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Irish Foodservice Market Set to Grow by 6.1% to Reach Value of €8.2 Billion in 2018

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Irish Foodservice Market Set to Grow by 6.1% to Reach Value of €8.2 Billion in 2018

Irish Foodservice Market Set to Grow by 6.1% to Reach Value of €8.2 Billion in 2018
November 08
09:19 2018

Bord Bia (Irish Food Board) has released the findings of its 2018 Irish Foodservice Market Insights Report which shows that Ireland’s foodservice market is set to grow by 6.1% this year to reach a value of €8.2 billion. The report tracks trends in consumer behaviour when eating out of home and also highlights some of the challenges the industry faces in light of the significant growth in recent years. Findings from the report show that consumer demand for convenience and sustainable practises are disrupting the foodservice industry and that with more operators using food as a tool to compete, new channels such as forecourt food experiences continue to emerge.

The report also highlights the fact that city centres have now reached close to saturation point when it comes to quick serve restaurants and cafés, and that a tightening labour market has led to shortages in finding and keeping qualified staff.

Commenting on the report, Bord Bia Chief Executive Tara McCarthy said: “As the economy has grown, so too has the foodservice industry. Strong growth in income and employment, coupled with strong tourism figures, have been key contributors to the overall health of the sector. While we expect to see continued positive activity in the next three years, going forward overall growth figures are likely to be lower than previous years. As globalisation continues and Ireland remains an attractive location for expansion of multi-national foodservice operators, Irish provenance and its sustainability credentials remains a strong differentiator and something that Irish consumers see as unique and important to their decision making process which is encouraging for Irish food and drink suppliers.”

Maureen Gahan, Foodservice Specialist in Bord Bia, added: “The Irish foodservice industry continues to exhibit strength but with some cautionary signs on the horizon, it is important that our businesses continue to monitor and plan for Brexit and have a strong focus on cost control. Our research identified a number of critical strategic issues that will continue to have long-term impacts on the Irish foodservice industry. These should be addressed within the strategic planning process to ensure that companies remain competitive and ahead of macrotrends shaping the industry in the years to come. We would also encourage companies to prioritise investing in socially responsible activity, particularly packaging and explore ways to differentiate their offering.”

New Demands of the Irish Consumer

1.      Convenience is key with consumers looking to source food ‘anytime, anywhere’. A continued emphasis on convenient options such as takeaway and delivery will drive growth and spread to other segments that traditionally don’t cater for this, including full service restaurants, pubs and even hotels.

2.      Three meals per day is no longer “the norm” as day-stages blur and traditional ways of dining are disappearing. On the go dining will continue to grow and snacking and late-night occasions will grow in importance as consumers look to source food at any time.

3.      Consumers are looking for more experiences when eating out. Restaurants and foodservice are increasing seen as “entertainment” and consumers are willing to spend on something that is unique and different. Occasions will increasingly be divided into those that are convenience driven and those in which consumer demand “something unique.”

4.      Third party delivery is possibly the biggest disruptor as technology provides app-enabled ordering which is increasingly growing into segments that haven’t traditionally delivered such as full-service restaurants and even pubs. Delivery-only kitchens are starting to appear in other countries and will likely be an area of focus for delivery companies in Ireland.

5.      The growing on-demand foodservice culture is driving the popularity of cashless, click and collect and third-party delivery options. As more tech-enabled solutions enter the market, much of the ‘front of house’ experience between consumers and the operator could ultimately become automated.

6.      The changing palate of the Irish consumer has seen the rise in demand for ‘fresh and locally sourced’ not only to meet the needs of ‘health and wellness’ but also for sustainable business practices. Plant-based diets are no longer fringe and while the percentage of consumers that are vegan or vegetarian remains small, consumers are increasing looking for alternatives options.

7.      Operating with a conscience is the expectation, not the exception and this includes reducing food waste and reducing packaging. While the focus has been on the coffee cup, the issue is likely to spread to plastics and broader packaging (both consumer-facing and back-of-house). Consumers demand “something” be done but are often poorly informed on the broader infrastructure needed to recycle or compost foodservice waste.

8.      Irish consumers are becoming younger, and older and being ‘all things to all consumers’ is increasingly challenging for foodservice operators who require tech-enabled solutions to appeal to younger consumers, while older consumers tend to be more traditional in their usage of restaurants.

CAPTION:

Pictured are Mindy O’Brien, VOICE Ireland; Michael Sheary, Bujo; and Maureen Gahan, Bord Bia; celebrating the findings of the 2018 Irish Foodservice Market Insights Report which shows that Ireland’s foodservice market is set to grow by 6.1% this year.

2018 Irish Foodservice Market 2018 Consumer Spending (€M) 2018 Operator Purchases (€M) 2017-8

CAGR (in €)

Total Outlet Count
Limited Service (QSR, fast casual, food to go) € 2,856 € 955 5.2% 8,905
Full Service Restaurants € 994 € 328 5.3% 3,250
Pubs € 1,386 € 402 2.4% 8,250
Coffee Shops and Cafes € 456 € 132 7.5% 2,385
Hotels & Accommodation € 1,445 € 491 7.6% 1,325
Other Commercial € 311 € 109 6.7% 1,050
Total Commercial € 7,448 € 2,418 5.3% 25,165
Business and Industry € 313 € 152 3.8% 2,085
Healthcare € 236 € 123 1.9% 1,140
Education € 148 € 65 2.5% 4,940
Other Institutional € 41 € 21 3.0% 200
Total Institutional € 738 € 360 2.9% 8,365
Total IOI € 8,186 € 2,778 5.1% 33,530
Republic of Ireland € 6,030 € 2,040 6.1% 26,935
Northern Ireland € 2,156 € 738 2.5% 6,595

 

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