BHN spoke to Simon Stenning, founder and strategic advisor at Future of Foodservice, about the implications of current consumer trends on the UK economy and its hotel and F&B scene.
What consumer trends will shape the coming years?
There are many trends that will shape our industry, but lets look first at the drivers of change.
An ageing population means that there are more of us living for longer, which provides more consumers for a leisure industry (plus senior living and care!), but the other driver from this is that younger consumers have longer lives ahead of them with more focus on leisure, and as housing costs remain so high, we see the experiential being more important than buying material goods.
Despite Brexit, and the growth in staycations, we are also travelling more on a global basis which educates us and exposes us to new cultures and cuisines, and this drives demand for a greater range of food and drink when eating out of home. The esoteric and exotic become more normal and mainstream. Consumers therefore become more curious, which is going to be a long term trend.
The awareness of problems facing the world and the environment are also driving changes in the way consumers behave, with consumers seeking more purpose in how they live their lives and through their purchases and activities. Hospitality operators and retailers need to demonstrate that they have a purpose towards the common good in order to engage with consumers.
Also, as consumers have more purpose, they also seek greater fulfilment, and this is another long-term trend. Fulfilment comes from setting out new goals or testing oneself, and as a result we see growth in ‘Side-Preneurs’ – where younger generations develop their business ideas at the ‘Side of Desk’ whilst working in a normal job – and we will also see more ‘Mature-Preneurs’, as the older generations realise that they have time to fulfil their ambitions with new business ideas in later life.
How will the rise of the staycation affect the UK economy?
There are economic drivers that will affect what consumers do and how they spend their money; at the moment, the decrease in the value of the Sterling has led to the increase in staycations, but if that changes we may well find that going abroad is more attractive and better value.
However, the ageing population is going to continue to want to explore the UK, which will fuel further growth in our own leisure and hospitality provision, and this is going to be a significant driver for the UK economy. The old adage of ‘Travel the world in your 60’s, Europe in your 70’s and home in your 80’s’ will mean that there is increased demand for UK leisure.
You mentioned that 130,00 new hotel rooms in the UK will be added by 2025. How will these tap into changing consumer needs?
The UK population is growing steadily and will continue to rise to a forecasted total of 73 million by 2041, reaching over 70 million by 2030, which is an absolute growth of seven million people. Plus, already each year we are seeing an average increase of 300,000 becoming employed as the economy trickles along.
So take these two factors, along with an increase in in-bound tourism, with potential growth of five per cent per year meaning that we could see over 60 million inbound tourist visits each year by 2030, and there are significant drivers for more demand for hotel rooms.
Differing consumer needs however, mean that hoteliers need to tailor offers accordingly; Asian tourists have different needs and expectations, whilst an older leisure user might want more comfort and luxury. Business users in the future will require more working spaces whilst on the go, and hotels could well tap into the need for flexible, collaborative working space.
Turning to food and beverage, how might consumer demographic affect this sector? What trends will emerge in the F&B scene?
The ageing population is not simply going to need carveries and soup – we take behaviours with us as we age, and therefore current trends will be relevant in the future.
The trend of veganism gets all the headlines at the moment, but we have to remember that there are still only around two per cent of the population that are dedicated vegans; the trend is actually towards ‘Conscious Reducetarianism’ where we choose to reduce the amount of meat in our diets, and this is set to continue. Conscious Consumerism is the overall trend, which will continue to grow in importance, as environmental and sustainability concerns start to effect all our actions and consumption.
From a cuisine perspective, we will become more familiar with a broader range of global cuisines, with ones such as Fillipino or Vietnamese becoming more common and accepted. We won’t be eating insects as a main source of protein, but they may well be used as a source of animal feed.
There will be a backlash against the use of soy, in the same way that there has been with palm oil, and I also believe that there will be a growing concern at what processed meat alternatives are, and how they are made.
Why are pubs “snapping on the heels of hotels”? And will the brewtel become popular?
The British consumer has always held the pub close to their hearts, and as the pub industry has changed – declining with reduced alcohol consumption but then reinventing themselves as a food destination and as a community resource – consumer usage of pubs has reacted positively. Pubs have continued to develop, with accommodation being a strong growth driver, and consumers are using pub accommodation as part of the leisure experience.
We are also seeing business users turn their backs on the economy hotel market and use pubs as a more friendly, warming, cost-effective option for business trips. The idea of a brewtel is clever, combining the growth in interest in brewing, with the leisure demand and the growth in the experiences market. I can see that this is an angle for pubs and breweries to exploit further.
All things considered, how might the hotel landscape develop in the next decade?
There will be considerable growth, given the factors that I’ve outlined above, but there will also be clear polarisation – value and simplicity at one end, with luxury and experiential at the other. Any operators caught in the middle will face multiple competitors and challenges.
Hotel F&B needs to develop a stronger sense of purpose so that guests no longer see the need to order in from Deliveroo, or they need to provide delivery services for their guests.
Simon Stenning provides strategic insight and detailed market analysis for the UK hospitality and food service sector, identifying growth opportunities for operators, consumers, suppliers and distribution. For further information, visit the Future of Foodservice website here.