Meal plans, of course, are nearly as varied as the colleges and universities offering them. But regardless of the type, meal plans and dining programs fall into two Value Proposition categories: they're either consumption driven or access driven.
Let's take a look at pros and cons of each.
Consumption driven dining programs are defined by how much food is consumed. They include all-you-care-to-eat venues and programs that offer a certain number of meals per week. Research has shown that students with consumption driven meal plans often overeat because they want to “get their money's worth” each time they use a swipe. So they load up their trays with more than they can eat, causing food waste.
Another example of a consumption driven program is the declining balance plan, which provides holders with varying amounts of declining dollars that they must spend in one semester or school year or lose it.
Unfortunately, declining balance meal plan holders are continually reminded how much their meals cost because they see the prices at the checkout registers. This generally leads to complaints about how “expensive” food is on campus.
Even though students are using meal plan money that many of them perceive as “free” (because their family or financial aid paid for it or because it's not cash they have to take out of their pockets), the “sticker shock” remains and they naturally compare the price of food on campus to the price of similar food off campus.
Another challenge with consumption driven meal plans is that they encourage wasteful spending when students have leftover money at the end of the term that they must use or lose. So they use the leftover money to buy cases of bottled beverages and/or large amounts of packaged foods from campus c-stores, often for much higher prices than they would pay in off-campus venues like Wal-Mart.
But it's not just that you get students resenting having to pay $40 for a case of bottled beverages that would cost them $15 or less in some off-campus stores. Since the food cost of goods in campus c-stores can be as high as 60% versus the 22%-28% in all-you-care-to-eat residential dining venues (where pre-packaged foods are not available), this end-of-year buying binge also brings down gross profit on each product that is purchased in the c-stores with meal plan money.
Not surprisingly, research has shown that campuses with consumption driven programs often struggle with meal plan participation, especially among voluntary customers such as commuters, who either choose not to participate or buy down to smaller, less expensive plans. Customers make these choices when they don't believe that the meal plans are a good value.
Access driven dining programs, on the other hand, provide just that — unlimited access (flexibility) during extended operating hours to residential dining venues that offer all-you-care-to-eat service. Meal plan holders can come and go as many times as they'd like throughout the day and eat as much or as little as they want.
They swipe their campus ID cards to enter. But since, unlike meals-per-week or declining plans, there is no monetary deduction, they don't feel compelled to “get their money's worth” by overeating. Nor is there leftover meal plan money to count and/or “lose” if it is not used.
Access driven meal plans also appeal to parents because they don't have to worry about the student running out of meal plan money.
One misconception about access plans is that they will be “expensive” and that schools will have to raise the price of their meal plans to offer them. Actually, in most cases, they can be offered for the same price as the school's existing plan while making a positive impact on a dining service department's bottom line because food waste is often reduced and labor can be scheduled so that it is lower during slower day parts.
The fact is, regardless of the style of service, students still only eat between 11-13 meals a week even when they have unlimited access to a residential dining facility.
Research has shown that schools that have implemented access driven programs find that they get higher meal plan retention, higher voluntary meal plan participation and increased cash revenue, not to mention increased customer satisfaction.
So if you are struggling with meal plan participation, low customer satisfaction or are looking for ways to add value to your dining program, carefully consider whether an access driven dining program is right for your campus.
H. David Porter, FCSI, is president and CEO of Porter Khouw Consulting, Inc., a foodservice planning and design firm based in Crofton, Maryland.