Hospitality insights

Hot trends in hospitality sector deals

Trefor Griffith Trefor Griffith

There was an 80% rise in deals in the online and delivery sector in 2017. This increase was in line with the ongoing boom in consumer demand for home delivered meals. Despite the fall in M&A activity in the hospitality sector in 2017, there were two key trends within the sector that received a boost.

Home delivery

According to CGA Strategy, 26.6 million UK consumers have had food delivered at least once in the past six months, with 49% ordering home delivery at least weekly1. The market for home delivered food is now worth over £9 billion and, according to NPD, the home delivery and takeaway food sector is growing 10 times faster than the restaurant industry2. NPD also predicts an additional spend of £656 million by consumers on delivery orders by 2019 as delivery firms expand their reach across the country.

In November 2017, the Competition and Markets Authority approved Just Eat's takeover of rival Hungry House, which was first announced at the end of 2016. A key issue examined by the watchdog was whether newer operators such as Deliveroo, UberEATS and Amazon represented sufficient competition to the proposed merger. The three businesses are still considered relative newcomers by some analysts.

Meanwhile, Deliveroo received further funds in 2017 from both new and existing investors, in order to support its expansion into new markets, grow its technology team and build its delivery-only kitchens program. The technology-based food delivery group is now valued at over USD2 billion, working with over 20,000 restaurants in over 100 cities across the UK3. In 2017, Deliveroo also boosted its geographic footprint with the acquisition of US food delivery company Maple Food Co. All in all, it’s unsurprising that rumours of the company’s impending IPO are gaining pace this year4.

Despite this rapid growth, the sector is not without its challenges. There are pressures on firms to have a more robust delivery infrastructure and some backlash against US tech firms and their stance on employee rights. In 2017, we saw a handful of firms affected, including health food delivery company Soulmate Food, which was acquired out of administration by its management, and on-demand delivery app Jinn which went into administration with the assets acquired by a logistics company.

The power of plant-based foods

The “clean eating” craze was surpassed in 2017 by a diet that placed importance on a reduction in the consumption of animal products. Diets ranging from flexitarianism through to vegetarianism and veganism have grown exponentially in popularity.

As a result, both vegan restaurants and vegan offerings from traditional operators went mainstream in 20175. Plant-based burger maker The Vurger Co gained traction from pop-up sites and at festivals and has now opened its first permanent site in London’s Shoreditch. Pret opened its first Veggie Pret pop-up as an experiment, which proved so successful it became a permanent venture and it has since opened two further London sites.

Innovation in the sector is ensuring that vegan food stays inventive and diverse, including the creation of vegan versions of more ‘indulgent’ and typically meat-based foods such as burgers. Jackfruit, being touted as ‘pulled pork for vegetarians,’ is growing in popularity, and in December 2017 Moving Mountains introduced the first meat-like veggie burgers in the UK which release juices like meat. The product is similar to a product launched in the US in 2016 called the Impossible Burger.


  1. The Caterer, Moveable feast: what you need to know to get your food on the move, 24 July 2017
  2. The Caterer, Growth in food service predicted to be driven by burgers and delivery bikes, 15 November 2017 
  3. Deliveroo, Frequently Asked Questions, 2018
  4. CityAM, Deliveroo IOP could be on menu with star tech startup said to be eyeing 2019 float, 11 February 2018 
  5. The Caterer, 14 restaurants offering Veganuary menus, 11 January 2018