Business Schools

Food Costs Rise for College Students


Some students face higher prices for meal plans, and colleges are focusing on cutting the cost of food service

Sky-high tuition and increasingly precarious loan options may be the big-picture financial commitments on most college students' minds. But the most immediate monetary concern could be an everyday necessity: food.

The rising cost of food (BusinessWeek.com, 4/14/08) in recent months means that for some students, the cost of meal plans is going up, or the options for what to put on the plate are decreasing. And for schools, always hard-pressed to keep expenses down, efforts to cut waste and provide food service more economically are becoming a high priority.

For parents of college students, getting a handle on food costs is more often an art than a science. At many schools, students (often freshmen only or those who live on campus) are required to purchase a meal plan from the school. Universities often provide multiple options—from points systems (a student starts the semester with a certain total and each item costs a set number of points) to different meal counts (a 12-meals-per-week plan vs. a 14-per-week plan, etc.) to all-you-can eat plans. Other options include joining a co-op where residents take turns cooking and pool resources for snacks and other items, or forgoing meal plans entirely.

In all cases, the rising price of food is affecting these options. Staples such as milk and eggs have risen sharply over the past year, and the U.S. Agriculture Dept. predicts that food prices will increase by 4.5% to 5.5% this year alone due to the rising cost of fuel and a host of other factors.

Creative Cost-Cutting

The most immediate response, of course, is to pass price hikes on to students. Louisiana State University hiked the cost of its meal plans 7% this year, while Clemson University went up 6%. But in many cases, the price increases are being shouldered by the institution itself, or a third-party vendor, such as food-service giants Aramark and Sodexo (EXHO). At Austin College in Sherman, Tex., for instance, food costs for the month of September 2008 were 38.8% of the budget, up from 32.9% of the budget in September 2007.

With ongoing increases, "the contracted companies are needing to make adjustments to keep costs within the prenegotiated parameters," says Kaaryn Sanon, director of marketing and communications at the NASPA - Student Affairs Administrators in Higher Education.

To combat the unexpected expense, schools (and their vendors) are getting creative.

At Spokane (Wash.)-based Whitworth University, food-services provider Sodexo has slashed costs by cutting back on menu items like cheese that have significantly increased in price, instead opting to add more variety to the tossed-to-order salad station and other cheaper options, reports student newspaper The Whitworthian.

A number of schools have cut back on waste through simple, yet effective measures, such as getting rid of trays. "The use of a tray at an all-you-can-eat facility created a number of wasteful behaviors," says Mike Byers, assistant vice-chancellor for auxiliary services at the University of North Carolina at Greensboro, about the savings in food costs the school has experienced since getting rid of trays last year. "You don't have a big vehicle on which to stack food you wouldn't necessarily want."

Reconsidering the Meal Plan

University of California-San Diego's Director of Residential, Retail & Conference Services Steve Casad says his school has benefited by having a retail-based structure, rather than the all-you-can-eat plans offered by many institutions. "You have the ability to control the portion size you give," says Casad, whose school has added special "value for you" items that are smaller than regular portions and cost $1.95. "It was about being responsible not only in pricing but also giving them variety."

For students in big cities or towns where there are plenty of food options, there's always the option of fending for yourself, and being as creative as any homeowner in shopping for weekly specials at the local supermarket. But not every student has such choices.

For instance, at Glenside (Pa.)-based Arcadia University, students are sticking with the meal plans, says Jan Walbert, vice-president for student affairs. She said that while meal plan costs have already been set for the year, prices at the on-campus snack bar continue to rise, and fuel to travel to a grocery store is another expense students must consider. "We're not in a town per se," says Walbert, "so while there's grocery stores within a mile or a half, they're not in the midst of where they live."

Still, Arcadia senior and senior class president Maya Stewart, 21, chose to forgo a meal plan for the first time this year and says that thanks to diligent coupon-clipping, careful selections, and creative cooking, she's seen substantial savings over the roughly $1,000-a-semester meal plan cost.

And that's not the only benefit. Stewart says she's paying more attention to what's going into her food as well: "It's definitely a lot healthier."

Gerdes is a staff editor for BusinessWeek in New York.

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