Reynold’s recently attended Lumia Intelligence’s “Q3 Food Strategy Forum.” We had access to comprehensive market information through detailed reports and a food study tour. Here are our highlights of the day!
The Eating Out Market in 2022
Source: Lumina Intelligence 2022
Consumer confidence is at its lowest point; the many factors contributing to the loss in confidence include the war in Ukraine, record-high inflation, and the increasing cost of living. According to Lumina Intelligence (2022), consumers visiting restaurants had fallen by 6% midway through the year, averaging 1.4 visits a week and spending £10.73 per transaction.
Despite the declining number of consumers visiting restaurants, Lumina Intelligence reports that KFC has seen an increase in their visits by 0.7% ppt. There has been a trend of consumers going to lower ticket options such as retail or QSR – consumers are prioritising value and convenience.
Consumers are becoming more price-conscious, and value for money has become increasingly important. In fact, according to Lumina Intelligence reports, “Good value for money” is the third most popular reason people visit coffee and sandwich shops, with 21% of people agreeing.
Of course, operators are cautious about raising menu prices. So, what are some ways to navigate the current market?
Premiumisation is trending – Lumina Intelligence statistics show that 41% of customers are value-conscious, and 23% are experience-driven. Again, it’s the idea of a treat. A modest-priced main meal with a premium side of customised, topped chips or regular latte paired with an indulgent, rich, chocolate-covered raspberry doughnut can increase average spending per transaction despite the decrease in footfall. On average, the cost of main dishes has decreased by 1%, and sides have increased by 6%. Nevertheless, consumers are happy to spend more on sides as the main is “cheaper.”
With the upcoming colder months and holiday season, seasonal campaigns might aid with premiumisation. Coffee shops are a great example. Pumpkin spice lattes are a hit every Autumn. Created in 2003 by Starbucks, it continues to be a top-selling drink. Forbes estimated the drink bought in around $100 million over a single season. From a marketing perspective, limited/seasonal items work well by creating FOMO.
The impending global recession has hit the food industry hard, with an overwhelming 77% of restaurants and owners finding the market “challenging” (Lumina Intelligence, 2022).
Food Study Tour
After the insightful presentation, we travelled to Angel, London, to tour some of the up-and-coming restaurants. The tour was fascinating as we explored a variety of cuisines, flavours and business ethos’.
Our first stop was Sessions – a food hall-style restaurant serving street food from all over the world. The vendors change every six months, which is an exciting new take on a menu refresh! Many elements at Sessions were refreshing, such as their promotion of diverse foods, the digitalisation of their table service, the open plan layout, and the kitchen, as well as their décor, really stood out. Diversification of food has become increasingly important as cities become more cosmopolitan.
Up next was Kipferl, a small and sweet Austrian restaurant. Kipferl, named after the Austrian sweet, has this wonderful focus on authenticity. Entering the venue felt like you were transported on holiday, setting the scene for their large range of Austrian food, snacks, and beverages. They claim they mostly attract other Austrians, which recalls the idea of a slice of home, away. To balance authenticity with profitability, Kipferal source locally, as well as imports Austrian wines so endemic to their region that they “cannot even be found in the supermarkets”.
Another great food adventure was OmNom, a vegan restaurant that provides “efficient energy consumption” via their venue. Energy consumption in OmNom combines the ideas of increasing vegetable intake, ethical food consumption, mindfulness, and balancing being healthy and indulgent – this is no easy feat, so how does OmNom deliver this? OmNom is all vegan and, as such, follows the philosophy that veganism is more energy efficient for the body and the world as it causes less waste, among other advantages. They also have a yoga studio above the dining area to encourage consumers to practice mindfulness and exercise. It’s an exciting concept but what’s more exciting was the food. Even the pictures look delicious. Despite no meat being served, it certainly was not missed as they serve meat-free substitutes. Every dish was incredible, bursting with rich, mouth-watering flavours.
Our last destination was a fabulous restaurant called Noci, a restaurant serving delicious dishes inspired by the chef’s journey through Italy. There was a real focus on recreating regional dishes. Noci provided lots of fresh and rich flavours to end our food tour. Noci, like OmNom, also commits to sustainable practices. Behind the scenes, there is a KPI tracking machine that will project the meal forecast for the next week, so food is prepared accordingly, ultimately, reducing food waste.
It was wonderful to see so many different cuisines and operations in Angel. Seeing, first-hand, these innovative businesses and hearing their stories were super inspiring. Also, understanding what food trends are dominating the London scene was also fun and very insightful. We can’t wait to visit these restaurants again soon!