Food for thought

A great catering proposition can increase profits – but what do students want and can going with a contractor help boost business?

University catering is big business. Every year, university caterers in the UK generate in excess of £200m for their universities. Until relatively recently university catering had a questionable reputation – through misconceptions of the student diet as impoverished or unhealthy – but it is now a dynamic industry, attracting top chefs and proving itself as a sound investment in the cut and thrust of the recession.

The reason catering at universities is becoming more important is much the same as the reason why estates teams are investing in halls of residence – because today the student experience is king.

Today’s students pay fees and expect not only top-level education but top facilities – including well thought out, stylish and healthy catering options. What’s more, a recent study has revealed that the catering facilities act as a shop window for universities and can have a significant impact on potential students’ decisions about where to study. The University Lifestyle Survey, conducted by CUBO and Sodexo, identified catering facilities as a key factor in students’ decision about where to study.

A growing industry
This stands to reason. Once at university, catering forms an integral part of everyday life and – for universities at least – can be a constant battle to win the hearts and stomachs of your student customer base. The good news is that, even in these challenging times, university catering is a growing industry. Peter Taylor, Head of Universities at Sodexo, a leading catering contractor for higher education, confirms the stability of the sector: “The economic climate does have an impact on individuals and their spending patterns and ability. However, as part of our strategy, we continually look for opportunities to provide real value for money to students in particular, as well as staff and visitors. The result is that our catering business is growing strongly year on year.”

Part of this buoyancy can be attributed to financially robust student consumers. While it’s true that they have a relatively small spending power, they are unaffected by unemployment and interest rates, meaning they have a relatively high disposable income.

This said, value for money remains a key driver for them, as is confirmed by Sara Johnson who is Director of Stern Consultancy, consultancy responsible for past catering projects at Said Business School, De Montfort and University of Bedfordshire to name but a few. “Value for money is one of the biggest challenges facing caterers now,” she says. “The university has to represent that value for money compared to the competition around.”

High pressure
Of course, catering teams in city centre universities face the ever-present threat of the high street, with its recognisable brands, low prices and comfortable environs. So what can caterers do when faced with well-oiled businesses on the high street? The answer is, play them at their own game. Johnson says: “City centre universities have a lot of competition from the high street – it tends to be that students are attracted by branded offers.” However, the loyalty of your customers can be easily won, as Johnson continues: “Many universities might not have high street brands but they’ve got the ones that matter to students. There will be Fairtrade and Rainforest Alliance. There can be a backlash against high street brands in universities and, in many respects, Fairtrade has become a mainstream brand for this customer group as students like to support it.”

So, knowing your customers and what they want is the first step to successful catering. Every university is different and the things that will boost catering trade in one university might not in another – Taylor and Johnson both make this point very clearly.

However, there will always be trends and, broadly speaking, these can be applied. Taylor says: “In the current climate, the most effective sources of driving up income are through the provision of good retail solutions to satisfy the student market and to steer them away from local shops and bring them back on campus. In addition, providing value offers that make life simple and a bit more fun is particularly successful.”

Social spaces
Johnson has seen several trends that students find desirable: “Broadly I would say I have seen the move towards the coffee and branded sites and social space,” she says. This is a phenomenon that has been sweeping universities across the country – creating social spaces that are conducive to study meetings and casual working.

The phenomenon tallies with another occurance, which is the decline in alcohol sales and bar business. Taylor and Johnson both point this out as the only area of university catering that is not growing. “There has been a marked decline in bar sales across the sector, demonstrated by a number of student union bars closing altogether,” says Taylor. “Although this is not attributable entirely to the economic climate, there is clearly a correlation between reduced sales and straightened financial circumstance.

“It does seem that students are spending more time working rather than visiting campus bars and
venues,” explains Taylor. Also, as the number of overseas students increases, so the popularity of the student bars fade and the more sedate pull
of these alcohol-free social areas takes over.

Of course, this ties into the other important pull of your catering proposition: look, feel and image. Johnson explains: “Some of it’s about image but it’s different for different sites. Universities aren’t all the same. They’re unique. It’s not solely about glamorous surroundings but outlets do have to be at a certain level so they don’t look out of date. It’s about having a strong image for the students – it has to reflect their values about the outlet.”

This requires universities to understand what their students want, which can be gleaned through surveys, focus groups or, as Johnson says, by watching where your students go when they leave campus. “You can learn a lot by the branded cups thrown in the bins on campus,” she says.

Contract catering
Most universities run their catering departments in house. However, some decide to contract out their business in order to ensure the best possible service and to benefit from professional caterers’ experience. Sodexo is one such catering group and it has 25 university contracts across the UK.

Sodexo’s Taylor explains why he thinks contractors offer a benefit to universities in this area: “The key motivation for a university to develop a partnering with Sodexo is to release the university staff so that they can focus on their business. This will allow us to develop a thriving commercially oriented catering offer, or indeed move onward to a comprehensive facilities management service and the introduction of a more innovative approach to service provision.

“Naturally universities expect there to be a financial benefit which we believe can be delivered by growing sales activity and better use of space, and the provision of catering services which reflect the high street.”

Taylor insists that Sodexo comes to every university as a fresh opportunity for partnership, which means that the cost of their service to a university varies depending on how much they do. However, they offer the full package from covering facilities to complete renovation.

Of course, though it is obviously difficult for universities to relinquish such a lucrative area of business, Taylor is clear in explaining what’s in it for the institutions: “There are three key issues faced by universities that can be addressed by working with a contractor. It enables them better access to capital. It provides close, clearer management of a very important part of the university experience. There is also the benefit of adapting innovations and initiatives both within the sector and elsewhere, while retaining sovereignty over the services provided.”

He continues: “Sodexo constantly updates its offer through intensive local and national research, notably the University Lifestyle Survey. This ensures that we can continue to meet or exceed our customers’ expectations. We work closely with the students in identifying their key needs locally to ensure a close match of service to customer, introducing new ideas and concepts at appropriate prices. Our entire focus is on delivering high quality catering and FM
services so therefore quality is key to our success.”

Ultimately, then, it is this intensive research and awareness of the industry that makes contracting out your business appealing. Even when a contracting company is employed to oversee a catering operation, the university is the overall winner – as Taylor concludes: “Catering forms an integral and very important part of daily life. It is therefore our mission to ensure that students leave university with a very positive impression of the catering and refreshment services they receive. Both the university and Sodexo rely on a positive student experience for their continuing future development and success.”

University catering is blossoming. As students demand more from their universities, so catering departments are responding with increasingly dynamic solutions and sensitive offers. This considered and focused approach to food on campus – whether from the university itself or through a contractor – can have a huge impact on the student experience, entice more students to your university and ultimately make money for your institution.