When the University of Maine System switched last March to remote learning for the rest of the spring semester because of the coronavirus pandemic, food service company Sodexo lost most of its Maine campus business overnight.
Only 100 students with meal plans remained out of the usual 1,300 residents on the University of Southern Maine’s Gorham campus. Communal dining in the cafeteria stopped. Tables topped with overturned chairs were pushed to the corner, and food stations with pizza or salads gave way to a small kiosk with prepackaged grab-and-go meals as Sodexo worked quickly with the university to get safer service in place. Another eight smaller coffee shops around the USM campus that it ran closed.
Challenges like Sodexo’s rippled throughout the country’s food supply chain as the pandemic disrupted the delicate balance of supply and demand. Abrupt closures of restaurants and corporate and school cafeterias rippled down the supply chain from companies like Sodexo to its suppliers. Service changes like the move to digital pre-ordering and grab-and-go food may be here to stay as their flexibility becomes more popular among customers.
The company, which provides food and cafeteria service to 12 university campuses in Maine, saw student customers and revenue both drop by 90 percent from last March through August, Tadd Stone, general manager at Sodexo in Portland, said. It laid off about 80 percent of its full-time employees at the time. The Maryland-based company, which also services hospitals and corporate dining customers, has 470,000 employees, 760 of them in Maine.
“The most difficult part was that the information at the beginning of the pandemic was ever-changing,” Stone said. “So we were trying to build standards around information when we didn’t have the full picture.”
Depending on how fast the economy bounces back and whether the virus recurs in some form, it could take up to four years for the U.S. food service industry to recover, according to a McKinsey & Co. report. Houston-based food distribution company Sysco, which provides food to Sodexo and others, reported a 43 percent drop in U.S. sales from April to June of 2020.
To be able to afford feeding so many fewer students, Sodexo and USM worked out a temporary contract under which the university paid for food and the cost of Sodexo staff salaries and benefits. Stone said the company was only breaking even that way, but it allowed employees to keep working as much as possible.
The new arrangement also has helped the university reduce its costs, David Roussel, USM’s associate vice president for student affairs, said. Sodexo also was able to provide meals to students in quarantine, delivering food to their room on campus or in a hotel.
The food service company was able to bring back about 70 percent of its staff in the fall semester when the resident students on meal plans rose to 700 people, Dan Roy, Sodexo’s district manager, said. Roussel said about 40 students at a time can sit in the Gorham cafeteria now. Others use the grab-and-go service.
Sodexo also rolled out an app called Bite U that ties into its online production system and daily menu and lets students preorder and customize their meals to an extent. Mobile ordering services have grown quickly during the pandemic, catering to the lifestyles of tech-savvy students, according to Food Management.
Another trend is demand for smaller, pop-up restaurants around campus. That already was happening in the small coffee shops in the school library and elsewhere around campus, but the pandemic accelerated the trend at USM and other universities, Roy said. He expects more kiosks to be set up around campus.
“Students can get different dining experiences throughout the campus and not necessarily have to go sit in a specific cafeteria,” Roy said. “I can see where you might have a food truck or a woodfired pizza oven trailer in an athletic parking lot or a high-traffic parking lot.”
Roy said Sodexo did not run into food shortages during the pandemic because it is a national company and works with large distributors including Sysco. But it also has been promoting a program to buy more foods locally, and spent $1.6 million on Maine-sourced produce, seafood and meats in 2019. That dropped to $300,000 in 2020, but Roy expects to see the amount bounce back as more students return to school.
At least one local food company in the Sodexo program, Heiwa Tofu of Rockport, sold more food during the pandemic by expanding other businesses. When the pandemic hit, tofu stock initially piled up, said owner Jeff Wolovitz. Tofu is premeasured into specific sizes for restaurants, food service and retail, so extra in one market is not easily sold into another.
The company found high demand from retail buyers such as supermarkets and restaurants as they began reopening and a national competitor stopped shipping to New England, he said. Sales in 2020 rose 50 percent over 2019.
As students return to campus, his food service business is returning slowly as well. But he plans to keep growing the newer retail business.
“For me, staying diverse and robust is key,” Wolovitz said.