EP Business in Hospitality Issue 48 - January 2014

GRAEME SMITH OPINION
The changing
face of foodservice
New research reveals a surprising number
of common themes among the top 20
Standing outside a local Apostrophe one
morning and looking around at Leon, Pret a
Manger, Eat, Subway and Crussh, I am taken
aback by the range of choice available. It is clear
the face of the foodservice industry has changed
fundamentally in recent years as consumers’
expectations have been heightened by the volume of
choice and the shift in consumer eating patterns. Eating
out through the day is a habit, not a trend, and it is not
one which has just concentrated in the City of London or
the South East. The recent launch of Trinity Kitchen in
Leeds demonstrates the value that retailers, landlords
and consumers alike now place on foodservice options
at every hour of the working or leisure day.
There is little doubt that branding has become a
more important element of the consumers’ outlook.
Whitbread’s acquisition of Coffee Nation in 2011
demonstrated that demand for the Costa seal in petrol
stations, supermarkets or corner shops truly resonates.
The investment market is catching up, as Tesco has
proven with their acquisition of Giraffe, while ECI
Partners have taken a minority stake in Rhubarb, the
venue and event specialist. The dining experience is
very appealing for a variety of stakeholders, whether it
is to secure additional footfall in a retail site, maximise
efficiencies from a contented workforce or deliver
options for an increasingly health-conscious public.
Higher customer expectations and the use of
innovative foodservice offerings to drive value for
landlords, retailers and employers were the catalyst for
the launch of the Zolfo Cooper Foodservice Growth
Report. This report identifies independent foodservice
operators in the UK with the fastest-growing profits.
What was striking from our research was that, despite
difficult economic times, the top 10 companies in
our list had average profit growth over the last three
years in excess of 20 percent, demonstrating the
The top five
Rank Company Three-year
profit CAGR* (%)
1 Concerto Group 65.3
2 Vacherin 58.1
3 Harbour & Jones 55.2
4 Peyton & Byrne 51.8
5 Unique Catering 48.7
& Management Services
*Note: Profit measured as earnings before interest tax and
depreciation with directors’ remuneration added back
vitality of independent operators in this sector.
What also became clear from our research is that while
something of a divergence between London and other
cities still exists, successful operators have significantly
raised the quality of their offering across the board.
Consumers are attracted by innovative, energetic brands
going the extra mile to enhance the customer experience.
While price is still an important attribute in decisionmaking,
quality and flexibility have become genuine
industry watch words.
A number of independent operators such as Harbour
& Jones and Peyton & Byrne have achieved success by
relentlessly focusing on quality and best-in-class service.
Clients view high quality foodservice as a differentiator
and if the operator can demonstrate added value they
can move away from having to compete solely on price.
The report also identified several other themes that
are supporting the development of the top 20 fastestgrowing
independent operators in the market:
• The majority of the top 10 firms focus on event and
B&I markets, and the most successful businesses, such
as Concerto Group, have developed their offering into
catering services
• The top 20 are predominately mid-market in scale,
with 50 percent turning over between £15 million and
£50 million
• The highest growth companies are led by passionate
people, many of whom have been running their
business for over 10 years.
While the B&I and events market have continued to
support growth through the recession, it is noticeable
that foodservice operators have continued to stretch
their offering to meet demands. Flexible operators such
as Vacherin and Lexington Catering have responded by
developing front-of-house services supporting a holistic
client service offering. How you are perceived as a
business is now very much about the service you deliver
at reception, the work canteen experience, and the core
product or service you deliver.
It is unsurprising that those foodservice businesses
that are consistently voted the ‘Best Companies to Work
For’ in industry polls are the ones that maintain excellent
levels of contract retention. Staff development has always
been an important element of the foodservice industry
and it is the fresh, innovative brands that recognise the
importance of investment in training that will continue
to flourish in 2014.
The sector is constantly evolving and is well placed to
enjoy continued success and growth. •
Graeme Smith is partner at Zolfo Cooper
EP | January 14 | 31