By Mark Jachecki
At the 2019 Terroir Symposium earlier this year, I noticed a seemingly never-ending supply of breakfast sandwiches coming from the kitchen. Along with some of my Gen X colleagues, I observed as our younger lunch companions lustily devoured these tasty sandwiches. It’s not that we were unfamiliar with breakfast sandwiches; we’re just used to eating them at breakfast.
But all-day, breakfast-for-lunch is increasingly the norm, and it’s being driven by younger generations with different priorities. Canadians, like most people, are creatures of habit when it comes to lunch, but those habits shift with each demographic, and they include differences in what consumers eat and drink, and when. According to data from NPD Crest, which continually tracks consumer use of U.S. restaurants, the traditional peak lunch time is between 12 and 2 p.m. It’s no great surprise, since the traditional work day still tends to revolve around a nine-to-five schedule with a lunch break somewhere in the middle of the day. Over the last few years, however, lunch has been getting pushed later into the day.
When we look at compound annual growth rates in traffic at Canadian foodservice, the data demonstrates that the largest increase in lunch is now at 3 p.m. In other words, lunch is creeping into traditional afternoon snack territory, with the 3 p.m. time slot experiencing the strongest annual growth on average. The noon hour, however, still holds the highest proportion of consumer visits at 45 per cent.
Using NPD data to go deeper, we know that the 3 p.m. eater is most often a single-party consumer having a quick working lunch. In fact, this single working consumer represents just over half of the traffic occasions during this hour. Although they only represent 20 per cent of the lunch market collectively, younger and older Gen Z consumers have been the primary drivers of growth for this daypart with 56 million more occasions than last year.
Where to Eat?
On-premise occasions continue to drive growth at lunch, with a 5 per cent annual growth rate that amounted to 37 million more occasions than last year. However, delivery continues to be the fastest growing access mode when it comes to Canadian foodservice. Delivery has been growing by 8 per cent on average and experienced strong double-digit volume growth on the year, even though it only represents 2 per cent of lunch traffic occasions overall.
In my experience, FSRs have always been challenged when it comes to competing for lunch business. This is mainly due to the price points, brick-and-mortar locations and the time that it takes to eat a sit-down lunch. The top items reflect that concern with the most volume growth at FSRs being seafood, non-fried vegetables and East Asian and Southeast Asian flavours — all relatively quick to prepare, generally healthy and accessible.
Retail-based foodservice is becoming increasingly important. Established brands outside of foodservice are increasingly investing in it, whether it typically deals in groceries, clothing, furniture or even gas. (I was shocked when a friend of mine told me that she grabbed lunch at a Shell gas station before a work meeting. Then I went to Nordstrom’s and had a coffee and crème brûlée.) The retail segment will always have hot dogs, sausages and fries available, but the top items that show the strongest volume growth most recently are surprising: side salads, salty snacks and, again, non-fried vegetables. This indicates that our interest in perceived health and wellness is evident even when purchasing food at retail.
When it comes to non-alcoholic beverages at lunch, we continue to see a mix of caffeinated beverages, like coffee and tea, carbonated soft drinks and healthier options like milk, water (both tap and bottled), and juice. Specialty coffee, tap water and iced tea in particular made significant gains, while juice, though still in the lunch beverage top 10, suffered a steep volume decline.
All Grown Up
For the last five years, everyone has been on pins and needles trying to better understand Millennial consumers. Now that generation is gradually transitioning into lives as parents, and their cares and concerns are changing with them. It’s an opportunity, and the industry will have to both re-establish who the Millennial consumer is and set its sights on the next large demographic, Gen Z, which is now entering the workforce. Gen-Zers tend to meet up for a late breakfast in a group or have a quick late lunch at their favourite QSR, and as their lives progress, they are only going to get busier. Soon they will be going food shopping, and when the opportunity arises to go to an FSR, they will likely continue to eat quickly and explore global trends with strong, bold flavours, either alone or with friends.
The lunch daypart is changing along with the generations that engage with it, and that shift demands that operators accommodate them if they want to remain relevant. Operators need to consider grab-and-go food offerings, as well as healthy late breakfast offerings. Lunch has already been pushed to 3 p.m., so maybe there’s room for a 2–5 p.m. menu. Depending on your food platform I think either option could be a potential winner.
Chef Jachecki is a consultant with the NPD Group and a chef-professor at Humber College.