfying a fast-paced community. Although they may mean loss of
students in the cafeteria, they pay a fee to the food-service company or university which
evens out the business of the cafeteria. Overall, competition is good for everyone
concerned.
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7) Health care foodservices need to provide special meals with specific dietary
requirements to the right people in a limited amount of time. With the stay and the
number of patients declining, hospital foodservices need to find new ways of generating
revenues. In an effort to reduce cost and labor, there has been an increase in “helpyourself” food stations including buffets, salad bars, and dessert bars. Also, entry into
the delivery business, like pizza, helps keep costs down.
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