Is the current workplace catering model sustainable & relevant post Covid-19?
Food service in workplaces / offices – The state of the nation
With organisations now starting to talk about, and in many cases mobilise the reopening of their corporate headquarters and offices, attention is turning to how their office environment will need to change for both the short and longer term. Included within this is how employee dining and workplace catering can be reconfigured to meet the Covid-19 environment and in the longer-term post Covid-19 landscape.
A considerable number of offices and corporate headquarters across the UK have some form of workplace catering provision, ranging from vending options, typically providing a lighter touch office catering provision, to all day full service staff restaurants, often also supported with additional cafés, break-out pods, ‘dealer-delis’ as well as extensive corporate hospitality facilities and in a number of cases, private dining rooms.
What are the typical contract catering types within workplace environments/ B & I?
It’s worth reminding ourselves of the current food service contract catering models that are typical within the workplace catering environment. The majority of employee dining and workplace catering services and contracts within the UK are outsourced to third party caterers, in most cases larger contract caterers who, typically, operate multiple contracts across the UK. Most of the contract styles within the business & industry sector and workplace catering market more often than not fall in to one of the following contract types:
- Cost plus catering contract
- Fixed price catering contract
- Guaranteed performance catering contract (or sometimes called cost plus guaranteed performance)
While these are the main contracts types, there are other workplace catering contracts including some concession based contracts, although typically these are the exception within the B & I/ corporate marketplace and are more often found in offices with very large daily numbers of employees/ building occupants or where there are very specific catering facilities
For further details on contract types see one of our previous articles here.
What will employee dining and workplace food service look like in the future?
So what will employee dining and workplace catering look like in the future?
From communications from corporate clients and colleagues across the industry there seem to be some common themes and considerations that corporate environments are planning in relation to their general office environments.
Specifically, office populations are unlikely to be at full occupancy any time in the short to mid term. Most businesses and corporate employers that we have heard from as well as wider observations have cited that they are not encouraging workers to return back to office working before October 2020, particularly where employees are able to work remotely. Some have indicated that they are not anticipating office occupancy to be much more than 25% for most of this year. Of course, there are exceptions and some office jobs cannot be undertaken remotely. However, we are also aware of a number of organisations that have seen the benefits of increased permanent remote working and are looking at rationalising their office accommodation and wider portfolio, not least to reduce operating costs.
So what does this all mean for workplace catering and employee dining?
The impact of this radical change in how offices may be utilised in the future has a wide reaching impact on workplace catering. Specifically, less employees or occupiers on site means less opportunity for workplace catering. To compound this the frequency that employees or occupiers may be on site or within offices is likely to be less consistent, which will make predicting catering demand uncertain. As such for all on-site employee dining catering facilities, and particularly larger ones and those with high fixed costs, is likely to result in increased catering costs and ultimately higher catering subsidies, where subsidies previously existed or new catering subsidies where they didn’t. But does this really have to be the case?
Depending on whom you talk to (and of course, there can be vested interest in the direction that certain individuals and organisations would like to see workplace catering heading) there are a few different views. We have set some of these broader views out below:
What is the future of workplace catering post Covid-19?
- “Organisations will want to invest even more in their workforce and employees’ wellbeing now and a quality workplace foodservice provision is essential to this”.
- “The workplace catering environment is a much more controlled environment than the food and drink operations on the high street, and therefore, it will be essential to maintain an in house catering provision for the safety and wellbeing of employees’’.
- “Ultimately, the new environmental conditions, combined with potentially lower building occupancy is going to cost more and staff catering subsidies will need to increase”.
- “The old workplace contract catering model is broken and will need replacing”.
These are a just a few views we have heard, and for some organisations with staff catering services many of these views may be relevant. However, we believe that the current conditions have presented an opportunity for a greater number of organisations to review not just their employee catering provision but also how they are structured contractually. In turn this may also lead to how they are managed and what type of catering partner is the most appropriate for a new workplace catering service.
While some employers may be prepared to increase subsidies and continue with the same food offer, catering facilities and services others will not or may not have the financial budgets to do so.
Considering alternative workplace catering facilities to the existing employee dining restaurant, which may now be more labour intensive and with other higher catering operating costs does not mean that employees cannot enjoy affordable, healthy food and drink at work.
Workplace Catering & Employee Dining – Revaluation & New Beginnings?
Our catering consultancy work across other sectors as well as within the workplace environment has involved introducing commercially sustainable, customer centric and culturally sympathetic catering and foodservice facilities and operators. Contrary to what some people may believe it’s really not always about having a specific number of people on site for a catering operation to be commercially viable. While this does provide a rule of thumb relating to specific catering styles and facilities, a different style of catering with a related commercial and contract structure and relevant commercially minded operator can result in achieving a cost effective workplace catering operation appropriate to the needs of employees and workforce.
At Montfort Catering Consultants we have been introducing commercial principles, combined with relevant contractual arrangements and operators into workplace and employee dining for over 10 years. See our news article from 2012 here – this particularly example was for the European HQ for one of the world’s largest entertainment companies. See also what we are doing with Frasers Property in terms of introducing commercial food and drink operations managed by like-minded operators. What we have done and continue to do is taken from our extensive catering consultancy experience and learnings from working in the commercial sector for more than 20 years and sensitively applying to workplace catering
Now really is a good opportunity to revaluate what is still relevant and the requirement in relation to your workplace catering provision.
There are many different alternative models that could also be considered including a delivered-in employee dining model. While a number of companies already provided this pre Covid-19, the pandemic has resulted in some contract caterers re-examining their models and introducing quality delivered-in office catering – not just the previously delivered-in hospitality model but the main staff dining provision. Pret and others have now launched an office delivery service that is not just for meetings but also an alternative to an onsite catering facility. If contract catering companies can’t flex to the times other external operators will seize the opportunity.
There are of course some other potential significant benefits to revaluating your workplace and employee dining catering provision, that go beyond the benefits of more closely aligning your foodservice offer with employee and occupiers’ needs. Workplace catering is space intensive, typically with many food service facilities only used at lunchtime. A more aligned or alternative workplace catering facility has the potential to release some of the current catering space requirement for alternative office use (be it for break out, meeting rooms etc) or simply reduce the office sq m requirement and associated space cost. And that’s before you start looking at the direct catering cost savings, including the often less tangible ‘central’ utility costs.
At the same time it is appreciated that many organisations may want to enhance their current workplace and employee dining catering facilities, and may be prepared to pay higher costs and subsidies although it’s unlikely to be palatable or sustainable for many others.
Do get in touch with Montfort Catering Consultants if you would like to discuss how we can support you with the evolution of your employee dining and workplace catering.
Posted on June 12th, 2020