Private Sector Solutions May Overlook True Cost of Healthy Meals

December 16, 2009

By Mark Bishop, Deputy Director

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The media’s interest in private sector responses to the challenges of
school food fascinates me. For the most part it’s good because it helps
increase understanding of our food systems and highlight the barriers involved with serving healthy food in schools — something that I believe can ultimately lead to greater support for increased resources and changes to our current system. But on the
other hand, the coverage always seems a bit off to me.

USA Today recently ran a story
about Revolution Foods, a company that is privatizing healthy
food for schools. It’s a model that is working in some areas and
focuses on local and healthier options:

Revolution
shuns high-fructose corn syrup, artificial colors and flavors, trans
fats and deep-frying. Its meats and milk are hormone- and
antibiotic-free, and many of its ingredients are organic and locally
sourced.

As I wrote before,
I think that it’s great that the private industry is getting involved,
and we’re always glad to see kids being offered (and eating) healthier
foods. And the USA Today article offers opposing views by quoting others in the field who ask if Revolution’s priorities are right, or if their model is truly
scalable. 

However, I have another concern. In short,
saying that a company can provide a healthier meal for $3 doesn’t
account for all the costs that a school must cover. Let me break it
down a bit. According to the story:

The
federal government pays, on average, $2.68 per child per meal – and
most food advocates say that simply isn’t enough. A few insist it can’t
be done for less than $5.

(For reference, HSC believes that schools need an additional $1 to provide a healthy meal.)

What
many people forget is what that federal reimbursement has to pay for.
Not only does it have to cover food costs, labor, and prep, but it also
has to pay for overhead and the facility. For most schools, the overhead and
facility costs associated with serving a meal may be close to $1 per
meal — just to have a space and staffing for a kid to sit and eat.

So
if you have to purchase a Revolution Foods meal for around $3.00 per
meal (only losing $0.32 per meal based on federal reimbursements) you
then need to add the cost of the facility, staffing, utilities etc.
That means an outsourced $3.00 meal actually costs a school closer to
$4.00 per meal by the time it reaches kids at their cafeteria tables. That’s not too far off what the “advocates” cited in the story claim that schools need to spend for a more healthful meal.

We’re all for creative private solutions, but in order to have meaningful and practical discussions about their impact, we need to come up with a
common accounting system to track the true expenses of school food. We
need to make sure we’re comparing apples to apples when we discuss
costs.

What we really see is that the solution to providing healthy school food is not
based only in tweaking the existing system. Schools need increased funding to invest in healthier food — and along the way, develop a
system that supports children’s health.