CW Retail - Food Halls Report

The trend has only really just begun… projects that are wide in their site selection process… that build resonance with consumers based on the values of authenticity, quality and community will be the ones that experience the greatest success.

Trend or just a fad? So, the question now is: Are food halls a real trend, or just trendy? Our research suggests that answer is clear—a definite trend. The intense popularity that food halls are experiencing did not occur by chance. The rise of food and beverage retail, the explosion of new and unique fast casual and chef-driven startup concepts, and the increasing in restaurant rents in major cities are among the many real estate factors that have aligned to propel this trend. The need for incubator space and the relatively cheaper overall rents that operators face when opening concepts in food hall environments compared to leasing independent space are all positives when it comes to feeding future demand for food hall space. But developers should be aware of a few, larger trends that have played into the food-hall surge. Among them are the emergence of “foodie” culture over the past two decades, demographics that

resulted in millennial consumers driving demand and preferences, and the strong growth of urban markets in the post-reces- sion era. Developers, food purveyors (of any type), and investors would do well to recognize what those trends represent: a new consumer who looks for authenticity, source-ability (farm-to-fork), quality and uniqueness in their food offerings, as well as quality in the surroundings in which the food is presented. To use a baseball analogy, the food hall phenomena is perhaps in the second or third inning of the game. The trend has only really just begun. There will be plenty of new projects over the next couple of years with, inevitably, some clear winners and losers. However, managers of those proj- ects who are wise in their site selection process, who don’t cut corners and who build resonance with consumers based on the values of authenticity, quality and community will be the ones that experience the greatest success.

Food Halls of America 2016

17