Food-to-go offers £16bn opportunity for firms
Food-to-go sales are expected to rise 6.8% this year, as shoppers stepped up their purchases of sandwiches, sushi and salads, according to new research from grocery think-tank IGD.
The research revealed 70% of high-street shoppers had bought food on-the-go for lunch last month. Almost half said they had bought a snack on-the-go, and more than 25% said they purchased breakfast on-the-go last month.
IGD chief executive Joanne Denney-Finch said: “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.
IGD survey – at a glance
• Food-to-go worth £16.1bn by December
• Market value up 6.8% from 2015
•70% of shoppers bought food-to-go for lunch last month
‘A strong opportunity’
“Suppliers looking to expand into this area must, first and foremost, broaden their understanding of the different types of food-to-go shopper.
“Those suppliers who really develop their knowledge of this unique market will be best placed to make the most of the growth opportunities available.”
Three key questions for businesses looking to exploit the market were: What drives shoppers to buy food-to-go products, what excites them and how can repeat sales be encouraged?
Three key questions for food-to-go suppliers
- What drives shoppers to make food-to-go purchase?
- What excites them?
- How can you work with your food-to-go customers to keep shoppers coming back for more?
Source: Joanne Denney-Finch, IGD
The top two channels for food-to-go sales, measured by value, were: quick service restaurants, with sales of £5bn and food-to-go specialists, with sales of £4.6bn.
Most valuable outlets
The next most valuable outlets were: coffee specialists, accounting for sales of £2.7bn, newsagents and convenience stores, with £2.5bn and supermarkets with sales of £1.2bn. See box for details.
Quick service restaurants, particularly premium burger chains, have increased their focus on health and nutrition by offering more fruit and salad, revealed the research.
Many companies specialising in the food-to-go market had relocated from London, and exploited new technology to personalise the shopper’s experience.
Growth in the sector was attributed to little-and-often shopping, the rising popularity of street food and coffee culture, and shoppers’ flexible lifestyles, said Denney-Finch.
“Many suppliers are now starting to expand beyond grocery retail, and food-to-go could present them with considerable opportunities”, she said.
One manufacturer targeting the sector was Greencore, which yesterday (July 26) revealed a 4% rise in third-quarter sales.
The results followed Greencore’s £15M acquisition of The Sandwich Factory from Cranswick.
Five most valuable food-to-go markets
- Quick service restaurants, £5bn, have been increasing their focus on health and nutrition including more fruit and salad options
- Food-to-go specialists, £4.6bn, have introduced new health-driven brands and used technology to personalise the shopper's experience
- Coffee specialists, £2.7bn, have introduced lunchtime and evening food options and seasonal ranges
- Newsagents and convenience stores, £2.5bn, have introduced specialist food-to-go counters
- Supermarkets, sales of £1.2bn by end of year, have been trialling new formats and idea in-store
Source: IGD
