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A healthy future for Foodservice?

How Foodservice is responding to the Health debate

Emma ReadDirector of Marketing and Business Development

25 February 2016

Overview

• Foodservice - what is it?

• Health - what do we mean?

• Supply, Demand, or both?

• Consumer demand

• Operator supply

• What next

• Key points

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We know Foodservice - specialists

www.hrzns.com

Foodservice - what is it?

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We define The Foodservice Universe

• Food, drink sales to consumers £46.6 Bn• Excludes drink in Pubs, Hotels, Student Unions etc not served with food

• Food sales to consumers £34.5 Bn

• Food sales to operators £10.7 Bn

• Food shipments £7.5 Bn

• It serves 7.9 Bn meals/year

A large market

Source: Horizons – Market Structure and Trends 2014

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One consumer - different sectors satisfy different needs

Source: Horizons Market Structure and Trends 2014

• Quick Service Restaurants• Pubs• Restaurants

• Hotels• Leisure

• Staff Catering• Health Care• Education• Services

• Destination outlet -customers are primarily going there to eat

• Food not main reason for visit - secondarysecondarysecondarysecondary need is to eat whilst there

• Food not main reason for visit - limited other choice of food so restricted to outlet

Sector Customer need

Health - what do we mean?

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Health has comes of age - now we talk about “wellbeing”

Horizons highlight it as a Top 10 Foodservice Trend

• Growth of Fast Casual

• Location, Location, Location

• Health and LifestyleHealth and LifestyleHealth and LifestyleHealth and Lifestyle

• Blurring of day parts

• Personalisation

• Evolution of pubs and café culture

• Adaptation of technology

• Cuisine and flavour trends

• Ongoing evolution of what works

• Acquisition and mergers

Note: These trends are within the wider context of macro factors affecting the Foodservice market, which are not considered here

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Supply and Demand for health - or both?

Demand - from consumersSupply - from operators

Demand: what consumers are saying

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All of us, and in different environments

With different needs

I’m hungry!!!

I want to chill

I’m at work – it’s

lunchtime

It’s my

grandmother’s

birthday

I’m a vegetarian … and I love the

planet…

I want to take my girlfriend

out

I’m

on a

diet

… and

I’m not

… I don’t … I don’t … I don’t … I don’t give a tossgive a tossgive a tossgive a toss

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And other demands as well as health

Dietary

requirements

Personalised food

Food on the go

Ethical sourcing

Allergen

information

Faster payment

methods

24/7: I want it

when I want it,

where I want it!

Latest trends

And the quandry of “being good” vs “it’s a treat”

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Source: Eating Out-Look Consumer Survey January 2016. Base: GB Adults who ever eat out (2,013)

12%

9%

7%

5%

4% 4%

3%

2%

3% 3%

10%

8%

7%

5%

4%

3% 3% 3%

2% 2%

0%

2%

4%

6%

8%

10%

12%

14%

June 2015

December 2015

One in ten are looking for vegetarian options

Consumers more interested in healthy options in the summer than in the festive season (approx. 1/3 vs 1/4)

Women generally more interested in these issues than men

47% of consumers mention at least one health / lifestyle factor affecting choice of where to what to eat – slightly less so at Christmas!

Supply: how operators are responding

- On menus- Operator initiatives- Operator openings

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Supply - on menus

0

10

20

30

40

50

60

70

80

Num

ber of Foodservice Brands

Winter 2013

Summer 2014

Winter 2014

Summer 2015

Winter 2015

‘Healthy/lifestyle’ factors Dietary requirements

Allergens and GF continue, Superfood as a term is emerging

• ‘Superfood’ is a more common term up 45% year on year

• ‘Allergy’ or ‘Allergen’ has steadily increased up 20% year on year

• ‘Gluten free’ up 71% over the last 2 years, but stable vs last season

Source: MenuramaWinter 2015

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Terms - “Superfood” increasing, “Healthy” declining

Source: Horizons Menurama Winter 2015

• 14% of brands in Menurama have dishes containing the term “superfood

• “Superfood” dishes have increased by 61% since last year

• Brands using the term “healthy” fallen from 17% to 12% since 2011

0%

10%

20%

30%

Summer Winter Summer Winter Summer Winter Summer Winter Summer Winter

2011 2012 2013 2014 2015

Superfood

Healthy

“On trend” ingredients in “superfood” dishes

Samphire

+24%

Avocado

+11%

Quinoa

+154%

Chia Seeds

+300%

Figures show growth in numbers of dishes inlcuding the superfood from winter 204 to winter 2015

Source: Horizons Menurama Winter 2015

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Brands with gluten free menu options on the increase

Source: Horizons Menurama Winter 2015

• 50% of brands in Menurama now have gluten free options

• Up from 36% a year ago

10%

20%

30%

40%

50%

60%

Summer Winter Summer Winter Summer Winter Summer Winter Summer Winter

2011 2012 2013 2014 2015

Brands offering Gluten Free Dishes

• Abokodo

• Carluccio's

• Chef & Brewer

• Chiquito

• Ed’s Diner

• Horse

Free From choices abound!

Source: Menurama Summer 2015

JD Wetherspoon Website

Lactose/dairy free’ is increasingly an option on menus

• LEON

• TGI Fridays

• Pizza Express

• Zizzi

• Little Chef

• Thistle

• EAT

• Jamie’s Italian

• Handmade Burger Co

• La Tasca

• Marstons

• Hungry Horse

TGI Website

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• Pizza Express

• Ask

• Zizzi

• Prezzo

• Bella Italia

• Harvester

• Giraffe

• Jamie’s

• Itsu

• EAT

• Gusto

• Abokado

• Yo Sushi

And Healthy is flagged on menus

The option of a Healthier alternative has proven particularly popular on Casual Italian Menu’sSource: MenuramaWinter 2015

As is ‘vegetarian/vegan’

Source: MenuramaWinter 2015

• Separate Vegetarian section is becoming less popular

• More commonplace is to have a vegetarian option within the main menu

• 81% of brands surveyed had a Vegetarian main course choice

• 14% of all main course listings are Vegetarian

Goose

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Supply - operator initiatives: some examples

56

43

40

26

22

20

14

13

13

9

20

39

23

32

20

20

19

15

18

16

13

31

0 20 40 60 80 100

Gluten Free

Dairy Free/Lactose Intolerance

Vegetarian options

Vegan options

Free from..in general

Calorie Info

Salt Levels

Low/reduced fat

Low/reduced sugar

low/reduced carbohydrate

None

%

Autumn 2014

Autumn 2015

69% 69% 69% 69% claim issues listed are likely to claim issues listed are likely to claim issues listed are likely to claim issues listed are likely to affect the dishes they serve in next affect the dishes they serve in next affect the dishes they serve in next affect the dishes they serve in next few monthsfew monthsfew monthsfew months

Dietary trends or issues likely to have an impact on the dishes served over next few months or soDietary trends or issues likely to have an impact on the dishes served over next few months or soDietary trends or issues likely to have an impact on the dishes served over next few months or soDietary trends or issues likely to have an impact on the dishes served over next few months or so

Source: Eating Out-Look Operator Survey Base: All Respondents: Spring 2014: (296), Autumn 2014 (292), Spring 2015 (281), Autumn 2015 (307)

Gluten Free & Dairy Free highest impact on dishes likely to serve

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Responding to consumer and government pressures

Others catching up quickly through partnerships…

Pressure on industry to ‘do the right thing’….

Operators catering for a variety of dietary requirements

…or lifestyle choices!

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Vegetarian – take a leaf out of Pret’s book?

• Best-selling vegetarian SuperBowlof beetroot, butternut squash and feta

• Falafel and Halloumi wrap now the fastest selling hot wrap

• UK’s healthiest and fastest fast-casual restaurant…

Other examples

• Pho gains accreditation 26 Jan

• Patisserie Valerie launches Gluten Free - 5 in range

• Starbucks launches National Green Juice Day

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On the move! Healthy pulls up at Motorway Service Stations

Tossed now available in 6

Motorway Service Stations

“Even we were gob-smacked by

the PR,” he said. “Customers are

walking the talk (on healthy food).”

McKie

McKie also revealed that the

fastest growing line at the

Waitrose stores located with

Welcome Break is sushi. “It’s

growing by 35% year-on-year,”

he said.

Supply - Operator openings

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Healthy Quick Service Restaurants are the 5th fastest growing outlet type

Rank Type Of Offer UK

Outlets2015

Growth Brands Sector

1 Coffee shop 122 154%

Antigiano, Beany Green, Benugo Cafe Deli, Bobs and Berts, Cafe Grounded, Ca'puccino,, Fait Maison, FCB Artisan Espresso Bars, Fernandez & Wells, Filmore & Union, Ground Espresso Bars, Notes, Red Kiosk Company, Rhode Island Coffee, Small Batch Coffee

Q

2

Mexican burrito fast casual

113 146%

Barburrito, Benito's Hat Mexican Kitchen, Chilango, Chipotle Mexican Grill, El Mexicana, FreebirdsWorld Burrito, Mi Casa, Mission Burrito, Pinto, Poncho No 8, Taco

Bell, Tortilla Mexican GrillQ

3Italian casual dining

102 82%Caffe ́ Concerto, Gusto, La Porchetta, Polpo, San Carlo, Tony Macaroni, Valentina, Villagio, Wildwood Kitchen, Zaza R

4Sandwich bar quick service

70 59%Birley Sandwiches, Camden Food Co., Delice de France, Piece, Pita Pit, Simply Eat, Wrap It Up Q

5Healthy quick service

68 100%Chop'd, Friska, Planet Organic [Food To Go], Pure, Tossed, Vital Ingredient Q

Source: Horizons Ones To Watch – Nov 2015

Ones to Watch - Healthy Quick Service Restaurants

Source: Ones to Watch Nov 2015

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• Operators are reacting to changing consumer lifestyles by supplying healthy food options and more information on menus

• Allergen information has seen a significant change of importance on menus since the legislation change a year ago

• 67% of operators say health issues have already / are likely to affect dishes served –gluten free is most commonly cited issue

• Existing operators are leading the way with new initiatives and taking advantage of this growing/relevant sector

• New operators are appearing on the high street, offering new and exciting variations of ‘healthy food’

Operator highlights

What next?

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Horizons highlight as a Top 10 Foodservice Trend 2015

• Growth of Fast Casual

• Location, Location, Location

• Health and LifestyleHealth and LifestyleHealth and LifestyleHealth and Lifestyle

• Blurring of day parts

• Personalisation

• Evolution of pubs and café culture

• Adaptation of technology

• Cuisine and flavour trends

• Ongoing evolution of what works

• Acquisition and mergers

Note: These trends are within the wider context of macro factors affecting the Foodservice market, which are not considered here

More to follow

SuperfoodsMore use of vegetables, vegan

Clean, raw, paleo…

Guilt free snacksOptions for kids

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Key points

• It’s a healthy future!

• Foodservice is a large market

• Consumers are more educated and are expecting and looking for more choice of healthy options and information on menus

• Operators are actively making changes to their offer to meet this

• And new operators are entering the sector with “healthy” offers

• A positive future looking forwards

In summary

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Thank you!

www.hrzns.com

emma.read@hrzns.com