On-trade

Pub food market set to grow by 2.2% to 2020

Pubs account for 18% of consumer spend in our foodservice market (excluding alcohol), with food-led pubs seeing the biggest return.

Ireland’s foodservice market grew to a record €7.5 billion this year and is forecast to grow to over €9 billion by 2020 according to a new Bord Bia report published recently. These figures were welcomed by over 300 delegates at Bord Bia’s annual foodservice industry seminar which took place in the Aviva stadium in Dublin.

Foodservice or “out of home” describes all food consumed away from home including everything from restaurants, hotels, coffee shops and bars to workplace catering, hospitals, education and vending.

According to Bord Bia, this market segment has benefited from better than anticipated economic growth, buoyant consumer confidence, a strong domestic and international tourist market, an unemployment rate now less than 8% and the continuation of 9% VAT for hospitality.

“It has been a bumper year for foodservice in Ireland,” said Bord Bia’s Foodservice Specialist Maureen Gahan, speaking at the seminar, “The foodservice market has witnessed an annual growth rate of over 5% per year over the past number of years, with both consumer and business tourist numbers fuelling major growth in urban centres.”

 

 

Foodservice Market trends in Ireland

Almost 35% of consumer spend is found in Quick Service Restaurants which comprise traditional fast and more upmarket food outlets along with the growing area of ‘food-to-go’. The coffee shop segment shows the strongest growth, although from a small base. Other segments showing significant improvement are notably leisure and travel, positively impacted by growing tourism business and spending on leisure activities.

Some trends highlighted in the in-depth report into the “out of home” food and drink market find that:

Despite the fact that foodservice can be associated with a space that consumers crave, indulgence, health and authenticity continue to experience growing consumer demand. Increasingly operators are focused on broadly defined ‘healthy’ offerings. This may not necessarily mean lower fat or lower calories, but rather more on the types of ingredients, the transparency of the menu and how much of a menu item can be described as ‘natural’.

The potential mandatory inclusion of calorie counts on menus as well as a tax on sugar sweetened drinks coming into effect in 2018 will put pressure on many outlets to consider healthier menu items that are cohesive with their offering

Provenance is still very much on trend, she said, with consumers expressing a need to know who they’re supporting.  Food with a story is something that operators increasingly market to their customers and where the food or beverage comes from is increasingly viewed as a critical determinant as to the quality of the item.

There’s been a strong focus on hiring chefs and others with culinary experience in an effort to create a better offer for the consumer. Ethnic food operations continue to thrive, matching the consumer taste for non-domestic menu offerings.

At the seminar, chaired by businessman Bobby Kerr, delegates heard from a number of speakers including Amanda Roche Kelly, Managing Director of JustEat, Ireland’s leading online takeaway delivery service, who amplified consumers’ appetite for online technology; Louise O’Donohue of the Penny Loaf, an Offaly-based family bakery that has participated on Bord Bia’s foodservice business programmes and Michelle Fennell from Musgrave MarketPlace who provided an insight into the future of Cash and Carry. Delegates also heard market data updates and trends from other speakers including Techonomic and MCA.

The success of the event, including a record attendance, is proof that foodservice in Ireland offers major opportunities for suppliers offering innovative products and solutions to meet changing consumer needs, concluded Maureen Gahan, adding, “It’s important for suppliers to access available insights in order to make informed decisions that will allow them to grow their business.”

Bord Bia has also published its Irish Foodservice Market Directory which includes detailed profiles of over 100 operators and wholesale distributors. It’s aimed at providing companies with key background information on potential customers and advice on how to drive their foodservice business. The directory is a key part of Bord Bia’s Ireland Market Foodservice Programme which assists suppliers develop relationships with foodservice distributors and operators. Under this programme, Bord Bia works closely with an average of 20 companies each year, delivering new business on the domestic market worth some €2 million annually.

See full seminar report in our November issue.

 

Island of Ireland Foodservice Market Breakdown

 

2016 Consumer Spending (€M) 2016 Operator Purchases (€M) 2014-2016 CAGR 2020 Consumer Spending (€M) 2016-2020 CAGR
Limited Service € 2,624 € 874 5.5% € 3,185 5.0%
Pubs € 1,344 € 390 2.7% € 1,466 2.2%
Hotels and Accommodation € 1271 € 432 7.5% € 1,653 3.7%
Full Service € 913 € 301 5.6% € 1,122 5.3%
Coffee Shops and Cafes € 397 € 115 9.5% € 530 7.5%
Other Commercial € 276 € 97 12% € 384 8.5%
Total Commercial € 6,826 € 2,209 5.7.0% € 8,340 5.1%
Business and Industry € 297 € 143 3.4% € 338 3.3%
Health € 232 € 118 2.5% € 256 2.5%
Education € 143 € 62 2.3% € 157 2.3%
Other Institutional € 39 € 20 3.1% € 44 3.0%
Total Institutional € 712 € 343 2.9% € 796 2.8%
Total in Ireland € 7,536 € 2,552 5.5% € 9,136 4.9%

 

 

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