Why we need to talk about lunch

Britain’s huge appetite for sandwiches has given rise to an £8bn industry, but it is being transformed by new market trends and technology. Can SMEs keep up?

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The sandwich industry in the United Kingdom is worth an estimated £8bn a year and employs around 325,000 people – close to double the number of active personnel in the British Armed Forces, and approximately 5,000 more people than Tesco, the country’s largest employer in the private sector.

According to the British Sandwich Association, the industry’s trade body, around 60 per cent of the UK sandwich industry is made up of micro-businesses and small to medium-sized enterprises (SMEs), namely specialist sandwich bars, bakeries or cafés; with the remainder accounted for by the ready-made, pre-packed products sold in many convenience store chains, public-sector organisations and supermarkets. “In reality, the definition of a sandwich shop is so broad these days,” says the BSA’s director Jim Winship, “that the £8bn estimate actually feels a bit conservative. So many different places stock and sell sandwiches in some form or another… you’ve got paninis and toasties sold in coffee shops. Lots of retailers might be inclined to explore the sandwich market.”

According to Kantar’s 2017-18 assessment of the £20bn-valued “food-to-go” market, which it defines as any ready-to-eat snack from a purpose-built retailer, sandwiches are the most popular product that meets these criteria, with a 57 per cent share of the market. Salads, in second place, represented just ten per cent of the UK’s food-to-go market in the same year.

While sandwiches are now a global food with multiple cultures offering their own takes on the bready snack – from the United States’ cheese steak to Mexico’s cemita or Greece’s gyro – their origin is widely credited to one particular historical figure. In 1762, John Montagu, the fourth Earl of Sandwich, in Kent, was supposedly too busy to stop for dinner and asked for some cold beef to be brought to him between two slices of bread. The source of sandwiches’ popularity, the food journalist and author Bee Wilson notes in her 2010 book, Sandwich: a global history, is their simplicity. “Portable, quick, satisfying, cheap and requiring neither a plate nor cutlery, the sandwich is the most universal of all fast food,” she writes. The average price of a sandwich in the UK, according to the BSA, is £2.40.

Given the scope and scale of the industry, is there a risk of taking it for granted? The £8bn figure, Winship points out, does not only represent how much the sandwich industry has grown, but equally how much it stands to lose if it is not “managed effectively”. He warns: “We can’t afford to become complacent. I think the government is doing very little to help small businesses generally. Business rates are high and rents are high, especially in cities, to the point that they can be quite crippling for small businesses.”

For Richard Smith, managing director of Love Bites Ltd, a mass producer of pre-packaged sandwiches based in Bradford, West Yorkshire, “a lot of [government] legislation” represents an “unnecessary barrier” to his business. Supplying a range of clients, including corner shops and on-board train food carts, has been made more difficult, Smith suggests, by a regulatory industry that has “created a lucrative racket, employing many people who appear to spend their time coming up with these new rules, which we at the sharp end of the food business, actually find quite ridiculous.”

Although he “obviously” recognises the significance of high hygiene standards, Smith claims that “generally auditors must come up with non-conformances if only to justify their existence and fee.” Love Bites, accredited with an overall grade A by the British Retail Consortium for food hygiene, incurred a non-conformance mark because of “some leaves found outside our compound”. He explains: “It was November when she [the auditor] came. It was 8am and the night before there had been a storm. We have to pay for a two-day audit for a company of our size. After not finding anything wrong on the first day, she told my production manager she would have a think about what to put overnight!”

Despite his frustration with some red tape aspects of the sandwich industry, Smith does not underestimate the importance of diligent allergen labelling. Last year, a teenager died after eating a baguette she had bought from a Pret a Manger outlet at Heathrow airport. The baguette did not have any allergen advice on its wrapper and there was no requirement for it to do so because of the reduced labelling requirements for food made onsite. Although Smith can understand the concerns of some small businesses over the cost and time it takes to label all food, he insists it is a step that needs to be taken to ensure people’s safety. “There are enough software packages around that can make the labels for you… you just need a good label printer. The Pret incident might have been a one in a million chance, but you still don’t want to take it.”

Against the backdrop of declining high streets across the country, Jim Winship says, maintaining trade for sandwich bars and cafés has taken on fresh importance in supporting regional economies. “As more shops [along high streets] close, cafés and sandwich makers have a new role… they are sort of destination venues. They are places for people to go and meet their friends, to have a meal. They are also an important source of employment, which is crucial for their local area. They produce social and economic capital.”

A study by the Office for National Statistics found that nearly one pound in every five spent in retailers on UK high streets is now done so via the internet. And this trend is being mirrored by the fast food industry. A report by The NPD Group, a market research firm, predicted that the value of online takeaway and delivery retailers in the UK could reach £5bn in the next two years. This boom, the firm suggested, will be fuelled by the rise in smartphone apps making it easy to have different types of food delivered to people’s homes or offices. Digital aggregators such as Deliveroo and Uber Eats act as a bridge between the customer and individual restaurants or chains, processing their order and payment, before collecting and delivering the food to them.

For Maria Di Tano, the manager of Brunel, an independent sandwich bar on the Strand in London, “technology” signifies one of the major challenges for SMEs. She says: “There are fewer people on the high streets now. We rely on a regular client base, with local customers, in offices for example, and people walking by. We also do catering for weddings or events. But advertising is more challenging for us… We do have a website but we’d definitely want to improve it. It’d be easier if our menu was online or if people could order stuff online. But that takes time and money.”

Di Tano says that apps and delivery services have changed consumer habits. “People want speed and convenience,” she says. “We have a good location, but we’ll still have quiet months. For us it doesn’t make sense to sign up to Deliveroo or Uber Eats, because they charge quite a big commission [20-30 per cent] to list you.” Di Tano says “support” for SMEs can come from both government and industry. More ring-fenced loans at favourable rates to help SMEs to adopt technology, she agrees, “would be a good idea. And there’s also an opportunity for the apps to be part of the change themselves. If they were to offer a cheaper rate for SMEs, for example, then it might be a way of getting more variety on there.” In any case, Di Tano recognises that a delivery service of some description is “probably going to have to be the next step.” And functionality and a bigger presence online is “definitely something that we have to look into seriously if we are going to compete.”

Bee Wilson, meanwhile, argues that an increased health consciousness among the general public, as well as a rise in the number of vegans in the UK, are other market trends for which SMEs in the sandwich industry must strategise. “The great question for small sandwich businesses is whether anyone can crack the question of developing more types of vegetarian or vegan sandwiches that people want to eat,” she says. “For all our talk of plant-based diets, sandwiches, as a rule, are still very much focussed on processed meat and cheese.” According to comparethemarket.com, as of 2019, there are more than 3.5 million British people (around five per cent of the population) who now identify as vegan, with this figure expected to grow in the coming years.

Gemma Pearson, who runs Cyril’s, an SME sandwich bar in Margate, Kent, says that the best way to get around diminishing levels of footfall is to offer a product that people will want to travel to specifically. “Passing trade isn’t always reliable. There’s a big vegan and vegetarian market to be exploited. It was one of the first things we did when we started the shop, to learn about the ways we could make our menu more modern and appeal to a wider audience. Glutenfree bread was another thing we invested in.” Presentation, Pearson adds, is also key. “We made sure that our food was really well presented, that it was ‘Instagrammable’ if you like, so then people posted about us online, and word soon spread.”

The UK’s decision to leave the European Union, the BSA’s Jim Winship fears, is likely to have a “net negative” impact on the sandwich industry, “unless the government can negotiate better terms.” The prospect of a no deal Brexit would cause “a lot of problems” to do with employment and access to ingredients. “Freedom of movement is the big one,” Winship says, “and the government seems to get in a muddle with migrants versus immigrants in its language. Small sandwich shops rely on a steady flow of people coming into their sector. Also, think about the tomatoes, in particular, that are used in sandwiches. Access to those ingredients out of season, when we can’t produce them ourselves, is hugely important. Products like that have a short shelf life, so border controls have got to be fluid.”

Ultimately, something which started off as a makeshift way of eating has since informed a broad culture and cuisine, while establishing itself as a major player in the economy. The future health of the UK sandwich SMEs, Winship says, will hinge on “what sandwich shops are able to do in the market, how well they can cope with trends and the nature of their competition, but also on what the government is prepared to do to help.”

Rohan Banerjee is a Special Projects Writer at the New Statesman