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Technavio names top 8 vendors in US

July 13, 2016

The top eight vendors in the U.S. food service industry for the next four years are, according to a study by Technavio, offering a lot of value for their clients amid a highly fragmented and therefore intensely competitive market. However, the report finds that the increasing competition among vendors, along with rapid technological changes, might actually end up posing some risks to their operations.

"Due to the increasing competition, the vendors are reducing their product prices, which could negatively affect vendor margins and market growth," said Tenavio Food and Beverage research expert, Arushi Thakur. "Some of the companies in the market are more specialized than others with respect to particular commodities and financial resources.”

The results of Technavio's analysis of the market indicate that vendors who succeed in this highly competitive environment will be those who can best show why their products and services offer more value to their clients

The top eight

• Aramark:This  longtime Philadelphia-based vendor provides food, facilities and uniform services to the restaurant industry and others. With 272,000 employees worldwide, it's the second leading vendor on this continent and among the top three in the United Kingdom, Chile, China, Japan, Ireland and Germany in food service clientele. It reported strong financials for 2013 and 2014, with net sales in the most recent year of $14.8 billion.
• Compass Group North America: This North Carolina-based vendor is a key player in food service nationally, with $13.6 billion in net sales in 2014. Some of its brands include a line of sustainable food choices, called Balance Kitchen, as well as Simply Puur, which offers fresh food, and Chef jet, a quick-service concept with Asian cuisine from Chef Jet Tila.
• Domino's: This longtime Michigan-based pizza restaurant brand reported 2014 revenue of $1.99 billion. It is the world's second largest pizza chain and has, since 2009, invested $1.5 billion in co-op, local and national advertising. 
• McDonald’s: This 76-year-old icon of the burger business is the world's largest QSR chain in revenue, with locations in more than 100 countries. Worldwide it serves about 69 million people every day. Interestingly, more of its total revenue comes from European locations than anywhere else worldwide. For instance, Technavio reports that the brand's European locations comprise 40 percent of total revenue, followed by 32 percent in the U.S., then 23 percent from Asia Pacific, the Middle East and Africa combined, and 5 percent generated in other countries and through corporate.
• Restaurant Brands International: This relatively new (founded in 2014) Canadian-based company has 18,000 restaurants in 100 countries under the Tim Hortons and Burger King brands. By far the largest percentage of each brand's locations are franchisee-owned and operated.
• Starbucks: This Seattle-based company that is now 45 years old, revolves around coffee, of course. It is a premier roaster, marketer and retailer of specialty coffee, but in 2015 food service constituted about 3 percent of the company's total revenue. It also provides coffees and teas to a lot of other industries, including healthcare, hotels, restaurants and airlines. The maximum sales are made through nationwide distribution networks with U.S. Foodservice, Sysco Corporation and others.
• Subway: This Connecticut-based chain owned and operated by Doctor's Associates now has nearly 45,000 restaurants in 100 countries. It is also involved in the near field communications-based mobile payment product, Softcard, in a joint venture with Verizon Wireless, AT&T Mobility and T-Mobile US. Last year, the chain launched a wi-fi loyalty program with a Canadian company that specializes in monetizing wi-fi installations. The collaborative effort offers free Subway sandwiches to customers who log in via wi-fi at Canadian Subway locations.
• Yum! Brands:This Kentucky-based QSR company is one of China's fastest-growing retailers, with its KFC, Pizza Hut Casual Dining, and Pizza Hut Home Service brands. Aside from those two restaurant brands, Yum! Brands also is the company behind Taco Bell restaurants. Last year, the company said it's separating into two independent, publicly-traded companies, Yum! Brands and Yum! China.