Guess who’s coming to dinner? (Plus breakfast and lunch)

By Asad Amin

No, this title is not the opening to a classic Sidney Poitier remake, although one does exist.

It regards the new diner who visits restaurants after a two-year hiatus. It’s not that nobody ordered from foodservice through the pandemic, but considering our lives are very different now than in 2019, there are significant behavioural changes of which we should be mindful.

Traffic eliminates uncertainty

Things were starting to look up for the foodservice industry through summer and fall 2021. Then, Omicron hit.

Unfortunately, that was not the end of the challenges facing restaurants on their road to recovery. The number-one factor currently suppressing a full-on rebound, and the topmost issue among Canadians according to Ipsos findings, is inflation. Add to that the other elements of uncertainty such as the Ukraine war, supply chain challenges, labour shortages, and, of course, COVID-19, and you could suggest the outlook looks bleak.

In contrast, however, our Foodservice Monitor Diner Optimism Scale is the highest it’s been since the start of the pandemic. 40 per cent of Canadian diners strongly agree that they want to enjoy life more than ever and are eager to return to restaurants.

At this juncture, it’s important to get a better understanding of what new habits and behaviours these new diners have developed after being homebound through the pandemic. The best way to understand any differences in the market in detail is to analyze what has changed – and what has remained similar – daypart by daypart.

In mid-2022, foodservice may have a very different consumer to target.

Slow start

Breakfast traffic growth (+29 per cent YoY) has been the strongest relative to all meal dayparts through the past 12 months to the latest data in February 2022, albeit still below pre-pandemic levels. There is a reason why Wendy’s Canada has decided to enter this space now of all times.

What’s the same?

  • Breakfast foods were always most likely to be sourced from home and still are, even more so. While we see some occasions improve for sourcing breakfast out-of-home, they are still below pre-pandemic levels. This could still hinder a full recovery for breakfast if consumers become accustomed to working from home; there is a considerable loss in morning commute traffic that Breakfast focused operators would have a hard time replacing.
  • QSRs still dominate morning traffic (74 per cent) but FSRs are slowly starting to regain their share of the morning, both during weekdays and weekends.

What’s changed?

  • Average eater cheques (AEC) have grown more than any other daypart. The higher spend at breakfast is certainly driven by higher menu prices but, interestingly, we also see food-only occasions higher than previous years while beverage-only occasions are shrinking in the morning. Naturally, the habit of making coffee at home is likely affecting coffee-only demand at breakfast, and this has implications for the types of foods consumers seek in the morning.
  • Dine-in dropped from over one-third of all traffic prior to the pandemic to one-fifth. Drive-thru has the lion’s share of morning traffic, although it has slightly softened prior to its peak last year.
  • Unplanned visits are up versus pre-pandemic times. Considering the break from our previous habits and rituals of going to work every day, there may be more opportunities to drive impulse purchases.
  • Breakfast motivations were always led by the Four Hs: Hunger, Hurry, Health, and Habit. All were very functional. Now, we see the strongest-growing morning drivers have an emotional tinge to them, including mental and emotional uplift factors such as wanting to take a break.

Lunch limitations

Lunch traffic also improved (+27 per cent YoY) over the 12 months to February 2022. A larger lift might have been expected as lunchtime traffic was the most affected during the pandemic. This validates that while we see a gradual return to work, those working from home remain steady and will continue to impact lunchtime traffic, particularly in urban centres.

What’s the same?

  • Consumers carried their meals from home most often at lunch relative to any other daypart, and this has accelerated during the pandemic among those who go into work. Not only is there less lunchtime traffic due to the urban exodus, but operators will also have to vie with meals prepped and brought from home. With inflation and increased pressure on disposable income, one can see the consumer appeal of packed homemade lunches continuing in the near term.

What’s changed?

  • Off-premise dominates, particularly takeout (40 per cent of traffic) followed by drive-thru. Dine-in currently only accounts for one-quarter of traffic; at its mid-pandemic heyday, it owned more than half of all lunchtime traffic.
  • While lunchtime traffic for going to work is up, there is still a high proportion of consumers working from home (27 per cent). That’s a considerable proportion of the population that is unlikely to have co-worker or business lunches or afternoon coffee runs.
  • Lunch drivers have increasingly shifted from “mid-day gut fill” and “keep one going until the next meal” needs to “taking a break” and “reward-driven needs”.

Dinner diversity

While dinner traffic is up (20 per cent YoY), it did not bounce back as much as breakfast or lunch. Keep in mind, however, that dinner had declined the least among key dayparts.

What’s the same?

  • Generational distribution at dinner remains steady. Boomers and Gen X drive the majority of traffic but the next generation behind them, Leading Millennials (32 to 41 years old), are leading the resurgence. This makes sense, considering they have more pent-up demand and are more eager to return to restaurants than older cohorts.
  • FSRs remain heavily dependent on dinner, with approximately 50 per cent of sales being driven by the occasion.  

What’s changed?

  • Even at dinner, dine-in is competing with a bigger playing field of different channels vs. prior to the pandemic. Dine-in peaked in August 2021 for dinner at 28 per cent of traffic share, so that could be the new threshold target by the end of summer/early fall of this year.
  • Meanwhile, delivery has taken a sizable chunk of all channels at dinner, where it’s the strongest, accounting for 13 per cent of traffic.

In conclusion

As difficult as the past two years have been for our industry, the response has been equally nimble and resilient.

The lesson that most have learned is to expect the unexpected. While there have been some changes that have transpired and continue to evolve, there are still key occasions and cohorts to target. All signs point to steady growth for foodservice in the near term, as long as current impediments aren’t further dialed up.

Operators who are ready to welcome and address the needs of new and pandemic-weary diners will be the ones who will have a headstart on the rest of the industry.

These conclusions are based on findings from the Ipsos Foodservice Monitor (FSM) consumption tracker, a continuous diary that tracks what Canadians ate and drank yesterday at any foodservice establishment. Data for this article was also sourced from the FIVE consumption study, which captures consumption across all venues, including at home.

Asad Amin is a Senior Vice President with Ipsos and leads the firm’s Food and Beverage syndicated services. Based in Toronto, Asad leads the team of research experts dedicated to serving the market research needs of the F&B industry across Canada.