Trends in the foodservice Marketplace
Taking inspiration from our current foodservice trends 2021 book, released early January (free download here: www.coverpoint.co.uk), we take a look at the spaces, places and environment (online and offline) in which foodservice operators interact with their customers. Here’s looking at you - landlords, asset managers and developers – this is the new expectation from your tenants and their customers…..
In this year’s trends book, we look at the foodservice business environment (let’s call it the ‘marketplace’), in terms of Experience, Functionality and Design. When we considered the trend, it felt natural to split it this way but, as always with these things, they fit together and blend into each other, rather like a massive trend omelette! These sub trends create a marketplace that is changing rapidly in the wake of Covid-19, recessions and people’s desire to ‘get back out there’.
What’s that coming over the hill – is it a monster?? Nope, it’s experiential foodservice. ‘What?’, you cry, ‘this isn’t new, this is old news’. Well, it is but also it isn’t. As far back as the beginning of 2018 (remember them days?), we predicted that the ‘Experience Economy’ was going to be huge with two main segments, we nattily named ‘Dinertainment’ and ‘Snobbmodities’ taking centre stage. Dinertainment was all about social dining with entertainment thrown in; competitive socialising etc. This really worked and was huge until Covid-19 hit. Snobmoddities was all about a bit of luxury, tied in with social media presence and the need to be seen. This was also very accurate, with the rise of the middle classes and increase in social media use and accessibility. So, what is different now?
I would answer that there are three huge changes that have occurred:
The world hasn’t just spent a year in lockdown not to get out and party like it’s 1999, when it all eases. According to Eventbrite, 7 out of 10 millennials experience FOMO (Fear of missing out), whilst 80% of festival goers will be attending an event within six months*.
The world just spent the year in lockdown reassessing what life is all about, concluding that it’s for living. Family, friends and good cheer are the most important things. A survey by McKinsey has shown that the top three things Europeans are most looking forward to are a) getting together with friends, b) getting together with family, c) Dining indoors at a restaurant bar.
The world has also spent the year in lockdown getting to grips with zoom, social media and all the apps. Yep, even my 75 year old mum. The transformation that was projected to take years happened in just months. Forecasts for total U.S. online food delivery are $45 billion in 2020, reaching 13% of the addressable market this year and 16% by 2022.
What does all this mean?
The online marketplace is now more important than ever. Know your customers and what they want. 50% of customers will stop visiting a website if they don’t like it, even if they like the business. Almost everyone now visits online spaces and there is no reason to doubt that this will continue once we can interact physically again. The places and spaces that will succeed will be the ones who have the best social media, the best website experience, showing people that they are worth a physical visit. Yes, this was the case before but not as widely spread or as prevalent. It’s no longer a ‘young person’ thing.
I know experience in foodservice has been around for many years, however, it is now essential in every single aspect of the marketplace, online, physical and in all locations. It’s not just relevant to the large regional shopping centres, city centres or resort hotels, its about every single level of foodservice in every environment. When people finally come back, make sure it’s you they come to…
This leads us nicely into the next forkful of the marketplace omelette: Functionality. The previously rather obvious line between functionality and experience has now blurred somewhat and the expectation of the customer has increased. They expect everything to be easy, contactless and without queues. If you don’t achieve it, someone else will.
The previous point 3 is also very relevant here. In order to move forward or even survive last year, operators had to evolve their offer (more on this next week when I discuss supply) but it still needed to be accessible and easily used by the customers it was aimed at. It had to function correctly. In many situations, this meant that the operator had to move the marketplace to the customer as their movements were limited. People are working from home with 46% saying they would like to continue after the pandemic**. The same percent of people across Europe apparently intend to shop more locally. All this adds up to a segmenting of the foodservice marketplace with footfall more spread out into suburban areas and smaller, local areas. The customers’ hunger for local may have been forced on them, but it feels good and it will be a factor going forward.
All this talk of function and experience has already built the case for the change in design of the foodservice physical space. Add in expectations of delivery, cleanliness, more space in foodservice units, the increased appreciation of the environment with external terraces and greenery and you have a whole new set of design standards and benchmarks. I have a feeling that the physical space is going to become more competitive with customers focusing in on the experiential and functional and expecting everything just as you promised….
For lots more great ‘In Practice’ examples and an all-round a jolly good read, please really do download our trends book (www.coverpoint.co.uk). Over the next weeks I will also be tackling the other sections of the foodservice trends wheel, namely Supply and Consumer – watch this space.
* Festicket survey ** Forbes