Changes Afoot?

The last few years have seen some interesting new players entering the concession catering market. Are they here to stay and what impact will they have on the concession catering sector? We explore the newcomers and what values they bring to the clients.

The announcement last year of the award of the concession contract at The Historic Royal Palaces to Ampersand caused quite a stir through the catering market. Ampersand was formed as a separate division of CH&Co in 2010 to target the commercial concession market but CH&Co have been operating commercial contracts at the Law Society, The Royal Institute of British Architects (RIBA), Portsmouth Historic Dockyard and others for many years.

So why the surprise? Perhaps because of the scale of the HRP business, reportedly £60 million over five years at the three locations: The Tower of London, Hampton Court Palace and Kensington Palace and the significant capital investment injected. Perhaps more cynically though, it’s because commercial contract caterers have found a new competitor in a narrow competitive field and one not afraid to make its mark.

Over the past few years there have been a number of new entrants into concession contracts from other catering markets. Some have entered with one site and remained at that, others have expanded.

Perhaps the most notable new entrant was independent deli bar operator benugo at the V&A Museum. Six years on they hold the contracts at the two other Kensington museum sites: the Science Museum and Natural History Museum, as well as BFI Southbank, the Museum of London, the Ashmolean in Oxford, the Serpentine Bar and Kitchen in Hyde Park and several sites in Scotland including Edinburgh Castle. Starting out on the high street they now seem like ‘the old boys on the block’ in concession catering, but this growth has occurred in just a few years.

The recent announcement that Grazing another, newer, high street operator, has been awarded the concession contract at the Design Museum on Shad Thames suggests that more independent high street operators are looking to this market. Gails, the Artisan Bakery with nine shops in London have also expressed interest in recent museum and gallery contracts.

And what about the High Street brands? High Street brands will continue to infiltrate the market where opportunities lie but for many brands the trading conditions in visitor attractions are not suitable. The fact that they are often located off the high street, limited by visitor numbers and operate to strict opening and closing hours provides restrictions which many of the brands are unwilling to accept. For the most part the visitor attraction market is chasing the brand rather than the brand chasing the market.

The economic decline in 2008 hit event caterers hard, particularly those which relied on corporate business. Some fell by the wayside, the victim of the harsh economic times, but others chose to diversify. Rhubarb, the high end event caterers most usually associated with creating spectacular dinners and cocktail receptions in some of London’s most prestigious venues won the contract in 2011 to run the bars and restaurants at The Royal Albert Hall. This followed closely on the back of their success with the restaurant at the Saatchi Gallery.

Creativevents,the UK Event Caterer of the Year in 2011, operate the catering at exhibition venues Earls Court, Olympia and ExCel.  The company have been looking at the concession catering market for a few years now and in 2011 they were awarded the contract at Brooklands Museum in Surrey. In the first six months the Museum reported a 50 per cent increase in catering and hospitality revenue.

There are many synergies between exhibition catering and visitor attraction catering. Both operate on a commercial concession basis, both have to gear up and down to accommodate the peaks and troughs of business and both require a very proactive approach to sales.

Amadeus, the caterers at the NEC in Birmingham have similarly expanded out of the exhibition catering market and into visitor catering scooping the prestigious North Olympic Park contract as well as a number of Midland locations including Coventry Cathedral.

When Harbour and Jones, a caterer operating in the City staff catering and directors fine dining market, won the contract for public catering at St. Paul’s Cathedral in 2008 there was a similar flurry of – Who? Why them? A B&I caterer, there was some degree of scepticism in the market but Harbour and Jones pulled it off. The company have achieved growth and the restaurant has received some favourable critiques. The company have now expanded into other commercial contracts including the Henry Moore Foundation.

So what do the caterers from other sectors bring to this market sector?

Those that operate at the top end of the in the B&I sector in Bank HQs, law firms, insurance houses and other City institutions operate cafes, staff restaurants and partners dining rooms of the very finest quality. The catering in many City private dining rooms is the best in the market, exceeding that in your average high street restaurant. The cafes and staff restaurants operate day in and day out with the same clientele so standards have to be high or in these days of nil subsidy or even commercial pricing staff will simply go out onto the High Street. Driven by corporate expectations many have recognised accreditations- ISO 9001 and ISO 14001 and their financial accounting and control systems are often highly developed. So you can expect high standards but whilst many B&I caterers operate what they consider to be commercial contracts they are generally more risk adverse. So for example, capital investment offers could be considerably lower.

The traditional image of staff catering should not deter the wily visitor services manager from examining what these companies have to offer. However, a word of caution: not all B&I caterers have the necessary attitude and approach to risk which the commercial market demands. Nor do all have the skills to drive sales in a highly competitive market. Many are still very cost focussed in the management of the catering accounts, a factor which will be detrimental to a fully commercial venture.

The event and exhibition caterers deliver catering offers that can change as frequently as twice a week in response to the market visiting the exhibition or event. They are light on their feet, innovative and highly responsive to change. Their skill lies in their ability to maximise sales though adaptation. Scaling up or down to accommodate the peaks and troughs of business they employ creative solutions in the form of pop up cafes, kiosks, bars and restaurants to deliver high volume, high quality catering directly to where it is needed. In visitor attractions challenged by a shortage of catering space or with significant fluctuations in trade these solutions could prove invaluable in driving revenue. Many are supported by strong internal marketing teams driving excellent marketing and merchandising campaigns.

In our view the entry of new operators to the market can only bring positive benefits to clients looking for choice in a very narrow market. We believe that it has made some of the established concession caterers review their delivery standards and up their game which again is no bad thing. The likelihood of a new entrepreneur joining this market and making significant market penetration in the next few years is, in our view, fairly slim. We would love to be wrong but the high capital investments required by clients together with high cash flow requirements make it difficult for entrepreneurs. We think that the new players will be established players from other markets changing their cloaks.

No two contracts are ever the same and the caterer that suits one venue will not necessarily suit another so don’t be afraid to think outside the box and explore all options.


Fiona Boyd-Thorpe
Director