Field report from the ICSC Food for Thought conference
Last Thursday, the #ICSC Food for Thought conference concluded at the iconic Roosevelt Hotel in New Orleans following 2.5 days of restaurateurs and industry panel experts addressing real estate professionals and landlords, all hungry to learn more about the seemingly internet-proof topic of food.
Statistics tell the astounding F & B story:
Sales comprise 11.1% or $717,000,000,000 of all 2018 retail sales (4.5T)
Sales have grown 24.4% since 2014
Adults are spending 12% more on F & B than just two years ago
From fancy Food Halls, to food trucks to brew pubs to fine dining, where we dine has become where most of us seek experience. But not all. There is one group that is 50% more likely to have their food delivered – Millennials. In 1960, 23% of ages 18 – 34 lived at home but in 2017, 32% of Millennials live with their parents. This trend however has not slowed the desire of most everyone else to “go out and grab a bite” – and leave the confines of home behind on multiple nights per week.
Still restaurants are hedging bets that the convenience factor of home delivery will strengthen. In a recently released JLL Food Service 2019 trend report, 4 in 10 restaurants plan on investing in their off-premise operation with 63% of all restaurant traffic is now off-premise. This percentage also includes chef prepared meals that are shipped direct like Birmingham-based Nourish Meals as well as deliveries from brick and mortar restaurants. Fewer than 1 in 10 restaurant owners believe their delivery has declined. Could “room service” offered in multifamily projects become the next apartment amenity differentiator?
Despite the “cocooning” tendencies of Millennials, experience as it pertains to the rest of the consumers, remains the overwhelming buzz word. The chink in the armor of the all-powerful internet becomes exposed when good food is paired with an equally good experience. Because of this, Food Halls, popular in Europe for decades, are gaining noticeable momentum in U.S. markets. Currently there are 30 U.S. Food Halls, but that number is projected to rise to over 300 by the end of 2020. Food Halls are win-win for both consumers and operators who can incubate their concept in a cozy 400 square feet, while paying low to moderate rent to build brand rather than bear risk on non-negotiable “break- the-bank” rents some landlords offer. Landlords love unique, first to market concepts that present their products and services differently but are rarely known to lower rents to allow for new concepts, smaller , or at times even regional concepts.
Prepare to watch as Food Halls begin to emerge within hospitals, transportation hubs, and student housing developments while even offering branding rights in the same vein as American stadiums. Some will offer a family friendly focus while others will provide multiple tasting rooms, brewpubs, and gastropubs. A successful Food Hall must carry the crucial component of live performance and entertainment. Rock Row, whose development team was featured at Food for Thought, includes an 8200 seat Amphitheatre. The team is taking an unsightly rock quarry site in Portland Maine and transforming it into a massive 110 acre mixed use development that will include a “Brewplex” and Food Hall scheduled for opening in 2021. https://www.youtube.com/watch?v=keB-AsF4MC0 @rockrowmaine
Look for hotels, sporting venues, and even museums to up their game in leasing space to distinctive restaurant concepts to further attract and retain consumer loyalty. Shopping centers have long hosted food courts and a smattering of chain restaurants. The study reported that a shopping center is now chosen based on its restaurants by 40% of its consumers with a reported 50% of customers asking for additional dining options in malls and shopping centers. 53% of consumers are visiting shopping centers specifically for the purpose of dining. These statistics reveal that a shopping center’s relevancy is inter-connected with its food offerings. The pairing of great retail with great food sets the future for great success.
Tracy Gatewood is a commercial broker with Alabama-based Gatewood Retail Real Estate specializing in consumer real estate. Tracy works in multiple Alabama markets with business owners representing retail, restaurant, hotel and student housing concepts that are 1) unique 2) consistently work in excellence 3) first to market 4) passionate about their product. You can contact email@example.com or through Linkedin messaging. Tracy attended the #ICSC FFT conference April 16 – 18, 2019.