good food is good business / good people are good business...

FOODSYSTEM

PLANNING

SUSTAINABILITYSOLUTIONS

RESEARCH &

EVALUATION

RECRUITING&

ORGANIZATIONALEFFECTIVENESS

STRATEGICSOURCING

good food is good business / good people are good business / 27 East 21st Street, 3rd Floor, New York, NY 10010 / (212) 260-1070


Today’s Agenda

•  Introduce an integrated Food and Health strategy for CDM

•  Present preliminary roadmap: from today to tomorrow

•  Review operating scenarios and recommendations

•  Discussion

•  Next steps

This project is part of a two-year exploration about food, nutrition, and health engagement at CDM, through programs, services and new business models.

Key elements include:

Collaboration between multiple partners to develop new ways of framing and explaining healthy food choices

Transformation of museum spaces including:

•  Kids’ Café •  Kids’ Garden •  Exhibit Spaces

Creating new museum experiences related to local food production, eating, and health that are culturally relevant, informative and fun

Determining optimal business models, aligning on strategic direction, and execution

A Brief Review: Family Foodways

Today’s Focus


Rationale: Improved Child Nutrition

The consequences of poor nutrition and diet among children are increasingly acknowledged.

Concerns

•  Childhood obesity rates have quadrupled over the last 40 years; rates are significantly higher among Hispanic and black youth.

•  Nearly one in three children are now overweight or obese. Of those, 70% have at least one risk factor for cardiovascular disease.

•  Chronically undernourished children attain lower scores on standardized achievement tests, are more irritable, have difficulty concentrating and have lower energy levels.

•  Current cost of childhood obesity: $14B

Image credit: CSBA, 2012.


Integrative Strategy

A child-serving institution like CDM has both opportunities and an imperative to address the crisis in children’s health through programs, education …..and food!

CDM can…

•  Engage and educate children with their families

•  Offer healthy, delicious, and fun food, increasing both awareness and consumption of healthy food

•  Teach good food, nutrition, and gardening habits that last a lifetime and change patterns at home

•  Become a point of access to fresh food for underserved families (through produce kiosks, etc.)


Project Objectives

•  To develop a sustainable café business model that features more healthy and diversified food offerings

•  Incorporate experiences, learning opportunities and events for children and their families that embrace the emerging importance of food and health in children’s development

•  To support alignment among board and leadership team about direction going forward


Activities since January

•  Researching and refining three operating scenarios

•  Visitor surveys

•  Exploration of partnerships

•  Further detail on strategy elements (retail, programming)

•  Report-writing and presentation

•  Recommendations

Vision Statement (draft)

Children’s Discovery Museum of San Jose will foster healthy relationships to and

behaviors with food for children and their families in ways that inspire, delight, and

educate them about what healthy food is, where it comes from, how it can be prepared, and why it’s important.


Research indicates multiple opportunities to improve food-related revenue.

•  Increase food sales through:

•  New foods

•  Physical upgrades

•  Increase number and type of events

•  Food and nutrition programming

•  Expand retail line to include food and food-related items

•  Improved marketing

Food and Nutrition at CDM: New Opportunities


Increasing Food Sales: New Foods

In addition, we found several relatively easy ways to begin making beneficial changes to the café experience immediately.

Improve product offering •  Focus on fresh, healthy food,

especially produce •  More options specifically for children •  Improved quality and diversity of

offering •  Variety of food experiences

Visitors want different foods •  “more fresh & healthy” •  “better coffee” •  “more fresh fruits”

•  “more ethnic foods” •  “more variety” •  “less processed food”

Feedback & Observations Opportunity


Increasing Food Sales: Physical Upgrade

Better marketing and signage •  Improve signage, displays, and

merchandising to highlight freshness, healthfulness, and assortment

Visitors don’t see what café does

offer •  Survey respondents repeatedly

asked for more fruit, vegetables, and snacks already sold—but not well merchandised



Improving Visitor Experience

New venues and promotions •  Launch a kiosk offering fresh fruit,

healthy snacks, and coffee by entrance or in garden

•  Enables more flexibility for where/when to purchase

•  Introduce “Member’s Discount Card”: prepaid card, $18 for $20 value at the café

Concerns about price, value and convenience •  “foods that are…quick to eat”

•  “more seating” •  “keep it inexpensive”

•  “…cost-efficient” •  “lower prices”



Increasing Revenue: Events Leverage existing space to increase revenue from events

Birthday parties

35 per year

Small parties & meetings

50 people per event

10 per year

Large parties

150 people per event

5 per year

Potential to generate

$50k+ in annual revenue


Introduce retail products that reinforce food-centered strategy

Gardening

Growing kits, seeds,

tools

Educational

Books & puzzles

Character based

Books & toys

Price points: $5 to $25 Average purchase: $7

Potential revenue: $72k

Increasing Sales: Food Retail

Food

Honey, snacks, drinks


Food and Nutrition Programming

Educate visitors about preparing and eating healthy food Kids’ cooking classes Family cooking classes Gardening classes

50 classes per year 20 classes per year 10 classes per year

Questions So Far?


New Food Service Operator

•  New bid process and contract with experienced institutional food service provider, specializing in kids� spaces / healthy food

•  Revenue share model: CDM gets % of gross revenue

•  Operator owns food COGS

Self-Operated

•  CDM staff oversee all food venues (café, kiosk)

•  Hires, trains, and manages staff

•  Retains all revenue and carries all COGS

•  Contracts with caterers for large events

Continue with Hope Services

•  Hope continues to run café

•  Profitability/break-even for Hope is unlikely

•  Consider kiosk

•  CDM staff works more closely with Hope to coordinate marketing

•  Catering outsourced to qualified operators

Three operating models assessed for profitability and operational implications

Café Operating Models: Overview


Café Operating Models: Detail


Café Income (Loss): $12,263

•  Café sales increase 20%

•  CDM receives about 7% of café revenue

Self-Operated

Funds required: ($59,008)


•  CDM receives all café revenue, and incurs all costs; food, labor, supplies,


Café Income (Loss): ($30,100)


•  CDM receives $2,400

All Operating Models

•  Food kiosk: open 200 days per year, total revenue $20k

•  Member café card: 10% discount on prepaid café card, total revenue $10k


Café Operating Models: Comparison


•  Benefit from operator experience in child-focused food service

•  Potential to support implementation of food & health strategy

•  Partner for program delivery and retail strategy

•  One partner manages café and catering

•  Highest likelihood of profitability

Self-Operated

•  CDM controls all aspects of integrated food & health strategy

•  Very high resource requirements (people and capital)

•  Will require expertise in new areas

•  Potential for high reward, but very high risk (and cost)


•  Limited capacity to support integrated food & health strategy

•  Not positioned to support program design or food-centered retail strategy

•  Past results indicate low likelihood of profitability

Achieving the Vision

What’s needed to achieve the vision? It’s much more than a café, a holistic strategy Will need the right person to lead/execute strategy and bring it all to life A food program director What does a food program director do? Communicate with the cafe/ & coordinate with events Manage the garden program (the expanded garden) and ongoing operations and volunteer and internship programs Manage educational programs – developing content and marketing strategy Manage retail strategy Form synergistic relationships with local food producers


Keys to Success

To ensure the success and effectiveness of CDM’s Food and Health Strategy will require significant investment.

•  Food Program Director hired to oversee and coordinate food and garden venues, programs, events, and retail products

•  CDM oversees programming for children and families

•  Accurate allocation of and increase in budget for related marketing, administrative, and programming costs

•  Physical changes and infrastructure improvements

•  Time and resources to create and execute the strategy over the next 12-24 months

This investment is needed regardless of which operating model is selected.


New Food Strategy: Financial Overview

Financially, the differences between the models are noticeable but relatively less significant than determining which scenario offers the most promise for delivering a fresh, innovative, and engaging food experience for CDM visitors.

New Operator Self-Operated Hope Services


Food for Thought & Discussion


Imagine…..2030

Put yourselves in the shoes of an adult who grew up in San Jose and attended the Childrens Discovery Museum frequently.

This adult is a vibrant, healthy member of the community now with a young family of his own.

When asked about key influences that led to his—and now his family’s—well-being, this young man cites CDM as a key influence.

Your assignment: What did this young man experience here as a child—what did he see, do, learn, eat –that led to this way of life?

Small Group Work


Capital Needs: Overview Improvements to the aging equipment and café facilities will be needed to achieve the desired growth, though there is a wide range of possible investment.

Low Medium High

Professional Services & Fees, e.g.: - Architect - Contractor - Consultant $44,183 $74,003 $96,766 Construction & Facility Improvements, e.g.: - Demo/Carting, Electrical - Carpentry - Furniture & Fixtures $71,830 $170,033 $272,663

Foodservice Equipment & Tabletop, e.g.: - Salad Bar - Pizza Oven - Coffee Cart, Fresh Cart $81,840 $125,290 $143,784 Total Capital Required $197,853 $369,326 $513,213


Food and Health at CDM: Executing the Vision

Each of these areas represent opportunities for CDM to be a visionary and leader amongst children’s institutions. However, a phased launch strategy may make sense given costs and execution complexity.

2013 2014 2015

OUTCOME •  Food and Health

strategy plan •  Fundraising plan

KEY ACTIONS •  Fundraising •  Recruit Food Program

Director •  Physical upgrades •  Café re-opens (holidays)

KEY ACTIONS •  Launch of the new Food

and Health Program at CDM

•  Rollout new curriculum •  Introduce new retail line

KEY ACTIONS •  Align on strategy •  Determine café

operator scenario •  Set fundraising goals

OUTCOME •  New café and menu •  Larger event volume

OUTCOME •  Increased café sales •  Increased revenue –

café, events, retail •  Greater museum traffic


Potential Partners

A number of promising partnerships have been identified that can help make the new Food and Health initiative robust and efficient.

Existing partners

•  Health Trust

•  Kaiser Permanente

•  First Five Santa Clara

County

•  IMLS

New partners

•  ICC Campbell (Culinary School)

•  Veggilution (San Jose urban farm)

•  Café operator (tbd)

•  New cache of funders (social investors, e.g.)

•  New private donors

•  Education foundations of food industry marketing groups (United Fresh, Calif Dairy Association)


Next Steps

Appendix


Café Operating Models: Detail


Funds required: $49,967


•  More events (15)

•  CDM receives about 7% of café revenue

Self-Operated



•  Moderate events (8)

•  CDM receives all café revenue, and incurs all costs; food, labor, supplies,




•  Few events (4)

•  CDM receives $2,400

All Operating Models

•  Food Program Director: total cost $90-$100k

•  Food kiosk: open 200 days per year, total revenue $20k

•  Member café card: 10% discount on prepaid café card, total revenue $10k

•  Birthday parties: 35 per year, with 15 children per party

•  Programming: 80 classes per year; cooking and gardening, children and family

•  (Food) retail: 7% of adult visitors purchasing, average purchase $7

New Models: Operating Capital Required

Needed Grant Funds: Summary Scenario 2 Needed Grant Funds: Summary: Scenario 1 and 3 Revenue Revenue

Education programs (kids cooking ) $11,250 Education programs (kids cooking ) $11,250

Public Programs - family classes (cooking, learning) $45,000 Public Programs - family classes (cooking, learning) $45,000

Field Trips (gardening) $2,500 Field Trips (gardening) $2,500

Total Revenue $58,750 Total Revenue $58,750 COGS COGS

Education programs (kids cooking ) $11,250 Education programs (kids cooking ) $11,250

Public Programs - family classes (cooking, learning) $31,500 Public Programs - family classes (cooking, learning) $31,500

Field Trips (gardening) $875 Field Trips (gardening) $875

Labor, Public Programs (family classes) $3,000 Labor, Public Programs $3,000

Labor, Children's Education (kids cooking) $3,938 Labor, Children's Education (kids cooking) $3,938

Labor, Field Trips $875 Labor, Field Trips $875

Payroll taxes/benefits $2,891 Payroll taxes/benefits $2,891

CDM Food Program Director - fulltime $65,000 CDM Food Program Director - fulltime $75,000

Payroll taxes/benefits $24,050 Payroll taxes/benefits $27,750

Total COGS $143,378 Total COGS $157,078 Total Grant Funds Needed $84,628 Total Grant Funds Needed $98,328

While revenue from new programs will cover a portion of COGS, fundraising will be necessary to fully plan and launch them.

good food is good business / good people are good business...

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