The contract catering industry expects improved market conditions going forward due the ongoing UK economic recovery, increased employment, and greater outsourcing contracts. However, public cuts and budget freezes in other areas continue to pose challenges for caterers.

For the purposes of this report, Mintel has used the following definition:

Contract catering is defined as the part of the foodservice industry that supplies meals to third-party organisations. This encompasses a wide variety of businesses and institutions.

This report concentrates on the following main sections of contract catering:

• Business and Industry: company staff catering, including government and agency locations.

• Local Authorities: local government.

• Education: including both state education, such as schools, colleges and universities, and independent schools.

• Healthcare: including NHS and trust hospitals, private hospitals, and private nursing homes.

• Defence: MOD and armed services.

• Remote sites: including oil rigs, training centres, and construction sites.

• Retail catering: including catering for the public in high-street retail outlets.

There has been an increasing trend for facilities management companies to provide contract catering services. However, as these services are often bundled with other services and provided under one facilities management contract, it is not always possible to analyse the value of the catering aspect of such contracts. The value of such facilities management services are analysed separately in The UK Facilities Management Market Development report.

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Contract catering was traditionally the domain of industrial work places, where canteens had to be provided for employers due to government legislation. However, the privatisation of public sector services has substantially expanded the variety of locations where contract caterers are found. The sector encompasses a number of end-use markets, including business and industry, education, healthcare, defence, remote sites, and local authorities.

There are various types of contracts used by UK caterers, including

• Cost plus, where the client is responsible for all costs in addition to paying a management fee to the caterer.

• Fixed price/performance guarantee, either with a pre-negotiated total price, leaving the contractor to reap profits but also responsibility for any losses; or where the contractor has an upper limit, above which costs may not rise.

• Profit and loss concession contract and total risk contracts, where the profit/loss is shared between caterer and client; or where the caterer invests in the facility and receives all profits.