"Corporate food service operators are facing a slow-motion crisis. Technology is enabling companies to reduce headcount in their offices, factories, and other workplaces," says Tom McDermott, principal at the Clarion Group.

According to Tom, there are several challenges a corporate food service operator has to overcome. One of the biggest issues is the declining factory and office workforce. "As companies have become more efficient and obviously more cost-conscious, the number of people served by the onsite food service has declined," says Tom. "The other factor that has gone into it is the ability of people to work remotely. We also see on Fridays that the number of people coming in is reduced from the prior days."

"In addition, there has been a great increase in the number of people who bring their meals for both economic reasons to save money and because of health consciousness," Tom continues. "They are concerned that the food they can eat in the cafeteria is not as healthy as the food they bring from home. For example, in a survey we just completed of a 7,500 people office complex, 37% of everybody there brought their lunch from home and the result is the food service operation is diminished."

In many cases facilities were designed to serve more people than they currently serve, so it takes more labor to serve the smaller number of people.

A second issue is the health and wellness trend. "The operator has to be able to demonstrate they are using local food, preparing it freshly on-site, and the meals they prepare are healthy. They have to promote that. They also have to stage marketing and promotions that will draw people in. Operators can no longer just turn on the lights and expect people to come."

Tom suggests that one of the best ways to show your food is healthy is to bring the cooking out of the kitchen and into the front counter with demonstration cooking. When you go to exhibition cooking on the line, you reduce your need for kitchen personnel tremendously. An interesting statistic I had found is that about 30% of the payroll of the typical corporate food service is culinary - the chefs and cooks helpers. They generate about 15% of the sales. So every hot meal you sell in a conventional way is being sold at a loss. When you go to display cooking you reduce your labor costs by 15 to 18%. You also reduce your food costs because there is no waste. If you haven't sold it, then you don't cook it."

Price is also an issue. Tom continues, "in the corporate market, an operator has to be able to operate very efficiently as customers expect that prices will be below what they are on the street."

Tom shares what he believes is on the horizon. "When designing new facilities, we are looking at a considerable reduction in the space involved and a much more customer-focused type of operation. For example, instead of having one huge cafeteria, there may be one central facility that is relatively small and several kiosks scattered at various points in the building where people gather. When you have the new open type office where people work in collaborative groups, you need to bring the food close to them."

For more information on Intellaprice or to contact Tom McDermott, www.clariongp.com

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Special Report: Challenges To Corporate Food Service
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