With limited growth in Europe’s grocery retail market, suppliers are turning their attention to the £16bn food-to-go market. The food-to-go/convenience space is growing as retailers and food-to-go operators are capitalizing on shoppers' changing behaviors and priorities. Over the next five years, growth will top 35 percent, according to market research firm IGD’s report.
Food-to-go market trends
Gavin Rothwell, senior retail insight manager at IGD, identified the trends that will drive the future of this sector:
- Shoppers are becoming more health conscious. “Foods that support active lifestyles and tick the box for dietary needs are performing well, while wearable technology and apps are helping shoppers to better understand the nutritional value of what they eat,” Rothwell said.
- Shoppers are more time conscious and therefore are willing to shop at a nearby grocers rather than major shopping malls, even though this might end up being more expensive. The trend is already changing the face of the industry, with food-to-go specialists, such as Tossed and Pret now having a presence at motorway services and Subway and Greggs expanding across petrol forecourts, according to Rothwell.
- Convenient food-to-go options are needed to go beyond the classic options of coffee and lunch, to also include alternative missions at different times of day. “Some of this might be for evening meals, but there may also be opportunities at other times of day, for example a post-work snack or post-gym energy boost,” Rothwell said.
Rothwell expects more fusion between retail and food-to-go, as more major retailers and grocery stores try to capture a share of this market.
Millennial shoppers are driving growth
Millennial shoppers as the main drivers of growth in this segment, being twice as likely than their older counterparts to buy food-to-go. “While relatively small today, the future proofing of businesses will lie in their ability to meet the growing demands of the millennial group,” said Michael Freedman, senior insight manager at IGD.
The group is extremely time conscious and therefore willing to pay more for innovations that help them save time. According to an IGD survey, they tended to buy ready-meals, prepared foods, instant food, pre-cut fruit and vegetables and food-to-go; eat leftovers from a previous meals; cook in bulk; miss breakfast and use self-checkouts, all in order to save time.
The survey found that while many of the post- millennials still shopped in larger stores, use was lower than average for older groups. Asked about shopping in larger stores, a quarter claimed to have difficulty finding products and 23 percent found it too time consuming. The group is also very interested in expanded ranges of food-to go, wanting an increase in vegetarian, vegan, dairy and gluten-free options.
Collaboration will be key for U.S., South African and Latin American suppliers to capitalize on this growing segment
Fresh produce suppliers are in a great position for success as shoppers want healthy, fresh options, virtually everywhere. Collaboration between European food-to-go operators, retailers and global suppliers is critical to maximize the opportunities in this market. Suppliers can partner with customers to create the food-to-go solutions or components of the food-to-go options. In some cases, a retailer has invited certain suppliers to provide additional services, which puts them in a position to deliver directly to the retailer’s distribution centers.