Senior Living Providers Control Dining Costs with Better Budgeting, Management

As senior living providers seek to optimize dining from a cost perspective, they ought to adopt practices that are common in the restaurant world.

That was just one of the ideas submitted by culinary leaders from Elder Care Alliance, Pathway to Living and The Kendal Corporation, who spoke at Dished, a Senior Housing News event held in Chicago on March 7.

The bottom line of the discussion was clear: to control dining budgets, senior living providers must track food spending at each step, from ordering and inventory to when the food is served to residents. While it’s true that dining services is often a senior living cost center, this doesn’t justify wild variation in month-to-month food spending.

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Easy as PRD

In order to standardize their dining budgets, senior living providers should get in the habit of tracking food costs per resident day (PRD), according to Arnold Alejandrino, regional culinary director at Elder Care Alliance. Based in Alameda, California, Elder Care has five communities throughout the state.

The basic idea is that providers should know exactly how much they’re spending on each plate of food they serve to a resident, much in the same way that a restaurant does to make sure it’s turning a profit.

“Whenever you make a plate cost, you want to create targets,” Alejandrino said. “That way, I’ve got a range of what I can spend.”

The entire process starts with good menu management practices. That often means providers must think carefully about the cost of everything they order, from which products they’re buying to how much they’re ordering at a time. It can also mean hitting narrow targets, such as ordering exactly as much food as you might use per month. To that end, a menu planning tool is a great resource for balancing nutrition for residents and cost to providers.

But tracking spending doesn’t need to be all about austerity — it can also help free up more money for new creative menu items or better ingredients.

“If you’ve saved it, put it back in. Get a better cut of prime rib. Get some lobster if you can. Have fun with it,” Alejandrino said. “Because it’s the resident’s money and we want to create resident happiness.”

Watch for food waste

Another habit senior living providers can borrow from the consumer-facing world is eliminating food waste. In restaurants, wasted food is tantamount to malpractice, and senior living providers should take the same approach to their operations, according to Eli Ayoub, director of culinary experience at Pathway to Living. The Chicago-based provider has 32 senior housing properties spread across the Midwest.

Ayoub cited a study by RecyclingWorks in Massachusetts — a recycling assistance program for businesses and institutions in the state — as evidence of just how large the problem can be. An average assisted living community in the state generates about 286 pounds of food waste per day, according to the organization.

“If we’re not going to be able to control our food waste, how are we going to be able to control our PRD?” Ayoub said. “And how can I go to my investor and say, I need more money for my PRD?”

Ayoub shared some specific tips senior living providers can use to reduce food waste and save money:

• Create a meal plan

• Expand your ingredient list and put it to use in creative ways

• Create a shopping list and set your par level

• Put diminishing products and leftovers to good use

• Keep produce fresh

• Be smart about storage

• Embrace the freezer

• Cook fresh or local fare, cook to order or cook very small batches at a time

• Practice portion control

• Perform a “trash can audit,” where someone records all the wasted food

Get analytical

In their pursuit of better dining budgets, senior living providers should embrace big data — much as The Kendal Corporation currently does with its business intelligence platform, according to Ben Butler, the organization’s vice president of culinary services  and operations. The Kendal Corporation is based in Kennett Square, Pennsylvania, and is the No. 12 largest non-profit senior housing operator in the U.S., according to the 15th annual LeadingAge Ziegler 200 (LZ 200) ranking.

“We started several years ago … by saying, we need a high-level data summary,” Butler said. “And we need to understand our cost per day, our meals per labor hour, but more importantly, we need to be able to see this in real time.”

So, Kendal came up with some simple productivity measures — such as productive labor hours and cost per meal — and hired an employee to build a data warehouse. And that has made a big difference in tracking and budgeting culinary spend, Butler explained.

“We, through Microsoft’s [Power] BI, can now deliver to all of our managers in real time, on a desktop or through their smartphone on a BI app, several dashboards on every level of our business, from finance, HR, marketing, culinary to facilities, real-time analytics that help us make decisions faster,” Butler said. “If you’re a director at one of our communities, you can see this data … and see cost, sales, by-date mark, by-location, by-venue, and that’s allowed us to make some really smart decisions quickly.”

Analytics dashboard at The Kendal Corporation

For example, using this kind of granular real-time data, one of Kendal’s communities was able to determine that serving breakfast in their cafeteria no longer made sense, financially. So, the community closed its breakfast venue and began offering a grab-and-go menu with coffee for breakfast.

“[It allowed us] to allocate those resources to all-day dining and a full-service waited restaurant that really is what we should have been doing 10 years ago,” Butler said. “But it took this type of business intelligence for us to understand and be able to understand and analyze our business a little bit better, and convince the leadership and residents of the community, that based on data, this was the best thing.”

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