Foreign Investments in U.S. Commercial Food Service N
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Marketing Foreign Investments in U.S. Commercial Food Service N. Seigle (202) 447-6365 t least $2. 7 billion of the over $93 bil motel restaurants, recreation and sports vately owned, franchises, or divisions of Alion in U.S. commercial food service centers, caterers, and vending retailers, companies for which separate sales figures sales last year were made by 58 firms affili reached nearly $94 billion in 1980. Of the 58 are not reported. ated-in one form or another-with foreign foreign-affiliated firms, sales data through Foreign investors' involvement in U.S. investors. annual reports and industry estimates were corporate structures range from complete Sales for the U.S. commercial food ser available for only 34. These 34 accounted ownership to joint ventures and franchising vice industry, which includes food contrac for $2. 7 billion, or 2.8 percent of the indus all or some units. Twenty-eight foreign firms tors, eating and drinking places, hotel and try total. The remaining 24 firms were pri- own their U.S. affiliates outright, while nine Foreign Investments in Multi• Unit Food Service Operations in the U.S., 1980 U.S. Company Date of Annual Share of Foreign Investor major Extent of sales and total U.S. Name investment foreign Stores 1 revenues commercial or investment 1 1980 food service acquisition dollars2 sales3 Percent Number Million Percent Imperial Group, Ltd., UK Howard Johnson 1980 100 525 4916 .52 Hanson Trust, Ltd., UK Interstate United Corp. 1977 100 800 3505 .37 Trust Houses-Forte, Ltd., UK Hobo Joe's 1971 100 100 555 .06 Colony Kitchens 1978 80 Trust-Forte Food Service, Inc. 100 Empire International Restaurant, Richoux 1979 100 2 355 .04 Ltd., UK Unilever, Ltd., UK Lawry Restaurant 1975 95 2 36 .003 United Biscuits, Ltd., UK Ruggles 1978 100 2 36 .003 J. Lyon & Co., Ltd., UK Baskin-Robbins, lnc.4 1973 2,300 4 NA4 lmasco, Ltd., Canada Hardee's Food Systems, Inc. 1976 100 1,287 3006 .32 Scott's Restaurant Co., Ltd. Scott's Family Restaurant, Inc. 1975 100 40 566 .06 Canada Prime Food Systems, Ltd. Hy's of Canada 1971 100 4 226 .02 Canada Hy's of Hawaii 80 Kobe Steak (Calif.) 80 Kobe Steak (Hawaii) 66 Keg Restaurants, Ltd., Canada Keg Restaurant, Inc. 1980 100 6 8.5 .009 Mother's Pizza Parlor and Mother's Pizza Parlor 1977 50 6 7.2 .008 Spaghetti House, Ltd., Canada Cara Operations, Ltd. Cara Flight Kitchen 1979 100 1 76 .007 Canada Swiss Chalet 1980 100 3 Champs Food Systems, Canada Mother Tucker's 1980 100 5 76 .007 Mr. Greenjeans, Canada Mr. Greenjeans 1980 100 3 56 .006 Mr. Submarine, Ltd., Canada Mr. Submarine4 1976 4 54 .006 Old Spaghetti Factory, Canada Old Spaghetti Factory 1976 50 4 6 .006 Swiss Chalet Bar-B·O, Canada Swiss Chalet Bar-B-04 1979 4 54 6 .006 Country Style Donuts, Canada Country Style Donuts4 1979 5 54 6 .005 Mike's Submarine, Canada Mike's Submarine 1979 100 4 46 .004 Smitty's Pancake House, Smitty's Pancake House4 1979 3 2.44 6 .003 Canada St. Hubert, Ltd. St. Hubert's Roasted Chicken 1979 100 26 .002 Multi Restaurants, Inc. Les Rotisseries 1978 100 1.76 .002 Canada 10 National Food Review Marketing Foreign Investments in Multi- Unit Food Service Operations in the U.S., 1980 U.S. Company Date of Annual Share of Foreign Investor major Extent of sales and total U.S. Name investment foreign Stores1 revenues commercial 1 or investment 1980 food service acquisition dollars2 sales3 Percent Number Million Percent 4 4 Grandma Lee's, Canada Grandma Lee's 1980 3 NA 7 NA4 7 4 4 Gold Tex Foods, Ltd., Canada Tiffany's Bakeries, lnc. 1971 200 NA 7 NA4 7 Dipper Dan4 1980 100 6 Friederick Frick Industrial W. R. Grace Restaurant Group: 1976 31 550 600 .64 Holdings Co. Grace Restaurant Co. West Germany New American Restaurant Co. Jojo; Del Taco (W. R. Grace) 4 5 Wienerwald Holdings, AG Wienerwald 1974 100 837 390 .42 Switzerland Lums4 1978 IHOP 1979 51 Ranch House Love's Copper Penny Nestlt'l Alimentana, SA Stouffer Corp. 1973 100 230 1725 .18 Switzerland Rusty Scuppers Jacques Borel Group Movenpick Enterprises, Ltd. Movenpick, Inc. 1980 100 2 2.56 .003 Switzerland Sodexho, SA, France Ancorp 1978 100 7 675 .07 6 Les Grand Moulins de Paris, Vie de France 1979 60 9 11 .01 France 6 Estabissement Economiques Cat' Casino 1977 100 5 7.5 .008 du Casino, France Frere Jacques Restaurant Co., La Vie en Rose 1977 100 4 5.56 .006 Inc., France Casa di Pompei 5 Hiroak' Aoki, Inc. (Rocky Aoki, Benihana of Tokyo 1964 100 45 61.6 .07 Inc.), Japan Oriental Xpress 1980 50 2 Sugano, Ltd., Japan Gourment Sandwich Shops 1979 100 6 155 .02 Yoshinoya, Ltd., Japan Beef Bowl 1975 100 10 145 .02 Mitsukoshi, Ltd., Japan Mitsukoshi 1979 100 2.56 .003 Hokkoku Shoji Co., Ltd., Japan Dosanko Restaurant 1974 100 7 NA7 NA7 Japan Airlines, Japan Ginza Berkey Restaurant 1977 100 2 NA7 NA7 Tokyo Boeki, Ltd., Japan Tokyo Boeki Restaurant 1978 100 7 NA7 NA7 Yae Japanese Steakhouse Government of the People's Sichuan Pavilion 1980 50 NA7 NA7 Republic of China, China Government of Hungary, Hungary Hungar Restaurant 1978 100 NA7 NA7 UP Hotels, Ltd., India Gaylord's Indian 1974 100 2 NA7 NA7 Shezan, Inc., Pakistan Shazan Restaurant4 1978 4 2 NA7 NA7 1 Includes direct/indirect holdings; foreign investor 4Foreign investor licenses name-parent corporation Sources: Nation's Restaurant News; Service World In- owns corporate name and may operate some units. sales not available. ternarional; Restaurant Business; Restaurantsllnstitu- 2Annual sales-industry estimates may not reflect 5rotal US sales-industry estimates. tions; National Restaurant Association; International foreign investors' total sales of other operations. 6u.s. restaurant sales-industry estimates. Franchise Association; Industry sources. 3$93.6 billion preliminary commercial foodservice ?Not available. sales-1980. Summer 1981 11 Marketing others own at least a SO-percent interest of companies have direct or franchisor interest ated firms. The People's Republic of China, U.S. affiliates. Eight foreign firms were in 20 American affiliates with $447 million Hungary, India, and Pakistan also have one franchisors that licensed their name and of sales accounting for 16.5 percent of total operation each, but sales data are not avail products to independent franchisees who food service sales by foreign-affiliated firms. able. The expected acquisition of Victoria are subject to franchisors' standards and The United Kingdom, with 7 parent firms, Station stock by American Values N.V. will controls which relate to menu, product is the second largest source country by mark the first entry into the U.S. food ser quality, service, and sanitation. Eleven for number of firms but accounts for a dispro vice industry by a firm incorporated in the eign companies had both licensed and com portionally large 33.6 percent of all foreign Netherlands Antilles. pany-owned operations. affiliated food service sales ($905 million). Japan also has 7 parent firms,but accounts Industry Characteristics Source Countries for only 3.4 percent of foreign food service The first significant foreign investment in With 18 firms, Canada is the leading sales. Although West Germany has interest the U.S. commercial food service sector source country for foreign investment in in only one major food service company, began with Benihana of Tokyo (a Japanese terms of number, but it trails the United W. R. Grace, it accounts for about 22 per style steakhouse) in 1964. By 1975, 11 for Kingdom in sales volume. The 18 Canadian cent of food service sales by foreign affili- . eign owned firms or franchises operated in the industry, and as of December 1980, the number of foreign firms had grown to 44 Foreign Investment in U.S. Commercial Food Service, 1980 with franchisor or other type of proprietary interest in 48 U.S. operations. Total annual Total annual Total annual U.S. firms Foreign firms Foreign investment into the U.S. food sales-1980 sales as a sales as a with foreign with U.S. service industry has generally occurred percent of percent of investors interest through horizontal market extension by Country total total foreign other food service firms,rather than through commercial investor conglomerate mergers. Some notable excep food service sales tions include Frick Industrial Holding Com sales pany (a West German heavy industry con glomerate), Nestle' Alimantana of Switzer Dollars Percent Percent Percent Number Percent Number land (primarily a food manufacturing con United Kingdom 905,500 .97 33.6 15.6 9 15.9 7 glomerate), Sodexho (a worldwide hotel West Germany 600,000 .64 22.2 8.6 5 2.3 1 company based in France), and the Govern Switzerland 564,500 .60 20.9 10.3 6 6.8 3 ments of The People's Republic of China Canada 446,800 .48 16.5 34.5 20 40.9 18 and Hungary. Japan 93,100 .10 3.4 15.6 9 15.9 7 The 58 U.S. affiliates of foreign firms France 91,000 .09 3.4 8.6 5 9.1 4 vary widely in sales and corporate structure. China 1 1.7 2.3 NA NA NA 1.7 2.3 The U.S. companies range in size from 1 Hungary NA NA NA India 1.7 2.3 unit to 2,300units and in annual sales from NA NA NA 1.7 1 2.3 less than $1 million to over $590 million. Pakistan NA NA NA Total 2,700,900 2.88 100.0 100.0 58 100.0 44 Eight U.S.