Cooking up a new deal

What are the key criteria to consider when 
carrying out a catering contract tender?

Buyer, Bracknell

David Rowell, director of category management, Metropolitan Police

Have a clear view of the following factors to determine the most appropriate route to market:

• What type of catering requirement is needed? Is it operational feeding, such as in the field requirements for military or transport activities? With a corporate canteen or restaurant, it is important to determine whether there is any subsidy involved or if is on a financial standalone basis.
• Is the output of the sourcing and delivery of the service to maximise revenue? And how important are factors such as brand or product differentiation if the products/services are revenue generators?
• Is the requirement local, regional or national? This will define the logistics model and platform on which you go to market on. The operating model will determine whether to place the whole end-to-end supply chain on the market or parts of it.
• Ensure that there is as much transparency as possible within the sourcing, tender or evaluation process as this will drive where to concentrate negotiations. Typically, 70 per cent of catering costs are on labour and 
30 per cent on supplies and services, raw materials, premises and logistics.

Anil Alim, procurement and supply chain director, Westbury Street Holdings

Consider the following criteria:

• Is the caterer financially sound with a robust growing business? Catering is a ‘people’ business 
so does it have motivated and well-trained staff?
• How many deliveries a week is it proposing to each site? What proportion of food ingredients are frozen versus fresh? Does it source ingredients ethically and sustainably? Does it have any provenance stories, such as UK-sourced meat, RSPCA-accredited free-range eggs or MSC-approved fish?
• What structure of operating teams and support teams is it suggesting for this contract? What is its environmental policy on waste and packaging? Does it comply with health and safety laws and go beyond? Does it use local suppliers where possible?
• Does it want to control the tariff in the outlet, or are you responsible for that? Can it increase sales in 
the restaurant, as a result of it being awarded the contract? Is 
its range of food exciting, 
seasonal and covering all 
tastes and time constraints?

David Read, chief executive, Prestige Purchasing

Consider business requirements before conducting your tender, in particular:

• What do you want your catering to deliver? Is it lowest cost, or are there drivers such as improving employee loyalty, providing nutritional food, removing a historical requirement for subsidy, or even creating a profit stream?
• The scope of service. Is it just catering, or do you want food purchasing, waste management, or even facilities management too?
• How do you want the commercials to work? Contract caterers often make more money from buying than catering. What level of transparency do you want? More transparency has commercial benefits, but you will need to invest in auditing outcomes and working in partnership with the successful vendor to drive out cost.
• What type of caterer do you need? Large-scale caterers have strong operational management, good buying, excellent safety standards, strong brands, and a wide range of support services. Smaller players, though, succeed through being specialists in niche markets, giving flexibility, innovation and quality that large competitors struggle to match.

Key facts

1. Define what type of catering requirement is needed, whether staff canteen or public restaurant and if there is a subsidy involved

2. Find out 
if the caterer has motivated, well-trained staff

3. Work out what you want your catering to deliver, whether it’s profit, sustainability, employee loyalty or more

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Please note: Responses can only be given on this page, represent writers’ personal views and should be regarded as general guidance only.