Global Food and Beverage Industry Takes a Cue from Fashion Retailers

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In  the quest for growth, food retailers are on the heels of the fashion industry expanding globally and combining technology, gastronomy and a bit of psychology to entice, entertain and satisfy, according to a new report by JLL released today. Like its fashion counterpart, international food and beverage expansion is being fueled by low growth in US and Western European markets, an increase in globalization and tourism, and the rapid rise of the middle class, especially in Asia and the Middle East.

IMAGE: Brunifia, CC by 2.0

IMAGE: Brunifia, CC by 2.0

“We are seeing new chains such as U.S.-based Eataly and Chipotle, U.K.-based PizzaExpress and Germany’s Vapiano, as well as upscale restaurants from celebrity chefs, including American Gordon Ramsay and British Jamie Oliver are among the latest to arrive where mainstays like McDonald’s, Subway and KFC landed years ago,” said Jonathan Doughty, Head of EMEA Foodservice Consulting for JLL.

The amount of global retail space dedicated to food and beverage service has increased five percent over the past 10 years and by far more in some regions. The addition of dining and drinking destinations can provide consumers a reason to travel to a city retail area and increase their time spent there. Such establishments, if well configured, can boost consumers’ shopping experience and give them a reason to return.

“New concepts often provide diners with internet access, where they can post reviews and pictures,” added Naveen Jaggi, President of Retail Brokerage and Capital Markets for JLL. He notes that pop-up concepts can create a go-before-it’s-gone immediacy, which we saw recently with the Saved by the Bell Chicago pop-up The Max, which entertained and drew pop-culture fanatics from all over the United States. Pop-ups also can provide a level of exclusivity, like the tony “Cube” that travelled around Europe showcased a different Michelin Star chef for a week or a month at a time and served only about a dozen guests each evening.

Regional food and beverage trends:

In the United States, yesteryear’s food court — dominated by neon fast-food chains — have morphed into food halls and indoor markets dedicated to local food sellers and artisans. Such areas can act as anchors for a shopping center or breathe new life into an abandoned warehouse, office building or factory. To succeed, these retail spaces need to cater to a diverse group of consumers – be it student or business traveler — with the expectation of eating what they want, when they want it no matter the hour of the day, be it breakfast in the evening or dinner at noon.

In Asia, the amount of space dedicated to gastronomy over the past 10 years has jumped as high as 30 percent in some parts of Asia and the Middle East, luring US and European food and beverage providers itching to expand. Many of these providers are franchising their concepts abroad as a way to capture local market expertise. Franchising also provides the necessary capital to tackle these geographically disparate markets. PizzaExpress is targeting the Asian market, as are US retailers The Coffee Bean & Tea Leaf and Pacific Coffee Co and British Caffe Nero.

In Europe, London-based Time Out magazine, which owns and operates food hall Mercado da Ribeira in Lisbon is seeking to expand its concept across Europe. Meanwhile, the UK is the site of Burger Wars, where local plays such as Gourmet Burger Kitchen, Byron and Meat Liquor are going head-to-head with US-based gourmet burger players, such as Smashburger and Five Guys. The same conflict is expected to spread to crepes, burritos and juices, while the playing field is expected to spill over to the Middle East and Asia.

Learn more by downloading JLL’s Destination Retail Report

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