2006 B&I Census Report: Reinventing the meal
With revenues flat, B&I market's top challenge is to create value-driven meals, according to FSD's 2006 B&I census report.
Total foodservice sales remained relatively unchanged at 100 business-and-industry (B&I) foodservice operations from 2004 to 2005, according to FoodService Director's annual B&I Industry Census Report. That follows an increase of 5.2% from 2003 to 2004, indicating how the market, while idle, has stabilized after several years of economic adversity.
Technomic's Outlook for the B&I segment in 2006 predicts nominal growth of 2%, while the NRA Forecast says it will grow 3.7% (though contract accounts will grow 4.2%, NRA says).
Meanwhile, the B&I market as a whole continues to face a formidable adversary: containing costs, says Russ Benson, president of the Society for Foodservice Management and vice president of guest strategies for Parkhurst Dining Services and Cura Hospitality. "That's difficult because of gas, food costs and weather (specifically, 2005's hurricanes). All costs are going through the roof. This year has its own spin on it in terms of current events."
Creating value: The FSD census shows that just 8% of survey participants reported increases in customer counts last year, while counts remained flat at most. Given this, the challenge of maintaining value for customers in the meal experience will remain critical in 2006 and into 2007, Benson believes. "People are very price-sensitive, and we have to keep creating value-driven meals," he says. "Our expenses are going up, (yet) people don't want to pull out more than $5, $6 or $7 for lunch. We have to keep reinventing what we are doing."
Meal volume averaged 60% lunch and 40% breakfast among the 100 companies, according to census calculations, with scant dinner volume. More operators, in fact, continue to look at the morning daypart for growth opportunities: among those saying breakfast meal counts grew last year, they averaged 21% more meals, compared to a 16% boost for those reporting more lunch volume.
Other B&I census data indicate that: Operators oversee an average 3.4 cafeterias, 2.2 dining rooms, 2.6 kiosks and two "other" facilities, such as a conference center, coffee shop or food cart.
- 54% operate vending, with close to 100 machines available.
- 29% operate c-stores, running an average of 1.67 units.
- Most (97%) do catering, which averages 23% of total sales.