UK Foodservice Market

Transcription

1 Marketplace International 2015 World Leaders. World Class. Worldwide. UK Foodservice Market Terry Cook November 2014 AIDAN COTTER CHIEF EXECUTIVE BORD BIA 28 JANUARY 2009

2 UK Market opportunity Population of 6 million UK Population of 60 million Inside M25 12million M25 provides 25% of all Catering Outlets in UK West Midlands population is 5+ million!!

3 2013 Irish food and drink exports to the UK reached 4.1 billion Seafood 52m Hort. & Cereals. 210m Beverages 361m Meat & Livestock 1,5bn Prepared Foods 635m Dairy 1.1bn Meat & Dairy Products account for over 64% of total exports to the UK

4 Some of our well known brands

5 What is Foodservice? the provision of food and drink away from the home

6 Out of Home is GROWING! Today, over 35% of food spend is outside the home in the UK, 15 years ago, it was 20% and yet in the United States currently it is over 50%. It is STILL predicted that by 2025, 50% of food consumption in the UK will be Out of Home. Snacking and eating on the go is reducing the number of formal meal occasions. Out of Home 35% Growing In Home 65% Declining

7 Recession? What Recession.? Sector experiences 18 months of consecutive like for like growth Pubs in London and restaurants outside the M25 were September s strongest performers as the sector enjoyed its 18th consecutive month of growth, the latest Coffer Peach Business Tracker shows. Source: M&C Report, 16 th October 14 Two thirds of foodservice operators see 2014 food sales rise Confidence continues to improve in the UK foodservice market, as more than two thirds of operators reported an increase in food sales year-on-year. That's according to the latest figures from foodservice analyst Horizons' Eating Out-Look with JRA. Source: The Caterer, 23 rd October 14 Whitbread celebrates revenue growth of 13% Whitbread has announced its interim results for the six months ending 18 August showing a total revenue growth of 13% to 1,293.2m (2013/14: 1,144.7m). Premier Inn delivered total sales growth of 14.7% with like-for-like sales growth of 9.6% and record UK occupancy at 84.0%. Costa delivered total sales growth of 16.9% with like-for-like sales growth of 6.1% in the UK stores, driven by a 5.0% increase in customer transactions. Whitbread's restaurants business grew its total sales by 4.3%, performing ahead of its industry benchmark. Source: Caterlyst, 21 st October 14 IHG posts double digit RevPar results for UK division InterContinental Hotels Group (IHG) has reported strong results for the third quarter with RevPAR growth of 7.0%, with a 6.3% rise in the first nine months. The UK delivered double digit RevPAR growth reflecting strong performance in both London and the regions. Source: Caterlyst, 21 st October 14

8 Fast Facts on UK Foodservice c260,000 outlets No player with more than 5%. 90% of businesses t/o less than 250k. Groups = 45% of meals. 67% via Wholesalers. 8% via Cash & Carry. Vending & Direct 25%. *Note: Food Purchases & Sales above EXCLUDE Alcoholic Beverages Source: Allegra / Horizons 2013

9 UK Foodservice - Caterers Profit Sector: Food & Drink sold for profit!! High Street Coffee Shops Pubs Restaurants Travel Catering Road Rail Ferries.. 2,500 Groups only account for 45% of the market. 240,000 Independents make up the balance. Cost Sector: Where the Caterer is simply recovering the cost of Food & Drink provision it is not their core activity. NHS Education Prisons Social Services.

10 Is it worth targeting..? High Street (sites) Hotels (sites) Pubs & Restaurants (sites) Workplace (sites) Costa Coffee 1,550 Hilton 68 JD Wetherspoons 950 Compass Group 8,000 Starbucks 800 Premier Inn 700 Whitbread 2,000 Sodexo 4,000 Caffè Nero 550 Travelodge 520 Greene King 1,900 Baxter Storey 1,200 Greggs 1,700 IHG 281 Spirit Group 1,200 Elior 650 McDonalds 1,200 Accor 200 Mitchells & Butlers 1,600 CH&Co 200 Burger King 500 Marriott 63 TRG 400 ISS 229 Subway 1,500 Best Western 286 Wagamama 109 Pret a Manger 300 Bespoke 85 Carluccio s 70 Eat 120 Source: Allegra / Caterlyst 2013

11 Market Structure - FUNDAMENTALS SUPPLIERS Very little Direct Delivery in UK WHOLESALERS CATERERS

12 UK Foodservice Understanding Supply Chain

13 Supply Chain- Traditional Wholesale 4 Routes Cash & Carry Traditional Delivered Contract Distribution In-House Distribution Some Deliveries Ambient Grocery Wholesaler Keystone Distribution Frozen & Chilled Specialist Consolidators Multi-Temp

14 Wholesale: Cash & Carry Few Groups to target. Simple to service: Head Office Listings. Pallets to CD or Branch. Simple Pricing Structures. Costs of Doing Business: Listing Fee Promotion Support. ORD. Performed well in Recession.

15 Wholesale: Multi-Temp Delivery Core Ambient service Larder provisions. All adding Frozen & Chilled. Gives One-Stop Shop capability. National service dominated by 3663 & Brakes (also own Woodward). Country Range federation now No. 3. Chef Direct owned by Booker Regionals & Specialists available.

16 Pricing - Delivered Wholesaler Negotiates the best price for the product. Controls ordering and stock levels. Takes stock risk. Sells to Caterer at the best price attainable. Any cost price improvements (product or operational) are retained by the Wholesaler.

17 Wholesaler Pricing Via Wholesaler Manufacturer trade price Product rebate 1.00 Nett cost to Wholesaler 9.00 Wholesaler margin 6.00 Wholesaler margin % 40% Selling cost to caterer Nett cost to Caterer 15.00

18 Wholesale Margins & Discounts Discounts: Cash & Carry Promotions margin cut to 15%? Trading with a Catering Group: Discount for Number of Sites & Product Range. Discount for Committed Volume. Discount for Fewer Deliveries. Discount for APL Approved Product List. Wholesaler will aim for margin of: 20% Minimum Margin Target. Cannot operate below 12% Margin.

19 Supply Chain Contract Distribution Some Deliveries Cash & Carry Ambient Grocery Frozen & Chilled Multi-Temp Wholesale Sector Traditional Delivered Wholesaler Specialist Consolidators Contract Distribution Growing importance. Driven by Catering Groups. All Delivered Wholesalers doing some contract work & Brakes have separate logistics divisions. Specialists include: Wincanton DHL Exel Kuehne & Nagel

20 Contract Distribution Bidvest Logistics. Sister company to Contracted by the Caterer as his logistics partner. Not a Wholesale supplier.

21 Contract Distributor Acts simply as storage and wheels. Price negotiated by the customer THE CATERER. Stock risk taken by the customer. Customer determines the selling price. Distributor orders and maintains agreed stock level. Fee is per case or fixed on cost percentage: say 1 per case; or 10% on-cost. Fee covers logistics charges to: Hold stock Break bulk Deliver to individual sites.

22 Contract Distributor pricing Via Distributor Manufacturer trade price Product rebate - Nett cost to Distributor Distributor margin 1.00 Distributor margin % 10% Selling cost to Caterer Nett cost to Caterer 11.00

23 Caterer Terminology & Structures Caterers Groups Independents Head Office Purchasing Food Development Wholesaler s range will determine their choice Operations Controlled Units Lower Discipline

24 Mitchells and Butlers The Good 2012 Food Spend of 280mill + Opportunities for ALL in this room. Contract Distribution: Fixed with Brakes Product Development: Tailor to each Brand Summer/Winter Menus Blackboard specials Less Good Low margin Will take time: Brand Managers Development Chefs Purchasing Managers Me-too is no good!! Service Level Penalties Paperwork!!

25 Menu Costing Caterer works back from his Price Point. VAT is lost. Food Costs: Protein Carbohydrate Vegetables Sauce Target GP of 66%+ Fish Pie. 9.25

26 Caterer Menu Costing Selling Price 9.25 Main Course Net Selling Price (ex 20%) 7.71 SP/1.20 (or Multiply by ) Assume Gross margin of 66% 5.09 Multiply NSP by 0.66 Cost price allowance of Jacket Potato/Chips/Rice/Pasta 2.62 Difference above = Food Cost available to the Caterer Portion Vegetables 0.25 Sauce 0.20 Roll & Butter 0.20 Total Allowance for Main Item - Protein 0.95 Cost of support products 1.67 BUT, YOU WILL REALISE LESS ONLY IF WSALE MARGIN IS 25%

27 What is your point of difference? Give me a compelling reason to buy from you USP s OR Are you just another me-too selling on price?

28 Must re-assure the Buyer Independent audit of Food Standards: Food Safety. Processes Product Recall etc. Allergens declarations. Demonstrate CSR is important to your business

29 You must be on trend Long-term trends Value for money Healthier eating No nasties Allergens labelling Catering for dietary needs Food provenance Red Tractor Environmental initiatives Social Media!! Caterer Operator Grab & Go Blurring of day-parts All Day Dining Tapas & Sharing Simple Food well executed Bolder Flavours!! Labour-saving ideas De-skilling ideas

30 Buyer targets Over 500 buyers will be canvassed in UK: Key retailer decision makers in your categories Key foodservice players Manufacturers & Distributors Specialist food retailers & foodhalls 104 UK buyers will be present on the 26 th of March

31 Bord Bia Office Services Workshops PR Buyer Contact 4 Fellows Study Tours Mentoring Strategy & Planning Information & Research Supplier Capability & Profile Development Route to Market

32 Irish market vs. UK Foodservice market UK 60+ million Formal Sales Process Group Purchasing Controlled Menus Food Safety phobias 6-7oz Portion size Higher taste profiles Direct delivery gone Sterling IRISH 6 million Approachable More Independents More flexibility More relaxed More generous!! Milder More Caterer contact Euro

33 For more information Please contact our team in London: Michelle Butler, Manager Adrian Rivers, Retail Micheal Gately, Foodservice Henry Horkan, Meat Tel:

34 Questions please?