Generating Unique Propositions
The following article was written and included in the En Passant Report ‘Vision: The Vision of a Sector’ 2015/2016.
Being able to interpret the market in order to identify the next customer base is still the key to success.
The contract catering sector is still a fiercely competitive marketplace. The creation of a USP for food service operators is challenging because, what was once considered to be original, is now the norm. For example, all companies profess to provide;
- Locally sourced ingredients (the question is how local is local?)
- Freshly prepared food
- Sustainable practices
- Well trained staff
- Enthusiastic and passionate teams
- Client retention focus
In nine out of ten cases the contract is awarded to the organisation with the right cultural fit, so the most successful organisations will have been building relationships with prospective clients long before the tender is issued.
The contentious issue around supplier discounts and rebates is less of a focus as the market has moved towards nil subsidy and profit share arrangements. It’s about Value for Money and openness and transparency. It’s expected that Contractors will have negotiated keen prices from their suppliers as part of good business practice. The decision of how much to share with clients is irrelevant if the bottom line cost delivers what was agreed within the contract. It’s about shared risk and rewards therefore; loyalty, trust, professionalism and fairness are the critical success factors for long term contracts.
Innovation is often mentioned within the food service industry but, in many cases, is incorrectly or over used. The majority of contract catering companies claim to be “innovative” but the reality is they replicate what is happening in the High Street. They are followers not leaders of trends or fads and it’s a difficult environment from which to generate truly unique service propositions. Creating a food offer that is copied in the High Street is still something to aspire to.
A developing area the food service industry will need to keep a watchful eye on is the growth of the ‘free from’ market. According to Mintel, this is the fastest growing retail market in the UK, worth £365 million in 2015. It is expected to grow by 60% over the next two years. Future growth is expected to come from lifestylers who chose to eat ‘free from’ foods because they want to eat more healthily. The millennial generation (18-34 year olds) has a different outlook on where and how they buy food compared to the Generation X and the Baby Boomers that came before them. Contract caterers will ignore this customer base at their peril. It is both an opportunity and a threat depending on which strategy is followed.
Ramsay Todd Ltd