HBM 131 1st Edition Lecture 17Outline of Last Lecture:I. Red Lion Presentation Outline of Current Lecture:I. On-site Food Service Current Lecture:I. On-Site Food Service A. Definition 1. Food outlets in business and industry, schools, universities, hospitals, skilled-nursing centers, eldercare centers, correctional facilities, recreational facilities such as stadiums, and child care centers2. This can include locations where people are at work, play, recreation, school, etc.3. This segment has a long history-it was originally known as “institutional” food service because it was associated with “institutions” such as universities and hospitals. 4. General categories include: (1) Business and Industry; (2) Education; (3) Health Care; (4) Corrections5. The segment was also known as “noncommercial food service” because originally it was operated by the institutions themselves on a break-even basis (without attempt to make a profit)6. It was long operated on the assumption that its customers represented a “captive market”-thecurrent perspective reflects the market more as customers who have choices B. Major Categories1. Airlines/airports2. Businesses and Industry3. Corrections4. Education5. Healthcare6. Military7. Recreation- State parks, Stadiums etc. 8. Vending C. Terms 1. Participation rate (compare with measure used in commercial restaurants)2. Self-op3. Contractor4. Managed services5. Client D. Performance indicators1. Capture/participation rate= the percentage of the potential customers who actually use the services2. Penetration rate: basically it is the same as market share3. Note based on a Food Cost percentage but a cost per person basis-Corrections-Health care-Military-Schools E. Managed service companies1. The “penetration” of managed services companies continues to grow. The penetration rates inthe major market segments is:-B & I: 85%-90%-Colleges and universities: 60%-65%-Health care: 45%-50%-Schools: 20%-25%2. The major companies include ARAMARK(USA), Sodexo (France), and Compass (UK)3. Other companies tend to be smaller, regional operators or operators that specialize in a particular segmentD. Business and Industry1. Business and industry (or business dining) provides food service to company employees2. B & I food service is affected by the size of the work force and the health of the economy (or employment rate)F. Trends in business and industry1. Aggressive marketing2. Organic growth3. More options for diners4. More branded concepts5. Innovative menus6. Grab n’ goG. Trends in colleges and universities1. Healthy segment2. Universities are trying harder to attract nontraditional students3. New brands (Starbucks)4. More choice5. Comfortable/multi purpose dining
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