Planning for changing consumer demands

No one operating a catering or foodservice business will need reminding that 2019 has some challenges in prospect when it comes to business planning. However, with so much focus on the potential for Brexit to cause disruption, operators should also to bear in mind that there are some quite fundamental changes underway at the sharpest end of the supply chain – the customers who buy food and drink.

The newly-published Foodservice Management Market Report, published by trade body UK Hospitality, certainly sets out the challenges operators face on the input side of their businesses. The report’s survey of operators found that 73% are worried that Brexit will have a negative on food pricing and availability, and the same number are concerned about its impact on the labour market and their ability to fill vacancies. Half of companies said that the quantity of job applicants they receive per position has declined.

Overall, 82% of operators want the Government to support ways to improve the attractiveness of catering as a long-term career choice, and 64% want a more measured approach to National Living Wage increases. They also want to see greater Government encouragement for a UK-based food supply chain.

Key factors operators believe could hold back growth of their business over the year ahead are:

  • Tighter customer spending 64%
  • Rising food inflation 55%
  • Staff recruitment difficulties 45%
  • Difficulties in passing on price rises 36%
  • Staff skill shortages 27%
  • Sterling weakness 27%
  • Economic slowdown 27%
  • Client cut-backs 18%
  • Higher living/minimum wage costs 18%
  • Old / inefficient technology 9%

More importantly, though, the report shows that operators are facing, and responding to significant changes in consumer expectations, which have the potential to have far more of a long term impact on the sector than any disruption caused by Brexit. The key eating out trends identified by the survey are:

  • Street food 82%
  • Healthier eating 73%
  • Meat free eating 55%
  • Snacking and grazing 27%
  • Sugar reduction 18%
  • ‘Free from’ options 18%
  • International cuisine 18%
  • Growth in breakfast 9%

With many of these directly related to the overall consumer expectation that they will be offered healthier menu choices when eating out, the report found that there has already been significant business investment in health and nutrition, targeting reductions in the salt, sugar and fat content in dishes, as well as nutrition-based training for chefs.

In addition, every business in the survey offers vegetarian and vegan options, and 64% say they are reducing the number of meat options on the menu. This tallies with new consumer research for Mintel which shows that 34% of consumers have limited or reduced their meat consumption over the past year, rising to 40% amongst 25- to 34-year-olds.

Operators are not alone in working to deal with these challenges. Suppliers are certainly rising to the challenge. For example, it was reported at the end of November that an Italian bioengineering company has created a vegan ‘steak’ that mimics the texture of beef, which can be produced on a 3D printer using vegetable proteins such as rice, peas and seaweed.

It may be a while before that particular delight find its way on to menus, but as new products come onto the market, it’s more important than ever for operators to work in partnership with reliable suppliers who can meet these changing customer expectations. Whatever challenges 2019 and beyond has in store, Lynx Purchasing can help operators to review their menus, identify suppliers and help secure the best prices.

Changing menus also need to be carefully costed. To ensure that new dishes are  profitable, the Lynx Purchasing GP Calculator App, enables chefs, caterers and restaurant managers to monitor margins in busy kitchens or when negotiating with suppliers, using a smartphone or tablet. To download the FREE App, go to https://www.lynxpurchasing.co.uk/purchasing-expertise/gp-calculator-app/

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