‘New’ marketing idea: cheap, healthy, simple – business and industry food service – Forecast & Trends
Business and industry
`New’ marketing idea: Cheap, healthy, simple
Foodservice managers at the nation’s offices and factories are grappling with the effects of widespread layoffs and budget cuts by sharpening their focus on new merchandising concepts.
Both contractors and self-operators say B & I will unveil proprietary culinary marketing programs, adopt nationally known fast-food brands, trim both kitchens and menus, and develop retail outlets such as convenience stores and takehome food shops.
“In the midst of `R’ word [recession], B & I will be one of the toughest foodservice categories in which to work,” predicted Neil Reyer, vice president of dining and travel for Chemical Bank in New York. In fact, Reyer was recently forced to shutter two of his cafeterias because of a combination of layoffs and commercial competition.
“Basically, I see the whole segment as having flat sales,” stated Harold Ritchie, president of Ritchie & Associates, a Winnetka, Ill.-based consulting firm. Before establishing his own operation, Ritchie had served in the sales and marketing division with Chicago-based Canteen Corp. for 16 years. “And the ones that say they’re keeping steady sales are actually just losing business at a slower rate.”
The National Restaurant Association forecasts the part of the B & I segment that is under contract will hit $5.5 billion in sales in 1991, an increase of just 2.4 percent compared with 1990. For self-operators, the NRA forecasts revenue will dip 5 percent, to about $2 billion.
Small, regional contractors appear to be making some of the biggest inroads, according to the Society for Foodservice Management, a 1,300-member organization consisting of B & I operators and suppliers.
Regional contractors like the New York-based Flik International and Creative Gourmets in Boston are among the most successful second-tier players in the sector.
“We’re seeing more companies with internally run food-service programs turning toward the midscale contractors,” said Claudia E. O’Mahoney, executive vice president of SFM.
Yet whether a company’s dining facilities are self-operated or contracted, the common denominator with regard to B & I food trends will be a return to basics.
“I see B & I food fitting into three categories this year and in the near future,” Reyer said. “Price, health and simplicity. Ethnic foods will play a more important role in menu offerings–especially Mexican food. In a few years Mexican food will be thought of in the same light as Italian food was 15 years ago. Now Italian food is really not perceived as ethnic.”
Ritchie contends that B & I’s traditional reputation of the five-entree, five-vegetable menu is a thing of the past.
“Today maybe you’ll see a maximum of two entrees,” Ritchie said. “The segment staples, like beef stews, macaroni and cheese and basic meat and potatoes, will be making a quiet comeback. Meanwhile, both the kitchens and the menus will become smaller as both the labor force and the customer counts are reduced.”
More and more B & I contract feeders, such as Service America and Marriott Food & Services Management, are entering into franchising agreements with national fast-food brands. Mrs. Field’s Cookies, I Can’t Believe It’s Yogurt and Sbarro’s are among the newcomers to B & I.
Other contract feeders are establishing their own proprietary lines of cuisine and spinning them off as modular food concepts. ARA’s “Itza Pizza” and “Allegro’s” and Canteen’s Saturn II program are among the leaders.
Bill Lembach, director of foodservice for Eastman Kodak, in Rochester, N.Y., sees operators going beyond just feeding clients at meal periods.
“More B & I feeders will attempt to capture the employees’ business as they leave the building in addition to having them dine on premises,” Lembach said. “At Kodak we’ve set up a series of retail operations like bakeries and heat-and-serve entrees prepared by the cook-chill method. Many of our employees come from two-income families, and they don’t have time to prepare dinner. I’ve seen several operators rolling out similar programs.”
Joe DeScenza, vice president of food and travel for Banker’s Trust in Jersey City, N.J., said in the long run, a recession might actually be a boon — especially to B & I feeders with “white-collar” accounts.
“When a company goes on austerity, the first thing it cuts out is the travel & expense budget,” explained DeScenza. “However, company cafeterias and dining rooms are not necessarily considered part of T & E expenses. So you may actually pick up a larger percentage of loyal diners.”
DeScenza said that in one of his accounts, he has discontinued the practice of supplying free lunches for the investment traders, opting instead to install a 200-square-foot C-store concept titled “Morsels.”
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