Why You Should Market Your Food Product to Hospitals
So, you’ve thought about selling your food/beverage product to the healthcare industry. Driving past your local mega-hospital, maybe you’ve thought ‘Hey, those are big buildings with lots of people in them. I wonder if they would buy my food product?’ Or, ‘What do all the doctors, nurses, and medical technicians, not to mention patients and visitors, eat? Are they all brown-bagging it?’
The answer is, basically no, for the most part, they aren’t.
Hospitals and other healthcare facilities like nursing homes, provide cafeterias and other retail outlets for visitors and employees, as well as the nutrition services for patients. Both aspects are managed by the same food and nutrition team; a director of food and nutrition, dieticians, chefs and other staff.
As in other foodservice sectors like colleges – read more about the college foodservice market here – the quality of the foodservice in a healthcare facility is an important part of their guest’s and employees’ experience and is taken very seriously. These foodservice teams are constantly looking for new and improved food ideas and products to enhance their offerings.
Here’s a Quick Overview of the Healthcare Foodservice Industry
There are 60,000 healthcare institutions in the U.S.; ranging from urban mega-hospitals to smaller local hospitals and nursing homes.
How it Breaks Down:
▸Centers for Rehabilitation: 2,800+
▸Retirement & nursing homes: 38,700+
▸Nursing homes: 20,000+
▸Assisted living: 9,600+
▸Senior living: 9,000+
▸Other healthcare: 11,000+
A large hospital can have as many as 5,000 employees, as well as thousands of daily visitors and several hundred patients. So, these can be very large operations, with thousands of meals served.
How the Industry is Structured
The team who runs the food service, as mentioned above, are the director of food and nutrition, dieticians, executive chefs and their foodservice staff. These are known as operators.
For a large part of the industry, this team is employed by the hospital; these are known as ‘self-operated’.
But in some cases, the food service team is working for an outside company – called a contract management company. The largest three of these companies are Sodexo, Aramark and Compass Group. These contract-management companies also run foodservice in other sectors such as colleges and corporate dining (Business & Industry) – read more about these other foodservice industry sectors here. About 70% of healthcare foodservice is self-operated. The remaining 30% are contract-managed.
In addition to the operators on site, the wholesale-distributors who supply their operations are also critical. For the operator to buy your food product, it usually has to be ‘in-distribution’ – meaning it is being carried by these wholesale distributors.
The largest of these wholesale distributors are U.S. Foods and Sysco. Learn more about the foodservice wholesale industry here.
How to Sell to the Industry
The main industry organization for the self-operated part of healthcare foodservice is the Association of Healthcare Foodservice (AHF), which is a non-profit, industry-managed association. They hold an annual national conference and tradeshow and also have regional chapters and meetings. Attending and exhibiting at AHF events is an important way to market to the self-operated side of the industry.
Getting your product into wholesalers like U.S. Foods’ supply chains can be challenging – check out our eBook on this.
However, the best way to do that, is to have a large operator, that is an important customer of a distributor, advocate for you. This is sometimes known as ‘forcing distribution’. If a foodservice operator, like the executive chef at a large hospital, wants your product, it’s likely their wholesale-distributor will add it to their system.
Reaching the contract-management companies like Aramark and Sodexo is more complicated and involves a longer process to gain access to their purchasing departments. Of course, this is feasible, especially if your product fits an emerging need (like sustainability) or is truly ground-breaking.
The healthcare industry is a very large and stable part of our economy, that will never go away. The foodservice aspect of healthcare is equally large and stable. So, if you think your food/beverage product could be a part of this industry, it is well worth taking a look at and beginning your journey to market to this important channel.
And if you need some pointers along the way, we’re here for you! Contact us here.