New research shows that the food-to-go market in the UK suffered a 45.5% decline in 2020, as the pandemic severely reduced travel and movement. However, with restrictions now easing, the Lumina Intelligence UK Food To Go Market Report forecasts growth of 31.6% to £15.3bn in 2021, representing 72% of its 2019 value, before wider recovery and growth will see the channel reaching a value of £22.6bn in 2024.
The study suggests less restriction exposed and low-ticket channels are best placed for recovery with convenience store and supermarket grab-and-go, sandwich & bakery, and travel all expected to recover more swiftly, to over 74% of their pre-pandemic value in 2021.
Lumina Intelligence expects some of the shorter-term challenges for the sector to evolve into longer-term opportunities, spearheaded by shifts in the way that consumers interact with food to go:
Outdoor socialising
In the next few months as social restrictions ease, food-to-go is well placed to capitalise on the outdoor socialising occasion. 21% of consumers say they are likely to purchase food-to-go and eat it in a park in the future and this figure rises to 38% for 18-24’s.
Operators including Pizza Pilgrim’s, German Doner Kebab and Megan’s Restaurants have already begun to develop propositions that offer portable and picnic-style meal solutions.
Hybrid working patterns
34% of consumers are planning to work from home in the future, with over half of this proportion bullish in their preference for a high proportion of their workdays to be spent at home.
Food to ‘go home’ is a particular focus, with operators including Costa, Pret A Manger and Marks & Spencer already targeting this occasion with new products featuring clear heat-at-home instructions.
The coffee opportunity
Coffee has dominated food-to-go drinks occasions lately, enjoying a 50% share of total drinks consumed over the last four months. Reflecting the increase in socialising in outdoor spaces, younger consumers are the most active on coffee walks, with almost 1 in 4 having picked up the habit of purchasing a hot drink-to-go when on a walk with a friend since March 2020.
Meanwhile, the report suggests that the top 10 food-to-go channels can look forward to a £1.1bn sales opportunity between 2022 and 2024, with sandwich & bakery and coffee shop/café segments poised to lead in absolute terms; underpinned by physical outlet growth, a core focus on takeaway/to-go and continued consumer aligned new product development.
Convenience store grab & go remains the largest food-to-go sub-channel but its contribution to growth is expected to fall as it comes under increased pressure to compete with dedicated food-to-go specialists.
Katherine Prowse, Insight Manager at Lumina Intelligence, said: “The sudden shift from a highly transient, on-the-go society, to one with restrictions placed on movement had a significant negative impact on the UK food-to-go market in 2020, with much trade diverted to other routes to market such as delivery. However, buoyed by the easing of restrictions and the swift vaccine rollout, we will see a resurgence of the market in 2021, before a full recovery to pre-pandemic sales levels by 2024.”
She added: “Retail-led food-to-go channels that are less exposed to tight restrictions and offer low-ticket solutions are best placed to recover quicker. However, operators and retailers will be forced to adapt. The continuation of home and hybrid work patterns for many and the rise in outdoor socialising will result in changes to the ways in which consumers will interact with food-to-go. Portable food-to-go solutions will strike appeal with consumers meeting friends/family in parks, whereas a shift in focus on food to ‘go home’, will provide a relevant solution to those home working.”
NAM Implications:
- Worth taking these predictions ‘as read’…
- …and conducting what-ifs in terms of how they affect your categories.
- (Probably more productive than attempting to second guess the decimal points…?)
