Aramark offers Elon students choice, for a price
By Hannah Williams
Dec. 1, 2008
ELON, N.C. – Elon University has lofty expectations for its dining services, and Aramark, its foodservice provider, fires back with higher prices to cover the costs of operating on Elon’s campus perhaps the greatest number of dining facilities per capita in the higher education foodservice market.
Colleges and universities face an interesting challenge outside of education. Their administrators must determine the best methods for housing, feeding and otherwise serving a demanding domestic population of undergrads and the parents who are usually the ones footing the bill.
Elon has been contracting dining services to Aramark since 1960. The two share an exclusive contract that is renegotiated each year, according to Vickie Somers, Elon’s director of auxiliary services.
“As long as Aramark’s satisfied, we’re [the administration] satisfied and the students are satisfied, then we [Elon’s administration and Aramark] just sort of sit down and talk about what we want to do for the next year,” Somers said.
The bursar’s office reports 3,732 Elon students purchased meal plans with Aramark in the fall of 2008, which is more than the approximately 2,400 required to do so by the university due to their on-campus residence.
Aramark, the oft-lamented but rarely challenged food service provider at Elon University, serves up more than 200 million meals annually at more than 500 higher education institutions nationwide.
Students voice concern about high prices
The average costs per swipe were calculated by taking the annual meal plan cost, subtracting any declining balance dollars, and diving it on meals allotted per week based on a 14-week semester, plus a 4-week winter term at Elon University only.
The Elon meal plans cost students an average of $9.80 per meal plan swipe, ranging from the lowest per swipe cost of $7.63 on a 19-meal plan to the highest $12.32 on a 9-meal plan.
The average cost per meal plan swipe is $5.58 at Winston-Salem State University, another campus of slightly more than 5,000 undergraduates that contracts its dining services to Aramark and mandates meal plans for all students. The cost per swipe at WSSU ranges from $3.98 at the lowest on a 19-meal plan to $7.82 at the highest on a 9-meal plan.
At Wake Forest, an Aramark-served university with about 4,400 students, meal plan swipes average $8.21, which breaks down to a low of $6.70 on a 17-meal plan to a high of $9.43 on a 5-meal plan.
Wake students, however, may only swipe the meal plan card three times in any 24-hour period and are allotted a small number of guest passes proportionate to their plan.
University of North Carolina students are also dissatisfied with Aramark’s food service on their campus, according to their student newspaper, The Daily Tar Heel.
“With the average cost per meal ranging between $5.75 and $8.60, depending on the meal plan,” writes a Daily Tar Heel staffer, “one wouldn’t expect long lines, flavorless food and meat quality ratings lower than your last midterm grade.”
Price per meal is only part of the picture
There are many factors at play that make a difference in dining services from institution to institution.
At Elon, Aramark operates 14 dining locations in eight buildings, offering its students various choices including three all-you-can-eat facilities, whereas WSSU and Wake Forest, each have just one traditional dining hall.
“The dining services can do whatever we want to, but somebody has to pay for it,” said Somers. “Since we’re a tuition-dependent school, the students ultimately will pay the cost.”
Jeff Gazda, resident district manager for Aramark said, “My responsibility is to take what you as a student collective have paid for the meal plan membership, and I give you as much as I can for it. That’s basically my job.”
Meal plan costs cover more than food
By purchasing a meal plan, a student is investing in the comprehensive dining services of the university, not just covering costs. The cost of the overhead involved in running dining-services operations complicates the figuring of food costs to consumers in different locations.
All swipes are not equal. Although an all-you-can-eat dinner in traditional dining hall at Elon is advertised at $7.25, a meal plan swipe in a retail location is only worth $2.50.
“The $2.50 represents what it would have cost us in food to feed you in one of the three dining halls. If you don’t eat in that dining hall, I save around $2.50 in food costs, but I don’t save labor costs; I don’t save direct expenses,” said Gazda. “Unless everyone left and people could go home, certain costs are fixed.”
Conversely, someone without a meal plan must pay for all the costs associated with the meal.
“On average a third of what you pay, Elon uses to maintain the facility,” said Gazda. “The remaining two-thirds is what we [Aramark] have to pay for the employees, the food, the dishes, the cleaning, the cooking.” Aramark also figures in additional overhead for administrative costs and other business needs, as well as profit.
Students at Wake Forest, however, get $4.23 in exchange for a meal plan swipe in their retail locations on campus, including the Aramark-operated Starbucks and Subway on their campus, thanks to a new meal plan system impletmented there this October.
When people question Aramark’s role at Elon University, the discussion usually revolves around meeting student demands for lower prices, extended hours, food offerings and sustainability.
Aramark capitalizes on required residency
Aramark’s exclusive presence on Elon’s campus gives it a monopoly over student dollars. Students are required to live on campus for their first two years at Elon, and all students living in traditional residence halls must purchase a meal plan.
Residence Life estimates that out of the approximately 2,800 students living on Elon’s campus, around 2,400 are required to have meal plans.
The required meal plan is an Elon policy, said Somers, and it’s in place as much for parents’ peace of mind as it is for the students’ well-being.
When the meal plans were restructured in 2004, auxiliary services was going to recommend a mandatory 9-meal plan, but residence life suggested that parents would be more comfortable with something in the double-digits, said Somers. She added, “A lot of socialization takes place in the dining facilities.”
Freshmen are required to have at least the 11-meal plan regardless of their housing assignment.
Sophomores must buy at least the 9-meal plan, unless they reside in university-owned apartments and thus are allowed to purchase the 5-meal plan.
If students select to live on campus during their junior and senior years, similar rules apply: Traditional hall residents minimally require the 9-meal plan; those in specialty housing select from the 5-meal plan or higher; and university apartment-dwellers are encouraged, but not required, to purchase a plan.
“The most satisfying meal plan I purchased was the 5-a-week plan,” said Will Allen, a 2007 Elon alumni who lived on campus and was required to purchase a meal plan all four years. “It allows the most flexibility, and I saved some money buying groceries for some meals while still being able to eat on campus with friends.”
Off-campus residents have the option of purchasing a meal plan, as well.
“By one’s junior and senior year, students should be able to meet their needs any way they see fit, and Elon shouldn’t supply Aramark’s monopoly by forcing these students to purchase a meal plan [even if they do live on campus],” Matt Christian, another student who was required to purchase a meal plan all four years of college due to his residency, said.
Students forgo meal plans to cut costs
Amy Reitnouer, a senior at Elon who lives off-campus, decided she’s better off without a meal plan.
The cost of a 9-meal plan for the academic year is $3,747. Without it, Reitnouer’s parents agreed that instead of paying Aramark, they would deposit $200 per month into her Phoenix Cash account, totaling $1,600 for the eight months she will be at Elon this year.
“I actually like being able to use my Phoenix Cash on and off campus,” she said,” and not having to calculate a weekly balance of meal plans is really nice. I don’t miss the plan at all.”
While she still frequents Acorn, Brown & Co., Varsity, and downstairs McEwen, Reitnouer uses most of her weekly $200 to grocery shop off campus and cook many of her meals at home.
“Overall, I’m saving over $2,000 a year,” said Reitnouer.
Aramark at Elon goes green
Students indicated their desire for sustainable products to decrease their carbon footprint in Aramark’s annual dining-services surveys and Aramark recognized that desire in its MarketMatach service assessment.
This fall, Aramark distributed reusable aluminum water bottles to all resident students and installed filtered water dispensers to minimize the amount of plastic bottles used at Elon. The introduction of composting at all its dining facilities allows Elon students to dispose of their waste more responsibly too.
Organic and locally-grown fare comprise 60 percent of the groceries for sale at Fountain Market, the Aramark convenience-store concept located on the first floor of the recently constructed $6.7 million dining facility, Colonnades.
Sustainable products, however, mean higher costs. Gazda predicted that the proportion of organic to nonorganic products would flip flop based on students’ purchasing habits, but their buying patterns indicate students’ commitment to social responsibility.
Universities outsource for efficiency
A recent study of the outsourcing of foodservice on U.S. campuses that was published in the International Journal of Education Management suggested that most universities outsource dining services because it provides higher quality, better service and lower costs in most cases.
“Any of the companies that you would have operating your food service are probably going to be the same, in terms that they’re large and they’re international,” said Somers, citing this as an advantage bringing new perspectives to campus dining.
Somers listed Aramark and Sodexho, the two largest foodservice providers in higher education, and a third company, Chartwells, as the main alternatives to self-operating campus dining, which at Elon, she said just wasn’t feasible.
In 1960 when the in-house dining services manager retired, Elon turned to then-Slater, now-Aramark, to feed students.
A 2002 survey by the National Association of College and University Business Officers showed that only 9 percent of responding schools didn’t outsourcing any services; about two-thirds of the respondents were outsourcing between two and five services.
Gazda explains that his company tailors its products to its customer. “We continue to differentiate ourself from the competition and retain accounts and really help campuses reach their goals, it grew even more,” he said.
“Best-practice sharing saves a lot of time,” said Gazda when explaining how his company operates. “Why reinvent the wheel? If we know what you want and someone else has it, why not save time and money and go see what worked and what didn’t work and readjust it to that?”
Aramark: One brand among many at Elon
Somers said Elon seeks to provide students with the most cost-effective and best possible services and that she checks with her peers in auxiliary services at other institutions to make sure Elon is paying a fair price.
In addition to Aramark, Elon also has contracts with Barnes and Noble to run the bookstore, Coca-Cola to operate campus vending, Macgray to manage the laundry system and LRG to handle trademarks. Mail and print services are still in-house.
Somers said outside vendors play roles in various ways to rid Elon of extra responsibilities. She used the laundry services as an example.
“We’d have to buy all the washers and dryers, service the washers and dryers,” she explained referring to Macgray’s contractual duties, “and collect the money for the people who still use money and not their Phoenix Cards.”
In the case of contracting campus dining, cost, service and liability coverage all factor into the outsourcing equation.
“There’s a lot of liability in the foodservice area: the equipment you’re using; the preparation of the food,” said Somers. “You really want somebody who knows what they’re doing.”
Elon builds trust relationship with Aramark
Elon is one of hundreds of Aramark-operated institutions but Gazda points out that it has more dining options than most – maybe more than any comparable school.
“I think Elon is a great example of a really true collaborative partnership,” Gazda said. “We customize things to the university. Our goal is to be solution-providers for Elon In essence do everything we can to help Elon succeed in achieving its mission and goals.”
“It helps if you want to do something new and innovative. You’re a little bit more willing to take risks, if you’ve had that partnership for a while. There’s that trust factor there,” Somers said of the extended partnership with Aramark. “You’re a little bit more willing to take a risk and try something new, so I think that’s a big advantage.”
Gazda cited Aramark’s purchase and renovation of Brown & Co. as one of those trust-based ventures. “We would not probably have done this at a lot of campuses, but because of the tenure here and our partnership we were approved,” he said.
Gazda and Elon’s vice president of business affairs, Gerald Whittington, played crucial roles in transforming Elon’s dining services over the past 15 years.
“The volume of our business here is nearly seven to eight times what it was when I started in 1992,” said Gazda.
Aramark caters to convenience
Elon’s exclusive contract with Aramark ensures that Aramark has sole rights to campus dining and campus catering.
“You need to have that [exclusivity] to have a successful contract,” Somers said, citing peer institutions where dining services have crumbled when multiple providers were allowed to compete.
“I think it’s a matter of economies of scale,” said Somers. “If they [food service providers] know they’re going to have a certain amount of business, then they can plan for that. You sort of get a lower price sometimes, because they know anything that’s going to be on campus, they’re going to be providing for. They’re set up and ready to provide for that. They’ve got the labor here. It works better.”
“It’s highly recommended that we use Aramark for our events,” said Student Union Board President Jenn Montrose who coordinates a host of student events on campus.
“Just because Elon does have a contract with Aramark, it doesn’t look good if you’re ordering out. We try to use Aramark as much as possible.”
SUB is in charge of student programming from weekly late-night meals and entertainment in The Zone in Moseley Student Center to themed monthly activities, such as making candied apples, to Friday night concerts at Lighthouse, an off-campus bar acquired by the university in January 2008.
Aramark supplies the refreshments at midnight meals, supplied the materials for October’s candy-apple making, and operates Lighthouse’s food and drink services.
“Sometimes it’s easier, convenience-wise, to order from off-campus vendors,” especially for off-campus events, Montrose said. “Also, [Aramark] can get very pricey.”
At Elon, Somers said it’s permissible for students to solicit food from off-campus vendors for informal events. Usually, if the vendor is willing to donate the food, that’s okay; otherwise, Aramark has an opportunity to match the price.
“It’s just a matter of talking with him [Gazda] and getting his permission,” said Somers. “Now we wouldn’t want them [outside vendors] to come in and cater a sit-down dinner for 100 people. We would not approve that.”
Aramark costs stack up
The price of meal plans is determined by looking at costs and competition.
“We look at what Aramark’s costs are going to be for food and labor. Food was a big deal this year, and it’s still going up. Then we look at what shape our facilities are in,” said Somers. “And we look at what other colleges are charging too, so we know we’re competitive.”
“We comparison shop, we don’t just slap prices on things,” said Gazda. “We have folks that constantly monitor market prices. Every week we get produce reports and protein reports, where things are going cost-wise and whatnot.”
In addition, Aramark employs over 300 people on Elon’s campus paying all waged, nonstudent employees $10 an hour.
“I think it’s a very socially responsible thing to do,” said Gazda.
The facilities maintenance and repair costs can be expensive, as Elon has zero deferred maintenance, meaning that anything that need fixing will be fixed, said Somers and Gazda.
“For instance, the ice cream machine in upstairs McEwen is on its last leg. So, I’m putting in a request for that ice cream machine to the tune of $14,000,” said Somers.
Somers explained that Aramark pays for the food, employees, liability insurance, and all associated costs, while Elon owns and maintains the facilities.
Aramark does, however, contribute funds to some of the building construction renovation costs – like the six-figure amount Gazda said Aramark invested in the Colonnades facility at Elon.
If Elon ever wanted to change food service providers, it would have to buy out Aramark for its share in the facilities it has helped fund. Somers said this process was messy and undesirable.
Complicating factors like these contribute to the unlikelihood that Elon and Aramark will sever ties, even if it means higher prices than the competition.
Aramarks aims for transparent future
As Aramark is a for-profit corporation, it maximizes earnings by minimizing costs.
“I don’t want to beat my budget. I want to be right on my budget,” Gazda said. “I don’t want to be below my budget, because I have no reason to do that. I don’t want to be behind my budget, because I like my job. If I have to be behind my budget, I will to take care of you guys.”
Gazda said there’s a lot of confusion about where the meal plan money is going.
“What I want to do next year is full transparency,” he said. “Maybe even have a whole page on the web site that says, ‘Where do my funds go on the meal plan?’”
Until then, students can use the “leave a comment” function on the campus dining web page or stop by Gazda’s office in the Colonnades to inquire further about Aramark at Elon.
