Full recovery in the foodservice sector is not expected until 2023 at the earliest, according to new consumer research.

The Bord Bia Irish Foodservice Market Insights Report 2021 finds that there remains a degree of caution around eating out, especially among older demographics.

Despite a widespread view that there are adequate Covid-19 safety measures in place, for 6 in 10 diners there is some degree of nervousness about eating out.

The foodservice market includes all food and drink consumed and prepared out of home, incorporating restaurants, pubs, hotels, coffee shops, workplace catering, hospitals, education and vending.

The consumer research involved a survey of 1,417 adults in the Republic and Northern Ireland. Fieldwork was conducted between October 21 and November 2.

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The Bord Bia report estimates that the value of the Irish foodservice sector for 2021 is €5.15 billion. This would be up 14.6% on the 2020 level and 41% below the outcome in 2019.

Bord Bia foodservice specialist Maureen Gahan commented: “We still have a way to go to returning to pre-pandemic levels. Certain segments such as limited-service restaurants and coffee shops have been less impacted and will recover quicker in 2022.

“However, restaurants, hotels, pubs and workplace catering will continue to be impacted not only by public health restrictions but also by other broader sector challenges.

“These barriers to growth include labour shortages, supply chain disruption and rapidly rising inflation.”

The report calls out eight Critical Factors facing the industry which are set to continue into the future:

‘Big Three’ barriers to growth - supply chain challenges, labour and higher prices/inflation all have the potential to hamper stronger growth in 2022.

Ongoing restrictions – underlying consumer demand remains strong, but full return to normality won’t occur until the public health situation allows.

Return of international travel - while domestic demand helped sustain many segments of the tourism industry, it will struggle to reach full recovery until public health advice allows the return to full international travel.

Off-premise initiatives – even as the industry is allowed to re-open for dine-in, click and collect, take-away drive-throughs are critical to operator success.

Experience is increasingly important - consumers crave the experience of eating out and will increasingly be looking for something new, unique or different to drive their decisions in the future.

Workforce remains unsettled - consumers have yet to return to any type of ‘routine’ and a return to the office and resumption of pre-pandemic activities remain unlikely to occur in the short term.

Changing consumer priorities – outside of Covid-19 protections, other priorities have an important bearing on choice of foodservice outlet. Healthier food choices, sustainability and support for local will all play a greater role.

Future consumer demands – the future of foodservice will not simply be a return to ‘business as usual’. Operators will need to embrace a changing consumer that has more choice in the range of options they can access and the means by which to access them.

Tara McCarthy, CEO, Bord Bia, stated: “There is no doubt that suppliers can play an important role in helping operators to navigate ongoing challenges facing the sector and we would encourage them to work collaboratively in helping to identify future solutions.

"This could include creating labour saving products, providing transparency around environmental, sustainability and provenance messages, enhancing communications around supply chain issues; and developing new products that meet the needs of hybrid workers or delivery customers.”

Stuart Fitzgerald from LEON Restaurant in Temple Bar commented: “The outlook is uncertain, there’s no two ways about it, and it has been hugely challenging for the industry over the last 24 months. However, people still want great food, served in a convenient location, at an affordable and fair price, that’s good for them and kind to the planet.

"For operators it is now about understanding where the consumer will be, whether that is at home, in the office or in a hybrid working model and how we can reach them.”

Foodservice Seminar

The findings of the report will be shared at Bord Bia’s Foodservice Seminar broadcasting live from the RDS, Dublin from 10am – 1pm on Wednesday December 8.

The event will feature contributions from Declan Foley, Krispy Kreme; Sandra Kirwan, Glanbia Ireland; Deirdre O’Neill, Compass Group Ireland; John O’Toole, Airfield Estate; Lucy Dee, Taco Bell; Jeananne O’Brien, EATTO and Glenn Edwards, LEON.

Sign up for the webinar here.

Photo: Maureen Gahan and Stuart Fitzgerald. (Pic: Chris Bellew / Fennell)