Analyst Corner: Is There Still Mileage In Food To Go?

After a decade of growth, there is some suggestion that the food to go (FTG) sector is losing its shine, but is that right? Perhaps the dizzy heights of +5% year-on-year growth have been and gone, but we’re still forecasting that food to go will grow by +2.7% in 2020, to a whooping £21.7bn.

Of course, there are pockets of growth and decline behind that top-line number, so to ensure you are on top of all the detail, make sure you get hold of your copy of our Food To Go 2020 Market Report.

Convenience store grab and go continues to take the largest share of the UK FTG market, but this share is unsurprisingly under pressure as other parts of the market physically expand and offer an increasing array of menu options. So how can convenience retailers fight back?

In the report, we identify seven key trends driving the FTG market. These give us clues about the direction of travel and where leading operators will put their focus – here we briefly take a look at four of them…

Profitable partnerships

Partnerships remain a great way of bringing in expertise and increasing the credibility of the FTG offer with a nationally recognised brand name, or an esteemed local supplier. For many retailers, infrastructure and cost are two key barriers to investing in FTG. However, in many cases there is an argument for leaving it to the experts and exploiting the footfall that they can generate.

The obvious example of this is Subway, who are growing their presence within grocery retail, but there are some other brilliant examples, for instance Budgens in Islington has partnered with Pizza Taglio and Maido Sushi.

Plant-based innovation

Innovation is of course key to success, particularly in food to go where variety is paramount. From our analysis of new products on offer across the FTG sector, the vast majority tap into the healthier eating trend – and specifically plant-based eating. This is not just a fad: two-thirds of industry professionals surveyed for our ‘Top of Mind 2020’ study, felt that plant-based eating would be the fastest growing cuisine over the coming 3-5 years.

Some recent examples of FTG innovation in action include Premier Foods’ new plant-based on-the-go brand, Plantastic; and Co-op who introduced a Vegan Feast sandwich to its festive FTG range, alongside a commitment to donate £50,000 of its Christmas sandwich sales to mental health charities.

A solution for every day-part

Food to go hasn’t just been about lunch for a long time, with an increasing focus on breakfast, snacks and even a speedy dinner. Whilst some other outlets might be trialling longer trading hours, convenience stores are already open and therefore well placed to tap into this demand, particularly if the offer explicitly targets these occasions.

A great example of this in action is MJ’s Premier in Royton, which has a dessert bar within its store to help drive different FTG occasions such as treat and snack. Meanwhile, Ancoats General Store in Manchester has a coffee bar that offers quality hot drinks and FTG throughout the day.

Good value comes in many forms

Finally, there’s no getting away from the fact that in the current climate a value proposition is important. Consumer confidence remains low and budgets are under pressure. Food to go is an easy area for shoppers to cut spend and there are psychological price barriers for shoppers on a FTG mission, so meal deals – and simple ‘good value’ continue to have a significant role to play.

Packaged sandwiches, soft drinks and crisps/snacks remain incredibly relevant and important in the FTG space; however, things have evolved massively, offering retailers different options when it comes to offering value. Coffee and pastries for breakfast, hot food-to-go deals and freshly made options are three alternatives to pre-packaged sandwich meal deals that are available to retailers.

In summary, food to go is as relevant as ever, but grocery retailers will need to do more to satisfy the evolving demands of consumers and compete with the FTG specialists,  which they must do if they are to stand a chance of maintaining their current share of this crowded market.

www.himshopper.com