food & beverage trends influencing shopping centres€¦ · increase in footfall and dwell time...

FOOD & BEVERAGE TRENDS INFLUENCING SHOPPINGCENTRES

F&B TRENDS | m3property | SEPTEMBER 2018

SHOPPING CENTRES BRING PEOPLE TOGETHER — EXCEPTIONAL F&B EXPERIENCES BRING THEM BACK!

A DINING DESTINATION IS CREATED BY OFFERING AN IMMERSIVE EXPERIENCE BASED AROUND 'LOCAL CHAMPIONS', WHILE ALLOWING FOR SOCIAL CONGREGATION

INTRODUC TION

El Nacional, Barcelona

This latest Food & Beverage (F&B) Trends report looks at the key trends in the F&B market, particularly how the consumer's demands are influencing Shopping Centre and Mixed Use Developments and how Shopping Centre owners are responding to these demands.

This report highlights nine key F&B trends across the globe as listed below. – Antibrands and Local Champions form the

basis of leasing strategies – DNA Mapping and F&B Brand matching

will define customer behaviour – Entertainment and food are one combined

offer– Food Halls define ‘Food of the Future’ by

creating a ‘community’ vernacular– Technology is a social glue – Fast premium segment has given rise to

Chef Tier II concepts – Externalising the F&B statement is crucial

to allow for experience and longevity – Price point categorisation is crucial to

increase frequency of visits and dwell time – Creating a 'third space' will attract an

increase in footfall and dwell time

The retail industry across the globe, and specifically Australia, is undergoing a transformation – an adaptation to consumer behavior and preferences, and a shift in the ‘traditional’ economic model of fashion retail being the primary driver to a shopping centre. With clicks taking over from bricks, it has become essential that retail centres and mixed use developments create a ‘community vernacular’ specifically for the primary trade area. This can only be done through the amalgamation of food and entertainment, and by presenting F&B experiences as an ‘anchor’ of the development. Creating F&B experiences (variety and offer) as a focal point of appeal will not only, inadvertently increase frequency of visit, but will also increase dwell time across the development, successfully allowing for the implementation of an evening economy.

Offering a curated selection of F&B offers that are experiential and engaging, requires a lot more than just clustering. Mapping the customer journey, and understanding influencers in the F&B Master Planning process, are what will allow for Retail Centres and Mixed Use Developments to evolve and stay relevant in 2020, transitioning to 2025.


ANTIBRANDS AND LOCAL CHAMPIONS FORM THEBASIS OF LEASING STRATEGIES

DNA MAPPING AND F&B BRAND MATCHING WILLDEFINE CUSTOMER BEHAVIOUR

FOOD HALLS DEFINE 'FOOD OF THE FUTURE' BYCREATING A 'COMMUNITY' VERNACULAR

ENTERTAINMENT AND FOOD ARE ONE COMBINEDOFFER

TECHNOLOGY IS A SOCIAL GLUE

PRICE POINT CATEGORISATION IS CRUCIAL TOINCREASE FREQUENCY OF VISIT AND DWELL TIME

FAST PREMIUM SEGMENT HAS GIVEN RISE TO CHEFTIER II CONCEPTS

CREATING A 'THIRD SPACE' WILL ATTRACT ANINCREASE IN FOOTFALL AND DWELL TIME

F&B TRENDS FOR CONSIDERATION

EXTERNALISING THE F&B STATEMENT IS CRUCIALTO ALLOW FOR EXPERIENCE AND LONGEVITY


LOCA L CHA M PIONS FORM THE BASIS OF LE ASING STR ATEGIES

Millennials are the primary user groups of many retail centres – especially with consideration to growth and relevance over the coming five to 10 years. Millennials are very specific in their behavior and preferences. It is critical to:

– Create a sense of community and appeal to Millennials, especially since Millennials now have an 'anti brand' mentality and a sensibility where they are attracted to innovative concepts that are centred around 'experience'

– F&B concepts considered for lease need to be independent (not majors or national chains) if a destinational status is to be incorporated

– The challenge with Local Champions is that they lack disciplines in design and legalities and are concerned with entry costs into malls, which is why, moving forward, a traditional lease model will be challenged and innovative financial underwriting will be required by lease equity

El Mercat, Barcelona - houses a total of 20 F&B operators, all being Local Champions

DNA M A PPING A ND F&B BR A ND M ATCHING WILL DEFINE CUSTOM ER BEHAVIOR

Informing a customer of responsible (and ideal) consumption, is the benefit of technology and data today. Companies across New York and California are testing DNA of customers to advise on the type of diet for consumption (high protein, vegetarian, more carbs etc) and are developing databases of restaurants and F&B concepts (with their detailed menus) to connect in real time with customers through geo-mapping. The intent of these corporations will be to:

– Communicate with customers through texts or push notifications within a mall or supermarket to suggest they visit a particular retailer and what menu item could be bought that matches their body requirements, thereby creating 'impulse' appeal and 'knowledgeable buying'

– Combined with Social Media Interaction (technology as an enabler), this initiative could become a point of difference for retail centres

El Mercat - Barcelona


ENTERTAINM ENT A ND FOOD A RE ONE COM BINED OFFER

What was initially perceived as two separate visitation reasons have now morphed into an amalgamated expectation.

– Customers now look for experiences that include entertainment and leisure that are aligned to F&B or adjacent to F&B to allow for 'one' combined visitation

– Mall developers are now creating zones and programming F&B clusters with or around entertainment (permanent and pop up) which allows for increase in dwell time and average spend of customers

– Zones and Stages are now introduced as a part of the base build design to ensure a permanent calendar of events and programming to allow for planning of visitation

Platea, Madrid is a gourmet Food Hall and is located within a former cinema, combining delicious cuisines with entertainment.

FOOD HA LLS DEFINE ' FOOD OF THE FUTURE' BY CRE ATING A 'COM MUNIT Y ' VERNACUL A R

Emergence of Tier II concepts, and an anti brand mentality has been the breeding ground for F&B clusters that are experiential and encourage social interaction. Food Halls (within retail centres and mixed use developments):

– Create a community vernacular

– Are not restricted to day part trade (have an evening economy)

– Are defined through no national brands or Quick Service Restaurants (QSR) hence appeal to Millennials

Time Out Food Hall, Lisbon was developed three years ago and has been planned to have space activation strategy at different times during the day.

PLATEO - MadridPlateo, Madrid

TIMEOUT - Lisbon


TECHNO LOGY IS A SOCIA L G LUE

F&B (and dining) was the original social media. Utilising this to their advantage, developers around the world have realised the importance of leveraging social media to allow for:

– Sharing of experiences

– 'Personal' marketing

– Connecting in 'real time'

– Introduce media screens across Malls to allow F&B users to 'connect' to shoppers and encourage impulse appeal

– The creation of an 'instagram moment' and an 'instagram design feature' have become a requirement to allow for subliminal marketing and increase appeal of visitation

– Strategised use can reduce marketing budgets and encourage visitation by Millennials

FAST PREMIUM HAS GIVEN RISE TO CHEF T IER I I CONCEPTS

The antibrand mentality and the sensibility to re-tribe has given rise to the fast casual segment where creativity is aligned to product quality and experiential dining. Rising chefs and F&B entrepreneurs are appealing to Millennials as their offer is 'perceived' to be a better product. This specific trend:

– Allows chef based concepts to be more affordable and accessible

– Increases frequency of eating out as the price is lower than actual chef restaurants (with specific appeal to Millennials and Generation X)

– Is usually based on a 'single' product which gives the impression of 'specialisation'

Farsh Cafe, Moscow a successful Chef Tier II concept.

Farsh Cafe, Moscow


E X TERNA LISING THE F&B STATEM ENT IS CRUCIA L TO A LLOW FOR E XPERIENCE A ND LONGE VIT Y

A "see and be seen" environment, and a need for an abundance of natural light, have resulted in a demand for alfresco dining and activation of F&B clusters. Customers are seeking experiential environments where:

– They can visit the F&B offer without interfacing with retail

– The F&B clusters trade longer hours than retail hours

– An evening economy is encouraged

– Integration with entertainment can be offered

– Externalising the F&B offer with weather protection is critical for longevity of a retail centre.

City Walk II, Dubai - F&B offer has been externalised and is centred around a Central Fountain, with live entertainment and a laser light performance to enable a destination for people to socialise.

PRICE POINT CATEGORISATION IS CRUCIA L TO INCRE ASE FREQUENCY OF V IS IT A ND DWELL T IM E

To ensure customers are catered to during non main meal occasions, and an increase in spend on F&B can be encouraged, it is essential that price point categorisation across a retail centre is offered as:

– It will ensure customers have options and can spend more

– The value proposition is linked to experiences not prices so it appeals to more customers who may not want just lunch or dinner

– Creates an 'offer' for customers seeking a different experience over what is available in most malls

– Allows for social congregation of teenagers and Millennials

– Increases Dwell Time by providing options during non main meal occasions

N2 Extreme Gelato - Melbourne

CITY WALK II - Dubai


CRE ATING A ' THIRD SPACE' IS RETAIL OF THE FUTURE

To mitigate visitation limited to just fashion or lifestyle retail, visionary developers are creating zones and clusters in their developments that:

– Allows for an increase in Dwell Time as people congregate and socialise

– Encourages people to have business meetings or social engagements in a zone that is neither an office nor their home, which brings more footfall

– Encourages (enhances) cross pollination with retail as people are visiting for a different reason and end up spending on F&B or retail that they weren't initially planning

– Creates another 'reason' for visitation

ME Madrid Reina Victoria Hotel - where the hotel lobby is used as a third space and is closer to the Restaurant.

It is essential that developers realise the importance of strategic master planning – with an emphasis on experiential F&B clustering, as retail centres of the future will be categorised based on customer engagement and meeting consumer needs. To mitigate the risk of poor performance and defunct centres, it is essential that developers adopt a visionary approach, incorporating selected F&B trends that are aligned to their target catchment and asset type. Food of tomorrow is now retail of the future!

ME Madrid Reina Victoria Hotel

Prepared by: Amita Mehra, F&B Director

Food precincts developed today within any asset category need to be validated for the future. Our in-depth and unique approach to financial forecasting and analysing market potential is aimed at maximising Food & Beverage (F&B) GLA and turnover to boost revenue and asset value.

m3property Strategists has market leading capabilities with its F&B Master Planning Services division led by Amita Mehra, which is supported by our national retail valuations team.

Amita has extensive international experience in this area having previously been the General Manager of a F&B master planning consultancy. Amita specialises in forecasting F&B volumes and assessing market potential for F&B precincts with succinct, practical reports. Our forecast reports can be easily digested, yet have the depth to empower stakeholders to make informed decisions.

Amita’s experience in the forecasting of sustainable volumes and market potential for F&B precincts covers shopping centres, mixed use developments, office towers, Universities, arts precincts and airports. We use a wide range of tools for interpreting market strength, drawing on data evaluation and market prospects, which enable us to incorporate a macro / micro approach.

We analyse all macro and micro data and compare the results to benchmark turnover to clearly outline the potential in the market and discover where our clients financial growth opportunities lie.With the experience of F&B master planning across all property sectors, and through access to an extensive database, a specialist research library and on-going market and trends examination and assessment, we can significantly improve the understanding of a project.The aim is to estimate how much F&B revenue can be expected from the F&B precinct/cluster and how this equates to a sustainable level of GLA and subsequently the sustainable number of F&B tenancies.

F&B M ASTER PL A NNING SERVICES


National Retail Valuation and Advisory Contacts

Heath Crampton NSW | National Director+61 2 8634 [email protected]

Sam Linden NSW | Senior Valuer+61 2 8234 [email protected]

Monique YounisNSW | Assistant Valuer+61 2 8234 [email protected]

Shaun o’Sullivan VIC | Director+61 3 9605 1082 shaun.o’[email protected]

Annalee Neil VIC | Assistant Valuer+61 3 9605 [email protected]

Robert ReidVIC | Valuer+61 3 9605 [email protected]

Ross Perkins QLD | Managing Director+61 7 3620 [email protected]

Simon Hickin SA | Director+61 8 7099 [email protected]

Jennifer WilliamsDirector - Research+61 2 8234 [email protected]

Nicholas Dreyer SA | Senior Valuer+61 8 7099 [email protected]

Amita Mehra Director - Food and Beverage+61 3 9605 1075 [email protected]

Grant JacksonNational CEO / Director – Rating & Taxation(03) 9605 [email protected]

DISCLAIMER© m3property Strategists Australia. Liability limited by a scheme approved under Professional Standards LegislationThis report is for information purposes only and has been derived, in part, from sources other than m3property Strategists and does not constitute advice. In passing on this information, m3property Strategists makes no representation that any information or assumption contained in this material is accurate or complete.

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