As 2018 comes to a close, it’s time to take a look at the trends that are likely to influence the fish and chip industry during 2019
Higher potato prices
Unfortunately, poor yields over the summer are still taking their toll and will mean stocks will diminish. The knock on effect is that the better quality produce will continue to rise in price as farmers hold onto stock and force the market up. While the end of this year will see the price of a bag of spuds averaging at around the £13 mark, it is predicted that by March this figure could be 30% higher.
Global demand for whitefish will eat into the UK’s traditional sources of supply over the coming year not purely because of quota restrictions in the Barents Sea and the Alaskan Sea but due to big reductions in US quotas, which is turning sights to North Atlantic suppliers to fill the gap. Add to this a strong dollar compared to sterling and each cod and haddock landed in North America is earning a premium. Inevitably, fishing companies are having to think about supply and demand, with European buyers caught up in a new reality.
FAS cod prices will be impacted most over the coming year as the North American supply chain has seen 2017-19 cod quotas drop by around 15-20%, however, haddock is a different picture and whilst there is a worldwide drop of around 9% in supplies, we see haddock prices easing sometime around March 2019 when they could well have reached a level to cool world appetite. Haddock is the fish of preference for friers in many parts of Britain and might even become more popular as friers look at the direction of cod pricing. Of course, other species are another option.
Though not a bumper alternative, there is always the option of buying fresh fish and the new auction hall for Peterhead’s daily market is handling decent volumes caught by the home fleet and priced in sterling.
With cost increases across the board, it is not the most comfortable time for anyone. Introducing smaller portions as a healthy eating option is one way of containing price rises. Those shops that have already actioned this have found that although some customers were less than happy initially at the cost of smaller portions, the facts about increasing costs are getting through and customers are accepting the inevitable. Friers who concentrate on professionalism and quality will enjoy a loyal customer base and are in a better position to weather the increases.
Delivery to grow
NPD predicts that consumer spend on restaurant food delivery could grow by 10% in 2019 to reach £5bn. In order to be successful outlets must provide value for money, a good experience and innovative loyalty schemes.
The price of rapeseed is expected to increase as European production has fallen to a seven-year due to the extreme weather this summer. Prospects for other major crops, however, are looking pretty good, particularly for soybean oil and palm oil, although we are about to enter a period where there is a seasonal low in palm oil production (January to June) so prices could be firmer in the new year.
Interest in fully sustainable and traceable palm oil is expected to increase as is the use of high oleic oils, particularly sunflower oil. The latter is a very robust frying oil and is now very popular to those who are moving away from other liquid oils and fats as it gives a favourable performance. There has been an issue in the crop in the last harvest, so supplies are a little tight and prices will, unfortunately, be firmer in the new year. We are also now starting to see the introduction of a high oleic rapeseed oil, which can be grown in the UK.
Free from and vegan
The demand for gluten-free and vegan or plant-based options is expected to continue. According to Mintel, 13% of the UK population is now avoiding gluten while business insights company Foodable Labs reports that more than half (51%) of chefs added vegan options to their menus this year, up from 31% in 2017. In fact, this year has seen two dedicated vegan fish and chip shops open - one in Kent and one in London.
The takeaway that isn’t a takeaway
You no longer need a fixed location to create a loyal following. Pop-ups and mobile vans are both providing opportunities for fish and chip shops to establish themselves in amongst new audiences without requiring large amounts of capital. Food halls are also proving popular, creating foodie hubs.
There will be an increased focus on environmentally friendly packaging as shops look to move away from single-use plastic. But until the ideal packaging is agreed upon, shops should focus on using reusable and recyclable packaging and educating their customers on how to reuse and dispose of it correctly so that it doesn’t end up going to landfall and the efforts of businesses aren’t wasted.
Could we see the first virtual fish and chip shop? Run from ‘dark kitchens’ often on an industrial estate or under-used conventional restaurant premises, virtual restaurants offer delivery only. A core appeal is that they can begin trading quickly and are relatively cheap to run. Deliveroo already has around 400 and Uber Eats aims for a similar number by the end of 2018. Just Eat is also entering this space with ‘digital pop-ups’.
Offering customers, in particular, millennials, the opportunity to skip the queue by ordering and paying ahead will be key to driving growth in the year ahead.
The hot summer had a huge impact on trade with some shops down 10-30%. So be prepared this year, alter your offering to include things like light bites, grilled fish and salads. Popular all year round, they will come into their own during the summer. The shops that saw a steady trade during the heat wave tended to be those that offered a click and collect or a delivery service.
Loyalty programmes that pay
In the past, having a loyalty scheme in place meant giving out stamp cards. Not anymore. Now businesses are starting to integrate their digital ordering systems with loyalty solutions that identify the purchasing preferences of customers and encourage them to return repeatedly.
Becoming a destination that caters for customers with disabilities will be a big issue. Think not only about access but printing your menu in a large font.