Corporate cafeterias are a hot topic in today’s business world. But do you really know how they work? If you’re considering a corporate cafeteria management company for your in-house food service, there are a few things you should know.

We’ll start with the basics, then dig into the details.

What Is a Corporate Cafeteria?

A corporate cafeteria is a place where the employees of a company can get lunch without leaving their place of work. Each meal might be paid for by the company, by the employee, or a combination of the two. Corporate cafeterias can also serve entire buildings containing multiple businesses.

If you think about the cafeterias you ate in while you were in school or summer camp, you have the right idea (though you’re less likely to find chicken nuggets on corporate dining menus).

Office cafeterias have some serious benefits. As an employer, you get to provide a perk that your employees will appreciate, whether it’s a company subsidized cafeteria or employees pay full price.

Some companies run their cafeterias completely in-house, but it’s often easier (and more economical) to hire a management company. Fooda for example, a food management company, has found a way to bring local restaurant Popups into the cafeteria space, replacing the old and mundane food options with fresh, authentic local favorites in a term they coined as ‘Cafeteria Replacement’.

What Corporate Cafeteria Management Companies Do

To put it simply, corporate cafeteria management companies handle everything related to your cafeteria. They order food, plan menus, prepare food every day, and handle cleanup. They might help you with getting your cafeteria set up, too, if you don’t have one yet.

Let’s take a look at each step in a bit more detail.

Ordering Food

Corporate cafeteria vendors have relationships with national food distributors. And because they order for facilities all over the country, they can negotiate discounts on much of the food they order.

That’s good for them and for you, because it saves you both money. The better deal the management companies get on their food, the less they have to mark it up to make a profit.

Planning Menus

Based on the ingredients they’re able to order, corporate cafeteria management companies plan the menus for each cafeteria. It might be fried chicken one day, Thai salads the next, and salmon patties after that.

Corporate cafeteria menus can vary widely, both in the kinds of food and in the variety they present.

That variety, however, is often one of the counts against these kinds of corporate dining facilities. Because of those national-level discounts, chefs get the same ingredients on a regular basis. So they’ll rotate through the same dishes every three or four weeks. And even if they’re eating great food, employees get bored with having the same thing regularly.

Preparing Food

Every day, the chef running your cafeteria will oversee the preparation of the day’s food. In almost every case, this will be a lunch—but depending on your contract, they might also serve breakfast, coffee, or snacks, too.

This is one of the biggest reasons why corporate cafeteria management companies are so helpful: they prepare all the food. Employees get freshly made meals every day that they go to the cafeteria.

Serving Food

Once the food is prepared, cafeteria employees serve it to members of your company. This can happen in a few different ways. There might be serving stations, like in the cafeteria you remember from school, for example.

But some of these businesses are going to a self-checkout model to save money. Others might offer boxed lunches that are easy to grab and bring to a meeting or back to an employee’s desk.

Cleanup

Once the lunch rush is over, cafeteria employees clean up the dishes and put away the rest of the food.

This is an underappreciated aspect of corporate cafeteria management—the fact that you and your employees don’t need to clean up after you’re done eating lunch is a huge timesaver.

How Cafeteria Management Companies Make Money

There are several ways you might pay for a cafeteria management company. But you can bet that you’ll be paying a regular management or contract fee, depending on how you price and configure your cafeteria.

For example, a limited or capped subsidy system sees your company paying the management organization a specific amount each month or year—if the management company goes over that amount, they’re liable for the cost.

In contrast, with a full subsidy, your company pays for everything the cafeteria provider needs. This is a tough place to be in, as the management company has little incentive to reduce their overhead costs.

The cost of each meal also goes to the management company. Whether that comes from employees, your company, or a mix of the two, is up to you.

Forecasting, cash management, and other expenses can also come up. Again, how these are paid for depends on your deal with the cafeteria manager.

Figuring out exactly how much you’ll pay can be difficult. Each vendor will deliver a custom quote for your in-house cafeteria. But you can bet that the management fees will add up to a lot.

The Trouble With Corporate Cafeterias

You’re probably already seeing where corporate cafeteria management companies run into problems. But let’s look at them in detail. There are three main ways that these companies struggle:

Menu Fatigue

Work cafeteria menus are repetitive. It’s the nature of the business. Because management companies have to negotiate the best deals with distributors to stay profitable, they get a lot of the same ingredients.

Not only that, but each chef—no matter how talented—has a specialty. Maybe it’s French food. Or American cuisine. They could have trained in Mexico. Sure, all chefs have a variety of influences and dishes from other parts of the world. But they can’t drastically change their style from week to week.

Both of these things mean that employees get the same meals regularly. It might not be every week—but even with a cycle of three or four weeks, people can get bored.

That’s called menu fatigue.

Not Meeting Consumer Demands

Modern consumers have high expectations of their food. They want authentic, cultural experiences from chefs who come from—or at least trained in—different cultures.

Depending on your corporate cafeteria management company, you may end up with a chef who has authentic South American or Asian experience . . . or you might not.

But that’s not the only thing your employees want from their food. They also want to support local businesses, that use local ingredients, and environmentally friendly methods and materials.

Traditional corporate cafeterias just aren’t set up to meet these demands. They have deals with huge national distributors and can’t absorb the cost of eco-friendly materials. Some traditional companies are trying to lean in this direction, but they’re having a lot of trouble with this massive shift.

Decreasing Participation

If you have a company cafeteria, you want your employees to take advantage. If they’re not using the cafeteria, the economics of the situation quickly get out of hand (we’ll get to that next).

But because of the problems I mentioned above, employees are just aren’t using corporate cafeterias as much as they used to. That forces corporate dining services to raise prices or further cut costs, leading to even less participation.

Beyond the financial aspect of decreasing participation, it makes it hard to justify providing this perk to your employees. If they’re not taking advantage of it—and not especially enjoying it—is it worth the time, effort, and money it takes for you to provide it?

Rising Costs

Because of the decreasing participation in corporate cafeterias, management companies need to raise their prices to stay profitable. As you might expect, that can drive participation down further.

But it’s not just the cost of food that goes up. There are other costs, too. For example, some corporate cafeteria companies are using more self-checkout lanes so they don’t have to pay cashiers. This decreases costs, but it also decreases human interaction.

Cafeteria management companies also look to different ways to add to their income stream. That often means signing a contract saying that you’ll use that company for any food-, vending-, or catering-related contract you need. Which locks you into something you might not want.

How Corporate Cafeteria Companies Need to Change

Okay, so it’s clear that workplace cafeterias have some problems. But providers of these services are trying to figure out how to improve employees’ cafeteria experience. And there are a few things they could do.

We’ll take a look at two primary things that corporate cafeteria services could do to improve that experience.

Offer More Variety

When employees first start going to a cafeteria, they’ll think there’s plenty of variety. A three- or four-week menu cycle has a lot of options on it. But after a couple months—much less a few years—of the same cycling options, they’ll get bored.

So cafeteria services need to offer more variety.

The best way to do that is to partner with local restaurants and caterers that cook with their own ingredients. These popup restaurants are better than your traditional cafeteria in every way. Their menus change seasonally, they use fresh ingredients from local sources, and they can offer a wide variety of dishes on any single day.

This is the idea behind corporate food halls, which host a rotating selection of local restaurants. They can also feature their own signature chefs—the food hall at Hyatt headquarters is a great example of combining these two concepts.

Of course, there are other ways to do this. Corporate cafeteria management companies could rotate chefs, prioritize widely varied menus, or work with local providers for more seasonal (and varied) ingredients. But that doesn’t work well with their current profit model.

Emphasize Authenticity

The modern business cafeteria needs to offer more than what’s convenient based on which ingredients are on sale.

It has to emphasize authentic dining experiences. Often that means letting a chef drive the menu decisions instead of leaving profits in control. Chefs have unique styles that stem from lots of experience and dedication to a particular cuisine. The standard corporate cafeteria model just can’t support that.

But authenticity goes beyond food. It includes the interactions that your employees have with the cafeteria employees. Because of their profit models, corporate cafeteria management companies employ low-wage workers who aren’t passionate about their jobs. And with more companies going to self-checkout stations, even those interactions are falling out of favor.

That’s where local restaurants come in again. When they’re serving in the workplace, your employees get the chance to interact with people who have built a career out of service. They even get to meet the owners and chefs from the restaurants—people who exhibit great passion for their craft.

An Uphill Battle for Corporate Cafeteria Management Companies

It’s easy to see why Popup restaurants are an important corporate dining trend. They give business owners all of the things that management companies don’t—without costing a fortune.

But corporate cafeteria services struggle providing these services. They’re built on a very different kind of profit model. And partnering with other businesses just doesn’t fit with how they’re run.

To be sure, some companies are trying to change how they do business and partner with more local food service providers. But it might be once a month—once a week if you’re lucky. That’s not enough to solve the problems mentioned above.

Which is why so many tech companies are disrupting this space.

Will corporate cafeteria management companies change in time to save the industry? Or will they be displaced by more modern corporate food halls? We can only wait and see.