the uk sandwich market presentation by jeffrey young allegra strategies 10am
TRANSCRIPT
The UK Sandwich MarketPresentation by
JEFFREY YOUNG
Allegra Strategies
10am
Allegra Strategies LimitedNo 1 Northumberland Avenue, Trafalgar Square, London WC2N 5BW, UK
Tel: +44(0)20 7691 8800 Fax: 44 (0)20 7691 8810 Email: [email protected] www.allegra.co.uk
Trends in the UK Sandwich Market
Presentation at The Taste Experience
British Sandwich Association
Jeffrey Young, Managing Director, Allegra Strategies Ltd
1 November 2007
Page 3
1. Background on Allegra Strategies
2. Consumer Food Mega-Trends
3. Market Landscape
4. Case Study: Branded Coffee Chain Segment
5. Future Sandwich Market Developments
6. Q&A
Page 4
• Leading UK research and strategy consulting firm focusing on Coffee and Foodservice, Retail and Consumer Lifestyle
• Mission to deliver outstanding quality information, assisting clients to better understand their competitive environment and to focus on customers, markets and innovation
• Publish Project Café series since August 1999, recognised as the definitive report on the UK and European branded coffee and sandwich chain markets
• Research projects: qualitative and quantitative customer insight programmes, competitive analysis, best practices and commercial due diligence for leading UK and global clients
• Project Café7 release May 2007. European Coffee Shop Market 2007 released October 2007
• In addition to bespoke research and strategy consulting to the coffee sector, Allegra also pioneers a series of definitive retail publications including:
- How Women Shop!™ 2007
- Ethical Consumer Trends UK – Clean Energy and Energy Efficiency 2007
- Ethical Brands – Implications for the Food sector
• In 2007, Allegra established an industry Think Tank - The Food Strategy Forum
• Senior Food & Beverage Executive Top of Mind Survey completed 30 October 2007
• Currently working on a new report: ‘Food on the Move’
• Leading UK research and strategy consulting firm focusing on Coffee and Foodservice, Retail and Consumer Lifestyle
• Mission to deliver outstanding quality information, assisting clients to better understand their competitive environment and to focus on customers, markets and innovation
• Publish Project Café series since August 1999, recognised as the definitive report on the UK and European branded coffee and sandwich chain markets
• Research projects: qualitative and quantitative customer insight programmes, competitive analysis, best practices and commercial due diligence for leading UK and global clients
• Project Café7 release May 2007. European Coffee Shop Market 2007 released October 2007
• In addition to bespoke research and strategy consulting to the coffee sector, Allegra also pioneers a series of definitive retail publications including:
- How Women Shop!™ 2007
- Ethical Consumer Trends UK – Clean Energy and Energy Efficiency 2007
- Ethical Brands – Implications for the Food sector
• In 2007, Allegra established an industry Think Tank - The Food Strategy Forum
• Senior Food & Beverage Executive Top of Mind Survey completed 30 October 2007
• Currently working on a new report: ‘Food on the Move’
ABOUT ALLEGRA STRATEGIES
Page 5
CLIENTS
Allegra Strategies provides research and consulting products and services to a wide variety of leading UK and global corporations. Our recent client list includes:
Page 6
1. Background on Allegra Strategies
2. Consumer Food Mega-Trends
3. Market Landscape
4. Case Study: Branded Coffee Chain Segment
5. Future Sandwich Market Developments
6. Q&A
Page 7
Allegra’s research and analysis over the past decade identifies 7 Mega-trends driving developments across the global food sector, with important consequences for the UK sandwich market.
1. Healthy Eating
2. Food-on-the-Move
3. Premiumisation / ‘Culture of Food’
4. Greater Variety and Choice
5. Expansion of Branded Chain Concepts
6. Growing Importance of ‘Experience’
7. Ethical Consumerism
Page 8
• Societal concern with obesity in the UK
• Press and government programmes have stimulated a growing focus on healthy eating
• Greater awareness of nutrition
• Proactive efforts by leading supermarkets and foodservice chains
• Trends towards simpler, more natural, fresh foods and organic produce
• Dramatic reduction in trans fats
• Reduced additives and preservatives
GLOBAL FOOD MEGA-TREND - HEALTHY EATING
Page 9
73.8%
6.3%
19.8%
0%
10%
20%
30%
40%
50%
60%
70%
80%
Agree Strongly/Agree Neither Disagree Strongly/Disagree
Allegra’s national food buying behaviour consumer research identified a major trend towards healthy eating. Nearly three-quarters of UK consumers interviewed stated that they are more concerned with healthy eating than they were five years ago. 55% believe that they should be eating healthier still.
CONSUMERS’ INCREASED CONCERNS ABOUT HEALTHY EATING [NATIONAL FOOD BUYING RESEARCH]Response to Prompt: I’m more concerned with healthy eating than I was 5 years ago.Percentage
Source: Allegra Strategies National Food Buying Behaviour Interviews and Analysis, 2006
Page 10
• Also known as Convenience-led consumption, Dash-board Dining or Grab&Go
• Busier and more mobile lifestyles
• Consumers are eating more meals out-of-the- home
• Increasing snacking and grazing
• ‘Three meals a day’ is now an out-dated stereotype in much of Britain
• Takeaway food and beverages have risen substantially in the past decade and is now widespread
• Retailers, foodservice operators and food manufacturers have responded with a wide variety of convenience offers
GLOBAL FOOD MEGA-TREND – FOOD-ON-THE-MOVE
Page 11
Nearly two-thirds of UK consumers eat out-of-the-home at least once per week or approximately two meals per week on average.
This trend has grown substantially over the past decade with the introduction of more convenience offers and more mobile consumption habits.
EATING OUT-OF-THE-HOME [NATIONAL FOOD BUYING RESEARCH]How many times per week on average would you eat meals out-of-home?Percentage
Source: Allegra Strategies National Food Buying Behaviour Interviews and Analysis, 2006
9.1%
12.7%
10.7%
13.2%
19.5%
5.3%
6.8%
1.1%
3.4%
18.2%
0%
5%
10%
15%
20%
25%
7 times or more per
week
5 to less than 7 times
per week
3 to less than 5 times
per week
2 to 3 times per week
Once per week
2 to 3 times per month
Once a month
Once every two months
Once or less every
quarter
Very seldom/
don't normally eat
out
Page 12
A quarter of UK consumers under 35 stated that they eat many meals ‘on-the-move’, an important current and future market for sandwich players. Allegra’s national food sample reveals that younger consumers are more likely to eat unstructured meals.
Source: Allegra Strategies National Food Buying Behaviour Interviews and Analysis, 2006
EATING ON-THE-MOVE [NATIONAL FOOD BUYING RESEARCH]Response to Prompt: I eat many of my meals on-the-move.Percentage
26.3%
24.0%
18.8%
12.7%11.5%
3.0%
0%
5%
10%
15%
20%
25%
30%
18-24 25-34 35-44 45-54 55-64 65+
Page 13
• Historically high relative wealth has increased discretionary income
• Growing demand for higher quality products and luxury treats, provides food players with opportunities to increase revenue
• A few examples:
- Growing popularity of deli concepts
- Rise of farmers markets
- Premium supermarket own-label
- Shift from instant to roast & ground coffee
- Premium niche brands, e.g. Kettle Crisps
• Rise of celebrity chefs and TV programmes e.g. Master Chef, Hell’s Kitchen, Jamie Oliver
GLOBAL FOOD MEGA-TREND - PREMIUMISATION / ‘CULTURE OF FOOD’
Page 14
• Increased travel and exposure to different cultures is driving more open-mindedness
• Increased acceptance and enjoyment of a wider variety of food types and multi-cultural cuisines
• More demanding consumers expect a higher degree of choice and quality
• Wide variety of product formats and channels to market
• Variety in tastes is particularly evident from the diversity of supermarket shelves and restaurant menus of today
• 24-hour access to food purchases is potentially a contributor to obesity
GLOBAL FOOD MEGA-TREND - GREATER VARIETY AND CHOICE
Page 15
• A global trend to consolidation in retail and foodservice
• Branded chain foodservice concepts, e.g. Costa, Starbucks, Pret, Carluccio’s, Subway, La Tasca, Pizza Express have proliferated at the expense of independent operators
• Significant growth in the quality mid-market
• Consumers shunning ‘greasy spoon’ outlets
• Despite a stated ‘emotional’ link to independent operators, UK consumers are gravitating to brands that they trust, associate with and aspire to
• Brands create a sense of ‘fashion’ and excitement
• Financial strength and operational excellence of branded operators provide distinct advantage
GLOBAL FOOD MEGA-TREND – EXPANSION OF BRANDED CONCEPTS
Page 16
4.2
4.7
6.8
7.9
8.3
10.2
11.5
0 1 2 3 4 5 6 7 8 9 10 11 12
Jun '99
Nov '00
Mar '02
May '03
May '04
Nov'05
April '07
Number of Brands Recognised
Source: Allegra Strategies Coffee Shop Interviews & Analysis, April 2007
AVERAGE NUMBER OF MAJOR BRANDS RECOGNISED UK BRANDED COFFEE SHOP VISITORS, 1999 - 2007 [COFFEE SHOP INTERVIEWS]Response to Question: Which of the following coffee/sandwich shops brand do you know?Number of Brands
Year-on-Year change
Apr ‘07 +12.7%
Nov ‘05 +22.9%
May ‘04 + 5.1%
May ‘03 + 16.2%
Mar ‘02 + 44.7%
Nov ‘00 + 11.9%
Growing brand awareness is evident as consumers increasingly use foodservice chain concepts. Vibrant brands that connect to a broad but well-defined target audience are those that gain most customer recognition.
Page 17
• High quality, themed store environments have become important tools to unlocking consumer spend
• Rise of ‘3rd space’ as a social venue – importance of a ‘my time’ space is not to be underestimated
• Sense of ‘urban casualness’ is encapsulated in the successful Starbucks, including the use of sofas, hand-written menu boards and themed graphics
• New McDonald’s stores now feature vibrant, café-like environments
• Supermarkets such as M&S and Waitrose are food-shopping
• Tastings, customer education and events
GLOBAL FOOD MEGA-TREND – IMPORTANCE OF CUSTOMER ‘EXPERIENCE’
Page 18
• Ethical dimensions are increasing in consumer purchase decisions. Key areas include:
• Environmental impact / Food miles
• Fairtrade
• Local sourcing
• Organics
• Social responsibility
• Impetus has been driven by corporate activities and widespread media coverage
• Growing concern with climate change but also an important focus on food provenance, localness and reduced packaging
• Ethical positioning is a business imperative
GLOBAL FOOD MEGA-TREND – ETHICAL CONSUMERISM
Page 19
While, 9% of visitors expressed strong opinions in favour of Fairtrade coffee, a high 57% of visitors remain passively indifferent to ethical coffee purchases.
IMPORTANCE OF FAIRTRADE [COFFEE SHOP INTERVIEWS]Response to Prompt: It is important to me to order Fairtrade coffee whenever I can.*Percentage of Respondents
8.7%
34.2%
23.8%
28.3%
5.0%
0%
10%
20%
30%
40%
Agree Strongly Agree Neither Disagree Disagree Strongly
Note*: Scale 1 to 5; where 1 = Agree Strongly; 2 = Agree; 3 = Neither; 4 = Disagree; 5 = Disagree StronglySource: Allegra Strategies Coffee Shop Interviews & Analysis, April 2007
Page 20
1. Background on Allegra Strategies
2. Consumer Food Mega-Trends
3. Market Landscape
4. Case Study: Branded Coffee Chain Segment
5. Future Sandwich Market Developments
6. Q&A
Page 21
With its highly concentrated population of 60 million and increasingly brand-led, food-conscious consumers, the UK provides a fertile market for quality sandwich providers.
• The UK is a hybrid between the US and Europe, combining a strong chain presence and convenience-driven behaviour, with the food and café culture of Europe
• Growing consumer ‘food culture’ has emerged over the past 5 years, e.g the success of Waitrose, M&S food, Taste the Difference, Finest and branded food chains such as Pret, EAT and Carluccio’s
• Café culture has risen exponentially over the past decade, with 47% of consumers visiting a coffee venue at least once per month. 67% of adult consumers eat out-of-the-home at least once per week
• UK out-of home Food & Beverage market is estimated at £37 billion
- Estimated 228 million daily meal occasions in the UK
- UK day-time convenience F&B market is estimated at £14bn and £3.3bn in London
- Sandwich market estimated at £3.5 - £3.7 billion
• Significant growth of the branded coffee/sandwich chain market, currently at £1.3bn. Forecast to reach a market size in excess of 6,500 units with total sales of £2.5bn within a decade
- Pret leads the branded food-focused coffee segment in sales and outlets, followed by EAT
• M&S, Sainsbury’s Local, Tesco Express, Boots and Greggs provide strong competition within the lunch time/sandwich market, as does fast-growing chain Subway, with 986 stores currently
Page 22
Source: ONS, Defra, Allegra Strategies Analysis, 2007
ESTIMATED ANNUAL TURNOVER – UK OUT-OF-HOME FOOD & BEVERAGE MARKET£ Billions
The UK out-of-home food and beverage market is estimated at £37 billion and is expected to grow at 1.6% per annum to 2010. Allegra estimates that the daytime on-the-move market at approximately £14 billion.
33.2 33.9 34.1 35.3 35.7 36.5 37.0 37.6 38.1 38.9
0
5
10
15
20
25
30
35
40
2001 2002 2003 2004 2005 2006 2007F 2008F 2009F 2010F
Compound Annual
Growth Rate2006 - 2010F
1.6%
Page 23
Note: Figures are for VAT registered businesses ONLY and numbers are start of year figures
Source: ONS Business Activity, Allegra Analysis, 2007
TOTAL NUMBER OF UK FOODSERVICE ENTERPRISES, 1996 – 2007ENo. of Businesses
Compound AnnualGrowth Rate
1996 – 2007E
Total Market 2.0%
Canteens & Catering 3.6%
Hotels -1.5%
Bars & Pubs 1.4%
Restaurants & Cafes 3.2%
The UK comprises approximately 130,000 Vat registered foodservice businesses with the total number of outlets estimated around 170,000.
Restaurants and cafés account for a growing 50% share.
45,195 45,900 47,325 48,435 49,840 51,495 52,815 54,400 56,975 59,330 62,005 63,750
44,385 43,925 43,690 43,690 44,020 44,850 46,355 47,39548,430
49,17550,755 51,500
12,110 11,645 11,410 11,195 11,030 10,95510,775
10,52510,405
10,25010,220 10,200
3,655 3,845 4,015 4,140 4,380 4,6204,850 5,065
5,2205,325
5,335 5,375
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
100,000
110,000
120,000
130,000
140,000
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007e
109,270 111,920114,795 117,385
124,080128,315
130,825
106,440 107,460
121,030
105,315105,345
Page 24
Source: Allegra Strategies Analysis, 2007
SELECTED UK SANDWICH/FOOD-TO-GO OPERATORS STORE NUMBERS, MAY 2007Number of Outlets
McDonald’s remains the largest foodservice chain in terms of number of outlets. However, this gap is narrowing with Subway soon to reach 1,000 UK outlets.
1,190
1,098
975
735
555 540
326 305
170 165 162 145 133 13265 44 29 18
702
0
200
400
600
800
1000
1200
1400
Mc
Donald's
Greggs Subway Tesco Expres
s
Boots Sand.
Costa Coffee
Starbucks
Sains-bury's Local
Caffè Nero
Caffè Ritazza
Bakers Oven
Pret A Manger
BB’s Coffee & Muffins
O'Brien's M&S Simpl
y Food
EAT Coffee Republic
Bagel Factory
Benugo
Page 25
A variety of players are present in the market, each targeting a specific niche. Allegra expects the main value growth for sandwich players to occur in the upper right-hand quartile.
UK SANDWICH/FOOD-TO-GO OPERATOR POSITIONING MAP
Source: Allegra Strategies Analysis 2007 -
+ ILLUSTRATIVE
-
Price
Quality Food Credentials
+
BB’s Coffee
& Muffins
Sainsbury’s Local
Starbucks
Caffè Ritazza
Costa
M&S Simply Food
Caffè Nero
EATSubway
Greggs
Bakers Oven
McDonald’s
Tesco Express
Benugo’s
Benjy’s(Defunct) Boots
PretWaitrose
Sandwiches
Page 26
Recent Allegra industry research identified Rising food costs as the single biggest challenge for UK food & beverage players and is currently a major concern for sandwich manufacturers and sandwich retailers.
Given intensifying competition and the need to differentiate means that Innovation/New Product Development is the second most important challenge currently.
TOP 5 CHALLENGES MENTIONED BY UK FOOD & BEVERAGE EXECUTIVES, OCT. 2007
Source: Allegra Strategies Analysis Food Strategies Forum Top of Mind Survey, Preliminary Data, October 2007-
RANKING KEY CHALLENGE
1 Rising food/ingredient costs
2 Innovation & new product development
3 Sustainability/Environment
4 Intense competition
5 Attracting & retaining staff
Page 27
1. Background on Allegra Strategies
2. Consumer Food Mega-Trends
3. Market Landscape
4. Case Study: Branded Coffee Chain Segment
5. Future Sandwich Market Developments
6. Q&A
Page 28
• Branded coffee shop market now totals 3,000 units, set to nearly double over the next decade
• Regional growth will account for the lion’s share of growth in outlets at circa 10% per annum
• London is still growing, forecast at 6-7% per annum for the next 3-4 years
• Branded segment turnover is valued at £1.3 billion in 2007 and to exceed £2.5 billion by 2017
• Top 3 coffee-focused players: Starbucks, Costa Coffee and Caffè Nero accounted for 1,400 units and each adding 40-60 outlets per year
• Branded food-focused players Pret A Manger and EAT have accelerated growth plans
• UK café culture is here to stay. The popularity of coffee bars continues to grow as a significant proportion of UK consumers make coffee shops part of their daily lives
• Coffee shops have become important venues not only to drink coffee and other beverages, but also to eat, relax, socialise and conduct business meetings
• Major branded chains Starbucks, Costa Coffee, Caffè Nero, Pret A Manger and M&S Cafés have set strong benchmarks on product variety, coffee quality and store environments
• Consumers now expect these features across a growing set of UK foodservice, leisure and shopping venues
• An increasingly important channel for sandwich manufacturers
• Branded coffee shop market now totals 3,000 units, set to nearly double over the next decade
• Regional growth will account for the lion’s share of growth in outlets at circa 10% per annum
• London is still growing, forecast at 6-7% per annum for the next 3-4 years
• Branded segment turnover is valued at £1.3 billion in 2007 and to exceed £2.5 billion by 2017
• Top 3 coffee-focused players: Starbucks, Costa Coffee and Caffè Nero accounted for 1,400 units and each adding 40-60 outlets per year
• Branded food-focused players Pret A Manger and EAT have accelerated growth plans
• UK café culture is here to stay. The popularity of coffee bars continues to grow as a significant proportion of UK consumers make coffee shops part of their daily lives
• Coffee shops have become important venues not only to drink coffee and other beverages, but also to eat, relax, socialise and conduct business meetings
• Major branded chains Starbucks, Costa Coffee, Caffè Nero, Pret A Manger and M&S Cafés have set strong benchmarks on product variety, coffee quality and store environments
• Consumers now expect these features across a growing set of UK foodservice, leisure and shopping venues
• An increasingly important channel for sandwich manufacturers
MARKET OVERVIEW
Page 29
371 590 7781,382 1,784 2,056 2,190 2,402 2,624 2,869 2,973 3,205 3,502 3,752 3,985
3,9004,000
4,100
4,2604,345
4,4534,587
4,7604,870
4,967 4,9925,041
5,0925,125
485503
518
714796
8971,160
1,2521,335 1,320
1,4051,484
1,565
5,158
1,651
522
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
10,000
11,000
Dec-97 Dec-98 Aug-99 Dec-00 Dec-01 Dec-02 Dec-03 Dec-04 Dec-05 Dec-06 Apr-07 Dec-07F
Dec-08F
Dec-09F
Dec-10F
The UK branded coffee market has quadrupled since 1999 to reach an estimated 3,000 outlets a and accounting for 30% of the defined coffee shop market in 2007. Allegra predicts the branded market to grow by more than 8% to 2010 and ultimately to double within 10 years.
*Note: Non-specialist segment excludes branded chains who have partnered with non-specialist playersSource: Allegra Strategies Industry Interviews and Analysis, 2007
TOTAL NUMBER OF UK COFFEE SHOP OUTLETS, BY TYPE, DEC 1997 - DEC 2010FNo. of Outlets
Compound AnnualGrowth Rate
Dec 2006 - Dec 2010F
Total Market 4.2%
Non-specialists 5.5% -Hotels -Supermarkets-Department/Book stores -Service Stations
Independent Operators 0.9%
Branded Chains 8.6%-Coffee Focused-Food-Focused
7,3057,674
8,746
9,171
8,322
9,651
10,07710,443
10,795
6,160
6,843
9,285
5,4005,093
4,756
Page 30
TOTAL NUMBER OF UK BRANDED COFFEE SHOP OUTLETS, BY SEGMENT, DEC. 2000 – DEC. 2010FNo. of Outlets
Source: Allegra Strategies Industry Interviews and Analysis, 2007
Coffee-focused segment, e.g. Starbucks, Costa Coffee and Caffè Nero is set to grow at 9% to 2010 vs. 8% for the food-focused segment, e.g. Pret and Eat.
Total BrandedChain Market 8.6%
Food-Focused 7.6%
Coffee-Focused 8.9%
Compound Annual Growth Rate
Dec 2006 - Dec 2010F
9141,226 1,395 1,527 1,708 1,878
2,1472,425
2,652 2,843 3,016
468
558635
663716
746
722
780
850910
969
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
Dec-00 Dec-01 Dec-02 Dec-03 Dec-04 Dec-05 Dec-06 Dec-07F Dec-08F Dec-09F Dec-10F
1,382
1,784
2,0302,190
2,4242,624
2,869
3,205
3,752
3,985
3,502
Page 31
• 24% of the UK adult population or approximately 11 million consumers visit coffee shop at least once per week. 47% of UK adults – 20 million individuals – visit at least once per month
• 76% tend to visit their favourite coffee shop vs. 74% in 2005, strengthening brand loyalty
• Location is the main factor influencing a consumer’s choice of a given coffee shop/sandwich shop, at 63% in 2007 vs. 67% in 2005
• Atmosphere has grown in importance as a key influencing factor for UK coffee shop visitors
• Sandwiches are purchased on a regular basis by 50% of coffee shop visitors
• Take-away is more important than in the past 12-18 months according to 38% of visitors
• Brand awareness of coffee and sandwich bar brands is high and growing
• Allegra’s national telephone sample indicated brand awareness of 10.9 brands on average across the UK, revealing how far branded chains have penetrated the UK consumer mindset
• Only 12% of adults UK rank an independent coffee shop as their favourite
• Pret A Manger leads in the food-focused segment with leadership in food quality and service
• Caffè Nero ranks highest among high street chains on overall key success factors
• 24% of the UK adult population or approximately 11 million consumers visit coffee shop at least once per week. 47% of UK adults – 20 million individuals – visit at least once per month
• 76% tend to visit their favourite coffee shop vs. 74% in 2005, strengthening brand loyalty
• Location is the main factor influencing a consumer’s choice of a given coffee shop/sandwich shop, at 63% in 2007 vs. 67% in 2005
• Atmosphere has grown in importance as a key influencing factor for UK coffee shop visitors
• Sandwiches are purchased on a regular basis by 50% of coffee shop visitors
• Take-away is more important than in the past 12-18 months according to 38% of visitors
• Brand awareness of coffee and sandwich bar brands is high and growing
• Allegra’s national telephone sample indicated brand awareness of 10.9 brands on average across the UK, revealing how far branded chains have penetrated the UK consumer mindset
• Only 12% of adults UK rank an independent coffee shop as their favourite
• Pret A Manger leads in the food-focused segment with leadership in food quality and service
• Caffè Nero ranks highest among high street chains on overall key success factors
COFFEE SHOP CONSUMER RESEARCH OVERVIEW
Page 32
According to Allegra’s national telephone sample, 24% of the UK adult population, approximately 11 million individuals, visit coffee shops at least once per week.
47% of the adult population, more than 20 million consumers, visit coffee shops at least once per month.
23.5%
8.1%
15.5%
9.3%
43.6%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
Once a week Once a fortnight Once a month Less than once a month Very rarely / never
FREQUENCY OF VISITS [CONSUMER TELEPHONE INTERVIEWS]Response to Question: In general, how often do you visit coffee shops? Percentage of Respondents
Source: Allegra Strategies Household Telephone Interviews & Analysis, April 2007
Source: Allegra Strategies Household Telephone Interviews and Analysis, April 2007
Page 33
25% of coffee shop visitors frequently purchase food items within coffee bars.
A further 47% of customers occasionally make food purchases in coffee shops.
Only 16.5% of customers never buy food in coffee shops.
FREQUENCY OF FOOD PURCHASED IN COFFEE SHOPS [COFFEE SHOP INTERVIEWS]Response to Question: Do you normally purchase food with your drink in coffee shops? Percentage of Respondents
25.1%
11.2%
16.5%
47.3%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
Often Sometimes Rarely Never
Source: Allegra Strategies Coffee Shop Interviews & Analysis, April 2007
Page 34
1. Background on Allegra Strategies
2. Consumer Food Mega-Trends
3. Market Landscape
4. Case Study: Branded Coffee Chain Segment
5. Future Sandwich Market Developments
6. Q&A
Page 35
Allegra’s national research highlights themes of healthy eating, local origin of products and exploring new tastes to be important on-going and future trends.Despite trends to premiumisation, value-for-money will continue to be important.
UK CONSUMERS’ EXPECTED FUTURE CONCERNS AND INTERESTS [NATIONAL FOOD BUYING RESEARCH]In the years to come, what will you be generally more focused on?Percentage
Note: Multiple responses; answers were prompted and randomised when askedSource: Allegra Strategies National Food Buying Behaviour Interviews and Analysis, 2006
69.8%
43.8%
34.1% 33.3%30.8%
21.2%
0%
10%
20%
30%
40%
50%
60%
70%
80%
Healthy eating Greater value-for-money
Local origin of products Exploring new tastes Food safety Ethical consumption
Page 36
Allegra’s Food Strategy Forum has examined the corporate competencies required to lead in the rapidly evolving Food & Beverage sector.
Low Importance
Declining Importance
Rising Importance
High Importance
Brand Authenticity
Product Freshness
Customer Experience
Cost-efficiency
Customised Choice
Multi-reach
Premium Provenance
Talent Management
Collaborative Mindset
Capacity to Innovate
Flexible Operations
Price Competitiveness
Traditional Working Practices
Production Volumes
EMERGING FRONTIER OF CRITICAL CORPORATE COMPETENCIES
Pre-defined Production Runs
COMPETITIVE FRONTIER
ILLUSTRATIVE
Ethical Values
Service Excellence
Page 37
• Eating out more
• More informed
• More aware of ‘food culture’
• More demanding in terms of quality and service
• Busier and more mobile
• More informal
• More adventurous
• Variety-driven
• Complex set of value expectations
FUTURE CONSUMER BEHAVIOUR
Page 38
• Healthier
• Tasty and flavoursome
• Fresh and Natural
• Wider variety and more exotic fillings (incl. Ethnic)
• Artisanal breads
• Local provenance
• Premium
• Convenience
• Organics
• Smaller portions
• Priced to reflect segmentation
FUTURE PRODUCT DEVELOPMENTS
Page 39
• More diverse:
• Foodservice
• Traditional Retail and Convenience formats
• Widening set of non-food players
• Independent sandwich bars
• Workplace
• More sophisticated, more segmented
• Great emphasis on branded chain concepts
• Increased competition
• Sandwiches increasingly competing against other products for shelf space
• In the short-term, more cost-driven due to food price rises
FUTURE ROUTES TO MARKET
Page 40
• Innovative packaging
• Authentic
• Ethical
• Informative
• Honest
• Convenient
• Communicate a compelling story
• Deliver consumer 'Experience'
FUTURE WINNING BRAND CREDENTIALS
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1. Background on Allegra Strategies
2. Consumer Food Mega-Trends
3. Market Landscape
4. Case Study: Branded Coffee Chain Segment
5. Future Sandwich Market Developments
6. Q&A