CGA’s CEO Phil Tate (pictured left) gave our Peach 2020 conference a whistlestop tour of eating and drinking-out, stopping at crucial food and drink market trends along the way. Here are ten of the biggest movements to watch as we move into 2020.
1 Business confidence nudges up
Our latest Business Confidence Survey shows two thirds (66%) of sectors are optimistic about the prospects of their business over the next 12 months. That figure is up slightly on the third quarter of the year (58%), but still well down on confidence levels before the EU Referendum of 2016, which suggests optimism is only gradually ebbing back. “We’re seeing a bit of a kick-up in confidence,” Phil Tate told 2020.
2 Consumers continue to go out to eat and drink
Business confidence should be boosted by news that consumers still love to eat and drink out-of-home. CGA’s BrandTrack survey indicates exactly half (50%) of consumers eat out at least weekly, and a third (32%) drink out at the same rate. Both numbers have held up well in recent years, despite pressures on spending and economic uncertainty. “There’s a perception that people are hiding away from Brexit at home, but that’s not the case,” Tate said.
3 Restaurants outperform pubs again
CGA’s Coffer Peach Business Tracker reveals that leading managed pub and restaurants grew their like-for-like sales by 1.7% in the 12 months to October—a touch below the UK’s inflation rate. Pubs outperformed restaurants in the Tracker throughout 2018 and the first half of 2019, but that trend has flipped since July. Restaurant groups saw like-for-likes rise 2.0% in October, topping pub groups at 1.5%.
4 Huge churn in casual dining
The CGA AlixPartners Market Growth Monitor shows there have been 2,423 restaurant closures in the last 12 months, and 1,789 new openings. In the 20 British cities with the most licensed premises, nine in ten openings are on ‘churn sites’—restaurants that closed but were promptly reopened by other brands or independents. “It shows the challenges and the sector and the new competition coming in,” said Phil Tate.
5 Small groups trump bigger ones
What growth there is in the market is being driven by small and medium sized operators. CGA’s Outlet Index has recorded a 6% outlet increase from managed groups with fewer than 25 sites, and a 3% rise from groups with between 25 and 99. But for 100+ estates, the going has been much heavier, with numbers down 6%. That reflects restaurant a string of restaurant closures from several big brands, as well as the collapse of Jamie’s Italian.
6 Third space upends conventions
Conventional pubs, bars and restaurants are increasingly challenged by fresh takes on the eating and drinking-out formula, like pop-ups, street food, market halls and game-based venues. Half (49%) of consumers have visited a third space food or drink activation in the last six months, BrandTrack shows—and since these people tend to over-index on eating and drinking out-of-home, it’s a crucial market to play for. With such variety on offer, it’s no surprise to see that consumers’ brand loyalty is waning and their expectations are soaring. “There’s never been so much quality and choice… the consumer has never had it so good.”
7 Venues flex the offer
Rising costs and pressure on margins mean pubs, bars and restaurants need to get cash through the till round the clock now. Leaders in this fast-growing all-day space include Loungers, which evolves its offer right through from morning coffee to late-night cocktails. Serata Hall on Old Street, a venue that combines hot desking with restaurant and bar operations, is another example of how venues can flex over the dayparts—as is Greenwich’s Mama Fuego, which rolls a coffeeshop, bakery, riverside garden, barbecue, gin distillery and tap room into one compelling all-day destination.
8 Frontline teams make the difference
Speakers at Peach 2020 were in no doubt about the most crucial component of success: people. Four in five (83%) leaders think service is a key driver of consumers’ choice, making it even more important than value for money. Nearly as many (76%) say developing staff is their top priority as they build brand values and purpose. “Service is becoming a key differentiator… it’s all about the people on the frontline,” Tate said.
9 The health kick goes on
Healthier lifestyles and a greater awareness of sustainability are twin trends that are changing consumers’ attitudes to brands and eating and drinking-out. The big challenge is to respond with an offer that caters to these people, alongside the fast-growing number of vegans and vegetarians—but without alienating those for whom health isn’t such a big concern.
10 Consumers chase the new and the different
As Tate pointed out at 2020: “People want everything now—it’s moon on a stick time.” For many, that translates into a thirst for new and exciting flavours, and a desire to be among the early waves of adopters. CGA’s Food Trends report highlights Asian cuisines like Burmese, Filipino and Sri Lankan as some of the next big things, while in drinks hard seltzers could be about to take off in the UK. But operators need to make smart judgments on which trends will last and which are passing fads—and as ever, getting the range right will be crucial.
CGA’s Peach 2020 Conference was supported by platinum partners Asahi, Bookatable by Michelin, Caterer.com, Coca-Cola European Partners, Coffer Corporate Leisure, CPL Online, Diageo, Fourth, Groupon, Omnivore and Zonal. Network partners were Casual Dining, Chapman Ventilation, Fishbowl, Freeths, Garden Gourmet, Majestic Commercial, Reynolds, RSM, Shield Safety Group, and Yumpingo.