The hunt for the perfect cup of coffee drove sales at Benugo, the upmarket delicatessen that serves visitors to London’s V&A museum, the BFI Southbank and Edinburgh Castle in Scotland, 24 per cent higher in the year to December.

The company, which started as a bar in the capital’s fashionable Clerkenwell district in 1998, has 15 cafés in London railway stations and high streets in addition to its concessions in museums, galleries and historic buildings.

It has plans to expand further, opening six more of its New York-style delicatessens on the high street each year in London, Edinburgh and Oxford. It is also bidding for more museum and art gallery contracts, looking to sell its sandwiches throughout the UK and Europe.

Alastair Storey, chief executive and chairman of Westbury Street Holdings, the parent company of Benugo, said that the business was doing well from rare, “single-sourced bespoke coffee blends” in an increasingly competitive café market. The company’s emphasis on locally sourced food has also helped, he added.

“We’re seeing people looking for a simpler, less complicated dining experience. Five years ago 25 per cent of sales were sandwiches, and 15 per cent were salads and wraps,” he said. “Now that has completely reversed. People are wanting to eat less bread; fewer carbohydrates.”

The growth helped WSH to hire at its fastest rate since it was formed in 2000. The company created 1,800 new jobs, taking total employment at the company, which runs an extensive range of training and apprenticeship schemes, to nearly 14,400 staff.

Sales at Benugo grew from £56.5m to £70m in the year to December. WSH also owns catering brands Baxter Storey, Caterlink, Holroyd Howe and Portico. This week the company will report that operating profits rose 36 per cent from £18.2m to £24.6m on sales that grew 15 per cent to £530m in the year ended 27 December. Pre-tax profits fell from £6.2m to £2m due to an exceptional charge of £15m as a result of a debt restructuring in November.

WSH is the third biggest player by sales in the British catering league table, behind Compass and Sodexo.

Caterlink, its state schools catering division, which accounts for 12.5 per cent of WSH revenues, saw sales rise 20 per cent in the past year, as take-up of school meals became more popular amid a renewed focus on health.

The British government is committed to spending £600m a year on free school meals from September – increasing the market from 3.5m school meals a day to 5m a day – and Mr Storey said he expected to “mop up” some of this growth in business.

Sales at its main Baxter Storey contract catering brand, which accounts for nearly three-fifths of sales grew 12 per cent underpinned by 44 new client wins, including Reed Smith, Shell UK, Verizon and BAE Systems. But Mr Storey added that the corporate hospitality market had not yet recovered to pre-recession levels.

“It’s interesting just how severe the reduction in corporate hospitality has been,” he said. “It’s improved but its still not back to precession levels.”

Mr Storey set up the company in 2000 after 25 years at Sutcliffe Catering, later part of Granada Food Services. Since going it alone, he has expanded his business rapidly, acquiring independent rivals including Halliday Catering, BaxterSmith and Holroyd Howe.

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source: http://www.ft.com / Financial Times / Home / ft.com> Companies> Retail & Consumer> Food & Beverage / by Gill Plimmer / June 11th, 2014