Rock and roll music, if you like it, if you feel it, you can’t help but move to it.” Elvis Presley’s famous lines may have gone down in history, but today they have a new resonance when “eating out is the new rock and roll” and the foodservice sector in 2017 is expected to be worth almost £90 billion.
That’s according to analyst Giles Smith, of foodservice insight firm MCA, who says: “Over 90 per cent of consumers eat out regularly. There is a lot of opportunity there and a lot of money being spent.”
But while the overall picture is one of ongoing growth, there are some important changes taking place as newer brands gather momentum, and others fall by the wayside. Favourite cuisines are also changing, with consumers favouring newer flavours from south-east Asia, and a fresh focus on health and veg-centric cooking.
Trends aside, one of the most important factors influencing menus, chefs, and their suppliers is cost.
The retail price war has so far dominated any debate about cost rises and inflation, but foodservice suppliers are facing the same challenges and the restaurant sector is equally, if not more, competitive than the supermarkets.
Until this year, inflation in overhead costs and produce prices had been swallowed within the chain to protect the consumer. But the first part of 2017 saw restaurant bills start to rise, says Smith. “Spend is going up in general, not because consumers want to spend more, but because prices are going up due to inflation,” he explains.
“But price hikes aren’t the only response to inflation – chefs are also starting to value engineer the plate. This is when you put together a plate looking at portion size and coverage. They might also use cheaper alternatives, such as using lower-quality potatoes or less protein.”
For foodservice suppliers, it may be welcome news to hear that customers are prepared to shift cost down the chain, but it won’t be enough to ensure ongoing growth. Smith says: “Mega trends that we’re seeing include health, indulgence, informality and value. The all-you-can-eat trend has peaked, and there is a demand for more authentic cuisine.
“Operators must pay more attention to harnessing trends, menu engineering and value perception. We expect them to keep innovating.”
This year’s predicted growth of 1.7 per cent in the foodservice market is a slight reduction on previous years, caused but the uncertainty around Brexit and the general election damaging consumer confidence, and subsequently, spend.
Within the sector, established brands such as Subway, McDonald’s and Pizza Express are seeing growth rates decline, making way for a raft of colourful new entrants such as Itsu, Franco Manca, Pho and Giggling Squid.
These branded contemporary fast food chains, as they’re known, is where the money is being made. “They are much healthier and include more fresh produce, they’re vibrant and they’re making lots of money,” adds Smith. At the other end of the scale, those that are suffering most are the family-run independents, he continues, such as Italians and Indians.
While some eating concepts are turning to street food due to a lack of bricks and mortar sites in city centres, others are turning to regional expansion and the appeal of lower rates in cities with equally buoyant foodie scenes, such as Brighton, Bristol, Glasgow and Manchester.
As costs continue to rise, keeping abreast of fast-paced trends and changes in foodservice will decide who will keep up with the winners, and who won’t.
No comments yet