Sydney, Australia, February 22, 2017 – Consumer spending in Australia’s foodservice industry grew by 2 percent in 2016, sourced to both an increase in visits and a higher average eater cheque, according to The NPD Group’s CREST® foodservice market research. There were a number of ‘firsts’ for the industry in 2016, and deviations from time-honoured trends, which has set the stage for a different landscape to take shape in 2017.
“The foodservice industry is ripe for new development and innovation tailored to meet the needs of a diverse group of consumers. Operators and manufacturers must look beyond their known customer base and focus on resonating with the broader group of consumers who frequent the foodservice market,” said Ciara Clancy, Director, Australia Foodservice, The NPD Group. “While gaining more visits from loyal consumers is certainly worthwhile, serving a wider variety of consumer needs and achieving unique foot traffic is critical in this competitive environment.”
Clancy highlights the trends that shaped the industry in 2016, and will be areas of further development in 2017:
Fast Casual is Slowing Down – After the initial boom in 2012, the gradual slowdown in fast casual traffic growth has now turned into a decline. The drop in traffic volume can be viewed as the market rationalising after the long, sustained period of growth that saw a number of fast casual chains and segments reaching saturation point. It can also be seen as a reflection of the challenge that operators within the channel face trying to keep up with the evolving tastes and preferences of their customer base.
Families Return and Boost Traffic Growth – The return of families to the foodservice industry accelerated in 2016, growing at twice the pace of 2015 and bringing the volume of family visits to a three-year high. This return has particularly benefited QSR traffic growth. Families are providing a boost to the QSR channel, but are in decline across the rest of the industry. Looking at the broader foodservice market, operators and manufacturers need to re-assess their menu offering to become more relevant with this group.
Consumers Opt for the Home – In 2016, delivery and pick-up occasions reached their highest point since CREST® began tracking the industry in 2009. By far the largest source of growth for these occasions was dinner at full service restaurants, driven by the higher visibility they are receiving from a growing number of food delivery aggregators. Also coinciding with this trend, traffic at the retail channel increased in 2016. Although it represented just 9 percent of the foodservice market, retail accounted for 18 percent of the year-over-year increase in visits.
It’s Quality Over Quantity – Consumers opted for fewer meal items in 2016, but spent more on the items that they purchased. They are moving away from bundling in favour of the meal personalisation that a la carte ordering offers, and are also reducing the number of ‘nice to have’ purchases in favour of the more core meal products.
Consumers Crave Independence – For the first time in 2016, traffic gains at independent foodservice outlets outstripped chain restaurants (chains with more than 20 stores). Themes such as differentiation and personalisation are becoming increasingly important to consumers. While they desire value and convenience, they also seek enjoyable and customisable experiences that make them feel good about their food choices.
Source: The NPD Group, Inc. / CREST®, Annual 2016