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The road ahead for onsite dining: Contractors and vendors

Massive revenue losses may force major consolidation among foodservice contract and distribution companies.

Mike Buzalka, Executive Features Editor

May 19, 2020

2 Min Read
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The crisis also enticed foodservice distributors, including major firms like Sysco and U.S. Foods, into retail distribution, perhaps for the long term.Smith Collection/Gado / Contributor / Archive Photos / Getty Images

No discussion of the longer-term impact of coronavirus on onsite dining would be complete without some reference to the commercial enterprises that offer management services and supply and distribute product to the industry.

The 2021 FM Top 50 is likely to see most, if not all, listed firms posting losses, with those operating in especially hard-hit segments—sports concessions, convention/conference facilities, airport dining—seeing huge drop-offs while those in less impacted markets like healthcare and senior dining being somewhat less affected. Bankruptcies are not impossible and there may be a spate of acquisitions of troubled firms by better financed ones, or mergers by complementary firms looking to pool resources.

Bottom line: A significant consolidation in the foodservice contract management market over the next year may be in the offing.

Meanwhile, the food supply and distribution markets—dealing with a sudden contraction of the foodservice channel and a concomitant surge in the retail channel—has seen a convergence as product diverted from the fast-shrinking foodservice end to the suddenly booming retail one. The crisis also enticed foodservice distributors, including major firms like Sysco and U.S. Foods, into retail distribution, perhaps for the long term. Given the growing blur between the channels, a presence on both sides of the food market may benefit distributors and their customers, who might want to maintain some form on onsite retail grocery operation.

Related:5 coronavirus things: Supply chain facing difficulties under coronavirus

Still, as in the contract community, the extended loss of business this spring may force a number of distributors into bankruptcy, acquisition or merger, further consolidating that industry as well.

This is part eight of an eight-part series on the future of onsite operations following the COVID-19 pandemic. The first part is on the impact of salad bar; the second is on the impact of colleges; the third is on the impact in hospitals; the fourth part is on the impact to school nutrition programs; the fifth part on the impact to B&I; the sixth was about the long-term impact to senior dining; and the seventh was about the impact to concessions and recreations.

About the Author

Mike Buzalka

Executive Features Editor, Food Management

Mike Buzalka is executive features editor for Food Management and contributing editor to Restaurant Hospitality, Supermarket News and Nation’s Restaurant News. On Food Management, Mike has lead responsibility for compiling the annual Top 50 Contract Management Companies as well as the K-12, College, Hospital and Senior Dining Power Players listings. He holds bachelor’s and master’s degrees in English Literature from John Carroll University. Before joining Food Management in 1998, he served as for eight years as assistant editor and then editor of Foodservice Distributor magazine. Mike’s personal interests range from local sports such as the Cleveland Indians and Browns to classic and modern literature, history and politics.

Mike Buzalka’s areas of expertise include operations, innovation and technology topics in onsite foodservice industry markets like K-12 Schools, Higher Education, Healthcare and Business & Industry.

Mike Buzalka’s experience:

Executive Features Editor, Food Management magazine (2010-present)

Contributing Editor, Restaurant Hospitality, Supermarket News and Nation’s Restaurant News (2016-present)

Associate Editor, Food Management magazine (1998-2010)

Editor, Foodservice Distributor magazine (1997-1998)

Assistant Editor, Foodservice Distributor magazine (1989-1997)

 

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