Saga's 'monopoly': expenses drive student groups away from the new Grewcock union
Saga claims competitive prices; Collegian investigation finds savings elsewhere
Liz Essley
Issue date: 4/16/09 Section: News
Junior Amy Grace Goodrich organized the Student Federation's meet-and-greet in the Grewcock Student Union on March 5. She needed refreshments and bought hot cider and four dozen cookies from Saga, Inc. catering for $68.25. She wasn't happy about the price.
"Literally everyone I know who's organized events in the past with the union has been frustrated with Saga," she said.
As treasurer of the Student Federation, she said the organiza-tion may work on the problem next semester in an effort to get changes made in 2010. Saga's contract comes up for renewal every July, and administrators said they are willing to explore proposals made by students.
The contract is the issue.
By this contract, Saga has exclusive catering rights for Hillsdale College, said Chief Administrative Officer Ken Cole. That means first, that other caterers cannot provide food, and second, that student groups can't bring in their own food - homemade or purchased - to college buildings like the student union.
Goodrich, also the head resident assistant in Koon Residence, once tried to organize a dorm so-cial event with fellow RAs. They wanted refreshments and couldn't use the student union because of the cost for catering.
"We quickly eliminated the union as a gathering place," she said.
Junior Michael Sessions faced similar frustrations. As social chair of Delta Tau Delta fraternity, he organized the group's Christmas party last semester. They spent $450 on food catered by Saga. Sessions obtained a price estimate for the same refreshments from an outside local food provider, and discovered they could have saved between $100 and $150 - about one-fifth their total budget for the party.
"That one-fifth could have gone to more prizes or games," he said.
Goodrich said Student Federation would tackle the rule that prevents students from serving their own food.
"I think Saga does a fine job overall," she said. "My main concern is that students can't bring food in."
If the rule did not exist, Goodrich said she would buy cookies and cider from Kroger, rather than Saga catering. Fifty-four bakery cookies from Kroger cost $17.97, approximately $50 less than what Goodrich paid Saga for the meet-and-greet.
Competitive prices?
But Saga general manager Kevin Kirwan said catering critics "are not informed."
"They don't do catering out and about," he said.
Saga regularly compares their prices with several local catering companies, Kirwan said.
"All of our prices are either at or below our competition in the area," he said. "We review our pricing every year ... I know, because I've been in this business for 37 years, [that] our prices are competitive."
In addition, he said, the quality is better.
But Saga doesn't base its prices on the competition. Rather, Kirwan said, the company deter-mines catering bills based on the cost of the food, the linen it is served upon, fuel that keeps the food warm, transportation, dish soap and the wages for workers to prepare, serve, transport and clean up the food.
Kirwan pointed out an item on Saga's catering menu. "This is basically a three-course meal for $12.95. Does that seem expensive to you?"
As for smaller catering orders, Kirwan said Saga charges about 50 cents per cookie, similar to what shoppers would pay at a grocery store, and 50 cents for a cup of coffee, cheaper than what customers would pay at almost any restaurant.
Others agree concerning Saga's cost and quality.
"Catering means just that: you're being catered to," Cole said, adding that the environment Saga must create explains the price.
"The value's very good here [with Saga]," said Lynn Prough, director of special events for institutional advancement. She often works with other caterers around the country to plan events. She said she pays them a lot more than Saga charges.
But a Collegian investigation revealed that Saga catering charges significantly more than four local caterers (see sidebar). Whereas a fruit and cheese platter for 50 people from Saga costs $197.50, Hillsdale Market House charges $83.50 for a fruit and cheese platter for 50 people. That's a $114 difference.
Saga offers all student groups an unadvertised discount of 20 percent off all catering. In addition, its Web site features a long list of student groups to whom the company has donated food, including sports teams, Greek houses, volunteer organizations, Relay for Life and Hillsdale Christian Fellowship.
But the discount doesn't satisfy Goodrich.
"Any discount they give isn't going to be enough to compensate for their super-high prices," she said. "I think it'd be healthy to have some competition."
Open to change
Cole said he would be open to hearing proposals from the Student Federation for changes in the catering rules, but that he thinks the Saga's exclusive contract ultimately benefits the school.
Since Saga's revenues from all of its operations, including catering, play into how much it charges students for meal plans, Cole said that board costs could go up if groups were allowed to hire other caterers.
"The whole activity allows them to keep a lid on the cost to the college. And that allows me to limit the cost to the students," he said.
He also said liability and health concerns motivated the rule preventing student groups from providing their own food for on-campus events.
"The problem with [changing the rule] is ... with Saga, I know the quality we're going to re-ceive," he said.
But he said he would be more open to reviewing the student's-own-food rule than letting in other caterers. He said bringing in another caterer would not reduce the cost.
Cole did not shy away from calling the exclusivity a "monopoly."
"It is. That's what they have," he said. "I personally don't have a problem with that. Safety is very important to me on that."
De J De Jong, who serves on the Parents Association Steering Committee, sees danger in this approach.
"A monopoly at Hillsdale is not a good business model," he said. "It can bring quality down and price up."
De Jong said he thinks Saga wants to do the best job it can. He said the problem lies more with the business model than the stereotyped "bad Saga." In some respects, he said, Saga's hands are tied by college policies.
De Jong, along with his son, junior Drew De Jong, visited St. Olaf College, in Northfield, Minn., home to food provider Bon Appetit, which receives high rankings from the students it serves. He advocates that the college and Saga remodel their relationship to resemble the Minnesota school and caterer. Bon Appetit receives a bonus by St. Olaf College. If it increases meal participation - that is, the more students choose to eat in the cafeteria, the more profit the caterer makes.
De Jong said the Saga-Hillsdale relationship stems from a different philosophy.
"[Saga is] not incentivized to get participation up," he said.
Bon Appetit board does cost more - about $500 per semester, said De Jong. And any change at Hillsdale would require an effort by students and the college.
"All the bad mouthing about Saga could go away with a little bit of partnership and maybe more money," he said.
Vice President of Administration Rich Péwé said the college has never considered the Bon Appetit model because participation has never been low enough, and student dissatisfaction never high enough, to prompt the college and Saga to consider major changes.
But Péwé, like Cole, said the college could explore the rule concerning students bringing food into the student union. He, too, emphasized the college's liability concerns. The college is responsible for the safety of the food served in its buildings, as well as the clean-up afterwards, he said.
"I think there still needs to be some oversight. So people aren't bringing in fried chicken ... and leaving it all over," he said.
Accountability is key - Péwé said if Saga were to make a mess, he could phone the company and ensure it didn't happen again.
"They consider themselves part of the college community," he said.
Any change to the contract's rules would have be looked at "hard," Péwé said. The college and students would have to consider the benefits and consequences, as well as the financial repercussions for Saga.
"If we start opening the floodgates to that sort of thing, we're going to get some good things with that and some bad things with that," he said.
Copy editor Maria Schmitt contributed to this report.
"Literally everyone I know who's organized events in the past with the union has been frustrated with Saga," she said.
As treasurer of the Student Federation, she said the organiza-tion may work on the problem next semester in an effort to get changes made in 2010. Saga's contract comes up for renewal every July, and administrators said they are willing to explore proposals made by students.
The contract is the issue.
By this contract, Saga has exclusive catering rights for Hillsdale College, said Chief Administrative Officer Ken Cole. That means first, that other caterers cannot provide food, and second, that student groups can't bring in their own food - homemade or purchased - to college buildings like the student union.
Goodrich, also the head resident assistant in Koon Residence, once tried to organize a dorm so-cial event with fellow RAs. They wanted refreshments and couldn't use the student union because of the cost for catering.
"We quickly eliminated the union as a gathering place," she said.
Junior Michael Sessions faced similar frustrations. As social chair of Delta Tau Delta fraternity, he organized the group's Christmas party last semester. They spent $450 on food catered by Saga. Sessions obtained a price estimate for the same refreshments from an outside local food provider, and discovered they could have saved between $100 and $150 - about one-fifth their total budget for the party.
"That one-fifth could have gone to more prizes or games," he said.
Goodrich said Student Federation would tackle the rule that prevents students from serving their own food.
"I think Saga does a fine job overall," she said. "My main concern is that students can't bring food in."
If the rule did not exist, Goodrich said she would buy cookies and cider from Kroger, rather than Saga catering. Fifty-four bakery cookies from Kroger cost $17.97, approximately $50 less than what Goodrich paid Saga for the meet-and-greet.
Competitive prices?
But Saga general manager Kevin Kirwan said catering critics "are not informed."
"They don't do catering out and about," he said.
Saga regularly compares their prices with several local catering companies, Kirwan said.
"All of our prices are either at or below our competition in the area," he said. "We review our pricing every year ... I know, because I've been in this business for 37 years, [that] our prices are competitive."
In addition, he said, the quality is better.
But Saga doesn't base its prices on the competition. Rather, Kirwan said, the company deter-mines catering bills based on the cost of the food, the linen it is served upon, fuel that keeps the food warm, transportation, dish soap and the wages for workers to prepare, serve, transport and clean up the food.
Kirwan pointed out an item on Saga's catering menu. "This is basically a three-course meal for $12.95. Does that seem expensive to you?"
As for smaller catering orders, Kirwan said Saga charges about 50 cents per cookie, similar to what shoppers would pay at a grocery store, and 50 cents for a cup of coffee, cheaper than what customers would pay at almost any restaurant.
Others agree concerning Saga's cost and quality.
"Catering means just that: you're being catered to," Cole said, adding that the environment Saga must create explains the price.
"The value's very good here [with Saga]," said Lynn Prough, director of special events for institutional advancement. She often works with other caterers around the country to plan events. She said she pays them a lot more than Saga charges.
But a Collegian investigation revealed that Saga catering charges significantly more than four local caterers (see sidebar). Whereas a fruit and cheese platter for 50 people from Saga costs $197.50, Hillsdale Market House charges $83.50 for a fruit and cheese platter for 50 people. That's a $114 difference.
Saga offers all student groups an unadvertised discount of 20 percent off all catering. In addition, its Web site features a long list of student groups to whom the company has donated food, including sports teams, Greek houses, volunteer organizations, Relay for Life and Hillsdale Christian Fellowship.
But the discount doesn't satisfy Goodrich.
"Any discount they give isn't going to be enough to compensate for their super-high prices," she said. "I think it'd be healthy to have some competition."
Open to change
Cole said he would be open to hearing proposals from the Student Federation for changes in the catering rules, but that he thinks the Saga's exclusive contract ultimately benefits the school.
Since Saga's revenues from all of its operations, including catering, play into how much it charges students for meal plans, Cole said that board costs could go up if groups were allowed to hire other caterers.
"The whole activity allows them to keep a lid on the cost to the college. And that allows me to limit the cost to the students," he said.
He also said liability and health concerns motivated the rule preventing student groups from providing their own food for on-campus events.
"The problem with [changing the rule] is ... with Saga, I know the quality we're going to re-ceive," he said.
But he said he would be more open to reviewing the student's-own-food rule than letting in other caterers. He said bringing in another caterer would not reduce the cost.
Cole did not shy away from calling the exclusivity a "monopoly."
"It is. That's what they have," he said. "I personally don't have a problem with that. Safety is very important to me on that."
De J De Jong, who serves on the Parents Association Steering Committee, sees danger in this approach.
"A monopoly at Hillsdale is not a good business model," he said. "It can bring quality down and price up."
De Jong said he thinks Saga wants to do the best job it can. He said the problem lies more with the business model than the stereotyped "bad Saga." In some respects, he said, Saga's hands are tied by college policies.
De Jong, along with his son, junior Drew De Jong, visited St. Olaf College, in Northfield, Minn., home to food provider Bon Appetit, which receives high rankings from the students it serves. He advocates that the college and Saga remodel their relationship to resemble the Minnesota school and caterer. Bon Appetit receives a bonus by St. Olaf College. If it increases meal participation - that is, the more students choose to eat in the cafeteria, the more profit the caterer makes.
De Jong said the Saga-Hillsdale relationship stems from a different philosophy.
"[Saga is] not incentivized to get participation up," he said.
Bon Appetit board does cost more - about $500 per semester, said De Jong. And any change at Hillsdale would require an effort by students and the college.
"All the bad mouthing about Saga could go away with a little bit of partnership and maybe more money," he said.
Vice President of Administration Rich Péwé said the college has never considered the Bon Appetit model because participation has never been low enough, and student dissatisfaction never high enough, to prompt the college and Saga to consider major changes.
But Péwé, like Cole, said the college could explore the rule concerning students bringing food into the student union. He, too, emphasized the college's liability concerns. The college is responsible for the safety of the food served in its buildings, as well as the clean-up afterwards, he said.
"I think there still needs to be some oversight. So people aren't bringing in fried chicken ... and leaving it all over," he said.
Accountability is key - Péwé said if Saga were to make a mess, he could phone the company and ensure it didn't happen again.
"They consider themselves part of the college community," he said.
Any change to the contract's rules would have be looked at "hard," Péwé said. The college and students would have to consider the benefits and consequences, as well as the financial repercussions for Saga.
"If we start opening the floodgates to that sort of thing, we're going to get some good things with that and some bad things with that," he said.
Copy editor Maria Schmitt contributed to this report.
Viewing Comments 1 - 1 of 1
Alum
posted 4/17/09 @ 11:26 PM EST
Hey Saga,
Who calls a caterer when they need 4 dozen cookies?
You shouldn't be forcing college students to pay catering prices for quantities and types of food that obviously don't need to be catered!
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