By Vince Sgabellone
Commercial foodservice traffic has reached 2019 levels over the past 12 months. Whether we deem this a recovery or not, it’s a psychological hurdle that will help as our industry continues to heal.
The key word in the opening statement is commercial. This part of the industry includes meals, snacks, and beverages purchased through quick-service and full-service restaurants, as well as retail foodservice purchases. However, we track a whole other segment of the industry in CREST, our continuous foodservice consumption tracking service. I’m referring to the non-commercial (non-comm) segment of the market. This includes foodservice establishments in captive-audience settings such as workplaces, hospitals, recreation, lodging, and educational facilities, plus vending.
For the year ending June 2023, CREST reported commercial visits were flat compared to 2019, while non-comm visits declined 25 per cent. This represents 12 per cent of total foodservice visits for the most recent year, down from 15 per cent pre-pandemic. Looked at another way, about 400,000 visits have evaporated from non-comm, potentially contributing to the commercial-traffic recovery.
The reasons for the non-comm traffic declines echo those from commercial restaurants, only amplified. Most notable was the rapid ascent of home-centric lifestyles. When Canadians were forced to shelter at home, they were unable to visit non-comm venues or the restaurants they hosted. Unlike commercial restaurants, non-comm restaurants don’t have the option to pivot to an off-premises business model. Let’s face it, how many people would consider ordering a meal for delivery from a workplace cafeteria, even if it was open and served great food? As a result, many of these facilities have closed permanently, similar to what has happened with commercial restaurants.
Despite the persistent challenges, opportunities do exist in the non-comm space. Two of the fastest-growing channels this past year have been recreation and lodging. This reinforces our latest studies, in which consumers reported they plan to continue spending money on experiences rather than goods. Another opportunity is vending, the least-impacted channel over the past four years, as these devices helped to fill the void when staffed venues were shuttered.
“Interest in automation is growing,” says Andrew Waddington, principal of foodservice consultancy fsSTRATEGY. “Operators increasingly use tools such as self-pay micro markets, smart refrigerators, and enhanced vending that finishes food to order, to provide quality and variety to their customers when the business case doesn’t exist for traditional foodservice.”
Continuing the theme of technology, consider digital ordering, which represents eight per cent of non-comm visits. This is a few points lower than commercial digital-ordering rates, but it’s more than twice the pre-pandemic rate. Consumers have embraced digital-ordering technologies, and non-comm restaurant operators risk being left behind if they don’t get on board.
Positive news for non-comm operators is the rise of the morning meal daypart. This is the largest and fastest-growing daypart across all of foodservice and represents more than one-third of all non-comm visits. Nothing goes better with a morning meal than a coffee (increasingly, a cold coffee), servings of which have rebounded nicely across foodservice. A winning coffee program can help to attract customers, build traffic, and generate habitual return visits, no matter the venue.
An increasing number of non-commercial visits are driven by food-based influences such as cravings, food quality, and variety. Similar to commercial restaurants, digital technology has lessened the need for convenient locations, allowing foodservice operators and customers to focus on what matters most — the food. This is true regardless of how captive the audience a restaurant is serving.
