Salad Bar Procurement

Overview

The menu drives everything in procurement. If there is one area that derails food expenses, it is a lack of commitment to menu cycle development. If salad bars are added to current meal costs without any change to the menu cycle, the resulting expense of labor and food will be unsustainable. The most successful programs using salad bars are those that incorporate the salad bar as the primary “go-to” for vegetable side dishes and fruits.

Menu cycles should be developed with the understanding that if hot vegetable sides are retained daily, then the department budget may not be able to absorb the increased cost of salad bars unless there is also an increase in participation. Since every district is different, we cannot generalize about what one district can or cannot support, but the primary strategy is to be accountable for the changes ahead of time, track new program costs closely, and adjust if you are not on target.

Impact to Food Cost

Since the 2012-13 school year, the new fruit and vegetable serving requirement has resulted in increased produce costs in districts across the country. The old regulations, though they included fruits and vegetables, did little to truly promote kids choosing to eat them. Consequently, the USDA now requires that a student must take a half cup of fruit or vegetable as part of their reimbursable meal. In districts that had implemented salad bars before the serving guideline change, impact to food cost in the fruit and vegetable category was minimal as student behavior had already shifted to selecting vegetables and fruits as part of their everyday routine.

One of the biggest impacts of adding salad bars as part of the reimbursable meal is a change in the way that fresh fruit and vegetable products are purchased: fresh versus frozen or canned. One of the most common questions that we hear from salad bar grantees of the Let’s Move Salad Bars to Schools program is "How do we plan for purchases?" We recommend planning the department’s food budget based on average menu costs for all meal types (see Food Costs page for more details), which includes salad bar. Essentially, your food budget would be based on an average cost per meal by type multiplied by the number of projected reimbursable meals that you will serve for the coming year. It's important to remember that when adding a totally new feature to your menus like salad bars, rolling over the prior year’s food expenses as the cost projection for your budget is not accurate enough to protect you from under-budgeting food costs. 

Salad bars will transform your approach to menu planning and help you identify which aspects of your menu can be replaced. When adding salad bars to your lunch program, you need to analyze the cost of the fruit and vegetable sides offered in your current lunch menus. As long as you are planning to have the salad bar replace your current fruit and vegetable side costs in your future menu cycles, a reasonable budget is possible and fairly straightforward to project. In analyzing food costs around the country, we find that fruit sides average $0.18 to $0.30 per serving and vegetable sides are similar. 

Forecasting Produce Purchases for RFPs

As we mentioned earlier, without historical data it is a challenge to know exact volume for each ingredient you want to offer regularly on your salad, but it’s not impossible to forecast produce purchases to guide you in the first year. The change in procurement practices will vary based on the practices and menus of the district prior to implementing salad bars. If the district is serving a lot of fresh product from the service line prior to implementing the salad bar, the change will not be as dramatic as it will be for a district that limited its menu to primarily canned and frozen product. The use of USDA foods and the DoD Fresh Fruit and Vegetable program will also need to be considered in your overall procurement plan.

Analyze your purchases, commodity, and DoD records to establish how much volume in your lunch menus are attributable to fruit and vegetables in your current cycles. If you use digital production records, you will be able to export production data that will accurately reflect fruits and vegetables served at each meal period. You can align those numbers with your purchase and commodity history to have a fairly accurate volume of produce served over a set period of time. If you don’t have digital production records, you can use a large sampling of your paper records to manually calculate a percentage of fruit and vegetables served. This percentage can be applied to the volume of purchases in order to arrive at a reasonable estimate of fruit and vegetable usage at each meal.

Collecting this information establishes a baseline of past practices, which is very useful for future evaluation as well as establishing some realistic projections for fruit and vegetable volume when preparing to shift to a salad bar model. For districts that have less experience in using fresh fruits and vegetables, the conversion of canned and frozen to fresh--with regard to projecting how many cases or pounds of product they may need--is a particular challenge. The following exercise will help you develop a realistic RFP for produce and determine the cost of the salad bar ingredients compared to your current practices. 

Step 1: Analyze Prior Practices
Step 2: Organize the Data by Food Type

Step 1: Analyze Prior Practices

Depending on what time of year it is, you’ll either want to analyze the prior year’s purchase data or the current year. If it is late February, then use the current year and develop an estimate for the remainder of the year based on the menu volume (servings), Average Daily Participation (ADP), and current vendor costs.

What Do You Need?

  1. Lunch Production Data: As discussed above, production data provides the actual usage in your current pre-salad bar menus. Given the current regulations, you know that students must take at minimum a fruit or vegetable, so at minimum your lunch ADP is the baseline to help with volume estimates, though actual production data is most accurate.
  2. Vendor Velocity Data: This is a report that your vendor can export from their system. You’ll want to see the full school year, July 1 through June 30. It’s a by-item report (see examples below), so ask them to provide it in an Excel or csv file to make it easy for you to sort and add columns. If you use your own back-office program that receives invoices, that would be a suitable alternative, but velocity reports are excellent tools and it should be standard practice to receive them monthly as well as annually from your vendors for tracking purposes.
  3. USDA Food Received Report: Export a detailed “received” commodity report from WBSCM or whichever tool your state has developed for USDA commodity records.
  4. DoD Fruit and Vegetable Program: Depending on the state and your district practices you may also have access to a report of your DoD receipt for the same period.  If you do not, you may need to create a report that includes product items, description, amount, and average fair market value for the DoD product in that time period.
  5. Current Menu Cycles: These reflect the year represented by the purchase data.
  6. Future Menu Cycles: See Cycle Planning Steps.  
  7. Salad Bar Menu: See Menu Planning for salad bars.
  8. District Calendar: Pull calendars from the period that you are analyzing. You’ll need to know the number of serving days by month and year.
  9. Breakfast and Lunch ADP: Use the total for the district as well as the school for the year analyzed. If you serve snack or supper you will need those numbers as well. (Use Simple Meal Count / Average Daily Participation Worksheet to calculate.)

Produce vendor velocity report

Prime vendor velocity report sorted by product type

Step 2: Organize the Data by Food Type

Using the reports that you’ve gathered, organize the data by type: fruit or vegetable, and also by sub-category: fresh, frozen, or canned. This data will be for all meals that you serve—breakfast, snack, and lunch. The data will reflect all meal types. If there are products that are specifically only served at breakfast or snack then you can eliminate that data as it will not affect your lunch food planning. If you have a USDA Fresh Fruit and Vegetable Program (FFVP) and purchase or track that procurement separately, you can eliminate those items from the spreadsheet as well.  

Step 3: Determine the Volume by Meal Type

Presumably there will be some overlap of items that are used in breakfast, snack and dinner if you serve those. The next step is to isolate the fruit and vegetable purchases by menu category: breakfast, lunch, snack and dinner if you serve that. A la carte produce sales will also need to be isolated if you sell produce in addition to any of your meals. 

The most accurate way to determine fruit and vegetables served by meal type would be to use your “items served or used” history from the production records. However, if you do not use digital production records and your menu cycles repeat the same fruit and vegetables throughout, it is reasonable to analyze a week’s worth of production records to extrapolate approximately how much fruit and vegetable is attributable to each meal type. The goal is to understand what percentage of your fruit and vegetable volume is attributable to each meal.

MEAL TYPE

SVGS OF FRUIT

SVGS VEGGIES 

BREAKFAST

20%

0%

LUNCH

70%

95%

SNACK

10%

5%

SUPPER

0%

0%

 

100%

100%

 

Comparing the actual volume and expense data of the fruit and vegetable components of your current menu cycles gives you a historical baseline and will also allow you to track the shift in your procurement once the salad bars have been added.

Step 4: Determine Your Salad Bar Menu

The menu drives everything in procurement. If there is one area that derails food expenses, it is a lack of commitment to menu cycle development. If salad bars are added to current meal costs without any change to the menu cycle, the resulting expense of labor and food will be unsustainable. The most successful programs using salad bars are those that incorporate the salad bar as the primary “go-to” for vegetable side dishes and fruits. If hot vegetable sides are retained daily, then the department budget may not be able to absorb the increased cost of salad bars unless there is also an increase in participation. Since every district is different, we cannot generalize about what one district can or cannot support, but the primary strategy is to be accountable for the changes ahead of time, track new program costs closely, and adjust if you are not on target

In your launch year, you may want to keep your salad bar menu plan simple in order to make it easier to develop realistic volume projections to use in a producer vendor RFP. Yes, the salad bar provides lots of opportunity to showcase many choices, but we still recommend keeping it simple at first. Anchor your bars with standard selections and then choose some rotating ones that may be more seasonally driven or more expensive and offered less frequently. 

Step 5: Project Product Volumes for Your RFP

With your menu cycle planned and your salad bar menu identified you can determine the highest-volume items that your produce RFP will solicit for pricing. Salad bar is challenging because every student takes a different combination of product. Until you have historical data, you may be nervous, but in your inaugural year you will be pleasantly surprised with how well your launch can go when you keep your salad bar selections moderate, track all production, and allow enough time to train the students on the bar, on how much to take, and encourage them to try new foods.

In the district example below, breakfasts were prepackaged and juice was used as the fruit (pre-current regulations). They did have a fresh fruit and vegetable program, but those purchases were made under a separate contract, so isolating their fruit and vegetable use at lunch was fairly easy. Due to the size of the district sample, we summarized the item detail. What this illustrates is that their actual purchase of fruit and vegetable was approximately $0.41 per lunch meal daily, which is well more than what is needed to implement a salad bar program. 

Sample produce purchasing data from one year in a large district

Salad Bar Item Cost Case Study

Once you’ve started operating salad bars in your district, you can perform much more detailed cost analysis if you maintain daily records. In our salad bar item cost case study, we did a cost analysis of salad bar consumption in a sample district's elementary schools using the by-item production record discussed earlier. 

Based on 22,000 Meals

PAN

TOTAL

Total Mon - Fri

 

 

SALAD BAR ITEM

SIZE

FITS/PAN

Used

Unit cost

Weekly cost

Beans, Garbanzo USDA

1/4 pan

61 oz

154.0

2.12

326.48

Broccoli

1/4 pan

26 oz

38.3

3.26

124.70

Carrots

1/4 pan

20 oz

134.1

0.66

88.51

Celery

1/4 pan

28 oz

139.5

2.39

333.41

Chicken, Diced USDA

1/4 pan

32 oz

90.0

0.33

29.70

Corn USDA

1/4 pan

32 oz

111.0

0.66

73.26

Cottage Cheese

1/4 pan

64 oz

99.2

7.09

702.97

Egg, chopped

1/4 pan

24 oz

61.1

1.1

67.21

Jicama

1/4 pan

28 oz

71.3

1.1

78.46

Peas USDA

1/4 pan

40 oz

66.8

1.02

68.09

Peppers, green

1/4 pan

20 oz

62.2

1.99

123.78

Potatoes, roasted

1/4 pan

32 oz

88.0

0.86

75.68

Salad Mix - romaine

1/2 pan

32 oz

235.3

2.73

642.37

Salad Mix - spring

(same pan)

8 oz

46.8

1.83

85.55

Salad Brown Rice

1/4 pan

2.5 qt

25.9

4.64

120.18

Salad Tabouli

1/4 pan

1.5 qt

23.3

2.24

52.08

Dressing Balsamic

bottle

24 oz

38.1

1.64

62.48

Dressing Italian

bottle

24 oz

33.3

1.46

48.55

Dressing Ranch

bottle

24 oz

139.8

0.95

132.76

 

 

 

Total Weekly Cost

3236.20

 

 

22,000

Approx Cost per Svg

0.15

 

The costing example was aggregated from a week of onsite production data in 28 elementary schools for a total of 22,000 reimbursable meals served. When analyzing the actual used portion for a typical week, the cost-per-serving at the elementary level was $0.15. Secondary school salad bar cost-per-meal averages--using the same method of accounting--were $0.35.

In this analysis, fruit was factored separately. We recommend costing the salad bar without the fruit because:

  1. The components are separated on the production record.
  2. Most districts have good production data on fruit consumption because they count the fruit individually.
  3. For budget purposes, it is preferable to plan the budget presuming that every student will take fruit and salad bar vegetable components.

In this district, protein was also included in the salad bar layout. Since different proteins were offered on different days, the averages from this type of data collection allow the district to capture a fairly precise view of their real costs and volumes used in the menu.

The assumption in this model is that salad bar items are offered as part of the reimbursable meal to every student and the student can come back to the bar for seconds. In the sample district, purchases of fresh produce used in salad bars and in scratch cooking shifted from 4% of food purchases prior to salad bar implementation to 24% of food purchases in the first year they ran salad bars in all sites and removed a majority of the manufactured foods. The increased volume of fresh produce was balanced by abandoning the use of canned vegetables, all baked French fry products, and most canned fruit; a deep reduction in the use of juice; as well as an increase in scratch cooking. So though salad bar will increase your produce purchases, if fully embraced within menu planning, it will replace other purchase categories and be a sustainable choice.

BACK TO TOP

Vendor Relationships

It is not uncommon to find school districts that have never posted a solicitation for their produce purchases. Why? If fresh produce is a small percentage of their purchases, they may not have thought it warranted a specialized vendor, they may just be in the habit of receiving produce as part of their prime vendor bid, or they limit their produce procurement to allocation through the DoD Fresh Program. Once salad bars are introduced into a district, particularly larger districts, produce procurement becomes pretty serious business, so we recommend developing a Request for Proposal (RFP) that outlines the district’s requirements. RFPs differ from bids, primarily because there are more considerations than just the lowest bid. This is especially pertinent with produce because the price of many products fluctuates throughout the growing season. Selecting a produce vendor strictly on the lowest bid may mean that the quality of the product is not number one grade. Here are two examples of RFPs:

Making decisions about what vendor to purchase produce from will depend in part on the delivery model for the district or the delivery model that local vendors can provide. Ideally, you want to encourage as much competition between vendors as possible, but realistically the delivery model can often determine how many vendors will respond to your RFP. Your RFP needs to be very clear on the requirements for delivery. For example: a district with multiple sites prepping their own product for salad bars needs to receive deliveries directly to the sites, provided minimum purchase levels can be reached and the vendor is willing to deliver to multiple sites. This model can also apply to districts ordering from DoD, which usually only limits delivery locations based on minimum order.

Typically, the biggest challenge for produce vendors is the delivery window that schools require. Unlike private industry, schools only have Monday through Friday service (a relatively short window of business hours compared to restaurants), frequent breaks in the year, and many three-day weekends. All of these can pose a challenge to vendor relationships, but “relationship” is the key word; schools may represent a challenge with regard to delivery and other unique criteria, but they also provide an opportunity for a large volume of sales and reliable payment to the chosen vendor. 

Pricing Agreements

Produce differs from other food items due to various factors:

  1. It is highly seasonal and relies on the weather to a degree that many products do not.
  2. It is perishable.
  3. There are a lot of products to choose from.

When school districts solicit for responses to their RFPs, it is often a year ahead of the agreement term, so asking a vendor to bid a set price on 30 products a year in advance is simply not in sync with the industry. As an alternative, there are two commonly used practices for produce pricing: short-term bidding and cost-plus pricing.

Short-term bidding consists of the district requiring vendors to provide a price list for a determined length of time. It can be weekly, bi-weekly, monthly, etc. In this arrangement, the district is typically assured of benefiting from the lower costs of in-season produce. The downside is the time it will take to monitor the bids, presuming that multiple companies will respond. If there are not multiple bids, then there is no real incentive for competition.

The second practice that has proven successful across many geographic regions is a “cost-plus” pricing model. This requires the vendor to determine a flat rate per case that is added to the cost of the product. This arrangement is more transparent and makes it easier to ascertain that certain products aren’t carrying the cost of the contract. For example, in a conventional low bid contract, a vendor could low bid the five most frequently purchased items, but mark-up items that are purchased less frequently. With this cost-plus model, the district requires that the vendor provide copies of their quarterly purchase records to the district for a pre-determined list of products. This audit of the vendor’s costs maintains transparency of the transactions and assures an open vendor relationship.

Request for proposals should include:

  • Primary district contact for response to the RFP
  • Date when proposals are due
  • Date when vendors will be notified of decision
  • List of schools and addresses
  • Preferred delivery day, time of delivery, and any other information that a vendor should know about each delivery location
  • Explanation about how the RFPs will be evaluated or scored
  • School calendar highlighting all school breaks and closures requiring an alternative delivery schedule
  • List of products, their specification, and projected annual quantity
  • Request for records of the vendor’s purchase price by case of your top 10 products (in volume) over the last three quarters
  • Identification of your requirements with regard to Country of Origin
  • Identification of any other preferences such as local sourcing, identification of farms, sending weekly market reports, etc.

In addition to this information, be sure to include standard contractual language used by the district as well as all federally required contract language.

Staying Local

There are tremendous opportunities for using the salad bar as a showcase for local, seasonal foods and education. In fact, there are several well-known examples of salad bars that were established primarily to serve local foods in the schools as a means to integrate food education within the cafeteria In California, the best-known examples are in Davis, Santa Monica, and Riverside: these districts specifically designed their procurement around local farm relationships. Given their close proximity to the primary growing area for produce in the United States, their ability to source local foods year-round is very different than in regions with colder temperatures or that are not within historically agricultural regions.

Other limiting factors of local farms include lack of a distribution system and lack of scale (i.e., not enough of the necessary product grown to garner a competitive price or meet the district’s demand.) Despite these limitations, local produce is a growing industry in regions all over the country and the salad bar is a perfect place to showcase and educate students about the significance of local foods

From the Blog

Lunchroom Education ‒ Making Salad Bars Work for Your District

This blog post has been reposted with permission from Let's Move Salad Bars to Schools, read the original blog post here. Revolutionizing your lunchrooms with salad bars is a complex process from the initial idea to the actual...

SALAD BAR TOOLS & RESOURCES

Visit our Salad Bar Tools & Resources page for worksheets, calculators, signage, guides, and more.

Register to Download The Lunch Box Tools

Chef Ann Foundation is able to provide The Lunch Box free of charge through generous support from our donors. Your information helps demonstrate to our supporters how this site is used in school food work.