Irish foodservice rebounds to pre-pandemic levels, but inflation hinders out of home eating
03 Nov 2022 --- Bord Bia’s 2022 Irish Foodservice Market Insights Report has revealed that eight in 10 (76%) Irish consumers say that they enjoy the social aspect of dining out now that COVID-19 health restrictions have been lifted. However, eight in 10 consumers (77%) are concerned about their finances, so many are changing their out-of-home consumption to reduce costs.
The report also identifies several growth opportunities for the foodservice sector in response to changing consumer behaviors. This includes the rise in popularity of eating out on Thursday evenings rather than Friday, lunch and early dinners replacing late-night eating and the return in demand for eating breakfast out of home.
The Irish foodservice industry has experienced significant growth of 61% in value to reach over €8.2 billion (US$7.9 billion) this year. This represents an almost complete recovery to pre-pandemic levels. Still, it is set against a modest growth of 11.6% in 2023, predicted to be fuelled mainly by cost inflation rather than consumer visits.
Economic headwinds remain in place
Maureen Gahan, a foodservice specialist at Bord Bia, says that the boom seen in 2022 has been a welcome return to growth for many companies. Still, most acknowledge that looking ahead to 2023, projections are perhaps just as challenging as they were at the height of the pandemic.
“Significant economic headwinds remain in place, including higher inflation, rising interest rates, global uncertainty and rising energy prices, all of which are likely to create consumer pull back and add to existing industry challenges.”
“Today’s report identifies several trends and key imperatives for Irish F&B suppliers to familiarize themselves with to ensure that their businesses remain relevant to industry needs moving into next year,” she outlines.
“There is no doubt that suppliers can play an important role in helping operators to navigate ongoing challenges facing the sector, and we would encourage them to work collaboratively in helping to identify future solutions.”
This could include creating labor-saving products, providing transparency around environmental and sustainability messages and enhancing communications around supply chain issues. The industry is also looking for suppliers to come to them with innovative menu offerings that can create consumer excitement and drive repeat visits, Gahan highlights.
Factors facing the foodservice sector
Bord Bia identified nine factors that the Irish foodservice sector and suppliers should consider as we move into 2023. These include rising energy prices, inflationary pressures, labor shortages, sustainability issues. Other issues include menu tension, where operators have mostly simplified their menus with limited innovation.
Cost of living impacts wider industry
Notably, the cost of living is rising, and inflation across the industry continues to bite.
As food inflation hits record highs across continents, consumers and companies should prepare for years of price fluctuations and unforeseen market disruptions, as reported previously by FoodIngredientsFirst.
Last month, Innova Market Insights crowned “Redefining Value” as its Top Trend for 2023, as consumers adapt to a global cost-of-living crisis in the face of economic and political volatility. With budgets stretched and supplies under strain, brands must be flexible and open to connecting more with consumers.
Over the last year, cost and value for money have become more critical to more than half of F&B consumers worldwide. Today’s shoppers are increasingly exploring money-saving strategies, such as choosing lower-cost items and cooking from scratch.
Despite political and economic volatility becoming the second biggest concern for consumers in 2022, the health of the planet remains the top global issue, and financial pressures are leading to an increase in eco-friendly behaviors.
Consumers revealed to Innova Market Insights they have reduced food waste and upcycled or recycled more as part of their belt-tightening. As the cost-of-living crisis continues, brands can achieve success by combining economic benefits with apparent health and sustainability goals.
At the start of the year, cost inflations were looming for food players such as Nestlé and FMCG giant Unilever.
With regards to out of home consumption, in April, it was reported that as COVID-19 accelerated demand for snacking, opportunities for innovation in an attempt to meet evolving consumer demands are seeing an uptick.
However, with costs rising and consumers shifting habits to save money, this trend could be reversed, and a decline in eating out of home because of inflation could be impending.
By Elizabeth Green
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