Catering Services Industry Supplier Intelligence Report 2020 – 2025: Global Market Procurement Analysis With Covid-19 Impact | Grand View Research, Inc.

Grand View Research, Inc.
The global catering services market size was valued at USD 540 million in 2020 and is expected to record a CAGR of 4.5% from 2020 to 2025. Europe occupied a share of 43% in the global market in 2020 despite the pandemic and will continue to be the leading region for catering services.

Services Industry Category Intelligence

The catering services market boasts of a mature European and North American market and a fast-growing APAC market. However, the COVID pandemic resulted in businesses being closed, events being postponed, and eateries being shut down. As such, the catering/cafeteria services were negatively impacted. One of the saving graces for the industry was the resurgence of take-away meals, which resulted in the contractual employment of employees from the cafeteria service providers.

With the pandemic loosening up, various countries have resumed operations with certain rules and regulations to maintain COVID safety protocols. For instance, pubs and restaurants in Ireland have opened for indoor service. In France, people visiting eateries have to show proof that they are vaccinated or have tested COVID negative recently. In India, ceremonies and gatherings can help with a limitation on the number of attendees decided by the local authorities. Such steps are opening business opportunities for catering service providers globally.

Catering Services Industry Category Intelligence Highlights: 

The COVID pandemic has proven disastrous for the catering service providers due to businesses and restaurants being closed as well as people maintaining social distancing protocols
The global cafeteria services market is highly fragmented and competitive, with many large corporations striking strategic partnerships with mid-sized or small-sized companies to leverage their regional logistics capabilities
Majority of the players in the market use cost-plus pricing. While this mode of pricing provides the least value to the client, there is certainty in profit generation per item sold
The maturity of the European market helps the suppliers operating in it realize greater profitability as compared to ones operating in growing markets like APAC
The German is a mature market for catering service suppliers with high profit margins being derived in Germany and UK markets. Since the market is mature, chances of the profit margins changing are also low.
Asian countries are expected to have high penetration of catering services. Japan has already witnessed the penetration of catering services in schools, colleges and offices. Additionally, restaurants also provide catering services. These factors would aid in driving profitability.

Catering/Cafeteria services are resuming with limited capacities. Eateries are employing personnel from cafeteria service providers on a contractual basis
The cafeteria market features a highly fragmented competitive landscape owing to the presence of several small players and regional players
Suppliers widely prefer bundled outsourcing model as their operating model to diversify work 

Grab your copy, or request for a free sample of the “Catering Services Industry Procurement Intelligence Report, published by Grand View Research” for In-depth details regarding supplier ranking and selection, sourcing, and pricing criteria & strategies

Catering Services Industry Cost Intelligence Highlights:

Catering Service Types –

Restaurants
Public Gatherings
Eating Facilities
Canteens

Grand View Research has identified the following key cost components for availing catering services:

Raw Material Costs (60%-65%)
Operational Costs (35%-40%)
Rental Cost
Personnel Cost
Associated Costs
Opportunity Cost
Wastage Cost
Transportation Cost
Profit Margins

Raw material cost is the largest cost component of catering services, accounting for 60%-65% of the total cost of service. 

List of Key Suppliers in the Catering Services Category

Aramark Corporation
Compass Group North America
Sodexo
ISS Facility Services Pvt. Ltd.
AVI Foodsystems, Inc.
Mitie Group plc
Bartlett Mitchell
Elior Group
Baxterstorey Limited 

Catering Services Industry Methodology to Identify Key Information for Suppliers

Supplier Screening Criteria

Identification of Initial List of Suppliers
Finalizing Suppliers
Supplier Recommendation

Supplier Ranking Methodology

The suppliers are divided into the below mentioned four quadrants in the matrix with the help of the weightage assigned to each of the categories:

Rulers
Challenger
Niche
Lounger

Operational Capabilities – Weightage

Years in Service (20%)
Geographical Service Presence (25%)
Employee Strength (25%)
Revenue Generated (10%)
Key Clients (20%) 

Functional Capabilities – Weightage

Area of Expertise (50%)

Restaurants
Public Gatherings/Events
Eating Facilities
Canteens

Location Expanse (50%)

Local
Regional
National
Multinational/Global

Catering Services Industry Category Add-on Services

Should Cost Analysis

Component wise cost break down for better negotiation for the client, highlights the key cost drivers in the market with future price fluctuation for different materials used in the production process.

A should cost model is an all-important technique for deriving and forecasting the actual cost of a product/service over the forecasted period. It serves as a competitive edge for supplier negotiations by determining the actual price for the cost components. The outcome helps procurement leaders to understand detailed fact-based cost drivers for the category.

In the catering services market procurement intelligence report, we have estimated and forecasted pricing for the key cost components while availing services from catering service providers. The cost of catering services can be categorized into two major types; raw material costs and overhead costs. Raw materials are the basic food ingredients that go into making a dish. With a wide variety of meals being on the menu, the cost of raw materials also tends to vary significantly. Raw materials accounted for more than 60% share in overall catering service cost. It is majorly driven by cooking oil and gas price fluctuations. Salary of personnel is the key cost component of the overhead costs segment. It accounted for more than 8% share in overall catering service cost. Chefs’ salaries have witnessed unpredictable trends in the past. However, the role of professional chefs has become mainstream in professional kitchens globally and chefs are seeing strong appreciation in salaries and remuneration. Over the forecast period, the salaries of culinary professionals are expected to rise at a good pace.

Rate Benchmarking

Offering cost transparency for different products / services procured by the client. A typical report involves 2-3 case scenarios helping clients to select the best suited engagement with the supplier.

Every organization and its procurement team wants to negotiate the best deal while procuring a set of products or services. Rate benchmarking uses price/cost comparison of more than one set of products/services to analyze the most efficient combination that will help the procurement team to get the optimum rate.

The canteen set-up of catering services is one of the most important aspects while analyzing the rate benchmarking. In our research, we have analyzed the rates of catering services for both instances where canteen set-up is provided by the customers as well as where canteen set-up is not provided by the customers. By using rate-benchmarking analysis, we found that, where canteen set-up is not provided, the profit is 4% higher than where canteen set-up is provided. In addition, the personnel cost where canteen set-up is not provided is 60% lower. However, the electricity cost, cutlery & assortments cost, and transportation cost is higher when canteen set-up is not provided.

To gain a comprehensive understanding of the other aspects of rate benchmarking, please subscribe to our services for the complete report.

Salary Benchmarking

Determining and forecasting salaries for specific skill set labor to make decision on outsourcing vs in-house.

Labor is one of the key cost components incurred while offering a product or service. Understanding the pricing structure of salary is important for organizations in selecting the appropriate supplier and to build a good negotiation strategy. It is also an important factor in determining whether the category under focus should be outsourced or built in-house.

Our research indicates that DoorDash managers earn 42% higher salaries than managers from other industry leaders like Aramark and Delaware North. However, Aramark and Delaware North offer 20% higher yearly increments to managers compare to DoorDash.

Supplier Newsletter

A typical newsletter study by capturing latest information for specific suppliers related to: M&As, technological innovations, expansion, litigations, bankruptcy etc.

It is cumbersome for any organization to continuously track the latest developments in their supplier landscape. Our newsletter service helps them remain updated, to avoid any supply chain disruption which they may face, and keep a track of the latest innovations from the suppliers. Outsourcing such activities help clients focus on their core offerings.

Brief about Pipeline by Grand View Research:

A smart and effective supply chain is essential for growth in any organization. Pipeline division at Grand View Research provides detailed insights on every aspect of supply chain which helps in efficient procurement decisions.

Our services include (not limited to):

Market Intelligence involving – market size and forecast, growth factors, and driving trends
Price and Cost Intelligence – pricing models adopted for the category, total cost of ownerships
Supplier Intelligence – rich insight on supplier landscape, and identifies suppliers who are dominating, emerging, lounging, and specializing

Sourcing / Procurement Intelligence – best practices followed in the industry, identifying standard KPIs and SLAs, peer analysis, negotiation strategies to be utilized with the suppliers, and best suited countries for sourcing to minimize supply chain disruptions

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