Food Service Management

As noted, many public and private institutions today outsource their final food production and service activities to food service management companies. This trend is especially true for complex institutions with multiple departments and locations, including the military, universities and large campus-based corporations. Services offered by food service management companies typically include centralized food production, multi-site catering and food-related environmental management. Today, management companies are also taking on non-traditional activities such as housekeeping, laundry, uniform management, facilities management and employee, patient and student transportation.

The three largest food service management companies are the Compass Group, Sodexo and Aramark with annual international sales of US$29 billion, US$22.3 billion and US$15.8 billion, respectively.20 Their overall sales and percentage by industry segment data are shown in Table 7.2, which also illustrates the extreme

Table 7.2 Food Service Management Companies

Company

(Base)

Revenue

  • (billion),
  • 2018

B&l

(%)

Health Care/ Nursing Homes (%)

Education

(%)

Sports/ Leisure/ Museums (%)

Defense/

Corrections

(%)

Airports/ Facilities/ Other (%)

Compass Group (UK)

US$29

31

29

23

15

2

Sodexo

(France)

US$22.3

32

34

33

1

Aramark Corp (US)

US$15.8

15

13

32

24b

16

Elior Group (France)

US$6.4

13

31

32

7

17a

Delaware North (US)

US$3.2

7

64

29

Healthcare Services (US)

US$1

100

AVI (US)

US$0.80

43

20

27

6

2a

Legends (US)

US$0.75

100

Thompson

Hospitality

(US)

US$0.70

42

9

37

12

GSI (US)

US$0.50

20

10

2.5

22.5

30

15

B&l are business and industry food service, a Represents corrections only, b Represents corrections not separated from others.

concentration of the industry. These companies have grown by targeting a range of institutional clients, as well as taking on activities beyond basic food service. The Compass Group focuses predominantly on food service in businesses and schools. While Aramark and Sodexo also focus on these clients, Aramark services more sport and leisure venues than its competitors while Sodexo has a bigger presence in health care.

Recently, Sodexo divested its 17% stake in the publicly traded Corrections Corporation of America after university students opposed to large-scale incarceration— particularly the privatization of prisons—boycotted the Sodexo-operated facilities at a dozen US and Canadian campuses. Aramark, on the other hand, buries its corrections food management revenues under sports and leisure as an attempt to draw attention away from this business. But according to the American Civil Liberties Union, the company was reported 240 times in 2014 for shorting inmates on food, and Michigan canceled its three-year US$145 million contract after numerous complaints involving tainted food, unsanitary conditions and other health violations.21

As funding for public institutions dwindles, arguments are increasingly being made to outsource public food service activities to private companies to save on costs. However, many have voiced concerns about this practice, particularly parents of schoolchildren and advocates for prisoners and labor unions. For-profit food service companies largely achieve reduced costs for government by minimizing the nutritional

BAMCO Sourcing Philosophy

Figure 7.5 BAMCO Sourcing Philosophy.

and quality aspects of food and by paying minimum wages or offering minimal to no benefits to workers relative to what they once received. Clearly, the issue of privatizing formerly government-managed activities is highly political with public health, social justice, economic policy and business concerns at stake.

As an alternative example of food service management, Bon Appetit Management Company (BAMCO), a division of the Compass Group, has made a concerted effort to source sustainable, local foods for their more than 1,000 cafes around the US (Figure 7.5). Bon Appetit introduced environmental sourcing early on and is one of the few major companies to have invested the time, energy and money necessary to develop effective, category-specific procurement policies. For instance, specific programs exist for meat, egg and dairy procurement, addressing animal welfare and antibiotics issues; the company has a separate set of non-negotiable standards for seafood purchasing. Examples of Bon Appetit’s clients include corporate campuses such as Google, Twitter and Starbucks, as well as many colleges and universities. The company has received numerous awards for its work from organizations such as the Natural Resources Defense Council, the Seafood Choices Alliance, the Humane Society of the United States and Food Alliance.

 
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