Food inflation rose by 1.5% in April, the largest monthly rise in three years, according to Livingbridge investment director Steve Cordiner.
Although the sector had braced itself for potential impacts on the availability of labour due to Brexit negotiations, he predicted innovative operators are using ‘pockets of potential’ to tap into growth opportunities.
Livingbridge also cited CGA Business Leaders’ Survey report, which revealed three in five operators admitted the increased cost of ingredients had already impacted their business.
Menu management strategy
Livingbridge said using customer analytics to create optimised menu management strategies is one way to fight against the rise.
The volatility of consumer spending and food prices has the potential to throw curve balls into the trade over the coming years but taking a more scientific approach to menu development and management to maximise profit is a must to mitigate food cost increases.
Almost a third (29%) of the 250 business leaders who took part in the survey, predicted that pub restaurants and food-led pubs will thrive this year, ahead of salad and juice bars (24%) and drink-led pubs and bars (15%).
More than half (55%) of operators estimated the food-to-go format will do well this year, ahead of street food (41%), pop-ups (40%) and outside catering (10%).
Food trends for 2017
Business leaders also had their say on what the food trends for 2017 would be with 38% of them saying the ‘free-from’ category would be hot this year.
The expected success of ‘free-from’ products was followed by chicken (31%); small plates (31%); superfoods (30%); vegetarian (27%); Indian street food (26%); food waste and sustainability (26%); vegan (25%); and barbecue (23%).
Fewer business chiefs believe the future is as bright for pizza (21%), cheaper cuts (20%) and Scandinavian & Nordic (20%).