Spending on betting makes class B eat out less often, says food service sector

The out-of-home meal market, including delivery, generated R$61 billion in Brazil in the second quarter of 2024, an increase of 3% compared to the same period in 2023. The sector is made up of restaurants, fast-food chains, the food and beverage industry, as well as service providers, such as packaging, equipment and technology companies.

Despite the increase, data from the Food Service Institute Brazil (IFB), the largest entity representing the sector in the country, assesses that the sector “is a little stagnant” and that this is related to consumer debt and the greater spending of Brazilians on sports betting, the so-called bets, which have multiplied in the country.

“In July 2023, there were 61 registered betting houses in Brazil and in March of this year, this number was 380. The biggest consumer in this market is class B, and we lost 2% of consumption from this social class, which no longer has as much to spend”, said the institute’s executive director, Ingrid Devisate.

Founded in 2014, the Food Service Brazil Institute (IFB) is the main entity in the sector and works to facilitate companies’ access to data and technology. Sworn in in January 2024, the institute’s new president, Danielle Gary, and executive director, Ingrid Devisate, spoke exclusively to the website This Is Money about new trends in the sector, the challenges faced by the population’s high level of debt and new consumer demands.

According to IFB data, the sector’s average ticket up to June 2024 was R$19.8 per purchase, up from R$18.8 in 2023. Average consumer spending on restaurants’ own delivery services rose from R$20.9 in 2023 to R$23 in 2024. For delivery orders via apps, it rose from R$23.2 to R$24.2.

“The sector lost more than 400 million visits in 2023, but the average ticket increased and compensated for this drop. In other words, consumers are more selective and want to spend more on better products,” said Gary.

Check out the main points of the interview

How important is the institute for the sector today?

Danielle Gary: The institute was founded in 2014 and today has 105 members, including giants such as McDonalds, Burger King and Bob’s. Our main role is to feed the sector with reports on consumer habits, technology and data for better decision-making. In addition, we have committees such as the market intelligence committee to help companies with insights. In Brazil, more than 80% of the food market is made up of independent restaurants and 30% is made up of large chains. This is the opposite abroad. So our job is to help these establishments that often do not have the money to invest in research and data for better decision-making.

Today, we have consumers with more discerning tastes and who demand new things, which is why companies need to innovate their service and menus. Our job is to build a structure so that these restaurants can grow.

What is the reality of the sector today?

Ingrid Devisate: The interesting thing about our sector is that it is very broad, ranging from breakfast at the bakery, to a work lunch, to a big family celebration. We see crises in retail, for example, but this sector is resilient. The latest data we have is that Brazilians spend on average 30% of their monthly budget on eating out. That’s a very high number.

Today we are living in a slightly more challenging scenario. The food-out market has been growing since 2021 and is now somewhat stagnant, due to high consumer debt, which may also be related to bets, which grew a lot last year. In July 2023, there were 61 registered betting houses in Brazil and in March of this year, this number was 380. The biggest consumer in this market is class B, and we lost 2% of consumption from this social class, which no longer has as much to spend. The sector lost more than 400 million visits in 2023.

This is an expected trend because when people don’t have money, they cut back on spending outside the home. At the same time, the average amount spent by consumers has increased, meaning that those who are going out are going out to spend more.

Could the increase in the average ticket have to do with some change in Brazilian consumption habits?

Danielle: Yes, because spending ends up being more selective. Eating a sweet treat every day after lunch, at the end of the month, has a big impact on the budget, R$200, R$300. Instead, he will eat it less often, but it will be a more expensive, more sophisticated sweet treat, not just any old one. I will choose better ones, a sweet treat from a place where I know the origin of the ingredients, for example. One that I can feel that it has quality condensed milk, that it is not a product that has been stored there for days and by the time I go to eat it, it is stale and dry.

Another piece of information we gathered is that 38% of customers want promotions. So restaurants need to keep an eye on this and invest more and more in these combos. People who go with their family are looking for value for money. Consumers want a burger and a milkshake at a promotional price. Those who were able to see this came out ahead.

We also found that customers want to innovate their menu. Of course, there are exceptions, but if a customer goes to the same place three or four times and always finds the same things on the menu, they won’t come back. Competition in the sector is very strong, so restaurants must always be on the lookout for innovations.

What changes did the pandemic bring to the food-out market?

Ingrid: There has certainly been an acceleration in delivery, which has become a household habit. Before the pandemic, it represented less than 10% of transactions and reached 32% in 2021. In 2023, it stabilized between 17% and 19%. We evolved 10 years in this technology during the pandemic and the sector needed to move, with investments in the IT area. Between 2016 and 2020, orders via smartphone had already increased by 1000%. Today, we can see that a family orders food from three or four restaurants in one meal.

Investing in self-service tokens is also a reality for many restaurants and increases conveni
ence for consumers. But we need to keep in mind that Brazilian consumers do not give up on good service, on calling the waiter by name, on feeling welcomed. We saw that many operators who went for a more technological approach had to backtrack.

How does the sector view the growing demand for things that go beyond food, such as a more Instagrammable environment, for example?

DG: We don’t have data on this, but in some conversations we have with restaurants, they tell us that the first thing consumers do is take a picture of the food. So today there is a concern to delight this customer. If you don’t have the best chair, the air conditioning at the ideal temperature, the best lighting, the customer often won’t come back. It’s not enough to have the best food.