In this 2021 trend forecast, we examine the food and drink trends that will drive consumer behaviour in the year ahead. COVID-19 certainly presented an unprecedented number of challenges for the wine, beverage and hospitality industry in 2020. And while the pandemic’s effect on the hospitality industry shows no signs of receding, this new landscape also presents plenty of new opportunities and openings for brands willing to adapt, evolve and connect with consumers in novel ways. Let’s dive in.
What does the food and drink landscape look like in 2021?
When it comes to drinking and dining out, highly limited and set menus have replaced a la carte menus across the board. Social distancing means less interaction between patrons and waitstaff, and we’re pouring our own water and wine at the table. Who will offer the cracked pepper? With more fluid menus and more pop-ups, restaurant menu posting and ordering is happening increasingly via Instagram and Facebook – platforms that open an immediate line of communication between brands and audiences in this extremely fluid environment.
Digital ordering has in many instances replaced printed menus. We’re using our phones to snap QR codes that take us to digital menus to place our orders. This new virtual ordering user experience is something to seriously consider. Online menus and ordering systems need to be seamless, fun, informative and replicate a human ‘touchpoint’ for customers with radically reduced human interaction between customers and hosts. This means bespoke digital design rather than replicating hard copies of menus online. What design will help drive more sales, upsell, lead customers to specials, give wine pairings, communicate provenance, tell the story of the brand? For now, imagery, interactivity and video will be key. Looking forward we’ll start seeing advancements to voice activated menus.
As more venues close, there will be far fewer businesses competing for customers. What does this look like for pricing? With limited capacities and fewer people dining out, will prices increase? Will customers be willing to pay? And if so, what offering can justify the new shiny price tag? The prediction is that there’ll be more considered and conscious spending when it comes to entertaining budgets, but that customers will be willing to pay for the experience, which must be unusual, unique, with a je ne sais quoi that sets it apart.
“I’ve been a big ambassador for the social role of restaurants. I talk about it quiet often. Icebergs is not just about the food or the wine. It’s about the art and music, the night out… The night out will become a bit more special. People are genuinely excited to be out and socially active,” says Terzini.
“There’s an opportunity for new talent once the dust settles,” Chin Chin restaurateur Chris Lucas told Delicious Magazine. While the closure of many venues has been a huge part of the pandemic’s collateral damage, Lucas reckons those that prove resilient will be the ones with a strong, clear and well communicated ethos or brand story behind them. “Edgy, ground-breaking creativity had been marginalised and we were being swamped with a plethora of cheap, middle-market, throw-it-together type concepts. Now the market is going to be that much tougher in every respect, and you’re going to have to have more integrity about what you stand for as a restaurant operator. And I think that’s a good thing.”
Looking further ahead, according to IBISWorld, the Restaurants industry – a market worth $18bn in Australia – is forecast to recover over the next five years, as restrictions implemented in response to COVID-19 are fully lifted. Rising interest in foodie culture is projected to support industry revenue growth over the period. Further opportunities for growth will likely stem from projected increases in health consciousness and discretionary income. These trends are anticipated to boost demand for higher margin premium products. However, significant competition from other hospitality industries, including fast food, pubs and cafes, is anticipated to limit industry revenue growth. Consequently, industry operators will need to control efficiency and respond to changes in customer demand to sustain profit.
Staying in is the new going out
On the home-front, the focus is much more on in-home experiences. Parents are not in the office, teenagers are doing remote university learning and young kids are at home more with restrictions still often in place in schools. Families are re-gathering around the table – on two fronts. During the day, household dining tables have become the new ‘desk’ or ‘office’ or ‘study’ for many, and in the evening, the dinner table is a place for families to re-engage without the interruption of busy social schedules drawing people out of the house. The dinner ritual is more important than ever. Families are eating more home-cooked meals and many are nostalgic in nature, reports News Corp.
Soaring home delivery is the other side of this coin, as families crave novelty and a break from the 24/7 at-home routine. Hospitality Magazine reports that delivery has experienced a boom across the country. More than 4 million Australians use delivery services to order food, and the industry has grown by 81.1 per cent between 2015 and today. Uber Eats, Deliveroo and Menu Log continue to lead the market, with new player DoorDash launching earlier in the year. Many operators have chosen to keep delivery in-house to skip commission fees, using existing staff to complete, pack and even deliver orders.
At home drinking is up 15-30 per cent depending on who you read. And while household expenditure at hotels, cafes and restaurants for the June quarter declined by 56 per cent, nationally an increase in spending was recorded for at home items including alcohol, hardware and furniture purchasing. What are we drinking? In short more premium spirits, Aussie wine with a sustainable story and more low-ABV options.
Drinks Trade hails the rise of at-home consumption of spirits during COVID as the biggest alcohol trend of 2020. According to Nielsen, the “homebody mentality” created during pandemic restrictions is continuing to drive off-premise spirit sales. “There was ongoing strong growth in at-home consumption of spirits, a trend that we’ve noticed since the second quarter of 2020 and an increase in demand for premix,” said Coca-Cola Amatil’s Peter West, Managing Director Australian Beverages. He said spirits were the “star performer” in Alcohol & Coffee for FY2020.
We’re drinking more, but we’re also drinking less. As reported in The Shout, at the 2020 National Liquor News Industry Leaders Forum, Peter Neilson from Treasury Wine Estates revealed: “The rise in consumer focus around health and moderation will see the lighter-in and alcohol-free category expand dramatically. Additionally, the heightened discussions around sustainability will be a key consideration for the industry going forward.”
Darren De Bortoli, Managing Director De Bortoli, echoed this sentiment that sustainability and health will drive purchasing patterns. “The health and wellness and premiumisation trends will see people drinking less in quantity but higher quality products. The effects of this fire season will be reflected in heightened consumer expectations of businesses’ sustainability efforts, which will increasingly be considered in their purchasing decisions.”
News Corp Australia Director of Food and Travel, Fiona Nilsson, revealed in the Autumn/Winter 21 Trend Report that as people have spent more time at home, we are seeing the kitchen emerge as the place to quell boredom, develop skills around food and discover passions such as baking, preserving and home-brewing. And with lockdown, quarantine and isolation, there has been a strong appetite for nostalgia. While we wait for the roll-out of a Corona virus vaccine, we have been soothing our souls with comfort food, from family-friendly recipes that link to the past to classic cocktails that evoke the golden days of drinking out. Old-fashioned ingredients are on the rise across Food Corp – think golden syrup, condensed milk, meat pies.
2020 saw a huge increase in searches for sourdough making and home-brewing. So, the question for new revenue streams is what DIY or make-at-home kits can brands offer this new wave of at-home connoisseurs. Will DIY seltzer be the kombucha of 2021?
What does this new landscape mean for food, drink and hospitality brands?
Pre-COVID, we visited restaurants about twice as often as food stores. During Covid, that number flipped, and many hospitality venues created brand extensions to reach customers at home. Think new lines of pantry staples from neighbourhood pubs and cafes, and meal packs from high-end restaurants such as Fred’s, Mr Wong, St Peter and Firedoor in Sydney. Some brands are selling their own merch as a touchpoint for customers who are stuck at home. ‘Would you like a T-shirt with that?’ could be the new hospo catch cry.
The bump in online ordering is here to stay as lockdown and restrictions on social gatherings remain. With Uber Eats, Deliveroo and MenuLog dominating, how can small, boutique brands dip their toe in?
As Darren De Bertoli flagged sustainable production will shape consumer habits, packaging is the new frontier when it comes to food waste. How can brands reduce packaging and plastic with increased home delivery? We fought the war on waste with our reusable coffee cups, then COVID-19 changed that, with bans on reusable cups in cafes over health concerns about spreading the virus. Now the environmental impact is being felt but will consumers rally around the cause like they did prior to the pandemic?
With vegan and vegetarian lifestyles firmly planted in the mainstream, how can brands relate to the rise in flexitarianism, largely touted as a more sustainable way of eating? In Hong Kong, McDonald’s has rolled out an all-vegetarian menu based on plant-based spam. And Michelin-starred chef Heston Blumenthal is backing the plant-based braised meat alternative created by Australian start-up Fable Food Co. It’s minimally processed and made from 65 per cent shiitake mushrooms. Heston used it in his famous snail porridge at Dinner by Heston in Melbourne. The foray into the mainstream of new plant-based products opens up opportunities for food and wine pairings and collaborations with plant-based brands to educate consumers on how to consume these new products together.
When it comes to food buzz words, ‘immunity-boosting’ is the new ‘sugar-free’ or ‘paleo’ as the COVID cloud looms over us. There has been a surge in searches for ‘immunity boost’ and ‘immunity foods’ reports Food and Beverage Magazine.
Julian Mellentin, food industry expert and director of consultancy New Nutrition Business, predicts: “In the short term (12-18 months) the biggest winners are likely to be any ingredients that support the microbiome – and particularly probiotics – and any nutrient or food that has an established link with immunity in people’s minds.”
While the health claims may be unfounded, the new ‘superfoods’ in the food and drink sector are: turmeric, zinc, ginger, green tea, specialty honey, mushrooms and mushroom extracts, adaptogens chia seed, CBD, plus ‘healing’ herbs with anti-bacterial and anti-viral properties, probiotics, prebiotics and fermented foods such as kimchi, kombucha and sauerkraut. How can booze brands re-tell their story to plug into this desire for functional foods to boost immunity?
Mike Bennie, drinks writer and owner of P&V Merchants in Sydney offers one solution. He is urging consumers to “Reinvograte the industry using a deeper consciousness to how you purchase.” He believes the questions of “Where does it comes from? How is it made? Who are the people making it?” will be critical for brands to answer to stand out in this climate.
Words of wisdom from restaurant royalty
Iconic Melbourne restaurateur Rinaldo di Stasio – the man behind some of the many upscale businesses who pivoted into takeaway in 2020 – told Delicious Magazine that while there are many new frontiers to navigate, 2021 is not all doom and gloom for the sector. “Hospitality is about service, good food and wine and getting people together. So, dig deep and take a breath. The public is still out there waiting to eat and drink and be with us.”
Need help trying to digest what the trends mean for your food or hospitality business? Give the Mastermind a call and we’re happy to help map out a strategy for the road ahead.