Number of new foodservice brands declines

Entrepreneurial activity in the eating out sector appears to have slowed down over the last six months. Releasing details of its biannual Ones to Watch research, Horizons said that there had been a decline in the number of new brands qualifying to be included in the research, as well as a slower rate of expansion among established brands.

Ones to Watch tracks the emergence of new eating out brands once they reach five units through their period of growth to 25 outlets. They qualify for inclusion if they have shown growth of at least 20% over the previous three years combined.

“Foodservice is traditionally a sector that attracts a great deal of entrepreneurial activity. Some of these concepts will inevitably fail in the longer term, but others go on to become the next big high street brands such as Bill’s, Byron, Jamie’s, Tossed and Leon,” said Horizons’ analyst Nicola Knight.

“Overall there is still growth in the number of new concepts included in Ones To Watch but at just seven new brands, a total of 190, this is fewer than we have seen in its five year history. In April 2016 the research revealed 12 new concepts, a total of 183, while this time last year 30 additional brands met the criteria.”

Knight said the slowdown of entrepreneurial activity could be the beginning of a more general slowdown in the foodservice sector, and that uncertainty around the effect on the economy that Brexit was likely to be having an effect.

“It shows that fledgling operators are currently being more cautious in their expansion plans,” she said.

Dessert café Kaspa’s emerged as one of the fastest growing brands in Ones To Watch. The franchise concept, specialising in ice creams, gelatos, waffles, crêpes, milkshakes, smoothies and sundaes, grew from just two sites in 2013 to 25 in 2016.

Another dessert café, Treatz Dessert Parlour, made the list of fastest growing Ones To Watch brands, expanding from one outlet in 2013 to seven in 2016.

“Dessert cafés are a relatively new addition to our high streets but have expanded rapidly through franchising. The US-style concept looks set to grow in the UK, attracting millennials as an alternative to coffee bars as places to meet and hang out with friends. One of last year’s top performer was Creams, another dessert café, which now has 39 outlets,” said Knight.

Fastest growing Ones to Watch brands by new site openings

1. Kaspa’s (from 2 to 25 outlets*)
2. Red Kiosk Company (0 to 20)
3. Burger Shack (0 to 18)
4. Cau (3 to 20)
5. T2 (0 to 15)
6. = The Stable (4 to 17)
= Chatime (0 to 13)
8. = Wahaca (11 to 23)
= Coast To Coast (9 to 21)
= Joe and the Juice (5 to 17)
= Chozen Noodle (4 to 16)
* Number of outlets in 2013 compared with Oct 2016

Fastest growing Ones to Watch brands by percentage growth

1. Kaspa’s (from 2 to 25 outlets*)
2. Chicken Shop (1 to 10)
3. Bobs and Berts (1 to 9)
4. = Dunkin’ Donuts (1 to 8)
= Toro’s Steakhouse (1 to 8)
= Red’s True Barbeque (1 to 8)
= Churchill’s Fish & Chips (1 to 8)
7. = Treatz Dessert Parlour (1 to 7)
= Palm Sugar (1 to 7)
= Grind & Co (1 to 7)

* Number of outlets in 2013 compared with Oct 2016

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