‘Out of home’ food sector hits record €9.3bn in 2023
A more discerning, occasion-led approach to dining out is likely to take hold next year, the latest Bord Bia annual Foodservice Market Insights report concludes.
It comes against the backdrop of continued increases in consumer prices together with growing economic uncertainty, as well as a ‘rebalancing’ of consumer demand following a post-pandemic surge.
Figures from the annual report show that the so-called ‘out of home’ sector gained nearly 13% in value this year to a new record high of €9.3 billion across both the Republic of Ireland and Northern Ireland.
It was the first time that the market value exceeded pre-pandemic levels, and came about amid mounting challenges since the start of the decade.
However, industry growth had slowed from 2022 levels this year.
Consumer research was conducted in Ireland, the UK and Germany as part of the report to test consumer attitudes to eating out of home.
In all three markets, dining out was considered more expensive, but in Ireland, 86% said they believed dining out had become too expensive to do on a regular basis.
78% of survey participants in the UK gave the same response.
The report identified a number of themes and challenges affecting the sector in recent years.
Cost inflation, driven by the cost of goods and other input prices, is driving much of the increased cost of dining out as service providers are passing higher costs onto consumers.
In order to justify the price increases, consumers are expecting consistent value and quality.
Consumers are increasingly eliminating spontaneous dining and opting instead to eat out for special occasions like birthdays and reunions.
Another trend that has been emerging is the cutting back or the elimination of alcohol from the bill as well as choosing to split certain courses like starters or desserts.
Consumers are also increasingly choosing less expensive and smaller dishes in order to to keep to a budget.
When deciding on a venue, value for money is to the fore for consumers.
On the industry side, sourcing labour remains one of the most challenging aspects for the industry, although the situation is reported to have improved from the severe shortages experienced by the industry in the aftermath of the pandemic.
Maureen Gahan, Foodservice Specialist at Bord Bia, welcomed the return of the industry to pre-Covid value levels, but said inflation was having a clear impact.
“Although Irish consumers are more pessimistic when looking ahead than other countries surveyed, we have identified key factors motivating consumers when eating out of home that we believe will help those working in the industry to navigate the future.
“It was reassuring to find that good quality food is still the primary driver motivating consumers when eating out of home. Our key message to the Irish food and drink companies supplying the sector is to continue to maintain consistency and quality, while also being cognisant that delivering value is more critical than ever before,” she added.
Although inflation was impacting, Ms Gahan appealed to service providers not to focus solely on price in the value proposition.
“Consumers are looking for premium experiences and those suppliers who can offer products or solutions that enhance the overall eating out experience are well positioned,” she added.
Article Source – ‘Out of home’ food sector hits record €9.3bn in 2023 – RTE
