This week Horizons presented its “Game Changers in Foodservice” at the annual Arena Christmas Lunch. A look back at 2013 and what our ever changing industry can look forward to in the next 12 months.
It’s been an amazing year, if you didn’t make it to the briefing here is a summary of what happened.
Despite the snow there were positive signs with the Casual Dining and Healthy Quick Service markets making a promising start – POD grew by +12%. We also saw the number of food led pubs increase, with Greene King announcing a growth of +4.1% in food. UK visitor attractions also felt the afterglow of the Olympics growing by +5%, with Eurostar reporting a staggering +14% increase.
We saw menu engineering introduced by many brands, to counteract inflations and the rising cost of food. Many operators increased prices but also meal deals to give consumers greater value for money.
In foodservice, brands made their mark in retail with Pizza Express, Jamie Oliver and Wagamama proving just as much a hit in the home as out-of-home. Tesco also hinted what was to come with Giraffe and Harris + Hoole – saying they were thinking about how to keep people on site merging foodservice and retail even further.
We became the 24/7 consumer in April with both the snack and breakfast market showing signs of growth (+4.4%). The digital age also played its part, as Domino’s announced its online ordering service was going from strength to strength – I may have played a part in that!
It had been bubbling under the surface for a few years but 2013 saw allergens and the free-from market really influence operators and their menus – incredibly 27% of brands now have a gluten free offering and Peter hinted there was more to come!
Eating out in the UK became a habit rather than a treat with 67% of us regularly choosing to eat out, due to convenience, special occasions or just to catch up with friends. Understanding the consumer and giving them what they wanted became more important than ever and operators were quick to react with Yo Sushi hopping on the burger trend by introducing a rice burger. TGI Friday realised happy staff would lead to happy customers and won a ‘best place to work’ award. June 2013 also saw Starbucks pay its first £5million tax bill – ouch!
As predicted the Fast Casual (American), Fast Casual Healthy, the Coffee Market and Casual Dining all proved their buoyancy.
July brought the longest heat wave for the UK since 2006 and unsurprisingly outside eating outlets did well. The anniversary of the Olympic Games encouraged consumers to enjoy the best of British, with tourism and visitor numbers to the UK increasing and British influenced cuisine growing by +16%!
In August US-inspired dishes topped UK menus with hot dogs knocking scampi & chips from the top 20 list. The burger wars began with both Five Guys and Shake Shack opening their first sites in London.
There was also a public health responsibility deal with many operators including Wetherspoons agreeing to put calorie counts on menus and removing dishes with very high calorie counts.
Though the hot weather was a boost for many pubs with a beer garden, Greggs felt the impact with sales dropping by -3.2%.
The new school term saw consumer confidence at its highest since 2006, the tax parity day proved a huge success with sales up 23%. At the same time Healthy Casual Dining operators, ITSU reported an incredible growth of +76% and Casual Dining outlet, Tortilla a +22% increase.
Horizons released their ‘Ones to Watch’ report, with the fastest growing area for eating out and branded chains including Chinese, Mediterranean, Caribbean, Mexican and Thai.
Location also became key, with brands moving into the high street to replace retailers and market towns such as Harrogate and Reigate proving their pavement appeal. Transport hubs such as airports and rail stations with extended waiting times also showed opportunity following London’s King’s Cross redevelopment and Wetherspoons opening the first pub at Beaconsfield services. Horizons also predicted that by 2019, 25% of shopping centres will have a greater food and drinks focus, with research revealing that consumers who eat/drink on site spend 48% more with retailers.
November brought a positive report from the Bank of England – with recovery finally taking hold. Consumers weren’t spending as much, but operators relied less on vouchers and instead used clever pricing technology to reduce overheads and pass on the benefits to the consumers. Marsden’s pubs also announced that 200 of its sites would be converted to convenience stores, drive-throughs, medical centres and residential properties.
And so we find ourselves in December and what’s happening right now. Consumers expect more and a better service. They’re also willing to try new experiences. As predicted in January 2013 the Casual Dining market saw a real growth of 10.9% since 2008. Looking ahead to Christmas, businesses are planning to spend under the radar and keep it low key, however Marsden’s reported that 70% of their Christmas Day bookings had been pre-booked – a positive but not enough to get us to where we were five years ago.
So what will we be eating during the season of festivities? Well the old favourites are still very much on the menu but Horizons has also seen:
Three Bird Roast Turkey – Miller & Carter Four Bird Roast with Trimmings – Ember Pub & Dining Italian Turkey Porchetta – Jamie’s Italian Yorkshire Guinea Fowl – White Swan Duck Breast with mulled wine compote – Old English Inns Winter Mulled Lamb Stew – Peach Pub Company Christmas Venetian Fish Stew – Jamie’s Italian Salmon di Natale – Strada Calzone Festivo – Strada Prima Pizza Natale – ASK.
What a year! And as we look to 2014 Peter Backman predicted that due to the improved economy there would be greater consumer confidence, but consumers would remain cash strapped especially the 19% of under 25’s out of work – value for money will prove an important motivator in the months ahead. Because of this the casual dining market is sitting strong being able to offer customers good quality food at an affordable price, with the likes of Bills, Giggling Squid and Leon all sitting in the less than £20 per head spend category.
The pub market also finds itself in a very sweet spot in 2014. The combination of being able to offer customers great food quality and flexibility through all day dining – as well as having two income streams of food and alcohol – makes the pub market one to watch in the year ahead. Peter also predicted we’ll see more shopping centres and transport hubs partnering with operators.
So what are Peter’s top tips for operators in 2014?
Invest in branding – we’ll see more branded concepts in managed pubs and hotels – look at the success of Costa in Whitbread pubs!
Focus on service
Be quick – even if you’re a big operator you need to be quick to adapt like Yo Sushi with their Rice Burger Be personal Redefine coffee shops – The market is reaching saturation, with coffee shops evolving into artisanal bakeries and Starbucks US growing their lunchtime market by offering soups and more sandwiches Redefine distribution Go multichannel – Could your restaurant serve breakfast? Take Away?
Offer value for money not low prices
Be aware of the unexpected – What will the weather bring? The World Cup?
Whatever happens there’s lots to look forward to in this industry of ours and I for one can’t wait. I’d love to hear your thoughts on Horizons’ predictions for the year ahead, do you agree? Why not drop us a tweet at https://twitter.com/JellybeanAgency
For Horizons’ presentation visit http://www.hrzns.com/gamechangers
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