School cafeterias are in crisis. The reason: Feeding U.S. schoolchildren doesn’t pay in this economy.
, but it also includes economywide pressures that have driven up food, energy, labor and delivery costs over the past year for businesses and consumers alike.
“We’re very seriously concerned about next year and the coming years,” De Lucca said, adding that the district has little choice but to pay the higher prices. Since her district is reluctant to make sacrifices to students’ meals and has recently raised employees’ pay, painful staffing decisions are now on the table.
. Households can apply for free or reduced-price meals, but not all meet the narrow income guidelines to qualify, which often leaves districts picking up the tab. A USDA spokesperson said the agency encourages schools to apply for “community eligibility,” which means that if enough students apply and qualify for free or reduced meals, their whole district can be provided with free breakfast and lunch.
In May 2021, US Foods CEO Pietro Satriano told investors that K-12 is among the “segments which are less strategic to us.” On a February 2022 earnings call, CFO Dirk Locascio said that executives “expect to grow below the market there” and cited “added complexity” among the reasons K-12 customers “tend to not be as profitable.”Rae Hollenbeck, executive director of the power buying group in florida
In July 2021, Florida’s largest buying group, representing over 600 schools, was alerted that US Foods was terminating a contract set to last through 2024 in just 90 days, ending a nearly 20-year relationship. In Pennsylvania, a buying group representing 60 school districts said it received a bid from US Foods for the current school year with prices up 35% from its prior contract. Over the past year, the group has received hundreds of price hike notices citing inflation, said Kristan Delle, the food services director at Upper Dublin School District and a leader of the buying group.
The problems have pushed some schools to ink deals with local grocery chains, whose prices tend to be higher.
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