Food for thought
Chico State’s student-run eateries unveil marketing plan
For more than a year, as construction on the new Bell Memorial Union at Chico State University lagged behind schedule, the food on campus was officially sub-par. Students streamed off campus to eat, turned off by the pre-prepared offerings at the stop-gap cafeteria in Colusa Hall, even as the Associated Students paid $250,000 in rent for the privilege of locating there.
The BMU finally opened last year, to a sparkling new facility and tasty new menus. But there was a problem: The A.S. had to figure out how to get the customers back in.
While the A.S. Bookstore remains a money-maker, Food Service hasn’t turned a profit in three years, prompting a formal reminder from Chico State brass that, under the state Education Code requiring such operations to be self-sufficient, the university can now take over the auxiliary’s food business if it so chooses. It’s rare for students to run the eateries on college campuses; universities do it themselves or, more often, contract with an outside vendor.
Yves Latouche, whom the A.S. hired in September 2000 to run its food ventures, has devised a plan to turn things around.
“We want to promote it as much as we can,” he said. “We’re ready to go. We have everything that we want. Now we are trying to build up higher volume.”
They’re not that far off. “As far as sales were concerned, we reached our goal,” said Latouche, tallying a $900,000 increase in revenues last year. But at the same time there were the lingering effects of that high rent at Colusa Hall, plus rising employee costs: Workers’ compensation expenses alone went up 67 percent—$27,000—last year. In 2001, losses came to $310,000, the worst ever.
Before the reconstruction, A.S. Food Services did turn a profit, with the Whitney Hall cafeteria being the most profitable. The Primo Espresso “coffee house” loses money, while catering revenue is on the rise.
In May 2002, in response to the university’s “warning” letter, then-A.S. President Amber Johnsen wrote, “Without the delays and the high ‘rent,’ we believe Food Service overall would have been self-supporting in 2000 and 2002.”
As an immediate measure, Latouche has dropped food costs 3 percent. And the A.S. froze wages for Food Service employees in 2002-03, the first time it’s done so since 1996.
The Food Service Marketing Plan 2002-03 is still in draft form and, before being implemented, must be approved by the A.S. Businesses Committee and the A.S. Board of Directors. This will likely happen during the first weeks of the fall semester.
The plan calls for an 8-percent increase in revenue to more than $6 million, leading to the break-even point by 2005. The draft details eating trends among the main customers—students—and lists strategies to make the most of the trends. Ideas include a late-night snack and coffee bar in the basement of Whitney Hall, on-campus pizza delivery and capitalizing on the fact that non-spill drink mugs will finally be allowed in the Meriam Library this year. A new customer service program is planned, as is more aggressive advertising (including coupons) and more prominent signs.
A campus food service survey should be done by January, and its results will be used to fine-tune the new marketing approach.
“We want to go out and let people know who we are and what we do,” Latouche said. “The whole goal is to do it by the end of the year.”
A paid “marketing team” will then implement the plan. “I still haven’t decided completely who I’m going to use,” mused Latouche. A likely choice would be marketing students, whose professional inexperience could be offset by their personal knowledge of the market.
The plan comes with a budget of $18,200, almost half of which comes from Pepsi Cola by way of a promotional fund contract.
The A.S. already knows what went wrong—students and others who used to eat on campus got out of the habit.
“No one wanted to go to Colusa Hall and get prepared food,” observed Jimmy Reed, the A.S. president.
“If you lose a customer base, it’s very hard to get it back,” Latouche said.
To makes matters worse, in a bit of design weirdness that no one seems to remember the logic of, the new BMU eatery has about half the seating area of its predecessor. The old BMU’s Garden Cafà had 240 seats for diners. Now, there are 130, plus 100 on the patio outside. The current A.S. leadership would have preferred 450. They’re looking at adding even more patio seating, plus tables on the first floor of the BMU.
If there’s nowhere to sit, or the ambience doesn’t look inviting, it’s only a short walk down the block for pizza, a smoothie or a sandwich. “Chico State is very unique in a way by being downtown. We are surrounded by 30 or 40 restaurants,” Latouche said.
To work with, rather than against, Chico businesses, the Union Marketplace started the guest chef program. Restaurants such as Speedy Burrito, Sultan’s Bistro and Shadetree Restaurant participated last year. All three are coming back, and Gen Kai is on board as well. It’s like local branding. “Not only are we providing something different, but we’re working together to keep business on campus,” Latouche said.
Tiffany Yost, in her second year as the elected A.S. vice president for business and finance, said that unlike some schools, which actually have Taco Bells and Pizza Huts on campus, the A.S. wants to stay away from large corporate presences.
“I think the biggest fear I would have [if A.S. was not the food vendor] is the university going to big corporations like McDonald’s and the chain stores,” she said.
An exception might be something like a partnership with, say, Krispy Kreme donuts, bringing some nationally known product into the Union Marketplace for sale. The BMU already “proudly serves” Starbucks coffee, which Latouche said is much different from plunking a Starbucks inside the BMU.
“We are constantly searching for new items,” Latouche added.
President Reed isn’t worried. "If the university wanted to take over the food services, they would contract it out to a national firm and basically get sales revenue out of that firm," he said, and everyone pretty much agrees that the university wouldn’t have better luck making money. "They would have to have good reasons for coming and taking it."