Almost all segments of the out-of-home market are developing positively. The entire purchasing volume for food amounts to €13.6 billion. The largest part is handled by the specialist trade for food. We are providing you with an update of the development. The economic environment for the German out-of-home market in 2012 was positive. The findings indicate, among other things, that the gross domestic product has grown, adjusted for price, by 0.7%, whereby the prices have only risen moderately by 1.8%. As in 2011, almost 82 million people also lived 2012 in Germany. 50% of them were gainfully employed; 2.34 million individuals were unemployed at the end of last year.
Out-of-Home Market – Diversified Development
The entire market is strongly affected by many small hotels and restaurants. Especially the small gastronomical operations have been struggling for many years with diminishing revenues. Even in 2012, the entire gastronomical market sunk up to the end of October 2012 by 4% (the data for November and December is still not available). The development in the segment of overnight stays, which has taken another course, has risen, without consideration of price increases, by 1.5%. The examination of individual segments is informative. For 2011, the NPD Group, Inc. estimates €65 billion from the entire eating-out-of-home market; we record €34 billion with it. Hospitals and retirement homes, which don’t show a turnover of food on the books, are not included in this turnover.
Purchasing Volume for Food – Almost €14 Billion
But for the manufacturers of food and food wholesalers, it is not the turnover that is decisive but the purchasing volume i.e. the costs of goods employed, because they reflect the potential that this market offers to its suppliers. Very cautiously estimated, in 2011 almost 21% of the turnover of €65 billion was allotted to the purchase of food i.e. €13.6 billion; 69% of the volume was allotted to large-scale consumers, 31% to (hotel) gastronomy. Business Catering – The Most Important Segment Catering for employees is the largest market segment with €5.2 billion yearly (main and intermediate meals), followed by care facilities, i.e. by hospitals and retirement homes, which buy food for €3.3 billion (note: these institutions serve three to four meals per day). The number of hospitals is stable; on the other hand, the capacity for retirement homes is growing. In 2011, 6.2% more accommodations were offered to senior citizens than in 2010. Consequently, the buying volume also climbed in this segment of the market by 1.5%. A detailed comparison of these figures with earlier ones requires, especially in the area of staff restaurants, a costly reassessment of the data base.
Catering – Special Conditions
In quite a few countries in Europe like France, the staff canteens, hospitals, and retirement homes are firmly under control of catering companies, who take care of the catering of employees, patients, senior citizens, or students for their clients. In Germany, catering has a comparatively defensive position. According to the ranking of the renowned specialist journal gv-praxis, Issue 5/12, the top 31 catering companies have a turnover of around €3 billion in 2011. Almost 50% was allotted to staff restaurants, 23% to hospitals, 15% to retirement homes, and 5% to extremely price-conscious catering in schools. Caterers generate 8% of their revenues in new markets like gastronomy in sport stadiums or at events. The revenues are distributed over 5,044 contracts, which may care of the services for several operations. 10% of the contracts were new in terms of newly canvassed clients. Conclusion: the German market for services in catering is comparatively small and records a rather subdued development for many years. It is unlikely that this situation will change significantly in the foreseeable future.
Specialist Trade – Food Larger than Equipment
In 2011, the top ten of the German communal feeding and cash & carry trade had a turnover of €16.6 billion. 40% of this was allotted to the wholesale delivery trade and 60% to C&C operations, in which all tradesmen and tradeswomen, therefore not only cooks, can indeed buy food as well as non-food products. So the share of the revenues, which are allotted to the customers of gastronomy in the C&C markets, cannot be precisely estimated. The kitchen professionals not only buy their food, but also their technical equipment on the market. GastroSpiegel, the leading specialist journal for this kitchen technological specialist trade, estimates that the entire market volume for technical equipment of large commercial kitchens amounts to €2.5 to 3 billion. €1.5 billion are allotted predominantly to medium-sized specialist dealers, who offer in addition to the sale of equipment a wide range of services like planning, assembling, or after-sales-services and generate more than half of their revenues with this. With food as well as with technology, there are companies that deliver directly to their customers in institutional kitchens. The German out-of-home market offers attractive potentials for food as well as for industrial equipment and services. Just as it is in any other market, it is mandatory to know its structure and the important players. Foodservice is a very personal business.
Higher Budgets for Investments
According to the GV-Barometer 2013, large-scale operations of communal feeding in Germany are able to invest more in 2013 than in 2012 and would like to use their food more efficiently because too much food is still thrown away. For this reason, those responsible from the food industry are asking for smaller packaging sizes. This was shown by the current large-scale consumer barometer, which is always published before the Internorga. In 2013, the leading trade fair for the out-of-home market takes place from 8 to 13 March 2013 in Hamburg. The representative study on the subject “Innovation and Investments” was carried out by the well-known market researcher Professor Dr. Wolfgang Irrgang. He asked 309 executives in communal feeding, from which 147 were from staff restaurants with more than 500 meals per day as well as 86 from hospitals and 76 from retirement homes, each of which serve more than 300 warm meals daily.
A Bit of Caution with Investments
A total of 51 percent of the interviewed communal feeding professionals would like to invest in 2013. Equipment for cooking and general equipment (flatware and tableware) are top priority for staff restaurants as well as for clinics and homes (care facilities). In comparison to 2012, acquisitions for visual merchandising, dishwashers, flatware, as well as point of sale systems, and data processing were put somewhat into the background. Clinics and retirement homes plan fewer new acquisitions of food transportation and distributing systems than in the previous year.
Growing Budgets
Around half of all of the communal feeding operations have an investment budget of at least €50,000 at their disposal; that is 33% more than in 2012. The number of staff restaurants, which are willing to invest, has declined slightly; in return, their budgets have climbed considerably. The number of care facilities, which are willing to invest, has lowered considerably more than those of staff restaurants in comparison to the previous year. But also in this segment, the number of companies, which are able to invest €50,000 and more, have risen noticeably. The climate for investments is especially positive in retirement homes; 64% of the interviewees rate it with good. That has to do with the fact that this segment of the market is growing. If those responsible for their operations have to or want to restructure, then they cut down mostly on personnel and or centralize the production of their meals. This applies to care facilities more than for staff restaurants. In 54% of the clinics and homes, such measures were initialized, planned or, reviewed. On the other hand, only 42% of the staff restaurants address the question of reducing staff.
New Foods – Great Interest
Like earlier surveys, chefs are very interested in new foods, especially for vegetables, pasta as a main dish, poultry, fish and meat dishes. With more than half of the interviewees, there is a definite interest if the food product offers innovative solutions with regard to the quality, optic, and health orientation or in terms of taste.
Smaller Packaging of Food
A third of the communal feeding operations throw away food daily and most frequently leftovers from cooked meals, which can’t be served anymore (63%). Fresh products, which cannot be processed any more (38%), follow in second place. In addition, products, whose sell-by date has expired, and packages, which have been opened, play a roll. Operations with less than 500 warm meals per day throw away food more frequently as those, who serve food daily to 1,000 guests. Those responsible would like to reduce the quantity of waste further, for example, by optimizing the menu planning (70%) and preparing meals in batches (44%). 26% of the kitchen professionals demand (additional) smaller packaging sizes from the industry, in order to reduce the discarding of food still further.