The Latest from Lumina Intelligence’s Food Strategy Forum

As a leading food and drink agency we make it our business to keep up to date with the latest eating out market trends. Each of the Lumina briefings is hotly awaited to see what they have to share with us as we use these key market insights to inform our planning and strategy for clients in foodservice and the hospitality market. This session looked at the current status of the market and predictions up until 2024 with a focus on the pub and bar sector pulling on findings from their latest report.

The session was very informative as ever, but here are my top take outs…

Eating Out Market Overview

  • The market is the strongest it has been since 2020!!
  • Eating out penetration is going from strength to strength in 2021. Now at 56% from a precious low of 34%. Driven by the vaccine roll out, lifting of restrictions and growing consumer confidence.
  • Eating out frequency is making a shaky recovery. Now at a high of 1.51 average visits per week, up from its lowest point of 1.22.
  • Previously the QSR sector was leading the recovery, but this switched to the pub sector over the summer months.
  • There is a strong preference for eating in which is at the expense of delivery and collection as consumers seek an experience ‘ that can’t be put on the back of a scooter’.
  • Breakfast and snacking are growing, driven by workers returning at least part time to offices with breakfast up 0.5% and snacking up 0.7% – with donuts the indulgent snack of choice.
  • Innovation is out there with stand-out concepts to watch (across the country) including: The Old Pharmacy in Somerset, bringing foodservice, and retail together with a focus on provenance and artisan produce. Boom: Battle Bar, Liverpool, offering competitive socialization with a modern twist and customizable menu. The Blind Rabbit, Nottingham, bringing a taste of downtown New York to the Midlands with vegan options and trend-led cocktails. The Olive Boardz, Glasgow, made to order instagramable charcuterie board in a modern floral setting with omni channel options for gifting and corporate catering.

Pub & Bar Sector

  • The sector is currently at 64% of its 2019 value.
  • Pubs and bars have a channel share of 8%
  • This year it is forecast to be worth £14.8bn turnover with 42,754 outlets.
  • Recent improvements have been driven by consumer confidence which is at an 18-month high at -8 having dropped to -34 when the pandemic hit in April 2020.
  • Pub spending is in positive growth for the first time since Sept 2020.
  • Investment in outdoor spaces, staycations, the Euros and Tokyo Olympics all helped pubs recover this year. Whilst family-friendly and dog-friendly dining also helped attract a wide customer base.
  • Unsurprisingly labour shortages are the no. 1 concern. Followed by the risk of future restrictions, Brexit related issues around food and drink costs and recruitment and the colder months returning.
  • Despite this the pub market is predicted to exceed its 2019 value by 2024, with net pub closures to offset by 2024.
  • Food led pubs will need to focus on innovation around offer and occasions to drive frequency and spend. With examples like ‘working from the pub’ packages, outdoor kitchens, low/no prep menus etc.
  • Concepts to check out include The Tap on Tower Street (no prep menu to save on labour), Pity Me Inn Cornwall (outdoor kitchen) and The Crown Bow (work from the pub £20 package).
  • Wet-led pubs may look to focus on experiences (like Blame Gloria from Adventure Bar Group) and more niche and craft drinks both alcoholic and non-alcoholic (like gin specialist bar The Argyle from Stonegate Group).
  • Moving forward over a 1/3 would like to continue to use digital in pubs with QR / app ordering which may ease staffing issues but would like to see exclusive rewards for doing so and nutritional info on the digital menu.

Pub & Bar Menu Trends

  • Menu contractions originally driven by the pandemic are continuing due to staffing issues. Indeed, menus are still -15.6% smaller than pre-pandemic.
  • Customizable dishes in pubs and bars have seen a rise with 32.6% of dishes marked as customizable. The top 3 items being burger, steak, and wings.
  • Dietary requirement tags are increasing with 15.2% tagged vegetarian, 12.2% gluten free available, 10.6% vegan, 10.65% gluten free, 4.1% vegan alternative available and 3.2% low cal.
  • Dish price inflation is now in-line with CPI inflation having fallen from it’s highest in summer 2020 as operators make use of VAT reduction.
  • Mains received the highest price inflation due to consumer elasticity on main dishes compared to starters and sides.
  • Dinner is the second most popular day part at 24% after drinks at 42%.
  • When it comes to drinks 65% of those bought are alcoholic, 28% non-alcoholic and 7% both.
  • 61% of alcoholic drinks consumed are beer, followed by wine at 20%, cider at 14%, spirits at 12%, cocktails at 11% and other at 2%.
  • Drinks only occasions are most likely to be with alcohol but coffee over indexes for drinks only occasions.
  • Training is worth the money as average spend increases with friendly service satisfaction.

If you would like to know more about the pub and bar sector Lumina have their full report available to buy here. Equally, if you’re a brand looking to target the hospitality sector including pubs and bars we’d love to help you, so feel free to give us a shout here.