Lumina Intelligence estimate the food-to-go sector will reach £23bn by 2025.
More than 200 people attended the MCA Food-to-Go conference in London on March 9th, where Lumina Intelligence spoke, and delegates heard presentations from a range of food-to-go operators including Café Nero, Greggs, itsu, Leon, Pret and Pure.
Key takeaways from the conference included:
1. £23bn by 2025. An accelerated rate of physical outlet expansion, new product development and growth in channels such as delivery should help the food-to-go sector recover by 32% this year and reach a value of £23bn by 2025.
2. £1.6bn size of the prize. Coffee shops and cafes are destined to lead an expected sales growth opportunity of £1.6bn over the top 10 food-to-go channels between 2022 and 2025.
3. Consumer confidence is at 13-month low. The expected longer-term growth is set in the context of a tough market currently with consumer confidence dropping to -26 in February because of very low confidence in the UK economy.
4. Bouncebackability. The pandemic understandably delivered a huge hit and negative impact to the food-to-go market, but it is expected to bounce back, with the CAGR estimated to stabilise at 2.5% between 2022 and 2025.
5. Loyalty tech to increase spending. Continued innovations and developments in tech, including digital loyalty schemes and rewards will pave the way for increased consumer spending, repeat purchasing and improving perceived value for money.
6. FTG is low ticket and resilient. Lumina think the habitual and low-ticket nature of food-to-go means that consumers are unlikely to cut back on their spending in the channel.
7. Are meal deals a good deal? A very good deal it would seem with average pricing of meal deals in the top food-to-go brands (incl. M&S, Greggs and Tesco) sitting at close to the £4 mark. This highlights why spending in the sector is often a lot lower than in other areas of the eating and drinking out sector.
8. Classic lunch options are back! Snack pots might have had their day and made way for more classic choices like wraps, sandwiches and salads. Products like these could help to trade customers up and therefore increase spend over the lunchtime period.
9. NPD gets premium. There is definitely a trend towards NPD premiumisation, with 34% NPD in Q1 2022 priced at £4+. An example was the Meatless Meatball & Feta Hot Rice Bowl, from Pret priced at £6.25. Vegan and healthy products are also dominating NPD entrants, with almost 1/5th being low calorie or gluten free. The sector is also seeing a greater level of menu options that are customisable tapping into the trend for personalisation and experience.
10. Chips, burgers and pastries rule! Despite the move towards more virtuous and healthier NPD, the top three food-to-go items by % share of the occasion are the stalwarts of chips, burgers and pastries – with almost 1/5th of occasions involving chips.
Thanks to the team at MCA and Lumina Intelligence for another thoroughly enjoyable and insightful conference.