The past 18 months have shaken up the priorities of the Foodservice industry. How can operators futureproof their offering to meet the needs of different occasions?
Unsurprisingly after being in and out of lockdowns, consumers are looking forward to going back to On-premise. Over 70% of consumers in Chinese Mainland, France, Portugal, Spain and the UK said that Meal Delivery will never replace going out to a restaurant.
And this suggests that some of the short-term Meal Delivery growth achieved during lockdown will be at risk once all COVID-19 restrictions are lifted. We’ve already seen Meal Delivery begin to slow down as OOH outlets reopen and the shared enjoyment occasions being the first to recover, especially in Full Service Restaurants. However, despite this slow down, Meal Delivery is still over three times bigger than pre-COVID.
However, it’s important to note that 77% of Meal Delivery growth came via switching from On-premise occasions during the pandemic. As locations begin to open again, we’ve seen Meal Delivery growth returning to similar patterns as before the pandemic, with it being incremental to On-premise.
This supports the notion that Meal Delivery is considered a different occasion than going out. Whether it’s a special treat or for convenience, this steadily increasing habit is here to stay.
If we compare August and September 2021 (without restrictions) with August and September 2019 (pre-pandemic), we see that the total in-and-out food and drink market value is already 2% higher thanks to Meal Delivery, with grocery purchasing 1% lower and On-premise yet to fully recover.
In the coming months we can expect the total market to be bigger than pre-pandemic thanks to the positive incremental impact of meal delivery and the imminent recovery of on-premise.
As we’ve seen throughout this paper, COVID-19 has intensified the growth of food tech and the make-up of different occasions for meal delivery. But whether these changes stick will depend on a number of factors:
1. The level of socialising and type of occasion – how quickly will we return to restaurants vs sharing moments with friends at home? Which will continue to be a key occasion for Meal Delivery?
2. Working from home – this habit looks set to remain to varying degrees, so we can expect convenient lunch occasions to remain higher than pre-pandemic.
3. Convenient cooking – with the rise of Meal Delivery being used for convenience rather than a treat/reward, this is now the ultimate level of convenience – blurring the lines of competition for retailers and brands in this sector.
4. Multi-platform & digitalisation – we’ve seen some of the challenges faced by the growth of consumers using third-party aggregators. As the strong growth of Meal Delivery over the last few years has meant that these challenges haven’t been much of a problem - but as the growth slows to more normal levels, these challenges will become a reality for players in this space.
