Ministry of Cake Studen t Pack

Ministry
of Cake
Student
 Pack

Our Market Sectors
Catering 2009
The catering industry, as covered by Key Note, includes the following markets:
restaurants; fast food and takeaways; contract catering and foodservice
management; hotels; public houses; licensed clubs; and holiday camps/villages and
caravan/camping sites. The fastest growing market in 2008 was that of fast food
and takeaways and, despite the recession, all of the markets achieved some growth
during the year.

Some sectors of the catering market are currently facing some of the most difficult
trading conditions they have encountered for many years. Within the pub-restaurant
sector, for example, the credit crunch has affected consumer confidence and heavy
discounting in the off-licence trade has encouraged consumers to stay at home. It
is feared that the environment will become even more challenging in 2009, owing
to the full impact of rising unemployment, increasing negative housing equity and
continued high levels of consumer debt on discretionary spending.

Other sectors of the market may, however, benefit from the economic downturn.
For example, the contract caterers and food service management companies are
hopeful that more companies will now outsource their catering requirements, rather
than provide them in-house in order to reduce costs. The fast-food and takeaways
sector may also weather the economic recession in the UK better than some other
segments of the catering market, owing to its product appeal and value positioning
in the market. Confidence is such, in fact, that a number of the leading companies
in the fast-food sector have announced that their outlet expansion plans will be
maintained in 2009.

“
For example, the contract caterers and food service management companies
are hopeful that more companies will now outsource their catering
requirements, rather than provide them in-house in order to reduce costs.

Restaurants 2009
Eating out in restaurants as a leisure activity cost British consumers £13.65bn in 2008,
defined as purchases of `eat-in’ meals, excluding any alcohol. Spending was down 0.7% on
2007 as the `credit crunch recession’ hit leisure markets, and the market is predicted to
contract further during 2009, however Key Note predicts the restoration of growth from 2010
onwards. Positive factors include: busier lifestyles — reduced time for cooking meals at home;
and the interest in cuisine inspired by television programmes and celebrity chefs.

Restaurant meals are defined by Key Note as part of the broader catering industry, worth
£35bn a year, not including alcoholic drinks. It is the social trend towards eating out rather
than simply drinking in public houses that has changed the market historically; but so many
pubs now offer a meal service that they have grown to account for 35.2% of the market, having
overtaken the fast food sector in this decade.

These two sectors boast major US-based players such as: McDonald’s, KFC and Burger King
in fast food; while major pub-restaurant operators include Mitchells & Butlers (Harvester and
Toby Carvery) and Whitbread (Brewers Fayre and Beefeater). Excluding fast food, the largest
chain of restaurants is Pizza Hut (700 branches, used by 30% of adults), part of Yum! Brands
Inc, which also owns KFC (725 branches).

In contrast to these giant, global brands are successful UK companies with concepts such as
Frankie & Benny’s `casual diners’ (The Restaurant Group), PizzaExpress (Gondola) and Loch
Fyne (Greene King). The possibilities for innovation, in a UK restaurant market always open to
new ideas, have been illustrated in this decade by operators such as Nando’s — now with 215
Portuguese chicken-based `fast casual’ branches — and Clapham House Group, developer of
Gourmet Burger, The Real Greek and Tootsies.

“
so many pubs now offer a meal service that they have grown
to account for 35.2% of the market,

Sources:- Key Note Restaurants 2009/Key Note Catering 2009

Ministry of Cake
• We were originally founded in 1865

• We make and deliver around 2 million slices of cake in an average week

• We are the UK’s largest supplier of chocolate fudge cake for foodservice

• Our customers include Brake Brothers, 3663, Makro, Spirit Group, Ministry of Defence,
    Pizza Hut, Costa International

• We also have our own Ministry of Cake brand

• The UK’s biggest dedicated foodservice desserts manufacturer and the number 1 or 2 supplier to pub groups
    and quick service restaurants

• We are based in Taunton with 200 colleagues

• We became part of the Greencore Group in December 2007

• We produce over 350 different product lines (as at March 2012)

• Our main customers are wholesalers

Wholesalers supply goods to trade and business customers for whom dealing directly with suppliers is not
feasible and/or practical. By buying in bulk and selling on by case loads wholesalers provide a supply chain
solution to a wide range of business customers in the food and grocery sector, but especially:

• Independent and convenience retailers
• All types of operators in the eating out market: restaurants, caterers etc

As well as supplying product many wholesalers provide a range of business support services for customers, most
notably distribution/delivery services. Many wholesalers specialise in providing delivery as part of their offer,
enabling them to fulfill the function of logistics provider to customers.

What types of
wholesalers are there?
Grocery and foodservice wholesalers can be categorised into three different types,
distinguished by the key customer groups they serve and the platform from which they serve them:

1. Cash & carry wholesalers
    Supply a wide range of food and grocery categories with the majority of sales made through self service depots.
    Their primary customers are independent retailers and caterers, but may also have significant secondary
    customer bases in catering and general business users.

2. Delivered grocery wholesalers
    These operators supply product solely by delivery service, to customers in the retail sector. These customers
    are primarily independent and convenience retailers which may also include multi-site operators.

3. Delivered foodservice wholesalers
    These delivered operators service a wide range of businesses in the eating out market including cafes,
    restaurants, fast food establishments and schools and hospitals. As well as ‘broadline’ wholesalers the segment
    also includes many product specialists, with a limited category focus in areas such as meat and fresh produce.

How much is the grocery wholesale market worth?
IGD estimates that sales through the grocery and foodservice wholesaling sector in 2011 reached £26.6bn,
representing an increase of 2.9% on 2010

What is the split between the wholesaler types?
In 2011 cash & carry accounts for 42% of the market (£11.3bn), delivered grocery represents 34% (£8.8bn) and
delivered foodservice 24% (£6.4bn).

Who are the main operators?
The key cash and carry operators are:         The key delivered grocery wholesale operators are:
•   Booker                                    •   P & H McLane
•   Bestway/Batleys                           •   Musgrave Retail Partners GB & Northern Ireland
•   Makro                                         The SPAR wholesalers: CJ Lang & Son, James Hall & Co,
•   Costco                                        AF Blakemore & Son/Capper Co, Appleby Westward, John Henderson
•   Blakemore
•   Parefetts                                 The key delivered foodservice wholesalers are:
•   Dhamecha                                  •   Brakes
                                              •   3663
                                              •   DBC Foodservice

Ministry of Cake supplies the companies in Blue. Source: IGD Research 2011

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