Baby Boomers taking backseat to hungry young diners, Restaurants Canada’s 2018 Foodservice Facts report finds
Millennials are taking a big bite out of Canada’s foodservice sector. There’s no denying there is power in numbers, and the release of Restaurants Canada’s 2018 Foodservice Facts proves it.
The past couple years have been good for the Canadian foodservice industry overall, with growth of 5.1% in 2017 after advancing 5.9% in 2016. This helped annual total foodservice sales to climb to more than $84 billion.
Millennials were one of three factors driving foodservice sales. Here are a few ways the industry is changing in response to consumer demand:
- Millennials are easily the key drivers of growth, with traffic up 9% (triple the size of any other cohort)
- In 2017 millennials accounted for 74% of dollar growth and 79% of traffic growth
“Millennials are now the largest category of foodservice spenders in Canada,” says Shanna Munro, President and CEO, Restaurants Canada. “They are driving trends such as third-party delivery, mobile payments and changing menus. Millennials are looking for bold flavours, new experiences they can share and meals that are customizable and portable for their busy, on-the-go lifestyles.”
Millennials, Breakfast and Confidence
Breakfast has gone far beyond expectations and has become trendy again. With the need for convenience and portability becoming more important with consumers, the breakfast category continues to grow. Diners are eating the majority of their meals and snacks on the go, with 70% of breakfast and 56% of supper orders at a restaurant eaten off-premise. Lunch is the exception, where 52% of meals are eaten on-premise versus 48% that are off-premise.
The top 5 reasons* consumers are more likely to consume off-premise (% of individuals):
- Portable (33%)
- Eaten quickly (25%)
- Picks me up (24%)
- Energy boost (18%)
- Guilty pleasure (17%)
Chain restaurants have adjusted accordingly by integrating all-day breakfast options to their menus to appeal to millennial taste buds. However, menu offerings and creating experiences for consumers isn’t the only thing that’s changing. A healthy economy, low unemployment rate and rising housing valuations boosted consumer confidence in Canada at the end of 2017, to its highest level in 10 years. This has propelled spending at restaurants, especially in British Columbia, Québec and Ontario.
5 other trends Restaurants Canada is seeing that are changing the foodservice game:
- Plant-based food options
- Continued rise of healthy options
- Food waste – using less and/or using waste to develop dishes
- Energy efficiency
- Technology encroaching into all aspects of the restaurant business
The Role of Tech
A restaurant’s online and mobile presence has become more important than ever, and is growing.
“Thirty-eight per cent of operators are planning to introduce online or app ordering in 2018, while 28% are investing in inventory management software and apps to control costs,” says Chris Elliott, Senior Economist at Restaurants Canada.
When it comes to the foodservice industry, the vast majority of restaurateurs agree technology makes restaurants more productive, speeds up customer service and helps increase sales.
- When deciding which restaurant to visit, more than four in 10 Canadians base their decision on whether the restaurant offers free Wi-Fi access.
Opportunities and Challenges
With many millennials renting versus owning, an increase in disposable income has many households turning to foodservice for both indulgence and convenience. Those that own a home are faced with household debt and rising interest rates. People are looking for deals, so traditional grocery stores continue to lose ground to stores like Costco and Walmart (with a 66% growth between 2012-2017) – giving people the option to enjoy convenience while staying cost-efficient.
Despite a strong year of overall growth in the industry, foodservice employment is falling. Worker shortages and higher minimum wages have caused industry-wide labour pains. After growing by 11,000 jobs in 2016, foodservice employment unexpectedly fell by 11,000 jobs in 2017.
“Labour shortages put a damper on investment and expansion,” says Lauren van den Berg, National Vice President, Government Relations for Restaurants Canada. “Restaurants are at risk if they can’t properly be staffed. The restaurant industry is one of Canada’s largest employers, the biggest source of first-time jobs for youth and a top tourism driver. We need to ensure that legacy continues to grow.”
“It’s important to understand that although the industry is experiencing growth, profits are not flowing through to the bottom line,” adds Elliott. “While overall topline growth has increased, bottom lines continue to be stagnant at 4.2% for the past three years. Raising costs across the board and driving the growth.”
Additional Survey Highlights
- Annual total foodservice sales are projected to reach $88.7 billion in 2018
- By 2022, combined commercial and non-commercial foodservice sales will exceed $100 billion
- 1.2 million Canadians are directly employed in foodservice
- 22 million restaurant customers are served per day on average
The full report is available to all Restaurants Canada members through the Member Portal. To access the report, please call 1-800-387-5649 or email email@example.com.
* Source: Ipsos Foodservice Monitor
Restaurants Canada (formerly CRFA) is a growing community of 30,000 foodservice businesses, including restaurants, bars, caterers, institutions and suppliers. We connect our members from coast to coast through services, research and advocacy for a strong and vibrant restaurant community. Canada’s restaurant industry is an $84 billion industry, directly employs 1.2 million Canadians, is the number one source of first jobs and serves 22 million customers every day.