Food companies sell more heat-and-serve options to fill gaps in short-staffed kitchens

Food-service workers are hard to come by.

Packaged-food companies are filling in for them.

While Hormel Foods, Post and General Mills are best recognized for their consumer retail brands, they each have billion-dollar food-service businesses — providing bacon, eggs and baked goods to restaurants, schools and hospitals — that have grown as commercial kitchens struggle to find enough help.

Unfilled jobs in the industry remain well above pre-pandemic levels and these products are increasingly marketed as time-saving shortcuts for short-staffed operations. That's helping Minnesota food companies push their food-service sales well above pre-pandemic levels.

"I don't think there's a school that doesn't have a staff shortage," said Michele Hawkinson, president-elect of the Minnesota School Nutrition Association and the director of food service at Tracy Area Public Schools. "Anything helps."

Austin, Minn.-based Hormel Foods recently made food service its own operating unit, which had $3.6 billion in sales last year. This month the company reported selling more food "designed to minimize labor, simplify food preparation, save time and preserve flexibility."

For example, Hormel's heat-and-serve pulled pork and pre-cooked ground turkey.

"How do we take the complexity and the hassle out of the back of their house and help them with their menu creation?" CEO Jim Snee said of the food-service unit's goals to investors at a conference last week.

General Mills leaned further into pre-made food-service offerings when it acquired TNT Crust last year. The brand is a major provider of frozen crusts for pizza chains and cafeterias and has $100 million in annual sales.

In its latest fiscal year, Golden Valley-based General Mills had $1.8 billion in total North American food-service sales, much of it to schools. The company recently rolled out thaw-and-serve brownies and Pillsbury "freezer-to-oven" croissants.

"It's a great growth business for us," General Mills CEO Jeff Harmening told investors at a conference last week. "As long as our kids are in the classroom, that business tends to do well."

In Hopkins, the nation's self-described "largest processor of value-added eggs" is benefiting from a breakfast boom.

Michael Foods, a subsidiary of Post Holdings, makes and sells precooked omelets, heat-and-eat scrambled eggs and prepped potatoes to hotels, schools, restaurants and other foodservice operators. The company's Simply Potatoes brand is also found at retailers.

Post is investing nearly $150 million to expand the Michael Foods egg-processing facility in Norwalk, Iowa. The factory will nearly double in size when construction is complete at the end of 2024.

Post Holdings, which has a $2 billion food-service business, is seeing "strong demand for away-from-home breakfast consumption," CEO Robert Vitale said last month.

Customers are also demanding more innovation. Hawkinson, of the Minnesota School Nutrition Association, said she and other food-service directors are constantly on the hunt for new breakfast items.

"A lot of our breakfast options are prepacked. We warm it up and serve it to the kids, saving time and labor for us," she said. "It would be nice to have some newer ideas."

But like any consumer stocking their pantry, it has to taste good, too.

"It's always, 'What will the kids eat?'" Hawkinson said. "You can make it as efficient as you want but if the kids don't like it, it doesn't matter."