As the leading foodservice marketing agency we were lucky enough to be invited along to the ‘invitation only’ Annual Horizons Briefing, at the world’s largest firm of lawyers, Dentons. As ever the great and the good of the foodservice world gathered to hear what Horizons FS had to say on the state of the ‘out of home’ nation. The day kicked off as usual with a confidential talk from a leading economist on the wider macro setting which of course influences the foodservice market. Then it was on to the specifics of the out of home market. There was as ever a huge amount of information to digest from Peter and his team, not to mention the pearls of wisdom from M Restaurants, GBK and Dentons, as part of the panel discussion and Q&A session, but here are my top ten takeouts from the day…
1) The foodservice market (based on food and beverage sales) rose to around £47.9bil in 2015 and is growing at around 2%, taking us back to similar levels seen in 2008 – an expanding market at a slower rate of growth. But there are, as Horizons put it ‘stones in the road’ to bear in mind such as the slowdown in the economy, consumers becoming more cautious, Brexit, national living wage, rising rents and business rates and even England’s future football performance! However, the long term forecast is positive with 2020 set to see the market hit £56.1bn
2) QSR, Hotels and Pubs (and education) are doing well with strong growth, whilst staff catering, healthcare and services are in decline. Food and drink sales in QSR, restaurants and hotels are forecast to grow in 2016. As for overall winners and losers, on the winning side are pizza and pasta restaurants, pub restaurants, coffee shops, sandwich shops and of all things, holiday camps (!), whilst the losers (lowest performers) are tenanted and leased pubs, airlines, off shore, fish & chips / kebab shops and traditional cafes.
3) The smaller casual dining chains are driving innovation in the market with ones to watch like Creams, Turtle Bay and Filmore & Union.
4) Discounting and vouchers are still around but operators are far more savvy, using more sophisticated techniques to drive brand loyalty via online marketing or brand apps and clever vouchering to drive traffic in downtime or to upsell around occasions.
5) After some dips, eating out penetration is back to 72% where it was back in June 2012. Burgers remain no.1 on menus, whilst healthier food to go is also on the rise demonstrating how consumers want to be good but only sometimes!
6) New twists on old favourites are coming through on menus, such as Lobster mac ‘n’ cheese, arctic roll, toasties and even popping candy. Whilst Wagyu beef, cholla buns and chilli jam fillings along with wellbeing superfoods and gluten free options seem to be cropping up more and more.
7) The trend seems to be for acquisition, whether it’s Sysco buying up Brakes or larger high street brands to buy up the smaller ones. However, bucking the trend and still independent are ‘bubbling under brands’ like Shoryu Ramen, Almost Famous Burgers, Tootoomoo, Snowflake Luxury Gelato and M Restaurants.
8) As far as operator trends go, coffee shops, Mexican fast casual, Italian casual dining, sandwich bars, healthy quick service and juice bars seem to be doing well. London is still key but other large conurbations offer eating out ‘hot spots’.
9) The restaurant market could learn a thing or two from the airlines when it comes to things like being able to choose your table prior to dining and re-marketing online to traffic that has visited their site and then shops around online. Whilst with the rise of the likes of Deliveroo, restaurants need to make dining-in attractive to drive bookings by offering a real experience, differentiating it from the delivered option whilst still benefiting from the incremental sales ‘delivery’ can offer.
10) Finally a word of wisdom on menu innovation from a very experienced operator – simply put…try stuff and see if it sells – sounds fair enough to me!
So in summary for 2016, as Peter Backman puts it, ‘There are lots of opportunities, but also plenty to stumble on!’