For most consumers in Canada, lunch is pretty predictable. When you think about it, we are very much creatures of habit when it comes to lunch. Many of us eat the same thing, at the same time, in the same place, day after day. Our CREST® data shows the traditional peak lunch time is between 12:00 and 2:00 p.m. This makes sense, as the traditional work day still tends to revolve around a 9 – 5-ish schedule, with a lunch break somewhere in the middle of the day. However, over the last few years we have seen some shifts in the ways consumers approach the lunch daypart.
And while this routine-oriented lunch remains true for many consumers in Canada, there is a definite generational shift in how they approach lunch. During Terroir 2019 at The Carlu earlier this year, I noticed an influx in breakfast sandwiches flowing out of the kitchen. Some Gen X colleagues and I watched in amazement as our younger lunch companions devoured these tasty sandwiches. The rest of us were looking for the coffee station!
The recent emergence of “all-day breakfast” offerings by several large Canadian foodservice banners has had a significant impact on the way consumers approach the lunch daypart. This appears to have consumers wondering, “Am I having breakfast right now, or is this lunch?” When we look at compound annual growth rates in traffic at Canadian foodservice, the data shows the largest increase in lunch is now at 3:00 p.m. In other words, lunch is creeping into traditional afternoon snack territory, with the 3:00 p.m. time slot experiencing the strongest average annual growth! Even so, the noon hour still claims the highest proportion of consumer visits at 45 per cent.
Looking deeper into our data, we know the 3:00 p.m. eater is most often a single-party customer having a quick working lunch. In fact, this accounts for just over half of the traffic occasions during this hour. This made me think: Is everyone working from home these days and getting up late to eat?
Who Are These Consumers?
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; in 2018, they accounted for 56 million more traffic occasions than they did in 2017.
What Do They Eat?
On-premise occasions continue to fuel growth at lunch (+37 million in 2018 compared to 2017, with a +5 per cent compound annual growth rate). 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. Delivery posted strong double-digit volume growth on the year, even though it only represents 2 per cent of lunch traffic occasions overall.
Top Lunch Foods by Index
|Pizza||down to 83 on index|
*Indexed against total commercial foodservice traffic
Top Lunch Foods within QSR (Growth in servings)
|Steak Sandwich||+27.8 %|
|Other Sandwich (category other than chicken)||-40.2 %|
Source: The NPD Group/CREST®, 2018 vs. 2017
Lunch and the Full Service
In my experience, full service restaurants have always been challenged when it comes to competing for lunch business. This is mainly due to their price points, their brick-and-mortar locations, and the time it takes to eat lunch. The top items with the most volume growth at FSR are seafood, non-fried vegetables, and East Asian/Southeast Asian flavours. These items generally are quickly produced and perceived to be healthy, depending on the specific menu items selected.
Retail at the Lunch Daypart
We can’t forget the retail segment. If you’ve noticed, everywhere you go these days, strong brands are investing in foodservice – whether you are buying groceries, clothes, furniture, or even gas! I couldn’t believe it when a friend of mine told me the other day that he needed to go into a Shell gas station to grab lunch before a work meeting. I was shocked! Then I went to Nordstrom’s and had a coffee and a crème brûlée, which I suppose is really no different.
Millennials and Zennials
For the last five years, everyone has been on pins and needles trying to better understand the Millennial consumer. I think the opportunity in the lunch segment will have the industry refocus on the next generation as Millennials gradually move into their next life stage: families with kids.
What we are seeing now is a new type of lunch consumer: the Zennial (Gen Z). The Gen Z consumer is now entering the part-time work force. As a result, this consumer has a tendency to meet up for a late breakfast in a group or have a quick late lunch in a favourite QSR.
Lunch experiences may be new for Zennials. As their lives progress, they will only get busier. Soon, they will be going food shopping, and when the opportunity arises to go to a FSR, they are likely to choose quick, ethnic foods, with strong, bold flavours, either alone or with friends.
Is the perception of lunch changing? If I were looking for opportunities (and I am always looking), I would consider creating or expanding my afternoon grab-and-go food offerings, and I would think about creating a more compelling, healthy late breakfast offering or add-on. This new menu item certainly would be plant-based. Looking at the clock, is there room for a 2:00 – 5:00 p.m. menu? Perhaps something more substantial than an afternoon snack? Depending on your food platform, I think these possibilities could be winners.
And that’s my perspective . . .