Lunch dominant daypart, but slipping in schools

Lunch is big business for non-commercial foodservice, according to The Big Picture. All but one respondent serves lunch. For locations that serve lunch but not dinner, lunch makes up 76% of an operation’s total business. Lunch drops to 51% of total business in operations that serve dinner and lunch. Lunch is the smallest portion of total sales for nursing homes/long-term care/senior living (39%) when compared to other segments that also serve lunch and dinner.

For some markets, the biggest business daypart is getting bigger. Hospitals (62%), colleges (57%) and B&I (52%) all report lunch participation growth in the past two years.

“We’ve seen an increase in our patient volumes and in the hiring of additional physicians, which has contributed to more lunch business,” says Lynne Miller, director of nutritional services at Grand River Health, in Rifle, Colo. “We actually also get a large number of community members who dine with us. About 50% of our foodservice business comes from lunch, and I’d say about 10% of that comes from community members.”

Miller expects lunch participation to increase. “We are in a very rural area and there are not a lot of fresh food eateries around, so I think our amount of community members coming in to dine with us will continue to increase,” she says.

An increase in customer base is also responsible for the boost in lunch participation at the W. K. Kellogg Foundation, in Battle Creek, Mich., according to David Freeman, foodservice director for Creating Dining Services. Lunch accounts for 80% of the location’s business. Freeman was concerned that a push for breakfast sales might negatively affect his lunch daypart. But so far, that hasn’t happened. 

“We serve a continental breakfast Monday through Thursday,” Freeman says. “We introduced hot breakfast on Fridays with the understanding that perhaps our Friday lunch business would decrease, but that has not been the case.”

Susan Anderson, food service manager at the University of Wisconsin-Baraboo, says for many college students lunch is breakfast, which accounts for the daypart’s popularity for C&U operations. (Lunch makes up nearly 50% of total business in colleges that serve both lunch and dinner.) Since Wisconsin-Baraboo is a commuter school, Anderson says lunch plays an even larger role.

“We keep trying to entice more breakfast eaters, but most of our commuters have already eaten by the time they arrive on campus,” she says. “We have plans to add our first dormitory, which I think will increase our business.”

Long-term care, however, bucks the trend of lunch being the most important meal of the day (38%). 

Sherry Hicks, foodservice director at Brookhaven Retirement Community, in Brookville, Ohio, says lunch only accounts for 10% to 15% of her business. “I’m in charge of the independent resident side, and though lunch participation has increased in the past two years, due to the dining room becoming more like a restaurant, our residents are much more likely to dine with us for breakfast and dinner,” Hicks says. “A lot of the residents eat breakfast at 8 or 8:30 [a.m.] and then dinner at 4 or 4:30 [p.m.] and that’s their day.”

Lunch suffers in schools

According to The Big Picture, 46% of schools report that their lunch participation has decreased in the past two years. Some operators place the blame on the new school meal pattern.

“Our lunch participation has decreased, and we attribute that somewhat to the changes in the meal pattern, but also to the restrictions on sodium, the increase in whole grains and just bad press in general for the new meal pattern,” says Paige Holland, school nutrition director for Habersham County Schools, in Clarkesville, Ga. “Meal prices are also going up, due to regulations and rising food and labor costs, and typically when meal prices go up, participation drops.”

Though most school operators surveyed (37%) think that lunch participation will increase in the next two years, Holland, along with 17% of school operators aren’t as optimistic. 

“I think the new school regs will continue to impact participation, especially if the 100% whole-grain requirement and the protein and grain restrictions are put in place next year,” Holland says.

Lunch Lessons

Only two in 10 operators saw a drop in their lunch business in the past two years. Schools, however, were significantly more likely than other segments to report a drop in lunch business (46%). Conversely, four out of 10 operators saw an increase in lunch business in the past two years. Contract-managed accounts were significantly more likely than self-operated locations to have a boost in lunch business (53% versus 40%). 

For those locations that saw an increase, the average boost was 20%. Operations with annual food and beverage purchases of less than $1 million were significantly more likely to report a higher percentage of lunch growth (24%) than those with larger purchases (13%). The average drop in lunch business was 11%. Contract-managed accounts reported a significantly higher drop in lunch sales than self-operated locations (21% versus 9%). 

Few Expect Lunch Business to Drop

Only 6% of operators, virtually all of them schools, expect to see a decrease in their lunch business in the next two years. Seventeen percent of schools anticipate a drop in lunch sales in the next two years compared to less than .05% of the remainder of the industry. B&I (71%), colleges (61%) and hospitals (64%) are significantly more likely than other segments to expect an increase in the next two years in lunch. Contract-managed accounts expect more business in lunch in the next two years than self-operated locations (63% versus 46%). Nursing homes/long-term care/senior living are significantly more likely to expect a flat lunch business in the next two years (61%) compared to other segments (38%). 

The percentage of operators who expect an increase in lunch in the next two years:

Salads/Salad Bars to Grow

Five food categories are served by about 9 out of 10 operators and make up 60% of the total lunch sales: chicken-based hot entrées, salads/salad bars, burgers (e.g. hamburger, turkey, veggie), cold/hot sandwiches/subs and beef-based hot entrées. There are, however, some significant differences across segments in the percent of lunch sales in some of the categories. In schools, chicken-based hot entrées are 20% of total lunch sales compared to 15% in the other segments, and pizza/calzones are 13% versus 5% in the other segments. In colleges, burgers are 13% of total lunch sales compared to 9% in the other segments, while in nursing homes/long-term care/senior living, beef-based hot entrées are 13% of total lunch sales compared to 9% in the other segments.

Salads/salad bars (44%) is the category that operators say has the most lunch growth potential in the next two years. That is closely followed by cold/hot sandwiches (33%) and vegetable/bean-based hot entrées (31%). Vegetable/bean-based entrées was the second least likely category that operators currently offer, with 57% of operators serving these options and making up only 3% of operators’ total lunch sales. Schools are the least likely to expect a growth in fish at lunch (4%), while 23% of the remainder of the non-commercial market expects a boost in fish sales. Breakfast entrées for lunch are expected to grow the most on college campuses (20%). Twenty-nine percent of operators in nursing homes/long-term care do not expect growth in any lunch category, higher than any other segment.