Like most professional services firms, Torch Group has certain areas of concentration and particular excellence, owing to the various backgrounds and professional expertise of its principals. One of those happens to be the foodservice industry. In part, because of my pre-Torch Group career roots which has led to our firm doing a significant amount of work in that sector.
Early Impressions
When I first began attending the show, it was dominated by giant multi-billion-dollar companies such as General Foods. They staged elaborate booths, generously staffed by employees of their various divisions all decked out in dark suits, white shirts and ties. In those days, there were many fewer food equipment companies displaying at the show, and those that did tended to be smaller, privately-owned and overshadowed by the large corporate booths.
But in more recent years, the show has seen a marked increase in the number and size of the food equipment companies, to the point where such companies as Middleby, the Ali Group and ITW are now overshadowing the smaller food companies. There also is significant expansion in the tech sector. These software- and SaaS-based companies are targeting and developing products for foodservice operators. These mostly private-equity-backed companies, many of them startups, perform services such as automated reservations and supply chain services. And the tabletop companies have larger booths and a greater presence through new products, acquisitions and consolidation.
There are clear talent implications from these shifts. Large public companies have long recognized the importance of careful succession planning. They methodically develop a progression of talent, certainly for the C-level positions, but even at the VP and director levels, to replace key employees as they retire or move to other divisions or international assignments. That’s not necessarily the case for small and mid-sized privately-held companies. These organizations might do well to get some outside counsel on how to go about building a talent succession plan.
Some Additional Takeaways
There were a few additional takeaways from the trade show.
• The one thing we kept hearing is that there is a need for an infusion of fresh talent from outside the industry.
• Companies are having difficulty attracting people, especially younger talent, to what is perceived as an older, stodgy, unexciting industry.
• Most of the people we met are foodservice veterans who don’t leave the industry, but simply move from one company to another throughout their careers.
• Companies are starting to bring in retail and consumer products talent from their other divisions and other companies, where they can, to supplement the constant churn of people shuffling from one company to another.
• The industry is moving from an old boy network and relationship-based selling to solution and fact-based selling. Those that don’t, will be left behind.
• Lots of consolidation is happening at all levels within the channels: manufacturers, dealers, distributors, buying groups, and operators are all combining their companies and assets to grow and gain efficiencies of scale.
For us, this show is a reminder about the importance of mingling in person with industry players. As our lives become ever more digital, we can sometimes lose sight of the importance of in-person experiences, where we build lasting relationships.
Like every industry these days, foodservice is changing and evolving, but as in every industry, those who can attract and retain the right talent will have a decided advantage.
These lessons learned could apply to any industry that exemplifies the same characteristics. If you have some additional observations on succession planning or how industry is changing and consolidating and how that is impacting your company, I hope you’ll drop me a line or email me at rontorch@torchgroup.com and share your thoughts. I’d appreciate hearing from you, as I value your thoughts and insights.