The road ahead for onsite dining: Contractors and vendors

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.

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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.