The MCA Food to Go Conference is always a must attend event and this year was no exception. As a leading food and drink agency we make it our business to stay on top of the latest trends, so we were there to hear from a stella line-up of experts from market insight to operators. The day was, as ever, jam-packed, but here are our top take-outs…

1) Market Size Lumina Intelligence took us through their latest findings (points 1-6 below). When it comes to the eating out market, food to go is the most important sector for growth, has a 26.7% market share and an estimated value of £22.2bn, up 4.1% year on year (driven by inflation). Despite Covid, the sector has seen outlet growth with 1,400 more sites than five years ago, as the number of outlets hits over 152,000. Indeed, operators such as Co-op and Greggs have ambitious plans to expand, focusing on franchised sites and, in the case of Greggs, Drive-thru. As regards sub sectors, convenience store grab and go comes in as the largest, valued at £550m, followed by sandwich and bakery at £370m, coffee shops/cafes £278m, travel at £202m and street food at £192m.

2) Value Driven Of course, the cost-of-living crisis and low consumer confidence has impacted the sector with frequency down 2% and consumers more value-led, up 3% YOY. Unsurprisingly spend is up 12%, however this is sadly driven by inflation. Consumers are seeking out value and meal deals which are benefiting retail grocery food to go where they have the scale to offer attractive meal deals. Habitual purchases are down 2% as consumers change their habits to save money. With 35-44 year olds cutting back the most and many just buying food and forgoing a drink to save, purchases of both are down 4.2%. Operators have responded to this with the introduction of the Made Simple Pret range and the KFC Wrap of the Day.

3) Technology From loyalty schemes to kiosks, delivery to click and collect, the pandemic accelerated the food to go’s use of technology. Indeed, delivery has doubled for KFC and McDonalds since pre pandemic, as consumers are habitually using aggregator apps.

4) Premiumisation Despite the focus on value scrutiny we are also seeing healthy options command higher prices, as healthy and vegan options in NPD break the £4 barrier in food to go, with vegan and high protein options dominating. Overall lunch meal deal prices have increased by 4% but retailers are looking to offer choice with tiered options from value to premium.  84% of consumers think quality has a price and 74% are prepared to pay more for higher quality, which has seen upscale operators like Yolk and Soul + Grain (SSP) drive spend and engagement.

5) Travel Consumers are on the move again with more people returning to the office and traveling both for business and pleasure with food to go missions for snacks driven by ‘I was travelling/commuting’ up 4.3% to 15.5%, whilst weekday Highstreet footfall is also up.

6) Omnichannel Following on from my omnichannel blog the other day, Lumina highlighted the demand for food to go brands in retail with Nando’s, KFC McDonalds, Greggs and Wagamama coming in as the top 5 brands consumers would like to see FMCG ranges for in grocery.

7) Tim Horton’s – For the uninitiated Tim Horton’s started in Canada and is now a global brand with 5,300 stores. It is currently taking the UK by storm, its roll-out started in Scotland and the north and is now steadily heading south, with 72 restaurants opened over the last five years. The all-day brand serves coffee, donuts, baked goods and a range of freshly prepared made to order food, and positions itself at the heart of the community. To date they have driven the brand through its huge emotional connection to Canada, strong site launches, social media advertising and national PR. Certainly one to watch within the FTG space!

8) Digital Evolution – This panel discussion featured Dominos, Café Nero and Uber Eats. The key take out here was the need to own the relationship with the customer. With Dominos it was more about the data and keeping control and leveraging that data for the business, with possibly a loyalty scheme in the offing. With the ultimate aim of becoming the ‘Netflix of Pizza’, with digital personalisation taken to the next level. With Café Nero it was about creating an experience for the customer and adapting to accept that delivery will impact this but is still worth doing, as well as looking at linkups such as their current Waitrose one. Whilst Uber Eats has seen a shift to their service becoming less of a treat to a more everyday occasion, driving healthier options across dayparts outside of dinner, including breakfast and coffee, whilst cross-promotion between Uber Drives and Uber Eats remains a priority.

9) Operator Opening Strategies – CACI used their insights to identify which demographics are spending most out of home. This turns out to be ‘executive wealth’ consumers at 11% of spend, making up the largest consumer group and opportunity for food to go, followed by, surprisingly, ‘striving families’ at 8.5% and ‘city sophisticates’ at 6%, although this indicates a decline in spend as city sophisticates have been hard hit by the cost of living crisis. In addition, their key observations were that consumers have been impacted differently with the cost-of-living challenges and it has changed how we prioritise our spend. This presents opportunities for operators as consumers prioritise experiences and affordable treats, and trade down or shift spend to their priority area. And finally shifting demand impacts consumer and location requirements when it comes to site planning for operators, as we change how we prioritise spend, so we change our use of space and subsequent food to go interactions.

10) Moto – Moto is the UK’s largest motorway services operator with 60 motorway service areas, 335 restaurants and retail shops, serving over 120 million customers per year. It has 55 fuel forecourts and over 20 EV ultra-rapid charging hubs. And there’s the thing – electric cars, according to Ken McKeikan CEO of Moto Hospitality, are set to change the face of motorway service areas, liking the change to that of the early 1900’s when cars replaced horse and cart.  With more and more drivers switching to electric there is a huge opportunity for motorway service areas as drivers seek charging points and increase their dwell time by around a third! That’s why they have been upping their game with £400m investment and recent openings offering facilities aligned to customer research as they see EV drivers stopping more, staying longer and spending more!

12) Vita Mojo Maximising Sales – The software platform used by many in the casual dining and food to go space including HOP, Honest Burgers and I am Doner, offered up five top tips to maximise sales as follows:

  • Up-sell but don’t overload consumers with choice (max 5)
  • Customise to enhance consumer experience, but keep it simple
  • Offer basket recommendations at point of check-out, but make them smart and relevant
  • Include meal deals and combos including a discount to drive a larger order
  • Ensure you have menu agility and efficiency to be able to add specials and offers for National Days and promos quickly

13) Menu Innovations – With Pret and Benugo & Egg Soldiers hospitality consultants. Both Pret and Benugo deal in food to go, but the main difference being Benugo’s business model, which is as a contract caterer working for third parties such as leisure and heritage sites. As such they have to take into account the context of their operation and adapt and tailor their offer accordingly. One strong theme they have seen come to the fore is ‘Climaware’, ethical consumers keen to make positive climate choices, as well as clients also keen to be responsible across their F&B offering. Day parts and their move into licenced alcoholic drinks and evening offerings has also proved an interesting development for the brand.

Pret shared how they are on a journey with their regional sites to see how, if at all, they need to adapt their menu for sites outside of their London heartland. This and their recent developments to focus on iced drinks with interesting flavours and their ‘Made Simple’ range. They also continue to incorporate the most popular of the now defunct Veggie Pret products into their core range as vegan and veggie become mainstream.

Finally, Egg Soldiers commented on the evolution of food to go which has to adapt to changing consumer behaviour post-Covid. In particular, the opportunity to up-sell and customise using sauces and in some cases even creating a house sauce which can go into retail e.g. Nando’s and Pizza Express. Whilst as far as innovations go, the advice was keep it core, citing Greggs Hot Yum Yums and cookies – a simple and easy innovation which works operationally and plays to their strengths – working smarter not harder. As well as the sage advice to test and learn, to put things on for a trial period and see how they go. At the moment cool, nostalgic and entry price points are all routes to back.

14) Tortilla – The Mexican success story Tortilla has gone from one to eighty restaurants since 2007. The secret to their success? Well, aside from their delicious tacos and burritos, they tend to be 10%-20% cheaper than the competition – a strong selling point in the current climate. They have been careful with property, were quick to re-open post-Covid and made sure they engaged with customers. Their operation model allows for slow cooked meats to be cooked centrally with all the other fresh ingredients prepped on site. Their goal was to open 9-10 sites per year but they are currently ahead of schedule with their purchase of Chilango, of which some sites have been converted to Tortilla and three they have kept under the original brand.

They are fortunate to be debt free and self-financing and with London back online they are positive about the future. They also have linkups in place with SSP in travel and Compass in unis, which helps them reach these parts of the market and build the brand with both commuters and students. Indeed, they are a real favourite with students who can have a burrito for lunch and find it filling enough to last them through the day, helping them with their limited budget. But as with all operators, margins are tight and they see tech as a route forward to help efficiencies. They are particularly keen to speed up queue times, which often see customers queuing out onto the pavement, drive loyalty and frequency via the app and reduce back of house food waste to future proof the business. Delivery is also a big opportunity, but retail may be a step too far at the moment. As for Sombreros, the new entrant into the market, they will view them with interest but are confident in their offer.

15) Coffee Panel – Here we heard from WatchHouse, 200 Degrees, Blank Street Coffee and founder of Allegra, Jeffrey Young. Amongst the many themes discussed was the need to tailor the offer to the right place and right size, rather than defaulting to huge sites which are tough to make commercial as a third space for consumers. Loyalty schemes and omnichannel across delivery, subscription and in person (as utilised by 200 Degrees) had both its proponents and sceptics. Whilst a move to more natural and pure was discussed, along with the rise of tech and even (gasp!) flavoured coffees (not one for the ultra-purest WatchHouse).

16) Recruitment –We heard from Leon, Pure and Attensi (training sponsors) on how they found recruitment in the current climate. The good news…it’s a lot better than it was! They also discussed the need to pay competitively, offer flexible shifts, a culture staff can buy into and deliver training to give them the skills to succeed early on to avoid the ‘quick quit’.

15) Julian Metcalf The headliner, and famously charismatic founder of Pret and more recently Itsu, took to the stage with MCA’s Editor to share his wisdom and the latest developments with Itsu. From feeding wealthy workers lunch, to what now sounds more like hot food offer in the new sites planned, Julian Metcalfe is overseeing the evolution of the Itsu brand including franchising and all-day dining.

He showed his passion for food and hospitality, a field two of his children now work in and his hatred for price increases with the worry of going over the £10 mark a concern in the light of inflation. He also outlined how critical the relationship between equipment and menu is, having spent every day on site at one of the new openings making sure the equipment was just so. An early adopter of the kiosk ordering system (not without its challenges) he is now a convert and can see how Gen Z and even A’s as digital natives prefer interacting with tech over humans and how critical tech will be to the future of the brand.

Finally, when asked about the omnichannel expansion into FMCG retail it turns out this was driven by the need to get volume in order to secure authentic Japanese suppliers rather than a burning desire to see Itsu on grocery shelves.

It was, as expected, a great end to a great day. Well done to the team at MCA on another great event. To find out more about MCA visit https://www.mca-insight.com/