Course work
Today's students prefer hand-held food, premium coffee, are hooked on brands, expect food to be subsidised and will only frequent outlets that buzz with the right music and decor.
At the same time, colleges and universities want catering to shift from a subsidised to a commercial basis. To satisfy both these demands, the private sector has been called in to invest in facilities that will attract the high volumes necessary to reach nil subsidy, while still meeting students' expectations.
Contractors agree that this is a demanding but lucrative sector, with a potential customer base of thousands rather than hundreds.
"Any college looking to cover costs needs a simple, quality offer in good surroundings and still be able to provide a meal for less than £1.50," says Roger Whitehead, managing director of Sutcliffe Collegiate Services, set up in October 1998 to manage 120 colleges and universities on a £15.6m turnover.
At Oxford Brookes University, for example, a former refectory was replaced by Sutcliffe branded food counters resulting in a 7% increase in sales, £2.2m turnover and a reduction of the university's previous £500,000 subsidy to nil. "We've had to become much more commercially orientated in our food service operations," says Brian Summers, deputy vice-chancellor of corporate services at the university. "We have upgraded our facilities to rival the high street and we compete head-on for the custom of our students."
It's a similar story at Somerset College of Arts & Technology, where Sutcliffe invested £165,000 to transform the main restaurant into a Continental-style café with a £375,000 turnover and an average spend of £1.20, and helped reduce subsidy to nil.
Sutcliffe's collegiate division operates commercial-style contracts with a percentage of profit returned to the client or re-invested in the facilities.
In fact college-wide, continental cafés are now an essential part of the food offer, generating as much as 25% of the total sales. They provide premium coffees (which students are prepared to pay more for), baguettes and hand-held items.
Sales have trebled at Liverpool Community College since Chartwells, the education arm of Compass, took over the catering on four campuses. The most successful outlet is Café Trois, which attracts nearly 100% of the 1,200 students on that campus through the introduction of Chartwells' in-house brands. Its limed oak tables and Scandinavian decor are a far cry from the old-fashioned, refectory-style serveries.
Total turnover across the four campuses is £400,000 per year, with 25% of the 5,000 full-time and 11,000 part-time students on site using the facilities. The contract is cost-plus with performance-related guarantees, and each outlet is run on commercial lines.
"Although we face tough competition from local shops, we've tailored the products to meet the students' taste, priced them slightly cheaper than the competition and gone for volume," says Chartwells.
Catering outlets with computer terminals are also growing in popularity. A cybercafé with virtual reality chairs that move are part of the facilities at Kings College, London. The college has just undertaken a £100m private finance initiative redevelopment of two sites at London Bridge and Waterloo with Boygues, whose catering arm, Kings Cuisine, has been awarded the catering contract that was previously in-house. There are 7,000 students on the two sites and estimated turnover for the first year is in excess of £1m.
"Instead of filling the place with fruit machines, which we thought was tacky, we've installed 30 terminals," says Richard Shepherd, catering manager.
To meet students' thirst for variety, Shepherd and development manager Derek Neeve have sited Le Café wine bar, with its quiet music and calm atmosphere, opposite K Express, which Shepherd describes as "a posh tuck shop" selling packaged food and ready-made meals to take back to rooms.
In turn, this contrasts with outlets selling salads from £1.95 to £2.45, as well as pizzas and pasta from £1.50 to £1.85, and Coast to Coast, whichsells three dishes of the day ranging from £1.80 to £2.85. The average spend overall is £1.40.
"Students expect a high standard and deserve it because they now have to pay for their own education," says Shepherd. "We must be prepared for change. This is a disposable industry - within five years we could be replacing these outlets."
Upmarket catering facilities also help universities and colleges to sell themselves, an important financial factor as more students means more funds.
"Students and parents now look at catering facilities to help them choose which college to attend," says Sandra Kerton, Sutcliffe Collegiate Services general manager. "It's a reflection on the character of the college and how it views its students. The social environment has got to look the best. Old-fashioned refectories are losing out."
Not all universities look to the private sector. In the past 12 months, University of Warwick Hospitality Services, with 15,500 students, has carried out a £5m refurbishment of its catering and banqueting facilities - £4.5m of this came out of Hospitality Services' trade, the rest from a National Lottery grant.
More than £1m went on three new catering outlets. Eat, a restaurant open for lunch and pre-show dinners, was funded to the tune of £560,000 by the lottery. Kaleidoscope Café, with an average spend of £1.25, and Viva, a new sandwich bar with an average spend of £1.78, cost £575,000 to set up and are funded by Hospitality Services.
Before replacing the 11-year-old facilities, Hospitality Services carried out extensive research. "It showed our operation had been product-driven not consumer-driven - and it turned us on our head," says director Andrew Paine. "We now have distinctive in-house brands each with its own specific environment and uniform."
His research also revealed that students are creatures of habit and, having made a choice at the beginning of the year, they will stick with it. Paine has learned this the hard way: the opening of Kaleidoscope was delayed by two weeks and he lost the initial impetus. He plans to relaunch in September.
Across the board, college caterers rely on high volume and menu engineering to run a commercial operation while meeting students' expectation of good food at low prices. This means most can provide a cooked breakfast for 99p and a meal deal for about £1.50, while levelling out profit margins so that more expensive items can be included.
Paine has his own menu definitions: "workhorses" are high-volume, low-cost items that always sell, such as beverages; "dogs" are popular foods that cost more to produce but offer low profit margins, such as carveries; and "stars", which cost little but are perceived as high value, such as lasagne. It's simply a matter of getting the balance right.
What students want
Hand-held items
Premium coffee
Bright, social environment
Rationalised opening hours
Varied offers and brands
Low-cost items
