The market for dining out of the home, also known as the foodservice sector, showed unanticipated economic growth this year.
Bord Bia, it emerged, expects further increases to top €9bn by 2020.
Many pubs, especially gastro pubs, and coffee shops have enjoyed strong economic growth ion 2016.
The findings of the report, unveiled yesterday, are very positive for the industry, said Restaurant Association of Ireland chief executive Adrian Cummins: “This just shows the recovery is happening.”
The reduced 9% Vat rate for the sector was a big driver behind this growth, he said.
The report showed almost 35% of spending happens in quick-service restaurants — a sector that includes traditional fast food restaurants as well as more upmarket food outlets — and ‘food-to-go’ — ready-to-eat menu items consumed away from the premises from which they are sold.
Pubs accounts for 18% of the spend excluding alcohol, with gastro-pubs seeing the biggest return. Coffee shops also experienced strong growth this year, according to the report.
The report, presented to Bord Bia’s annual foodservice event, found there was a growing trend among customers for health and authenticity when dining out, despite the assumption that those eating out crave indulgence.
As a result, more establishments are focusing on providing healthy offerings by focusing on types of ingredients and menu transparency.
With an increasing demand from customers for healthy offerings when dining out, potential for the mandatory inclusion of calories on menus as well as the upcoming introduction of the ‘sugar tax’ adds pressure on fast-food outlets to consider opting for healthier items on menus.
According to Bord Bia, the growth in the market this year is a result of a combination of factors, including Ireland’s economic growth, an unemployment rate of less than 8%, high consumer confidence, a strong tourist market, and the reduced Vat rate of 9% for the hospitality sector.
The foodservice market includes all food eaten outside the home — in restaurants, hotels, coffee shops, and bars as well as catering in workplaces, hospitals, and education, and also vending machines.
This sector of the industry has grown at over 5% per year but 2016 has exceeded Bord Bia’s expectations.
Bord Bia foodservice specialist Maureen Gahan said: “It has been a bumper year for foodservice in Ireland.
“Despite the uncertainty that Brexit brings, we are still in the enviable position of being the fastest growing economy within the EU.”
The report showed the public is willing to spend money on ‘fair’ prices for higher quality foods as opposed to the lowest price.