As a leading food and drink agency, specialising in foodservice, retail and convenience, we make it our business to stay on top of the latest trends. Pulling key tangible insights from market information and trends data is crucial to the work we do with our clients and therefore attending events such as the MCA debrief comes high on our agenda.
MCA create a comprehensive quarterly report available to their Forum members, but here are some of the top take-outs covering the eating out market, menu trends, cuisine trends, consumer behaviour out of home and much more…
Consumers have a little more money in their pockets as inflation and wage rises cross over, which has improved consumer confidence slightly (although it is still negative). More disposable income and higher consumer confidence is what we need to see for a buoyant eating out market moving forward.
Pubs prove the most popular eating out sector, along with coffee shops and fast food which show lower ticket operators doing better than their higher priced competition.
Market dynamics – There are definite positives as participation, food spend and frequency are all up on Q1 2017 (although this was a weak quarter last year so it’s not as rosy as it might look and spend is being driven by menu price inflation).
The market is stable but subdued, with cost pressures impacting margins and Brexit uncertainty affecting consumer confidence. However, consumers are expecting to eat out a little more in a year’s time, so hopefully things are looking positive and operators who can move fast to keep up with consumer tastes will continue to thrive.
Looking at menus – vegetarian and vegan dishes have sky rocketed with vegan dishes up 237% YOY, while overall NPD has dropped from 130 in 2017 to 85 in 2018, with Beefeater, Ask and Café Rouge topping the rankings for new products on menus.
Menu price inflation has slowed from 3% in 2017 to just 1.4% in Q1 2018 with pubs and bars and restaurants leading price rises. But with skilful menu engineering operators can maintain margins and increase value perceptions.
Promotions are on the up in casual dining, with branded restaurants up 75% compared to 2013 and branded pub restaurants up 39% compared to 2013, with an average of four promotions running at any one time. Although pubs like Hungry Horse were, at the time of the research, running as many as 9, with the top 10 brands running an average of 6.4. Fixed price special offers (found in 40.6% of all operators surveyed) are the most prevalent, followed by app initiatives & partnerships (like download the app for X) and kids offers, while a discount on total bill was not seen at all. Branded restaurants favoured fixed price special offer, discount on food spend and lunch specials, while pubs favoured fixed price offer, app initiatives and drinks discounts. Overall there is more of a move to online codes rather than walk-in promotions (driven by the need for data capture creating on-going marketing opportunities) and a growth in use of promotions at lunch and dinner.
Price increases 51% of same-line dishes increased in price with a median price increase of £0.45, showing a 3.3% increase which consumers are noticing with 48% feeling that eating out costs have gone up.
Menu pricing strategies show the value end of the market (<£10) using prices ending in 9, mainstream (£10-15) using prices ending in 5 and up market operators (£20+) using prices ending in 0. There has also been an increase in the use of £X.99 and the use of healthy menu descriptors like green, fresh, vegan symbol, vegetarian symbol, light, skinny, superfood, organic, natural, healthy, etc. with fresh being used by 74% of brands surveyed. In addition, operators are applying better dish descriptors to mitigate the impact of price increases.
Consumer habits show (from most popular to least), chicken is up 1%, beef is static, fish is down 0.7%, pork is down 1%, vegetarian is up 0.2% and lamb is down 0.2%. So, although there is a lot of buzz on menus around vegetarian it is not translating (as yet) into consumer behaviour. With chicken; the sandwich, curry and burger are all popular, but growth is being driven by fried (KFC), grilled (Nando’s) and pizza (Italian chains). Beef has stalled with burgers up 0.5% but steaks, sandwiches, roast and pie in decline (as consumers move to lighter meals and away from hearty classics) while pizza is up (driven by Italian chain promotional activity). Fish and seafood, which you would expect to do well from consumers looking for lighter meals, is in decline mainly driven by fish & chips (down 0.3%) with sushi helping to counter this with 0.1% growth. Pork shows no growth. Interestingly vegetarian growth is predominately driven by sandwiches, so no real sign of the sea change with consumers as yet.
Top 10 dishes YOY – (from most popular) sandwich (static), beef burger +0.5, fish & chips -0.3, pizza +0.7, curry (static), roast -0.3, steak, chicken burger, pasta and other fish seafood (all static). Other growing dishes in the top 20 include salad at 11 +0.2, fired chicken at 14 +0.3 and grilled chicken at 18 +0.3.
Courses – the average number of courses is now 1.55 down 2%, as consumers cut back both for health and budget reasons, making mains the most popular choice followed by starter and main, leaving desserts in peril along with the 3-course meal.
Drinks – soft drinks and alcohol are down, with hot drinks or no drink at all up and overall there are fewer drinks being bought with food (possibly in an attempt to bring the ticket price down). While carbonates show decline (perhaps driven by health concerns and sugar tax) with water and coffee up.
Mega Trends – healthy eating, indulgence, informality, value scrutiny, provenance & sustainability, convenience, eating out technology and foodie culture.
Cuisine Trends – As far as cuisine, British, Middle Eastern, Japanese/Korean, South east Asian are all showing significant growth. Peruvian, Venezuelan, West African, Portuguese, Contemporary Indian and Contemporary Chinese are all showing growth. While undifferentiated BBQ and undifferentiated Italian are potentially under pressure. And interestingly Australia is showing an influence with regard to their coffee and brunch culture.
Drinks Trends – Augmented Reality drinks (coasters), New England IPAs, bottled cocktails and premium tonics are at the fore this year.
Trends – A key trend in recent years has been Instagram-friendly, ‘style over substance’ foods –but many of these are proving to be short-lived ideas. Gut-friendly foods, lower sugar consumption, lower meat consumption and meal & grocery delivery are among key lifestyle trends in 2018.
Food trends – Goat’s meat, jackfruit, authentic & fresh pasta and coconut are key food trends in 2018, while pulled-pork and juicing may have seen their day.
Responsibility is the key overall trend in 2018 – spanning craft producers, sustainability, health and spending. Although adventurousness still comes out top for eating out. As MCA put it…”Responsibility – the surging force sweeping along consumers, swaying operators and shaping menus.”
Hot Topics (a new service from MCA) – The 2,000 consumers surveyed bi-monthly by MCA highlighted – the sugar tax (driving the demand for diet/zero options), alcohol consumption (down, as 26% are consuming less), meat free (with the rise of flexitarian lifestyles), home delivery (which looks like it is stealing from home cooking (86%) rather than eating out (14%)), price/promotions (demanded by the young) and packaging and sustainability.
As ever it was an enlightening morning and we look forward to their next Forum event in July and of course to putting these vital insights to good use with our clients.
To find out more about the MCA visit https://www.mca-insight.com/