New Solutions for a Challenging Market

Brexit will inevitably lead to a decline in skilled chefs on the market and rising food costs and yet few businesses will be able to pass on these costs. The search is on for new innovation and new solutions.

It is a fascinating period of time for the Food Service sector with so many questions lingering in the air. It is no surprise that many caterers and FM providers are concerned about the possible effect of Brexit and the lack of skilled chefs to be able to recruit.

At the same time there is a debate raging on that the model needs to change and that is a need for a disrupter to enter the market to change the dynamic.

It is a fair debate as most Independents are working to operating margins that are producing net margins that lie between 3-6% and the cost of business is increasing all the time. More and more is being asked in terms of sustainability, people, innovation, regulation and there is a need to consider new solutions.

Importantly, many operations are seeking to reclaim space from their caterers – kitchen space and restaurant space is at a premium. To make the situation harder – and more of a pressure cooker – food has never been more important. Food today plays a key role in daily life with consistency, value, and quality being at the top of customers ‘must haves’.

It is all credit to the caterers that they have been able to find new solutions and answers but the market is ripe for new solutions and potential disrupters.

Many have been arguing that the delivered in model could be one such option. This service line is forecast to grow by around 15% per annum over the next 5 years and certainly this is a growing area. However, the caterers will not give up ground with no fight. There are quite a few seeking to develop their own CPU operations in order to compete. So it does look like an interesting battleground is being prepared.

It is therefore fascinating to see how apetito’s entry into this area will influence the market. They are poised to have an influential role to play.

apetito is an interesting company as many will know the name but few much more. The large multi-national company, founded in Germany and operating very successfully today in a number of International markets from Canada to The Netherlands, Germany and the UK. The company was given The Queen’s Award for Enterprise in 2005 and 2016 – so the company does possess a proven track record and expertise.

“It is therefore no surprise that there is considerable interest from contract caterers in apetito’s disruptive solution.”

It is already a leading provider of nutritious and sustainable food solutions into the UK Healthcare sector. With a plethora of expertise in patient feeding and the retail home delivery market via their £100m franchise business Wiltshire Farm Foods, apetito have put significant investment into the development of their retail proposition to solve the key foodservice industry issues.

Working closely with their customers, they have developed a unique and innovative retail meal proposition comprised of frozen entrees, toppings and sauces which can be assembled easily to create multiple dishes from a small number of meal components. This cook freeze solution is developing into some major industry sectors – Staff & Visitor dining for the healthcare sector, education, large scale B&I, stadia and events and conferencing. The food is delivered directly to site creating a one stop ends to end solution with no agents.

The core range offering focuses on traditionally plated restaurant quality meals and their offer has evolved with the pace of the retail market to deliver new and innovative on-trend ‘Food to Go’ solutions. The result – retail focused innovative food solutions that provide day in, day out consistency whilst de-skilling and de-risking the kitchen, and in turn, saving time, money and space.

Given all the pressures in the market, it is easy to understand – less pressure on the kitchens, no need for expensive culinary support, simple stock control, and little food waste. The operators can then focus on their service and interactions with customers, knowing that they have a good product in play. In conjunction with apetito’s continued operational support, operators can also benefit from exploring new revenue generating opportunities with confidence and put real focus on protecting their margins.

 

If one assumes – and it is hardly a major jump – that many operators would like to think about change to their cost structure in large scale canteens, in state schools, in stadia, in hospitals, then the apetito model could well be very attractive.

This is not a new argument as Compass explored this same option back in the 00’s with Circadia and there was a debate back at that time as to whether this is what the market wanted. The result was that it flickered but did not quite take off. The difference today is that that the pressure on operators is that much greater today with more risk, shrinking space, and skill shortages. The opportunity exists and apetito arguably have the experience and track record that very few others can offer.

It is therefore no surprise that there is considerable interest from contract caterers in apetito’s disruptive solution. apetito are one of the Industry’s hidden gems – a potential major player that is now stepping forward to play a key role.

So it should be an attractive proposition and offer a new dimension in the market. Maybe this is the start of change, new solutions and new partnerships in the market.

Game on.