Friday, 23 November 2018
Opportunities for potatoes in the eating-out market
- Inspire use of potatoes in trending world cuisines
- Educate on the importance of potatoes for health and well-being
- Continue to play on treating and indulgence
- Use descriptive words on menus to excite
- Continually innovate potato-based dishes (even traditional ones) to make them stand out on menus
According to MCA Insights, the UK eating-out market was worth £73.1 billion year ending June 2018. For the same period, this was nearly as much as grocery retail sales at £81.7 billion (Kantar Worldpanel, Total food & drink spend, 52 weeks to 17/06/18), highlighting the importance of understanding the eating-out category.
The eating-out market covers a representative sample of UK adults eating at quick-service restaurants, full-service restaurants, leisure/travel establishments and contract caterers. The part of the market not captured, worth approximately £18.5 billion and in strong growth, is delivery/takeaways, tourists, under 18s and ‘drinks only’ occasions.
Eating-out market performance
Year ending June 2018 saw the eating-out market value fall by 3.5% and occasions by 4.8%, according to MCA Insights. This is solely due to the frequency of visits per month, which are down 5.5% as visitor numbers are up 0.8% (driven by population growth) and average spend up by 1.4% (driven by menu price inflation).
A lack of consumer confidence and economic uncertainty has driven this drop in frequency, as consumers are treating less, eating out less when they are feeling lazy and removing eating out from their day-to-day routine. This has resulted in value channels faring better in terms of performance, with sandwich retailers, fast food establishments, pubs and supermarket-to-go, increasing their share in the eating-out market. The only channel to actually increase visits in a declining market are sandwich retailers, who are increasing footfall due to meal-deal offers.
In year ending June 2018, 3.3 billion eating-out visits involved a potato product*. This accounts for 34% of eating-out occasions. However, potato occasions are declining, and faster than the market, as this is 6.2% lower than year ending June 2017, versus the market at -4.8%. This loss in servings is the equivalent of approximately 23,455 tonnes fewer potatoes being consumed in the eating-out market in the last year.
Forty four percent of the decline in potato occasions are driven by full-service restaurants and 41% by quick-service restaurants. Similar to the market, all channels are losing potato occasions, apart from sandwich retailers, which are increasing through crisps. The losses are mostly driven by fast food establishments, pubs, independent restaurants and coffee shops.
Chips, wedges and fries account for the biggest share of potato occasions out-of-home at 58%. This is followed by crisps at 17% and hash browns at 12%. For these three formats, which cover the majority of the potato market, the biggest two are in decline. There has been a loss of 136 million chips/wedges/fries occasions and 45 million crisp occasions in the last year.
Chips, wedges and fries are, typically, a core component of a main dish or a side. The most popular dishes they are consumed with are fish, beef burgers and full English breakfast. While beef burgers are a growth area in the market, the more traditional British dishes are losing share to more adventurous world cuisines such as Portuguese and Middle Eastern. Therefore, this is inadvertently having a negative impact on the consumption of chips, wedges and fries, but does provide an opportunity to inspire potato-based international dishes. This is also reflected in the growth seen for ‘other’ potatoes, which is driven by Bombay potatoes and sautéed potatoes.
Potato-based sides account for 26% of sides offered on spring/summer 2018 menus (MCA Menu Tracker). However, consumer consumption of sides may be impacted by increasing health needs. MCA identified that 75% of industry leaders expect healthy eating offerings to grow the fastest over the next 3–5 years, rising from 47% in 2016 (MCA, Menu & Food Trends Report, 2018). As the industry taps into this trend, consumers could be switching away from chips and crisps to other sides such as salad and vegetables, or deciding not to have a side at all. This is the same story for snacking.
While this provides an opportunity for education on the health and well-being benefits of potatoes, it must not be forgotten that eating out is a treating environment and so the indulgence element should not be ignored. Descriptive words on menus are a way to excite and encourage consumption, with top words in the food category being fresh, green, hot and crispy. Potato formats should play on descriptive words to entice ordering.
The positive performance for hash browns highlights the final opportunity for potatoes in the eating-out market. The growth comes from breakfast, where the traditional full English breakfast is in decline (negatively impacting chips), but non-traditional breakfasts and brunches are growing in occasions, although not currently compensating. This is where hash browns are benefiting. More people are eating breakfasts including muffins, pancakes, waffles, avocado, halloumi, eggs and different combinations of products. Inspiring innovative and stand-out dishes on menus that are new and different will draw consumers in and this is a learning for all day parts.
*Potato could include sweet potato, as consumers don’t always specify which they consumed.
To find out more about the eating-out market and performance of other AHDB sectors, please see https://ahdb.org.uk/knowledge-library/consumer-insights-eating-out-review