13 Takeaways from the 2014 CSP Foodservice Handbook
Off-premise consumption growth, day-part bright spots and more
OAKBROOK TERRACE, Ill.-- For the past four years, CSP has used its annual Foodservice Handbook to compare sales trends inside and outside the convenience-store segment, looking for growth opportunities and areas for improvement as the industry continues to grow its share of stomach.
As this year’s issue hits the streets, we’ve collected the biggest takeaways found within its pages.
1. Industry Continues Moderate Growth. The entire foodservice industry is expected to reach a record high of $683.4 billion this year, up 3.6% over 2013, according to the National Restaurant Association (NRA). That’s the fifth consecutive year of sales growth, yet the upward trajectory still remains more moderate compared to the onset of the recession.
2. Retail Foodservice Grows Share. Retail-host restaurants, which include c-stores, are expected to increase sales by 5.1%, or 2.7% in real growth this year (compared to limited-service restaurants with 4.4% projected growth, or 2.1% real growth change), according to the NRA. The only segment expecting greater growth than retail-host is managed-service hospitals and nursing homes and hotel restaurants. Of course, keep in mind that retail-host restaurants are starting from a smaller base than all of these segments.
3. Off-Premise Continues Permeation. Today, more than 70% of all restaurant traffic is consumed off-premise, according to the NRA, reflecting a major flip in the past 50 years and indicative of the consumer need for quick, convenient, on-the-go options.
4. C-Store Operators Feel Optimistic. C-store operators report being quite optimistic about the year ahead, with 87% indicating they expect overall foodservice business conditions to improve greatly or somewhat over the next year, according to the 2014 FARE State of Foodservice Study. Twenty-three percent believe it will improve greatly, compared to 17% of QSR operators, 15% of college & university operators and 12% of hospital operators.
5. C-Stores See Only Traffic Growth. C-stores experienced 1% growth in foodservice traffic last year, compared to flat growth for the QSR and food/drug segments, according to The NPD Group.
6. Lunch Is Bright Spot for C-Stores; Breakfast Is Bright Spot for QSR. Lunch was the day-part with the greatest traffic growth for c-stores last year at 5%, according to The NPD Group. Morning meals dropped 1%, supper dropped 2% and the p.m. snack occasion increased traffic by 3%. Compare that to the QSR segment, which saw a 4% increase in morning-meal traffic, 1% drops in lunch and supper traffic and a 1% gain in p.m. snack traffic.
7. Day-Parts Provide Different Promises. QSR/fast-casual operators have about the same growth expectations for lunch as c-store foodservice operators, according to the 2014 FARE State of Foodservice Study. Where they differ is at breakfast, where c-store operators expect a far greater growth (34% vs. 17%), and dinner, where QSRs expect far greater growth (34% vs. 7%).
8. QuickChek Debuts Strong. C-store retailer QuickChek came out of the gates strong in its first year on Technomic’s C-Store Consumer Brand Metrics Study. The chain was added this year and took the top spot for food quality and beverage quality for the first quarter with scores of 94% and 96% respectively. It came in behind just Wawa for food taste and flavor with a score of 91%.
9. Papa Murphy’s Tops Restaurant Charts. On Technomic’s similar study for the restaurant segment, Papa Murphy’s took the top slot with the highest composite score of all consumer attributes, followed by Chick-fil-A. Krispy Kreme had the highest score in the beverage/snack segment, while Firehouse Subs had the highest score for bakery café/sandwich chains.
10. Convenience is King. IFMA and Datassential put together a comprehensive list of the most common foodservice eating occasions, average spend and frequency, as well as what segment garnered the most traffic from each occasion. The most important occasion for retail foodservice is “hold over;” for limited-service restaurants it’s a “cheap bite.”
11. Consumers Want More Than Hunger Satisfaction. Fifty-six percent of consumers want something beyond mere satiation during an away-from-home meal occasion, according to IFMA. Twenty-eight percent report being “experientialists” who look to not just the food but also ambiance and service when dining out; 28% are the slightly less adventurous “progressives,” who nonetheless carry a great appetite for experimentation.
12. Millennials Snack at C-Stores. C-stores are currently winning millennials’ snacking preference top spot, with 47% reporting they prefer purchasing snacks from c-stores, beating out fast-food restaurants at 39%, according to The Culinary Visions Panel. Baby boomers prefer to get snacks from home (45%).
13. Beverage Trends See Segment Disparity. When asked which beverage category has the greatest growth potential, QSR/fast-casual operators and college & university operators both answered made-to-order specialty coffee drinks, according to the 2014 FARE State of Foodservice Study. C-store operators differed, identifying packaged energy drinks as the category with the greatest potential, followed by packaged soft drinks and dispensed regular coffee.