How delivery is changing the shape of British foodservice
The NPD Group projects that drones will be a feature of the delivery channel in the country within five years.
Delivery is changing the shape of British foodservice, according to The NPD Group.
The market research company says there were 755 million delivery visits in the year ending (YE) December 2018, an increase of 210 million or 39% since YE December 2015.
In contrast, total visit figures for the British out-of-home (OOH) or eat-out foodservice industry grew just 2% between 2015 and 2018, peaking at 11.35 billion visits in 2017 and declining by 0.5% in 2018, equivalent to a loss of 60 million visits.
Delivery gained its share of Britain’s foodservice industry from 5% of visits in 2015 to 7% in 2018. NPD says this could soon reach 9% based its prediction of a 28% increase in foodservice delivery visits by 2021, based on current growth rates.
Delivery spend increased by £1.35 billion in 2018 compared to 2015, with NPD saying that the British foodservice delivery market could be worth £6.3 billion by 2021.
Lunch and breakfast delivery visits projected to grow
The delivery channel is strongly associated with evening meals in the UK, with over 60% of delivery visits occurring at dinner.
NPD says this suggests that delivery has ample room to grow at other dayparts, with breakfast and lunch combined accounting for 20% of delivery visits in 2018, an increase of 74 million and almost double in size since 2015.
Snacking delivery visits are also growing rapidly, up 67 million since 2015, indicating the increasing appeal of delivery across the day.
Around 7 in 10 delivery visits are to residential addresses whilst 1 in 10 are to work locations. But it’s not just young consumers that like food and beverages coming to their door; delivery visits grew strongly among the 35+ age group between 2015 and 2018, with visits up 45%, or an additional 63 million.
Pubs’ growing appetite for delivery
NPD also said that pubs have a growing appetite for delivery. Whilst British pubs only accounted for less than 4% of the delivery market in 2018, they have increased their delivery visits by 84% since 2015.
The market research company expects branded pub chains to offer more food for delivery in the coming years, explaining that it is an “effective way of keeping kitchens and kitchen staff busy during quieter trading times.”
“Over the short-term, commission charged by aggregator platforms could impact operator profitability. But the long-term trend for food delivery is growth. The arrival of virtual restaurants, usually run from ‘dark kitchens’ and offering delivery-only brands, will strengthen the wider movement away from retail-based foodservice,” The NPD Group insights director for foodservice Dominic Allport explained.
App orders growing
Delivery orders via phone, meanwhile, are declining in favour of apps. Phones accounted for 56% of all delivery ‘visits’ in 2015 but shrunk to 45% by 2018. App orders are up 182% since 2015 and accounted for 21% of total delivery visits in 2018. Within the 16 to 24 age group, app delivery visits now account for 30% of total delivery.
But NPD notes that operators will only see further growth “if they get the formula right in terms of quality, price, freshness and speed-to-customer, while also meeting the public’s concern about excessive packaging associated with delivered food.” They explain that packaging and on-time delivery is especially important for hot foods, such as burgers or chicken, that are not easily reheated. Burgers, notably, were included in 6% of delivery visits in 2018, and chicken in 23%.
Drones a ‘new marketing opportunity’
NPD also expects drones to be a feature of the delivery channel in Britain within five years, with branded drones offering a new marketing opportunity and increasing customer loyalty. They explain that drones are also likely to be more sustainable than some other forms of transport and could work just as well in rural locations as cities.
“There’s much more innovation to come from the delivery channel. Consumers will love the novelty value of receiving their food order via drones. As soon as British foodservice operators get a viable and authorized drone delivery platform, they’ll offer it to the public for appropriate foods in selected markets,” Allport added.
