Wholesalers need a better understanding of foodservice if they want to cash in. Tan Parsons reports.
TV chefs have a lot to answer for – and foodservice wholesalers are in a great position to cash in. This was one of the key themes at the FWD conference, which took place last month, and highlighted the general public’s growing “foodie” expertise, and the increasing demands and opportunities now facing the businesses that sell to all manner venues, from bars and pubs, to schools, hospitals and leisure centres.
Foodservice operators’ reputations are “won and lost” because of wholesalers’ actions, said Brakes CEO Ken McMeikan (pictured above). He urged wholesalers at the conference to consider if they knew enough about the foodservice industry.
He said: “Do you have colleagues in your company with foodservice backgrounds – a chef, for example? If not, you’ll struggle to meet the needs of your customers. It’s not about retail products being rebadged for foodservice.
“Suppliers are following the growth – casual dining and daytime snacking will grow faster than average,” he added.
The market for eating out of home is set to grow by £2.1bn in the next two years, and there is an opportunity for the foodservice industry to innovate and give people extra reasons to eat out.
While convenience retailers are traditionally driven by price, foodservice operators are by their nature more picky about what they buy. They are looking out for inspiration and quality products.
Tom Lynch, commercial director at CGA Strategy, said TV chefs have a lot to answer for, and that people know, or think they know, a lot more about food now; there has been a big change in people’s desire for quality and experience in hotels, pubs and the hospitality sector. “The licensed channel has become a lot more foodie,” he said.
“There’s been a huge number of pub closures, but they have been replaced in part by food pubs and restaurants.”
Across the country 43% of people eat out at least once a week and in London this rises to 59%. One in four meals eaten on the high street in pubs and bars is now a burger.
But currently 26% of wholesalers’ foodservice customers are driving 80% of value. And 57% use four or more suppliers. There is a clear opportunity to make foodservice operators more loyal.
“You need to work past price,” said Lynch.
“You need to find the value that’s going to make your customers more ‘sticky’.”
There are also foodservice opportunities being missed right now, such as coffee and craft beer. Coffee chains have revolutionised the way our high streets look, changing the way we meet for business and the way young people socialise. But coffee sales make up only 2.1% of sales in high street restaurants and pubs.
Similarly, premium craft beer is revitalising the category for young adults, yet only 3% of beer sales are craft beer.
At the same time, wholesalers forget convenience retailers at their peril. In 2011 Masterchef presenter and greengrocer Gregg Wallace spoke at the ACS Summit, where he urged retailers to try their hand in the kitchen.
He said: “If you sell food, cook it. If you go into a supermarket and ask what root vegetable would be best for a soup, they can’t talk to you about it.”
Today retailers are following his advice and blurring the lines between shop and restaurant. Spar retailer James Brundle has just opened a store with a burger bar in east London, and Blakemore Retail is set to trial Greggs bakeries and Subway in its stores. If you see foodservice and convenience retail as separate entities, you may miss the boat.