Alison Ryan, London Office, Bord Bia – the Irish Food Board
Last week, MCA and Bord Bia ran a webinar on MCA’s Food To Go (FTG) Market report. This second webinar in the series focused on why the FTG market offered opportunities for suppliers, who the operators are that are capturing market space through innovation and what consumer are looking for from a FTG offering.
FTG is currently the jewel in the crown of the Foodservice channel, outperforming the total eating out market by 3% and is set to be worth £21.2bn in 2019. Within the sector the Retail FTG channel, which includes coffee shops, sandwiches shops & bakeries, supermarket grab & go and c-store grab & go, is driving the growth.
The sector is performing well due to its low average spend, £6.84 versus the total eating market at £15.60, which gives it more room to grow in comparison with the total eating out market.
Further factors which are driving the success of the sector are a growth in employment rates in the UK, a higher demand from consumers for convenience, a greater focus on health and well-being and longer commutes and working hours. These factors are leading to a greater demand for healthy FTG option that facilitate consumers’ in their increasingly busy lives.
The operators therefore, who are adapting their business to caterer to these consumer needs are succeeding in the sector. These adaptations include faster service, longer opening hours, more hot food options, efficient use of promotions, effective use of NPD and better menu price management.
Branded contemporary fast food is the fastest growing FTG segment, while c-stores grab & go is the largest by turnover. Some of the leading operators in the FTG market are Tesco, McDonald’s, Subway, Sainsbury’s, Greggs, M&S, Co-op, KFC, Costa and Waitrose.
Greggs has performed particularly well over the past 12-months. This is thanks to a revised offering, which includes more healthy eating options, and the very successful launch of their vegan sausage roll in January.
Pret continues to perform well in the market. It recently launched the biggest overall of its menu, with the new offering including an increased number of vegan and vegetarian options, highlighting their desire to cater to the healthy eating demands of consumers. They also recently acquired their competitor Eat, and have announced plans to convert all Eat sites into their Veggie Pret concept.
The past 12-months has seen a drive towards diversity and diversification in FTG. A key example of this is in supermarket grab & go and c-store grab and go. Operators are increasing their hot food offerings and are frequently partnering with casual dining chains to set up concession stands in store, offering consumers a wide range of options. Sainsbury’s is leading the charge in this category with their Food Market, which offers a range of FTG and food for later options to their consumers.
Lunch is the leading day part in the FTG sector, accounting for 23.7% of the foodservice to-go market. However, breakfast is continuing to encroach on this market share, and now accounts for 19.5% of the market. The breakfast day part has experienced a 6% increase in frequency in the FTG market, and a 5% increase in average spend. This is in comparison with lunch, with has only seen a 1% increase in frequency and a 3% increase in average spend. Coffee shops and fast food channels are leading the growth in the breakfast day part.
FTG missions tend to be work-led, rather than social occasions or treats, which are driving missions in the overall foodservice channel. However, consumers are not willing to compromise on taste or quality. Healthily food options are also increasingly important for consumers.
The demographics of the FTG consumers is diverse. Age groups such as 25-34 year olds and 35-49 year olds account for a combined 60% of the market. 18-24 year olds account for 17.2% of the market, but this represents a 2.3% decrease from the previous 12-months, signalling a decrease of importance of this demographic within the sector.
High earning consumers are increasing their market share in the FTG sector. Consumer who earn over £60k, represented 15.6% of the market in 2018, up from 12.6% in 2015. This highlights an opportunity for operators to offer high quality and premium FTG options to this demographic.
FTG is more prevalent in cities, with London accounting for the largest share of the market in comparison to other cities in the country. However, this market share is decreasing slightly, from 22.6% in 2015 to 21.1%. This indicates an opportunity to drive FTG growth in areas outside of London.
Overall, the FTG sector in the UK offers a myriad of opportunities for suppliers. The sector is outperforming the rest of the eating out market, as it is meeting consumers’ needs. Concepts that offer quality and convenience are those that are winning in the sector. Breakfast is increasingly its market share, indicating that opportunities exist here. Operators that cater to the needs of busy consumer, who are looking for high quality and healthy options, are the ones that will succeed in this space.
Source: MCA Food To Go Market Report 2019