Senior living providers have had to make critical changes to their operations due to the outbreak last year.
Many providers experienced increases in prices and waste costs as a result of the pandemic. Often, revenues plunged in the wake of the pandemic as catering and special event reservations fell silent.
Despite the problems experienced one year ago, senior living dining is still not back to its normal levels, and chefs are far from it. Still, providers are hopeful that conditions will regulate when the industry returns to more stable operations, and they have budgeted for the upcoming year accordingly.
Care providers consider a host of concepts to improve dining room efficiency and make food more palatable for residents. These ideas include implementing robots, doling out meal kits, and starting ghost kitchens and in-house grocery stores.
Revenue and Costs
During the outbreak of the Covid-19 pandemic, dining departments in senior living communities across the country switched from communal dining to offer meals in residents’ rooms on a dime.
Ashleigh Pedersen, Aegis’ enterprise culinary service director, says previously serving food on ceramic plates to residents who ate in a dining room suddenly had to pack orders in disposable take-out containers with disposable cutlery.
According to Executive Chef Dan Galvin from Seattle’s Bayview life plan community, disposables also played a part in the rising costs at the Wake Robin in Shelburne, Vermont. And to-go containers drove up costs. Kate Hays, the Director of Dining Services, describes them as “compostables,” which are food waste and to-go containers taken from the life plan community to be composted, not discarded.
Butler says Kendal’s food costs increased 3.5% last year due to higher prices for meat, eggs, and dairy. That figure dropped to 2% in 2019. A more significant rise in meat prices during the pandemic was partly responsible for the decline.
Despite the economy’s fall in 2020, Kendal’s culinary costs were still down due to the new style of service before the pandemic.
A similar estimate from Bayview’s Galvin indicates that the food costs in 2020 will be about 8% less than they were last year.
Many communities also saw dramatic drops in revenue from dining. Some providers resulted from lower catering and special events, reduced alcohol sales, or the closure of dining venues.
Bayview, for instance, has closed the restaurants on the 10th floor as a result of infection control restrictions. The venue, the Cloud Room, hosted live music, eating celebrations, and other events.
Similarly, Kendal’s dining revenue decreased “to zero” as catering and special events ceased, Butler highlighted.
Residents and their families found it difficult to attend events at Aegis, and the company provided complimentary alcohol services for on-site dining as a gesture of support for them.
Many senior living providers were able to shift business from on-site to in-room dining without raising expenses along the way. One other area in which senior living dining budgets seemed to be spared was labor, as many providers were able to shift their existing departments to operating on-site. Even though some providers had to hire more workers as resident needs changed, they still managed to do so without increasing care costs. For instance, Wake Robin increased employment by hiring additional culinary workers, but they are now working shorter.
A survey was conducted by SHN between March 27 and April 6, 2018, with 22 respondents, and while the sample size is small at 22, it illustrates what the industry will experience in the spring of 2021.
In the survey, almost 32% of the participants stated dining-related costs had increased between 1% and 9% from pre-pandemic levels by 2020. Another approximately 23% reported the same trend with expenses rising between 10% and 20%.
Additionally, almost 18% reported increases in dining-related spending between 1% and 9% compared to before the pandemic.
In a 2010 survey, about 36% of respondents reported that dining-related revenue dropped more than 20% from pre-pandemic levels. Almost 27% of respondents reported seeing no change in dining-related revenue.
Making a budget for the future
The senior living industry is hopeful that the budgets will improve in 2021 and beyond despite significant disruptions in expenses and revenue last year. But this depends on the pace and scope of the extended recovery; the faster the recovery, the earlier the resumption of normal operations.
Almost 41% of SHN survey respondents said that in 2021 their dining budgets would remain the same. Another 27% said they would have 1% to 9% more culinary expenditures, and 14% would have 1% to 9% fewer culinary expenditures.
Likewise, Bayview’s Hays believes that profits will at least be rising in 2021, but labor costs are likely to rise. Aegis still expects increased food costs in 2021, but overall the company’s dining budget will remain consistent.
Despite regularly budgeting for 2021, Kendal is spending this year with a purpose. Butler is already discussing how to incorporate robots that serve food and ghost kitchens into the communities.
During the height of the pandemic lockdown in 2020, the community is focused on building up its revenue by offering the grocery service as a service. Hays recalls that it was not only an essential service but also “a great way to generate revenue.”
Her latest project is to develop ideas for both residents and the bottom line, such as offering meal kits to residents, à la HelloFresh.
To grow your business in the senior industry, Create a free profile on Senior GuidePost. The Industry’s premium resource for Senior communities to find Qualified vendors serving the Senior Industry