On the hottest day of the year so far, myself and jellybean Account Director, Clare Freeman headed to London for the Lumina Q2 Food Strategy Forum. Hosted at the Everyman Cinema – Kings Cross, the fully packed session provided an insightful look into the eating out market, as well as what consumers want, the pub market and ingredient innovation. The Lumina panel walked us through the ongoing challenges, as well as the significant opportunities, for growth in 2025 and beyond.

Read on for our summary of an insightful and very informative day.

Market Updates

The eating out market continues to navigate a complex environment, with businesses primarily concerned about the rising cost of labour (54% of leaders identifying it as their top challenge), followed by rising food and ingredient costs (43%) and declining consumer spending (29%).

Understandably, consumer confidence was down due to April’s cost increases which saw household bills, council tax, stamp duty, and Trump tariffs rising. Because of this, overall uncertainty is expected to delay both consumers and businesses in making major decisions. More positively, inflation is anticipated to ease, however the average wage growth remains relatively flat.

Despite these challenges, the UK eating out market is forecast to grow +2.4% YOY from 2025 to 2028, reaching £108,703 million. Food-to-go-led channels have been driving this growth, with sandwich, bakery, coffee shops and drive-thrus all earning visits. Most affected are restaurants and pubs, which must “double down” to appeal to the 76% of consumers who are value driven when it comes to eating out.

Main Drivers and Trends

To succeed in what is a challenging market, Lumina highlighted four key pillars driving growth:

  • AI Revolution: We are set to enter a “golden era” with an AI-first foodservice sector that will future-proof the Quick Service Restaurant (QSR) and food to go sectors especially, helping them to stay both responsive and relevant. Whether it’s analysing the weather and subsequent footfall (Honi Poke), monitoring equipment usage (McDonald’s) or your cravings (Papa John’s) – AI will become a core part of strategy and operations.
  • Differentiation: Service-led operators can prosper by offering additional reasons to visit, emphasising differentiation and excellence to appeal to these value driven consumers. This could include seasonal and limited offers, brand collabs, competitive socialising, events (like live music), zoning to cater for different demographical needs, increased professionalism, expanding local/British produce, and specialising in food/beverage categories.
  • Format Diversification: Brands are exploring new formats. Food-to-Go operator, Pret, is trialling a made-to-order format at new sites, with more floor space given to seating and children’s areas. There’s also going to be a trend towards “Format Fluidity” in 2026, the dayparts and locations operators experience success in will continue to change, with daytime and mid-week dining driving more visits than traditional evening sessions.
  • Brand Identity & Loyalty: Legacy brands are undergoing “resets” to regain market relevance, as seen with Prezzo. Loyalty initiatives are evolving to be “smarter, sharper, and more emotional,” operators are enjoying repeat visits by tapping into habit loops and consumers earning quick wins to build loyalty – the get your 10th cup of coffee free offer is outdated. Operators are also diversifying those opportunities to win more eating occasions, extending loyalty schemes from the high street to home delivery, as Wagamama has implemented with Deliveroo.

In summary, resilience and success won’t happen by standing still, operators will need to be bold to reach new levels, and it all starts with AI.

The 2025 Consumer

Consumers are increasingly shaping the market, with easing financial pressures (and good weather) benefiting the eating and drinking out market. This has led to increased penetration (from 53.1% in April 2023 to 58.1% in April 2025) and visit frequency (from 1.43% to 1.52% over the same period).

Key consumer demographics and behaviours:

  • Age Dominance: 25-34 year olds are dominating the eating out market, showing significant growth through both penetration and visit frequency. Unlike other groups, young millennials are considered to have a higher disposable income – being mortgage and child-free – and operators need to lean into this cash-rich generation.
  • Income Correlation: High income levels were also linked with changes in eating out behaviour, especially with higher affluent consumers earning +£100k (ABC1) living in city centres, and in particular, London driving growth. The analysis showed London accounts for 16.4% of all eating occasions and 19.5% of city centres.
  • Value and Quality: Good value for money (26.2%) and quality of ingredients (13.4%) are the top growing reasons for choosing an eating establishment. Healthy food options are also increasing in importance, with 75.2% of consumers stating they are “Very Quality Led” and 43.7% are “Very Health Conscious.” For operators, finding this balance will be key, as no matter the income level, value, health and ingredients are driving purchase.
  • Motivation Shift: Our reasons for eating and drinking are changing too, “Relaxation” is becoming a larger motivator for occasions – socialising remains an important reason, but relaxing is growing by +0.7% yoy. With consumers looking “to wind down or relax”, lunch, dinner, and drink dayparts are all feeling an effect and, “being out and about” is being de-prioritised as a reason to eat out.
  • Promotions and Innovation: Rewards and promotions remain key in this time, with 35.3% of occasions involving a promotion, and loyalty card/app schemes now the top promotion type. But it’s not just deals, consumers are also seeking innovative and different dishes. The everyday needs to be exceptional to maintain interest, with popular offerings such as burgers and sandwiches highlighted as losing share in lunch and dinner occasions, creating space for new offerings. Though alcohol consumption is in decline, there are opportunities for quality-driven cocktails (+1.5% in alcohol occasions), with operators such as Indian Restaurant, Manthams Mayfair pairing cocktails to their menu. Health-led drinks like fruit juices and smoothies (+0.9% in non-alcohol occasions), are becoming popular too, driven by the consumer demand for healthy options. So much so, bakery operator, Greggs has recently added Plenish Shots alongside its sausage rolls.

The Pub Market

While the overall eating out market is growing, the pub market will also grow, but its percentage share will slide slightly, with an annual growth rate of +1.9% in 2024, projected to reach +2.2% by 2028. Encouragingly, pub outlet closures are expected to level off by 2027-2028 which contributed to this share loss. Top pub brands like JD Wetherspoon and Marston’s are showing net outlet growth – so the market is looking optimistic. However, legislation, such as EPR (Extended Producer Responsibility which makes producers financially responsible for the full cost of managing their packaging waste at the end of its life) and alcohol duty, have both put a massive pressure on pubs and could create added complexities for the sector .

Key trends and growth drivers for pubs:

  • Sport as a Footfall Driver: Watching sports is a significant and growing reason for pub visits, increasing by +1.4% to 7.5% as a share of all pub visits. Darts, specifically, was highlighted as delivering “big wins” for pubs with the European and World Championship driving footfall, as well as the F1, and football. The FIFA World Cup 26™ could open a huge opportunity next year if late-night licensing can be secured.
  • Reimagining the Pub Experience: This involves adapting to the “new social,” which Lumina characterised as “inclusive, intentional, and early”. Pubs are focusing on estate restructuring and format differentiation to unlock future growth, such as Marston’s format-led growth strategy and Stonegate’s data-led segmentation which has seen them develop their Heritage Pubs format. A collection of traditional, family-friendly pubs focused on pub classics and Sunday roasts, with a cosy and rural setting. Stonegate also has a Pubsmiths format, which offers a livelier, drinks-led experience with small plates and shareable dishes in town and city locations, enabling them to cater for different consumer demographic needs.
  • Data and Digital as a Growth Enabler: Digital loyalty programmes are seen as a way to reshape how pubs retain, reward, and re-engage guests. Furthermore, tapping into TikTok and the power of social media is crucial for engagement, as evidenced by TikTok’s 4.4 billion global video views for #pubtok .

So in summary, the eating out market is characterised by a very real focus on value, quality, and health. Younger and affluent consumers are driving growth. To succeed, the eating out concept needs to be reimagined and immersive, with pubs especially adapting and growing through experiences and digital engagement.

Flora Southey Q&A – Editor of Food Navigator

Flora Southey’s role comprises of covering the latest food trends, sustainability, regulation, and nutrition across Europe, North America, and APAC, with a readership including major global food manufacturers. Her Q&A was a fascinating look at what consumers are hungry for in the ingredient world.

Functional Ingredients

There is a significant trend towards functional ingredients in the food industry enabling food manufacturers to develop products that can support our gut health (probiotics), muscle building (high protein), and even boost our mood (CBD).

The Takeaway for Operators and Manufacturers

Driven by consumer interest in health, food and drink, manufacturers may want to focus on developing products that incorporate these functional ingredients to meet consumer demand for health benefits and clearly communicate these. From protein to added fibre, Flora also predicts there are opportunities for innovation in supplements and nutraceuticals that can naturally boost and be beneficial bodily functions

Ultra-Processed Foods vs. Wholefoods

There’s an ongoing debate around ultra-processed foods (UPFs), with Flora highlighting that some can actually be healthy while others are not. Plant-based milk alternatives for example, often need added nutrients like B12 to be considered healthy. One of the challenges for consumers is that UPFs are generally more affordable, and easily accessible, compared to more expensive whole foods, making eating well harder than it can appear. Despite the conversations happening, consumer awareness and understanding of ultra-processed foods is poor, and the classification itself is broad, ranging from chocolate and cereals to bread and cheese. So what do we do? Flora still believes focusing on fat, sugar, and salt levels is important for consumers to understand the healthiness of food products.

The Takeaway for Operators and Manufacturers

Food and drink brands face the challenge of navigating consumer perception of UPFs. There’s a very real need to balance affordability and accessibility with nutritional value, as well as clearly communicate messaging to consumers about ingredients and their nutritional profile, especially where essential nutrients are added.

GLP-1 Drugs

GLP-1 (Glucagon-like peptide-1) drugs help consumers lose weight by increasing their feelings of fullness, which leads to less hunger and eating smaller meal portions. As use of these drugs grows in the UK, this will have implications for consumer snacking habits, placing pressure on food manufacturers and operators to offer products that meet the GLP-1 user’s needs.

Flora spoke about R&D teams being under pressure to develop new products that cater for both the nutritional and dietary requirements of people using GLP-1 drugs. For foodservice and hospitality, there may be a shift in consumer preferences too, as people on GLP-1 drugs can develop an aversion to high-fat and high-sugar foods impacting QSR and food to go. There may also be a need for menus to include smaller portion sizes to encourage GLP-1 users to still eat out.

Opportunities and demand around natural GLP-1 boosting ingredients may also grow, like lean protein, fibre, and certain herbs and spices such as cinnamon in food products – supplements and nutraceuticals could prove an exciting area for innovation!

The Takeaway for Operators and Manufacturers

Restaurants and manufacturers may need to reformulate menu items to offer balanced, nutrient-dense options that are satisfying in much smaller portions, as well as offer tailored versions to cater for people seeking lower fat or lower sugar alternatives. Natural GLP-1 boosters could grow in demand including lean protein and fibre, alongside certain herbs and spices.

Plant-based and Lab-Grown Meats

Flora highlighted that while sales of plant-based meat alternatives are declining, there is still a growing demand for traditional plant-based ingredients like tofu and tempeh as people look to reduce their meat consumption.

When it comes to lab-grown meat, progress is being made in the UK with cultivated meat products, especially following Australia’s approval of its first product. Will it take off in the UK? Flora believes consumers will be willing to try high-quality cultivated meat.

Over the next five years, there will likely be a trend towards eating less meat and a demand for better quality meat and dairy products when we do. Consumers will want to see high-welfare labels for these products, meeting the demand for real value and quality when eating out – something they will pay more for.

The Takeaway for Operators and Manufacturers

Brands need to diversify their offerings beyond just meat alternatives to include whole plant-based ingredients. Meat and dairy producers should focus on transparency and ethical sourcing, emphasising their welfare standards and communicating clearly to consumers what these standards means to justify premium pricing.

So what should food and drink brands do to innovate? Brands across all categories need to prioritise offering “real value,” whether through superior quality, ethical sourcing and high food standards, or adding functional benefits to meet dietary needs. By clearly communicating their USPs, and working in partnership with operators and retailers, there is real optimism for the food and drink industry in 2026 and beyond.

Food Concept Tour: Demonstrating Quality

The final part of the day was Lumina’s Food Concept Study Tour, dedicated to highlighting London’s most exciting operators at the forefront of innovation. The theme for this quarter “Demonstrating Quality,” showcased how venues are elevating classics such as burgers, pizzas and sandwiches with innovative flavours, locally sourced ingredients, and refined processes.

Rogue Sarnies
This concept, founded by former Michelin-star chefs, elevates sandwiches using freshly baked in-house, wood-fired bread and a seasonal menu. Ingredients are hand-picked weekly from Covent Garden Market, ensuring quality. We loved the Rogue Club and The Lord Nelson Sticky Shin Beef.

Flat Earth Pizzas
Flat Earth Pizza offers innovative, seasonal plant-forward pizzas prioritising both flavour and sustainability. They utilise wild-farmed flours and whole-ingredient toppings, which benefit the environment and digestion. Unsurprisingly it’s won awards for Britain’s Best Pizza! Our must try is the Courgette, Blue & Baby Potatoes heritage pizza and Kimchi Florentina.

& Chill Gelato
& Chill Gelato provides a unique dessert experience with small-batch, indulgent gelato. It respects traditional methods while incorporating innovative, trending flavours and global inspirations. Every gelato uses seasonal, responsibly-sourced ingredients, highlighting a commitment to quality and creativity. The Umami Stout Caramel and Ube Gelato made from purple yam are well worth a sample.

Jupiter Burger
Jupiter Burger, Netil Market, was created by Dom’s Subs founders and offers a no-nonsense smash burger concept. It emphasises quality, locally-sourced ingredients from nearby butchers and features a trending and delicious potato bun. With a specialised, focused menu, it highlights classic flavours and prioritises substance over style in the smash burger trend.

Frizzante
Inspired by Italian agritourism, Frizzante uses fresh, seasonal, locally-sourced ingredients from adjacent farm gardens. Located next to Hackney City Farm, it offers a tranquil oasis in London. With a strong farm-to-table approach we tasted beautifully fresh baked breads, olives, Italian cured meats and Italian cheeses, and recommend stopping here to relax.

Third Culture Deli
This 100% plant-based café and deli offers Italian American classics with a twist, featuring made-in-house menu items, including signature drink syrups. Ingredients are sourced from local suppliers and reforestation projects. With an elevated day-to-night drink experience, we sampled a range of functional drinks including iced Palo Santo matcha and the floral Iced pandan coffee which was delicious.

Thank you to the Lumina Intelligence team for a fantastic and informative session, we ended the day feeling optimistic and excited for what the future holds for the eating out market, as well as inspired by the innovation that’s already coming through. Despite the challenges, hospitality industry is hungry and ambitious to succeed!

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Gemma Felstead
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