London is booming for the foodservice sector but clients remain cost driven. That was the message from the Changing Face of a Sector conference, held this week at Central Working Whitechapel, the new collaborative working space located a stone’s throw from the lucrative City market which shaped much of the day’s discussions.
The role of the caterer in the City has changed, as people’s eating patterns have matured, said Chris Sprague, director at Elior, during a panel debate focusing on foodservice in the square mile. “People graze more, eat more healthily and drink less in working hours, although more after hours.” Tim West, chairman at Lexington agreed. “The high street is festooned with coffee shops, delis and sushi bars and it’s had an impact on us as we have to replicate, and exceed, the best of the high street on a daily basis. As an industry contract catering has had to up its standards.” The sector needs to constantly innovate to keep ahead, panelists argued, citing examples of street food stalls, farmers markets, pop-up stalls and coffee concessions in the workplace environment as a way to keep people in the office and away from the high street – which is seen as the City caterer’s main competition.
Nil cost remains the holy grail and working with procurement teams can be “gritty” at times said West, with some clients wanting to be paid for the privilege of the caterer being on site. But many are realising that by putting money into a subsidy, they will receive a better return on investment for their catering, said Andy Harris, MD of Restaurant Associates. “The workplace is changing. The space which used to be exclusively set aside for staff restaurants is now being used throughout the day for informal and formal meetings and people wanting to get away from their desks. It’s becoming a multi-purpose space supported by catering, and clients should make it an attractive environment to be.”
The conference, which had an impressive line-up of some of the great and the good of the catering sector, was an interesting mix of food trends, from food tattoos to the latest superfoods, to debate around using venture capital to grow catering businesses. Unlike similar events, where conference fatigue percolates after lunch, different formats from panel debates to Newsnight-style journalistic interviews, in addition to standard presentations, kept the audience’s attention.
The post-lunch debate on the rise of the FM model, led by FM and catering consultant Julian Fris, was fairly predictable with Andy Chappell, MD at ISS Foodservice and Chris Piper, director at Interserve, fervently agreeing that FM providers could deliver single service excellence in catering in a bundled or integrated way as well as, if not better than, specialist catering firms. But John Bennett, CEO of caterer BaxterStorey, dismissed the inter-company rivalry and instead echoed earlier speakers by arguing that the main competition – particularly in London – is the high street. “Sainsbury’s, Greggs, Pret and Tesco are the competition,” he said. A market that BaxterStorey, which owns high street chain Benugos, has also nicely claimed.
A key theme throughout the day was the increasing buoyancy of the catering sector, how it was moving away from being a low margin, low cost industry (although discussion around zero hours contracts and London Living wage revealed that these are still key issues) to being a career of choice. “Good food is no longer a dream,” said Graeme Smith, partner at financial adviser Zolfo Cooper, who offered an overview of the market. “People are passionate about food, they follow it on TV, they cook the recipes at home, they go to top restaurants in their spare time which has led to higher expectations of food service everywhere, combined with a willingness to pay more for quality.” People will pay £3 for an artisan coffee when they could get a basic coffee much cheaper, he said, which is allowing the sector to sell on value not cost, therefore increasing margins.
Margins was a key focus for both Bill Toner, CEO of Host Contract Management and Vince Pearson, chairman of The Waterfall Group, who spoke about growing catering businesses through partnerships with the financial sector. “Venture capitalist involvement gives you business rigour,” said Toner. “They strip away all the emotion; they’re not interested in the profile of the clients, they are purely focused on what it means for return on investment and the risk aspects.”
With the horsemeat scandal still fresh in the sector’s minds, supplier management was a key area of debate with Restaurant Associates’ Harris describing the company’s suppliers as part of its DNA. “In fact I don’t like the term suppliers, there is a high degree of mutuality.” It was a viewpoint emphasised by Oliver Cock, MD commercial at Compass who has more than 20 years’ procurement experience. Despite a rather facetious introduction from one of the conference organisers about purchasing people being some of the most hated in catering, Cock did an excellent job of demonstrating that caterers are only as good as their suppliers. “The chef is at the heart of the procurement process. No product goes on our ingredient list unless the chef signs it off. The chefs might find a great product and then we work with the supplier to audit their supply chain and make sure the right safety standards are in place. Integrity and traceability of the supply chain are the key issues in catering. It’s a team effort.”
One of the final speakers in the afternoon was Allister Richards, MD of the newly-rebranded Mitie catering arm Gather & Gather, who demonstrated the extent of the wide-ranging agenda, and the issues facing the catering sector, by talking about the risk of changing the company’s name, when rebrand failure rates are high. “There was a risk of distancing ourselves from Mitie – are we biting the hand that feeds us? But it has in fact rebalanced the pipeline business. We have won standalone business from companies who wouldn’t have got over the emotional barrier of Mitie – the company that cleans toilets is now doing my fine dining.”