‘Casual dining’ is in crisis. Jamie’s Italian is no more. Byron had to close 19 restaurants to save itself, while the much larger Prezzo closed more than 100 restaurants. But meanwhile the market for ordering and eating restaurant-style food at home is growing steadily. 28% of British consumers are now ordering more food online than a year ago. 40% of consumers believe they will see ‘more restaurants offering delivery from their website’. Perhaps most surprisingly, 61% of delivery customers think the quality of the food they receive is better than the food in physical restaurants, which just shows how those companies who have got service design and delivery right have fuelled this thriving sector.
Speedy, frictionless delivery delights customers but it’s not the only factor necessary for continued success. Businesses must negotiate other major food and social trends and innovations if they’re not to fall by the wayside in a burgeoning but highly competitive market. Here’s four topics that are currently on everyone’s lips.
More people are choosing plant-based foods
According to a 2018 Waitrose report a third of Britains have reduced their intake of meat or stopped eating it entirely. One in eight are now vegetarian or vegan and another 21% describe themselves as ‘flexitarian’, eating meat occasionally but mainly choosing plant-based foods. In the USA the number of vegans has grown from under 4 million in 2014 to 19.6 million in 2017. Food businesses need to cater to this growing audience and there’s been some perhaps unlikely success stories – Gregg’s vegan sausage roll anyone? – but also some failures. Byron only managed to puzzle its audience with last year’s ‘flexitarian burger’, made of beef combined with sautéed mushrooms to create a ‘healthier modern option’. It’s hard to work out how this confusing concept got as far as the menu, but it’s now been replaced with a growing number of more straightforward vegetarian and vegan options. With some of the newer pizza companies like Franco Manca offering tomato-only bases or an easy to swap to vegan mozzarella, the more traditional pizza joints need to keep on their toes, especially as it’s younger age groups who are most likely to cut their consumption of animal products as well as being keen advocates of having freshly cooked food delivered to eat at home – half of food deliveries are to millennials. Back in the land of casual dining, Pizza Express now has a plentiful range of vegan options, perhaps part of its larger plans to ‘future-proof’ the business after posting substantial losses this year due to the ‘casual dining crunch’.
Increased value placed on transparency and sustainability
73% of consumers say they would change their consumption habits to reduce their impact on the environment. Cutting down on meat and dairy is one of the biggest ways people can reduce CO2 emissions but there are also other considerations. Attention needs to be paid to packaging; many companies have already begun a shift away from single-use plastics towards options that are less likely to hang around for hundreds of years. Many people have increasing concerns about palm oil and would like to know that it’s come from sustainable sources. In addition, those who choose to eat meat may want to know if it’s organic, free range or comes from a country with high ethical standards for farming. With all of these issues it’s not enough just to offer one or two environmentally responsible options. To appeal to the increasing number of ethically-led consumers, companies need to make transparency and environmental responsibility a cornerstone of their business.
The robots (might be) taking over
There’s been much talk over the last couple of years of delivery innovations, from Just Eat’s partnership with Starship Technologies to trial delivery bots in South London to McDonald’s delivery by drone in San Diego. But none of them seem on the brink of going mainstream. Robot delivery whether on the ground or via drone may still present challenges (steps, tall buildings, dealing with the unexpected), but automation is something we’re likely to see more and more of in the restaurant and food delivery industry. MIT engineers opened Spyce in Boston, MA in 2018. It’s the ‘world’s first robotic kitchen’, though it does have human help to prep the ingredients and finish the dishes for serving. Spyce’s founders say that having an automated kitchen enables them to offer lower prices because of the savings on labour costs. Meanwhile Pizza Hut are working with Toyota to create a mobile pizza vehicle that cooks and boxes pizza while out on the road. There’s no doubt that restaurants at all levels suffer from a high degree of staff burnout, with long shifts and hot, exhausting working conditions that aren’t likely to worry a robot. On the other hand how kitchen and delivery workers will make a living instead if they see their jobs replaced by robots – along with everybody else – is something we all have ponder.
Dark kitchens and virtual restaurants
It used to be straightforward. Take-aways had premises you could turn up at. Sit-down restaurants occasionally had delivery services. Now you can get delivery from most eateries but they’ve been joined by a third kind of business: the dark kitchen or virtual restaurant. No customer-facing staffed tables or high street frontage means being able to keep costs down while potentially offering restaurant-quality food. With all interactions taking place online it’s also easier to make efficient use of data and feedback, analysing what works, constantly enhancing the menu and experience and experimenting with new ideas. It can also throw up new business opportunities. For instance, in Chicago, UberEats noticed that many users searched for ‘chicken’ but there weren’t many results. They notified a local pizzeria, who gave over part of their kitchen to a new chicken restaurant which now sells more chicken than pizza. It’s a strategy UberEats has now brought to the UK, launching virtual restaurants in existing businesses with hundreds now in place. Deliveroo have followed suit, launching their own Deliveroo Editions to serve gaps in the market. UBS estimates that the global online food ordering market could grow more than tenfold over the next decade or so, to $365bn by 2030 from $35bn today.
With 40% of consumers agreeing that more restaurants will offer delivery from their website in the future, for the time being this rapidly developing sector seems unstoppable. But with storm clouds on the horizon in the shape of Brexit and other global economic worries, businesses should ensure they stay on top of their game to weather the months and years to come.