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Food fight: Demand for

Food fight: Demand for quality food blurs lines between industries Hotels are now getting in on the boom in home delivery of food, thanks to the rapid uptake of UberEats. Seeing an Uber car parked outside a pub for five minutes will become a more common sight as this trend continues. Australia’s insatiable demand for quality food has blurred the lines between food-service industries over the past five years, according to industry research company IBISWorld. Operators across a range of food-services industries have sought to capitalise on trends towards premium dining, disregarding traditional business models, the company says. Over the past five years, many fast food operators have sought to expand their range of restaurant-quality meals, while the restaurants industry is awash with premium establishments providing a new take on fast-food classics. These trends will pose a challenge for operators that do not embrace premiumisation, as they will face growing competition from rival businesses across the hospitality sector. IBISWorld reports that fast-food has traditionally been associated with cheap, quick, unhealthy food, and fried products have dominated much of the industry. “While giants like McDonald’s, Subway and KFC still hold significant shares of the market, the tide is turning. Consumers have demonstrated a willingness to pay higher prices for products of a higher quality. This has encouraged an influx of new businesses into the fast food services industry. These new operators have sought to tear down the barriers between fast food and restaurant dining, finding new ways to produce premium-quality meals at fast-food speed. “This trend has provided a strong avenue for growth in the industry, with revenue expected to rise by 2.7% during 2014-15 to reach $14.2 billion. “While the shift towards restaurant-style fast food has pushed the boundaries of the fast food services industry, fast-food providers are under pressure from similar trends in the restaurants industry. Traditional favourites have fallen out of favour in the fast food services industry, but premium equivalents in restaurants are more popular than ever, with gourmet burger, pizza and fried-chicken restaurants leading the charge. “Consumers have embraced these products, willing to forgive poor health content if the quality is high. The expansion of these products has supported strong growth within the restaurants industry, with revenue expected to rise by an annualised 3.6% over the five years through 2014-15. This growth includes a rise of 2.0% in the current year to reach $11.7 billion. Competition 44 | Hotel SA | www.ahasa.asn.au

among restaurateurs and from other food-services businesses has limited growth to a degree. “The blurring of the lines between food-services industries extends further to the cafes and coffee shops industry, with cafes trying to broaden their appeal while at the same time facing strong external competition. “Coffee sales have provided some insulation from external competitors, with many discerning consumers preferring to buy coffee from specialist cafes over restaurants. However, restaurants have sought to introduce cafe-style operations during the morning and lunch-time hours in an effort to capitalise on strong demand for coffee. “While fast-food operators have been unable to compete on quality, these players have sought to undercut both cafes and restaurants when it comes to prices. Consumers can now easily get their morning caffeine hit from fast-food providers at a fraction of the cost of visiting their local cafe. “The changing landscape of the food-service sector is shifting what consumers purchase and from where. It is also providing consumers with more options, allowing them to easily choose between fast food, restaurants and cafes when eating out. While this trend is being welcomed by consumers, it is forcing these industries to compete against each other for customers, pushing prices lower, and quality higher. Operators will need to carefully choose menus, prices and spending strategies in order to attract consumers while remaining profitable.” For more information, visit www.ibisworld.com.au • BEER SYSTEMS • SALES & SERVICE • ICE MACHINES • BEVERAGE SYSTEMS • REFRIGERATION & FREEZER UNITS Get your message to the inbox of The Forager’s food and wine interested subscribers. advertising@solsticemedia.com.au 08 8224 1600 www.ahasa.asn.au | Hotel SA | 45

Platform July 2018