The MCA annual Food To Go conference is a must attend for anyone in this dynamic sector and this year boasted some heavyweight speakers including the godfather of food to go, Julian Metcalfe of Prȇt and Itsu fame and Gerry Ford founder and group CEO of Caffè Nero. Currently the UK food to go market is set to reach a value of £20.7bn in 2018, outperforming the wider eating out market and retail with growth set to be around 2.8% compared to the 1.5% predicted growth for the eating out market, making it a land of opportunity for operators. But why is this? Well quite simply there are more of us, working longer and commuting more, we are ‘time-poor’ and grabbing food ‘on the hoof’ as table meals are replaced by food in the car, on the train, at our desks, etc. Whilst the proliferation of outlets and choice means that picking up food on the go is easy and we have a wide range of cuisines and formats to choose from.
In particular convenience stores, coffee shops, sandwich and bakery retailers are driving growth in this sector. Although the growth rate of 2.8% is good, in context it is a substantial drop-off from 2017 which saw 3.2% and 2016 which experienced 4.3% growth. This is as a result of consumers cutting back on discretionary spending in the current economic climate as well as menu price inflation, which has impacted on frequency of visits. Consequently this has meant that the value end of the market, like Greggs, is doing well as consumers choose lower priced snacks and meals, whilst the more premium end is finding it harder and overall outlet expansion is slowing down. That said this is still an exciting and fast moving sector showing a great deal of innovation, especially around healthy eating, vegetarian and vegan options and technology. The speakers throughout the day shared their insights and learnings and as ever it was crammed full of great content, below are my top take outs…
1 – Julian Metcalfe, founder of £100m turnover business Itsu, in conversation with Mark Wingett (Head of Events Content at MCA) stressed the importance of people in the success of any food to go business and the challenges of dealing with landlords. He also touched on the launch of Itsu in the USA, the delivery opportunity (which currently makes up 3% of sales) and how Itsu products work well for this channel. The chart also touched on his ambitions for more eat-in and evening meal occasions for the brand and how unsurprisingly with all this happening he doesn’t feel the need to launch another concept as Itsu has so many more opportunities to go for, especially as it is so well aligned to the current trends for healthy eating, Asian cuisine, vegetarian and vegan options.
2 – Greggs – Customer Director Hannah Squirrell shared Greggs learnings around their award winning rewards loyalty app which uses personalisation to target their consumer profiles with relevant offers and content to drive engagement and sales. With birthday treats, social media offers, a digital coffee loyalty card, user tutorials and much more the app is a great source of customer data which they are using to inform business decisions and work smarter. It also offers a platform for customer feedback and feeds into their store awards program. With plans to further engage their super fans, geo targeting and a staff focused app on the horizons Greggs is leading the way and determined to stay ahead of the game with its use of technology.
3 – Attensi UK, sponsors of the day, shared their vision for staff training through AI and gamification. With what looked much like the Sims game, staff can live out real life situations to improve their performance and compete against other teams and individuals to motivate them to improve. With proven 5-15% increase in like for like revenue this may look like fun, but it offers some serious commercial advantage.
4 – Eagle Eye, founded by the brains behind Tesco Club Card Tim Mason (another of the day’s sponsors) talked about their platform and how it can connect & engage through the consumer journey using the DIAL model – Data, Insight, Analysis, Learning. Their Key take-out – Connection is king!
5 – Cawston Press – Took us through the latest trends in the soft drinks market, including health, good quality real ingredients, crafted/ mass artisan, tee-totallers, better diets, more adventurous tastes, avoidance of nasties and of course the sugar tax and the search for naturally sweetened great tasting drinks. These along with emerging trends around hot to cold (think Cold press coffee), savoury flavour profiles including Matcha, Turmeric and Vinegars!, premiumised water and meal replacements are shaping the soft drinks market. As for Cawston Press, their hero product is one which stands alone – their Rhubarb Presse (one of my faves) and they are keen to ensure fizz isn’t a four letter word by creating great tasting no added sugar drinks which deliver for consumers and operators alike.
6 – Concepts to Watch – Speakers from K10, Chopstix and Vita Mojo took to the stage to take us through their brand journey and with all of them incorporating Asian cuisine they will doubtless be glad to know that according to Chopstix presentation that by 2020 the Asian fast food market will be worth £474mil. K10 talked about their move to embrace restaurant quality Asian take away as part of their business model and their high volume mentality. Chopstix outlined their cost efficient Asian noodle bar model which has concentrated on food halls and other high footfall locations and is also keeping an eye on technology as they estimate that by 2021 8% of total foodservice orders across the world will be online. Whilst Vita Mojo talked us through their vision to make all our meals truly personal through their subscription based back and front of house technology which can personalise everything about your dish and even match your food to your DNA profile! With 92% of the meals they serve personalised in under 60 seconds, two sites live and a third one in the pipeline which will focus more on the ‘eat in’ occasion this is truly a ground-breaking concept worth a visit.
7 – Waitrose – Kicked-off the afternoon sessions with an overview of Waitrose evolving F&B offer which includes Waitrose Kitchen and Sushi Daily and focus’ on their ethos of doing the right thing across the board. With their commitment to food to go seeing innovation in the chiller and via their F&B offer Waitrose is a big grocery player who can clearly see the market opportunity.
8 – HIM, sister company to MCA, took us through their insights into the food to go shopper in particular in the convenience sector where the average store is less than 100sq ft, shoppers spend 4.2 minutes in store, 3 mins 51 seconds of that browsing and encounter 606 POP messages. This means with 0.9 seconds to influence the convenience shopper it’s a tough nut to crack and keeping it clear and simple with bright colours is often the best approach. With the food to go mission in convenience predicted to be up 49% in the next four years from £3.7bn in 2017 to £5.4bn in 2022 it’s an opportunity convenience retailers are embracing and rightly so if they are going to future proof their businesses, as research shows that predominately younger people are the ones driving the food to go missions in convenience. And there are some impressive examples of retailers doing it well like Londis Cheltenham, Blackmore Lacey Lodge and many more (with notable examples across the Irish Sea).
9 – JLL Foodservice Consulting was next up with their advice on the importance of clever menu engineering to help maintain margin when faced with food inflation and growing overheads. They also stressed the increasing importance of social media influencers and micro influencers, VIP engagement programs, team incentives, and making the most of your data.
10 – SSP the travel catering specialists took us through their food to go business including brand partnerships and the challenges and of working air side. With 450 brands operating in 30 countries across 140 airports and 280 railway stations they know their stuff and food to go is a huge part of their business. With air passengers who arrive 90 minutes before their flight likely to spend 3 times more than your average consumer, the pickings can be rich if you get it right. However, operating in airports isn’t simple with 24 hour requirements, short leases, eye-watering rents, security & logistical challenges, expensive tendering and much more besides. With brand partners including Costa, Starbucks, Prȇt, M&S Simply Food, Yo!, Leon though they must be doing something right.
11 – Caffé Nero – The conference ended on a high as Mark Wingett interviewed Founder and Group CEO of Caffé Nero Gerry Ford, on the success of his 900 strong chain which is planning 300 more in the UK in the next 3 years. With an international business now extending out into the states and an approach to ensure they think global but act local to ensure the offer is bespoke to each country, Caffe Nero has been built from the ground up and is owned rather than franchised with the same management team in place since the start – 21 years ago. Ford admits that some countries are more food focused than others with food a key part of the Polish offer and is keen to do more on the food side in the UK. The acquisition of Harris + Hoole also brings opportunities as far as more sites and another brand in the portfolio. His vision is for something extraordinary, he doesn’t want to be on every corner, but what he wants is to do what they do brilliantly. As for Brexit it has certainly made recruiting in London more challenging, but fortunately the business has 65-70% of their sites outside of the M25. On the sustainability front they have been recycling coffee grounds for years and would like to see cups being recyclable in the near future. It was a great closing to the day and a coup to have top an tailed the conference with two such big hitters.
With our heads buzzing with insight and views it was time to head out into the cold after a very informative day at the food to go conference. Well done to the team at MCA and of course the speakers and sponsors with a special mention for Moy Park (our client) who sponsored and supplied some delicious food during our well earned break for lunch. We look forward to next week’s MCA Top of Mind debrief, in the meantime you can find out more about MCA here.