Although sometimes it feels like all we do is talk about the long-term effects of the pandemic, it’s hard for us to really understate the obvious impact it has had on the foodservice industry.
While bars and restaurants still struggle to offer the ‘complete’ experience they used to because of a lack of staff, increased wage bills, inflation on raw ingredients, higher energy bills and increased rents, rapidly changing consumer expectations and behaviour also mean that how, when and where we eat is evolving.
Almost 50% of foodservice occasions are now not (I repeat, not) taking place on premises, according to Kantar.
This represents a noticeable – and pretty incredible – shift from out of home consumption to freshly prepared food anywhere we want to eat it, and delivery services are winning by offering consumers the ultimate convenience.
So, how much of the pie is delivery taking, what is happening with consumers, and what does the future look like?
The rise of delivery
After a long period of enforced isolation, it’s clear that consumers have become adept at using food delivery and collection services.
And that trend, which grew over the course of the pandemic, is only set to continue.
On one in three (31%) occasions we have food delivered to our homes, while 22% of the time we pick up takeaway ourselves, Kantar data shows.
In fact, meal delivery services have added new buyers everywhere in the world compared to 2020 levels.
We’re also seeing an upward trend in how frequently people are ordering delivered food – with an average of 16 purchases per year, or once every three weeks.
This is compared to parts of Asia such as South Korea and Thailand, where consumers are having meal delivery once per week on average.
As well as an increase in frequency, there is also a reported emergence of what is called ‘heavy meal delivery buyers’ (someone who buys delivered food once a week or more) across the world.
This cohort is growing worldwide, including by a massive 114% in Europe. Those driving the growth are typically – and somewhat unsurprisingly – between 25 and 34 years old, from urban areas and key cities, and from higher socioeconomic backgrounds.
So why is this rising so dramatically? Well, my first thought would of course be convenience.
And the Kantar data suggests that’s true – with 70% of heavy buyers citing this as their ‘demand moment’.
But the ability for food delivery to expand our horizons plays a key role too, with more than half (55%) saying that ordering in gives them the opportunity to sample different cuisines and try new flavours.
I think we can all attest that with a higher number of people working from home, the idea of closing our laptops at the kitchen table or home office (formerly known as the spare room!) and turning to cooking after a long day of conference calls is less than appealing.
Put plainly and simply, the leading reason to order in is good old-fashioned apathy.
A quarter of consumers say the leading reason to order in is quite frankly that they just “can’t be bothered to cook”. I get that – make mine a takeout treat Tikka on a Tuesday!
What we order is changing too
Think back five years (I know, challenging these days) and ordering in often looked like a Chinese or pizza on a Saturday night in front of the TV.
In fact, even only three years ago nearly a third (30%) of delivered meals included a pizza and a quarter (25%) were Asian meals. If you didn’t fancy a margherita or chow mein, heading out was your only option.
But since then, the growth of delivery services means what we can get our hands on has changed, and therefore the impetus to go out and eat has dropped.
Now the opportunity for more adventurous dishes like ramen, or Mexican at home means that you don’t have to leave the house for a tasty meal.
Platforms are making it easier, and cheaper
Using aggregators is an accepted and expected method of food ordering – and their market penetration for use has increased even against pandemic levels.
When it comes to the ‘why’ of their success, convenience wins again – with half of consumers stating it as a key deciding factor in why they use an aggregator.
But as the cost-of-living crisis bites and wallets tighten, aggregators are also winning in the war on price – with a third of respondents (34%) saying they use aggregators because of promotions.
Globally, half (50%) of meal delivery customers actively look for discounted items when using an aggregator to purchase orders. This includes discounted prices (50%), no delivery fees (45%) and multi-buy offers such as 2 for 1 deals (35%).
What does the future look like?
Looking back at the rapid evolution of foodservice in the last few years, it’s hard to predict with any certainty what is going to come next.
As working from home cements its presence in our lives, restaurant closures continue, and brands open what are essentially just kitchens for delivery across the world, it’s a safe bet to assume the use of delivery and collection will only continue to grow.
Our ever-busy lives, juggling work and family commitments, will also mean that our reliance on the convenience of ordering a freshly prepared food delivery will also mount.
And a cost-of-living crisis, where adventurous cooking at homes feels more expensive than ever, will probably increase our reliance on using aggregator promotions to enjoy rewarding dinners – whatever night of the week.
But whatever happens, on premises dining experiences are not gone forever.
Three quarters (75%) of even those ‘heavy buyers’ we talked about say that delivery services will never replace on premises dining.
Afterall, sometimes even all the convenience in the world can’t replace the joy, and tribal instinct, of coming together over food.
What is certain is that change is afoot. And I’ll be watching with interest to see what the foodservice industry delivers as a result.
What can retail learn from the evolving trends in the foodservice industry?
These changes don’t happen in isolation, and they have ripple effects on other sectors, like food retail.
So, the big question is, how can retail learn and futureproof against the changes taking place in foodservice?
Consumers put a price on convenience
Convenience can mean many things – time, quality, or price.
Regardless, customers are willing to put a price on something that fits their lifestyle. The likes of Hello Fresh, Gousto, Chef For Foodies are all immediacy offerings to help the customer get the convenience they need at a premium price.
By putting convenience at the top of decision-making processes, the retail sector can help ensure they are more consumer centric in their approach.
Consumers still actively shop for a deal
Not a new phenomenon, shopping for deals is a major part of the future for consumers.
But they’re also wary and informed – they know what a good deal really looks like, and they know when they think they’re being taken for a ride.
This is a trend that will keep growing throughout both retail and foodservice and finding new ways to innovate the world of deals is going to be imperative.
The old tricks aren’t as effective as they used to be!
Innovation, innovation, innovation
During COVID the rise of QR code ordering and the integration of innovative tech within foodservice created a space for a new way of doing things.
Businesses like EMenuNow and Yoello are growing and disrupting the space, and bricks and mortar retail need to explore how to integrate tech into their ecosystem to keep up with what is fast becoming a must-have with consumers.
While some of this change is generational, it’s often younger age groups who buy more, more often, so keeping up with (or ideally ahead of!) their progress is going to be essential.
The rise, and threat, of the pivot
No businesses is staying in their lane anymore, and innovative tech businesses are responding to consumer behaviour, not simply their own industry’s behaviour.
If they can solve a consumer need, and get there first, they won’t hold back.
For example, delivery apps like UberEats and Deliveroo are all branching out to provide and push the instant delivery of food into grocery, at cheaper prices (but still higher than walking to the supermarket – but convenience wins here again!).
Looking out of the retail industry for inspiration on how to improve will help retailers hold their ground and stop people trading away.
The foodservice industry has always been seen as stable and consistent, but the need to rethink during the pandemic has created significant innovation.
As such, retail should also adapt to the shifts too – especially when there are four generations in the market place with significant purchasing power.
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