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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