- Investment bank Bernstein thinks lunchtime delivery from takeout startups like Deliveroo and UberEats could threaten canteen operators like Compass and Sodexo.
- Deliveroo recently introduced a £4.99 lunch deal.
- The threat is at an early stage but catering groups must head off any threat by working with startups, innovating, and focusing on cost and convenience.
LONDON — Catering companies like Compass and Sodexo face a growing threat from on-demand food delivery services such as Deliveroo and UberEats, according to Bernstein.
The investment bank asked in a note sent to clients on Friday: “Are Deliveroo/Uber Eats viable disruptors of the staff canteen?”
A team of analysts led by Richard J. Clarke highlighted that Britain’s Deliveroo has recently £4.99 lunchtime delivery options in major UK cities, an attractive price point that could undermine staff canteens.
“If delivery becomes a viable alternative to a canteen, the company may decide to do away with the canteen entirely,” Bernstein said.
“Bloomberg’s London office has done just that: there will be no in house canteen for lunch (although coffee and snacks are available). However, the main explanation here is that Bloomberg wanted employees to get out and enjoy the local businesses not because of delivery. However, it is possible.”
This is a threat to the large companies that operate these types of canteens: £24 billion Compass, the world’s largest food services company; and €12 billion Sodexo, its French rival.
Bernstein estimates that staff canteens that could theoretically face disruption — those in built-up areas where Deliveroo and Uber Eats operate — contribute 39% of Compass’ revenues and 32% of Sodexo’s.
“Delivery’s growth cannot be ignored (with some of that coming at the expense of in-house canteens) and with Deliveroo now offering £4.99 lunch deals (albeit just in London) the price advantage [of canteens] has been partially eroded,” Clarke and his team write.
Bernstein has three recommendations for the catering companies to head of the growing threat from delivery startups: focus on the canteen’s advantages, such as price and convenience; innovate with new formats such as delis and coffee shops; and collaborate with startups that could one day pose a threat.
“The caterers are not lame ducks here, they are large scaled organisations with a history of innovation and dealing with competition,” the Bernstein note said.
“In January, Sodexo announced it had taken a majority stake in French start-up FoodChéri, a ‘virtual restaurant’ which focuses on delivering fresh meals to businesses. Currently, it delivers over 12,000 fresh meals prepared by professional chefs in the Paris areas, but has ambitions to expand nationally in France.
“While neither Compass or Sodexo are likely to turn their back on their core offer (in-house catering provider), they are showing they are able to adapt to the needs of those where an in-house canteen is not deemed suitable while utilizing their expertise in food preparation.”
Clarke and his team also stress that the threat posed by the likes of Deliveroo and UberEats are at a very nascent stage and most companies are a long way off eradicating their canteens entirely in favour of takeout or local chains.
“Google’s new London headquarters offers extensive and innovative free food to employees for breakfast, lunch and dinner: it notably wants employees to eat in the canteen and talk to each other, it doesn’t want you having a burger delivered to your desk,” the note said. “Overall, despite the threat form delivery, the office canteen is still alive and kicking.”
Finance <h2>Visit <a href="http://allinoneinternetsearch.com/">All-in-one Internet Search</a> to begin your search!</h2>
RSS Follow Topics: Uncategorized