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Pundit Mailbag — Food Eaten At Home
Vs. Food Away From Home:
Is This A Sign Of Retail Competition Or Industry Improvement?

It was a long time ago that we headed out to Australia to keynote the old United Fresh conference; we talked about the experience in a column in Pundit sister publication, PRODUCE BUSINESS, that we titled An American Abroad. As the fortunes of United and PMA changed in the US, so did the nature of associations in Oceania, and back in 2010 we ran a piece titled, A New Era Commences: PMA Australia-New Zealand Triumphs With Its First Event.

Then this year, we headed off to New Zealand as we were asked to present a plenary session on global consumer trends:.

Now we received a note from an industry veteran:

I found your presentation at the PMA-ANZ Auckland conference reflected the depth of insight so typical of your work, and there is one point I would like to raise. You profiled the shift in US household food expenditure over time, from food eaten at home to food eaten away from home, with a clear pattern of a shift towards eaten away from home.  

You also mentioned that in recent years the pace of this trend seemed to level out, rather than continue to shift toward eaten away from home at the same prevailing rate. You drew the conclusion that you expected the shift to eaten away from home to continue over the medium term.

My question is about what may have caused the arresting of the trend towards eaten away from home. Could this be driven by the impact of more intense competition between food retailers and food service operators? Particularly as the retailers in developed markets are challenged by low population growth and move to target the eat-out-of-home spend. Perhaps this is reflected in…  

A. Food retailers offering better quality meals, that are offering better value than eating out;

B. The new array of online food providers that are offering weekly meal plans.

If A & B are correct and picking up share, they are going to slow up the trend towards more spend on food eaten away from home.

This has sparked foodservice operators to respond and that has included: easier “no booking” casual dining; being a community connection with share tables and food from local grower; seeking to bring guests back in 2-3 times a week with better value.  

Your learned and insightful views appreciated.

— Martin Kneebone
Managing Director |
Hawthorn West, Victoria, Australia

My ticket down to Australia on that long ago United trip was paid for by the Australian supermarket chain Woolworth’s, whose then produce director, Peter Pokorny, now runs produce for Metcash. Woolworth’s was generous, though, and although we spoke for several Woolworth’s groups, they also allowed me to speak for several groups at the No. 2 supermarket chain, Cole’s, where the produce department was run by none other than Martin Kneebone.

Martin raises an interesting question: To what degree are these long term trends influenced by industry actions as opposed to simply shaping the industry?

Certainly our statistics are not perfect. For example, generally all supermarket sales are considered “food eaten at home,” and all restaurant sales are considered food “eaten away from home” — which creates the bizarre effect that an Italian sub bought at Subway is considered a food “eaten away from home,” while the identical sub sold at Publix is considered “food eaten at home.”

As supermarkets move more and more into the foodservice arena, this is something to keep an eye on.

In general, though, it seems there are more likely reasons that suggest themselves, notably the economy. As the economy declines, consumers tend to “trade down” — that can be from a high-end store to a middle-range store or a mid-range store to a discounter. It also can be from a restaurant to eating at home.

Part of this is seeking to save money but, also, if there is increased unemployment, it leaves more households with someone available to cook.

Of course, how the retail industry facilitates people’s reaction to these broader economic trends makes a big difference.

Our bet is that when robust economic growth resumes, we will see the move to foodservice resume with gusto.

Many thanks to Martin Kneebone for this thoughtful note.

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