For almost 40 years,
Foodservice and Hospitality’s Top 100 Report has been the definitive barometer of growth in our industry. Beginning in 1972, when the foodservice industry was still in its infancy, the report chronicled just 50 companies. VS Services, now known as Aramark Canada Ltd., was the top company on the initial report, boasting sales of $80 million. A&W Food Services of Canada followed in second position with sales of $60 million.As the report has evolved, companies have come and gone and the industry has grown immensely, becoming more profitable and ushering in new trends and unique concepts. Four decades later, this year’s Top 100 rang in sales of more than $29 billion for 2008, representing almost 50 per cent of total industry sales volume, which was $59.7 billion. Our top company, Tim Hortons, leads the way with sales of more than $4.5 billion.ÂMuch has changed since the early days and operators would agree it was a simpler time. Food choices were predicated solely on taste. Few consumers gave a passing thought as to whether food was healthy, where it was sourced or if it was ethically produced. Today’s industry continues to expand, but growth is measured and the operating environment is very challenging. Still, the Top 100 remains the most reliable source for information on how the industry is faring, whether its growth is tempered or robust, and what its future patterns and directions will be.While North America was besieged by turmoil brought on by the economic meltdown in the latter part of 2008, both the Canadian and U.S. foodservice industries still fared reasonably well for the year. The CRFA reports total foodservice sales for 2008 climbed 3.8 per cent. (Not surprisingly, it’s forecasting a huge drop of 5.3 per cent for 2009.) According to statistics from Technomic, which produces the Top 500 rankings in the U.S., sales growth south of the border came in at 3.4 per cent in 2008, and system-wide sales reached an estimated $230.2 billion last year, up $7.6 billion over 2007.Technomic also reports that many U.S. chains scaled back their expansion efforts, growing units by just 1.8 per cent compared with 2.6 per cent a year ago. Certainly, when one looks at unit growth, it’s evident the industry is slowing down. In many markets saturation is quickly becoming a reality. Tim’s, Subway and McDonald’s are Canada’s three largest foodservice chains by units, boasting 3,437, 2,381 and 1,414 stores respectively, and one wonders how many more of these locations can be built.Still, consumers will always be hungry for new concepts. In the U.S., for example, 700 new concepts are projected to be introduced in 2009. Even if the 10 per cent rule is applied to Canada, that would mean we can expect 70 new concepts to debut north of the border during the next year. That bodes well for consumers who seek out the latest new menu items, but it’s also exciting for operators who are keen to develop innovative concepts and build them into powerful brands.
So what will tomorrow’s brands look like? Technology will play an even greater role in streamlining operations, and clearly, the industry will continue moving away from highly processed foods served in throwaway disposables. At a time when sustainability is front-and-centre in our quest for a better life and a healthier planet, emerging concepts will have a greener operating philosophy. Whether these chains focus on fresh and organic salads, allergen-free meals or meatless menu options, you can be sure they’s™ll be serving more local products in eco-friendly packaging, and they’s™ll promote a greener operation from front of the house to back. Tomorrow’s foodservice operators will push new boundaries in the hopes of creating a more meaningful, sustainable legacy, and we can all take pride in that.
