That is the question JUDE BARBACK considers here, looking at the pros and cons of contracting out catering services.

How to cater for residents can be a difficult issue for retirement villages and aged care facilities. Should they contract catering services out to a professional company? Or employ people to do this on site?

John Collyns, director of the Retirement Villages Association (RVA), says this is a topic that crops up now and again in discussions had by the RVA’s food and beverage forum. Collyns says many villages have subcontracted out their catering and then brought it in-house, or vice versa, struggling to find the best option for them.

“It seems a cyclical thing – people do it themselves, get all tangled up and subcontract it, then that doesn’t work (because they’re giving away margins) and bring it back in-house again … and so on.”

Bruce Cullington, manager of Acacia Cove retirement village, says he is split on the issue. His village currently does it all in-house and runs at a loss. He believes that financially they would be worse off still if they were to contract out, purely because Acacia Cove doesn’t have the economies of scale to support such a decision. Although a relatively large village with 320 people, as a standalone operation, Cullington doesn’t think Acacia Cove could afford to contract out the catering.

If the figures stacked up, though, it would. “In a perfect world, we would contract out,” Cullington says. He believes contractors are likely to achieve better value in food purchases, as they are buying in bulk and have access to better deals.

Cullington says it is difficult to plan for the right quantities.

“They never go for the healthy option,” he says of his residents. “They pour the salt on. And any form of physical exercise is always followed by a chocolate biscuit and a cup of tea!”

The recession hasn’t helped matters. Cullington has noticed a downward trend with people’s disposable income.

“Typically, 60 or 70 come to our annual dinner, which is $25, but this year, just 21 have signed up so far.”

The importance residents place on food hasn’t waned, however. Cullington says the very few complaints they receive at Acacia Cove tend to revolve around food service: ‘the plates aren’t heated’ is a common one.

Cullington believes contracting companies have the necessary expertise and appropriate training for their staff, which can be a difficult aspect of employing staff to take care of the catering in-house. Job-share arrangements, which are common, can also be problematic, in Cullington’s experience.

“Because of job-share arrangements, I feel that no one really takes ownership for the service as a whole,” he says.

Cullington is quick to point out, however, that the residents appreciate the familiar faces of their own catering staff. He believes that an employer has more control over who is involved with food preparation and service. Villages that contract out their catering service have been known to lament the frequently changing staff, often with poor English skills, with whom their residents have little rapport.

However, this isn’t the case at Te Hopai Rest Home and Hospital in Wellington, which contracts its catering to Spotless. Manager Pakize Sari says the contracted chef, in addition to cooking on-site, attends the residents’ meetings and even serves the morning tea so as to chat with the residents and glean feedback on yesterday’s meals, to improve the service and build relationships.

Sue Prowse, manager of Rosebank Rest Home and Hospital in Ashburton, also thinks contractor or not, the main issue is for the people responsible for the preparation and cooking of the food to have a presence in the kitchen and a connection with the staff and residents.

“I believe cooking on-site, whether in-house or contracted, is an essential component of this service as the residents often give feedback both positive and negative to the kitchen staff,” says Prowse.

Certainly, due to more competition and greater expectations of village and facility operators and residents, it seems contractors expect to go the extra mile.

Compass Group New Zealand, a vast organisation, encompassing a plethora of catering companies including Medirest, aimed at meeting the needs of the senior living and healthcare industries, well understands its role in relation to villages and care providers.

“We know food is an integral part of life and our community; contractors allow an organisation to define their core business outside of food services and allocate resources, while maintaining a level of assurance that an agreed standard of services is delivered,” says Lauren Scott, Compass’ strategic partnership manager.

“The decision by a retirement village to contract out food and support services is motivated by commercial, operational, and systems-based considerations.”

Scott echoes what Cullington says about contractors achieving economies of scale when utilised across multiple sites. Scott says contractor organisations can achieve large-scale purchasing cost efficiencies and provide a robust senior management structure to support site management.

The expertise held by contractors is another area Scott highlights. With highly trained dietitians and executive chefs on board, they can provide expert advice to organisations, meaning facilities aren’t faced with the price tag that comes with contracting out the services of highly trained individuals.

Often, the expertise of contractors, especially those on a large scale like Compass, extends beyond the food into the business of food service delivery systems and processes, ensuring they are up to date and drawing on knowledge and best practice from catering for other sectors.

Alliance Catering, owned by the Spotless Group, also sees itself as an expert and innovator. Catherine Mitchell, National Operations Manager for Alliance Catering, says, “Apart from outsourcing compliance management and HR management, and capitalising on purchasing benefits, you are also inviting in our innovation based on experiences in our many other facilities where we see overarching trends.”

Mitchell says they can test ideas and, in their customised service delivery model, match client requirements, and develop new ways of serving food and keeping residents happy.

“Over the next decade or more as the baby boomers enter villages, the expectation will be quite different – ‘retail cafes’ and ‘home delivery’ meals will play an increasing part in village life, as will restaurant-style service and self-service style dining,” says Mitchell.

It will be interesting to watch over the next ten years the evolution of services provided by companies like Spotless and Compass. However, for the time being, contracting out the catering isn’t everyone’s preferred option. Rosebank is one facility that prefers to do it themselves.

“Food is a very important component in our residents’ lives. Staying in-house allows us to be responsive to their individual needs. When people are unwell or in the palliative stage of life, they often feel like food that is not on the menu and this can easily be catered for. Also, our kitchen often cooks special meals for special feast days or for theme days we have at the home; this flexibility is more difficult with a contractor,” says Rosebank manager, Sue Prowse.

Napier District Masonic Retirement complex at Taradale is another proponent for managing the catering themselves. Manager Graeme Taylor says the village’s current chef has been involved in both models and ultimately prefers keeping the catering in-house. Taylor believes they are providing a fresher option to the residents. “Morning tea this morning was freshly baked scones straight out of the oven,” says Taylor, by way of example.

“We are also in a better situation to respond to residents’ likes and dislikes. Because our chef is on-site, he can receive immediate feedback and can respond rather than have residents fobbed off with the excuse that the food has come from a contractor,” says Taylor.

Taylor doesn’t think the cost-saving argument is enough to sway him from providing what he perceives to be the best possible service to residents.

“We actually struggle to see why we would change as our residents are our priority, and we do not believe in compromising this even if it were cheaper to contract the service out.”

However, contractors argue that the cost factor should not be a deterrent to facilities that shirk from using their services. Catherine Mitchell of Alliance Catering says understanding the real cost of managing a food service in-house in not just dollar terms helps determine whether outsourcing is the right model.

“The most important thing is that your food service partner understands your care philosophy and embraces and supports it – there’s more to it than just putting meals on a plate.”


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