Out-of-home

Elit Rowland highlights five things you need to know about the out-of-home market 

Last year, out-of-home sales of food to consumers were £33.5bn, compared with sales to operators of £10.5bn. With a healthy margin of more than 30%, that makes it no surprise that wholesalers are increasingly tapping into the lucrative food­service market. 

The good news is that out-of-home food and drink sales are expected to continue to grow as consumer confidence slowly returns. 

One particular area that needs help is contract catering, where budgets are tight and expectations are high. 

Whether you are old or new to the foodservice game, there are some key opportunities to think about, which foodservice consultant Peter Backman revealed at the Horizon’s Foodservice Workshop, held recently in London.

Restaurants versus pubs

There are 29,000 restaurants in the UK, which account for 11% of the total foodservice market. But that number hasn’t changed much since 1981, mainly because pubs are driving the restaurant market – more than 5,000 food-led pubs are now categorised as restaurants.

“Pubs are in decline but the successful ones are turning to food as the answer,” said ­Backman.

The leisure market

This includes sports and social clubs and mobile catering, and accounts for 19,968 outlets and 8% of the total foodservice market. But according to Backman, most operators tend to be inexperienced and there is an opportunity to do better.

“My local gym has a food area but no one ever eats there – I’m sure there is something they could do better,” he says.

Contract catering

This accounts for 13,690 outlets and 6% of the total market – one of the most interesting trends here is the increasing demand for contract caterers to be facilities managers.

“The lines between catering and cleaning are blurring – there is an increasing clash between contract caterers and cleaners,” says Backman. Wholesalers can support this trend by offering a strong core range of household and cleaning products.

Contracted staff catering for local government and other workplaces account for 17,960 outlets and 7% of the total foodservice market. Workplaces are getting smaller and this is putting pressure on contractors to compete with the high street. “Workers have a choice to either eat at the staff canteen or eat out – contractors need to be more adventurous with their menus,” says Backman.

Schools and local authorities are on tight budgets

As a result, caterers are increasingly on the lookout for competitive pricing. Bestway has been doing particularly well in its cost-sector drive, after recently being awarded the contract to supply the Midlothian council, previously held by 3663.  But with low margins, is the cost sector a profitable one for wholesalers? Bestway UK group catering controller Paul Rabone, also at the Horizon’s workshop, says that it’s a worthwhile investment. 

“Once we build the infrastructure to service these new customers, we can easily deliver to the retailers and other outlets in those areas, too.”