Hospital, Nursing Home and Residential Facility Foodservice Trends in the U.S.

Table of Contents

Chapter 1: Executive Summary

Scope and Methodology

Scope

Methodology

Consumer survey methodology

Industry Framework and Drivers

Insight Capsule

Fast Facts

Foodservice Usage & Outlook Tracker

Insight Capsule

Fast Facts

Share of Stomach: Sales Analysis

Insight Capsule

Fast Facts

Hospitals & Restaurant Brands

Insight Capsule

Fast Facts

Hospital Foodservice Trends

Insight Capsule

Fast Facts

Hospital Program Analysis

Cleveland Clinic

UCLA Medical Center

University of Washington Medical Center

Hospital Foodservice Management

Self-management versus contract management

A loyal—and growing—following?

The tighter the budget becomes, the more outsourcing becomes attractive

Bottom line: contracts grow but overall revenue flattens

Aramark

North America Health Care Sector

Strategy: partnering in patient care, custom menus, branding

Partnering in patient care

Custom menus

Branding

Sodexo Inc

North American Health Care

Health care foodservice strategy: high-value custom offerings, nutrition services

High-value custom offerings

Nutrition Services

Compass Group PLC

Compass Group North America (CGNA)

North America Health Care Sector

Strategy

Personalized Care

Retail Branding

Retail Strategy

Healthcare Services Group, Inc.

Sales analysis

Foodservice strategy

Chapter 2: Industry Framework and Drivers

Overview

A massive captive foodservice audience

Employee meal opportunity: $1 billion

53,000 locations and counting

Table 2-1: Hospital, Nursing and Residential Facility Establishments, 2005-2009

6.4% of U.S. workforce, with higher than average earning power

Table 2-2: Hospital, Nursing and Residential Facility Employee Earning Power, 2009

Healthcare employment trends assure more mouths for foodservice to feed

An employment behemoth that is only getting bigger

Aging population to drive employment need—and patient foodservice need

Table 2-3: Population Projection, Age 65+ and Age 85+, 2010-2025

Nursing and residential care job growth to be twice the rate of hospital employment

Table 2-4: Healthcare Employment Projections, 2008-2018

Hospitals

Overview and hospital types

General hospitals

Special hospitals

Rehabilitation and chronic disease hospitals

Psychiatric hospitals

Community hospitals

Almost a million beds and 40 million admissions

Table 2-5: U.S. Hospitals, by Type and Operational Characteristics, 2009

General hospitals predominate

Table 2-6: Hospital Facility Establishments, by Type, 2005-2009

Average length of stay stable over time, with demographic variations

Table 2-7: Average Length of Stay Trends, Gender Analysis, by Age

Hospital patient meal opportunity: millions and millions served

Table 2-8: Inpatient Meal Opportunity, Community Hospitals, 2000-2008

Patient illnesses and treatments strongly determine foodservice approach

Male and female admission rationales significantly different

Table 2-9: Surgical Procedures, Type of Procedure, by Sex

Table 2-10: Hospital Earning Power & Foodservice Labor Expense,

by Hospital Type, 2009

Nursing and Residential Care Facilities

A more labor-intensive environment calling for greater degree of salary allocation

Assisted living facilities

Table 2-11: Nursing and Residential Care Facility Earning Power

& Foodservice Labor Expense, by Type, 2009

Residential care licensing types evolving toward “assisted living” terminology

State licensing and regulatory approaches

Institutional model

Housing and services model

Service model

Umbrella model

Multiple levels

Services, demographics and fees

McDonald’s watch out: assisted living meal opportunity may be a billion a year

Inpatient meal opportunity outstrips that of hospitals

Service assessment

Room and board rates

An overwhelmingly female demographic

Table 2-12: Assisting Living Facilities: Key Demographics, 2009

Nursing homes

Table 2-13: Nursing Facilities: Key Operational Statistics, 2010

A higher degree of assistance required

Less than half of nursing home residents can eat independently

Table 2-14: Nursing Facilities: Patient Characteristics, 2010

Mental health facilities

Chapter 3: Foodservice Usage & Outlook Tracker

Packaged Facts’ Consumer Restaurant Tracker

Table 3-1: Foodservice Categories and Types

February 2010 food retail momentum continues through October 2010

Graph 3-1: Consumer Restaurant Tracker: Current Behavior: A Top Line View

Looking ahead: Consumers more likely to save & spend on groceries than spend at restaurants

Intended behavior portends full-service restaurant pullback

Graph 3-2: Consumer Restaurant Tracker: Next 3 Months: A Top Line View

Saving money remains at the forefront; intention to save spreads

Graph : Consumer Restaurant Tracker: Future Behavior: Saving Money

Foodservice usage and usage frequency

Overview

Limited-service restaurants

Full-service restaurants

Snack and beverage concepts

Institutional foodservice

Table 3-2: Foodservice Establishment Usage and Mean Use, 2010

Foodservice and institutional foodservice usage analysis

Note on reading charts

Foodservice category use

Age

Graph 3-4: Foodservice Usage in Last Month, by Foodservice Category, Age 2010

HH income

Graph 3-5: Foodservice Usage in Last Month, by Foodservice Category, HH Income, 2010

Work status

Graph 3-6: Foodservice Usage in Last Month, by Foodservice Category, Work Status, 2010

Population density

Graph 3-7: Foodservice Usage in Last Month, by Foodservice Category, Population Density, 2010

Institutional foodservice category use

Gender

Graph 3-8: Institutional Foodservice Use in Last Month, by Foodservice Category, Gender, 2010

Age

Graph 3-9: Institutional Foodservice Use in Last Month, by Foodservice Category, Age, 2010

HH income

Graph 3-10: Institutional Foodservice Use in Last Month, by Foodservice Category, HH Income, 2010

Work status

Graph 3-11: Institutional Foodservice Use in Last Month, by Foodservice Category, Work Status, 2010

Population density

Graph 3-12: Institutional Foodservice Use in Last Month, by Foodservice Category, Population Density, 2010

Hospital Users

Bottom line: dealing with illness correlates with foodservice use

Relationship with food changes; foodservice plays important role

Table 3-3: Hospital Users, Foodservice Use by Type, 2010

Caregiver restaurant usage & food, health and diet attitudes

Caregiving pressures may draw caregivers to full-service restaurants

Table 3-4: Caregiver Restaurant Usage Frequency, Family and Fast Food Restaurants, 2010

But kids also play a role

Caregiving adds a layer of restaurant use

Table 3-5: Caregiver Restaurant Usage Frequency, Family and Fast Food Restaurants, Kids, 2010

Caregiving an added burden for parents

Graph 3-13: Caregivers, Influence of Children

And for grown children

Graph 3-14: Caregivers, Influence of Age

Hectic life of the caregiver reflected in food, health and diet attitudes

Table 3-6: Caregiver Food, Health and Diet Attitudes, Strength of Agreement, 2010

Chapter 4: Share of Stomach: Sales Analysis

Summary analysis

The future of hospital & nursing and residential care foodservice is bright

With significant caveats

Contract management may win share

Cost cutting versus revenue generation

Packaged Facts hospital& nursing and residential care market size and forecast

Graph 4-1: Hospital & Nursing and Residential Care Foodservice Sales, 2005-2012

National Restaurant Association market size and forecast

Graph 4-2: Hospital & Nursing Home Foodservice Sales, Contract Management Share, 2001-2009

U.S. Economic Census foodservice contractor market size

Table 4-1: Foodservice Contractor Revenue, Hospital & Nursing Home Share, 2007

Foodservice contract management contracts grow while revenue flattens

Table 4-2: Foodservice Contract Management Performance, 2008-2009

Table 4-3: Foodservice Contract Management, Hospitals Contracts, 2008-2009

Growth factors

Industry growth to drive foodservice increase

Hospital spending grew 5.9% in 2009; solid growth ahead

Nursing home care expenditure growth rate to increase

Graph 4-3: Hospital and Nursing Home Care Expenditures

& Projected Expenditures, 2005- 2019

Buoyed by government funding

Table 4-4: Healthcare Expenditure Receipts, By Source

Graph 4-4: Hospital and Nursing Home Care Expenditures & Projected Expenditures, Public Funding, 2009-2014

Serving an aging population

Table 4-5: Population Projection, Age 65+ and Age 85+, 2010-2025

Table 4-6: Hospital, Nursing and Residential Facility Employee Earning Power, 2009

Key hospital performance measure undervalues foodservice

HCAHPS survey leaves out foodservice!

So what?

Meal opportunity analysis

Inpatient hospital foodservice meal opportunity stagnates through decade

Table 4-7: Inpatient Meal Opportunity, Community Hospitals, 2000-2008

Meal opportunity highest among female and older patients

Table 4-8: Inpatient Meal Opportunity, Gender and Age Analysis

Outpatient hospital meal opportunity outstripped inpatient opportunity

Table 4-9: Outpatient Meal Opportunity,

Community Hospitals, 2000-2008

Pricing and expenditures

Average hospital check on the rise

John H. Stroger Jr. Hospital of Cook County: foodservice expense primer

Table 4-10: John H. Stroger, Jr. Hospital Of Cook County,

2009 Foodservice Expense Analysis

Chapter 5: Hospitals & Restaurant Brands

Restaurant brands at hospitals: a tug-of-war pitting health against revenue

The dilemma

A violation of trust?

The bottom line: healthy brands have room to grow

Restaurant brand penetration above 40%

Table 5-1: Frequency of Brand Name Fast Food (BNFF)

Franchises at 233 Academically Affiliated Hospitals

Table 5-2: Food Outlet Analysis, U.S. Children’s Hospitals

Barometer for fast food penetration at children’s hospitals set at 30%

1 in 4 children’s hospitals with fast food franchises

Fast food presence influences food purchases and perceptions

Does food purchasing at a hospital with a McDonald’s differ from those without one?

Study parameters

A strong McDonald’s skew!

Table 5-3: Children’s Hospital Study, Fast Food and McDonald’s Purchases

Why did they pick McDonald’s?

Convenient location and child preference

Table 5-4: Children’s Hospital Study, McDonald’s Purchase Rationales

The Subway alternative

Where are they now?

30,000 McDonald’s in the U.S. but only 32 in hospitals

Mayo Clinic: “Live Well” and eat Zpizza

Cleveland Clinic: McDonald’s on the way out; GO! Foods on the way in

Ten-year battle with McDonald's coming to a close

Fruit and walnut salad first offered here

GO! foods a healthy option

Brands galore

UCLA Medical Center

Johns Hopkins Hospital

University of Alabama Hospital

Other hospitals

University of Pittsburgh's Magee-Women's Hospital's

Children's Hospital of Philadelphia

Massachusetts General Hospital

University of Washington Medical Center

Franchise cost analysis

Local, independent brands; revenue-sharing

Healthier restaurant profiles a better sell

Contracts that address degree of risk-reward

Chapter 6: Hospital Foodservice Trends

Hospital Foodservice Trends

Overview: trend prevalence and momentum

Primary trends

Room service and individualized patient care

Customer service

Wellness and nutrition

Variety and culinary exploration

Sustainability and green initiatives

The need for speed

Secondary trends

Visual stimulation

Catering

Room service and individualized patient care

Personal dining care: examples

Variation in services

Customer service!

University of Washington Medical Centeruse of feedback

The need for speed

Examples

Food safety

Examples

Minimizing disease transmission

Examples

Wellness and nutrition: the obvious is actually not obvious

Pros to healthier hospital foodservice

Cons to healthier hospital foodservice

Wellness and nutrition initiatives in the upswing

Menu labeling catching on

Variety

Examples

Culinary exploration

Examples

Chefs on board

Special discounts and incentives to dine in the hospital

Would you make a trip to the hospital just to eat the food?

Green initiatives

Examples

Visual stimulation

Driven by restaurant competition

Food as visual stimulation

Catering

Integrated technological systems

Building staff collaboration, knowledge, and morale

Chapter 7: Hospital Program Analysis

Cleveland Clinic

Overview

Patient profile

Table 7-1: 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

UCLA Medical Center

Overview

Demographics

Foodservice programs and services

Signature Dining, anyone?

Customized service

The backend meets the front end: how it works

A diverse menu to meet needs of a diverse population

Café Med: serving 1.2 million customers a year

Offerings and sales trends

Catering at 10 years of age

Foodservice growth trends

2009-10 foodservice initiatives

Foodservice philosophy

Overnight café

Price increases

Future initiatives

UCLA Medical Center -numbers recap

University of Washington Medical Center

Overview

Patient and employee profile

University of Washington Medical Center

2009 statistics

Harborview Medical Center, Staff Ethnicity

Harborview Medical Center, Patient Ethnicity

Foodservice programs and services

General, renal, heart healthy, and low fiber/soft menus

Room service reduces food and supply costs; limiting overtime reduces labor costs

Equipment upgrading

Plaza Café: local chefs, expanded offerings

Harborview Medical Center

Foodservice growth trends

Emerging trends

2009-10 foodservice initiatives

Future initiatives

University of Washington Medical Center -numbers recap

Chapter 8: Hospital Foodservice Management

Self-management versus contract management

Self-managed hospital foodservice still holds sway

A loyal—and growing—following?

An issue that stirs passion among the faithful

Hospital CEO plays pivotal role

The tighter the budget becomes, the more outsourcing becomes attractive

Cost concerns favor contractors

Outsourcing trend among government institutions?

Bottom line: contracts grow but overall revenue flattens

Table 8-1: Foodservice Contract Management Performance, 2008-2009

Table 8-2: Foodservice Contract Management, Hospitals Contracts, 2008-2009

Table 8-3: Foodservice Contractor Revenue, Hospital & Nursing Home Share, 2007

Aramark Corp

Foodservice operations

Sales analysis

North America Business and Industry Sector

North America Education Sector

North America Health Care Sector

Patient foodservice

Retail foodservice

Facility services

Strategy: partnering in patient care, custom menus, branding

Partnering in patient care

Custom menus

Branding

Table 8-4: Aramark by the Numbers

Sodexo Inc

Corporate Foodservice

Education Foodservice

North American Health Care

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

Table 8-5: Sodexo by the Numbers

Compass Group PLC

Compass Group North America (CGNA)

Sales analysis

Foodservice strategy

Room for growth

It Takes You - Eat Local

Leveraging role of single-source provider

Selective acquisitions

North America Health Care Sector

Patient Foodservice

Senior Living Foodservice

Retail Foodservice

Support Services

Strategy

Personalized Care

Retail Branding

Retail Strategy

Table 8-6: Compass Group by the Numbers

Subsidiaries

Healthcare Services Group, Inc.

Sales analysis

Foodservice strategy

Future growth

Table 8-7: Healthcare Services Group, Inc. by the Numbers

Miniprofiles

AVI Food Systems, Inc

Unidine Corp.

Prince Food Systems, Inc.

Appendix

Works Referenced

Abstract