You don’t go to a hospital to grab a bite to eat. Or do you?
Given the attention the health care industry is giving of late to its food offerings, the question might not be as far-fetched as it sounds.
“A hospital in Lincoln, Neb., invested $7 million to upgrade its café in order to attract world-class employees,” said Brett Asleson, who recently managed the health care segment of the Hormel Foods Foodservice division. “There are some very nice restaurant-style options for patients, visitors and staff in many places,” he said.
To wit: The Nebraska facility, a Hormel Foods customer, counts a pho station (a Vietnamese noodle dish) among its amenities. And yes, some hospitals are even capturing outside traffic, Asleson said.
The New Normal
As curious as it may sound, it’s all part of a trend that’s bringing hyped-up creature comforts to the health care sector. Airports figured it out years ago, abandoning ho-hum restaurants for big-time national brands and concepts with regional flare. In much the same way, the health care industry is recognizing that consumers have choices, and smart organizations are working hard at becoming the chosen ones.
“The new normal is exponentially more intensively competitive with unprecedented pressure on health care foodservice operators to be at the top of their games,” wrote Donna Boss, an editor at Foodservice Equipment and Supplies.
That spells good news for Hormel Foods, which is hardly a newcomer to the industry. Indeed, it has long counted hospitals, assisted- living residences, long-term care facilities and related businesses among its foodservice customers. Nevertheless, the company amped up its attention to health care several years ago, a strategic move that was in part based on economics.
“When the [foodservice] market compressed around 2008, the hotel and restaurant business deflated,” said Annemarie Vaupel, who oversees innovation for the company’s Foodservice division. “Health care, which includes senior living, became an area of focus for us.”
Health care eventually became a segment unto itself within the Foodservice division under the large and successful Refrigerated Foods umbrella of Hormel Foods. In 2013, Vaupel was tapped to head it up.
“Since we employed that strategy, we’ve grown our health care business by 2 to 3 million pounds a year,” she said. “And we’re just scratching the surface.”
Health care, which includes senior living, became an area of focus for us.Annemarie Vaupel, marketing director, Hormel Foods Foodservice division
The immense potential is no doubt anchored in the rapidly growing United States senior population that’s been widely reported, including on Census.gov, the U.S. Census Bureau’s website.
“Between 2012 and 2050, the United States will experience considerable growth in its older population,” wrote Jennifer Ortman, Victoria Velkoff and Howard Hogan in “An Aging Nation: The Older Population in the United States.”
“In 2050, the population aged 65 and over is projected to be 83.7 million, almost double its estimated population of 43.1 million in 2012. The baby boomers are largely responsible for this increase in the older population, as they began turning 65 in 2011,” the authors wrote.
At the risk of oversimplification, the generation known as baby boomers — the first of whom are in their early 70s — will be wanting or needing more health services and different living arrangements as time goes on.
As for housing, “There are still traditional options, but there are also very high-endproperties that offer amenities such as golf courses, sushi bars and cafes,” Vaupel said. Think of an all-inclusive resort for seniors.
Needless to say, not all seniors are wealthy by any stretch of the imagination. But as a demographic, there is — and will be — more buying power there than ever before, according to Dan Voorhis, a writer for the Wichita Eagle.
Backing up Vaupel and lending credence to Voorhis’ claim, Asleson commented that even as the health care sector at Hormel Foods is outpacing its other foodservice business, housing is a standout. “The subsegment of senior living is experiencing an even faster growth rate and outlook as baby boomers come of age,” he said. “We expect it to grow 6 to 7 percent a year,” Vaupel added.
The decision of Hormel Foods to hone in on health care has been nothing, if not fortuitous. Still, any company can find itself in the right place at the right time. Knowing how to handle such serendipity is one of the things that sets Hormel Foods apart.
“The way our strategy differs is that we innovate against what our customers need,” Asleson said. “Understanding our customers’ operational challenges and meeting them makes us successful.”
To that end, Vaupel’s board position with the Association for Healthcare Foodservice “gives the company tremendous understanding of the nutritional needs, food-cost parameters and other key factors,” she said. “It gives us incredible intelligence that we can use to develop products that work in that segment.”
In some cases, it’s relatively simple, as was the case several years ago when Hormel Foods learned that the 4-ounce chicken breast offered in its successful line of Hormel® Fire Braised™ meats was simply too much for the appetites of seniors and hospital patients. Using the palm of her hand to indicate the size of the new product, Vaupel said, “Our customers asked us if we could do a 3-ounce portion, so we did. It helps them with cost and food waste, too.”
It also demonstrates that Hormel Foods is listening and caring about the challenges the industry is facing. At times, that leads to products that are nothing short of revolutionary.
One need not look beyond Hormel® Bacon 1™ perfectly cooked bacon, a line of fully cooked bacon that looks, tastes and performs like a bacon cooked from raw. Hormel Foods introduced the product in 2013 to rave reviews. “We’ve maxed out two production lines already,” Vaupel said. “We can’t make it fast enough.”
In addition to the taste and texture, the product is a boon to the health care industry in other ways. For example, it saves time, reduces labor and practically eliminates the grease that is a byproduct of cooking bacon from scratch.
A Partner In Foodservice
That brand of creativity and innovation is no doubt among the reasons industry foodservice directors are increasingly looking to Hormel Foods as a partner that wants to understand what they’re facing — and will be facing — and help them figure out new and better ways of doing things. That sharing of information happens on a day-to-day basis through relationships that are forged over time, and more formally, through In Front of the Future, a three-day summit that takes place annually in Austin, Minn.
The summit is a joint venture between Hormel Foods and FoodService Director magazine. Each year, 12 first-time participants are treated to valuable networking and discussion, a tour of one of the production facilities of Hormel Foods, a visit to The Hormel Institute and a presentation on emotional intelligence by a staff member of Harvard University.
This year’s edition of In Front of the Future brought customers together from health care and higher education, as both areas are now under Greg Hetfield, national sales manager for Hormel Foods and a long-time member of the Foodservice division. It makes sense, Vaupel said. “Very often, they are connected and have a similar mission,” she offered, referring to universities affiliated with large teaching hospitals, for example.
Asleson agreed. “We have a dedicated team of 120-plus sales people to call on health care, colleges and universities. They understand the setting, and that it’s different from commercial foodservice,” he said.
“We speak their language. We take time to understand. We take time to sit down and talk with them.”