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Retail Food Provides New Healthcare Revenue Streams

June 19, 2020
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With nonemergency medical care on hold to preserve resources for COVID-19
patients, hospitals are seeking new ways to recoup lost revenue through retail food.

Hospitals were advised to discontinue elective and nonemergency procedures,
which are often lucrative and well-reimbursed by insurance companies, in late
March, causing a collective loss of up to $50 billion per month.

However, hospitals can create new, and much-needed, profit streams through retail
food options such as catering, cooking demonstrations, coffee kiosks, grab ‘n go,
food trucks and full-service restaurants.

According to a survey, about 70 percent of hospitals reported their retail business
growing in the past two years, with retail meals making up 60 percent of their

Hospitals that implement these trends help the bottom line, while serving patients,
staff and the community long after the coronavirus pandemic.


Dining Destination

Gone are the days of bland cafeteria food. Consumer demand for nutrient-rich,
locally-sourced meals are changing menu options. By improving the on-site dining
and catering experience, foodservice directors transform their campus from a place
people have to eat, to one where they want to eat.

Aside from patient rooms and cafeterias, 80 percent of surveyed hospitals say they
offer catering services. The same survey showed 23 percent of big-budget hospitals
use some form of locally sourced produce, dairy, baked goods, meats, beverages and
seafood, while 70 percent plan to.

By serving healthful and delicious tasting food, foodservice directors help accelerate
patient recovery, support nutrition education and reduce readmission rates.
Hosting chef demonstrations and on-site cooking classes for the community is
another way to promote healthy eating, which reduces risk for obesity, malnutrition and diabetes. This trend is growing, as 62 percent of surveyed hospitals already offer cooking demonstrations and nutrition education programs.

During normal conditions, some hospitals are opening their dining rooms or
restaurants for community events like senior dining or after church programs,
according to Beckers Hospital Review.

Others are investing in food trailers and trucks to promote healthy meals in the
community. Hospital food trucks serve as an extension of the existing cafe to provide
food to local businesses and clinics, add a new revenue stream, and serve as a
“moving billboard,” according to Concession Nation.


Improving Grab ‘n Go

To increase retail purchases, many foodservice operators are constructing cafes and
bistros for quick grab ‘n go options. These dining kiosks provide an invaluable service
to essential workers changing shifts or staying energized, without having to leave

If COVID restrictions have shut down or limited dining room capacity, cafes offer
staff pre-packaged meals and snacks that adhere to sanitation guidelines.

To better support your staff’s busy schedules, consider offering a “coffee only” line
versus a “food line,” so patrons can move more quickly. Another way to improve
quick dining is by accepting alternative forms of payment. This can be through
badges or payroll deductions, which frees staff from having to carry their wallet or
extra cash.

Foodservice directors should also encourage their vendors to advertise “add-on”
menu items that staffers can eat later for a snack. Add-ons create small increases in
revenue that add up over time.


Foodservice promotion

Investing in new foodservice trends means nothing without marketing and
promotion to get the word out.

Promote your retail food with posters in high traffic areas or through online
newsletters. To keep staff dining on campus, instead of seeking out competitors,
send out an email with the bistro specials, or a featured “drink of the day” at the cafe.

To encourage customer loyalty, some hospitals implement frequent buyer cards
celebrate employees with a free meal for their birthday.

Driving revenue through retail foodservice is a viable option for hospitals during the
pandemic and provides a valuable service in health and nutrition for the community.
Implement these dining trends to see improvements in patient satisfaction, staff
loyalty and community interest.

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