US party politics: forecasting the foodservice future

As Donald Trump prepares to become US president in 2017, Amelia Levin looks at key policy from his administration likely to affect the foodservice community

Clinton vs. Trump. Some say the presidential election campaign of 2016 was the most animated, controversial, emotion-stirring, debate-rousing, surprising, and, at times, wince-worthy of all time. We watched two candidates duke it out – often at a personal level – for the country’s top position as ‘leader of the free world’. Even after the election, the debates, protests and media obsession continued as we faced what, clearly, was a nation divided.

Donald J. Trump ultimately won key battleground and swing states to win the most electoral college votes, proving to be more powerful than winning the popular vote, which Hillary Clinton accomplished. His election as the 45th president of the United States, supported long-held theories that it’s impossible for one party to control the White House for more than two consecutive terms.

At Foodservice Consultant, we strive to stay away from party politics, instead focusing on top issues and themes that affect us all in the foodservice community. In the fourth quarter of 2016, we examined some top issues impacting our industry, such as the overtime rule, minimum wage and immigration reform, and what a Clinton or Trump administration could mean for those outcomes.

Challenges and opportunities

Still, it’s hard to gloss over what took place in the last year – for most Americans in the foodservice industry, the presidential election was at the forefront of their minds for months on end, and there it has remained. Instead of asking our community members what they think of the election’s outcome, we instead took to the streets to find out what they would like to see from the new administration – the good, the bad and the possible – for our future as a nation, an economy and industry.

Dawn Sweeney, president and CEO of the National Restaurant Association congratulated President-elect Donald Trump and said her association looks forward to working with him in the months and years ahead to protect and expand the contributions restaurants make to our communities and our economy. A new administration presents challenges, but also new opportunities.

“As the country ushers in new leadership in Washington, we will ensure that America’s restaurants have a seat at the table,” said Sweeney when Trump’s victory was announced. “Working with President-elect Trump, his administration, and members of Congress, we will continue to advocate for restaurants, our employees and our customers. We are committed to working with both sides of the aisle to find solutions that grow our economy and help all Americans succeed in the work force.”

Immigration reform

When it comes to immigration, Trump has been especially vocal about his intent to build a wall between Mexico and the US. Even if this doesn’t happen – or happens slowly over time – his stance is likely to affect immigration reform in some way, which could impact on the restaurant industry, known for employing many undocumented workers.

Tax reform

“Given Trump’s background in the hospitality industry, it is likely he will push for his proposed tax cuts and regulatory reform for the business sector,” the National Restaurant Association has said.

FCSI executive director Wade Koehler shares a slightly similar view. “The election of President-elect Donald Trump was a surprise to most of the country; however, his views on tax code changes could be a positive movement for the foodservice industry by lowering taxes rates for corporations to invest more in their companies and the United States,” he says. “My biggest hope is that he and his cabinet can figure out how to make Washington more efficient.”

Bureaucratic efficiencies

The efficiency topic is key. A positive view of Trump’s glass wall-shattering style is how he might handle old school government bureaucracies. By breaking down some of those barriers, his administration could open up doors for greater efficiencies, according to Brad Pierce, president of Restaurant Equipment World, a dealership with offices in Florida, and Dubai. At restaurant level, this could actually lead to faster timetables for obtaining permits, managing the budgeting process and negotiating other legislative hurdles, he points out.

“I’m cautiously optimistic about solid growth for restaurants under a Trump presidency due to the proposed decreases in the social costs of doing business as they relate to insurance, healthcare, permits and more,” says Pierce.

“Trump is pro-business and favors reducing bureaucracy, insurance cost reform and increasing the labor participation rate, which all fare well for the foodservice industry.”

Regardless of the impending changes, Pierce believes “business will not simply go away, and American entrepreneurs will continue to strive to win every single day, not just for the economy or the industry, but for their own families, their employees and their customers.”

Healthcare issues

Trump also said he would like to repeal or heavily amend president Obama’s Affordable Care Act – which could lead to some changes in the way restaurant worker benefits are handled.

The National Restaurant Association views a Trump presidency as potential for relief in some “burdensome” requirements imposed on business and healthcare as well as in labor regulations.

Ed Norman FCSI, president of MVP Services Group, takes a positive view toward what could be potential healthcare reform. “The other issue is [Trump’s] plan to open up healthcare insurance so that companies are not restricted by state,” he says. “If that happens, the American people could save significant money on their healthcare coverage as the competition would be greater once the state-by-state restrictions are removed.”

Minimum wage

President-elect Trump believes new minimum wage rules shouldn’t be handled on a federal level and that they should be left up to the states. During the election, voters passed proposals to raise the minimum wage in Arizona, Colorado, Maine and Washington.

Trade agreements

“People will always need to eat so our industry, compared to some other industries will always be pretty solid regardless of a presidential election outcome,” says Jeff Couch, principal of the Preferred Marketing Group in Chatsworth, California, and current MAFSI president. “My main concerns – and optimism – with the incoming administration is the renegotiating of trade agreements. Hopefully it will put more people to work without sacrificing the progress we have made in the global economy. Hopefully any tax reform or small business (de)regulation will ease the tax burden in the middle economy, allowing for more growth. The real challenge to our side of the industry will come with regulations concerning food imports and farming, as these costs will trickle to our business.”

Ed Norman also believes trade agreement changes could potentially benefit the industry. “If trade agreements are modified to make it easier for multi-national companies to move foreign money into the US to build factories it would be great,” he says. “Some companies are holding large amounts of money that they would like to bring into this country but due to taxation they cannot afford to do that. If tariffs are going to be attached to imported equipment it would be great if companies were allowed to use foreign capital to build plants without the worry of taxation on those dollars. I believe that several manufacturers will consider manufacturing in this country if the entire tariff issue becomes a reality.

“Trump is softening on several key issues now that he has won the election,” Norman continues. “If he can generate new revenues for the country and reduce taxes it could work positively by increasing discretionary spending for the average tax payer.” 

Clean energy

More concern has centered on the clean energy/energy efficiency side of the foodservice equipment and supplies (E&S) industry.Trump has loudly suggested climate change is a hoax, which could hinder plans for environmental clean up and clean energy initiatives established during the Obama administration.

Major changes could take shape due to cuts in federal spending on renewable energy production and more dollars put toward reviving more traditional forms of energy from less sustainable coal and fossil fuels.

In our discussions with consultants, dealers and manufacturer’s reps about what they would like to see from the new President, everyone agreed drastic changes are less likely to happen right away as we all know political, economic and industry-wide reforms take time. Incremental changes, however, are more likely to occur in the next four years, and potentially beyond.

Amelia Levin

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