September 08, 2009

Written by: Vince McConeghy

If you were to ask Warren Buffet where to put your money in a basket of food service stocks, the Oracle of Omaha (now that he's made a tidy sum with his Dairy Queen holdings) might take a hard look at school food service companies.

Why?

At LFS.com, we think that school food service will be the greatest growth area in the overall industry, or better stated, a preponderance of events leads us to believe that growth in this sector has all of tell-tale markers of the most momentous event in school food service history – the invention of the fish stick.

Take, for example, current legislation being considered in Washington called the Child Nutrition Reauthorization Act, which calls for a whopping 70 cent increase in government reimbursement per meal. Factor in a huge demographic shift in favor of school age-going children, and a terrifying growth rate of obesity amongst these children, and you have a nice little cauldron that puts school food service in the media, in government committees, and  most importantly, dollars in the pipeline. There seems to be no getting around the health care debate these days, and school nutrition is at the top of the list when it comes issues facing our young generation.

Food service equipment vendors have just come off a frenzied bidding process that had them grabbing for President Obama’s pocket change when the Prez included school food service equipment in his National Stabilization Act. The actual spending spree for this equipment  has yet to commence, but I know of a few food equipment guys who still have their fingers crossed waiting for the green light.

But just keep thinking of that 70 cent per diem increase. Let’s say it goes through (or let’s just say some increase is absolutely going to go through), imagine what that little bump can do for an industry where over a couple hundred million meals are served annually.

It’s enough to make me set foot back in my old high school with a sales sheet in hand, and stare down those lunch ladies who served a fine dish of comeuppance.