n Manufacturers and consumers must recast their mindsets if foodservice is to expand. Helen Gregory explains why
It's commonly accepted that people are eating out more as busy lifestyles create time-pressed consumers with more cash to spend and less interest in cooking.
According to ACNielsen's Food for Thought report, more than 20% of households eat out more than ever before. And when they do, they choose fast food outlets, cafés and takeaways more than any other outlet, with 51% of the population using them once a month or more.
Any new retail park worth its salt has a food court with numerous fast food outlets and every petrol forecourt offers a range of food to eat on the road.
Supermarkets have also jumped on the bandwagon by opening takeaway food service counters where rotisserie chicken is proving the most popular hot meal, followed by Indian and Chinese foods.
But fewer than 40% of households have ever bought a takeaway or a ready to eat hot meal from a supermarket or other grocery store, proving that eating out is still a conventional business for most diners.
David Glennon, business manager, wholesale, at ACNielsen, believes it's because shoppers' mindsets are wrong. "They still see shopping as a chore, and until retailers look at things that are successful in the foodservice area, in terms of brand offering, excitement and choice, they will struggle to grow it."
But it might not be so easy for retailers to make the change to foodservice, according to Glennon. "The operation of taking orders from caterers and delivering to them is a complex one. Although retailers are highly skilled in terms of logistics, those skills are not immediately transferred into foodservice. However, the problems are not insurmountable and the tie-up with Booker and Iceland, involving Woodward Foodservice has some good people involved and has the best chance of making such a crossover a success."
The split between retail and foodservice is thought to be 70:30, although it's rapidly creeping up to the American figure of 55:45.
But catering could grow even more quickly, Glennon believes, if manufacturers learned to recognise where their products are consumed. That would help them develop future products and meet the needs of caterers and consumers. He says manufacturers used to replicate their products which were successful in retail, but now it was proving equally beneficial to put the expertise into developing foodservice products.
"One of the key trends in retail is that own label offerings have moved towards targeting high quality that challenges the major brands. Catering own label has tended to be on the value end of the scale, but more recently they are looking to be more of a challenge in terms of quality."
Own label tends to get used in the kitchen of foodservice outlets, while brands are given prime position on tabletops because consumers recognise them. But Glennon believes that, following on from the success of companies such as Compass Group UK and Ireland, which has put its Upper Crust brand around the country, a way forward for own label is to develop quality offerings.
"The real opportunity is for manufacturers to become experts in certain fields and produce dishes which understand trends. They need to drive the market rather than just fulfil orders," he says.
Caterers usually make up the highest proportion of a cash and carry's registered customers. They can account for 60% in terms of numbers but less than 30% of the sales turnover because more often they use cash and carries for top-up purchases. Typically, about 15% of their spend is in cash and carries, compared with independent retailers who part with about 40% of their total spend there.
Glennon suggests that cash and carries need to understand what caterers want and why they're going elsewhere.
Some are now incorporating a delivery service from the cash and carry to the caterer as the old boundaries of traditional wholesale begin to blur.
But Glennon believes that even if they manage to get more business, caterers will always use delivered wholesale as well, and says more cash and carries could start to offer the service.
And he says wholesalers should use the opportunity to advise caterers on what they should be using, especially independent outlets who are looking for guidance.
"Rather than delivering only products, they should ask caterers what kind of outlet they have, and tell them about their range of products."
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