Horeca Report 2016: What Comes Next? Release date: August 15th, 2016 (157 pages) PDF/Powerpoint format. Price: GBP2,499.00 PDF brochure Buy

Abstract

Is the future of food artisanal, local and unique? Or will it be dominated by chains and be bland, inoffensive and globally recognizable?

There are many pointers that we have reached peak chain. Then again there is still a place for the big corporates, as their business model economics trump smaller indie start ups. Starting from much better supply chain efficiencies and better quality controls, they are especially good at the occasional convenience of not having to cook a meal and not having to argue with fussy kids – or for the business traveler and tourist. But they are very much tied to bricks & mortar.

On the other hand the boom in artisanal, organic, health & wellness, independent, street food, etc shows no sign of slowing down. Clearly the future of food is bifurcating and “average is over”, which is bad news for the undifferentiated middle. It will be either the best value/cheapest options (chains) or the luxurious best. The current middle will get squeezed hard.

Behind this development is that fact that many shoppers are starting to shift their meals to prepared food, either from stores or restaurants. This is where chain restaurants can realize the cost benefits of their industrial scale. It’s also a clear argument to team up with the delivery start ups, from GrubHub to Amazon and UberEats. It should be noted that people who don’t cook at home are going to be more sensitive to pricing.

Those cooking at home will be looking for something special when they dine out at a restaurant. That will imply a cuisine they don’t normally prepare or something that requires a high level of expertise. It’s going to be more artisanal, focused on the craft of cooking. (The high-end Italian, the macrobiotic vegan place, or one of the many family-run ethnic restaurants...)

So what is just around the corner?
With the middle ground being eroded new spaces open up. Especially in large cities, there is an increasing number of new “mini” chains. These tend to edge up the generic chain experience and give shoppers something of a local feel, often with more creative food stylings. Even a handful of locales can reduce operating costs (when food production becomes more centralized) and increase buying power - and of course kitchens can be shared.

The other massive opportunity can be found in the digital transformation and new business model emerging. The digital disruption by meal kits and delivery start ups and the transformation they bring is still poorly understood.

But there are also a number of threats on the horizon:

The trend to unintentionally cloned-yet-unique hipster enclaves that have their own name and menu but are basically interchangeable with a hundred other brick oven pizza, high end coffee roasters etc is fizzling out – because it becomes too mainstream.

The cost structures are changing, especially with rising minimum wages and other regulatory burdens threatening restaurants.

For more insights and recommendations dive into our latest report…

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