As the leading foodservice agency, we make it our business to stay ahead of the game when it comes to foodservice trends. As regulars at Horizons Annual Briefing events we jumped at the chance to find out the latest facts and stats on the hospitality market, brought to us by Peter Backman and colleagues.
Well the good news is the foodservice market has seen real growth of just under 1% over the past year, although it is predicted that it will take us to 2016 to reach pre-recession levels. On the up side there seems to be less of the margin squeeze at play than we have seen in recent years with operators passing on cost increases through to menus, although not across all sectors. Consumer confidence is improving, we are moving away from the voucher culture of a few years back with more sophisticated promotional tactics being employed using online and social media as well as meal deals. Meanwhile pubs seem to be closing the gap on restaurants as their prices creep up to meet restaurant pricing, driven predominantly by convenience of location, high quality food and family appeal.
There is however a polarisation of the profit sector with clear winners and losers. Winning are – pizza delivery, pub restaurants, managed pubs, sandwich shops, coffee shops (predominantly groups), while small hotels, off shore catering, fish and chip shops, leased and tenanted pubs and cafes (mainly independents) are struggling.
Across the market Horizons have identified five key components of growth:
1) population growth (up 0.5%)
2) meals per person (up 0.4%)
3) spend on food (0.9% up) Although not consistently across the market, as pub sector sees an increase while staff catering has seen a decrease.
4) product mix
Based on these key factors Peter predicts a real growth for 2014 of 1.8% with £10.5bn spent on food and beverage purchases.
Horizons then turned the spotlight on the consumer behaviours driving these trends and predicted growth. Well, it seems consumers have been cutting back on starters and desserts but hopefully as things improve this means there wil be an opportunity to sell more as they cut out less. They have been eating out more at the weekends and less in the week, and having said that wellbeing and healthy choices are important to them they are choosing them on menus and operators are adjusting their offers to reflect this consumer demand.
As for the marketing side of foodservice (our bag), Horizons has taken the traditional 4 Ps and extended them to fit the specific needs of this market. They are as follows:
Products – Here is all about co-creating solutions (have it your way! a gluten-free wrap with chicken no mayo and salad on the side – you get the kind of thing).
Promotion – Is now more about communicating through communities (online).
Price – Is about customised value, cheap and cheerful if that’s what you want, or super-premium – it’s the consumer who decides, as you can see with the huge range of burgers available.
Place – Is about the choice of how you enjoy your meal e.g. take pizza, it could be takeaway, delivered, in a restaurant, in a pub, etc.
People – Is about the people who deliver customer service day-in day-out (training and standards here are key).
Physical evidence – Is all about the environment, the ambiance/signage/branding.
And finally, Process – Covers the options around ordering and payment, making things easier for the customer.
Peter then went on to throw in a word of caution around the risks of growth. Factors that can damage or aid growth include consumer confidence which can be fragile, the fabulous British weather, politics (if Scotland goes its own way we will loose 7.5% of the current foodservice market), international uncertainty affecting tourism and of course the joker in the pack – unexpected circumstances! So although things are looking up nobody should be counting any chickens yet.
He then turned to the route to market which is likely to see all temperatures grow (frozen, ambient, fresh) and all formats (cash and carry, delivered, online etc.) so good news for wholesalers! Other winners include schools with the new free school meals initiative, casual dining and pub groups especially in London. As ever there was a list of growth sectors with the top ten as follows:
4. French Bistro
6. Chinese Buffet
7. Gourmet Burger
9. Pub Restaurant
Brands such as Wildwood, Pesto, Real China and Aagrah to name but a few were noted as strong players in these areas.
Leaving us with the summary that 2014 was about ‘considered optimism’ with customers becoming more demanding and competitors hungry, Peter then joined a panel of operators to take questions along with representatives from M&B, ASK and Metropolitan Restaurants.
All in all it was a very enlightening morning and well worth the early alarm call. Well done to the team at Horizons! If you’d like to find out more you can contact them at www.hrzns.com
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