From Business Services
The following report, issued by the Office of the Vice President for
Business Services, contains the major findings and recommendations from
a University-wide Food Services Study which began during FY 1997.
Summary of a Study on Food Services at Penn
Responsibility for food services at the University of Pennsylvania has long been fragmented and unnecessarily decentralized--reflective of the historically independent nature of our organizational structure. During fiscal year 1997, we embarked upon the development of a master plan for food services across Penn, with the goal of identifying the components that would provide the best group of services to the University community in an operationally sound, fiscally responsible manner. During the conduct of the study, special attention was paid to developing a plan to provide outstanding food services in Perelman Quad, planning for the move of the Faculty Club, leveraging the expertise of outside operators, and identifying opportunities in the current structure for eliminating unnecessary duplication, enhancing quality, and reducing costs.
Penn offers a wide variety of food services to its students, faculty, staff, and visitors. The major components of the existing environment include:
University Dining and Hospitality Services, which is responsible for four major dining halls, four retail outlets which do most of their business after 8 p.m., and campus vending, which includes coordination of Penn's vending machine contract and several small cafes located throughout University-owned buildings. Dining Services has operated on a break-even basis since the 1970s, with any balances being transferred to a reserve account used for major capital expenditures by the program.
The Faculty Club is an independent faculty club owned by its members and operated on behalf of the Club by Business Services. The Club currently occupies Skinner Hall under a fifty-year rent-free lease that expires in 2009. Like most faculty clubs throughout the country, the Club has been losing significant dollars on an annual basis and is experiencing declining usage and membership. The current facility, Skinner Hall, is outdated and oversized for its current purposes.
Houston Hall is the oldest student union in the country and is scheduled for major renovation starting in the summer of 1998 as part of the Perelman Quadrangle project. Food service is currently provided in a food court with contracted retail outlets such as Burger King providing commissions to Houston Hall for the rental of space. The current food and retail options, while generating net revenue for the union, is viewed as uninspired by most students and is not in keeping with the vision of a great student union.
Catering on Penn's campus is a haphazard, unmanaged system. Over 50 different catering companies are authorized to do business at the University. All schools and centers are free to select among these companies (or anyone else) to provide catering services in their buildings. Guidelines for access, cleanup, and provision of service are routinely ignored resulting in additional University expenses for trash removal, housekeeping and physical plant services. Catering in certain University-owned facilities is provided either under contractual terms with outside companies (e.g. Museum and Aresty Institute) or by the employees in each facility (e.g., Penn Tower Hotel, Sheraton, Dining Services, Faculty Club). Off campus, Dining Services operates food services at Wharton-Sinkler, and there are five authorized caterers at the Morris Arboretum. No attempt has been made in recent years to leverage the University's buying power across schools and departments, and the existing system is sub-optimal in terms of quality.
Athletic Concessions are provided under a contract administered by the Athletic Department in collaboration with Acquisition Services.
UPHS Food Services include a self-operated food service department within the hospital, and arrangements UPHS has inherited at Presbyterian and Pennsylvania Hospitals. Catering within HUP and Penn Tower is provided by a combination of self-operated food service units, Museum Catering, and Penn Tower Hotel food services.
University City Hotels, including the Penn Tower Hotel and the Sheraton Hotel provide in-house services to their restaurants (PT's and Smart Alex), lounges, and common meeting spaces. Food services and catering at the Inn at Penn will be self operated by the management contractor, Doubletree Hotels.
Vending Trucks are a pervasive influence at Penn. However, this study did not assume any significant change in their role within the market.
Area Restaurants offer a wide variety of options on and near the Penn campus. Until recent years, there has been little attempt on the part of the University to develop a master plan that will result in a broad array of quality restaurants to make University City more responsive to the needs of the community. The recent addition of La Terrasse and Mad 4 Mex, together with plans for additional restaurants at Sansom Common, will fortify the middle to high end of the food market. Lower cost alternatives such as the 3401 Food Court, McDonald's, Burger King, Campus Buffet, College Pizza and others round out the fast food segment. Plans are also under development to add a diner, "Eat at Joe's" near 40th Street that will fill a niche in this market.
The Division of Business Services retained the Cornyn-Fasano Group to work with us on a comprehensive assessment of food services at Penn. As part of the analysis, they conducted a broad survey of members of the University community, with particular emphasis on our students. In general terms, Dining Services was viewed as somewhat above average, while most remaining food services provided in our area were ranked below average in terms of quality. Several initiatives have subsequently been taken that have responded to specific needs identified in the analysis. Most specifically, the expansion of CHATS and the opening of McClelland Marketplace as well as plans to open Eat at Joe's have all been in response to the overwhelming sentiment that late night alternatives for food services are inadequate.
Historically, Penn's Dining Services has been perceived as among the best college food services providers. The winner of the Silver Plate award in the 1980s, Dining Services provided quality service and good food in a traditional cafeteria-style, breakfast-lunch-dinner manner.
During the past several years, however, dining service departments on college campuses across the country have been faced with the need to respond to a clientele that was brought up with very different expectations than those of the typical college student of previous generations. Today's college students work on a different clock. They have grown up with fast food as a part of everyday life. So the traditional cafeteria-style, sit-down, all-you-care-to-eat provision of services does not resonate well with a student who typically sleeps through breakfast, wants a quick on-the-go lunch, and views the two social dining experiences as dinner and late night snack.
Penn's Dining Service organization has reacted effectively to the late night demands of this new market, but has been slow to adapt to the changing aspects of the traditional services--partly inhibited by facilities that are in need of significant renovation, and partly because management focus has been traditional dining. Penn's budget decisions have, at the same time, mandated average rate increases of about 1% per annum over the past few years. Finally, market forces have combined to result in reduced market share in lunch and dinner. As a result, Penn's Dining Services sales have been flat. While most college and university dining services have a mandated board plan, ours is purely voluntary, thereby causing the effects of these market forces to be felt more quickly here.
Working with Cornyn-Fasano and the Food Services Steering Committee, Business Services has spent a considerable amount of time benchmarking and "market testing" both actions that are being taken on other campuses and the success of management contractors in dealing with the issues we are facing at Penn. The findings have been at once illuminating and instructive. While each campus certainly faces different circumstances and environments, there are a number of general conclusions that have become apparent:
After carefully analyzing all of the data, we have concluded that the most effective model for Penn is an innovative partnership between the University and the food service industry's recognized leaders. This partnership includes hiring one of the nation's top professionals to serve as our Managing Director of Food Services and retaining as our partner a nationally-respected food service company to serve as a "hands on" operator and advisor for the University. Our goal is to build upon the solid foundation of Penn's existing self-operated food service program and to take it to the next level. Specifically, we will create a new operation that will be responsive in providing great food when, and how, the community wants it--at a reasonable price.
We have selected Bon Appétit, a San Francisco-based contract food service company with a national reputation for creativity, to operate all food services in the Perelman Quad, to serve as the primary University caterer, and to provide hands-on advice and best practices to the University Dining Services management. Among Bon Appétit's clients are Stanford University, Oracle Corporation, and the Getty Center.
Specifically, the recommendations call for the following:
We are excited about the benefits to the University community that will result from implementation of this comprehensive plan. Our partnership with Bon Appétit will bring a new level of innovation and creativity to Penn's food service program. It will enable Penn to become more responsive to the needs of today's students, support the new residential college house initiatives, and develop services at Perelman Quad that will help make it an outstanding student center. Infusing Penn's already strong Dining Services program with Bon Appétit's ability to provide cost effective, high quality food with a restaurant flair will not only set a new standard for the University, but also create a model for university food service programs nationwide. We are also confident that this plan will allow us financially to support the renovation of our dining facilities over the next five years.