Food and Beverage Management

1. Chapter 1 – The Food Service Industry Food and Beverage Management

2. Eating is not optional The History of Food Service – • First Restaurants were part of homes that sold rooms and food to travellers • By the time of the Roman Empire, Inns were common. • The Roman Catholic Church – first “Hotel Chain” • Inns and Alehouses in England as early as 1400 AD • In the Americas – Cole’s Ordinary was among the first – Boston 1634

3. Food and Beverage in the Modern Era The early 20th century saw the construction of large modern hotels 1950’s – many felt the quality of food and beverages had declined in hotels. Today Food and Beverage is considered a prime profit center for many hotels.

4. Freestanding Restaurants Began in 1765 in Paris, France – the word restaurant derives from this establishment. In the U.S. the first restaurant is generally accepted as Delmonico’s in New York City (1827). The group closed in 1923. “Harvey House” was the first chain of commercial restaurants and hotels in the U.S.

5. Non Commercial Facilities • Business • Mills • Employee Benefit • Office Coffee Services • Hospitals • Therapeutic diets • Schools • Food Service began in mid 1800’s

6. Evolution of Food Establishments • The automobile – drive in restaurants, drive through, etc. (A&W, Howard Johnsons) • Quick Service and “Fast Food” (McDonalds, Burger King) • “Fast” Casual Food • Food Trucks • Delivery (Pizza, restaurant menus) • Laundro Bars • Food Courts • Grocery take out / sit down (Whole Foods) • Home Meal replacements

7. Basic Segments • Commercial Food Service Operations – • Non Commercial Food Service Operations

8. Commercial Food Service • Commercial Food Service Operations attempt to maximize profits primarily through the sales of Food and Beverage • Examples: • Restaurants • Hotel F&B outlets • Other – catering, food truck, carts, etc.

9. Freestanding Eating and Drinking Places – • Can Be independent • Corporate • Chain and Franchise Styles Include: Fine Dining Casual Dining Family Service Quick Service

10. Lodging Food Service Operations • Full Service • A La Carte Dining – Gourmet to Family • Catering • Room Service • Coffee shops • Bars • Limited Service • “Lobby Food Service” • None

11. Other Commercial Facilities • Public Cafeterias • Bars, Taverns, Lounges • Ice Cream Stands • Caterers • Food carts and trucks

12. Non Commercial Operations • Operations offering Food and Beverage as a component of –but not the primary mission • Usually focus on offering nutritious meals and minimize expenses related to Food and Beverage Operations

13. Non Commercial • Business Industry • Healthcare • Educational • Leisure/recreation • Transportation Organizations • Private Clubs

14. Business / Industry • Company canteens (Google), Vending • Healthcare • Hospitals, Orphanages, Nursing Homes • Educational Institutions • Schools, Universities, Senior meals • Private Clubs • Country Clubs, Dining Clubs • Leisure and Recreational • Arenas, Amusement Parks, Casinos, Bowling alleys • Transportation Companies • Airlines, Trains, Ships • Others • Prisons, Military, Religious, athletic facilities, Cruise Lines,

15. Organization of Commercial Operations • Commercial Food Services – 3 main categories • Independents • Chain Restaurants • Franchises

16. Independants • Owned by an owner or group with no chain affiliation • May have multiple units • Chain Restaurants • Multi Unit Organizations • Often have the same menu, purchase cooperatively • Maybe owned by a Company, Franchise company, private owners(s)

17. Advantages of Chain Restaurants • Easier to acquire cash, credit and long term leases • Scale affords the opportunity to make a mistake • Ability to experiment (foods, décor, etc) • Personnel advantages • Can afford specialists (finance, risk management • Better internal controls – can compare results within units.

18. Disadvantages of Chains • Difficult to keep up with changing markets and economic conditions • Bureaucracy creep slows and can hamper efficiency • Single bad event can damage the entire chain

19. Franchises • Special category of Chain Restaurants • Franchisee pays a fee to for the right use the Name, Design and Business Methods of the Franchisor • Franchisees are often local investors • Maybe be required to pay royalty fees on a percentage of revenue, advertising fees, sign rentals, food products etc.

20. Advantages to Franchising • Start up assistance • Company training programs • National Advertising campaigns • Name Recognition, Food Consistency • Lower food cost with volume purchasing • Tested operating procedures • Employee recruiting

21. Disadvantages • Strict Contracts • Menu set • Décor set • Specified production equipment • Contracts tend to favor Franchisor • Little room to negotiate • Co Branding – 2 franchises share facilities

22. Non Commercial Companies and Contract Management Companies • As Pressures for cost containment mixed with lower revenue, there is a need for non commercial operations to operate more like their commercial counterparts • Advantages • Large Companies have greater resources to solve problems • Can save money through effective national negotiations • Can often operate at lower costs • Faculty administrators can delegate to food service professionals

23. Disadvantages to Contract Management Companies • May assume too much control – effecting public image • Some people dislike the profit motivation in non profit type operations • Concerns of decreased food quality • Organization may become too dependent on the CMC.

24. The Future of Food Service • Home Meal Replacements • QSR – new foods and higher quality items • More entertainment in casual restaurants • More offering in non traditional stores (7-11) • Comfort foods, Fusion Cuisine, Healthy choices • Green Restaurants • Improved Technologies

25. Vocabulary • A La Carte Menu • Chain Restaurant • Co-Branding • Comfort Foods • Commercial Food Service Operation • Franchise • Franchisee • Franchisor • Green Restaurant • Home Meal Replacement • Independent Operation • Lobby Food Service • Non commercial food service operation • Office coffee service