Cracking the School Lunch Problem

NEW YORK (TheStreet) -- Debbie Blacher, co-founder of Wholesome Tummies has big dreams for her healthy school lunch delivery business.

While she isn't the first person to come up with the idea of breaking into the $42-billion national school foodservice market with healthier offerings, she does see opportunity in franchising the concept, while at the same time creating a national group of like-minded social entrepreneurs.

Childhood obesity rates have skyrocketed over the past 30 years, with one third of American kids either overweight or obese, the former human resources executive says.

First Lady Michelle Obama launched the Let's Move initiative in 2010 to combat the childhood obesity problem at the national level, with one leg of the initiative to provide healthy foods in school.

Even with the recent statistics by the CDC citing small improvements in the childhood obesity rate, healthy eating habits at the school-age level must be reinforced. Blacher says her company and others, like Wholesome Tummies, are working to solve that problem by serving fresh, nutritious offerings to students and faculty.

Started in 2007 by two moms who saw a need for healthier food offerings in their kids' schools, the Orlando-headquartered delivery service started franchising in 2010. Today it has 18 locations, serving close to 100 schools, with plans to reach 25 units by the end of the year.

Sales have doubled every year since its founding. Following the 2013-2014 school year, the company expects system-wide revenue to reach $5 million.

"More often than not, you've got parent frustration with the lack of healthy choices," Blacher says. "It's an opportunity for us to come in and really make a difference at the school level." (Blache's former partner Samantha Gotlib has left the company to pursue other interests.)

Eventually, the goal is for Wholesome Tummies to have 250 franchised locations, 2,000 school contracts and system-wide sales of $200 million.

Right now, Wholesome Tummies primarily works with private schools and is starting to expand its reach to charter schools and some public schools. Franchisees contract with schools, and just like with any outsourced school meal, parents opt in to the service and place orders for their kids through its Web site.

The franchisee receives orders and prepares meals fresh each day in a commercial kitchen. Meals are then delivered to school in time for lunch or served right on campus in schools with on-site kitchens.

But entering the school-lunch market isn't easy. Wholesome Tummies is no doubt a small fish in a competitive industry, where large food services corporations like Aramark, Sodexo North America, a division of the France-based conglomerate Sodexo and Chartwells, a division of U.K.-based Compass Group, have big stakes in the public and private K-12 and higher education food service market.

But even amongst smaller companies, Wholesome Tummies is up against a handful of players that have also seen the dollar-sign potential for providing more nutritious and better quality school food.