TORONTO — A report from Restaurants Canada has credited millennials and the Generation-Z cohort with helping grow foodservice sales by 5.1 per cent in 2018, driving sales to nearly $90-billion. This marks the fifth consecutive year of growth exceeding five per cent.
“The days when targeting a baby boomer was a can’t-miss strategy is over. Those under 40 are now driving the industry,” says Chris Elliott, senior economist at Restaurants Canada. “Whether they’re looking for environmentally sustainable alternatives, tech-friendly options or more-diverse menu offerings, it’s vital for restaurant operators to adapt to their changing customer base in order to appeal to new guests and maintain brand loyalty.”
Plant-based protein, sustainable seafood and locally sourced food are driving key shifts in the market and Canadians under 40 have been leading the charge, according to the Foodservice Facts report.
The report reveals more than 79 per cent of Gen-Z consumers and 71 per cent of millennials order food or beverages from a restaurant at least once a week or more. Meanwhile, consumers under 30 years old spend 44 per cent of their food dollar on food and alcohol from restaurants, compared to 35 per cent for those between the ages of 30 and 39 and just 27 per cent for those 65 and older.
Matters of sustainability have also come to the forefront as restaurants and major chains continue to take steps to eliminate plastic straws, recycle, compost and donate leftover food to charitable organizations. According to the report, 98 per cent of restaurants recycle, while 93 per cent use energy- or water-saving equipment. Approximately 77 per cent track, compost or donate leftover food.
The demand for delivery and the emergence of plant-based options have also fuelled sales growth over the last year. According to the report, foodservice orders made online, through websites and mobile apps totalled more than $4.3 billion in 2018 (a 44-per-cent increase from 2017). This resulted in a 49-per-cent increase in QSR delivery sales and a 54-per-cent increase in full-service restaurant sales.
“As Generation Z and millennials look for convenience, eating out or ordering in is appealing as a time-friendly alternative to cooking,” says Elliott. “We expect to see these generations looking to order food at lower price points and, while health is important, many want to indulge a little, too.”
Going forward, foodservice operators will continue to face challenges associated with labour costs, alcohol sales, higher minimum wage, food costs and labour shortages. Annual foodservice sales growth is expected to slow down, while commercial foodservice sales are expected to decelerate to an average of four per cent per year between 2020 and 2023. However, Canada’s foodservice industry is forecast to surpass $100 billion in annual sales in 2021.