Hiring a Food Service Company? 5 Things You Need to Know

There are a lot of food service companies out there. From massive multinationals to smaller regional providers, you have tons of options. We’ve already covered the nine questions you need to ask when hiring a food service provider, so let’s dig into a few other issues you should be aware of.

Keep in mind that there are many types of food service operations, each with strengths and weaknesses. The issues below are generally found when working with corporate cafeteria providers, but they can crop up with other service companies, too.

1. Menu fatigue is a real problem

Because of their history and how they create profit, food service companies have limited options when it comes to creating variety in your corporate cafeteria. And when we say “limited options,” we mean a regularly rotating menu. So your employees might be eating the same meals every three weeks or so.

Even with phenomenal food, people get bored. That’s called menu fatigue. It’s a real problem in the food service world. And it has real repercussions.

Corporate cafeterias are getting less business, and menu fatigue is one of the reasons. If your employees aren’t going to the cafeteria, the corporate food service company you hired isn’t making as much money. Which means they have to take cost-cutting measures.

So what’s the solution?

Make sure your food service provider emphasizes variety. That might sound like an easy fix, but it can be a big challenge. When national food service companies have huge deals with food distributors, they don’t have much input on what they’ll be serving. And, unfortunately, neither do you.

If you can find a food service company that promises variety, though, you’ve struck gold.

2. They’re slow to change

Restaurants and fast food chains have been quick to adopt the new meatless craze. KFC is serving plant-based chicken through its partnership with Beyond Meat. Burger King offers an Impossible Whopper. Local restaurants around the country serve meatless burgers.

But the largest food service companies have been slow to adapt. They’re starting to roll out meatless options, but they’re far behind many other food providers.

And it makes sense. With those national-level distribution deals, they don’t have a lot of choices. They take the ingredients that they get good deals on and turn them into the meals you see at your cafeteria.

Local restaurants are much faster to adapt to consumers’ changing tastes. All they have to do is place an order and they can be serving the latest meatless burger, locally sourced vegetables, and oat milk for your coffee. They can have bottles of celery juice in no time at all.

Food service companies’ lack of flexibility becomes very prominent when you think of it that way.

3. They’re expensive

It’s hard to get a straight answer on what food service companies charge. They work out contracts with each customer, because every company has different needs. But you can bet that you’ll be paying a hefty sum if you hire a traditional food service company.

From the outset, you’re paying for things like distribution and management. They’re factored into your contract cost and your cafeteria subsidy, and that can drive prices up. But there are other issues that increase cost, too.

Remember the problem with menu fatigue and lack of variety? That trickles down into the pricing of food service programs. When employees aren’t taking advantage of the cafeteria, these companies need to find other ways to make money.

That often means getting you to sign a contract saying you’ll use that food service company for any food-related needs. That means catering, coffee and snacks, and continued use of their cafeteria service. That adds to your cost.

Then, in addition to added costs, you’ll be subjected to cost-cutting measures. This includes things like offering fewer options, installing self-checkout lanes, and hiring minimum-wage workers with no passion for their jobs. That might not affect the food itself, but it can certainly affect your employees’ lunchtime experience.

All in all, food service companies are offering less and charging more. If you want to get a good deal, you have to go hunting for it.

4. Some options require on-site facilities

Do you have a kitchen and cafeteria in your office building? If not, you may face an uphill battle trying to find a contract food service company to work with. Some require that you have cafeteria facilities available (or that you build and make them available).

If you already have these facilities, great. That’s a cost you don’t have to worry about. But if you don’t, and you’re considering hiring one of these companies, you have a serious expense to consider.

It’s impossible to generalize what you might pay for these facilities. But a 2012 document from the State of Georgia put reimbursement rates at $79 per square foot of cafeteria space and $129 per square foot of kitchen space. The Balance estimates a bare minimum of $50,000 to $75,000 for opening a small cafe or diner.

And that’s before you get any food service at all. Even opening a small-counter cafe could cost you tens of thousands of dollars before you sign your first contract.

5. They work best for large companies

If you don’t have hundreds or thousands of employees, hiring a food service management company may not be economical. These giant providers work best with other very large organizations.

Why? Because everything they need is big. They need big contracts to stay profitable. That requires demand for a lot of meals. Large kitchens and serving areas are required to meet that demand.

Smaller companies may not be able to meet the requirements that national food service companies have. Or they’ll be forced into further compromises, forfeiting volume discounts and signing contracts for additional food services.

Of course, there are food service providers that work with smaller companies. But the economics of the industry are working against many small- and midsize businesses. It’s something to keep in mind when you’re looking for a food service company that will work for your organization.

Find the Food Service Company That Works Best for You

Choosing a company to feed your employees is an important decision. The right food and the right atmosphere can be a big boost to productivity and improve your company culture.

But choosing the wrong one will result in lots of headaches. We’ve seen it happen before, and we don’t want it to happen to you. So when you’re searching for food service companies near you, here’s what to look for:

1. Lots of variety (more than a three- or four-week rotation)
2. New foods and being on-trend
3. Affordability and flexibility in pricing/contracting
4. Ability to use the facilities you currently have on-site
5. Willingness to work with and adapt to a company your size

That’s a big ask. And it’s why so many companies are now replacing their cafeterias with different options. But if you’re set on a traditional food service provider, you know what to look for!