Contract Catering - UK - December 2004

INTRODUCTION AND ABBREVIATIONS
Definition
 ABBREVIATIONS
PREMIER INSIGHT
A holistic approach to menu development and catering provision required
A tiered meal system for schools?
Extending services and service hours will help stimulate additional demand
SUMMARY OF KEY REPORT FINDINGS
The contract catering market is worth in the region of £4 billion
A market in the midst of consolidation
Competition is rife
It’s tough at the top
Facilities management is changing the supplier landscape
More ‘grab and go’ and less hot meals
Health a big issue
More emphasis on design and ambience
Technology will be used to improve customer service
Less room to move
Central production and ‘cook chill’ growing in use
More retail opportunities
Vast potential still exists
MARKET FACTORS
The economic environment is conducive to business
Figure 1: GDP, PDI and CONEXP, at current and 1999 prices, 1999-2009
Staff shortages are hindering expansion and development plans
The minimum wage has had a mixed impact on businesses
Growth in outsourcing and a multi-service approach
In-house branding now an essential device
The high street is a major source of competition
Home working might spell the end of the staff restaurant
The impact of the snacking habit
Healthy options desired, but will it make caterers wealthy?
The end of yucky school dinners?
A wealth of opportunities within independent schools
Extended schools could boost profit margins
Vending in schools – a necessary evil?
MARKET SIZE AND TRENDS
Figure 2: Contract catering market size measured, by turnover, 1999-2004
Figure 3: Breakdown of turnover, by purchase type, 1999-2003
 KEY MARKET TRENDS
Number of contract catering enterprises
Figure 4: Number of UK vat-based companies engaged in the operation of canteens and catering services, by size of turnover, 1999-2004
Types of contract
Figure 5: Breakdown of contract types, by number of outlets, 1999-2003
Brands
Figure 6: Branded outlets, 1999-2003
Support services
Figure 7: Support services provided, by catering contractors, 2003
Private Finance Initiative (PFI)
Figure 8: Number of PFI projects with contract caterers involved, 2001 and 2003
MARKET SEGMENTATION
Number of outlets
Figure 9: Structure of the contract catering market, by number of outlets, 1999-2003
Number of meals served
Figure 10: Number of meals per market segment, 1999-2003
Business and industry
Healthcare
Education
Figure 11: total number of schools and pupils within the state and independent sector, 1999 and 2004
Figure 12: School meal suppliers, 2003
Public catering
Figure 13: Prison population, April 1999-April 2003
Ministry of Defence
Figure 14: UK defence personnel, 1999-2003
THE SUPPLY STRUCTURE
Compass Group plc
Figure 15: Compass Group plc turnover, by division, 2003
Figure 16: Compass Group plc turnover, by region, 2003
Figure 17: Compass Group, financial performance, 1999-2003
Sodexho Alliance
Figure 18: Sodexho Alliance turnover, by region, 2003
Figure 19: Sodexho Alliance turnover, by division, 2003
Figure 20: Sodexho, financial performance, 1999/2000-2003/04*
Aramark
Figure 21: Aramark Corporation, financial performance, 1999-2003*
Elior UK
Figure 22: Elior Group turnover, by sector, 2003
Figure 23: Elior group, financial performance, 1999-2004*
Other caterers
BUSINESS PRACTICE AND DEVELOPMENT STRATEGIES
 STRATEGIES AND TACTICS FOR GROWTH
Main areas of growth
Multi-service provision is not always the natural route for caterers
Growth lies in innovation and being attuned to client needs
Small operators tend to focus on penetrating existing markets
Small is beautiful
 BRANDING – IS IT STILL CRITICAL?
 THE DEVELOPMENT OF NEW AND BESPOKE CONCEPTS
Developments are market and client driven
Researching the market involves keeping track and staying ahead of consumer trends
 THE CLIENT-CATERER RELATIONSHIP
Catering consultants – A barrier to the client-catering company relationship?
 MENU DEVELOPMENT AND FOOD ISSUES
Clients want portable food and snack solutions
Health is on the agenda
It is about offering choice and educating clients
Going ethnic
Working together with the client to develop menus
 AN ALTERING LANDSCAPE
THE FUTURE
PAYD will pave the way for expansion
Most innovation in business and industry sector
Beyond branding – more bespoke, less ‘one size fits all’
‘Cook chill’ will grow in use
Healthier options will become more of an essential part of the catering offer
More services, more skills
More marketing, more merchandising
Expansion of risk and investment contracts
Competition will intensify further
Broader retail offer from caterers expected
Technology usage set to rise
Training will take centre stage
FORECAST
Figure 24: Forecast of the contract catering market, 2004-09