Foodservice in the Wider Context

An article from Horizons

Introduction

Many people find it difficult to reconcile different sources of foodservice statistics which appear to produce results which do not agree with each other. In order to rectify this, in 2005 Horizons embarked on an extensive collaborative programme with a number of organisations.

The outcome of this exercise was twofold:

• It demonstrated that most of the differences that exist between figures from reputable organisations can be explained by differences in definition. For example, we compared data with another respected market research company whose definition of the market and its geographical scope was different from Horizons'. But when we allowed for the differences in scope, we established that the two sets of data agreed to within 2%.
• The programme produced some unanticipated results that have allowed us to show the role that the foodservice sector plays in the wider economy.

This second point is expanded further in the sections below and we hope to add to these insights over the coming years.

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Foodservice within the total eating and hospitality market

Eating out is a part of both the wider hospitality market and the food market.

In 2005, the British consumer, supported by overseas visitors to the UK, spent £186 billion on goods and services in this combined market.

Foodservice sales, using figures from Horizons, totalled £36 billion; that is equivalent to 19% of this wider market.

But it is more helpful to look at foodservice in two ways, either as an element within the food and drink market – or as a component of the hospitality market.

Foodservice within the food and drink market

The foodservice share of the total food and drink market – foodservice plus retail – was 31% in 2005.

In order to collate the most accurate and reliable data for the combined food and drink market, Horizons joined forces with the Institute of Grocery Distribution.

The joint study showed that the market was worth £78.8 billion at consumer prices in 2005. This was up from £75.4 billion in 2004 when the foodservice share was the same as in 2005.

Note: for good order, we should point out that figures for the pub sector only included cold drinks if they were served with food.

It is worth noting that the US share is 48%, according to the National Restaurant Association, but this is based on slightly different definitions so the two sets of numbers are not strictly comparable.

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The hospitality market

Horizons undertook a collaborative research programme with the British Hospitality Association in 2005, and repeated it this year. It covered the whole hospitality market – including activities and services such as accommodation, travel within the UK for leisure purposes, gambling and much more. Eating out in commercial outlets was included, but not in places like schools, hospitals and at work.

The results of the project showed that the hospitality market was worth some £102 billion in 2005.

Within this, the commercial foodservice market was worth £31 billion – or 30% of the whole hospitality market.

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Putting foodservice into context

The foodservice sector is hugely important:

• In 2005, the market was worth £36 billion
• It accounts for:
  - 31% of the combined retail and foodservice market
  - 30% of the UK hospitality market
• And, in total, foodservice accounts for 19% of the combined food, drink and hospitality market

Note: further details are available from Horizons