Insights
Opportunities within delivery for foodservice outlets ballooned during the pandemic and have remained in growth as consumers seek convenient meal options. While both value and volume sales for delivery are on the up, there is room for further growth as many outlets have yet to fully tap into the segment.
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Foodservice delivery swelled by 50% in 2020 as consumers ordered in more, keen to treat themselves during the lockdowns. But the growth spurt did not slow, with 2021 volume sales rising by a further 6.5% and £0.7 billion in value as takeaway moved out of the treat occasion and into consumers’ mealtime repertoires.
Strong sales continue as many consumers remain working permanently from home or take advantage of hybrid working. In fact, analysts predict foodservice delivery will benefit from these working patterns and rise by a further 5.3% in 2022, pushing the format’s overall value to £13.3 billion by the end of the year.
Consumers have made delivery part of their permanent routines, meaning a delivery is no longer a mid-week or weekend treat, but a solution to not wanting to cook or ‘just because’. In the 12 weeks to 23rd January, for instance, foodservice delivery grew by 9% year-on-year.
A higher proportion (+4ppts) of orders include a combination of food and drink which offers an opportunity to increase drinks sales as data suggests that consumers frequently add drinks to their baskets to reach the minimum spend level needed for free delivery. This increase reinforces the importance of including an action at the end of an order to encourage users to complete their meal with a drink and create easy to purchase bundle deals.
Within the wider foodservice and licensed market, foodservice is roughly a 50% split of deliveries with and without drinks, with 29% of occasions containing a soft drink. Quick Service Restaurants (QSR) hold the largest identified opportunity for soft drinks delivery, with 54% of delivered occasions containing drinks – 37% of which are soft drinks which demonstrates consumer demand for simple delivery formats which can be replicated wider.
Opportunities for foodservice, especially local venues, begin with the fact that two in five customers now work from home. Around two-thirds of customers make their own lunch when working from home, which means a third are buying food-to-go from supermarkets or foodservice venues, eating in local establishments or are ordering delivery. This offers an opportunity for local businesses to tap into by offering lunchtime meal deals for local delivery.
Venues in smaller towns and villages should therefore market their offering to homeworkers, focusing on food and drinks that can’t be made at home to grow revenue from these consumers, through either food-to-go or as a delivery format for convenience.
Britvic’s Soft Drinks Review 2022 revealed delivery as the prime vehicle for operators to grow sales around lunch, as more Brits utilised this offering during and after the pandemic. Delivery as a route to market grew by 6.5% in value between Christmas 2020 and 2021 and is currently worth £12.6 billion.
Restaurants lag when it comes to soft drinks deliveries being sold against food orders, with two in every three occasions consisting of food only and soft drinks included just 19% of the time. Here lies a big opportunity for restaurants to generate additional sales by prompting customers at the point of purchase to add a drink to their order.
A key learning for all foodservice outlets can be taken from QSR, driven largely by fast food outlets, where soft drinks incidence is higher due to the number of occasions where food and drink are ordered together for delivery, but also because consumers are used to taking advantage of meal deals in outlet in this segment. Meal deals and soft drinks promotions will be key to driving revenue sales across the foodservice sector, being an easy to implement action for customers with lots of potential to tap into.
In a short space of time, delivery has quickly grown to form a bigger part of consumers repertoires, and this is showing no signs of waning. This has created new revenue opportunities for foodservice outlets to grow into alongside a traditional offering.
Visibility – make sure your soft drinks products are clear and perfectly merchandised on your menus to drive conversion (eg. accurate product title, supporting product image)
Variety – make sure your range of products on menu is suitable for the customer missions (eg. small cans for lunch missions, large bottles for sharing occasions)
Value – make products appeal to consumer on menu (eg. discounts, bundles)
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