Bord Bia today published a report on the Irish foodservice sector at its annual industry seminar at the AVIVA stadium in Dublin. The foodservice market has grown from €6.13bn in 2014 to €6.37bn in 2015, and is forecasted to grow to almost €6.9bn by 2018. Foodservice or “out of home food market” is the term used to describe all food consumed out of home, from restaurants, hotels, coffee shops and bars to workplace catering, hospitals, education and vending. This market has benefited from the growth in the wider economy, rising confidence amongst Irish consumers, a strong international and domestic tourism market, a falling unemployment rate and the continuation of 9% VAT for hospitality.
Speaking at today’s seminar, Bord Bia’s foodservice specialist, Maureen Gahan said, “It’s encouraging to see that the sector is continuing to grow at an even faster rate than was forecast this time last year. Overall, Ireland is still viewed as a growth market for both domestic and international chain operators and opportunities exist for Irish food and drink suppliers that have the capacity to service them. It’s also worth noting that this growth is at a time when the retail market remains flat, and is largely driven by opportunities in the Fast Food and Food-to-Go channels”.
Quick Service Restaurants or Fast Food remains the largest Irish foodservice channel demonstrating how lower transaction spend is motivating consumer’s choice of venue. Bord Bia’s Quick Service and Food-to-Go Insights Report reveals that this segment (which relates to food that can be prepared and served very quickly incorporating traditional fast food outlets, fast casual and food-to-go operators, along with coffee shops and cafes) now accounts for close to 50% of the total foodservice market and is valued at just under €3bn. Some 280 Irish food suppliers and foodservice trade buyers gathered for Bord Bia’s largest foodservice seminar to date to hear speakers from McDonald’s Ireland, BWG Foods and Food-to-Go giants, Greggs UK speak about how these particular channels are driving their business and how they are adapting to changing consumer habits.
Consumer Survey Results
Commenting on the main consumer trends affecting quick service and fast food outlets, Ms Gahan stated, “Consumer culture is evolving, with new demands being placed on restaurant operators. Fast service, fair price and transparency are the three of the most important characteristics for diners, according to our survey”. Some of the key findings from an online survey with over 1,000 consumers include:
- 62% of Irish people believe it’s important to support restaurants that are supporting local operators.
- More than 1/2 of people are looking for menus using fresh ingredients when they are eating out. Ingredients related to artisan and craft menu items are gaining attention also.
- 48% of people frequently make special requests to customise menu items. Convenience and customisation are key factors that today’s Millennial generation are looking for when eating out and restaurants responding to these demands are winning market share.
- Nearly 6 in 10 (58%) Irish people claim being able to find premium coffee is important to them. An affordable luxury that has shown resilience through recessionary times, foodservice operators recognise that coffee can act as a major footfall driver and that getting the offer right is all important.
- Some 55% of those surveyed said food sourcing transparency is important when going out to eat. Transparency is still very much on trend and it covers everything from provenance of ingredients, food integrity and sustainable supply chains, to fresher and better quality food offerings and healthier options on the menu. Those aged 25 to 44 are most concerned with transparency when going out to eat.
Other report finsings include:
- “Better-for-you” positioned foods are viewed favourably by consumers. Better-for-you ingredients are growing in importance, as they provide a “health halo” for menu items that can help operators differentiate from the competition in a manner that is highly relevant to their customer base.
- The role that technology plays in how outlets interact with their customers cannot be underestimated and is changing the face of how they build loyalty programmes, to facilitate pre-order, cash-less transactions and re-defining take away with online delivery services such as Deliveroo and Just Eat.
- There is an ever growing crossover between the retail and foodservice markets as the market continues to grow for ‘Food-to-Go’ and its being driven by a consumer that is looking for speed, improved food quality and expanding offerings from major chains. Forecourt convenience operators recognise the importance of servicing today’s Transumer - the customer that is on the go and looking for dashboard dining options.
Fast Casual” sets the pace of growth
The Fast Casual channel in Ireland is forecast to grow at three times the rate of overall market growth, driven by more robust consumer spending, a high degree of interest in the menu variety offered by operators and the ability for consumers to customise menu items. “Fast Casual” is the term used to describe outlets that provide quick service and counter service, but with higher price points, more innovative offerings and an enhanced overall eating experience compared to traditional fast food and examples include Rockets by Eddie Rockets, Tolteca Mexican restaurants and Five Guys ‘Better Burgers’. Consumers are willing to pay somewhat higher price points in exchange for a higher quality and enhanced experience and food from fast casual operators is perceived to be healthier in general.
Building Business with Bord Bia
Bord Bia also published its 2015 Irish Foodservice Market Directory today, which includes detailed profiles of over 100 operators and wholesale distributors. It is aimed at providing companies with key background information on potential customers and advice on how to drive their food service business. Bord Bia’s Ireland Market Foodservice Programme will continue into next year, assisting suppliers develop relationships with food service distributors and operators. Bord Bia works closely with an average of 20 companies each year on its Irish Foodservice Supplier Development Programmes, delivering new foodservice business on the domestic market of circa €2 million annually.
About the Research
Bord Bia partnered with Technomic Inc. to develop the report. The process undertaken included a large range of in-depth interviews within the trade to reveal insights and an online survey with 1,000 consumers. Visit www.bordbia.ie/foodserviceseminar2015 to access the presentations.