FM's Top 50 Foodservice Management Companies—2009
Our annual definitive listing of the industry's major contract players, what this past year has held for them, and how they're coping with the business environment.
The Top 50 managed to add almost $2 billion in new volume in the past year, basically matching the collective gain posted in each of the two previous years. Most of that gain was generated by the top three companies — Compass Group North America (which regained the top spot this year), Aramark and Sodexo. Together they accounted for about $1,700 in increased volume.
That number should be put into the context of when these results were reported, however. Compass, Aramark and Sodexo all end their fiscal years in the late summer/early fall. The fiscal 2008 numbers reported here were for periods that ended just before the banking crisis and subsequent recession last fall. Fiscal 2009 numbers reflecting that downturn won't be reported for several months, but interim reports from each indicate slowing growth.
Compass's interim financial report for the first half of fiscal 2009 (through March 31st) shows organic growth of 4.4% in North America, down from the 7% posted in the first half of fiscal 2008 and well under the nearly 10% growth rate posted in all of fiscal 2008.
Sodexo posted organic growth of 3% in the first nine months of its 2009 fiscal year (through May 31) in its North American operations, compared to 5.4% growth for all of fiscal 2008. Aramark was actually down about 4.3% in the first three quarters (through July 3) of fiscal 2009, from $6.550 to $6.270 billion in its North American Food and Support Services unit. In fiscal 2008, it grew almost 6%.
The Top 50 is confined to firms that operate significant manual foodservice operations, whatever else they may do. For this reason, companies that are, for example, exclusively vending specialists or caterers are not included.
It is also important to note in this context that the top-line volumes posted by some of the companies in the Top 50 contain revenues generated by operations other than managing manual foodservice. Most prominently, Aramark Food & Support Services is generally acknowledged to derive a significantly larger proportion of its revenues from non-food-related support services (facilities management, laundry, housekeeping, etc.) than Sodexo or Compass do. (For more specifics on this, go to food-management.com/editors_page/side-service-equation-0209/index.html.)
A similar search for growth has also led several other Top 50 companies to expand into areas like facility management and other support services, commercial restaurant operations and outsource meal production. Another nod to the sour economy: many Top 50 companies cite efforts to provide more economical and “value” meal choices as among current initiatives.
Of course, many are also expanding their offerings in terms of healthful meal options, and “green” initiatives, ranging from recycling and composting programs to local sourcing. These efforts are a nearly universal theme in their marketing.
Companies that operate in the B&I sector have seen major challenges, generally reflected on their top-line numbers. Those with heavy concentrations of business in other onsite segments have generally been more successful in driving growth.
While the Top 50 is an excellent resource for determining the major national and regional players in the contract foodservice sector, caution should be exercised before drawing larger conclusions about a company's market position simply from its nominal standing on the list.
TOP 50 at a glance
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© 2012 Penton Media Inc.
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