The UK’s cost of living crisis has dramatically changed the restaurant landscape. Diners are increasingly seeking lower cost but high quality, consistent food as ‘eating out’ budgets tighten, opening the door for central production units.
With over 19 million of us eating out each week in the UK, restaurants are under growing pressure to meet the demands of a fussy clientele in an increasingly competitive market. Both independent eateries and group chains are feeling the heat and finding it necessary to up the ante, lest they have to shut their doors.
In this respect, central production units (CPUs) are playing a steadily increasing role in the UK restaurant industry. Restaurants often outsource aspects of their offerings to CPUs, which specialise in an aspect of food production, whether it be a simple base sauce or fully prepared proteins.
CPUs are slowly becoming an essential ingredient of all restaurants. Since Mustard’s launch in 2008, the company has seen a steady increase in demand for centralised production.
It might surprise some diners, but restaurants across the spectrum, from casual dining to high-end, are reaching out to CPUs seeking to outsource elements of their menus.
Mustard Foods engaged a number of key clients and asked them why they are turning to central production units:
1. Core focus
Many restaurants engage CPUs to allow them to focus on their core strength. In some cases, this may be a patisserie or bakery outsourcing their deli items and soups. In the case of a steak restaurant, it may be their sauces and marinades.
2. Consistency across franchises
One of the main challenges for rapidly-expanding restaurant chains is consistency. With a national shortage of chefs, it is vital to ensure consistency across the more technical elements of a menu.
3. Reduced kitchen space
Driven by margins, restauranteurs have to limit the space allocated to the kitchen. This puts added pressure on the kitchen to perform with restricted space and equipment.
4. Commercial property
Most cities and town centres across the UK have a major shortage of A3 commercial real estate, forcing many restaurant chains to adapt their offering to A1. The competition for A3 space limits the growth opportunities for newcomers to the market and those wanting to scale quickly.
5. Shortage of chefs
It has been widely reported in the food industry media that the UK is experiencing a dramatic shortage of chefs. This appears to be a trend across many industries, and particularly noticeable in London. Simplifying requirements of chefs by outsourcing the more complex components of food production helps to alleviate the pressure applied by the skills shortage.
6. Minimum wage and NIC set to increase
With the National Minimum Wage set to increase by 6.7% in April 2025, as well as employer National Insurance contributions, restaurants will face even further cost pressure. Coupled with the increasing tax burdens for restaurant owners, outsourcing is becoming an increasingly attractive option.
7. Reduced food waste
Restaurants and cafés, especially A1 sites, have to limit their volume of on-site prep and fresh deliveries. By outsourcing a few key products, food businesses can curb surplus production and food waste, and economise available storage space.
Developing menu ideas, sourcing and tracking product across the supply chain, implementing a new menu item nationwide across a restaurant group, managing and ensuring consistency, hiring, training and managing skilled chefs are just some of the challenges and costs removed when working with a central production unit – essential for growing restaurant groups to be competitive.
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