1. Chapter 7
On-Site Food Service

2. ON-SITE FOOD SERVICE
On-Site food service is defined as “operations where food is served outside of the home but where food is not the primary business.”
This can include locations where people are at work, play, recreation, school, etc.
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.

3. ON-SITE FOOD SERVICE
Examples include: (1) Business and Industry; (2) Colleges and Universities; (3) Health Care and; (4) Schools.
These are the four primary segments that we will discuss but there are many other environments where people purchase food service in these types of environments – can you think of some examples?

4. ON-SITE FOOD SERVICE
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).
It was also long operated on the assumption that its customers represented a “captive market.” The current thinking views the market more as customers who have choices.

5. ON-SITE FOOD SERVICE
Some terms that you will need to understand (that are unique to this segment) include the following:
Participation rate (compare with measure used in commercial restaurants)
Self-op
Contractor
Managed services
Client

6. ON-SITE FOOD SERVICE
The reasons that we choose to include this segment in this course is:
The areas that it has in common with other hospitality sectors
The involvement of traditional hospitality companies in management
Its size and scope
The professional opportunities available

7. SELF-OPERATED FACILITIES
Self-ops are food service operations that institutions choose to manage themselves
Historically, before the advent of professional management companies, this was how most operations were managed

8. MANAGED SERVICES COMPANIES
Managed services companies are those companies that specialize in managing food service operations for a third party
Such companies believe that they are able to offer operational advantages to the host company (client) including cost savings, economies of scale, variety of offerings and problem solving abilities (trouble-shooting)

9. MANAGED SERVICES COMPANIES
Managed service companies have been able to develop a network of expertise from managing “accounts” all over the country and the world
They develop managers who are experts in the area
They have support systems, new product development and financial stability

10. MANAGED SERVICES COMPANIES
The “penetration” of managed services companies continues to grow. The penetration rates in the major market segments is:
B & I: 80% – 85%
Colleges and universities: 60% – 65%
Health care: 45% – 50%
Schools: 20% – 25%

11. MANAGED SERVICES COMPANIES
The major companies include ARAMARK, Sodexho, and Compass.
Other companies tend to be smaller, regional operators or operators that specialize in a particular segment (stadium feeding)
Oddly, their names rarely appear in (or on) the facility itself so that the customer sometimes does not know which company operates the food service

12. BUSINESS AND INDUSTRY
Business and Industry (or Business Dining) provides food service to company employees
Business Dining is affected by the size of the work force and the health of the economy (or employment rate)
It has the highest rate of managed service of all four segments.

13. BUSINESS AND INDUSTRY
Food programs have proven to be very important to companies in recent years but…
Companies have reduced subsidies in recent years
Affected by commercial restaurant segment
Many companies specialize in Business Dining such as Guckenheimer and others

14. TRENDS IN BUSINESS AND INDUSTRY
Aggressive marketing
Organic growth
More options for diners
More branded concepts
Innovative menus
Grab n’ go

15. COLLEGES AND UNIVERSITIES
Foodservice on college and university campuses is necessary even if the campus is non-residential
Food services must not only accommodate students but also faculty, staff and visitors
Where “board plans” were once the rule, now there are many options

16. COLLEGES AND UNIVERSITIES
College and university food service is affected by demographics, students living on campus, and food quality, among others
The introduction of brands has been the biggest factor in recent years (national and proprietary)
Most college and university programs are managed by contractors and the penetration rate continues to increase
Some large schools that are still self- operated include Purdue, Penn State, and Michigan State University

17. TRENDS IN COLLEGES AND UNIVERSITIES
Healthy segment
Universities are trying harder to attract nontraditional students
New brands (Starbucks)
More choice
Comfortable/multi purpose dining areas

18. HEALTH CARE FOOD SERVICE
This segment includes hospitals (large and small) and nursing homes
Food had always been important in this environment but has become more important in recent years
The presence of Dieticians makes this segment different
Dieticians are professional qualified individuals who manage the nutritional aspects of food service

19. HEALTH CARE FOOD SERVICE
Hospitals are taking food more seriously as a result of: (1) competition; (2) customer feedback and; (3) becoming more “business like”
Health care has sophisticated facilities and systems as well as unique challenges
Only about 50 % of health care food service facilities are outsourced but increasing

20. TRENDS IN HEALTH CARE FOOD SERVICE
More emphasis on retail
Introduction of brands
Cost reductions – doing more with less
Revenue enhancement (catering, cooking events)
Growth!

21. SCHOOL FOOD SERVICE
School foodservice serves two functions: (1) proving food to school children and; (2) taking care of underprivileged children through federally assisted meals
This is accomplished through subsidies and government food programs
Some systems feed 1 million children a day
Again, participation rates are important

22. SCHOOL FOOD SERVICE Lowest percentage of contractor penetration
Lower profit margins
Specialized market
Large systems (650 schools in Chicago)
Challenges with restrictions and diet

23. TRENDS IN SCHOOL FOOD SERVICE
Lower enrolments
Fighting child obesity
Greater responsibility of food service programs
Growing importance of education
Celebrity involvement