The out-of-home markets in Great Britain and France have grown in 2012. The same goes for the German out-of-home market, in which a sales volume of EUR67bn (2.6%) was achieved. How does this market differ from the other ones in Europe?
For the manufacturers and dealers of foodstuffs, the buying volume of food, processed by contract caterer and gastronomes is clearly more interesting than the turnover that they generate with their guests. On the basis of the current figures in 2012/2013, calculated carefully in all segments of the market, it amounts to EUR16.3bn. 69% of this falls to the catering in companies/hospitals and retirement homes, day care centers / schools / universities or other segments, like in penitentiaries or in the army. 31% of the food purchases unify the eight most important areas of gastronomy, including those in hotels. The high share of contract caterers might be one of the important differences to other similar markets in Europe.
Contract catering – the largest sub-market
The largest segment of this sub-market is catering for employees in companies, public authorities, etc. (business catering) with goods and materials employed amounting to EUR 7.3bn. At the same time, we make a difference between two areas: 62% falls to the classical warm midday meals, and the catering for “in-between”, which makes up for 38% of the volume. The first area is often regarded as an employee’s benefit, which has been co-determined by the work council. The people responsible have to cover its absorbed costs, partly after a deduction of a subsidy by the company. The situation is different with the snacks and snack drinks, in which companies want to and can also make a profit. Because if a guest, for instance, would like to eat a piece of cake with his espresso, he pays much less attention to the price, than if he takes a salad and a risotto at a free flow counter. One and the same person spends his money within a few minutes in a totally different way.
Hospitals – EUR4.76 per patient and day
Catering in hospitals, rehabilitation clinics, retirement homes, and facilities for people with handicaps is the second largest market segment in contract catering, with a sales volume for foodstuffs amounting to EUR3.1bn; 51% of it falls to (rehab) hospitals. Their number has lowered slightly, but those of the patients who are being treated has climbed slightly (18.6 million; German Hospital Association). Nevertheless, more than half of the hospitals don’t make a profit, in spite of the high numbers of cases, which points to a fundamental problem in financing the hospital sector. That’s why experts such as those from the German Hospital Association demand a fundamental reform, but also in order to gradually reduce the accumulation of EUR50 bn investments, which also puts more and more pressure on the kitchen, whose equipment becomes increasingly obsolete. This covers the largest part of the general information; however, kitchen chefs in clinics are able to spend an average of EUR4.78 per day for catering to their patients and have to cover three to four catering units with this. Each of the 3,200 facilities buys foodstuffs for just under a half a million euros. Therefore, this market segment has quite a considerable volume, which is a bit sensitive to changes.
The data for care in retirement homes in 2012 was not available by the editorial deadline, but we can proceed from the assumption that the number of rooms that are available have climbed moderately. Due to the fact that foodstuffs have also become more expensive for bulk customers, the purchasing volume for foodstuffs will have increased accordingly. Education is a smaller market in comparison, but it has grown significantly for two reasons. Due to an educational reform, an unusually high number of young people have taken their final exams (Abitur) in 2012/2013 and stream into the universities afterwards. But this changeover has now been finished on the whole so that the number of students in the future will clearly change considerably less. Even schools are finding themselves in a process of change: More and more all-day schools are being established and continually enlarged; 20% of the 11.3 million school children visited these types of schools in 2012/2013. Because each of the children is required by law to be served a meal, this market is growing slowly but steadily. The target groups, which fall under “other contract catering segments” are very specific and that is why they are not discussed here further.
(Hotel) gastronomy: a differentiated view
(Hotel) gastronomy stands for goods and materials which are estimated at EUR5 bn. 57% of it falls to the classical individual gastronomy, which encompasses just under 100,000 restaurants, cafes, and concession stands. Their proprietors buy the food mostly in cash & carry trade, while operations of other segments are usually delivered by delivery wholesale dealers or special third-party logistics providers such as brokers. The numbers of the first mentioned small gastronomical operations vacillate considerably, more than those of other segments; compared to the previous year, the numbers have been lowered by over 4.4%. Quick service is the second largest segment of the German gastronomy market. The undisputed market leader is by far McDonald’s with 1,440 units, whose sales with EUR3.2bn are almost four times higher than the second player on the market, Burger King. On the other hand, this company generates an almost three times higher turnover than the third-placed franchise, fish specialist Nordsee, which belongs to a private equity holding company. The concentration in this market segment is therefore unusually high. The 11,300 stores have a turnover of EUR6.5bn, whereby very carefully estimated, 60% fall to food.
Due to the fact that we don’t know the internal calculations, we assume a premium of 400% so that the goods and materials employed may be just under a billion euro. The third most important segment of the (Hotel) gastronomy is that of the travelers. There is here also an unequivocal front runner, the company LSG Sky Chefs, which belongs to the concern of the German airlines Lufthansa. Its core businesses are airline catering, the process management connected to and the board service. The second biggest player is Tank & Rast, operator of filling stations, hotels, and rest stops on the freeways. Tank & Rast is controlled by a group of investors. We estimate the goods and materials employed here to be just under a half a billion Euros. In comparison to both of the first three, the other market segments are considerably smaller; the volume of their goods and materials employed is clearly under 200 billion Euros per segment. According to a survey by the industry-leading trade journal ”Foodservice Europe & Middle East”, Issue 6/13, the top 99 players of the European brand restaurants & quick service chains generate 42% of their revenues in the segment “Quick Service” and 28% in “Contract Catering”. By comparison, the conditions on the German market are quite different as we have seen. References: Data, which have not been ascribed to special sources or we have calculated ourselves, come from the dfv Mediengruppe Deutscher Fachverlag GmbH, Frankfurt am Main, Germany