1. Source: U.S. Food Marketing System, 2002, ERS-USDA U.S. Food Service EconS 451: Lecture #5 Food service share of food dollar growing, at the expense of supermarkets. Relatively concentrated industry Multi-branding attempts Technological developments and impacts upon food service industry.

2. Source: U.S. Food Marketing System, 2002, ERS-USDA Food Service is Gaining on Supermarkets’ Share of Food Expenditure

3. Source: U.S. Food Marketing System, 2002, ERS-USDA Distribution of U.S. Food Service: Commercial vs. Non-Commercial

4. Source: U.S. Food Marketing System, 2002, ERS-USDA Top Five Food Service Chains

5. Source: U.S. Food Marketing System, 2002, ERS-USDA Technological Developments Restaurants developing presence on Internet: 30% had Website in 1999 56% had Website in 2000 Cybermeals: Worlds largest online meal ordering service Over 13,000 locations under contract Exclusive online ordering service for AOL, Excite, Yahoo, Lycos e-Vend-net: Equipping vending machines for electronic communication to relay instant info on inventory and sales

6. Source: U.S. Food Marketing System, 2002, ERS-USDA New Marketing Strategy for Food Service Multiple Branding Concept Welcome to Yum! Brands, Inc. Brinker family restaurants - casual dining, catering, locations, jobsBrinker family restaurants - casual dining, catering, locations, jobs How does this help? What are the risks?

7. Source: U.S. Food Marketing System, 2002, ERS-USDA U.S. Food Marketing System Ag. Producers Product Type Grain Beef Dairy Fruit Manufacturing Wholesaling Distribution Channel Retail Stores Food Service Broadline (50%) (Sysco) Specialty (33%) (Costco) Systems (17%) (Ameri-Serve) Food Service Distributors Retail Product Line Del-Monte LambWeston Frito-Lay MSBO (25%) Merchant (56%) Agent/Broker (19%) General Line (25%) Specialty (43%) Misc. (32%) Merchant-Third Party (38%) (Supervalu, Fleming) Self-Distributing Retailer (34%) (Kroger, Safeway) Direct-Store Delivery Manufacturer (28%) (Frito-Lay, Dreyers Ice Cream, Coke) OrganizationalProduct Type

8. Source: U.S. Food Marketing System, 2002, ERS-USDA Questions to Ponder: Overall Understanding the different degrees of concentration throughout the food marketing system, what are the likely consequences for producers, consumers? How has technology changed different components of the food marketing system? Explain how vertical and horizontal concentration alters the business landscape at each phase of the food marketing system.

9. Source: U.S. Food Marketing System, 2002, ERS-USDA Summary! Explain recent technological advancements in the food service industry and implications for consumers. Explain the Multiple Branding Concept in Food Service and the pros/cons associated with this approach. Understand the distribution of food service into Commercial and Non-Commercial sectors and how this has changed over time. How has concentration changed the food service industry relative to other components of the food marketing system?