A should cost model is an all-important technique for deriving and forecasting the actual cost of a product/service over the forecasted period. It serves as a competitive edge for supplier negotiations by determining the actual price for the cost components. The outcome helps procurement leaders to understand detailed fact-based cost drivers for the category.
In the catering services market procurement intelligence report, we have estimated and forecasted pricing for the key cost components while availing services from catering service providers. The cost of catering services can be categorized into two major types; raw material costs and overhead costs. Raw materials are the basic food ingredients that go into making a dish. With a wide variety of meals being on the menu, the cost of raw materials also tends to vary significantly. Raw materials accounted for more than 60% share in overall catering service cost. It is majorly driven by cooking oil and gas price fluctuations. Salary of personnel is the key cost component of the overhead costs segment. It accounted for more than 8% share in overall catering service cost. Chefs' salaries have witnessed unpredictable trends in the past. However, the role of professional chefs has become mainstream in professional kitchens globally and chefs are seeing strong appreciation in salaries and remuneration. Over the forecast period, the salaries of culinary professionals are expected to rise at a good pace.
Every organization and its procurement team wants to negotiate the best deal while procuring a set of products or services. Rate benchmarking uses price/cost comparison of more than one set of products/services to analyze the most efficient combination that will help the procurement team to get the optimum rate.
The canteen set-up of catering services is one of the most important aspects while analyzing the rate benchmarking. In our research, we have analyzed the rates of catering services for both instances where canteen set-up is provided by the customers as well as where canteen set-up is not provided by the customers. By using rate-benchmarking analysis, we found that, where canteen set-up is not provided, the profit is 4% higher than where canteen set-up is provided. In addition, the personnel cost where canteen set-up is not provided is 60% lower. However, the electricity cost, cutlery & assortments cost, and transportation cost is higher when canteen set-up is not provided.
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Labor is one of the key cost components incurred while offering a product or service. Understanding the pricing structure of salary is important for organizations in selecting the appropriate supplier and to build a good negotiation strategy. It is also an important factor in determining whether the category under focus should be outsourced or built in-house.
Our research indicates that DoorDash managers earn 42% higher salaries than managers from other industry leaders like Aramark and Delaware North. However, Aramark and Delaware North offer 20% higher yearly increments to managers compare to DoorDash.
It is cumbersome for any organization to continuously track the latest developments in their supplier landscape. Our newsletter service helps them remain updated, to avoid any supply chain disruption which they may face, and keep a track of the latest innovations from the suppliers. Outsourcing such activities help clients focus on their core offerings. Our research on the catering services market has identified the following developments:
In February 2021, DoorDash, a U.S.-based online food ordering, and food delivery platform, acquired an automated food preparation company called Chowbotics. This acquisition will help DoorDash expand its current menu offerings as well as reach new customers in new markets without investing in an entirely new store.
In October 2020, Westbury Street Holdings (WSH), the company behind a number of foodservice brands operating in the U.K. and Europe, completed the acquisition of bartlett mitchell. With this acquisition, WSH strengthened its presence across Europe.
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Component wise cost break down for better negotiation for the client, highlights the key cost drivers in the market with future price fluctuation for different materials (e.g.: steel, aluminum, etc.) used in the production process
Offering cost transparency for different products / services procured by the client. A typical report involves 2-3 case scenarios helping clients to select the best suited engagement with the supplier
Determining and forecasting salaries for specific skill set labor to make decision on outsourcing vs in-house.
A typical newsletter study by capturing latest information for specific suppliers related to: M&As, technological innovations, expansion, litigations, bankruptcy etc.
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