“Food Service – Tackling a £38bn market” 

The food service market, sometimes called out of home or catering, is estimated to be worth around £38billion in terms of sales to consumers. But as with any market it is not enough to throw big numbers around and say that there must be an opportunity. The question is how to tap it. 

A moments reflection about all the places where it is possible to get food away from home, from a stall at an agricultural show to a special meal at a top restaurant, through schools, hospitals, prisons and offices, airlines and motorway service stations, shows what a varied market this is. 

Broadly speaking, the market breaks down into the profit sector which makes its money by responding to consumer demand, and the cost sector which provides a necessary service. The starting point should be to consider what sort of offer the catering outlet is giving to its customers – for example,  the degree to which it needs  to buy at the lowest possible price,  or whether premium quality, or perhaps a distinctive product are more important to customers. In the latter case the emphasis may  be less on price, and margins may be more substantial for suppliers.  

The best outlets to target, particularly for smaller producers are therefore likely to be those where people are prepared to pay extra for good food. Examples would be hotels, smarter restaurants, golf and health clubs, independent pubs  and cafes. 

Other outlets worth considering are primary schools that are now being encouraged to spend extra to ensure young children are eating good fresh food, and fast growing sectors such as private hospitals and private care homes for the elderly who use the quality of their food as one way of  differentiating themselves from their competition. 

 The alternative approach is to sell direct to a speciality food  wholesaler. This has the advantage of getting products to more outlets, but with the downside that your line will be one of hundreds sold, and might not receive the sales attention required to be successful. 

Another step in drawing up a shortlist of possible target outlets is for the producer to consider who  makes the final buying decision. It is likely to be quicker and easier for producers to persuade a local hotel, restaurant, school or wholesaler to buy from them because it is possible to talk directly to the owner, chef, or head teacher. A larger organisation who might have many layers of management through whom a buying decision has to pass.  

Having drawn up a list of target outlets, the producer needs to become customer focussed, and consider what is important to the outlet. Regardless of the type of outlet, food service customers require consistency in terms of taste and texture, and in the case of meat products, size of  portion, degree of marbling, and fat cover. 

Once sure that the basic requirements can be met,  producers should  think about what they can offer to persuade the outlet to change supplier. 

The proposed product should fit with consumer trends. Perhaps the outlet is missing out on the trend to supporting locally produced food , or meat from a rare breed. 

 A hotel or restaurant may  want to offer something a bit different like venison, or ice cream and yoghurt made from buffalo milk, or traditional varieties of  fruit and vegetables. 

As well as thinking about a product which is different from what the outlet already buys, the producer might want to think about services which can be offered which save the outlet time or money. A fruit and vegetable producer might want to clean, peel and chop their products to save the outlet time. The outlet might be short of storage space and therefore appreciate a more regular or flexible delivery service. Or a meat producer could partner with a vegetable grower and offer the outlet just one point of contact, invoicing and delivery instead of two, again saving time and money.  

In summary, the food service market is complex, with requirements which will move the producer away from straightforward supply of the primary product.  

Success is likely to come from targeting outlets where margins are greater because quality and offering something different outweigh cost considerations. The product itself should be different and special in some way, and ideally with a message that the outlet can use to encourage greater sales to their own customers.