5 TAKEAWAYS | Market Snapshot – Food Industry Foresight
The foodservice industry has no doubt had to rapidly adapt and change to meet the quickly changing demand as a result of the pandemic. Now that things seem to be reverting back to normal, the question is where to from here for hospitality? Rod Fowler of Food Industry Foresight sized up the current state of the market, and what we can expect for the future.
Hear what was discussed and more in our Hospitality Unites 2021 panel discussion. If you missed the session or would like a recap, check out our 5 takeaways below!
1. How much are people spending on food?
To kick off the discussion, Rod highlighted the all important ‘Foodservice Dollar’. How much are people spending on eating out of home? And what exact effect did the pandemic have on that spend? Since 1990, consumers have spent 30% of their disposable income on eating out, climbing to a massive 37.2% in 2019. However, to no surprise, this dropped down to 13.7% in 2020. And although it may be quite obvious that the pandemic is the main cause of this downturn, Rod mentioned it was important to remember that this number is not demand-driven, as people weren’t allowed to spend their money, even though they had the money to spend.
Moving forward, the future looks bright as it is predicted the amount of income spend by people in 2021 will rise close to pre-covid levels.
2. The demand for foodservice
Speaking of not being demand-driven, Rod took the audience through the different areas in which demand is generated in the food industry and how they have been affected. At the top of the list was the tourism industry and it’s affects on foodservice, with low numbers due to the pandemic. Beyond the stats, the industry has also seen a loss in casual labour due to the reduction in international students. Rod predicted that we can expect these numbers stay at the lower end for a while, although with the normal spend on tourism maxing out at $65 billion annually – money which has not been spent by Australians – it can be expected that this money will be spent back into the local foodservice sectors around Australia moving forward.
3. A snapshot of the commercial sector
The commercial sector includes 63,315 commercial foodservice outlets, with an impressive 81% being independent. Rod highlighted that of these outlets in the commercial sector, most are small-to-medium businesses, and can be a direct reason as to why the roll out of new technology in foodservice is a little slower in Australia, given the high costs and risk that come with implementing these practices in their business.
Before the pandemic, 80% of Australians aged 14+ years were eating out, and as we start the road to recovery, we are already seeing the low numbers of last year revert back to pre-covid levels.
“The industry is rebounding strongly, stronger and quicker than expected. This is a national recovery, across all sectors. But it’s not over yet, businesses must remain vigilant and ready to pivot” said Rod.
4. Keeping up the confidence
There is no doubt we saw consumer confidence levels dramatically drop in foodservice over 2020. However, in 2021, Rod noted that levels are kicking straight back up, with levels at 68% already in April of this year.
He also mentioned, that as a result confidence levels rising once again, we can see that Foodservice Consumer Dollar climb back up to reflect this change. “The money that people would have normally spent on eating out, that hasn’t gone away. We can expect to see this find its way back into our industry as people start eating out once again” said Rod.
5. Returning to normal
So halfway through 2021, how is foodservice trailing? According to Rod, staff levels are reportedly climbing back up, with 80% of operators noting their staff levels have stayed the same or increased. Their profit margins are also doing better, with 56% saying that they have stayed the same or increased from the previous year.
And although home delivery is slightly declining, 80% of operators have said that they are now returning to a normal menu, as they were pre-covid.
When asked on what trends he expects to see come to light in the coming months, Rod spoke on the rise in popularity of plant-based protein, and the technological developments in foodservice. “As businesses, we’ve head to learn to change quickly. The trick now is to keep thinking, what else can we change? The momentum of this technology trend has seen new ideas and capabilities come to life, so now it’s a matter of seeing what else we can adapt to the business to keep improving”.
- Rod Fowler, Director, Food Industry Foresight