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Commercial vs. Noncommercial Food Service Explained

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In the food service industry, there are two main forms of food service: ​Commercial and Noncommercial.

Commercial food service, such as dine in and fast food restaurants, make up 77 percent of all food expenditures away from the home, according to the Agricultural Marketing Resource Center. Types of commercial food service include restaurants (both fine dining and fast-food), retail stores, catering organizations, cruise ships, and airlines. Noncommercial food service consists of educational institutions’ cafeterias and hospital cafeterias, and its sales make up 23 percent of those dining out of home.

Profit Versus Nonprofit

Commercial restaurants operate on a for-profit basis. Although institutions hosting noncommercial foodservice are usually operated as nonprofits, the food service operations themselves may be for-profit companies. This is especially common when franchises such as McDonald's and Pizza Hut open locations in schools or hospitals. These operations tend to be hybrids, combining established and tested menus, systems and business models with the special considerations inherent in noncommercial food service. For example, speedy service at noncommercial operations, such as university cafeterias, is even more critical than at fast food restaurants, so layouts and serving stations must be comprehensively designed and stocked to save time and movement.

Financial Viability

A commercial food service establishment, such as a fine dining restaurant, may aim to provide an elegant dining experience that expands customer awareness of culinary possibilities, but if the endeavor doesn't make money, it will go out of business.

Noncommercial food service ventures should be financially viable as well, but they may have more leeway if they serve the ends of the institution as a whole, especially if funds are available to subsidize them. Schools and healthcare facilities need cafeterias. If a school cafeteria is losing money, the administration will look for ways to reverse the loss, but it is unlikely to close the cafeteria. Noncommercial foodservice establishments can also be found in nursing homes or military bases. Similarly, these institutions need some form of quick-service dining, and will likely have ways to be funded.

Ownership

Commercial restaurants are usually privately owned, whether as independent operations, chains or franchises. For example, somebody who runs a food truck is operating a commercial restaurant. Restaurants that are part of a chain, whether that be a fine dining establishment or a fast-food restaurant, are also considered commercial food service facilities.

Noncommercial food service operations may be owned and operated by their affiliate organizations. This occurs most frequently with independent institutions such as private alternative schools, which treat food as part of their overall educational message. Large food service companies such as Sysco and Marriott often run large, streamlined noncommercial food service operations, and chain restaurants and franchises such as Burger King and Taco Hut may operate their own sections of noncommercial food courts.

Fancy Fare

Respected commercial restaurants are often passionate about their food, providing fine fare and memorable dining experiences. Commercial food service is typically regarded as being of high-quality all around—whether this be food quality or the overall quality of service. This is because this form of food service includes full-service restaurants, well-known fast-food chains, and bars and nightclubs. These institutions rely on returning customers to stay afloat, so they generally try to maintain excellent customer service and serve enjoyable food and beverages.

Despite the stereotype of hospital and school food service operations serving bland, industrial food, some noncommercial food service venues put attention and care into their offerings and provide meals that rival restaurant meals. Museum cafeterias, in particular, often work to create a dining experience that complements its art. Some school and hospital cafeterias have also begun making the connection between fresh, healthy food and the pursuit of overall well-being that shapes the missions of these institutions.

Summary

All in all, noncommercial and commercial operations run differently in a variety of ways:

  • Where one can find each type of food service
  • The means of food production
  • Their methods of funding
  • Ownership
  • The overall dining experience