Is it time to consider in-house catering?

The late Paul Prudhomme observed: “You don’t need a silver fork to eat good food.”

This may be true, but it is highly likely that you do need a good catering team to produce good food! Then comes the question of whether to outsource catering or to manage in-house.

Key reasons for considering in-house are control and cost. In this climate of unprecedented financial pressures, schools need to be agile, lean and to deliver the best food offer they can, ensuring they are receiving value for money – a challenge when these significant costs are nebulous.

The reasons for appointing a contractor are varied, such as outsourcing the administrative burden of managing the HR function for the team or if their current in-house food offer is not delivering the standard of quality required.

Contractors provide a multi-faceted head office support function and investment in refurbished facilities may be offered by them to schools, as an incentive. However, the repayments will, most likely, favour the contractor. What seems an easy, low risk option may come at a significant cost.

Contractors employ a variety of earning models. A common model is ‘cost plus’, based on an estimated budget – the cost of catering, plus a management fee. If this budget is exceeded the school pays more; if savings are made, these should be passed on to the school. The caterer charges the management fee, typically between 3% and 5% of the total cost of catering: food + labour + sundries, plus VAT.

Whilst increased competition has seen a steady reduction in these management fees, the majority of the contractor’s earnings are derived from food purchasing paid for by the school. High levels of opaque rebates are incorporated by the contractor into the food prices on the invoices from their suppliers. As a result, benchmarking of various contractors’ food prices consistently identifies them as being an expensive option.

To put this into perspective, if a school’s total annual cost of catering is £1m, half of which is food cost, the impact of the contract caterer’s management fee and inflated food prices could result in an excess spend as high as £200,000… food for thought?

If this appears unpalatable or indeed financially unfeasible, then it may be time to consider the in-house option. A skilled and experienced catering manager will be critical. A competent, professional team will ensure all the required deliverables will follow, from food quality and innovation to food safety and compliance, with visibility and the control of costs. The transition to an in-house operation will also support a culture of inclusion, as the catering team are employed directly by the school.

There are ways to surround an in-house team, more cost-effectively, with support services that would otherwise be provided by a contractor. For example, expert food procurement delivering both cost savings and insight, from a specialist company who also provide a catering controls platform to track and manage every penny of spend, stock audits and wastage. A catering-related procurement expert will manage suppliers and mitigate risk whist negotiating food prices – all this is increasingly an essential requirement.

And a procurement expert like allmanhall will also be able to deliver dietetic advice and regulatory compliance updates, as well as everything from menu design and food innovation to in-house staff training.

Great food service does not always require a costly silver fork. A competent team and a dedicated support partner will ensure the in-house journey is a success, enabling you to achieve significant – and perhaps necessary – cost savings and price increase mitigation

Visit allmanhall.co.uk to explore allmanhall’s full services and for further articles and information. If you’re interested in benchmarking your food costs, we can help! On average we save schools 11%