Lumina Intelligence’s food to go webinar: A future focus

As experienced PR professionals within foodservice, we make it our business to keep on top of all of the latest trends in the industry. We take every opportunity to attend webinars to find out what is impacting consumers, operators and brands. Last week we sat in on a webinar run by Katie Gallagher of Lumina Intelligence who shared some invaluable insights into the food to go market and what to expect from it in the coming years.

During the session Katie identified six key trends that are shaping food to go; growth expectations, nuanced healthier eating, digital innovation, partnerships, multiple formats and sustainability. Meanwhile the top three trends seen in food to go NPD are vegan, healthier eating and high protein (followed by Asian cuisine, indulgence, breakfast, gut health, immune system boosting and spicy).

Growth expectations

The session began with a brief outline of where the food to go market is, followed by Lumina’s expectations of market growth until 2027. Starting with a look at the key economic indicators, Katie reported that the economy is forecasted to return to a more normal historical level of growth by the end of 2024. Risks, however, to this outlook include interest rates and persistent inflation if low on employment continues to lead to higher wages. The recent announcement of the general election in July was also highlighted as one of the key factors adding to the uncertainty for the future of the UK.

Key factors currently impacting food to go include tourism and travel, which are set to see a boost this year following the pandemic and subsequent period of economic fallout. Employment rates are expected to remain at a record high, contributing to consumer demand for food on the go. Food to go specialist channels including sandwich bakery and coffee shops and contemporary fast foods are all expected to achieve the strongest percentage growth rates. All of these factors will contribute to see a total market value of ￡25 billion in the future.

Nuanced healthier eating

This is a trend expected to be at the centre of operator growth strategies across the next few years. It includes a focus on gut health, protein and nutrient-dense foods that will influence new product development in food and beverages in the marketplace.

?Recent pandemic-induced challenges have fuelled the growth of health awareness trends, prompting increased consumer mindfulness around dietary choices and government initiatives aimed at national health. According to Lumina’s eating and drinking out panel survey, 44% of food-to-go consumers consider themselves very health conscious, 2% above the general out-of-home audience.

Food to go giants Leon and Chipotle were used as prime examples of operators identifying that trend - and acting on it. Leon, for instance, has introduced a plant variety rating system this year which uses menu symbols to encourage consumers to top up their plant intake and guide them towards more diverse and nutrient-dense dishes.

Chipotle has done something very similar, launching a new menu featuring nourishing lifestyle bowls. Its aim is to make sustainable healthy habits more convenient for consumers, offering dishes that are compatible with a variety of lifestyles, including those that are vegan, vegetarian or flexitarian.

Functional health is also highlighted as a key factor and is becoming popular within the drinks category. Retail giant M&S, for example, has recently partnered with science based nutrition pioneers Zoe to launch a milk based gut health shot. This collaboration sees M&S at the forefront of gut health innovation, aligning itself with growing wellness trends. The retailer has also launched a range of good gut products including cereals, yoghurts and drinks. Yoghurts containing high levels of protein are a real focus for this year.

Digital innovation

Digital innovation aligned with artificial intelligence (AI) is predicted to help operators plan more effectively to mitigate staff shortages and drive operational efficiencies. AI is expected to impact the food-to-go market with front of house seeing an impact across social media, personalisation, self serve and payment, whilst back of house will see benefits around inventory predictions for staffing and utilising data.

Costa Coffee, for one, is using digitalisation to enhance its customer experience. It has opened its first site featuring touch screens to order and help streamline operations. Other features include a collection point for customers on the go as well as a mobile order to table feature. Subway is also looking to enhance its digital experience by introducing self order kiosks to its UK sites this year. This will modernise the brand, allowing it to compete with QSR giants such as McDonald’s, KFC and Burger King who have been rolling out touchpoint kiosks throughout their sites for the last few years.

Partnerships

Partnerships between brands and suppliers across FMCG and foodservice will explore limited-time offers to help boost engagement. Players are opting for partnerships with grocery players to boost distribution, locality and the availability for customers.

Greggs is just one example of those players and is expected to play a key role in sandwich and bakery channel growth, pushing forward with real ambitious growth plans, including new distribution centres and food innovation. It is also accelerating its partnership with Sainsburys, offering its first standalone cafe within a supermarket.

Multiple formats

Multiple formats will capitalise on investment in forecourts, railway stations and airports as operators leverage flexibility. Looking at outlet growth and expectations into 2027, outlet growth and channels including coffee shops, bakery and sandwich and travel segments are forecast to accelerate from now to 2027, versus the period of 2019 to 2024. Underpinning this will be investment in transport hubs, commuter belt towns and high streets offering opportunities for formats that are diversified from the classics we see such as kiosk-style operations.

Investment in transport hubs is expected to offer plentiful opportunities for food to go operators. According to Lumina, it will fuel projects including station and rail upgrades, new lines and stations. Food to go giants including Greggs and Caffe Nero have been prioritising openings in newly reinvigorated transport hubs. Greggs is also partnering with airport sites, opening a record site for the group at London Gatwick.

Sustainability

Sustainability is expected to be front of mind for operators when it comes to packaging and supply chain development. Operators are now prioritising sustainability initiatives, with continued government focus and legislation around food waste, single use plastics and packaging waste. According to Lumina, this is expected to ramp up over the next few years. Gail’s Bakery was used as a perfect example of an operator really levelling up on their sustainability credentials, using its three pronged approach to sustainability to have a positive impact on the environment, as well as its business.

Key takeouts from the webinar

●???? Market growth in food to go is expected to accelerate at 2.8%

●???? Food to go consumers are more health led, leading to nuance healthier eating. This is expected to continue to impact food and drink development over the next few years

●???? Digital innovation is allowing operators to cater to needs whilst also mitigate challenges around cost and staff shortages

●???? Partnerships are driving spend and premiumisation in the market through limited time offers and foodservice standard ranges in retail

●???? Operators are expanding with multiple formats, allowing them to capitalise on opportunities in travel hubs, with kiosk style operations and drive thru sites

●???? Sustainability is expected to be a business priority going forward from 2024

All in all, the webinar was inspiring, motivating and we have come away armed with valuable trends and insights. I’m so proud to be part of our incredible industry and I very much look forward to seeing what the future holds for foodservice, which according to this report, is a bright one.

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