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Report Predicts Irish Foodservice Market Down €4 Billion

Market recovery forecast for 2021, even in worst case scenario

Date: 11/11/2020

According to Bord Bia’s 2020 Irish Foodservice Market Insights Report, the value of the Irish foodservice (or out of home industry) for 2020 is estimated to be €4.5 billion, representing a drop of 47% against 2019 figures. After eight years of consecutive growth, the report shows that the industry is expected to lose over €4 billion in consumer spending in 2020. However, it predicts that, even in a worst-case scenario, there will be some bounce back in terms of market recovery in 2021.

Acknowledging the hugely challenging environment that the industry has faced over the past seven months and the ongoing uncertainties as we head into 2021, the report looks to forecast what the future will hold for all involved in foodservice in Ireland.  It also outlines key trends that foodservice operators and food suppliers should consider in order to ensure that their businesses remain relevant.

Maureen Gahan, Foodservice Specialist, Bord Bia said, “The performance of the foodservice industry is intrinsically linked to economic conditions, tourism and employment – all of which will continue to be challenged in 2021. The changing landscape will have a long-term impact on revenue and profitability - everything from the drive from consumers for keener value pricing, to the shift away from city centre and high street locations to the challenge of recruiting and training new staff.

We are predicting a bounceback in 2021 and have outlined three different scenarios within our report as to how this might play out.  In a best-case scenario, the market could see an uplift of as much as 41%, however in a worst-case situation, we’re suggesting that growth on 2020 figures will be circa 16%. In order to prepare for market improvements, we have outlined a number of considerations for foodservice providers and food producers in order to best position their business for recovery and growth.”

Considerations for Foodservice Operators:
  1. New Restaurant Layouts - As part of a shift in how foodservice operators can make money, a significant driver will be changes in the operational footprint/layout of restaurants across all sectors. Flexible indoor seating, additional outdoor seating and modular kitchens are just some of the corresponding front and back of house impacts.
  2. Safety & Sanitation Will Be Front and Centre- Safety and sanitation will continue to be a critical part of the operator emphasis during and post-COVID. Ensuring that consumers feel safe and that the facility has been properly sanitised is, according to many operators, the most important thing they can be doing from a brand positioning perspective.
  3. Off-Premise Acceleration the pandemic has shown that having alternatives and contingencies available to shift to off-premise for all will be critical to future success. 2021 will see continued growth in Take-away, Click n Collect, Drive Thru and Home Delivery.
  4. Reinvention of the Business Model - the restaurant and broader foodservice industry will need to re-look at the business model and may need to re-invent parts of the business. This will include everything from delivery-only kitchens to restaurants selling grocery items, to a growth in meal delivery kits.
  5. Supply Chain “Bumpiness” - Until the industry is on an established growth trajectory with little concern for additional lockdowns, there will be challenges in maintaining proper inventory.
Considerations for Food Producers:

  1. Reassess portfolio: operators and distributors are generally pairing back items carried, so it is a good time for suppliers to review product lines in terms of long-term profitability.
  2. Focus on critical targets: suppliers should invest in high priority customers for long-term success and look to support distributors as appropriate.
  3. Reset customer knowledge base:  suppliers should take time to understand the new attitudes and behaviours of customers and understand how the disruption in 2020 has changed their outlook on issues such as sustainability, health and wellness etc.
  4. Prepare for a rejuvenated industry – suppliers should remember that a healthy bounceback will come in time and prepare accordingly. This includes assessing how foodservice will continue to blur with other channels such as retail, forecourt convenience etc.

Tara McCarthy, CEO, Bord Bia said “Although 2020 has been a tough time for so many, we have also seen some amazing examples of resilience in the face of adversity. If you look at those participating on the panel at this year’s seminar, we have a restaurant chain driving increased sales through off premises activity and ‘cloud’ kitchens; a city centre based salad bar business partnering with a suburban coffee shop to reach customers that are working from home and a handmade dessert producer that has developed a direct-to-consumer channel. These are just some examples of the grit and determination that the Irish food and drink industry continues to display and ultimately a testament to those that rise to ongoing challenges day in, day out.”

Foodservice Seminar

The findings of the report will be shared with almost 500 delegates at Bord Bia’s Virtual Foodservice Seminar broadcasting live from the RDS, Dublin today. The annual event which discusses emerging trends in the sector will be chaired by business journalist, Richard Curran.

Keynote speaker at this year’s seminar is Professor Stéphane Garelli, presenting on the topic of “From Breakdown to Breakthrough – Thriving in a New World”. Professor Garelli is the founder of the World Competitiveness Center and a former Managing Director of the World Economic Forum. He is a Professor Emeritus at the University of Lausanne and at IMD, one of the world’s leading business schools, where he continues to teach.

A panel discussion sharing Lessons on Resilience will feature contributions from Jack Kirwan, Sprout & Co.; Robert Bullock, Le Patissier; Edel Kinane, Just Eat and Caoimhe O’Reilly, Camile Thai. The panel will share their own stories about how they have succeeded in turning Disruption to Advantage in 2020 and also revisit Health & Wellness and Sustainability themes, examining what affect Covid 19 has had on these consumer drivers when it comes to eating out of home.

For more information on the 2020 Foodservice Seminar and to download the full report, click the link below.