Posted November 27

Boutique offerings, celebrity chefs driving Auckland’s evolving F&B scene

What are the driving forces behind the growth of Auckland’s F&B sector? Is further growth expected or has the market topped out?

In June 2015, JLL reported on the investment surge in the New Zealand retail sector that followed the country’s office development boom. A similar surge is occurring in the Food and Beverage (F&B) sector. More establishments are setting up shop in the CBD that target a more discerning market.

A cursory look at F&B growth in the Auckland CBD suggests it is a natural progression of the city’s expansion in office and retail development. While these are certainly factors, Justin Kean, JLL’s Director of Research and Consulting, says the growth of Auckland’s population is a more significant factor.
“A real demographic ground shift is occurring in New Zealand,” he says. 10 years ago, the population living in and around the CBD was only about 10,000. Today, the number is closer to 30,000.”

The population’s dining preferences are changing, too.

What are Aucklanders looking for?

Kean says the new dining trend is “boutique in nature, designed to get away from the chain image.” He cites Nourish Group as an example of the shift, which has nine outlets, but focuses on upmarket cuisine. Each restaurant is unique, but all have one thing in common: an executive chef who has won numerous accolades for the quality of their cuisine.

Chris Beasleigh, JLL New Zealand’s Head of Retail, agrees, adding that Auckland diners are also looking for international cuisine. Beasleigh cites PapaRich, the popular Malaysian chain, which engaged the services of JLL to find its first New Zealand outlet in Auckland, as another example of locals seeking international cuisine.

While everyone enjoys Asian cuisine, the fact that Auckland’s population is 17 per cent Asian adds to the chain’s popularity.
“The food and beverage trend in the suburbs is a little different,” Beasleigh explains. “While more international chains are opening, many of them are more family and value-oriented. For example, JLL helped Texas Charcoal Chicken establish its first outlet in Manukau.”

Other chains that have established a presence in Auckland’s suburbs include Carl’s Jr., KFC and Pizza Hut. Taco Bell is also rumored to have its eye on New Zealand.

What’s in Auckland’s F&B future?

The F&B sector has by no means topped out, says Kean. “Currently, Auckland has about 200 F&B outlets per square kilometer. In Sydney, the number is closer to 400.”

With another 12,000 to 15,000 employees expected to be working in Auckland within the next five years, there is plenty of room for growth. “We anticipate room for at least 300 to 400 food and beverage outlets per square kilometer to keep pace with demand,” says Kean.

Auckland is following the global shift towards urbanisation. “If they do it right, opportunities exist for F&B outlets in Auckland,” says Kean. A unique brand image is part of the equation, but positioning can make the difference between success and failure. What works in one location may not work in another and inside knowledge and experience are the keys to success.