The business and industry (B&I) sector of the contract catering market accounted for £582m-worth of meals last year and consists of some 17,816 outlets, according to the British Hospitality Association's Food and Service Management Survey 2005.
When department store services and prison and prison shops were added in, it had a 38.5% share of the £3.9b UK contract catering market.
Taking a longer view, from 1991-2004, the B&I market has seen its share of meals fall from 49.7%, even though the actual number of meals served has risen by more than 89% to some 617 million, from 325 million in 1991.
Contractors accounted for 50% of the market last year, up from 31% in 1991. But because they operate the largest outlets, food and service management companies serve far more meals (about 95%) in the B&I sector than self-operators.
The B&I sector is a reflection of the wider contract catering market and is therefore dominated by big players such as Compass (with divisions including, among others, Eurest, Baxter & Platts and Restaurant Associates), Sodexho (including the Anton Edelman-led Directors Table division), Elior and Aramark.
Other significant players include Charlton House Catering Services, Initial Catering Services and BaxterStorey.
There is still activity in the market, but most of it is churn rather than organic growth, argues Chris Stern of consultants Stern Associates.
"I am not sure the market has grown significantly over the past year or so. In fact it may have pretty much contracted," he explains.
"It has been pretty much contracted out for some time, which makes it very hard for new business to come in, especially as more and more of it is moving to nil subsidy anyway," he adds.
B&I contractors are finding the market tough, agrees Vic Tippins, managing director of consultancy Catercheck.
"It is a mature market. And over the past 10 years contracts have become much longer than before," he says. "There has been tremendous pressure from facilities managers and finance managers to get contracts that are nil subsidy or as near as possible. There are many more fixed-price contracts than there were 10 years ago," he says.
Financially, as in the rest of the contract catering market, growth is being partly driven by acquisitions generating economies of scale.
"I think there will come a time when it will be very hard to find smaller players that have not have been snapped up," Stern forecasts.
Jamie Oliver's campaign to raise food standards may have been focused on schools, but it is having a knock-on effect in the B&I sector, argues Stern.
"People are taking a much greater interest in what they are eating," he suggests.
Another area growing in importance is "add-on" services, with more and more caterers, particularly the bigger players, looking to provide a wider range of facilities management-based services.
Cleaning and security have long been popular choices for this but, at least in London, the number of caterers now offering to run an organisation's reception is growing rapidly.
Compass's Restaurant Associates, for instance, has RA Business Services, which provides receptions, switchboards, help desks and meeting rooms.
On the food side, a survey by Catercheck last year found that own-brand services, high-street brands, beverage break-out areas, deli bars, take-aways and retail shops were all common services that had been introduced by caterers in the past couple of years.
Similarly, the trend for big corporate organisations to move to bespoke, out-of-town sites is changing the nature of B&I catering.
In an out-of-town setting there is obviously less competition from high-street sandwich or snack bars, pubs and bars, yet as a result there is also demand for a wider range of options and more flexibility in how they are accessed, for instance at the desk or on the move.
Operations across the board are becoming more focused on service, more commercial, and increasingly look like high-street outlets, and there is more "all-day dining". There is also a growing emphasis on service formats that are easy to set up and clear away.
"People are eating fewer and fewer meals at work, there is much more ‘grab and go' and people taking food with them," says Tippins.
Yet, within this, there is also the recognition that, in a long-hours, shift-working and even 24-hour-a-day culture, for many workers the substantial, hot canteen lunch doubles as the main meal of the day.
"A lot of companies still believe they get benefit from having a staff restaurant serving high-quality hot food at a reasonable price," he adds.
Alongside the trend to all-day dining there is a recognition that expensive assets such as canteen areas need to be worked harder, for instance allowing them to be used for events or services outside traditional eating times.
For the future, predicts Stern, there will be more diversification of services on offer, a continuing trend towards lower subsidies and more work being done on the best use of facilities.
Indeed, for some B&I contract caterers, the catering element of what they do could almost become a niche service alongside the wider facilities management-based offer, forecasts Tippins.
Quality has been an issue for at the best past of a decade but will become even more so, he predicts.
This, in turn, may mean caterers are able to charge more but it will be unlikely to have much impact on margins, unless caterers attempt to take clients for a ride, Tippins suggests.
Although the opening up of the European Union has given caterers access to new, cheap labour pools, attracting youngsters into the industry and offering them a clear career path is likely to be an issue in the future.
Market penetration by contractors:
|-||Contracted outlets||Share of market||Self-operated outlets||Share of market|
Source: British Hospitality Association Food and Service Management Survey