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Trends in U.S. Foodservice Contracting
July 1, 2011
Unlike restaurants and food retailers, foodservice contractors may not be household
names, but they participate in one of the most successful areas of the food and
foodservice industry. As detailed in Packaged Facts’ Trends in U.S. Foodservice
Contracting, we believe its future is bright, forecasting enviable growth in education,
healthcare, military, and sports and recreation markets, with more significant challenges
ahead for the business and industry segment.
Trends in U.S. Foodservice Contracting provides insight on opportunities for
contractors providing food services to commercial, non-commercial and government
locations. We provide in-depth segment analysis for six key market verticals, including
market size and forecasting, innovation leadership case studies, and opportunity
analysis.
The report also includes thorough competitive analyses of the four major foodservice
contracting players: Aramark Corp, Sodexo Inc., Compass Group PLC, and Delaware
North Companies. Each profile analyzes foodservice strategies and innovations, as well
as sales trends, by market segment. The report also includes profiles of growing mid-
size firms such as Guckenheimer Enterprises, Inc. Guest Services, Inc. Centerplate,
and Thompson Hospitality.
While certain aspects of foodservice are common to each market vertical, each
presents unique differences and challenges.
We view K-12 foodservice contracting trend momentum as positive, as
foodservice contractors can leverage the need for money-losing school districts
to provide meal service options that adapt to sweeping health and nutrition-driven
regulatory changes. Balancing nutritional requirements with boosting breakfast
and lunch participation.
Momentum in college & university foodservice contracting is also positive,
driven by a mixture of solid fundamental growth metrics and contractor innovation
in addressing student needs and expectations. To leverage opportunity,
foodservice contractors should focus on providing students with flexibility, variety
and convenience; healthful and sustainable options; and refashioned dining halls
fit for the 21st century.

2. Healthcare foodservice contracting trend momentum is also positive, as
healthcare continues to grow revenue and employment while serving an aging
population more apt to use its services. While opposition among some members
of the hospital foodservice community is strong, we believe contract relationships
built on serving the patient while controlling costs will grow solidly. Foodservice
contractors should target the following key areas for innovation: wellness and
nutrition (from targeted menu planning, to rebranding healthy restaurant
concepts,) customer service, individualized care and room service; and grab-
and-go options.
Corporate foodservice contracting trend momentum is negative. For Business
and Industry foodservice contractors, reliance on larger companies and declining
usage provide significant obstacles to growth. However, solutions abound, from
catering to smaller sites to targeting by generation to tapping into wellness. This
report frames these “solutions” with rationales and examples.
Military foodservice contractors are on the cusp of significant growth, as the
federal government seeks to increase efficiencies and consolidate contracts. This
report analyzes the evolving foodservice contracting relationships and
opportunities with the Armed Forces, framed against “trend applications” we
believe are important to growing military foodservice sales.
TABLE OF CONTENTS
Chapter 1: Executive Summary
Scope and Methodology
Scope
Methodology
Consumer survey methodology
Market size and forecast
Definitions
Content Summary
Share of stomach: foodservice contractor sales analysis
K-12 foodservice contracting trends
College & university foodservice contracting trends
Healthcare foodservice contracting
Corporate foodservice contracting trends
Military foodservice contracting trends
Chapter 2: Share of Stomach: Foodservice Contractor Sales Analysis
Introduction
Packaged Facts foodservice contractor market size & forecast
Graph 2-1: Foodservice Contracting Sales, 2007-2012
Bundling services
A significant strategic shift
Revenue among “Big Three” foodservice contractors surges
Table 2-1: “Big Three” Foodservice Contractors, U.S. Contracting Revenue, 2009-11

3. Segment analysis
Corporate and education markets dominate contract share
Graph 2-2: Foodservice Contract Management Contract Share, by Market Segment,
2010
Sales segmentation
Segment sales trends
Graph 2-3: Foodservice Contracting Sales, by Segment, 2007-2012
B&I more sensitive to macro-trends than education and healthcare
Graph 2-4: Foodservice Contracting Sales, by Segment, Percent Change, 2007-2012
Education foodservice contracting
K-12 foodservice
College and university foodservice
Summary growth analysis
Graph 2-5: Education Foodservice Contracting Sales, 2007-2012
Healthcare foodservice contracting
Self-managed hospital foodservice still holds sway
Summary growth analysis
Graph 2-6: Healthcare Foodservice Contracting Sales, 2007-2012
Business & Industry foodservice contracting
Summary growth analysis
Graph 2-7: B&I Foodservice Contracting Sales, 2007-2012
Military foodservice contracting
Graph 2-8: Military Foodservice Contracting Sales, 2007-2012
U.S. Army generates highest percentage of revenue
Sodexo receives highest percentage of revenue
Table 2-2: Top Five Military Foodservice Contracting Agencies, 2010
Recreation and amusement foodservice contracting
Graph 2-9: Sports & Entertainment Foodservice Contracting Sales, 2007-2012
Chapter 3: K-12 Foodservice Contracting Trends
Momentum analysis: positive
Government budget constraints a mixed blessing
Cacophony of K-12 foodservice attention to shield it from budget axe
Bottom line: enter contracting
Positive macrotrend: Enrollment
Table 3-1: PK-8, 9-12, and PK-12 Enrollment Trends, 2007-17
Macro-trend application: health and wellness
National School Lunch Program & Breakfast Program: scope of coverage
Nutritional requirements
Participation
Program costs
Adapting to government-driven health changes
Task Force on Childhood Obesity
Targeting food content
Strengthening legislation
Adapting to the Healthy, Hunger-Free Kids Act
Food waste and funding issues may stifle possibilities

4. Incenting breakfast use
Program availability reduces tendency to skip breakfast
Convenient breakfast options increase participation
K-12 foodservice innovation case studies
Contracting success: District of Columbia Public Schools
The perfect candidate: A debt-ridden school district in need
Revamping menus
Redesign by Chartwells
School innovation: San Francisco Unified School District
Table 3-2: San Francisco Unified School District, by the Numbers
Student Nutrition Services
Electronic POS system in place
Slow food pilot program
Nutrition initiatives: local, whole grains, and “featured” fruits and vegetables
Table 3-3: San Francisco Unified School District,
Food Service Menu Highlights
Portability innovation
Table 3-4: San Francisco Unified School District,
Grab n Go Breakfast Program, by the Numbers
Super Choice menu rollout to bridge income-related issues
Salad bar implementation
Other initiatives
Chapter 4: College & University Foodservice Contracting Trends
Postsecondary foodservice contractor momentum: positive
Addressing student needs and expectations
Healthful offerings and technology provide draws
Table 4-1: Food & Foodservice Attitudes & Behaviors: All Users, Students & College
Foodservice Users, 2010
Build flexibility, variety and convenience into meal plan
Grab and go flexibility
Late night flexibility
Provide healthful options
Address food allergies
Leverage social media
Inform and communicate
Obtain feedback
Reinvent the dining hall
Guest traffic drivers
Table 4-2: Mean Restaurant Usage in Last Month, by Restaurant Type, 2010, by Age
On-campus dining still lags the offsite competition
Ramp up entertainment value
Foodservice contractors partners in remodeling
Innovate with own-brand restaurant concepts
Practice sustainability
Trayless and to-go cups
University of Colorado at Boulder

5. University of Massachusetts
University of Texas at Austin
Chapter 5: Hospital Foodservice Contracting Trends
Hospital Foodservice contractor momentum: positive
Contractors to benefit from budget pressures
Positive macrotrend: government funding
Positive macrotrend: aging population
Table 5-1: Population Projection, Age 65+ and Age 85+, 2010-2025
Positive macrotrend: inpatient and outpatient guest footprints
Trend application: wellness and nutrition
Healthy hospital foodservice: pro and con
Pros to healthier hospital foodservice
Cons to healthier hospital foodservice
Wellness and nutrition initiatives on the upswing
Menu strategy: disease-specific menus
Menu strategy: probiotic menus
Restaurant strategy: branding health
The dilemma
30,000 McDonald’s in the U.S. but only 32 in hospitals
The bottom line: healthy brands have room to grow
Branding health innovation snapshot: Mayo Clinic
Customer service, individualized care & room service
Customer service
Room service and individualized patient care
Personal dining care, on demand
Johns Hopkins Hospital
Ronald Reagan UCLA Medical Center
Hybridizing room service and retail
The need for speed and convenience
Examples: Mayo Clinic, Children's Hospital of Philadelphia, UCLA Medical
Center
Grab and go!
Minimizing disease transmission at expense of self-service
Sustainability and green initiatives
Examples: Mayo Clinic Arizona, ARAMARK and AVI Food Systems
Variety and culinary exploration
Variety
Examples Central DuPage Hospital, Mayo Clinic, UCLA Medical Center
Culinary exploration
Examples: Mayo Clinic and Cleveland Clinic
Chefs on board
Example: Tyson Food Service
Special discounts and incentives to dine in the hospital
Example: Grant Medical Center
Visual stimulation
Driven by restaurant competition

6. Examples: Barnes-Jewish Hospital, Northwestern Memorial
Food as visual stimulation
Foodservice innovation profile: Cleveland Clinic
Patient profile
Table 5-1: Cleveland Clinic, Demographic Data, Treated Diabetics
Foodservice programs and services
Multitude of dining options
Ousting chains
Pizza Hut leaves; McDonald's stays
Management split between Sodexo and AVI Food Systems
Room service an extra: get a Founders Suite
Foodservice growth trends
Emerging trends
2009-10 foodservice initiatives
Future initiatives
Chapter 6: Corporate Foodservice Contracting Trends
Foodservice contractor momentum: negative
Challenge: reliance on larger companies
Challenge: declining usage
Meal participation declines
Lunch
Breakfast
Challenge: brown bagging
Brown bagging trend maintains momentum through 2010
Creating downward pressure on corporate foodservice
Solution: cater to smaller sites
Eurest's Simply Puur café concept
Whole+Sum menu
Solution: target by occupation
Consumer research suggests that food attitudes vary widely by occupation
Snacking
Meal times
Fast food
Table 6-1: Selected Food Attitudes, Full-Time On-Site Fortune 500 Employees, by
Occupation, 2010
Menu selection by occupation application: NASA Jet Propulsion Laboratory
Varying menus by occupation and location
Solution: target by generation
The Millennial issue
Solution: tap into wellness
A trend on the rise
Table 6-2: Wellness Program Benefit Access, 2000-2010
Healthy food promotion policies nearing majority status
Application: Aramark
Sustainable and local
Application: Thomas Cuisine Management

7. Application: Whitsons Culinary Group
Application: Cerner Corporation
Application: Hallmark Cards
Application: NBC Universal
Application: Guest Services, Inc.
Going trayless to reduce portion size
Solution: adapt to restaurant competition
Familiarity and ease of use drive restaurant decision
Convenience is King
Among restaurants, convenience comes in many forms
For employees, what does it mean?
Restaurant density analysis provides insight
Example: Aon Corporation
Developing the foodservice retail space
Application: Microsoft
The Commons: the future of corporate foodservice?
Application: Cerner Corporation
Aramark
Onsite brands
Example: Sodexo
Example: Thomas Cuisine
Example: Whitsons Culinary Group
Microsoft builds “local brands”
Leveraging celebrity
Solution: leverage cost advantage
Average guest check trends
Employment site examples: Whitsons Culinary Group
Lunch
Breakfast
Corporate foodservice can leverage pricing advantage
Datassential MenuTrends Direct menu pricing analysis
Table 6-3: Average Entrée Price, Breakfast and Lunch Dayparts, QSR, Family
Midscale, and Casual Restaurant Segments, 2008-2010
And increase supply volume
Solution: reinvent menus
Value meal approaches: Compass & Thomas Cuisine
Success story: Hallmark
Success story: Microsoft
The Commons hits some important notes
Menu variety initiatives
Whitsons Culinary Group: One contractor; a variety of menu concepts
Sodexo sees promise with international cuisines
A variety application: Microsoft
A variety application: Jet Propulsion Laboratory
Starbucks headquarters
Solution: adapt to break time and meal time

8. Hours of operation
Timing meals: an hour-by-hour analysis
Worker break spontaneity
Employee camaraderie & morale
Teaming up to slim down
Flik melds food & atmosphere to enhance social responsibility & camaraderie
Foodservice as oasis where people want to come to relax
Success story: 30 Rock
Solution: reduce costs
Reducing labor costs
Service and portability as means to cut costs
Example: Whitsons Culinary Group
Example: Thomas Cuisine
Example: Sodexo
Chapter 7: Military Foodservice Contracting Trends
Military foodservice contractor momentum: positive
Positive macrotrend: employment trends
Positive macrotrend: domestic military spending
Graph 7-1: Department of Defense Budget, 2001-2012
Contractor analysis: U.S. Marine Corp.
Sodexo’s military foodservice leadership
RGFSC I
RGFSC I consequences
RGFSC II
Sodexo’s contract halved into two
Superior Services picks up other half
Table 7-1: U.S. Marine Corps RGFSC II Foodservice Contract, Selected Metrics
Contractor Analysis: Air Force Food Transformation Initiative
Putting it in perspective: 91 million meals per year
Bringing food service into the 21st century
ARAMARK gets the nod
Expected improvements
Alaska base sees significant change
Air Force already weighing benefits
Bottom line
Trend application: feed the family, not just the soldier
Family members substantially outnumber service members
Table 7-2: Ratio of Family Members to Active Duty Service Members
Army breakdown: lots of kids!
Trend application: give them a reason to stay on the base
Remember! Most Army members live off-post
Table 7-3: Places of Residence of Active Duty Soldiers
Remember: military members prefer off-site food options to on-site options
On-post vs. off-post food & beverage services comparison
Table 7-4: Comparison of Quality of On-Post and Off-Post Food and Beverage
Services,

9. On Post versus Off Post
Dining preferences, by daypart and by service option
Table 7-5: Frequency of Meals Eaten Out, Taken Out or Ordered In, by Daypart &
Restaurant Service Type
Remember: borrow liberally from off-site foodservice options and atmosphere
Marine Corps takes a few pages from college campuses
Camp Lejeune borrows from Colorado State University
Remember: Leverage restaurant branding opportunities
Revenue and brand analysis: AAFES Exchange
Table 7-6: AAFES Retail and Concession Sales, 2007-2009
Growing restaurant operations
1,600 restaurants and counting
Trend application: adapt to health & nutrition initiatives
Military not immune to obesity epidemic
A significant military medical concern
Menu changes galore
Change in the wind: Army Meal Kits
Change in the wind: Army Soldier Fuelling Initiative
Change in the wind: Health education
Marine Corps FUEL For Life
JCCoE Goes for Green
Trend application: respect the environment
Marines lead the charge
Marine Corps base goes green
Aramark Corp
Foodservice operations
Chapter 8: Competitive Profile: Aramark Corp
Food service sales analysis: 2011
Food service sales analysis: 2010
Food service sales analysis: 2009
North America Business and Industry Sector
Sales analysis: 2009-11
Vending & Office Refreshments Operations
On-Site Foodservice
Event Catering
Strategy: Workplace Productivity, Value-Added Services, Contract Design
Workplace Productivity
Value-Added Services
Contract Design
North America Education Sector
Sales analysis: 2009-11
K-12 Education Overview
School Meal Programs
Expanded Meal Opportunities
Nutrition Education
K-12 Strategy: Health & Nutrition, Boosting Student Participation, Age Differentiation

10. Health & Nutrition
Boosting Student Participation
Age-Segmented Dining Brands
Higher Education Overview
Residential Foodservice
Food Courts & Snack Bars
Convenience Stores & Vending
Higher Education Strategy: Green Thread Program, Health, Technology
Green Thread Program
Health
Technology
North America Health Care Sector
Sales analysis: 2009-11
Patient foodservice
Retail foodservice
Facility services
Strategy: partnering in patient care, custom menus, branding
Partnering in patient care
Custom menus
Branding
North American Sports and Entertainment sector
Sales analysis: 2009-11
Summary sales analysis
Table 8-1: Aramark by the Numbers, 2008-2011
Sodexo Inc.
North American Corporate Foodservice
Chapter 9: Competitive Profile: Sodexo, Inc
Sales analysis: 2009-11
Cafes, Retail Brands
Catering
Office Refreshment
Corporate Foodservice Strategy: Sustainability, Celebrity Chef Partnerships, Employee
Health
Employee Health
Celebrity Chef Partnerships
Sustainability
Work/Life Balance
North American Education Foodservice
Sales analysis: 2009-11
K-12 Foodservice
School Lunch Programs
Age-specific dining programs
Childhood hunger programs
Nutrition Education
Higher Education Foodservice
Residential Foodservice

11. Retail Foodservice
Convenience Stores & Vending
Education Foodservice Strategy: Student Board of Directors, CustoMenu, Autonomy
Student Board of Directors
CustoMenu
Autonomy
Sodexo's Retail Brand Group
Pandini’s
Jazzman's Café and Bakery
Salsa Rico
Original Burger Company
Mein Bowl
Bruegger’s Bakery Café licensing agreement
Market Trends and Sodexo Response
Obesity and Health
Globalization and Diversity
Sustainability
North American Health Care
Sales analysis: 2009-11
North American Health Care Foodservice
Patient dining services
Visitor & staff dining services
Retail foodservice
Health care foodservice strategy: high-value custom offerings, nutrition services
High-value custom offerings
Nutrition Services
Market trends & Sodexo response
Health care expenditures
Patient consumerism
Shortage of health care personnel
Summary sales analysis
Table 9-1: Sodexo by the Numbers: 2008-11
Compass Group PLC
Compass Group North America (CGNA)
Chapter 10: Competitive Profile: Compass Group PLC
Acquisitions
Sales summary
Foodservice strategy
Room for growth
It Takes You - Eat Local
Leveraging role of single-source provider
Selective acquisitions
North America Business & Industry Sector
Corporate Dining
Premium/Executive Dining
Catering and Event Services

12. Vending
Strategy
Focused Promotions and Value Offerings
Kimco & Cross-Selling
North America Education Sector
K-12 Dining
Private Schools
Higher Education
Education Strategy
Health & Wellness
Campus Community
Dining Programs
North America Health Care Sector
Patient Foodservice
Senior Living Foodservice
Retail Foodservice
Support Services
Strategy
Personalized Care
Retail Branding
Retail Strategy
Sports & Recreation
Summary sales analysis
2010 sales on the upswing
Trend continues into 2011
U.S. operating segment performance
Table 10-1: Compass Group by the Numbers: 2009-11
Subsidiaries
Delaware North Companies
Segments
Recent performance
Chapter 11: Small & Midsize Corporate Foodservice Contractors
Sportservice
Recent activity
Gaming Hospitality Group
Recent activity
Travel Hospitality Services
Recent activity
Parks & Resorts
Recent activity
Delaware North Companies Boston
Centerplate
Recent activity
Guckenheimer Enterprises, Inc.
Table 11-1: Guckenheimer Enterprises, Inc., Selected Metrics
Guest Services, Inc.

13. Table 11-2: Guest Services, Inc., Selected Metrics
Thompson Hospitality
Table 11-3: Thompson Hospitality, Selected Metrics
AVI Food Systems, Inc.
Table 11-4: AVI Food Systems, Inc., Selected Metrics
CulinArt, Inc.
Table 11-5: CulinArt, Inc., Selected Metrics
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