Forecast: District foodservice costs will continue to rise.

People – especially kids — are testy about their food.

“Hey, I thought we were having pizza for lunch today!” “Why am I getting cut-up American cheese instead of cheese sticks with my muffin?” “This breakfast sandwich doesn’t taste as good as the ones we used to have!”

These concerns ring out in K-12 schools throughout the country. And it’s not just the students who are frustrated. Parents alike feel the brunt of their kids’ disappointment when the menu doesn’t match the meal.

Meanwhile, food service directors are scrambling every day (pun intended) to get meals put together under strict USDA standards, often with product shortages and/or substitutions that fall short.

“We were so short of breakfast products that I had no choice but to serve Goldfish with the honeybuns,” said one foodservice director. Another had to substitute white buns for wheat buns, which doesn’t sound like a big deal, but the USDA standard is to serve a whole-grain bun. If the district gets “caught,” it could lose federal reimbursement.

What’s happening in K-12 foodservice?

A lot is happening, and it’s not good.

“During the 2021-22 school year, we have seen substantial price increases, especially on commodity items– a 11% increase in chicken, 3% increase in beef, 7% increase in eggs, and a 13% increase in pizza. Fresh bakery items have risen 10%. Milk prices have gone up 26%. There has been a 60% increase in foam plates, 27% increase in foil, 16% increase in straws, and a 10-13% increase in plastic utensils,” said Kelly Taylor, Child Nutrition Coordinator for the Central Indiana Educational Services Center (CIESC). The CIESC helps Indiana districts procure food service supplies.

“The 2022-23 school year will see double-digit increases on top of these for chicken, beef, eggs, pizza and milk,” Taylor continued.

These increases are combined with record-high fuel costs resulting in fuel surcharges on deliveries. Not to mention, school districts are already low-margin clients for foodservice providers, so some suppliers are reducing or not providing services at all. “It has been a true test to get healthy meals on the table for our students,” Taylor said. “Over the past year, food service directors have been the unsung heroes of districts.”

When the National School Lunch Program (NSLP) and School Breakfast Program (SBP) began, many districts experienced large numbers of new participants. Now, foodservice directors wish they had a crystal ball to estimate next year’s numbers, to budget and manage those budgets appropriately. But they don’t.

What can districts do?

In most cases, foodservice budgets are separate from operating budgets. And while funds can be transferred to offset budget deficits, this creates additional accounting effort and is not sustainable in the long term. There are several tactics, however, that may help districts avoid going into the red.

1. Streamline the menu. 

It’s not popular to cut choices, but it may be a solution short-term. Be up-front with stakeholders about the challenges you’re facing, and clearly communicate that while this is not a preferred action, it is necessary to get back on track.

2. Better manage indirect services.

Mitigate increases in direct costs by better controlling indirect costs like utilities, office supplies, equipment, allocations for administrative support and rent.

3. Optimize your group purchasing.

According to Taylor, about 95% of Indiana districts are members of a co-op. These partnerships combine purchasing power and incent vendors to stand up for your district in the marketplace. A strategic sourcing partner can also help get the most value from your vendors.

We all know that a well-balanced, healthy meal makes our bodies work most efficiently. Isn’t it time to make your foodservice budget match?