“After benchmarking staff catering for a number of years some interesting changes have occured that are affecting this crucial support service,” says Alan Low of Purchasing index. “At the turn of the century many organizations had outsourced staff catering usually to one of the better known service providers, e.g. Royal, KKS, Fedics, etc. who usually took over the existing in-house staff, and had free use of the organization’s infrastructure. ”

Many of these arrangements were established on contracts that lasted in excess of five years, on the basis that the new service providers needed to defray their own initial costs and make a reasonable profit.
“The main benefits to providing an in-house catering facility revolved around attempting to minimize the time lost on the lunch break and keep the staff from leaving the building during the middle of the day,” says Low.

In many cases, the quality of food and the standard of service diminished soon after the new arrangements were in place, and the staff voted with their feet, opting to find alternative venues or bring their own lunch to work. Catering companies were often slow to respond and did so, by complaining to the organization or attempting to increase their management fees. Purchasing Index’s view is that the more “hands-off” the organizations became, the more the caterers’ service declined and the fewer staff used the facilities.

Smaller, more agile Caterers are muscling in on the market:
“As the new century progressed, new smaller, more agile caterers ‘muscled’ in on the market.
Offering amongst other things, more transparent costing systems, chefs on site to ensure consistent quality and innovative service offerings, they have provided much-needed innovation into what was seen by many as a stale industry set in its ways. ”

This seems to have corresponded with more organizations’ senior management realizing the attraction to existing and potential staff in offering up-market canteen or restaurant facilities as part of their employment package; and sometimes at no extra or even lower cost to the company.
It also has corresponded with retail restaurants and coffee shops realizing that they can compete effectively for this new share of the market.

If you would like to obtain more information about the catering service market, what other organisations are paying for the service, contact the author Alan Low on alan@pricetrak.co.za.