While many commercial segments are expected to experience healthy sales gains this year, the forecast is a bit gloomier on the non-commercial side of the industry.
The National Restaurant Association (NRA) is projecting a –0.5% real growth change for the college and university managed services sector and –1.1% for self-operated locations, for an overall segment drop of 0.7%. That’s compared to a 2.1% projected growth for quick-service restaurants and a 2.7% increase for retail-host restaurants, which includes convenience and grocery stores.
Things look slightly sunnier for other segments. Managed services in hospitals and nursing homes are expected to see a 2.9% real growth change from 2013 through 2014, while self-operated hospitals and nursing homes are expected to experience a 0.6% and 0.5% increase, respectively.
While hospitals, long-term care, senior living and nursing homes are experiencing a boost from the aging population, colleges and universities are feeling the pressure of outside forces. Commercial foodservice segments leapt out of the recession with an aggressive hunger to regain lost ground, thus creating compelling options for students to venture off campus.
Meanwhile, the slow economic recovery is keeping demand from the workforce low during the crucial lunch segment. People are bringing their own lunches—if they’re lucky enough to be working at all.
“A lot of it has to do with business and industry and high unemployment,” says Bonnie Riggs, restaurant industry analyst for The NPD Group. “We’re not going to see much growth in lunch until we see the employment situation improve.”
The NRA projects managed services at manufacturing and industrial plants to see a 2.1% real growth change this year, and 0.7% at commercial and office buildings. Self-op employee restaurant services is expected to experience a 0.2% loss.
Those operators who are doing well are becoming more aggressive in their approach. Justin Massa, founder and CEO of Food Genius, says the competitive landscape is spurring non-commercial operators to new creativity. He points to a college in Indiana that took on a Brazilian steakhouse theme for a week.
“Gaucho pants, swords, the whole nine yards—[in] college dining,” he says. For non-commercial to succeed, operators need to think like consumers. “If all they think about is their own segment, it’s a losing battle, because consumers don’t [make eating] decisions in a segment,” Massa says. “We think about not ‘grocery store or restaurant?’ but ‘cook or not cook?’ ”
NEXT: Data! C&U Growth & Expectations
C&U Menu Trend Growth Expectations
The majority of college & university operators report that the number of gluten-free items on their menus will increase in the next two years.
| Gluten-free menu items | 82% |
| Use of locally sourced foods | 76% |
| Vegetarian menu items | 50% |
| Vegan menu items | 44% |
| Use of organic foods | 29% |
| None of the above | 6% |
Source: FoodService Director 2014 C&U Census
Non-Commercial Business Expectations
The majority of non-commercial operators expect their business to improve somewhat in the year to come. Comparatively, a greater percentage of c-store operators (23%) expect their foodservice business to improve greatly this year.
| Response | College & university | Hospitals |
| Improve greatly | 15% | 12% |
| Improve somewhat | 65% | 58% |
| Remain the same | 16% | 25% |
| Decline somewhat | 3% | 4% |
| Decline a lot | 1% | 1% |
Source: FARE 2014 State of Foodservice Study
Day-Part Growth Expectations
College & university and hospital operators both reported the greatest growth expectations for lunch. C&U operators see notably greater growth promise than hospital operators for late-night snacks.
In which one day-part do you expect the most sales growth in the next year?
| Day-part | College & university | Hospitals |
| Lunch | 33% | 46% |
| Breakfast | 16% | 21% |
| Dinner | 11% | 5% |
| Late-afternoon snack | 7% | 8% |
| Late-night snack | 16% | 4% |
| Mid-morning snack | 3% | 0% |
| Do not expect sales growth in any day-part | 13% | 17% |
Source: FARE 2014 State of Foodservice Study
C-Stores in College & University
Eighty-three percent of colleges surveyed have c-stores with foodservice offerings on their campus.
| Foodservice department is responsible and manages | 71% |
| Available with foodservice but my department does not manage | 12% |
| Not available on campus with foodservice | 17% |
Source: FoodService Director 2014 C&U Census
Grab-and-Go Growth
The majority of operators (62%) anticipate an increase in their grab-and-go sales in the next two years, with only 5% expecting a decrease.
| Percent offering grab-and-go | |
| Business & industry | 88% |
| College & university | 90% |
| Hospitals | 79% |
| Nursing homes, long-term care, senior living | 26% |
| Total* | 70% |
Source: FoodService Director 2013 Big Picture Report
| Percent offering self-branded grab-and-go | |
| Business & industry | 100% |
| College & university | 91% |
| Hospitals | 89% |
| Nursing homes, long-term care, senior living | 63% |
| Total* | 79% |
Source: FoodService Director 2013 Big Picture Report
| Grab-and-go two-year growth expectations | |||
| Increase | Decrease | Remain same | |
| Business & industry | 72% | 28% | 0% |
| College & university | 70% | 26% | 4% |
| Hospitals | 71% | 27% | 2% |
| Nursing homes, long-term care, senior living | 42% | 54% | 4% |
| Total* | 62% | 33% | 5% |
Source: FoodService Director 2013 Big Picture Report
* Totals include K-12 schools
Grab-and-Go Sales Trends
Overall, 45% of grab-and-go foodservice sales/transactions (excluding beverages) are attributed to sandwiches/wraps, salads, and fruit or vegetables.
| Segment | Percent of grab-and-go sales | Percent expecting growth, next two years |
| College & university | ||
| Prepackaged sandwiches/wraps | 20% | 65% |
| Prepackaged salads | 13% | 62% |
| Prepackaged baked goods/desserts | 10% | 12% |
| Fruit or vegetables | 9% | 44% |
| Yogurts/parfaits | 5% | 31% |
| Prepackaged center-of-plate entrées | 5% | 20% |
| Prepackaged sushi | 5% | 20% |
| Prepackaged pizza | 3% | 5% |
| Business & industry | ||
| Prepackaged sandwiches/wraps | 17% | 57% |
| Prepackaged salads | 16% | 86% |
| Fruit or vegetables | 15% | 64% |
| Prepackaged baked goods/desserts | 11% | 29% |
| Yogurts/parfaits | 9% | 36% |
| Prepackaged center-of-plate entrées | 5% | 36% |
| Prepackaged soup | 2% | 21% |
| Prepackaged pizza | 2% | 0% |
| Hospitals | ||
| Prepackaged sandwiches/wraps | 17% | 52% |
| Prepackaged salads | 17% | 65% |
| Fruit or vegetables | 13% | 40% |
| Prepackaged baked goods/desserts | 12% | 20% |
| Yogurts/parfaits | 9% | 30% |
| Prepackaged center-of-plate entrées | 6% | 24% |
| Prepackaged soup | 2% | 3% |
| Prepackaged sushi | 2% | 14% |
Source: FoodService Director 2013 Big Picture Report
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