Aussie love of eating out driving food service

But the food service sector is not quite as upbeat.

According to the recently released Australian 2022/23 Australian Horticulture Statistics Handbook, the value of fresh produce that went to food service lifted by 9 per cent compared to the previous year.

For the year ending June 2023, the supply of fresh fruit and vegetables to the food service industry was worth $2121.8 million, representing 648,414 tonnes of produce.

The monetary value increase comes despite the volume used actually being down by 1pc.

In context, food service accounted for 16pc of the wholesale fresh supply with retail taking up the remainder.

The Australian Horticulture Statistics Handbook is developed by Freshlogic on behalf of Hort Innovation.

Freshlogic managing director Martin Kneebone gave input during the online launch of this year's handbook in February, saying the food service industry had come back with a hungrier appetite since taking a hit during COVID.

"For 18 months it suffered a lot. And then it's come back, with interest and it's now stronger than what it was," Mr Kneebone said.

"That's surprising, the extent of that, particularly when it's happened at a time when the cost of living pressure has been there.

"What it really confirms in our view is just the strength of demand for eating out; it's a lifestyle choice."

Australians show no signs of easing up on their restaurant and cafe dining either, according to Mr Kneebone.

This in itself holds potential for further fresh produce growth.

"Our intelligence would see 39 per cent of household spend would be spent out of home. And that's substantial. The US market is sitting at 50pc," he said.

"I'm not really sure if it's that well catered for. I think, given it's proportion of the amount of household spend it is capturing, it invites investment and it's now substantial.

"The demand signals we've seen over the last three years confirm that it's not going to go away, it's going to get stronger."

FIGURES from the food service industry appear more subdued than the Australian Horticulture Statistics Handbook indicates.

According to the Foodservice Suppliers Association Australia's (FSAA) 2023 Benchmarking survey, which is based on 2022 financial year figures, 75.63pc of respondents anticipated an increase in sales over the next 12 months, a notable decrease from 90.74pc in 2021.

"Asked to rank from one to seven (1-7) issues in order of historical over the past 12 months, the rising cost of goods was the number one concern, receiving 47.90pc of responses for the top spot," the survey said.

"In close second at 30.25pc was the shortage of skilled staff followed by the related shortage of semi/low skilled staff in third place with 10.08pc."

Respondents were also asked to provide additional comments.

"One argued 'we are in uncharted waters: many businesses have closed down or downsized', while another referenced inflation in food prices continuing to drive down sales, 'as people move to cheaper QSR (quick service restaurants) offerings and takeaway categories we don't supply to'," the survey said.

But in keeping with Mr Kneebone's observation of a COVID bounceback, the FSAA survey said the sales potential of the industry clearly remained strong, with no signs of permanent damage from COVID lockdowns.

While the food service industry has shown healthy growth, it is still dwarfed by the retail sector which accounted for 88 per cent of fresh supply and was worth $658.6 million, representing 180,089t.

In the retail space, Mr Kneebone said the country has seen the rise of more frequent shoppers, something food producers have capitalised on through value-adding.

"Across vegetables we see more added value, we see more success with more convenient-orientated perhaps portion-related products meeting the need of that more frequent shopper," Mr Kneebone said.

"About a quarter of the retail vegetable market enjoys that sort of convenience premium."

The wholesale value of the fresh supply distributed into retail was worth $10,268 million for a volume of 3,289,920t.