Opinion and comment from Food and Drink leaders.
Simon was one of our first speakers at our popular Food Business Breakfast event. With a lifetime working within the foodservice & hospitality sector, Simon is able to bring his experience as an operator working with the likes of Hilton, Albert Roux, Pret a Manger and Compass, into the mix with 10 years of providing authoritative and definitive market intelligence with MCA Insight. This column was written in April 2020.
He can be contacted via his website: http://www.simonstenning.com/
One business highlight of the last year
- My most significant highlight from 2019 was the launch of ‘The Future of Foodservice 2030’ report, which was the first time that anyone had developed such an in-depth study of the key trends, macro-factors and drivers of change for the industry, including forecasting the growth levels for each segment/channel. For 2020, I am naturally re-writing this report to focus on ‘The Immediate Future’ as the next 12-18 months are more critical than looking further ahead.
Two biggest challenges for the foodservice industry over the next year
- Not re-opening from lockdown too early, and risking a second spike and further lockdowns, therefore taking time to ensure that restaurants and pubs are able to re-open safely for customers and staff, whilst still providing a hospitable environment and service. The business model for such operators is going to function differently, and those that haven’t worked this through carefully enough won’t survive. The property market for hospitality is also going to have to change, possibly returning on a turnover-based rent agreement, rather than a fixed rent amount. Operators and landlords who can’t agree on these new terms will struggle to survive.
- Positioning correctly on either side of the polarity scale between hospitality operators that provide expert, wonderful, friendly, professional service experience from Front of House staff, and those operators that use technology to reduce labour costs and deliver a simple, automated, semi-self-service experience that provides a refuelling experience. Tech is going to play a larger part in hospitality, especially given the need for lesser staff involvement, and beacon technology enabling ordering and paying from a table is the future, but this reduces the whole service experience, so consumers who want that will need to pay more for it. The days of cheap, full-service dining are over.
Three forecasts for hospitality/foodservice
- Consumers will continue to eat out, but the focus will switch to takeaway/Food To Go, rather than eat in. We will get back into our normal routines, back at work, albeit with less travelling, and so we will get back into consuming our fast food, coffees, bakery items; this means that operators such as McDonald’s, Greggs, Pret A Manger, Costa, Leon etc, will become more successful, especially if they can deliver value, which will become more important to a lot of consumers.
- With international travel struggling to get back to pre-covid levels, the domestic tourism and leisure sector will benefit significantly with a rise in staycations as consumers remain cautious about travelling; this means that coastal regions and those with historical connections or a focus on leisurely pursuits will benefit, and the hospitality industry attached to them will boom – Hotels, Caravan Parks, Guesthouses, Cafes and Pubs (albeit with strong safety measures in place)
- The long-term consumer trend of ‘Caring’ will become more important, not just for those in our society (looking after our ageing population for example), but significantly for the environment; whilst strong at the moment, the need for greater provenance and sustainability within the food that we eat will grow stronger. This will encourage & push hospitality operators to source products from more local providers, to look at more responsible growing/production methods, minimising the supply chain and reducing wastage. A focus on newer, indoor farming methods such as aquaponics, hydroponics and aeroponics will grow, whilst seaweed farming will also grow as an opportunity.