The SmArt of Innovation in Contract Catering

Innovation in a service industry such as the foodservice or rather contract catering industry  has always been a personal interest. The market is huge, varied and cannot really be categorized in any specific operating industry because of it’s diversity, yet it’s a pretty simple business. It operates and feeds people at your business on a contract basis over a specified period of time, ‘invisible’ people trained to integrate seamlessly yet professionally.

After years in the industry reviewing and researching, not only South African market industry innovation but also European and North American innovation, its hard to find anything really earth shattering or radically new. From the South African perspective this is partly because at times, the industry has been locked in a trend of cyclical idea rehashing as well as a lack of quantitative industry research. It’s important to note that the lack of research often stems from a lack of budget, in a low margin, labour intensive and cost conscious business. Besides the cost though, the diversity of the contract base and substantially reduced contract tenure over the past 10 years has created an environment of constant change, which has made research difficult and exceedingly costly. Coupled with this the industry is highly competitive and secretive which makes it’s hard to gain a really deep view of industry innovation.

In saying all that though, a shift seems to be well on it’s way that has breathed air into the lungs of the contract catering industry by increasing the competitive pressure for new ways of operating and new thinking. This new pressure is…… the niche service provider.

Until a few years ago, industry players of any note (by ‘note’ I mean those that are large employers with large turnovers) have been monopolising the market. This has very gradually changed over the years in South Africa though with the proliferation and growth of the SMME sector since the downfall of apartheid. Contract catering as an industry has a low barrier to entry with low set up costs and the perception that anyone can cook. Although this group has eroded the monopoly market and niched themselves in the tender/government industry they have shown little customer focused innovation as far as I can tell (please send any new info that I may have missed). In the private sector, the growth of facility management companies has forced business to business catering companies’ to reduce margins and has created a rather cold contractual relationship with limited access to ‘the real client’.  The private sector market has also begun gradually changing shape, breaking up and growing into a multitude of smaller more technically skilled SMEs or focussed niche service category providers who’s focus seems to be ‘innovating’ and providing clients and customers with a more authentic, focussed, improved localised service via their people, offering, products, processes, technology, the environment but most importantly the delivery and flexibility of their approach.  We’re not saying the ‘big guys’ are not part of that party, they are all still around, offering what they offer and doing what they do. They are however also often anchored by their corporate mentality being inwardly focussed and not structured to support innovation or personalised service from the ground up, ironic considering the industry’s initial intention of servicing clients and customers. There tends to be alot of sizzle but no actual steak. For some that approach works, there are many clients that are all about cost but we believe true success comes from a well balance approach involving many variables not least a rather ‘intimate’ partnership with clients that smaller owner managed niche provider can offer.

We all know mass production has a market but lets be honest it’s just not cool. The smaller niche companies are a fertile ground for future innovation in this sector and it’s going to be interesting to watch the industry path as the little guys make bigger ripples.

Posted by: Candice

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