Horizons urges food manufacturers to take new product development for the catering sector more seriously

Food manufacturers should be encouraged to take the catering market more seriously when it comes to new product development, consider using the sector to launch products and build brands, and stop viewing catering as just a bolt-on to retail sales.

This was the message from foodservice analyst Peter Backman, managing director of Horizons, speaking at a conference in London attended by Fast Moving Consumer Goods (FMCG) investors.

Horizons values food and drink purchases made by the catering sector at £10.3bn, but is critical of the fact that many food and drink manufacturers are focussed almost entirely on the retail sector.

"Foodservice is a good place to launch products - manufacturers can test the market, gauge customer response and, with the help of restaurant operators, build successful brands. It's also far cheaper to build a brand through the catering sector than it is through the retail trade.

"The catering market is currently suffering from a real lack of new product development, at a time when pubs and restaurants are desperate to keep their menus fresh and interesting for customers. This is a great opportunity for food manufacturers."

Horizons' latest QuickBite survey, of over 1,000 consumers, puts the value of sales through the catering sector at £36.6bn, a figure that has shown an impressive 12.5% increase year-on-year. While the economy has slowed the market, consumers have opted to reduce their spend rather than not go out. Average spend per head including drinks currently stands at £11.69, a 7.5% fall year-on-year from £12.64.

This year the UK eating out sector is likely to be boosted by a strengthened tourist trade, with visitors attracted to the UK by a weak pound against the US dollar and Euro. British holidaymakers are also likely to stay at home again this year, given the high cost of holidaying abroad.

Horizons' QuickBite survey, conducted in December 2009, reveals that price is becoming less of an influencing factor on eating out and that consumers are becoming less pessimistic about how often they thought they would eat out in the future. Some 5% of respondents predict they would eat out more often in 2010 than they had in 2009, while 73% feel they would eat out just as often in the coming year.