We recently attended Lumia Intelligence’s Q3 Food Strategy Forum. First, a comprehensive presentation on the current market, followed by a food study tour. Here are our highlights of the day!
The Market
Source: Lumina Intelligence 2023
The previous months saw consumers restrict spending as concerns over household bills and the UK economy were wider. In August, we are seeing some growth as concerns over personal finance decrease, bringing consumer confidence closer to positive, but is still unstable. As inflation continues to decrease alongside falling energy prices, consumer spending is predicted to see modest growth in 2024 after plateauing in 2023. However, these factors will likely lead to a small growth in the market as the UK moves from a Cost-of-Living crisis to a Cost of Borrowing crisis.
Many households will restrain on more luxury purchases such as a holiday, meaning they look for affordable alternatives in the UK, especially as we approach the festive months. Wage growth is also improving and pushing consumer spending. Lumina predicts these two factors combined may lead to a boom in staycations in the UK. The UK is forecasted to see an influx of tourists coming in, matching the 2019 levels of tourism. As consumers have more money to spend, tourists’ numbers are increasing, and businesses expect staff to return to offices, increasing footfall; market reports show that fast food, sandwich/bakery/cafés, and dessert parlours are driving growth in the market. These operators are maximising opportunities from new sites in new locations and travel hubs.
Despite households having slightly more disposable income, consumers are still favouring lower-cost options at the expense of factors such as quality and sustainability. QSR and retail channels have been driving market growth in contrast with restaurant channels on the decline. A value-led mindset is the dominating decision-making factor for consumers. Energy bills and inflation falling, bridging the gap in wage growth, is not impactful enough to consumers who are still willing to forego other previously indispensable values, such as sustainability. However, as consumer confidence slowly rises, people are still willing to spend money on luxuries despite a sustained contraction in household budgets. These luxuries can range from a mouth-watering sweet treat, to a slightly bigger budget family dinner, to a staycation (these might be referred to as “affordable” luxuries.) The ongoing trend of UK consumers looking for “affordable” luxuries close to home, provides food operators with growth opportunities. Location expansion, technological innovation and compliance with consumer trends will be the most prominent markers of growth in the food market for the upcoming years.
Food Study Tour
Stationed in King’s Cross, London, we began the food tour of the up-and-coming eateries.
Café BAO
Café BAO is a BAO brand all-day dining concept. The restaurant serves Taiwanese meals with a Western twist. Its restaurant and bakery hybrid that provides unique experiences that set it apart from the other BAO locations. The menu includes freshly produced classic bao buns, a variety of small meals, and a bakery counter providing baked items to go, including their iconic sad face bao bun. We tasted Soy Glazed Aubergine, Taiwanese Fried Chicken, Fish Black BAO, Daikon BAO and Horlicks ice cream fried BAO.
This location links to the Reynolds experiential trend. Taiwanese cuisine is newly trending.
Trend: Nostalgia, Simple and Quality focused, Authentic Taiwanese
Arabica
The restaurant, born from exploring vibrant cities like Istanbul and Tel Aviv, presents a fresh and modern menu featuring locally sourced, sustainable ingredients. Guests can enjoy communal dining at banquet-style tables, and the Arabica brand is expanding its presence in both wholesale and catering, supplying meze, Levantine ingredients, and Turkish pastries to the food service industry. Notable menu items include Chicken and pistachio Shish, Hummus with red pepper, Beiruti Falafel Bites, Berbere Spiced Cauliflower, Lamb Adana Kofte, and Baked Pita.
This links to the Reynolds environmental trend. Levantine has been a growing trend in recent years and has widened its appeal with more people.
Trend: Sustainably sourced, High-Quality Menu, Authentic Levantine
Supawan
Led by chef Wichet Khongphoon, Supawan brings the authentic flavours of Southern Thailand to London, drawing inspiration from his childhood dishes. The menu offers a range of dishes, from traditional Thai green curry to speciality dishes to more regional dishes, such as Gang Tai Pla, a spicy southern Thai curry with grilled mackerel. Interestingly, the restaurant is attached to an “eccentric” florist. They aim to provide a more intimate and unique experience for their visitors.
This location links to the Reynolds experiential trend. Thai food has become very popular in the UK – what makes this restaurant particularly interesting is that it specialises in regional dishes.
Trend: Regional, Sharing Plates, Authentic Southern Thai
Longboys
Founded by pastry chefs Graham Hornigold and Heather Kaniuk in 2019, Longboys specialises in handmade finger doughnuts. They aim to make high-end patisseries accessible to everyone, featuring innovative doughnut flavours. The menu changes with the seasons, focusing on sustainably sourced quality ingredients. Indulgent doughnut flavours include Tiramisu, Pandan coconut, Raspberry rose lychee, and Peanut butter jelly.
This location links to the Reynolds experiential trend.
Trend: Seasonal, Sustainably Sourced, Artisan, Premium Treats
Sons + Daughters
The store offers a gourmet sandwich concept that elevates grab-and-go lunches with unique ingredient combinations and high-quality, sustainable, and local ingredients. Notable menu items include The Merguez (spicy lamb sausage on french fries with pickled red onion and gremolata) and The Mortadella (ham, taleggio cheese, smoked Isle of Wight tomato on focaccia). They also offer soft-serve ice cream with crunchy croissant flakes.
This location links to the Reynolds Cost of Living trend.
Trend: Innovative Use of Ingredients, Premiumisation
Babel Beerhouse
Bable Beerhous is an all-day craft beer destination with an extensive selection of craft beers, including those from its in-house brewery. It offers a “hop desking” service for co-workers who provide unlimited tea/coffee and a pint at lunch.
For more trends and insights information contact your account manager or our insights team!