FOOD AND BEVERAGE

MANAGEMENT

Chapter 1 – The Food Service Industry

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

Eating is not optional

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.

Food and Beverage in the Modern Era

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.

Freestanding Restaurants

Non Commercial Facilities Business

MillsEmployee BenefitOffice Coffee Services

HospitalsTherapeutic diets

SchoolsFood Service began in mid 1800’s

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

Evolution of Food Establishments

Basic Segments

Commercial Food Service Operations –

Non Commercial Food Service Operations

Commercial Food Service Commercial Food Service Operations

attempt to maximize profits primarily through the sales of Food and Beverage

Examples:RestaurantsHotel F&B outletsOther – catering, food truck, carts, etc.

Freestanding Eating and Drinking Places –Can Be independentCorporateChain and Franchise

Styles Include:

Fine Dining

Casual Dining

Family Service

Quick Service

Lodging Food Service Operations Full Service

A La Carte Dining – Gourmet to FamilyCateringRoom ServiceCoffee shopsBars

Limited Service“Lobby Food Service”None

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

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

Non Commercial

Business Industry Healthcare Educational Leisure/recreation Transportation Organizations Private Clubs

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,

Organization of Commercial Operations

Commercial Food Services – 3 main categories

Independents

Chain Restaurants

Franchises

IndependantsOwned by an owner or group with no chain

affiliationMay have multiple units

Chain RestaurantsMulti Unit OrganizationsOften have the same menu, purchase

cooperativelyMaybe owned by a Company, Franchise

company, private owners(s)

Advantages of Chain RestaurantsEasier to acquire cash, credit and long term

leasesScale affords the opportunity to make a

mistakeAbility to experiment (foods, décor, etc)Personnel advantagesCan afford specialists (finance, risk

managementBetter internal controls – can compare

results within units.

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

Franchises

Special category of Chain RestaurantsFranchisee pays a fee to for the right use

the Name, Design and Business Methods of the Franchisor

Franchisees are often local investorsMaybe be required to pay royalty fees on a

percentage of revenue, advertising fees, sign rentals, food products etc.

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

Disadvantages

Strict ContractsMenu setDécor setSpecified production equipment

Contracts tend to favor Franchisor Little room to negotiate

Co Branding – 2 franchises share facilities

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

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 qualityOrganization may become too dependent on

the CMC.

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

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