Having worked on Trispan’s acquisitions of Pho and Mowgli, we have spent a lot of time thinking about why South and East Asian cuisines are on the rise in the UK. The past 4 years has seen the largest Asian chains in the UK grow their portfolios by 31% at a time when the overall casual dining sector has contracted.
The market is showing strong confidence in this segment. Alongside the Pho and Mowgli deals, Sticks and Sushi was recently acquired by McWin for €80mn, JKS raised c.£10m to fund expansion, and Wagamama has announced continued roll-out after Apollo acquired its parent group last year.
Of course, Asian cuisine is not a monolith, but there are certain commonalities that position the whole segment for success.
Rice: the majority of these cuisines rely heavily on rice and rice-based carbs such as rice noodles. Whilst coeliac disease is relatively rare, gluten intolerances are on the rise, as is general avoidance of refined flour and yeast which is often seen as bloating. Google searches for “gluten-free” have increased 340% in the last 5 years.
Dairy-free options: alongside gluten-free, dairy-free is a growing trend, driven by increased awareness of lactose intolerance, and veganism. Although dairy has featured in South and East Asian cuisine, it is historically less dominant than in European cultures. As a result, there are many naturally non-dairy dishes, both sweet and savoury.
Low & no meat options: In contrast to many European culinary traditions, epitomized by the British "meat and two veg" mentality, many Asian cuisines are adept at making a little meat go far. They offer a plethora of low or no-meat options, with a focus on vegetarian dishes and techniques where even a modest amount of meat, such as broth or mince, can impart rich flavour to a dish. This adaptability positions Asian cuisines favourably to meet the growing demands of flexitarian consumers, as well as resourceful operators, looking to find cost-effective recipes in the wake of inflation.
Light & Healthy: As jobs have shifted towards more sedentary roles and global temperatures have risen, there's a growing preference for lighter, more health-conscious food. Many Asian dishes, known for their emphasis on fresh ingredients and lighter cooking techniques, are better suited to contemporary lifestyles, offering a diverse array of healthy options that cater to various dietary trends. Japanese cuisine, with its lower calorie count and focus on fresh, raw fish, aligns well with diets like Keto and Atkins, while Vietnamese cuisine, abundant in fresh herbs and vegetables, appeals to those seeking light nutrient-rich fare.
Delivery-friendly: Asian cuisines, particularly those with strong curry traditions like Indian, Thai, and Sri Lankan, deliver well due to their ability to retain heat and preserve meat tenderness. Meanwhile, cold dishes like sushi or Vietnamese salads, also fare well, avoiding issues of food becoming soggy or losing freshness. This has strengthened Asian cuisine business models, especially post-pandemic with consumers having become increasingly accustomed to the convenience of delivery.
Travel: increased accessibility to international travel has exposed a greater number of UK residents to diverse culinary experiences abroad. With more people exploring Asian destinations, there's a heightened curiosity and openness to exploring foreign cuisines. This cultural exchange fosters a desire among well-travelled individuals to recreate the flavours and experiences of their travels at home, driving demand for authentic Asian cuisine within the UK market.
Specialised: the rich street food cultures of Asian countries have inspired a trend towards specialised eateries focusing on perfecting a single dish. From tonkotsu ramen shops to Korean fried chicken joints and Vietnamese bánh mì stalls, these establishments hone in on one signature dish, becoming a destinations for foodies seeking authenticity and quality.
Overall, the Asian cuisine market in the UK remains undersaturated, with ample room for growth and innovation. We anticipate burgeoning interest in emerging cuisines such as Korean, Sri Lankan, and Malaysian, alongside deeper explorations of regional specialties like Keralan, Sichuanese, and Isaan. This will be paired with greater adoption of Asian-inspired dishes in more generalised brands and exciting culinary contributions from nations like Australia and the US, which boast large Asian immigrant populations and interesting fusions.
Beyond restaurants, the Asian food trend is rapidly expanding into grab-and-go and grocery sectors. Brands like Wasabi, Itsu and Kokoro demonstrate this with their impressive retail growth. Major retailers like Tesco have reported significant increases in sales of Chinese cooking ingredients (32%) and pan-Asian products (15%) including Korean, Japanese, and Thai. This reflects consumers' growing appetite for Asian flavors, both in the convenience of ready-made meals and in home cooking. This trend opens the door for larger Asian chains to partner with grocery stores, as evidenced by the increasing supermarket presence of Yo! Sushi, Wagamama, Itsu, and Wasabi in recent years.
Overall, we believe that macro trends support the Asian cuisine market, and that it will continue to present compelling investment opportunities in the UK and beyond.
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