How Do I: Understand What Is Foodservice?
The purpose of this guide is to give Scottish food and drink manufacturers an overview of the UK Foodservice market, especially those
companies who have ambition to enter this market for the first time.
Whether for market entry or development this guide should be used in conjunction with other How do I? guides such as How do I: know if I
am ready to supply the foodservice market? and How do I: better understand public sector tendering?
KEY MARKET FACTS
Foodservice sales are worth £27bn at consumer prices
Foodservice sales account for 30% of consumer food purchases
The foodservice market is worth around £8bn at suppliers’ prices
There are over 260,000 foodservice outlets
2,500 groups account for 40% of the market. 200,000 independents make up the rest
Compass Group, Sodexho and Aramark are the three largest contract caterers
McDonalds and Burger King are the two largest operators/franchisors in the quick service sector
3663 and Brakes are the two largest delivered wholesalers
Booker is the largest Cash & Carry operator
Some food service operators will require suppliers to have industry accreditation in areas such as quality, safety and due dilligence.
BRC Global Food (British Retail Consortium) and Safe and Local Supplier Approval (SALSA) are most common. Food and drink companies
are encouraged to find out more about these schemes and how to gain accreditation.
SALSA - suitable for small food processing businesses supplying locally, such as start-up food businesses;
www.salsafood.co.uk http://www.sfqc.co.uk/processing/safeandlocalsuppliersapprovalsalsa
BRC - suitable for established food processing businesses seeking to distribute products nationally or internationally.
www.brcglobalstandards.com http://sfqc.co.uk/processing/britishretailconsortiumbrc
(Source TL Dempster Strategy & Research 2006)
The Structure of the UK Food Market
The Value of the UK Food Market
The UK food market is estimated to be worth approximately £90
billion. Between 2003 and 2004, the retail market grew by 4.1%,
the food service market by 2.6%, and the market as a whole by
3.6%.
The retail market is more than double the value
of foodservice, but foodservice outlets
outnumber retail by 2 to 1
£M
100%
100,000
90,000
80,000
70,000
60,000
50,000
40,000
30,000
20,000
10,000
0
33%
130,000 outlets
80%
60%
70%
£64 billion
Foodservice
Retail
40%
20%
67%
260,000 outlets
30%
£27 billion
0%
Market Value
2003
Foodservice
Outlets
2004
Retail
Total
(Source TL Dempster Strategy & Research 2006)
(Source TL Dempster Strategy & Research 2006)
The value of the UK Foodservice Market
Foodservice Meal Consumption by Region
The UK Foodservice sector is currently valued at £26.7bn, an
increase of 22% since 1999
London and the South East is the most important
region for eating out, primarily due to above
average per capita income and high levels of tourist
activity. This area is clearly a most attractive target
for food and drink suppliers, and local competition
is intense. Scotland has the joint lowest percentage
of eating out, but this has increased in recent years
and is likely to continue to do so in the future.
30,000
8%
25,000
13%
36%
£M
20,000
10%
15,000
10,000
12%
8%
13%
5,000
London & SE
Yorkshire & NE
0
1999
2000
2001
2002
2003
East
Wales & SW
Midlands
Scotland
2004
(Source TL Dempster Strategy & Research 2006)
(Source TL Dempster Strategy & Research 2006)
North West
The structure of the UK Foodservice sector
Foodservice Market Map
2,500+ Groups account for 40% of the market
200,000+ Independents make up the 60% balance
Foodservice
Profit Sector
Restaurants
Hotel
High Street
Fine Dining
Local
In-Store
Food Courts, Malls,
Shopping Centres
Coffee Shops
Tea Rooms
Bakers
Cafeterias
Quick Service
Restaurants
Site Based
Pubs
Pubs
Food Primary Function
Burger
Chicken
Pizza
Ethnic
Fish & Chips
Bakers
Sandwich Shops
Ice Cream
Home Delivery
Retail
Restaurants
Outdoor Eating
Bar food
Clubs
Night Clubs
Social Clubs
Private Member Clubs
Food Secondary Function
Garden Centres
Sandwiches & Snacks
Forecourts
Supermarkets
Convenience Store
Newsagent
Mobile Operators
Source: TL Dempster Strategy & Research 2006
Cost Sector
Hotels
Leisure
Full Service
Guest House
B&B
Sports
Sports Centres
Health Clubs
Sports Clubs
Stadia
Speciality eg. Racecource
Tourist Attractions
Stately Homes, etc
Museums
Galleries
Theme Parks
Zoos, Safari Parks
Cinemas, Theatres
Casinos, Bingo Halls
Holiday Camps
Travel
Outside Caterers
Staff
Catering
Contract
Self Managed
Facilities Management
Healthcare
Education
Services
Local Authorities
Schools, Colleges, Universities
Hospitals
Nursing Homes
Social Services
Police
Prisons
Armed Services
The Structure of the UK Foodservice Market by
Number of Outlets
The Structure of the UK Foodservice Market by
Number of Meals Served
Pubs have the highest number of outlets, closely followed by hotels.
However, a proportion of these, especially small hotels and B&Bs,
will serve little food.
Restaurants, QSRs and pubs serve almost three
quarters of all meals. This is a group which
purchases primarily from foodservice wholesalers
such as 3663 and Brakes.
969
51,267
47,389
29,496
509
396
18,995
26,208
20,839
50
2,600
129
223
31,048
34,630
Restaurants
Quick Service
Pubs
Hotels
Staff Catering
Health Care
Education
Services
(Source TL Dempster Strategy & Research 2006)
Leisure
26
253
90
Restaurants
Quick Service
Pubs
Hotels
Staff Catering
Health Care
Education
Services
(Source TL Dempster Strategy & Research 2006)
Leisure
Foodservice Meal Consumption by Sector and Consumer Type
Foodservice Sector Meal Consumption by Day of Week
Adult females consume more meals in the profit sector because of
the higher levels of ‘eating out’ with friends. Not surprisingly, school
meals account for the higher child consumption of meals in the cost
sector
In contrast to the cost sector, almost 40% of all foodservice
meals consumed within the profit sector are consumed at
the weekend. The differing demand for products within
these two sectors may have significant implications for
suppliers, for example, of fresh produce.
% of meals consumed
100%
80%
36
44
30
25
60%
31
40%
38
Adult females
Adult males
Children
20
15
10
20%
33
18
5
0
0%
Monday
Profit Sector
Cost Sector
(Source TL Dempster Strategy & Research 2006)
Tuesday Wednesday Thursday
Profit sector
(Source TL Dempster Strategy & Research 2006)
Friday
Saturday
Cost sector
Sunday
The Structure of the UK Foodservice Market –
Major Routes to Market
Foodservice Meal Consumption by Time of Day
Manufacturer/Producer/Supplier
Cost sector consumption
concentrated in the early
afternoon
40
Contract
Distributor
35
Profit
% o f m e a ls c o n s u m e d
30
25
Cost
Profit sector consumption
primarily mid-evening
Delivered
Wholesaler
Cash
&
Carry
20
15
Others
inc.
Retail
10
5
t
gh
ni
gh
t-6
am
m
id
Foodservice Operator
M
pm
-M
id
-1
pm
10
11
(Source TL Dempster Strategy & Research 2006)
ni
1p
0p
m
pm
9p
m
-1
pm
8p
m
-9
pm
7p
m
-8
pm
-7
m
6p
5p
m
-6
pm
pm
4p
m
-5
pm
3p
m
-4
pm
-3
m
2p
pm
-2
m
1p
n
No
on
oo
-N
am
11
-1
m
m
1a
0a
10
am
-1
-1
m
9a
6A
M
-9
AM
0
(Source TL Dempster Strategy & Research 2006)
The Structure of the UK Foodservice Market Food Purchases by Major Routes to Market
OTHER USEFUL SOURCES OF INFORMATION
Over half of all food sold to foodservice operators is delivered
wholesale. Larger operators will invariably purchase from national
wholesalers. Smaller outlets may also use a wholesaler, but may
also buy from Cash & Carries or even retail stores.
53%
Visit www.scotlandfoodanddrink.org and choose
Marketing & Sales or Foodservice Zone:
Marketing & Sales Zone: access relevant data sources
available on markets, sectors, exports and more. The
Business Directory also features a constantly updated list of
specialist marketing suppliers.
Foodservice Zone: access foodservice-specific market data
and download free profiles on the UK’s largest catering
operators.
13%
There are many other How Do I? Guides which can help
you grow your business
www.scotlandfoodanddrink.org - The information
service tailored to the food and drink industry.
To contact Scotland Food & Drink please call us on 0131
524 8632 or, to access our food and drink information
Helpline, contact us on 0845 601 3752.
16%
18%
Delivered Wholesaler
Cash & Carry
Contract Distribution
(Source TL Dempster Strategy & Research 2006)
Others including retail