Plummer & Associates' Blog

For years the food services industry has been labeled an industry for low pay and low skills. Research recently completed by Plummer & Associates, an executive search firm, shows quite the opposite. The food service industry now has highly educated leaders.

This new study on the education of Chief Executive Officers at the top 100 food service chains in the United States shows that today over 68% have college degrees. This study also shows a growing trend of CEO’s with advanced degrees as 18% hold MBA degrees, 2% hold MA/MS degrees, and 4% hold JD degrees.

For years the food service industry was known for its career path from ‘dishwasher to CEO’. Our research indicates that while this may have been a viable path in the past, the current trend is for a minimum of a college degree and there is an increasing importance placed on advanced degrees. This demonstrates the importance of the sophisticated intellectual tools and the strategic vision gained through higher education.

Like with other segments of the retail industry, the food service sector has consolidated from regional companies led by founding families into massive, complex businesses requiring sophisticated tools to manage them effectively. This new breed of food service businesses are intensely competitive and are constantly looking for cost and marketing advantages to enhance their market position.

According to Plummer & Associates, some of the complexities facing the food service industry demand a command of the following disciplines:

 Marketing – Sophisticated tools have elevated the ability to forecast demand and to measure customer buying pattern changes. These tools also help measure brand awareness, customer loyalty, and the return on investment for all marketing programs. With the advent of social network marketing, the methodology of communicating with the customer is changing.
 Merchandising – Food trends and tastes are constantly evolving. To create a competitive edge it is important that food service organizations be active in planning product life cycles, assortment strategies, and new product introductions backed by a superior product development process. All these strategies must mesh well with operations to prevent overwhelming production and unnecessarily impacting quality and costs.
 Supply Chain Management/Logistics – Today there are tools available to help food service companies secure significant cost advantages throughout the supply chain while simultaneously improving the quality of customer service. This can provide organizations with a significant advantage over competitors.
 Finance – This function has quickly progressed from recording history to active involvement in ‘creating value’ through analytics. This is important as the company competes in the market for capital.
 Legal – Our society has become more litigious making larger businesses more of an attractive target. The complexity of new regulations has resulted in an increase of the legal staff. A food service leader is now required to be more involved and responsible for setting the tone of legal strategies.
 Human Resources – Once considered just an expense, Human Resources managed effectively must now create differentiation versus the competitors. A company’s talent and culture, including a devotion to the customer, are now more important than ever.
 Information Technology – In the past, technology seemed to be the sole domain of the IT department. With advanced POS systems, the food service organizations learned the power of information and the ability to forecast demand by day part. Now, leading IT departments interrelate with the entire organization by providing useful information to aid in decision making, control costs, forecast and analyze. Companies are now operating enterprise wide systems and it is becoming mandatory that the CEO know the capabilities of these systems to ensure the company gains a competitive edge.
 Global Reach – The days when food service companies only operated stores in the U.S. with product secured from U.S. sources are long gone. The implications of global activities are enormous.

Forward thinking food service companies such as Pepsico (Yum!) and Pillsbury/Grand Met (Burger King) who saw the need for talented executives started recruiting programs to attract students from colleges and also actively recruited MBA’s. These recruiting programs are responsible for the majority of CEO’s now leading the food service industry.

For those who are looking to progress up the ladder in food service, the data demonstrates that it takes more than experience in the industry to become a CEO. The food service business now requires the sophistication that comes with a college education and the trend shows an increasing demand for the additional tools gained in an MBA program.

The research shows that a college education is far more important than the particular school attended. While Ohio State University produced three CEO’s, the University of Kentucky produced two, and the University of Central Florida produced two, no other school produced more than one. On the other hand, in regards to CEO’s with MBA degrees, the Graduate School of Business at Harvard University produced four which is statistically important. Close behind is the University of Chicago producing two. It is clear that the industry prefers graduates from the top tier graduate business schools.