Food service market recovery slower than forecast
The food service market here will not return to the levels it was at prior to the Covid-19 pandemic until the end of next year, according to Bord Bia.
The Irish food promotion board says that the prolonged lockdown in the first half of this year and gradual reopening has meant the recovery has been slower than it had forecast in November.
However, it still expects a bounce in the second half of the year that should lead to an 11% growth in sales across 2021 compared to a year earlier, down from the 16% worst case growth scenario predicted by it in November.
This will bring the total value of the market to almost €5bn the new research by Bord Bia predicts.
The sector here has displayed resilience in the face of the most prolonged shutdown in modern memory, said Maureen Gahan, foodservice specialist from Bord Bia.
“The industry has shown adaptability, perseverance and tenacity to survive, and with the assumption that the worst part of the crisis has passed, will begin to emerge and grow again in 2021 and beyond,” she said.
“We are forecasting a strong second half to 2021 as the vaccine roll-out continues at pace, coupled with pent up demand and consumer savings and we remain confident on the longer-term viability and resurgence of the industry.”
“As the economy recovers and consumers grow more confident living in the age of Covid-19, this will see a parallel recovery in the Irish foodservice market.”
The recovery will be even stronger next year, the board thinks, powering ahead by as much as 56% or €2.8bn.
Last year, the food service market collapsed by 47% because of the widespread closure of restaurants, cafes, hotels, pubs and workplaces, leading to plummeting demand for food away from home.
This saw it drop from a total value of €8.5bn a year to €4.5bn.
It followed eight consecutive years of growth driven by more people eating outside the home.
The study, co-authored by foodservice research specialists, Technomic, predicts that many of the shifts in consumption patterns seen during the pandemic will remain permanently.
“For example, with the strong demand for off-premise food including delivery, takeaway and drive-thru, restaurant models are adapting to accommodate what is widely expected to be elevated demand, even as the pandemic ends,” said David Henkes, Senior Principal, Technomic and report co-author.
“Seating areas are being re-thought, with more outdoor space being added. For some quick serve restaurants, dining areas are being reduced in size or eliminated altogether.”
He added that technology has been key to many foodservice businesses surviving through the pandemic, with investment set to continue.
The report also highlights the challenges some foodservice providers face in attracting and retaining staff, which has been made worse by the pandemic.
It says the taste of products will be key, as will the ability of outlets to offer off-premises options for customers.
Safety will also continue to be important for the sector, including around things like reduced touch point experiences.