Decoding Channel Preferences in Consumer Foodservice

After the pandemic, despite players' expectations that circulation restrictions imposed during the crisis would stimulate consumers' desire to seek more out-of-home experiences, foodservice on-premises consumption (global value in USD current terms) has not yet returned to the levels seen in 2019 (pre-pandemic). However, other off-premises purchasing channels have shown complete recovery and even expansion, comparing 2019 vs 2023. This indicates that consumers are actively embracing convenience, prioritising delivery while also opting for takeaway and drive-through options.

Consumption patterns of connected younger generations

According to the Euromonitor Voice of the Industry Survey 2023, 57% of respondents from the foodservice segment at a global level consider that “Changing consumption patterns as Gen Z and Millennials share of the consumer base increases” will impact sales in the next five years.

Younger generations are increasingly spending more time online, especially after the pandemic. New remote or hybrid work arrangements, more online socialisation and decisions grounded in information and comparisons are some of the characteristics of these younger consumers who use digital tools. The new economic reality is also shaping consumption patterns: with expected global inflation of 4.9% in 2024, there is caution regarding spending and more selectiveness when eating out as consumers seek greater certainty of perceived value for money. Ordering online and consuming off-premises often involve access to discount coupons, savings in terms of commuting costs, and even access to cheaper meals offered by virtual restaurants/dark kitchens that have leaner operations and consequently can offer more competitive prices.

Identifying preferences across different foodservice channels

Although other consumption channels are gaining relevance, eat-in is expected to maintain its position as the main foodservice channel in the coming years, with approximately 55% of total industry sales (USD, y-o-y ex rates/current terms) in 2028.

Eat-in will not disappear, but it is expected to increasingly make room for the concept of omnichannel, combining takeaway, drive-through and delivery

^{Source: Euromonitor Voice of the Consumer: Digital Survey, fielded March to April 2023, n=20,079}  

The fluidity with which consumers alternate going to the office in person or working from home, participating in online and in-person events, can also be felt in the way they consume in restaurants.

In 2023, takeaway is the second most preferred channel for foodservice consumers, sharing the position with delivery. However, its relevance is expected to definitively decrease in the coming years as delivery is expected to continue growing more than all other channels, with a CAGR of approximately 10% (2024-2028).

It is important for foodservice players to understand the different drivers that motivate consumption through each of these channels. On the one hand, on-premises consumption is more linked to social activities, leisure, and the seeking of a better flavour experience. On the other hand, delivery is associated with convenience, practicality, searching discounts, and time-saving. Finally, takeaway and drive-through, in addition to convenience factors, are also used when the restaurant is full or when the consumer does not want to wait for delivery time.

In particular, drive-through, despite being the smallest foodservice channel at a global level, is extremely important for North America and its strength should not be underestimated. The region has the most representative drive-through sales in the world, being responsible in 2023 for 88% of total global sales via this channel (USD, y-o-y ex rates/current terms). In the US, for example, despite high interest rates and an economic environment that induces caution, brands are looking for space to add more drive-through lanes.

Online delivery ordering and loyalty: A symbiotic journey

Most consumers find it more convenient to have only a few apps installed on their smartphones that offer a variety of restaurant options to choose from.

54% of respondents affirm that they have one or two third-party delivery apps

^{Source: Euromonitor’s Voice of the Consumer: Digital Survey, fielded March to April 2023} 

In this scenario where there is a wide range of options to choose from, having brand loyalty is a challenge. Currently, the largest player in delivery online ordering (considering first-party and third-party apps), Meituan Inc, holds 21% of total sales (USD, current terms), which demonstrates the great fragmentation of the market.

Despite the existence of various loyalty programmes offered by restaurants, only 26% of respondents (at global level) confirmed participation, according to Euromonitor's Voice of the Consumer: Digital Survey, fielded March to April 2023. For comparative purposes, this number rises to 47% when referring to loyalty programmes related to grocery stores or supermarkets. The reasons behind this result encompass a series of factors, with “it takes too long to earn reward” being the main barrier to adhere to a loyalty programme, according to 38% of survey respondents.

To win in the delivery game, it is essential to evolve delivery platforms into holistic ecosystems. This entails going beyond mere convenience, actively engaging consumers digitally and adapting to the challenging economic landscape where consumers are financially constrained.

Read our analysis, New Concepts in Consumer Foodservice, to explore more trends shaping the consumer foodservice landscape.