More flexible menus and an increase of meal occasions from breakfast and all day brunch through to dinner has led to a €4.1bn increase in food service sales in 2017 to €335.9bn according to a new report launched today by IRI GIRA Foodservice. The UK food service market increased by 6.2% since 2015 to £58.2mn of sales in 2017.
One in five meals (18% of all meals) are consumed outside the home. IRI GIRA Foodservice believes that increasingly fluid families – in particular fewer families with children and more single parent or single occupant homes – and more people working away from home has led to greater demand for convenient meal solutions.
According to to Virginie Pernin, Chief Analyst at IRI GIRA Foodservice, “Restaurants and other food service outlets have capitalised on these trends by providing options for more meal occasions including breakfast and brunch. It is easier to eat out rather than buy food and cook at home. Food delivery services such as Deliveroo that provide easier ways to order, pay and deliver, are behind the boom in restaurant food at home.
Despite sales of ready meals and meal kits in supermarkets also catering to the trend for convenient ‘ready meal’ solutions – with sales in Europe* at €8.3bn in 2017- it seems many Europeans prefer their ‘eat out’ to be eaten in.”
IRI GIRA Foodservice predicts the number of commercial kitchens that are dedicated to food delivery through companies like Just Eat, UberEats, Amazon Restaurants and Deliveroo – which has just launched a global advertising campaign to showcase the breadth of food available on its service – will increase by 2020 with a particular focus on healthier and premium options.
Key findings in numbers for Europe:
- €335.9bn – value of European food service market in 2017, an increase of 2.5% per year on average since 2015.
- 48.5bn meals or snacks were sold in 2017, an increase of 1.5% since 2016, highlighting a return of consumer confidence across the region. IRI Gira Foodservice predicts this will increase to 50bn by 2020.
- Over 35% of sales in this sector are by big foodservice groups including the top five: McDonalds, Compass, Sodexo, Elior and Burger King.
- The Top 15 food service groups in this market generate 39% of turnover.
- Foodservice represents €111bn of food purchases – 70% of these are food with 30% being beverages.
Key findings in numbers for the UK:
- £58.2mn – value of UK food service market in 2017, an increase of 6.2% since 2015.
- £1.4mn – the amount added to the UK food service market in 2017.
- 12.3bn meals sold in 2017, an increase of 1.7% since 2017. IRI Gira Foodservice predicts this will increase to 12.5bn by 2020 in the UK.
Other key trends:
- Celebrity chefs drive increase in premium eating occasions.
- Healthy and sustainable eating out – Superfood, green and protein food trends lead to a rise in restaurants sourcing local and healthier food items for their menus. The emphasis is on the origin of the product and additive free.
- Consumers spend more when they order online or through an app. This provides an opportunity for restaurants to capture new customers using technology and packaging without compromising on food quality, which is often the route to increased margins in food service.
- Hot spots – restaurants that have branded themselves with clear and meaningful positioning appeal to consumers.
- Blurring of the boundaries between table service, self-service and quick service restaurants with some concepts offering a mixture of all services.
- Increased demand for ‘food to go’ in service stations and convenience stores.
“The food service sector is facing a challenging paradoxical environment, but the pace of change will intensify in the framework of dynamic, emerging players and evolving consumer needs,” added Virginie Pernin, Chief Analyst at IRI GIRA Foodservice.
“Digitalisation provides a huge opportunity for the food service sector as we have already seen with the success of disruptive new entrants like Just Eat and Deliveroo. Understanding and targeting customers according to their needs and at different times of the day and for different eating occasions is critical in this new world. Food marketers are becoming more mindful to the need to appeal to human emotions in order to sell new concepts or provide a surprising or personal experience.”