On-trade

Pub food to grow 2.5%

Pub food on the island of Ireland is projected to grow 2.3% (Category Annual Growth Rate) between 2018 and 2020 for the island’s 8,400 outlets according to Bord Bia’s 2017 Irish Foodservice Channel Insights report, just published.

The report finds that consumers will spend €1.354 billion on food in pubs on the island of Ireland in 2017 with another €392 million being spent on Operator Purchasing. RoI’s 7,200 pubs will have  spent €982 in 2017 with Operator Purchases totalling €285 million. The report projects CAGR of 2.5% from 2018 to 2020 for consumer spend in RoI pubs.

Consumer spending in pubs (excluding alcohol) accounts for 17% of the total foodservice market value but shows a lower year-on-year growth rate than the overall market. This is attributed in part to Brexit which has decreased weekend trips and holiday visits to Ireland by UK travelers, one of the pub’s most important geographical tourism markets.

The two segments showing the biggest share gain are the hotel segment, accounting for 17% of total foodservice consumer spend and the coffee shops and cafes which now account for 6%.

Bord Bia released the findings of its Report ahead of its annual foodservice seminar on emerging trends in the foodservice sector which took place in Dublin’s Aviva Stadium recently. The findings of the report were shared with more than 300 delegates and shows that Ireland’s foodservice market continues to grow and is now valued at a record €7.8 billion, comprising over 33,000 individual outlets.

Maureen Gahan, Bord Bia’s Foodservice Specialist, stated “We’re delighted to report that the sector remains on track to grow at a compound rate of 4.9% and to reach a value of €9 billion by 2020. Ireland has started to become known as a ‘food destination’ and much of the investment operators have made in quality and service upgrades have helped fuel the foodservice growth witnessed in the island of Ireland”.

The foodservice market includes all food consumed out of home incorporating restaurants, pubs, hotels, coffee shops, workplace catering, hospitals, education and vending.

 

According to the report, “During the downturn of the economy, consumers opted to drink at home rather than visit their local pub. Now, with the Irish economy on the rise and unemployment on the decline, consumers have extra disposable income to return to the pub.”

But the report adds, “Consumers continue to be less likely to visit a pub for ‘drink only occasions’. As a result, the channel continues to see a need for gastropubs and pub menus featuring higher quality, more diverse selections of food”.

The report also examines consumer drinks brand preferences to find that, “Despite the growing landscape of local breweries, whiskeys and alcohol beverage brands, consumers are more likely to ask for their preferred brand when at a pub. While pubs are a segment with one of the highest sales of craft beers, these sales often account for less than 10% of total revenue”.

The report, which also tracks consumer behaviour and sentiment when eating away from home, highlights that take-away or grab-and-go concepts are one of the key drivers of foodservice growth and that healthier foods are trending and influencing menu ideation.

Continued economic prosperity has contributed to a relatively strong and healthy foodservice industry. The report indicates a number of key trends such as coffee shops and cafes maintaining their position as the fastest-growing sector.

The investment in such beverages has been seen across all segments as operators strive to provide High Street-level coffee and beverage programmes to their guests.

Flat whites are this year’s trending coffee beverage with coffee perceived as an affordable luxury among consumers and health trends are beginning to shape coffee orders with consumers seeking out alternative milks.

Technology is a foodservice-enabler and third party delivery is causing some disruption and seeing strong growth, particularly in major urban centres as a result of younger consumers and business travellers favouring convenience.

 

Market Breakdown

2017 Irish Foodservice Market 2017 Consumer Spending (€M) 2017 Operator Purchases (€M) 2016-7

CAGR

Total Outlet Count
Limited Service (QSR, fast casual, food to go) € 2,715 € 904 3.5% 8,905
Full Service Restaurants € 943 € 311 3.4% 3,175
Pubs € 1,353 € 392 0.7% 8,400
Coffee Shops and Cafes € 424 € 123 6.9% 2,275
Hotels & Accommodation € 1,343 € 457 5.7% 1,275
Other Commercial € 291 € 102 5.1% 1,050
Total Commercial € 7,070 € 2,289 3.6% 25,080
Business and Industry € 302 € 145 1.6% 2,075
Healthcare € 231 € 118 -0.1% 1,140
Education € 144 € 62 0.4% 4,940
Other Institutional € 40 € 20 1.8% 200
Total Institutional € 717 € 345 0.8% 8,355
Total IOI € 7,787 € 2,635 3.3% 33,435
Republic of Ireland € 5,683 € 1,916 5.8% 26,845
Northern Ireland € 2,104 € 718 -2.7% 6,590

 

 

Sign up for Drinks Industry Ireland

Get a free weekly update on Drinks Industry trade news, direct to your inbox. Sign up now, it's Free