A financial feast for K12 schools
Today’s school district food-service directors often find that joining purchasing cooperatives saves them at least 5 percent in food costs.
Co-ops also save time by handling the request-for-proposal process and assisting with compliance reporting in the wake of increased federal nutrition requirements.
In addition, co-ops track vendor performance and offer forums for sharing best practices.
The following snapshots describe how co-ops save money and prioritize healthy eating in different regions of the country.
Introducing a nutrition software platform increased student participation during breakfast and lunch by 10 percent in one year at rural Staples-Motley ISD 2170 (1,150 students) in Minnesota.
SIDEBAR: Savings snapshots
But earlier, when Shelly Miller took over as director of nutritional services, new federal nutrition guidelines were making it tough for the district’s distributor to get the healthier fare.
“We were really struggling with being able to offer good menu items, and I had to keep going back to the district office for more money because it was costing us more than what we had projected,” Miller says.
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So Miller reached out to Sourcewell, a national public service cooperative that her district used for other types of purchasing.
Sourcewell offers its 50,000 members access to large, competitively bid contracts that can save a school district thousands of dollars per year.
Sourcewell helped Staples-Motley bid on a new distribution deal and also supplied Miller with NutriStudents K-12, a software platform that streamlines the management of food service programs.
NutriStudents K-12 has developed more than 100 school menus that meet federal Healthy, Hunger-Free Kids Act guidelines.
“Previously, I was taking menus home at night because I had to work on calorie counts, fat counts and sodium,” Miller says.
NutriStudents K-12’s compliance reports make state audits much easier to complete. Miller also says her budget problems have abated—in part because more students buy lunch—and she has redirected savings.
“I am able to buy equipment that I previously wouldn’t have been able to,” she says. “This year, I bought two brand-new milk coolers. There is always maintenance that is unforeseen, so it helps to have that cushion in your fund balance.”
When a district is considering joining the Northern Illinois Independent Purchasing Cooperative (NIIPC), co-founder Micheline Piekarski discusses the potential savings.
“I ask them to give me 20 or 30 items with the prices they have been paying, and I send them back the co-op prices for the same items,” says Piekarski, director of food services at Oak Park & River Forest High School near Chicago.
“In general, there is a 5 to 7 percent savings in joining.”
NIIPC, which comprises 75 districts serving more than 200,000 students, bids directly with vendors on the 600 most popular items. (Other items are ordered by districts at cost, plus a fixed fee charged by the distributor.)
Everything is taste tested by students, and an item must earn an 85 percent approval rating to make the bid.
“Doing bids correctly, ethically and legally takes a lot of work for a small district,” Piekarski says. “We have a bid group that does a lot of the work for them. We not only have a distributor bid, but also a bread bid, milk bid, produce bid and vending bid.”
Many NIIPC members plan menus with a web-based program called Heartland Mosaic, which comes configured with the latest USDA child nutrition database.
To get more district food-service directors involved in the bidding process, NIIPC has created an advisory board of 15 members and does longer-term strategic planning every three to five years.
It also offers professional development opportunities. For instance, NIIPC created a webinar on how to use the Heartland Mosaic software.
What you would have paid
Rural districts sometimes have a hard time hiring staff, and that includes food-service workers.
“When and if these positions are filled, their expertise is not bidding food, it is preparing food for the kids they serve every day,” says Craig Peterson, director of Nebraska’s statewide ESUCC Cooperative Purchasing service.
The co-op, which covers 17 educational service units and about 300,000 students, negotiates three-year contracts in which a prime vendor offers products to the schools at prices established through a bidding process.
A 1 percent rebate is given to schools that meet an annual spending commitment. There are no upfront costs, out-of-pocket fees or penalties.
The co-op has stepped up its legal vetting of bids as federal and state nutrition requirements have become stricter, he says.
ESUCC also handles documentation for USDA and Nebraska Department of Education compliance reviews, and tracks savings.
“One data point we utilize is the list cost or normal pricing that a member would have been charged if they did not participate in the program,” he says.
Four different hot dogs
Donna Davis has seen school food-purchasing co-ops from many angles. For 22 years, she worked for a broker selling food to individual districts and co-ops.
Then in 2013, she got involved with 37 Texas districts that broke away from their co-op to form the nonprofit School Purchasing Alliance (SPA).
While most co-ops are run by a government entity or intergovernmental agreement, SPA is managed under contract by Davis’ one-woman business, Houston-based Marketplace Alliance LLC.
“They hired me because I knew the other side of the business and knew how to make deals,” she says. Davis showed members that they were buying 4,000 items and not taking enough advantage of the power of their group purchase.
“They were buying four different hot dogs and four different dinner rolls,” she says. “I said, ‘Let’s figure out what the students like, and then let me bargain.’”
Although SPA buys more than 2,000 items, it spends most of its revenue on 500 items. Topping the list: 8-ounce bottles of water, of which the alliance buys 180,000 cases per year.
“Those high-dollar-volume items are the ones I want to make sure we are getting the best price on,” she says.
David Raths is a Philadelphia-based writer who regularly covers edtech.