The global catering services market is projected to grow at a steady CAGR of 4.5%, according to Beroe Inc, a procurement intelligence firm.
Based on recent valuations, the value of the catering services market is highest in Europe, worth $218.1bn, growing at a rate of 3-4%, while the Latin American market has had the lowest value of $23.7bn, growing at a rate of 2-3%.
The catering services market is expected to have the highest growth in the Asia Pacific (APAC) region, projected to grow at an annual rate of 7-8% until 2021.
While Singapore and Hong Kong have high market maturity and Japan and Australia have medium maturity, the remainder of APAC has low market maturity.
The overall value of the global foodservice industry is expected to reach approximately $616.2bn in 2023, growing at a CAGR of 4.5%, says Beroe.
At a global level, the high maturity regions are the US, the UK, France, Italy, and the UAE and medium maturity markets are Saudi Arabia, Turkey, and Canada. Other than Western Europe and a few other countries, markets for catering services as a standalone, specialised function remain underdeveloped.
In the fastest growing regions of the catering services market, such as APAC developing countries, there is a highly fragmented market, with very high demand from buyers for organised catering.
Meanwhile, political and economic unrest in Europe due to Brexit and other factors are expected to slow down the growth of the catering services market in Europe.
Growing demand among corporate buyers for fresh and healthy food is driving the demand for the catering services market to reduce dependency on frozen and pre-prepared food.
Top trends in the global catering services market include employee fine dining, technology adoption, local foods, sustainability initiatives, cashless payments, and subsidies.
Automation and other catering unmanned solutions are gaining popularity. Food delivery apps, food ordering, and staff restaurants are also influencing the best practices in the catering industry.
Beroe valued the global foodservice equipment market at $36.4bn in 2018, and this is expected to be worth $47.7bn by the year 2022, growing at a CAGR of 7%. The development of advanced automated kitchen equipment capable of saving valuable space and money by improving efficiency is expected to keep driving the sector, especially in the mature markets.
For the overall report into the catering services and foodservice equipment market, the research firm gathered data and insight from experts with 20 years of domain experience, interaction with buyers and inputs from supply chain partners.
Its key findings from this were that buyers have lower bargaining power in small contracts worth less than $5m, while they have significantly higher bargaining power for large contracts worth more than $10m. The P&L pricing model is most widely used for large contracts in developed nations, while subsidised contracts and cost plus and fixed price models are popular for smaller contracts and in developing regions.
Major buyers are looking to go beyond just catering service offerings to employees and create a dining experience that enhances employee satisfaction and morale. Mobile payments and cashless payment options encourage employees to be free and focus on what they want to eat rather than worrying about cash-in-hand or carrying bulky wallets.
The lack of significant complexities in the outsourcing of catering services and the volume of business involved are said to ensure considerable levels of competition.
Finally, the report stated that food spending accounts for 40% of catering costs while non-food related spending such as supplies, labour, and equipment accounts for 60% of costs.