TRENDS 2021

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Every year Brain & Poulter condenses hundreds of hours research, data, analysis and through leadership into a set of predictions for the food services sector within Australia and New Zealand property assets. Looking back through our predictions, 87% of them have come to fruition from the rise of home delivery to the growth in meal kits and the adoption of meat-free alternatives to the casualisation of “fine dining”.

Now more than any other year, there is much to predict for the future of food and beverage across the region. The pandemic wreaked financial havoc on hospitality businesses while creating a surge in fresh food and home cooking. As PanPac households re-balance their discretionary spending and hospitality operators radically reinvent their operating models to stay relevant, we share with you 10 thought provoking trends to inspire property owners, developers, government agencies and F&B operators.

To embrace the ideas on these pages will take courage, commitment and capital. For those readers up for the challenge, the rewards will be exponential.

We wish you every success,

Suzee BrainDirector

Kate PoulterDirector

CONTENTSMegatrend 1: Technology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .31.1 Dexterfindsaperfectmatch . . . . . . . . . . . . . . . . . . . . . . . . . .31.2 Omni-channelfoodpurchasing . . . . . . . . . . . . . . . . . . . . . . . .4

Megatrend2: Leasing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .52.1 Abandonmentissues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .52.2 Multi-generationalco-habitation . . . . . . . . . . . . . . . . . . . . . . . .6

Megatrend3: Design . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .73.1 Foodcourtde-risking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .73.2 Smallerfootprints . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8

Megatrend4: Marketing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .94.1 Valueengineering . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .94.2 Supportinglocal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .104.3 Redemptionbars . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .114.4 ZoomInNotOut . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12

©2021Brain&PoulterPtyLtd.Allrightsreserved.

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1.1 Dexter finds a perfect match Foodisaboutconnection,socialising,celebrationandhasalwaysbeendominatedbychefswithbigpersonalitiesright?CanarobotchefevenbetrainedtoswearlikeGordonRamsay?Whatwilltechnologymeanforrestaurantsandthecustomerexperience?

MEgaTrENd 1: TECHNOLOgY

FromRoboatDarlingSquareinSydneytoPazziinParis,turningoutpizzasmadebyaroboticarmwewillsoonhaveanideaofhowcustomersrespondandiftheconcepthaslegs(orwheels).SpyceinBoston,akitchenrunbyroboticchefshasamenuoverseenbyMichelinStarratedDanielBoulud.

Bytheendof2021Brain&Poulterbelievewewillhaveaninitialideaofwhatthisbeginstolooklikeasrobotsstarttoreplacechefsandwaitstafftoimproveprofitsbeingeatenupbythirdpartydeliveryfees.Onthegroceryfrontroboticdistributioncentreswillreplacetheremainingcheckoutoperatorspickinggroceriesashomedeliveryfoodretailrockets.

54%socialmediareviews

linkedtomealoptions

63%interactivemenus

42%VRheadsets

toseemealsin3D

Tech applications that Australians would most likely use

Source:FutureGrazingReport

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3 5OUT OF

hospitalitybusinessownerssaythirdpartyhomedeliveryappsegUberEats,Deliveroo,etchaveeatenintotheirprofitlinesSource:FutureGrazingReport

1.2 Omni-channel food purchasing OnlinefooddeliverywasthelargestgrowthsectorofallonlineservicesduringCovid-19.Smartlandlordswilllooktoowntheomni-channelanddeliveryspaceinanefforttoretainF&Boperatorsandavertthemarchtodarkkitchens.

2020taughtmanyfoodretailerstomaximisetechnology,useonlineplatformsandenhancetheabilityofcustomerstoorderwithoutactuallyturningup.Asweliveinaworldwhereeverythingisonlineandondemand(thinkNetfilx,UberEats)continuingtoallowcustomerstobuyfromrestaurantshowtheychoosetowillprovideapointofdifference.

Landlordsthatcanacceptandcreateanassetleveldigitalorderingandfulfilmentproducttocomplimentthebricksandmortarexperiencewillbetheonlysurvivors.

B&Pcallitanequalfocuson“fingertraffic”asthereisondriving“foottraffic”.

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Retail Vacancy Rates*Bypropertytype**

* Vacancyratesforspecialtystores** Regionalcentresareanchoredbydepartmentstores,sub-regionalbydiscountdepartmentstoresand neighbourhoodbysupermarketsSources:JLLResearch,RBA

0 .0% 2 .0% 4 .0% 6 .0% 8 .0% 10 .0% 12 .0%

Regional

Sub-Regional

CBD Retail

Neighbourhood

2020 2010

MEgaTrENd 2: LEaSINg2.1 Abandonment issues Lightsonoroff?AseveryoneplaysthewaitinggametoseewhatthefinalretaillandscapelookslikepostCovid-19thereisanopportunityformarriagesofconveniencethroughattractingchefsandgoodfood&beverageoperatorsinbetweengigsorthoseunwillingtocommittolongleasetermstocounteracttheriseinF&Btenancyvacancies.

Embracingtemporaryleasingsolutionsareameanstobridgingthegapbetweenanemptytenancyandapermanenttraderwhilemaintainingassetvibrancyandprovidingtherightdrawcardstokeepconsumersengaged.

ConsiderreplacingabandonedF&Boutletswith“casualleasing”fromoutofworkandcapitalpoorchefsforaseason/semesteronapercentagerentarrangement.

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2.2 Multi-generational co-habitationEverthoughtaboutallowingexistingF&Btenantsto“sub-lease”tootheroperatorstousetheirfacilitiesafterhoursasdarkkitchens–especiallyinfoodcourtswherethereislimitedopportunityforeveningtrade?

Co-sharedtenancieswithtwodifferingchefs,singlefocuscuisineswithshortenedmenusorrotatingtenancieswithpopupsprovidingseasonalemphasis(winter/summer)areamongsomeofthesolutionsB&Phaveidentified.

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MEgaTrENd 3: dESIgN3.1 Food court de-riskingCovid-19hasbeenboththegreatacceleratoranddisruptorforfoodprecinctsandtenancies.FoodcourtsalreadyindeclinereliedoncommonseatingspaceswhichwerefirsttocloseandlasttoopenupduringthepeakofCovid-19restrictions.Tenancieswithminimalseatingandinabilitytotradeeffectivelyfortakeawayonlyweredisproportionallyimpacted.

Astraditionalcommonspacesbecomerelativelyuncommonwhatwillfoodcourtslooklike?Individualtenancieswillneedconsiderinternallayout,alfrescoareasandtakeawayaskeyinteractionpointswhendesigningthecustomerexperienceandjourneywithmoreinternalseatingwherepossible.

Tofutureproof,smartlandlordswillre-furbishthefoodcourtstoaddattachedseatingtoalltenanciesandreducecommonareaseating.SurvivingFoodcourtswillbereimaginedasacollectionofsmallintimate,delineatedsealedoffspaceswithcontrolledentryandexitpointseasilysetupshouldtheyberequired.

Image Source: Mirvac Broadway

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3.2 Smaller footprintsSmallisbeautiful?

Inadditiontothetrendtowardsmallertenanciestoreducerent,afewotherfactorsarecontributingtotheincreaseddemandforsmallerfootprints.Andbyfootprintswedon’tjustmeanphysicalfootprintsbutthecarbonvarietyaswell.

Somedriversofchangeincludegeneraleliminationofgas-poweredcookingequipment,preferenceforF&Boperatorsreducingfoodmilesintheirsupplychainandfavouringrecycled/lowercarbonmaterialsintheirfitouts.

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MEgaTrENd 4: MarKETINg4.1 Value engineering As2021unfolds,consumer’sdiscretionaryincomewilltighten.Howretailersrespondeffectivelywilldeterminetheirsurvival.Retailersoftenconfusevaluesolelywithpricereductions.Inapricewareveryoneiscollateraldamage.

Fortunatelyeventhesmallestretailersnowhaveaccesstogooddatathroughmodernpointofsalesystems,onlineorderingplatformsandsocialmediainfrastructuretohelpmakemorestrategicmarketingdecisions.

Howevermostretailersaretimepoorandusingthisdatatofinetunewhatcustomersreallywantrequiresamoresophisticatedapproachtousinginformationtocreateclear,realisticsalesgoalsandpotentially,mentoring.

Smartoperatorswilllookatpricing“value”overpricing“discount”todrivesalesgrowth.Think2coursesetmenusthatoffervalueinsteadofpricediscountstomaincourses.Isthenewsweetspot$20or$50?Dependsonthetimeofdayandthecustomer’sneeds.Smartlandlordswillprovidementoringtoenhanceretailerpricingstrategies.

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ImageCredit:ArthurFranklin-Unsplash

4.2 Supporting local

Localfoodoutletsprovidingconsistentlygoodfoodandservicewillincreasinglyprovideacommunityfocalpointandwillbeabletorelyonadecentfrequencyofregularvisitationoverthecomingyear.Theunlikelihoodofinternationaltraveluntil2022willalsolikelyresultinincreasedstaycationswhichretailersshouldlooktotakeadvantageofthroughcreatingawellconsideredpromotionalcalendarfeaturingsuitablylocalandoccasionalevents.

OnepositivetoemergefromCovid-19wasthewillingnessoflocalcommunitiestosupportlocalsmallbusinesses.Withhardcashaswellasgoodwill.Prettyimportantgiventhatmanyoffood&beveragebusinessesinAustraliaareindependentoperators.

Foodoperatorsandmarketingteamsshouldcontinuetounderstand,talkandcelebratethisinordertocontinuetoleveragethis.Inaddition,changedconsumptionpatternsduetocontinuedworkfromhomeadoptionwillseesupportforlocalF&Boperatorsandmicrochainsoverfacelessconglomeratescontinuethrough2021 .

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ImageCredit:EilivSonasAceron-Unsplash

ImageCredit:PatrickTomasso-Unsplash

4.3 Redemption bars Covid-19andhealthhavereshapedhowweinteractwithalcohol.WhileduringCovid-19alcoholsalesboomed,atthesametimethedesiretowardshealthhasincreasinglymanifestedinnonalcoholicbarsandconsumerdrinkwithlowalcoholdemand.

Weexpectthatstandalonelow/noalcoholbarswillemergetoservethegrowingtrendoftheiGenerationwhorejectalcoholbutnotwhatgoeswithit!

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4.4 Zoom In Not OutAsourtastesbecomemoresophisticatedconsumersexpectmorevarietyandsophisticationintermsofchoices.Inadiversesocietywithmanydifferentbackgroundsthisisevenmoreinevitable.Theflavourofthemonthwillbecomeincreasinglylocalisedwithinregionsofadifferentcountriescuisines.ThinknotMexicanbutoutletsfeaturingfoodfromYucatan,notChinesebutoutletsspecialisinginSichuan,Cantonese,Hunan.

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Ifyou’reseekingadviceaboutplanningafoodprecinct,leasingyourassets,ormaximisingprofitabilityofyourtenants,thenBrain&Poultercanhelp.

WeareAustralasia’sNo.1foodretailconsultant,generatingfrom15-120%increasesonrentalyieldsforourretailfoodclients.

Wecanachievetheseconsistentresultsbecauseourteamhasdevelopedaprovensetofsystemsandstrategiesoverthepast15years.

Thesesystemsandstrategiescanhelpyouto:

1 . Generatethehighestreturnsfromyourdevelopmentorfoodprecinctbymasterplanning,conceptplanningandretailmixing.

2 . Attractthebestfoodoperatorsforyourassetwithleasingadvice,tenderingrecommendationsandin-depthindustryknowledge

3 . Increaseprofitsoftenantsseekingrentabatementwithtried-and-testedretailandsalesrecommendations.

WehavealsobeenthefoodconsultantbehindmanyofAustralasia’smosticonicfoodprecinctsincluding:

Mixed Use Commercial retailTramshedsQuayQuarterTheDepotTheGlen

WesleyPlaceQantasHQ80 Ann Street101CollinsStreet

BroadwayPacficFairDFO PerthMelbourneCentral

Tourism/Leisure Higher Education GovernmentSydneyFishMarketWet‘n’WildSydney ModernPortArthurVisitorCentre

FlindersUniversityUQUTSRMIT

TheCanopyLaneCoveIpswichCityHeartCityofCanadaBayTheRocksMarket(PropertyNSW)

Fordetailsabouthowwecanhelpyou,gotoBrainandPoulter.com.auorclickhere to booka30minutecomplimentaryassessmentofyourdevelopment.

Broadway by Mirvac

Port Arthur Visitors Centre

Flinders Uni

Rhodes Community Centre

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