Roi Write Up

Melina Conrad Return on Investment Project Introduction/Purpose/Need

Connecticut ranks 38th in the nation with 51.6% of students in Connecticut participating in free or reduced price school lunch who also eat school breakfast as compared to 56.7% nationally (1). Connecticut has made great progress to increase school breakfast participation over the years and work must continue to ensure more children participate in the years to come. Meriden most recently became CEP, Community Eligibility Provision (CEP) which is a federal program that allows the nation’s highest poverty schools or districts to serve breakfast and lunch at no cost to all enrolled students without collecting household applications (2). Allowing all students to receive free meals ensures students have equal access to the benefits of nutritious school meals while reducing program administrative costs (2). Meriden performed student focus groups at both of their high schools (Maloney and Platt) on products they would like to see served in the school. As a result of these focus groups it was learned that students wanted hot chocolate to be offered. With this information, Meriden set out to apply for the NEDFC Hot Chocolate Grant to meet student satisfaction/request, as well as increasing school breakfast participation. Due to CT’s beverage law, what beverages are sold within schools is limited. Coffee and hot chocolate are not allowed to be sold by law. A way around this is with the NEDFC Hot Chocolate Grant, which heats up chocolate milk and markets the milk as hot chocolate. With the funds gained from this grant Meriden has implemented hot chocolate in both high schools and is being offered initially twice per week, with plans to implement hot chocolate five times per week during the winter months. Meriden kicked off the hot chocolate roll out on February 14, 2019 and have continued the roll out with Marshmallow Monday’s and Whipped Cream Wednesday’s to market the hot chocolate. The goal of rolling out the hot chocolate is to increase breakfast participation rates and improve student satisfaction with the school’s Food and Nutrition Services department. Resources Expended *Calculations can be found in the Excel file attached

Initially the grant had covered a warming machine that the schools would use to heat the hot chocolate but they had found it took too long to heat up and could only hold a small portion of chocolate milk at a time. Due to this set back, six Carlisle containers had to be purchased (3 for each school) to hold the chocolate milk once it had been heated up using their existing steamers. These Carlisle containers will be multipurpose and also be used for catering events hosted by the schools. These containers can be easily stored and do not take up much room. The cost of these can be found in the excel spreadsheet. With the implementation of hot chocolate in Maloney and Platt each school had to now purchase whipped cream and marshmallows to go with the hot chocolate. With hot chocolate only being offered twice per week, whipped cream and marshmallows are only being purchased once per month. Once the hot chocolate is offered 5 days per week during the winter, it will go up to either twice or three times per month. The calculations in the excel spreadsheet only calculate the revenue and expenses based on offering hot chocolate twice per week for either four months (duration of winter) or the whole school year (10 months). The longer Meriden implements the hot chocolate the greater the increase in their revenue. The only reason they are in a profit loss

during the four-month duration is because of the added cost of the six Carlisle containers, which totaled $768.00 and the additional labor of one hour per week at Maloney for four months, which totaled $235.20. The $454 from the grant was used to purchase marketing materials (table tents) to promote the hot chocolate. As of yet they have not been put out during the lunch/breakfast times due to them not being made correctly and not being able to stay upright when put together. Outcomes *Calculations can be found in the Excel file attached

Hot chocolate has been a great success, with breakfast participation increasing by 13.3 and 30.6 breakfasts on both of the days’ hot chocolate is being offered. Once hot chocolate is offered five days per week, the faster they will break even on their expenses. If Meriden continues to offer hot chocolate twice per week and the participation rates continue at the same rate, they will be in a profit within a school year of 10 months. As a result of Meriden being CEP, all students are entitled to a free meal, but the schools have percentages that correlate to the number of students that qualify for free/reduced lunches. Maloney and Platt are both at 96.8% of students that qualify for free/reduced lunch and 3.2% are able to pay full price. These percentages have to be considered when calculating the amount of money that gets reimbursed to Meriden Food and Nutrition Services. So, when calculating a profit those percentages have to be multiplied with the amount of additional breakfasts sold. Then the number that is left would then be multiplied by the amount of money Meriden gets reimbursed from the government, which is $2.14 for free/reduced and $0.31 for paid lunches. Total revenue for four months would be $819.50 and total expenses for four months would be $1,233.36 with a ROI percentage of -33.56%. Total revenue for 10 months would be $4,109.01 and total expenses for 10 months would be $1,931.40 with a ROI percentage of 112.75%. Not only does the hot chocolate generate revenue, it lets the students feel as though they are contributing to what is being served in the school and that their voices are being heard. With an increase in student satisfaction with the school meals, participation will then in turn increase. Once the marketing materials are being implemented, the participation rates will increase at a more rapid pace. The Food Service Director and I believe that breakfast sales would continue to increase each year hot chocolate is implemented in the high schools. Due to increases in breakfast participation being variable, I am unable to determine an accurate way to estimate a percent increase in breakfast sales each year. Therefore, the expected revenue in four months and 10 months is remaining stable at 13.3 and 30.6 additional breakfasts sold per month or 439 meals per school year (10 months) for my calculations. We foresee that breakfast sales and participation rates will continue to increase, which in turn will further increase revenue and ROI from implementing hot chocolate. Summary and Conclusions In conclusion, offering hot chocolate at breakfast is an excellent investment indicated by the 10-month ROI and student satisfaction. The food service staff are becoming more comfortable with pre-pouring the hot chocolate and determining how much to prep based on each schools’ individual increase in breakfast participation. With this new marketing of chocolate milk, more students are drinking milk now than before the hot chocolate was

implemented. Overall there was an improvement in revenue generated as well as a nonmonetary benefit of student satisfaction with beverage selection during breakfast. With more students eating breakfast at school, the research shows school meals contribute to the health, attentiveness, behavior and academic success of students (2). With my current projections only based on serving hot chocolate twice per week at four and ten month intervals, it’s safe to say there will be a larger increase in breakfasts sold once hot chocolate is implemented five days per week. As far as implementing hot chocolate in other schools, I believe it would only be feasible in the middle schools. Elementary school children either get grab and go breakfast or breakfast delivered in the classroom. Having the younger students get hot chocolate would end up making more work for not only the cafeteria staff, but teachers and custodians as well, with the likelihood of them making a mess being extremely high. Appendix A: Carlisle 5 Gallon Container

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Extended Hold-Times – keeps beverages hot or cold for up to 4-6 hours (3) Superior Insulation – reinforced commercial-grade polyurethane insulation maximizes temperature retention (3) Dripless Service - spring action faucets and O-ring seals prevent leaks and provide heat retention (3) Easy Transport – ergonomic handles for secure two-person carrying (3) Non-metal latches - nylex II latches mounted into steel reinforcement plates have no sharp edges and won't rust, bend or dent for extended life (3) US Metric

Height

25.75in

65.41cm

Capacity

5.00gal

18.93l

Min Temperature

-40.00°F

-40.00°C

Max Temperature

180.00°F

82.22°C

Exterior Length

17.00in

43.00cm

Exterior Width

10.50in

26.67cm

References 1. School Nutrition Association https://schoolnutrition.org/aboutschoolmeals/schoolmealtrendsstats/ Date Accessed: March 5, 2019 2. End Hunger CT School Breakfast Report Card 3. Carlisle Foodservice Products. https://www.carlislefsp.com/cateringequipment/cateraide-insulated-beverage-servers/XT500008 Date Accessed: March 7, 2019