Riding The Food-To-Go Wave

The report, ‘Business models to ride the foodto-go wave,’ released by Rabobank, explores the growing trend of precooked and readyto-eat meals, and how retailers and foodservice providers can work together to benefit from this movement.

The rise of the Internet and smartphones has resulted in consumers looking for instant gratification, becoming more demanding or placing more emphasis on convenience. Socio-economic changes, such as the rise in the number of single-person households, mean consumers spend less time in the kitchen and look for convenient food solutions. Retailers can take advantage of this changing consumer behaviour by offering food that is fresh, fuss free, accessible and affordable: food-to-go.

WHAT IS FOOD-TO-GO?

This refers to retailers selling prepared food, in particular in supermarkets and convenience stores. The food can be prepared in a central kitchen and supplied to the retail outlet, or made to order on-site and intended for immediate consumption. Unlike packaged food, the preparation of food-to-go involves a degree of craft and culinary skill.

With the retail industry going through transformational changes, retailers need to continuously innovate and offer new services to stay relevant to consumer needs. Foodto-go represents one new growth strategy that can result in higher margins. According to industry estimates, it offers gross margins between 30% and 45% when compared to the 20% to 30% gross margins of packaged food. Food-to-go also allows retailers to stand out from the competition and provide a reason to visit a retail outlet when shopping may not necessarily be on their minds. It also enables retailers to capture a bigger share of the overall food-related consumer spend.

BUSINESS MODELS