Food & Beverage Trends Influencing Shopping Centres in Australia
Shopping Centres bring people together – exceptional food and beverage experiences bring them back!
The latest Food & Beverage (F&B) Trends report looks at the key trends in F&B market, particularly how the consumer’s demands are influencing Shopping Centre and Mixed Use Developments and how Shopping Centre owners are responding to these demands.
This report highlights 9 Key F&B trends across the globe listed below:
Antibrands and Local Champions form the basis of leasing strategies
DNA Mapping and F&B Brand matching will define customer behaviour
Entertainment and food are one combined offer
Food Halls define ‘Food of the Future’ by creating a ‘community’ vernacular
Technology is a social glue
Fast premium segment has given rise to Chef Tier II concepts
Externalising the F&B statement is crucial to allow for experience and longevity
Price point categorization is crucial to increase frequency of visit and dwell time
Creating a ‘third space’ will attract an increase in footfall and dwell time
The retail industry across the globe, and specifically Australia, is undergoing a transformation – an adaptation to consumer behaviour and preferences, and a shift in the ‘traditional’ economic model of fashion retail being the primary driver to a shopping centre. With clicks taking over from bricks, it has become essential that retail centres and mixed use developments create a ‘community vernacular’ specifically for the primary trade area. This can only be done through the amalgamation of food and entertainment, and by presenting F&B experiences as an ‘anchor’ of the development. Creating F&B experiences (variety and offer) as a focal point of appeal will not only, inadvertently increase frequency of visit, but will also increase dwell time across the development, successfully allowing for the implementation of an evening economy.
Offering a curated selection of F&B offers that are experiential and engaging, requires a lot more than just clustering. Mapping the customer journey, and understanding influencers in the F&B Master Planning process, are what will allow for retail centres and mixed use developments to evolve and stay relevant in 2020, transitioning to 2025.
A dining destination is created by offering an immersive experience based around ‘local champions’, while allowing for social congregation.
F&B Trends for consideration
LOCAL CHAMPIONS FORM THE BASIS OF LEASE PLANS
Millennials are the primary user groups of any retail centre – especially with consideration to growth and relevance over the coming 5 to 10 years. Millennials are very specific in their behavior and preferences. It is critical to:
- Create a sense of community and appeal to Millennials, especially since Millennials now have an ‘anti brand’ mentality and a sensibility where they are attracted to innovative concepts that are centred around ‘experience’
- F&B Concepts considered for lease need to be independent (not majors or national chains) if a destinational status is to be incorporated
- The challenge with Local Champions is that they lack disciplines in design and legalities and are concerned with entry costs into malls, which is why, moving forward, a traditional lease model will be challenged and innovative financial underwriting will be required by lease equity
El Mercat, Barcelona – houses a total of 20 F&B operators, all being local champions
DNA MAPPING AND F&B BRAND MATCHING WILL DEFINE CUSTOMER BEHAVIOR
Informing a customer of responsible (and ideal) consumption, is the benefit of technology and data today. Companies across New York and California are testing DNA of customers to advise on the type of diet for consumption (high protein, vegetarian, more carbs etc.) and are developing databases of restaurants and F&B concepts (with their detailed menus) to connect in real time with customers through geo-mapping. The intent of these corporations will be to:
– Communicate with customers through texts or push notifications within a mall or supermarket to suggesting they visit a particular brand and what menu item could be bought that matches their body requirements, thereby creating ‘impulse’ appeal and ‘knowledgeable buying’
– Combined with Social Media Interaction (technology as an enabler) this initiative could become a point of difference for retail centres
ENTERTAINMENT AND FOOD ARE ONE COMBINED OFFER
What was initially perceived as two separate visitation reasons have now morphed into an amalgamated expectation.
- Customers now look for experiences that allow for entertainment and leisure that are aligned to F&B or adjacent to F&B to allow for ‘one’ combined visitation
- Mall developers are now creating zones and programming F&B clusters with or around entertainment (permanent and Pop Up) which allows for increase dwell time and increase in average spend of customers
- Zones and Stages are now introduced as a part of the base build design to ensure a permanent calendar of events and programming to allow for planning of visitation
Platea, Madrid is a gourmet Food Hall and is located in a former cinema, combining delicious cuisine with entertainment.
FOOD HALLS DEFINE ‘ FOOD OF THE FUTURE’ BY CREATING A ‘COMMUNITY’ VERNACULAR
Emergence of Tier II concepts, and an anti brand mentality has been the breeding ground for F&B clusters that are experiential and encourage social interaction. Food Halls (within retail centres and mixed use developments):
- Create a community vernacular
- Are not restricted to Day Part Trade (have an evening economy)
- Are defined through no national brands or Quick Service Restaurants (QSR) hence appeal to Millennials
Time Out Food Hall, Lisbon was developed 3 years ago and has been planned to have space activation strategy at different times during the day
TECHNOLOGY IS SOCIAL GLUE
F&B (and dining) was the original social media. Utilizing this to their advantage, developers around the world have realized the importance of leveraging social media to allow for:
- Sharing of experiences
- ‘Personal’ marketing
- Connecting in ‘real time’
- Introduce media screens across Malls to allow F&B users to ‘connect’ to shoppers and encourage impulse appeal
- The creation of an ‘instagram moment’ and an ‘instagram design feature’ have become a requirement to allow for subliminal marketing and increase appeal of visitation
- Strategised use can reduce marketing budgets and encourage visitation by Millennials
FAST PREMIUM HAS GIVEN RISE TO CHEF TIER II CONCEPTS
The anti brand mentality and the sensibility to re-tribe has given rise to the fast casual segment where creativity is aligned to product quality and experiential dining. Rising chefs and F&B entrepreneurs are appealing to Millennials as their offer is ‘perceived’ as a better product. This specific trend:
- Allows chef based concepts to be more affordable and accessible
- Increases frequency of eating out as the price is lower than actual chef restaurants (with specific appeal to Millennials and Generation X)
- Is usually based on a ‘single’ product which gives the impression of ‘specialization’
Farsh Cafe, Moscow a successful Chef Tier II concept
EXTERNALISING THE F&B STATEMENT IS CRUCIAL TO ALLOW FOR EXPERIENCE AND LONGEVITY
A “see and be seen” environment, and a need for an abundance of natural light, have resulted in a demand for alfresco dining and activation of F&B clusters. Customers are seeking experiential environments where:
- They can visit the F&B offer without interfacing with retail
- The F&B clusters trade longer hours than retail hours
- An evening economy is encouraged
- Integration with entertainment can be offered
- Externalizing the F&B offer with weather protection is critical for longevity of a retail centre.
City Walk II, Dubai – F&B offer has been externalize around Central Fountain, it has music played in the evening ith a laser light performance and it becomes a place for people to socialise.
PRICE POINT CATEGORIZATION IS CRUCIAL TO INCREASE FREQUENCY OF VISIT AND DWELL TIME
To ensure customers are catered to during non main meal occasions, and an increase in spend on F&B can be encouraged, it is essential that price point categorization across a retail centre is offered as:
- It will ensure customers have options and can spend more
- Appeal will be created for more customers who may not want just lunch or dinner
- Will ensure customers have options and can spend more
- The value proposition is linked to experiences not prices so it appeals to more customers who may not want just lunch or dinner
- Creates an ‘offer’ for customers seeking a different experience over what is available in most malls
- Allows for social congregation of teenagers and Millennials
- Increases Dwell Time by providing options during non main meal occasions
CREATING A ‘THIRD SPACE’ IS RETAIL OF THE FUTURE
To mitigate visitation limited to just fashion or lifestyle retail, visionary developers are creating zones and clusters in their developments that:
- Allows for an increase in dwell time as people congregate and socialize
- Encourages people to have business meetings or social engagements in a zone that is neither an office nor their home which brings more footfall
- Encourages (enhances) cross pollination with retail as people are visiting for a different reason and end up spending on F&B or retail that they weren’t initially planning
- Creates another ‘reason’ for visitation
ME Madrid Reina Victoria Hotel – where the hotel lobby is used as a third space and is closer to the Restaurant
It is essential that developers realize the importance of strategic master planning – with an emphasis on experiential F&B clustering, as retail centres of the future will be categorized based on customer engagement and meeting consumer needs. To mitigate the risk of poor performance and defunct centres it is essential that developers adopt a visionary approach, incorporating selected F&B trends that are aligned to their target catchment and asset type.
The food of tomorrow is now the retail of the future.