Thoughts On... Eating and Drinking Out of Home

Understanding the consumer relationship with food and drink outside the home is vital for brands and retailers alike.

Opportunities out of home

Understanding the consumer relationship with food and drink outside the home – what people eat and where they buy it from – is vital for brands and retailers alike. This is a vast and multifaceted market which, in recent years, has become increasingly complex as once-distinct boundaries have blurred. Increasingly often, outlets are becoming a ‘one stop shop’ for out-of-home eating and drinking.

The  out-of-home market has seen much evolution in recent years, though consumers rushed back to their lunchboxes and dining tables during the recession as budgets tightened. As the economy recovered so did our dining options, with the out-of-home market seeing a healthy increase of 3.3% in consumption occasions compared with last year.

The out-of-home market may be growing, but with an increasingly complex repertoire of channels and categories it is important to understand the decision-making process behind out-of-home purchases. Only then can retailers and brands recognise which missed opportunities are being fulfilled by their competitors.

Understanding the shopper  

With 29 billion out-of-home consumption occasions in the past year alone, understanding consumer motivations is no easy task. Are
shoppers who buy coffee on the go in the morning the same people who tend to step out of the office to buy lunch later that same day? Are certain groups more likely to skip breakfast or pick it up once they’re on the move? We can be certain of one thing – with at least 9 out of 10 individuals purchasing something out of the home every four weeks, this presents a significant growth opportunity for retailers.

Channelling your offer

Consumers now expect food and drink quality in leisure and travel outlets to be as high as anywhere else. For example, only half of hot beverage sales now come from cafés and coffee shop outlets, the notion of a ‘traditional’ out-of-home channel is fading. With so many options now available it’s no surprise that consumers are frequently shopping across channels to meet their different needs. All of these dining experiences are related, setting up consumers’ expectations about food and drink quality, reasonable price points and appropriate level of service. With this in mind, those with an out-of home offer can no longer afford to hold a narrow view of who their competitors are – both retailers and brands need to be aware of all the channels in which consumers are enjoying what they have to offer.

As the market becomes saturated with more establishments and channels offering out-of-home options, the uniqueness of their offer begins to dissipate – now every café, supermarket and gym will offer consumers hot coffee. For outlets whose core purpose is not on-the-go dining, creating a world where consumers don’t care where they buy their coffee is good news. In contrast, the traditional coffee houses will be eager to distinguish themselves in this market and regain their more niche position as the ‘best’ place to purchase hot drinks and enjoy café culture.