Food lies at the heart of retail

June 12, 2019 | By Rupkatha B

Food continues to remain at the heart of retail. If the right mix of concept, experience and location is created, food brands are able to bring in the footfall.

“If you build an amazing food brand and place it in the right location, people will come and love what you do for them – this has not changed in the last three decades. Food is love, love and love,” stressed F&B industry veteran Jonathan Doughty, director at ECE Projektmanagement GmbH – global head of foodservice, leisure & placemaking at ECE.

Mario C Bauer, advisor for German restaurant chain Vapiano, agreed. “One of the differences between a big coffee chain and a small start-up is the love invested in the business. This love creates a value proposition for the brand. While choosing an investor, a brand must always remember to select one that will take good care of the heart in the absence of which the business might collapse.”

Vapiano follows a mixed model of ownership and franchise that helps the brand to clock rapid growth, going from 80 to 170 stores in less than three years. “It is crucial to evaluate the strength of the franchisee to see success,” Bauer emphasised.

“Creative food concepts are becoming stronger, pushing existing operators to work much harder to build a point of differentiation,” stated Andrea Bertoncello, managing director, DEA Capital Alternative Funds – Taste of Italy.

“Food is one of the most dynamic businesses today. But success depends on how food operators and landlords work together,” added Doughty.

Offering perspectives on what makes a market promising for F&B, he continued, “Lucrative markets are where consumers are moving from the in-home purchase of food to out-of-home. Often this is driven by a change in consumption, social and work habits of consumers. Spain is a good example, where for many years people went home for lunch. But that pattern has gradually changed, due to lack of time. Nowadays, they buy their lunch outside, which means they need more places to purchase food, leading to growth potential for F&B.”

“Germans are slowly starting to enjoy dining and shopping in retail centres, causing an increase in demand and supply. But in the UK, when we advised shopping malls on the percentage of F&B while leasing, they doubled or even trebled those numbers that didn’t work. It was in part led by a willingness on the part of food operators, backed by investors, to pay ridiculously high rents. Things were fine until Brexit happened, after which people reduced the frequency of going and eating out,” Doughty cited.

Offering a forward-looking view, he suggested, “Shopping and retail centres must encourage new food brands along with the established names. Food halls, for example, are quite a hot topic now driven by quality and variety of food. The shopping centre industry that is quite mainstream can now bring in a whole world of change through food.”

“We will see many more changes in the food service market in the next decade compared to what we saw in the last decade, driven by technology, anti-brand sentiments and need for authenticity. If we don’t do new things, diners will not come through the doors,” Doughty cautioned.