September 21, 2020
Foodservice Management Firms (FSMs) have been growing in size and share. In many ways, FSMs should be viewed as the chain operators of these beyond-restaurant/noncommercial segments, and the larger players tend to have large footprints that will continue to make them an attractive target for distributors as the industry recovers.
- Total food, beverage, and nonfood purchases for the segments in which FSMs operate were $58 billion in 2019. In total, these segments accounted for more than 260,000 locations.
- The report includes current state and outlook for segments in this market, including Business & Industry, Healthcare, College & University, Primary/Secondary Schools, Recreation, and Corrections.
- It’s expected that the larger FSMs will continue to outperform the overall foodservice industry and will likely see recovery first.
- Each of the three major FSMs own a procurement arm (which works like a GPO) that also offers procurement services to operators outside of those that are managed by the FSM.
- Fewer discretionary purchases are being made by the FSMs and more purchases are being made through mandates or approved supplier lists. As a result, distributors may see more of its volume tied up in contracted businesses, which may in turn have an impact on margin and overall profitability.
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