Global Catering Services Market to Reach $614.47 Billion by 2023, Says Beroe Inc
The global catering services market is projected to grow at a steady CAGR of 4.5 percent, according to Beroe Inc., a procurement intelligence firm. Based on recent valuations, the value of the catering services market is highest in Europe, worth $218.1 billion, growing at a rate of 3-4 percent, while the LATAM market has had the lowest value of $23.74 billion, growing at a rate of 2-3 percent.
The catering services market is expected to have the highest growth in the APAC projected to grow at an annual rate of 7-8 percent 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 food service industry is expected to reach approximately $616.24 billion in 2023, growing at a CAGR of 4.5 percent. At a global level, the high maturity regions are the U.S., the U.K., France, Italy, and the U.A.E. 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, specialized 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 organized 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.
- Buyers have lower bargaining power in small contracts worth less than $5 million, while they have significantly higher bargaining power for large contracts worth more than $10 million.
- 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 ensure considerable levels of competition.
- The P&L pricing model is most widely used for large contracts in developed nations, while subsidized contracts and cost plus and fixed price models are popular for smaller contracts and in developing regions.
- Major food contractors have the capability to pass on up to 14 percent of rebates to the buyers by leveraging economies of scale.
- Food-spending accounts for 40 percent of catering costs while non-food related spending such as supplies, labor, and equipment accounts for 60 percent of costs.