Take-away is king as food services to lose €3.6bn at tills
Bord Bia forecast sees 2020 sales likely slashed in half amid pared-down menus and demise of buffets
FOOD service firms will lose 45pc to 57pc of their total expected sales this year – representing a potential €3.6bn hit to their takings, Bord Bia has warned.
Its food service ‘white paper’ on the harm done by Covid-19 restrictions offers three scenarios for how bad the sector’s losses are likely to be in 2020. It also identifies likely changes to the landscape, including spartan menus, the demise of buffets and other self-service options, and surging growth in take-away services.
Bord Bia said food services – including restaurants, pubs, coffee shops and deli counters – totalled €6.3bn in 2019 sales and, before the virus crisis, appeared likely to improve on that performance this year.
But now, the food board calculates that this total turnover will barely reach €3.5bn – down 45pc – and this will be achieved only if the economy reopens positively in the third quarter. This would require a revival of tourism and a September return of students to third-level education.
If the economy struggles from September onward, Bord
Bia says total turnover over the year could slump to just €2.7bn – 57pc or €3.6bn lower than a year ago.
“The out-of-home channel was one of the most severely impacted by Covid-19, not just in Ireland but worldwide, experiencing a near-total collapse due to the temporary shutdown of the hospitality sector,” said Bord Bia food service specialist Maureen
Gahan.
“However, we also know that it is a hugely resilient industry and we have already seen outlets transitioning their businesses to take-away and home delivery.”
She said food producers should “take a flexible and adaptable approach, identifying products and solutions that are relevant to industry operators as they reopen their businesses.”
The report identified emerging trends as food service outlets plot a path to reopening, among them:
• Menus will become smaller and more streamlined, focusing “on those items that drive maximum revenue post-crisis”.
• Restaurants, hotels and pubs will invest in take-away and home delivery options, because “this crisis has shown that having any off-premise strategy to diversify risk is a must”.
• Outlets will provide less customisation or ‘made to order’ options in favour of prepared and packaged ‘grab-and-go’ options.
• Self-service options “may not disappear completely” but buffets, self-service beverages and even self-service ordering kiosks will be “reduced or removed”.
• Food service providers with stronger finance will acquire “more vulnerable operations” throughout the supply chain, particularly restaurants.
David Henkes, a senior analyst at food service research firm Technomic who co-authored the report, said it remains “bullish on the longerterm viability and resurgence of the industry, as the economy recovers and as consumers grow more confident living in the age of Covid-19”.