Global information company The NPD Group has identified five trends that could shape Britain’s £57 billion out-of-home (OOH) foodservice industry in 2020, with the need for increased sustainability from foodservice operators a clear theme. NPD Group analysts say consumers expect foodservice brands to do better in cutting waste, packaging and carbon emissions. An increasing number of consumers will seek vegetarian or vegan options as a means of moderating consumption of meat.
1. Foodservice delivery is great – but sustainable foodservice delivery is even better
Delivery is one of the fastest growing order channels in Britain’s out-of-home (OOH) or eat-out foodservice market with visits up +11% over the year ending (YE) October 2019. NPD is forecasting that food and beverages purchased through the delivery channel will represent 10% of Britain’s entire foodservice market by 2022. But while delivery offers speed and convenience, it has the potential to fall foul of consumer concerns around waste, packaging and carbon emissions.
NPD data shows that customer dissatisfaction with the quality of delivered, ready-prepared food and drink is 15% higher than for the rest of the industry. So the need for packaging that retains heat and freshness, as a way of improving overall quality, remains paramount. At the same time consumers expect less single-use packaging. Delivery operators therefore need to strike a better balance, perhaps by reducing the size of delivery catchments and using more acceptable, recyclable forms of packaging. They will also need to moderate their carbon footprint through greater use of low-carbon and zero-carbon means of delivery such as 100% electric mopeds, motorcycles and road-legal scooters as well as electric and conventional bicycles.
Winners in the foodservice delivery channel will be working hard to limit any adverse environmental impact. They will either use more renewable, compostable or recyclable packaging materials, or reduce packaging overall – or ideally manage both. An increased emphasis on making deliveries in the greenest way possible will help spur continued growth in foodservice delivery visits during 2020 and beyond.
2. Success means breaking boundaries
There used to be a clear distinction between restaurants, pubs, bars, coffee shops and fast food. And consumers would know if they were visiting a retail, leisure or foodservice outlet. But those boundaries have blurred. The Loungers chain is an example of a multi-faceted operation that is at once a restaurant, a pub and a café with a focus on the local neighbourhood. Planet Organic offers a clever mix of foodservice, including food-to-go and click-and-collect, with conventional retail such as organic grocery and beauty products, all supplemented by leisure activities such as yoga, cookery classes and workshops. Laine Pub Company provides customers with a range of leisure activities such as shuffleboard, paint & sip evenings, comedy, quizzes and virtual reality rooms, with the aim of modernising the traditional pub experience and attracting a new generation of consumers that want ‘more than a pint’. Independent foodservice brands are also moving directly into retail; these include operators selling Japanese food such as Yo! Sushi’s rollout in Tesco, Wasabi Sushi & Bento opening in M&S, and Sushi Gourmet in Sainsbury’s.
Winners must be prepared to break boundaries as a way of staying ahead of consumer needs and trends. With rising consumer expectations for ultra-convenience and engaging experiences, smart foodservice operators understand that defying old conventions can be a route to success. The old ways are not always the best.
3. There’s more to life than meat
Meat consumption remains important when eating out, but with more guidance than ever before about alternative sources of protein, consumers are finding it easier to flex their diet.
Data from the NPD Group shows that in the last three months to October 2019, almost 3% of British eating out visits were influenced by whether or not an eating out place had vegetarian or vegan options on the menu. Over the course of a year, 3% represents over 300 million visits, and it is likely that this figure will grow rapidly in future.
Consumers demand vegetarian and vegan options in different contexts. These options are 41% more important than average at breakfast, for example, and are 55% more important than average among 16-24 year olds. Young adults are the parents of the future so the importance of vegetarian and vegan options will only grow.
This all translates into good business sense. Average spend by consumers seeking vegetarian and vegan options is almost 4% higher than average. In addition, consumers who order ahead and collect their food or drink are almost three times more likely to pick vegetarian and vegan options.
Winners will understand the value of meat alternatives and that consumers of all kinds (even those who love meat) enjoy non-meat meals. The successful operator will serve up food that makes everybody happy – meat eaters, flexitarians, vegetarians and vegans. That means providing a range of great meat choices complemented by appetising vegetarian and vegan options. Meat-like plant protein (such as foods produced by Impossible and THIS!) will take off and has a major role to play in future market growth.
4. Kids’ menus are growing up
Kids eventually grow up – we all know that – but what about kids’ menus? Are Britain’s foodservice operators keeping up with children’s increasingly sophisticated eating out tastes?
Visits that include food or drink ordered from a kids’ menu, or which are part of a kids ‘meal deal’, represent a fast-growing part of the eating out market. NPD data shows such visits now represent 4% of total OOH visits and are currently growing almost ten times faster than total market growth (YE Oct 19 data).
The British high street now offers an enormous array of eating out options and cuisines that reflect many cultures. While much of this is targeted at adults, foodservice operators are looking to cater for younger palates through a fresh approach to kids’ menus. Many operators – such as Leon, Pho, Giraffe and Wagamama – have introduced innovative new kids’ dishes for youngsters with more adventurous tastes.
Winners will be those suppliers and operators that are able to offer classic kids’ meals with a contemporary twist, while also experimenting with new menu items or ingredients. Family visits represent almost 30% of all eating out spend so offering kids’ meals that will surprise and delight children and parents alike will be a key route to trading success
5. Food halls will storm ahead
In the face of a variety of business pressures and rising costs, operators are seeking different ways to expand their businesses. The food hall format is growing rapidly and tapping into the trend for informal, unstructured eating. These large indoor spaces allow street-food vendors and established restaurants alike to serve adventurous customers from their own stalls. Whether food halls focus on lunch or dinner, the average spend per head can be as little as £10. Street food operator KERB recently opened its Seven Dials Market food hall in London and other food hall venues include Arcade Food Theatre in London’s Centre Point, Baltic Market in Liverpool and Mackie Mayor in Manchester.
Winners will provide atmosphere, variety, excitement and value for money. Food halls offer lower rents and guaranteed footfall for operators, as well as more choice for consumers, creating a lower-risk environment where well-executed concepts can thrive in a fun and informal atmosphere.
Dominic Allport, insights director with The NPD Group, said: “What we see in these five trends is how creative the British foodservice industry can be, and how well it understands and adapts to consumer expectations. In delivery, we see lots of anecdotal evidence that consumers want to see more effort on reducing packaging and that the channel itself must be as green as it can be from a carbon emissions standpoint. The brands that are challenging conventional foodservice formats, and blurring the lines between foodservice and retail, will continue to enjoy success. Operators that provide appetizing choices not just for meat eaters but for flexitarians, vegetarians and vegans will also thrive. The industry’s ability to innovate is also evident in the growing range of improved children’s menus, and in the popularity of the food hall model.”