Busy consumers with limited time available mean food-to-go is becoming an increasingly popular choice. According to research carried out by the Institute of Grocery Research (IGD), it is a market sector set to be worth £16.1billion by the end of this year, representing an increase of 6.8% on 2015. Produce Business UK finds out more
IGD Shopper Vista research indicates that 70% of UK adults have purchased something for lunch-on-the-go in the past month, and that fruit now accounts for 19% of purchases, while salads account for 26%. More than 22% of shoppers spend between £3 and £5 on snacks that include fruit, savoury snacks and hot food.
Demand for healthy food
Food-to-go is no longer confined to burgers, chips and sandwiches. Consumers are becoming much more discerning, wanting better, healthier food. It is an expanding market. The IGD says that food-to-go specialists now account for a £4.6bn slice of the market, and that the wider food to go concept is now spreading nationwide. And these specialist retailers are increasingly moving out of London to open outlets in other big cities. Health-driven brands represent the biggest growth area, particularly the provision of salads and fruit. Even premium burger chains are now responding to consumer demand by providing a much bigger fruit and salad offer.
Established retailers too have recognised the potential of this changing market, and are no longer focusing purely on the sandwich, snack and drink deal, but expanding into more premium products such as salads and packets of prepared fruit. IGD points out that many convenience, forecourt and other retailers have now introduced specialist food-to-go counters and are focusing on the different times of day that shoppers purchase food-to-go. Consumers are particularly keen on having an improved offer in convenience stores and taste is the driver for choosing specific products in the on-the-go range.
Pret A Manger is a good example of how the food-to-go market is changing. Traditionally its stores have sold a mix of meat, fish and vegetable dishes. After seeking customer opinions, it piloted a pop up shop devoted to vegetarian and vegan fare. Within three months, public demand forced the business to turn Veggie Pret into a permanent retail concept, and is now looking to roll out the concept elsewhere.
“Food-to-go represents a strong opportunity for suppliers, but it’s a different market to grocery retail, requiring a very distinct approach to succeed,” says Joanne Denney-Finch, IGD chief executive. “Suppliers looking to expand into this area must first and foremost broaden their understanding of the different types of food-to-go shopper. What drives them to purchase? What excites them? How can you work with your food-to-go customers to keep shoppers coming back for more? Those suppliers who really develop their knowledge of this unique market will be best placed to make the most of the growth opportunities available.
“There are some really clear development opportunities for food-to-go in the UK, driven by the growth of little-and-often shopping, the rise in popularity of street food and coffee culture, and shoppers’ increasingly flexible lifestyles. Many suppliers are now starting to expand beyond grocery retail and food-to-go could present them with considerable opportunities.”
Although lunch remains the most popular reason for buying food-on-the-go (accounting for 70% of shoppers participating in the IGD survey), 28% now purchase breakfast-on-the-go. This is a significant move, since until now breakfast offers have been very limited. Eating breakfast away from the house is a trend that has been growing quietly over the past few years and business breakfasts too are increasingly popular for networking and meetings.
In May, the iconic Ivy restaurant in London’s West End began serving breakfast for the first time. Fresh fruit forms a prominent part of the menu, with seasonal fruit salad and mixed berries on offer alongside freshly squeezed fruit juices including daily market greens, and vegetarian options such as sautéed spinach and seasoned avocado.
Another company seizing the breakfast-to-go opportunity is The Pod. It now has 22 shops serving thousands of customers each week as well as delivering directly to offices and events. The menus bear witness to the demand for fresh, healthy food with options such as Supergreen Detox Blitz, Vitamin-Hit Blitz, Superfood and Superfruit Pots, and avocado & chilli sandwiches.
Can retailers catch up?
Daniel Lucht, research director at retail analyst Research Farm believes that retailers have a long way to go to catch up with the businesses that are specialists in the market place. “Supermarkets have tried to be like Pret a Manger and others, but do not have the atmosphere, the variety,” he says. “They are too basic.”
He points to the experience of Tesco which trialled two food-to-go concept stores in London, the first opened in 2014 and the second in 2015. These stores were designed to take market share from Pret, and were styled to be upmarket with exposed bricks and soft lighting. The stores were small, occupying about 1,000 sq ft and provided a product range of around 100 sandwich options, soups and ready meals. The stores lasted barely a year, before being closed in March 2016. Reasons for closure were said to be lack of customer interest, while observers also indicated that high rents also probably contributed to the lack of profits.
“The best way forward for retailers is to capture that special emphasis by focusing on their deli counters and concessions,” says Lucht. “Millennium shoppers are valuing food in a different way than has been seen before. Provenance is very important, as this links back to the craft beer and artisanal market. Food-to-go delivered to your office by companies such as Just Eat and Pod are offering something different to the standard supermarket fare.”