Trends in U.S. Foodservice Contracting


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Trends in U.S. Foodservice Contracting provides insight on opportunities for contractors providing food services to commercial, non-commercial and government locations. We provide in-depth segment analysis for six key market verticals, including market size and forecasting, innovation leadership case studies, and opportunity analysis.

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Trends in U.S. Foodservice Contracting

  1. 1. Trends in U.S. Foodservice ContractingPublished: July 2011No. of Pages: 162Price: $ 3995Unlike restaurants and food retailers, foodservice contractors may not be household names,but they participate in one of the most successful areas of the food and foodserviceindustry. As detailed in Packaged Facts’ Trends in U.S. Foodservice Contracting, we believeits future is bright, forecasting enviable growth in education, healthcare, military, and sportsand recreation markets, with more significant challenges ahead for the business andindustry segment.Trends in U.S. Foodservice Contracting provides insight on opportunities for contractorsproviding food services to commercial, non-commercial and government locations. Weprovide in-depth segment analysis for six key market verticals, including market size andforecasting, innovation leadership case studies, and opportunity analysis.Browse All: Food and Beverages Market Research ReportsThe report also includes thorough competitive analyses of the four major foodservicecontracting players: Aramark Corp, Sodexo Inc., Compass Group PLC, and Delaware NorthCompanies. Each profile analyzes foodservice strategies and innovations, as well as salestrends, by market segment. The report also includes profiles of growing mid-size firms suchas Guckenheimer Enterprises, Inc. Guest Services, Inc. Centerplate, and ThompsonHospitality.While certain aspects of foodservice are common to each market vertical, each presentsunique differences and challenges.• We view K-12 foodservice contracting trends momentum as positive, as foodservicecontractors can leverage the need for money-losing school districts to provide meal serviceoptions that adapt to sweeping health and nutrition-driven regulatory changes. Balancingnutritional requirements with boosting breakfast and lunch participation.• Momentum in college & university foodservice contracting is also positive, driven by amixture of solid fundamental growth metrics and contractor innovation in addressingstudent needs and expectations. To leverage opportunity, foodservice contractors shouldfocus on providing students with flexibility, variety and convenience; healthful andsustainable options; and refashioned dining halls fit for the 21st century.• Healthcare foodservice contracting trend momentum is also positive, as healthcarecontinues to grow revenue and employment while serving an aging population more apt touse its services. While opposition among some members of the hospital foodservice
  2. 2. community is strong, we believe contract relationships built on serving the patient whilecontrolling costs will grow solidly. Foodservice contractors should target the following keyareas for innovation: wellness and nutrition (from targeted menu planning, to rebrandinghealthy restaurant concepts,) customer service, individualized care and room service; andgrab-and-go options.• Corporate foodservice contracting trend momentum is negative. For Business and Industryfoodservice contractors, reliance on larger companies and declining usage providesignificant obstacles to growth. However, solutions abound, from catering to smaller sites totargeting by generation to tapping into wellness. This report frames these “solutions” withrationales and examples.• Military foodservice contractors are on the cusp of significant growth, as the federalgovernment seeks to increase efficiencies and consolidate contracts. This report analyzesthe evolving foodservice contracting relationships and opportunities with the Armed Forces,framed against “trend applications” we believe are important to growing military foodservicesales.TABLE OF CONTENTSChapter 1: Executive SummaryScope and MethodologyScopeMethodologyConsumer survey methodologyMarket size and forecastDefinitionsContent SummaryShare of stomach: foodservice contractor sales analysisK-12 foodservice contracting trendsCollege & university foodservice contracting trendsHealthcare foodservice contractingCorporate foodservice contracting trendsMilitary foodservice contracting trendsChapter 2: Share of Stomach: Foodservice Contractor Sales AnalysisIntroductionPackaged Facts foodservice contractor market size & forecastGraph 2-1: Foodservice Contracting Sales, 2007-2012Bundling servicesA significant strategic shiftRevenue among “Big Three” foodservice contractors surgesTable 2-1: “Big Three” Foodservice Contractors, U.S. Contracting Revenue, 2009-11Segment analysisCorporate and education markets dominate contract shareGraph 2-2: Foodservice Contract Management Contract Share, by Market Segment, 2010Sales segmentationSegment sales trendsGraph 2-3: Foodservice Contracting Sales, by Segment, 2007-2012B&I more sensitive to macro-trends than education and healthcareGraph 2-4: Foodservice Contracting Sales, by Segment, Percent Change, 2007-2012Education foodservice contractingK-12 foodserviceCollege and university foodservice
  3. 3. Summary growth analysisGraph 2-5: Education Foodservice Contracting Sales, 2007-2012Healthcare foodservice contractingSelf-managed hospital foodservice still holds swaySummary growth analysisGraph 2-6: Healthcare Foodservice Contracting Sales, 2007-2012Business & Industry foodservice contractingSummary growth analysisGraph 2-7: B&I Foodservice Contracting Sales, 2007-2012Military foodservice contractingGraph 2-8: Military Foodservice Contracting Sales, 2007-2012U.S. Army generates highest percentage of revenueSodexo receives highest percentage of revenueTable 2-2: Top Five Military Foodservice Contracting Agencies, 2010Recreation and amusement foodservice contractingGraph 2-9: Sports & Entertainment Foodservice Contracting Sales, 2007-2012Chapter 3: K-12 Foodservice Contracting TrendsMomentum analysis: positiveGovernment budget constraints a mixed blessingCacophony of K-12 foodservice attention to shield it from budget axeBottom line: enter contractingPositive macrotrend: EnrollmentTable 3-1: PK-8, 9-12, and PK-12 Enrollment Trends, 2007-17Macro-trend application: health and wellnessNational School Lunch Program & Breakfast Program: scope of coverageNutritional requirementsParticipationProgram costsAdapting to government-driven health changesTask Force on Childhood ObesityTargeting food contentStrengthening legislationAdapting to the Healthy, Hunger-Free Kids ActFood waste and funding issues may stifle possibilitiesIncenting breakfast useProgram availability reduces tendency to skip breakfastConvenient breakfast options increase participationK-12 foodservice innovation case studiesContracting success: District of Columbia Public SchoolsThe perfect candidate: A debt-ridden school district in needRevamping menusRedesign by ChartwellsSchool innovation: San Francisco Unified School DistrictTable 3-2: San Francisco Unified School District, by the NumbersStudent Nutrition ServicesElectronic POS system in placeSlow food pilot programNutrition initiatives: local, whole grains, and “featured” fruits and vegetablesTable 3-3: San Francisco Unified School District,Food Service Menu HighlightsPortability innovationTable 3-4: San Francisco Unified School District,
  4. 4. Grab n Go Breakfast Program, by the NumbersSuper Choice menu rollout to bridge income-related issuesSalad bar implementationOther initiativesChapter 4: College & University Foodservice Contracting TrendsPostsecondary foodservice contractor momentum: positiveAddressing student needs and expectationsHealthful offerings and technology provide drawsTable 4-1: Food & Foodservice Attitudes & Behaviors: All Users, Students & CollegeFoodservice Users, 2010Build flexibility, variety and convenience into meal planGrab and go flexibilityLate night flexibilityProvide healthful optionsAddress food allergiesLeverage social mediaInform and communicateObtain feedbackReinvent the dining hallGuest traffic driversTable 4-2: Mean Restaurant Usage in Last Month, by Restaurant Type, 2010, by AgeOn-campus dining still lags the offsite competitionRamp up entertainment valueFoodservice contractors partners in remodelingInnovate with own-brand restaurant conceptsPractice sustainabilityTrayless and to-go cupsUniversity of Colorado at BoulderUniversity of MassachusettsUniversity of Texas at AustinChapter 5: Hospital Foodservice Contracting TrendsHospital Foodservice contractor momentum: positiveContractors to benefit from budget pressuresPositive macrotrend: government fundingPositive macrotrend: aging populationTable 5-1: Population Projection, Age 65+ and Age 85+, 2010-2025Positive macrotrend: inpatient and outpatient guest footprintsTrend application: wellness and nutritionHealthy hospital foodservice: pro and conPros to healthier hospital foodserviceCons to healthier hospital foodserviceWellness and nutrition initiatives on the upswingMenu strategy: disease-specific menusMenu strategy: probiotic menusRestaurant strategy: branding healthThe dilemma30,000 McDonald’s in the U.S. but only 32 in hospitalsThe bottom line: healthy brands have room to growBranding health innovation snapshot: Mayo ClinicCustomer service, individualized care & room serviceCustomer service
  5. 5. Room service and individualized patient carePersonal dining care, on demandJohns Hopkins HospitalRonald Reagan UCLA Medical CenterHybridizing room service and retailThe need for speed and convenienceExamples: Mayo Clinic, Childrens Hospital of Philadelphia, UCLA Medical CenterGrab and go!Minimizing disease transmission at expense of self-serviceSustainability and green initiativesExamples: Mayo Clinic Arizona, ARAMARK and AVI Food SystemsVariety and culinary explorationVarietyExamples Central DuPage Hospital, Mayo Clinic, UCLA Medical CenterCulinary explorationExamples: Mayo Clinic and Cleveland ClinicChefs on boardExample: Tyson Food ServiceSpecial discounts and incentives to dine in the hospitalExample: Grant Medical CenterVisual stimulationDriven by restaurant competitionExamples: Barnes-Jewish Hospital, Northwestern MemorialFood as visual stimulationFoodservice innovation profile: Cleveland ClinicPatient profileTable 5-1: Cleveland Clinic, Demographic Data, Treated DiabeticsFoodservice programs and servicesMultitude of dining optionsOusting chainsPizza Hut leaves; McDonalds staysManagement split between Sodexo and AVI Food SystemsRoom service an extra: get a Founders SuiteFoodservice growth trendsEmerging trends2009-10 foodservice initiativesFuture initiativesChapter 6: Corporate Foodservice Contracting TrendsFoodservice contractor momentum: negativeChallenge: reliance on larger companiesChallenge: declining usageMeal participation declinesLunchBreakfastChallenge: brown baggingBrown bagging trend maintains momentum through 2010Creating downward pressure on corporate foodserviceSolution: cater to smaller sitesEurests Simply Puur café conceptWhole+Sum menuSolution: target by occupationConsumer research suggests that food attitudes vary widely by occupation
  6. 6. SnackingMeal timesFast foodTable 6-1: Selected Food Attitudes, Full-Time On-Site Fortune 500 Employees, byOccupation, 2010Menu selection by occupation application: NASA Jet Propulsion LaboratoryVarying menus by occupation and locationSolution: target by generationThe Millennial issueSolution: tap into wellnessA trend on the riseTable 6-2: Wellness Program Benefit Access, 2000-2010Healthy food promotion policies nearing majority statusApplication: AramarkSustainable and localApplication: Thomas Cuisine ManagementApplication: Whitsons Culinary GroupApplication: Cerner CorporationApplication: Hallmark CardsApplication: NBC UniversalApplication: Guest Services, Inc.Going trayless to reduce portion sizeSolution: adapt to restaurant competitionFamiliarity and ease of use drive restaurant decisionConvenience is KingAmong restaurants, convenience comes in many formsFor employees, what does it mean?Restaurant density analysis provides insightExample: Aon CorporationDeveloping the foodservice retail spaceApplication: MicrosoftThe Commons: the future of corporate foodservice?Application: Cerner CorporationAramarkOnsite brandsExample: SodexoExample: Thomas CuisineExample: Whitsons Culinary GroupMicrosoft builds “local brands”Leveraging celebritySolution: leverage cost advantageAverage guest check trendsEmployment site examples: Whitsons Culinary GroupLunchBreakfastCorporate foodservice can leverage pricing advantageDatassential MenuTrends Direct menu pricing analysisTable 6-3: Average Entrée Price, Breakfast and Lunch Dayparts, QSR, Family Midscale, andCasual Restaurant Segments, 2008-2010And increase supply volumeSolution: reinvent menusValue meal approaches: Compass & Thomas CuisineSuccess story: Hallmark
  7. 7. Success story: MicrosoftThe Commons hits some important notesMenu variety initiativesWhitsons Culinary Group: One contractor; a variety of menu conceptsSodexo sees promise with international cuisinesA variety application: MicrosoftA variety application: Jet Propulsion LaboratoryStarbucks headquartersSolution: adapt to break time and meal timeHours of operationTiming meals: an hour-by-hour analysisWorker break spontaneityEmployee camaraderie & moraleTeaming up to slim downFlik melds food & atmosphere to enhance social responsibility & camaraderieFoodservice as oasis where people want to come to relaxSuccess story: 30 RockSolution: reduce costsReducing labor costsService and portability as means to cut costsExample: Whitsons Culinary GroupExample: Thomas CuisineExample: SodexoChapter 7: Military Foodservice Contracting TrendsMilitary foodservice contractor momentum: positivePositive macrotrend: employment trendsPositive macrotrend: domestic military spendingGraph 7-1: Department of Defense Budget, 2001-2012Contractor analysis: U.S. Marine Corp.Sodexo’s military foodservice leadershipRGFSC IRGFSC I consequencesRGFSC IISodexo’s contract halved into twoSuperior Services picks up other halfTable 7-1: U.S. Marine Corps RGFSC II Foodservice Contract, Selected MetricsContractor Analysis: Air Force Food Transformation InitiativePutting it in perspective: 91 million meals per yearBringing food service into the 21st centuryARAMARK gets the nodExpected improvementsAlaska base sees significant changeAir Force already weighing benefitsBottom lineTrend application: feed the family, not just the soldierFamily members substantially outnumber service membersTable 7-2: Ratio of Family Members to Active Duty Service MembersArmy breakdown: lots of kids!Trend application: give them a reason to stay on the baseRemember! Most Army members live off-postTable 7-3: Places of Residence of Active Duty SoldiersRemember: military members prefer off-site food options to on-site options
  8. 8. On-post vs. off-post food & beverage services comparisonTable 7-4: Comparison of Quality of On-Post and Off-Post Food and Beverage Services,On Post versus Off PostDining preferences, by daypart and by service optionTable 7-5: Frequency of Meals Eaten Out, Taken Out or Ordered In, by Daypart &Restaurant Service TypeRemember: borrow liberally from off-site foodservice options and atmosphereMarine Corps takes a few pages from college campusesCamp Lejeune borrows from Colorado State UniversityRemember: Leverage restaurant branding opportunitiesRevenue and brand analysis: AAFES ExchangeTable 7-6: AAFES Retail and Concession Sales, 2007-2009Growing restaurant operations1,600 restaurants and countingTrend application: adapt to health & nutrition initiativesMilitary not immune to obesity epidemicA significant military medical concernMenu changes galoreChange in the wind: Army Meal KitsChange in the wind: Army Soldier Fuelling InitiativeChange in the wind: Health educationMarine Corps FUEL For LifeJCCoE Goes for GreenTrend application: respect the environmentMarines lead the chargeMarine Corps base goes greenAramark CorpFoodservice operationsChapter 8: Competitive Profile: Aramark CorpFood service sales analysis: 2011Food service sales analysis: 2010Food service sales analysis: 2009North America Business and Industry SectorSales analysis: 2009-11Vending & Office Refreshments OperationsOn-Site FoodserviceEvent CateringStrategy: Workplace Productivity, Value-Added Services, Contract DesignWorkplace ProductivityValue-Added ServicesContract DesignNorth America Education SectorSales analysis: 2009-11K-12 Education OverviewSchool Meal ProgramsExpanded Meal OpportunitiesNutrition EducationK-12 Strategy: Health & Nutrition, Boosting Student Participation, Age DifferentiationHealth & NutritionBoosting Student ParticipationAge-Segmented Dining BrandsHigher Education Overview
  9. 9. Residential FoodserviceFood Courts & Snack BarsConvenience Stores & VendingHigher Education Strategy: Green Thread Program, Health, TechnologyGreen Thread ProgramHealthTechnologyNorth America Health Care SectorSales analysis: 2009-11Patient foodserviceRetail foodserviceFacility servicesStrategy: partnering in patient care, custom menus, brandingPartnering in patient careCustom menusBrandingNorth American Sports and Entertainment sectorSales analysis: 2009-11Summary sales analysisTable 8-1: Aramark by the Numbers, 2008-2011Sodexo Inc.North American Corporate FoodserviceChapter 9: Competitive Profile: Sodexo, IncSales analysis: 2009-11Cafes, Retail BrandsCateringOffice RefreshmentCorporate Foodservice Strategy: Sustainability, Celebrity Chef Partnerships, EmployeeHealthEmployee HealthCelebrity Chef PartnershipsSustainabilityWork/Life BalanceNorth American Education FoodserviceSales analysis: 2009-11K-12 FoodserviceSchool Lunch ProgramsAge-specific dining programsChildhood hunger programsNutrition EducationHigher Education FoodserviceResidential FoodserviceRetail FoodserviceConvenience Stores & VendingEducation Foodservice Strategy: Student Board of Directors, CustoMenu, AutonomyStudent Board of DirectorsCustoMenuAutonomySodexos Retail Brand GroupPandini’sJazzmans Café and BakerySalsa Rico
  10. 10. Original Burger CompanyMein BowlBruegger’s Bakery Café licensing agreementMarket Trends and Sodexo ResponseObesity and HealthGlobalization and DiversitySustainabilityNorth American Health CareSales analysis: 2009-11North American Health Care FoodservicePatient dining servicesVisitor & staff dining servicesRetail foodserviceHealth care foodservice strategy: high-value custom offerings, nutrition servicesHigh-value custom offeringsNutrition ServicesMarket trends & Sodexo responseHealth care expendituresPatient consumerismShortage of health care personnelSummary sales analysisTable 9-1: Sodexo by the Numbers: 2008-11Compass Group PLCCompass Group North America (CGNA)Chapter 10: Competitive Profile: Compass Group PLCAcquisitionsSales summaryFoodservice strategyRoom for growthIt Takes You - Eat LocalLeveraging role of single-source providerSelective acquisitionsNorth America Business & Industry SectorCorporate DiningPremium/Executive DiningCatering and Event ServicesVendingStrategyFocused Promotions and Value OfferingsKimco & Cross-SellingNorth America Education SectorK-12 DiningPrivate SchoolsHigher EducationEducation StrategyHealth & WellnessCampus CommunityDining ProgramsNorth America Health Care SectorPatient FoodserviceSenior Living FoodserviceRetail Foodservice
  11. 11. Support ServicesStrategyPersonalized CareRetail BrandingRetail StrategySports & RecreationSummary sales analysis2010 sales on the upswingTrend continues into 2011U.S. operating segment performanceTable 10-1: Compass Group by the Numbers: 2009-11SubsidiariesDelaware North CompaniesSegmentsRecent performanceChapter 11: Small & Midsize Corporate Foodservice ContractorsSportserviceRecent activityGaming Hospitality GroupRecent activityTravel Hospitality ServicesRecent activityParks & ResortsRecent activityDelaware North Companies BostonCenterplateRecent activityGuckenheimer Enterprises, Inc.Table 11-1: Guckenheimer Enterprises, Inc., Selected MetricsGuest Services, Inc.Table 11-2: Guest Services, Inc., Selected MetricsThompson HospitalityTable 11-3: Thompson Hospitality, Selected MetricsAVI Food Systems, Inc.Table 11-4: AVI Food Systems, Inc., Selected MetricsCulinArt, Inc.Table 11-5: CulinArt, Inc., Selected MetricsAbout Us:ReportsnReports is an online library of over 100,000+ market research reports and in-depthmarket research studies & analysis of over 5000 micro markets. We provide 24/7 online andoffline support to our customers. Get in touch with us for your needs of market researchreports.Follow us on Twitter: Facebook Page:
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