Healthcare

 

Healthcare Segment

The total size of the healthcare segment in terms of operator retail sales was $28.9 billion in 2020, making up 34% of the total noncommercial retail sales in 2020. Hospitals form the largest share of the healthcare foodservice segment, with 43% of all segment sales made by the hospital foodservice operations. Senior living and long-term care subsegments have relatively equivalent shares at 31% and 26%, respectively.

The healthcare segment was one of a few segments to not have sales drop below pre-pandemic levels during 2020. However, the segment has lower growth rates than others. 

Key Decison Makers

• Foodservice Directors—Foodservice directors are those who run the foodservice operations and tend to have a strong input into the types of equipment necessarily for that hospital.
• Nutritional Directors—Nutritional directors play a secondary role as influencers since they are often developing menus and have input into preparation techniques. They often won't make the final decision but can have an impact on what is being evaluated.
• Facility Procurement—Depending on the setup of the healthcare foodservice operation (and whether it is self-operated or not), procurement departments may get involved in negotiations and final approval.
• Design Consultants—Particularly on new projects and major renovations or remodels, healthcare operators will defer to design consultants on brand and equipment specification.​​
  

The healthcare segment of the non-commercial foodservice industry is made up of three main subsegments: hospitals, senior living facilities, and long-term care units.

Hospitals

• 43% of healthcare segment
  
• Sales expected to grow $4.8 billion to a total of $17.1 billion going into 2025
• Majority (55%) self-operated
• ​Largest hospital foodserv​ice programs: UPMC Presbyterian (Pittsburgh); Yale-New Haven Hospital; New York-Presbyterian
  
• Key Segment Trends
• Hospital foodservice tends to serve three different audiences: in-room patient feeding, cafeteria (for employees and guests) and catered functions for executives.
• In the near term, operators are most focused on delivering on safety and keeping employees, guests, residents and patients safe. But once the pandemic has subsided and operations stabilize, we can expect operators to return to pre-pandemic initiatives, such as sustainability efforts and foodservice innovation.
• Demand for on-the-go food options is steadily on the rise, particularly in the cafeteria area, as COVID-19 visitor restrictions ease around the country.
• Hospital foodservice operators are currently offering made-from-scratch and made-to-order food options as well, with more operators planning to roll out these offerings soon.
• Apart from made-to-order options, use of fully prepared items and speed-scratch items on the menu is also expected to continue, especially due to continued labor recruitment and retention issues.
• Role of Equipment Within Segment
• Foodservice operators who choose easily and conveniently accessible, open-front, grab-and-go display units may see a boost in sales from guests and employees looking for quick on-the-go food options.
• Offering build-your-own stations for staples like salads and other equipment that facilitates customizability at foodservice locations is most likely to appeal to patients and visitors.
• With the rising cost of labor and tight budgets, operators based in hospitals are likely to have a continued need for traditional blast chillers and combi-ovens in addition to any abovementioned made-from-scratch-related equipment.
• With on-demand room service gaining traction, the need for cost-effective food and labor solutions is imperative. This can be achieved by leveraging premade meals and easy-to-use cooking technology. Among the nonfood prep and cooking equipment, quiet, nondisruptive food carts are also expected to be in demand.​
  

• 26% of healthcare segment
  
• Valued at $7.6 billion in 2020; expected to grow to $9.1 billion by 2025
  
• Vast majority (74%) are self operated 
  
• Two distinct categories:
  
• ​Residential disability care - provide residential care to those with developmental, mental or drug abuse related issues
  
• Nursing home facilities - provide inpatient nursing and rehabilitation, includes convalescent homes, hospices and other facilities that provide nursing care
  
• Key Segment Trends
• Long-term care foodservice tends to serve two different audiences: in-room patient feeding and cafeteria (for employees and guests).
• In the near term, operators are most focused on delivering on safety and keeping employees, guests, residents and patients safe. But once the pandemic has subsided and operations stabilize, we can expect operators to return to pre-pandemic initiatives, such as sustainability efforts and foodservice innovation.
• Better snacking and vending options are also increasingly appealing to residents in the long-term care facilities who are looking for greater flexibility in their snacking times.
• ​Role of Equipment Within Segment
• Specialized cooking equipment, such as steam-cooking equipment, can play a role in managing issues around healthfulness. Foods cooked using steam equipment retain vitamins and nutrients while holding flavor, giving operators the best of both worlds and appease residents looking for variety in healthy foods.
• Similarly, a variety of cooking equipment, such as combi-ovens, grills and broilers, will have demand as the segment shifts toward offering a greater variety of food options in general.
• Due to safety responses from the pandemic, open-front, grab-and-go display units may see a boost in sales from guests and employees looking for quick on-the-go food options.
• Equipment specific to food waste reduction like composting can help many of the long-term care facilities engaged in food waste reduction and sustainability efforts meet their goals.​