Monday, June 10, 2013

Revolution Foods in school meals

At the Menus of Change conference in Boston this evening, I especially appreciated the presentation by Kirsten Saenz Tobey, the Chief Innovation Officer of the ambitious new school food service company Revolution Foods.

The presentation took the form of an interview of Tobey by her former business school professor Will Rosenzweig, whose questions led her through the remarkable growth of her company from social entrepreneurship projects at university to a multi-million dollar corporation serving millions of meals.

Although Tobey and her collaborators had originally envisioned a not-for-profit corporation, perhaps principally with foundation funding, an instructive turning point happened when they realized that the amounts of capital required for kitchen renovations and other investments could not be raised except on a for-profit basis.

The company has had good coverage recently by Forbes, Take Part, and the Economist.  A difficult challenge is cost.  Revolution Foods may cost more, and San Francisco columnist Dana Woldow has been pressing for transparency on the full cost of the company's contract with that city's school system (and also rapping the company's knuckles for run-of-the-mill puffery in hinting at claims of improving student test scores).

Tobey says the company soon wants to challenge a major brand-name provider of packaged lunch meals sold in grocery stores (I can only think of Lunchables).  That is a worthy villain, and, at the same time, one can't help wondering if plain lunch ingredients sold as non-brand-name ordinary food might really be the more sustainable competitor to over-packaged brand-name lunches.

This is a company whose progress I want to watch in coming years.


Dana Woldow said...

For sure Revoluton Foods meals cost more. The proposed budget for the San Francisco Unified School District for 2013-14 shows an almost 14% increase ($1.36M) for school food to cover the higher cost (that's just for the food, not labor or overhead). However, the meals are excellent and well worth the extra money, for any school district which can manage to scrounge up the extra funds.

Parke Wilde said...

I agree. In the continental United States, the per meal reimbursement that USDA pays the school food service program for a free lunch is only $2.92, I think. I think there might be efficiencies in scale if more places served better meals, but, even supposing the per meal cost increase really were 14%, that comes out to $3.33 per meal. Our society should not be too cheap to feed its children well. We can afford $3.33 per meal.

Dana Woldow said...

Please keep in mind that the government reimbursement for a free meal (approx. $2.92 per meal in 2012-13) must cover not only the cost of the food, but also labor and overhead. Even schools buying prepared meals from an outside vendor like Rev Foods have their own labor costs, to serve the food, count and claim the students, clean up after meals, fill out endless forms to get the government payment, etc. There are costs for refrigeration for the meals, for utilities, pest control, cleaning supplies, delivery, and on and on. Most schools spend about 44% of the cafeteria budget on labor, another 44% or food, and about 12% on overhead. Given that 44% of $3.33 is about $1.46, that would still not be enough to purchase a Rev Foods meal. SFUSD pays $1.95 for an elementary school free meal (more for MS and HS), and that doesn't include milk or delivery costs. Realistically, $5 per free lunch would enable most schools to serve a top quality meal to kids, and I agree, our society should not be too cheap to do the right thing.