Clarion Group Warn Companies and Colleges Food Services to Adapt to the ‘New Reality’ Brought on by the Recession and Its Aftereffects
Kingston, NH, October 27, 2010 --(PR.com)-- “Companies and colleges food services have to adapt to the ‘New Reality’ brought on by the recession and its aftereffects,” says Tom Mac Dermott, president of the food and hospitality services consulting firm Clarion Group. “It will be some years before boom times like 2005-07 return.”
Underlining the change in on-site food service fortunes, a recent survey by the Society for Foodservice Management (SFM) found that 61% of corporate dining services lost money in 2009, including those that were planned to make a profit, compared to 46.5% in 2007.
Factors underlying the new reality include:
Economic uncertainty and high unemployment have inhibited consumers from spending as freely as they once did, including for meals at work or school. The lack of consumer spending also means fewer people are needed to provide goods and services, reducing the number of people at work and available as potential employee café customers.
“The mobility of both employees and students is continuing to increase,” Mac Dermott observed. “Employees working at home or on the road and students taking classes online don’t need meals in the workplace or on campus. Live conference and meting activity is affected by the growth of virtual conferences, webinars and tight travel budgets, meaning less profitable catering revenue.”
The new generations entering college and working their way through the early stages of their careers have very different expectations and lifestyles from their predecessors, the Baby Boomers, he says. “These younger folks have been raised with an awareness of sustainability and related issues since childhood, including the value of local, organic and fresh foods to their own, as well as the planet’s, wellness.”
With a smaller workforce, corporate food service operators need to concentrate on increasing the percentage of available customers who come to the company café for meals, Mac Dermott says. The SFM survey found that only 36% to 38% of potential customers come to the café for lunch, the lowest percentage recorded since the Society began tracking the trend in 1993. Breakfast traffic has dropped to only 22% of potential customers.
“Time and financial pressures have led more people to grab quick meals or snacks at convenience stores, according to market researchers,” Mac Dermott noted. “The on-site operator needs to provide better, and better packaged, grab-and-go foods in a convenient location to compete.”
“A kiosk offering coffee, fresh fruit and breakfast pastries can be strategically placed near the building entrance most employees or students use when coming to work or class. They may find it’s more convenient than stopping at the c-store on the way,” he says.
With an increased concern about wellness in both companies and colleges, the food service operator needs to emphasize the health, nutrition and sustainability of the on-site café.
“This is not an advantage, but a defensive move, as more off-site restaurants and other food outlets promote their fresh, local, organic and healthy foods and conservation policies,” Mac Dermott says. “The operator who doesn’t do the same will lose business.”
There’s also an increased general interest in ethnic dishes, especially Asian and Latin, along with an increase in the number of people from those regions in the workforce and on campus.
“The operator who promotes these foods will benefit, but diners from those regions will know whether your offerings are authentic,” he says. “One way to ensure customers know your ethnic specialties are worth trying is to have a chef from the region at the serving counter, preparing dishes to order.”
“If your dining facility is big and your population is small, it will pay to renovate it to an appropriate size, saving space, energy, labor and other costs,” Mac Dermott says.
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About Clarion Group:
Clarion is an independent consulting firm that specializes in dining and hospitality services for companies, colleges, government agencies and institutions nationwide. For information, contact:
Tom Mac Dermott, FCSI, President
Clarion Group
PO Box 158, Kingston, NH 03848-0158
Tel: 603/642-8011 E-mail: TWM@clariongp.com
www.clariongp.com
Underlining the change in on-site food service fortunes, a recent survey by the Society for Foodservice Management (SFM) found that 61% of corporate dining services lost money in 2009, including those that were planned to make a profit, compared to 46.5% in 2007.
Factors underlying the new reality include:
Economic uncertainty and high unemployment have inhibited consumers from spending as freely as they once did, including for meals at work or school. The lack of consumer spending also means fewer people are needed to provide goods and services, reducing the number of people at work and available as potential employee café customers.
“The mobility of both employees and students is continuing to increase,” Mac Dermott observed. “Employees working at home or on the road and students taking classes online don’t need meals in the workplace or on campus. Live conference and meting activity is affected by the growth of virtual conferences, webinars and tight travel budgets, meaning less profitable catering revenue.”
The new generations entering college and working their way through the early stages of their careers have very different expectations and lifestyles from their predecessors, the Baby Boomers, he says. “These younger folks have been raised with an awareness of sustainability and related issues since childhood, including the value of local, organic and fresh foods to their own, as well as the planet’s, wellness.”
With a smaller workforce, corporate food service operators need to concentrate on increasing the percentage of available customers who come to the company café for meals, Mac Dermott says. The SFM survey found that only 36% to 38% of potential customers come to the café for lunch, the lowest percentage recorded since the Society began tracking the trend in 1993. Breakfast traffic has dropped to only 22% of potential customers.
“Time and financial pressures have led more people to grab quick meals or snacks at convenience stores, according to market researchers,” Mac Dermott noted. “The on-site operator needs to provide better, and better packaged, grab-and-go foods in a convenient location to compete.”
“A kiosk offering coffee, fresh fruit and breakfast pastries can be strategically placed near the building entrance most employees or students use when coming to work or class. They may find it’s more convenient than stopping at the c-store on the way,” he says.
With an increased concern about wellness in both companies and colleges, the food service operator needs to emphasize the health, nutrition and sustainability of the on-site café.
“This is not an advantage, but a defensive move, as more off-site restaurants and other food outlets promote their fresh, local, organic and healthy foods and conservation policies,” Mac Dermott says. “The operator who doesn’t do the same will lose business.”
There’s also an increased general interest in ethnic dishes, especially Asian and Latin, along with an increase in the number of people from those regions in the workforce and on campus.
“The operator who promotes these foods will benefit, but diners from those regions will know whether your offerings are authentic,” he says. “One way to ensure customers know your ethnic specialties are worth trying is to have a chef from the region at the serving counter, preparing dishes to order.”
“If your dining facility is big and your population is small, it will pay to renovate it to an appropriate size, saving space, energy, labor and other costs,” Mac Dermott says.
###
About Clarion Group:
Clarion is an independent consulting firm that specializes in dining and hospitality services for companies, colleges, government agencies and institutions nationwide. For information, contact:
Tom Mac Dermott, FCSI, President
Clarion Group
PO Box 158, Kingston, NH 03848-0158
Tel: 603/642-8011 E-mail: TWM@clariongp.com
www.clariongp.com
Contact
Clarion Group
Tom Mac Dermott
603-642-8011
www.ClarionGP.com
TWM@clariongp.com
Tom Mac Dermott
603-642-8011
www.ClarionGP.com
TWM@clariongp.com
Contact
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