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Catering is the pandemic's winning sector

The shift to catering could help the food system overhaul to become more sustainable.

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The pandemic accelerated a traditional sector into a new, diverse, innovative and sustainable one.

Eaters’ changing preferences and expectations have challenged food service companies since the start of the COVID-19 pandemic. Now, vaccination levels are rising and restrictions are loosening in many areas, but consumer demand remains volatile — offering an opportunity for companies to reinvent traditional processes. Through adapting to this complexity, contract catering is emerging as a more agile and resilient industry, according to a white paper released this week by food technology company Winnow.

“The pandemic accelerated a traditional sector into a new diverse sector,” Jess Tausig, global head of contract catering at Winnow, tells Food Tank. “What’s becoming really critical to resilience is using technology to generate new revenue streams.”

New working patterns, for example, are evolving and many companies are moving to more flexible coworking spaces, Tausig writes in "Insights from a post-COVID world of the hospitality & food service industry." Moving forward, real estate consolidation will reduce demand for onsite catering at offices, and caterers will need to sustain business by diversifying their offerings.

“This is driven by a consumer need. Organizations are looking at how they can use technology to improve the customer experience of receiving food,” Tausig said. “They’re expanding more towards a disrupter model.”

Services such as curbside pickup and at-home delivery became common as pandemic restrictions kept consumers at home in 2020. Similarly, caterers found new ways to provide food by allowing eaters to access, order and receive meals through new contactless, digital platforms.

“When your market disappears, you have to find creative ways to rebuild your business and revenue streams, that’s happened in so many different aspects of the world because of the pandemic,” Tausig said.

Large food service companies are leading the way in building a more direct-to-consumer approach: In May 2020, Compass Group acquired Feedr, a food-tech startup that delivers personalized meals to office workers. In February, Sodexo acquired Nourish Inc. with the goal of delivering healthy, locally sourced meals direct to workers, no matter where they’re physically working.

This hybrid, flexible food model is likely here to stay; the post-pandemic workforce will be more dispersed, Tausig says. According to a Harvard Business School Online survey of 1,500 professionals who worked remotely from March 2020 to March 2021, only 18 percent of respondents said they want to return to the office full-time, with 61 percent saying they would like to continue to work from home at least two or three days per week.

Services such as curbside pickup and at-home delivery became common as pandemic restrictions kept consumers at home in 2020.

Changing consumer preferences includes a growing focus on sustainability. The World Economic Forum and Ipsos, surveying nearly 21,000 adults across 28 countries in 2020, found that 86 percent of people want to see a significant change towards a more equitable and sustainable world after the pandemic. And according to an Accenture and Consumer Pulse survey in June 2020, 82 percent of consumers reported making more sustainable purchasing decisions.

"The world has become a lot more conscious around sustainable practices, and businesses are responding," Tausig says. The contract caterers that Winnow works with are entering the recovery phase of the pandemic, according to Tausig, and sustainability is a main focus area.

While technology helped caterers diversify their services and control costs during the pandemic, it’s now driving sustainability by decreasing food waste, as well.

Winnow works with hospitality teams and chefs to help them measure and prevent food waste in their kitchens. They serve customers across the catering, hotel and resort, cruise ship, casino and retailer sectors in more than 40 countries, giving them the opportunity to benchmark the pandemic’s impact on food waste levels.

Winnow reports that a typical kitchen saw food waste increase by as much as 50 percent in the first month of reopening, but those that used technology to measure their food waste levels were able to cut overproduction waste by 40 percent, on average.

"If COVID has taught us anything, it’s that you can’t plan," Tausig said, and the white paper authors note that "not all kitchens are created equal." The key for contract caterers will be to continue to build agility and flexibility into their businesses through digitalization and data-driven decision-making.

"For me, that’s the exciting bit coming out of this," Tausig said. "There has been so much disruption in dealing with the complexity of the pandemic, how will that continue to evolve moving forward?"

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