FM's 2011 Top 50 Management Companies

Sep 1, 2011 12:00 PM, BY MIKE BUZALKA

The major foodservice contract management companies meet the challenge of tough economic times with operational innovation, fiscal discipline and targeted expansion.

Where the Numbers Come From...

The number that determines each company’s place in the Top 50 is its domestic top-line revenues for the most recently completed fiscal year (indicated in each entry in millions of dollars). Because most companies in the Top 50 operate on calendar years, they show a 2010 figure. In the few cases where a company completed and compiled 2011 fiscal numbers, we’ve used that figure. Where revenue or other numbers were not available, FM estimates are based on known accounts and other information (indicated by a red “e”).

Almost half of the 2011 Top 50 (23 companies)exceeded $100 million in revenues over the past year, the second most ever. There were 24 in 2009, of which three (Boston Culinary Group, Lackmann Culinary Services, Next Generation Vending) have been acquired in the interim. Last year, there were 20. The low for $100 million companies in the Top 50 was 13, posted in both 2003 and 2004. Joining the nine-figure club for the first time this year are Metz Culinary Management (#18) and Unidine Corp. (#20).

While the past year has been difficult for the economy as a whole, it is instructive to note that revenues for the Top 50 as a whole grew by almost $1.5 billion, or 4.6%, led by the Big Three of Compass, Aramark and Sodexo. But even the other 47 still added a net of around $165 million (2.4%) with only a half dozen posting actual revenue declines for the year. This illustrates the ability of Top 50 companies to manage operations and fiscals in even a difficult financial environment, as well as the way contractors manage their “portfolios,” balancing stable but slow-growth institutional segments with more volatile commercial ones like B&I and Recreation. It should be noted, though, that even contractors heavily in B&I have managed for the most part to hold their own while those concentrating on schools, colleges, healthcare and other institutional segments have generally done even better.

FM's Top 50 is limited to firms that operate significant manual foodservice operations, so companies that are, for example, exclusively vending specialists or caterers are not included. Onsite foodservice is a remarkably varied industry encompassing operations in a wide variety of environments, from school lunchrooms to football stadium skyboxes. Given this diversity, one should review the business summaries for each company to get a more accurate picture of its market activity and avoid drawing conclusions about any particular firm based simply on its position on the Top 50. Another complicating factor: contract terms that affect the revenue a contractor derives from a particular operation may obscure the scope of what is being managed. For clarity's sake, we use the gross revenue number that reflects the dollars companies put on their top line, believing that this best reflects a firm's size.

Click here for Top 50 results at a glance.