Penn State Researcher Analyzes Outsourcing K-12 School Food Services

UNIVERSITY PARK — While studies have recognized the need for schools to outsource food services, there is little research on how school officials can determine whether or not to outsource their food service operations, particularly by understanding the costs and benefits of this decision. Additionally, there is a major market opportunity for food service companies to manage operations at schools.

A recent article co-authored by Amit Sharma, associate professor of hospitality management, highlights the complex issues school administrators face when considering outsourcing food services.

“Cost-Benefit Framework for K-12 Food Service Outsourcing Decisions,” published by the International Journal of Hospitality Management in February, focuses on the issue at a time when childhood obesity is receiving national attention.

“There has been a continued focus on how schools can be instrumental in making kids understand healthy eating and provide balanced eating options for them,” Sharma said. “The question that comes up frequently is: Should food service operations be outsourced? It’s a business decision, it’s a financial decision and, at the same time, it’s a decision that is associated with health outcomes. Meanwhile, school administrators want to make sure that the new, third-party operator is going to do a good job in all of these aspects.”

Sharma and co-authors developed a generic framework to guide future research to investigate K-12 food service outsourcing decisions.

According to the U.S. Census Bureau, there are roughly 14,000 school districts in the United States. Between 12 and 15 percent of those districts outsource food services. Nearly half of the districts outsourcing food services are located in New York, New Jersey, Illinois, Michigan and Pennsylvania.

The study included a survey of school administrators mostly from districts where food service is outsourced. Authors used the information collected to create a cost and benefit framework for K-12 food service operations outsourcing decisions, incorporating the costs and benefits that respondents cited as being important in their decision-making process to outsource food services. Authors also incorporated input from stakeholders, parties that would be influenced by the cost and benefit items.

Costs that were identified in the proposed framework included: poor performance, lack of student or parent support, a poor contract or vendor selection, hidden costs and low morale of staff. Benefits within this framework included: access to skilled staff, quality improvement, quality of taste, nutritional quality of food, reduced operating costs, and better accountability and management of legal compliance.

“The Food Decisions Research Laboratory investigates decisions and choices of managers and consumers in the foodservice industry. We are particularly interested in how actual and perceived costs and benefits impact such decisions,” Sharma said. “In this paper we have laid out a possible map of what these costs and benefits could be. We will now leverage this knowledge to dig deeper into how these costs and benefits might impact food decisions.”

Future research questions could include: How are costs and benefits perceived and assessed in outsourcing decisions? How can costs and benefits be estimated, measured or quantified to enhance decision-making?

“We were not expecting this to be an easy answer,” Sharma said. “It’s not supposed to be an easy answer. It is more complicated. The main takeaway for us is that the decision involves a balance of pros and cons, the benefits and costs. How the decision is made, which one of these factors was weighted more, that requires further investigations about the complexity of such and other related food decisions.”

Further research could also compare the nutritional outcomes and effectiveness of achieving nutrition and wellness objectives in outsourced verses other food service operations, the authors said. Additionally, extending research into students’ behavior and food choices could further help researchers understand the value of outsourcing, they said.

“While previous research has shown that transactions have costs, and recently included potential benefits in the discussion, our studies are trying to disentangle these cost and benefit elements of the food decision transactions,” Sharma said.

Co-authors include Joonho Moon, hospitality management graduate student, Javid Baig of Sodexo, Jeong-Gil Choi of Kyung-Hee University in Korea, Kwanglim Seo of University of Hawaii Manoa and Lorna Donatone of Sodexo.

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