Economic growth. That’s what the public, the stock market, and the government all want. And growth is alive and well in the food and beverage industry. Food beverage predictions show expected U. S. revenues to surpass $1.6 trillion in 2019. That continued growth has strong positive implications for the total economy as well as for the facility management industry.
Restaurant Industry Growth Leads the Way
According to the National Restaurant Association (NRA), sales at restaurants hit $825 billion in 2018, representing 4 percent nominal and 1.4 percent real growth. “2018 is the ninth consecutive year of sales growth for the restaurant industry,” says Hudson Riehle, senior vice president of the research and knowledge group for the NRA.
Interestingly, eating habits continue to change as the share of Food and Beverage dollars spent in restaurants have exceeded spending in grocery stores since 2016.
9 Food Beverage Predictions
While continued growth is expected, there are some important predicted changes to note:
Grocers are expected to devote more space to prepared foods. While there is an increased shift to dining out, that does not mean a decline in demand for grocery stores. Rather, grocers will cater more to convenience-driven consumers (and especially millennials) who want specific foods and fresh foods that require less preparation time. This opens the way for grocers to offer more prepared meals, deli counters, and in-store restaurants.
Restaurants and grocery stores will continue to invest more in technology. That includes data capture, checkout, and automation to control rising costs.
While Baby Boomers continue to spend the most on Food and Beverage, Millennials will increasingly spend more, eventually outpacing other generations over the next 10 years. Food and beverage operators must understand and cater differently to the various age groups in order to appeal meaningfully to them. Investment in more data and understanding the demographics in each market will be increasingly important.
Price-consciousness will play an increasing role as millennials tend to be more price-conscious spenders given their lower spending power. This translates to more spending in fast-casual and fast food locations and value-oriented purchases at grocery stores.
Among the most significant food-beverage predictions is the continued drive to convenience. Single-person households have increased dramatically since 1969 and this is particularly true in large cities. People who live alone are more cautious about food preparation and clean-up and are more likely to seek options such as pre-prepared or partially prepared foods, on-line ordering and delivery services. These factors are strongly impacting the market at-large as well.
According to reports, 60 percent of food and beverage spending is by suburban residents. As the suburbs continue to grow in density, that has strong implications for real estate costs and availability. Further, food and beverage operations are now opening more frequently in office buildings, including coffee shops, full-service restaurants, and even convenience stores.
With increasing real estate costs, space issues promote a push to smaller kitchen equipment and increasing cooking technology.
Real estate footprints are likely to continue shrinking as the type of foodservice operations continues to change to more fast-casual and off-premise dining.
Food Beverage Predictions Impact Strong Demand for Facility Management Services
Economic growth offers a strong call for exceptionally skilled facility management service operators who know their market, know their customers and can cater effectively to the needs of their clients. Major industry verticals with high growth include retail, food service, manufacturing, and public sectors.