Food service ethics: Wages in the food service industry are more important than ever

A critical eye has been cast over the entire food service industry in recent years and it has largely been found wanting in many areas. From new modern delivery services through to traditional tipping culture and even to the way our food is grown and supplied, there is a kind of inherent exploitation of something or someone built into the actual business model.

This has largely been less important historically, but now that animal welfare standards and minimum wages are coming under the spot light so too are certain food service businesses with questionable practices. This is more important an issue than it has been previously because modern consumers are more aware and prioritize these issues highly when asked their opinion.

Key Highlights

- Much has been said about how the new generation of consumers now knows much more about the food they eat and they actively make consumer decisions based upon what they learn of a company’s business practices or ethics.

- This is a cause for concern for a number of food service outlets from high end to budget because there are numerous ethical issues with the modern food supply from production through to consumer. Of the main ethical topics in the food service industry, none are more important than “treating employees well” to millennial generation consumers.

- In the US, federal minimum wage is $7.25 and 29 states have improved on that setting their own levels higher, with some states about to move as high as $11.50 for 2018. It causes significant wage confusion for the food service industry, as there can be as much as $5 difference in minimum wages from one state to another and then gratuity differences on top.

- One of the very biggest issues of recent years in the food service industry has come from the emergence of the gig economy. Deliveroo and Uber Eats are two of the most notable examples.

- These companies are capitalizing on the fact that consumers want increased flexibility and the ability to order from top local restaurants to be delivered to their home.

- These delivery companies fill that gap. However in order to make this possible at a reasonable price point, delivery staff are paid per delivery and receive no workers’ rights benefits of any kind, either holidays or a set minimum wage.

- There are a variety of opinions on this issue and the companies themselves argue that staff actually prefer this method because they have increased flexibility with working hours as a result. However there are cases in the gig economy where workers that are portrayed as self-employed are punished as a regular employee would be for not working or meeting commitments.

Scope

- Wherever tipping is practiced throughout the world, it can become an unbalanced practice between different types of establishments and unbalanced between different servers.

- For instance, in the US and Canada while earning the same basic minimum wage as an average diner, working at a popular fashionable restaurant will always encourage larger tips despite the same work load and responsibilities as a normal restaurant.

Reasons to buy

- What are the major changes happening in the foodservice industry?

- Who are the major players implementing those changes

- What problems does the industry currently face?

- What does the future of the industry look like?

- Are there any major opportunities for players to capitalize on?

Companies mentioned

Table of Contents

Table of Contents

Executive Summary 2

Summary 2

Wages in the food service industry are more important than ever 6

Minimum wages are back on ...

Table of Contents

Executive Summary 2

Summary 2

Wages in the food service industry are more important than ever 6

Minimum wages are back on the table and new consumers are aware 6

Deliveroo and Uber Eats are the future of the industry but they are not pristine in image 7

Tipping culture is inherently discriminatory and will need to change in future 8

US tipping culture continues to cause problems for the restaurant business 8

It is uncertain if consumers actually mean what they say 9

Robotic replacements are coming 10

Conclusion 12

Appendix 13

Further Reading 13

Ask the analyst 14

About MarketLine 14

Disclaimer 14

List of Tables

List of Figures

List of Figures

Figure 1: US states with minimum wage increases 2017- 2018 US$ 6

Figure 2: Deliveroo workers protest for better working conditions 7 ...

List of Figures

Figure 1: US states with minimum wage increases 2017- 2018 US$ 6

Figure 2: Deliveroo workers protest for better working conditions 7

Figure 3: Consumer attitudes towards issues in the food service industry 8

Figure 4: Rates of obesity in millennials and baby boomers by 45 years old in UK 9

Figure 5: Prototype robotic kitchen from Moley Robotics 10

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