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Diners are still spending as much as they would, on a night out, in pre-pandemic times, but they are doing so less often and are becoming more discerning – these were some of the major take-aways (excuse the pun) from Bord Bia’s Irish Food Service Seminar 2022, which took place on 3 November.
The question arises: how do the many trends and issues identified fit into rural Ireland? Rural Irish food service providers face unique challenges: a lack of traditional footfall, staff shortages, rising energy costs and food inflation.
While Ireland’s food service industry is currently in a growth stage, this is expected to slow as we move into 2023. However, the predicted growth rate for 2023 is still 11.6% - up to €9.2 billion from €8.2 billion in revenue.
Post-pandemic diners
The COVID-19 pandemic provided unique challenges and opportunities to Irish food businesses, but it also changed the way we, as a nation, dine. Nine out of ten Irish consumers feel dining out is now too expensive and 77% are cutting back on snacks and treats.
While presenting the 2022 Bord Bia Irish Food Service Market and Consumer Insights, David Cullen – who is CEO of Opinions, which focuses on research, analytics and strategic consulting – identified three types of post-pandemic diner.
1. Re-emerging Socialiser
These diners are mainly older and are in a post-children phase of their lives. They are looking for special and unique dining experiences and will opt for more formal sit-down dining options in restaurants, pubs and bars. They are revelling in the fact that they can spend time with friends and family once again.
2. Food Service Champions
David identified this cohort of Food Service Champions as the “future of food service.” This cohort is generally between the ages of 25-34 and are pre-family or have young children. They are fully embracing technology, like delivery apps, and are happy to “consciously” splash out for unique dining experiences.
During the pandemic and the time of restaurant-at-home boxes, this cohort have started replacing going out with entertaining friends and family in their homes. While this isn’t great for traditional sit-down restaurants, it presents more opportunity for dining-at-home options.
The one thing about this group is they are complex. They want variety and global flavours, but they want local produce. They want more take-away options, but they want sustainable packaging.
3. Cost-constrained
We can likely all identify with the final dining cohort in Ireland: the cost constrained diner. These diners are largely in more-established life stages (their early 50s to 64) and they are acutely feeling the pinch of the current economic situation. Interestingly, this cohort is much more likely to be living in Northern Ireland and it was noted that many people living in the North, over the age of 45, are reducing eating out.
Small producers
The pandemic showed the resilience of Irish food producers. Many who would have traditionally supplied food service operations were forced to pivot into e-commerce, online sales and specialised at-home dining offerings. These were well received and the changes made during the pandemic have largely been adopted for good.
Now, as energy costs rise and staffing issues continue to put pressure on restaurants and cafes, there are opportunities for Irish food producers to fill gaps in service areas.
Maureen Gahan, Bord Bia’s food service specialist, tells Irish Country Living that now is the time for food producers to make the lives of restaurant owners easier.
What can I do to address their problems?’ That’s the conversation you need to be having
“We talked about [the issue of] labour before the pandemic, but I think it’s even more acute now,” she says. “Because, unfortunately, a lot of people left hospitality and they’re just not coming back. If you’re a producer, do you have something which is a labour saving solution? A pre-made dessert, or a sauce where [chefs] don’t have to start from scratch?”
“We know that although the business levels are back to pre-COVID - which is fantastic - that demand is going to run out,” she continues. “For next year, any forecast we’re predicting is driven by inflation, so restaurants will need to become more creative in luring people out from their sitting rooms. [As a food producer,] it’s about putting yourselves in the shoes of a restaurateur and then thinking, ‘What can I do to address their problems?’ That’s the conversation you need to be having, rather than, ‘This is my product and I think you need it.’”
Think breakfast, brunch and lunch
Late-night dining has gone down in popularity while more diners are looking for breakfast, brunch and lunch offerings. Teresa Phelan, who works in Bord Bia’s New York office, says in the US, this has to do with more diners working from home and looking for an “escape” from their work day at 5pm. Maureen says, in Ireland, the demand for earlier dining options comes as people are dropping their kids to school, going back to the office and are suddenly leaving home more often without having had their breakfast.
“[Earlier dining options] are definitely becoming more of an opportunity,” she tells Irish Country Living.
Middle ground isn’t good enough
David Henkes is a senior principal at US-based food research and analytics company Technomic. Technomic identifies key trends and areas of opportunity within food service and they work with countries around the world to provide tailored research for specific regions.
While presenting their research findings, conducted with Bord Bia, he indicated that diners are not content with middle-ground food offerings. In conversation with Irish Country Living, he reiterated this point:
“The two axis of growth we see [in food service offerings] is in the ‘convenience’ or the higher-end ‘experiential’,” he explains. “In either space, the worst place you want to be is right in the middle. You need to excel and understand what you’re offering to the consumer. That’s a message which constantly needs to be reinforced.
“As we look at the slowdown that’s going to happen, especially with the cost environment we’re in, you really have to be excelling at something,” he adds. “What ends up happening, as the consumer starts to pull back a bit and spend their euros more judiciously, is they’re going to pick places which offer that [special] experience. They’re still going to spend, but they’ll do it less often. If you’re in the middle, consumers aren’t going to come back.”
Growing world of technology
Bord Bia’s trends and insights specialist, Grace Binchy, spoke briefly on some of the unique ways technology and food service are combining. While working within technology might seem far off from what most rural food businesses can or even want to achieve, the solutions available through technology could help solve some common issues.
For example, restaurants have started to introduce robotic servers to help mitigate staff shortages. Larger food service chains - like Chipotle in the United States - are starting to engage in the “metaverse” (virtual reality spaces where users are engaging in a computer-generated environment); offering vouchers through online games like Roblox and reaching newer generations of diners.
Convenience
Convenience is an area which has seen consistent growth for decades. Anything that makes the diner’s life easier is always going to sell. We have seen smaller producers in rural Ireland introduce convenient ways of selling their product - like milk vending machines - but Technomic’s David Henkes says things are starting to go even further in this area.
“What’s interesting is this whole idea of automation and vending machines - it’s not so much about the machines anymore, it’s becoming more about ‘unmanned technology’ which replaces the need for labour,” he says.
Sustainability
All major future changes we’ll see in food service will likely be driven by climate goals and sustainability. The latte levy, which was covered in a recent edition of Irish Country Living, will change consumer behaviour in terms of using keep-cups for take away coffees.
It was mentioned that while consumers understand the implications of food on their personal health and the environment more than ever before, they do not necessarily understand the many symbols on food labels. Food service operators and providers need to be better at communicating their sustainability efforts.
Collaboration
We see larger food service operators collaborating with smaller brands with a strong online and community presence to their benefit. Having smaller brands in the corner of larger businesses will have a positive effect on the larger business. Collaboration with chefs is also a good move for larger food service operations. For example, we are seeing chefs collaborate with retailers for higher-end take home food options and pop-up dining events.
A small producer’s view
Jane Russell, who owns and operates Jane Russell’s Handmade Sausages out of Kilcullen, Co Kildare, was present at the seminar and spoke with Irish Country Living about the opportunities she sees for her business in 2023.
“Our business is made up of retail sales and food service sales,” she says. “I think the retail side of things is going to be quite tricky for the next couple of months; we’re a premium brand and it’s very hard to pass on all of the costs. In every pack of sausages we make, every single bit of it has gone up – the tray, the sleeve, the meat - everything. But the other side, the food service, I would see opportunities there for us.
“We’re small enough that I would hope we would be able to adapt and change quite quickly to a lot of the trends that are being identified here. Things like meal kits, working with food service operators who want to change what they’re doing, the collaboration and the partnership things being mentioned. I think today’s seminar is getting you to think about what your strengths are - and how you bring those things to the opportunities that are there.”
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