Are late-night dessert cafés the new nightclubs?

Massimo Franchi, chief executive of Badiani, says the business, which opened over a third of its UK footprint this year, with five store launches bringing the portfolio to 14 sites, has already seen "good demand".

"We have seen good double-digit like-for-like growth since 2015. We've built good infrastructure in the UK which will allow us to exponentially grow," he added, having received funding from several long-term investors. Badiani's expansion has also been supported by the provision of gelato to a number of restaurants in London.

Talks at Casual Dining Show 2023 also acknowledged the dessert café boom. Simon Stenning, founder of FutureFoodservice, said: "We are forecasting continued growth [in dessert cafés], as we're not drinking as much in the same way, so we're looking for other ways to treat and enjoy ourselves."

While there have always been communities that avoid alcohol for cultural or religious reasons, the low- and no-alcohol trend is particularly prolific among Gen Z. Laurence Brown, senior insight manager at Kam, stated "alcohol is not the main point of socialising" for this demographic. Research conducted by Kam and Lucky Saint earlier this year revealed almost three in 10 18- to 24-year-olds are tee-total, while six in 10 stated they were looking to reduce or moderate their alcohol intake.

Creams of the crop

Last month, dessert restaurant chain Creams Cafe appointed Oliver Rodbard as its chief operating officer amid plans for national and international expansion. The former chief operating officer of Soul Foods Group, a global franchisee for brands like Starbucks, said: "It's the right time for Creams to be looking at what comes next" as the dessert sector is experiencing "remarkable growth, driven by changing consumer preferences, and a desire for unique and indulgent experiences".

As a case in point, Creams exceeded 100 net store openings and entered a nationwide franchise agreement with Tesco Family Dining – a first for both parties – this August, which will see more Creams Cafes launching within Tesco Cafés. Creams opened its first Tesco affiliated restaurant inside Tesco Extra Streatham in London in November 2022, a month after the business was joined by chief executive Everett Fieldgate, who was previously based in Dubai overseeing franchisor and franchisee relationships with Yum!, Americana and Costa Coffee.

He said he had seen a "massive uptick" in potential franchisees in the UK, which has been "a real eye-opener over the course of the past three to five months".

Following the launch of its flagship site in the Manchester Arndale Centre in December 2022, Creams has opened six sites and has a "solid pipeline" of 10 or more restaurants planned this financial year. The brand relies heavily on franchising, as only five of its stores are company-owned. Since 2020, the business, originally founded by Adam Mani and Balal Aqil in 2008, has been majority-owned by Pistachio Holdings. Investment fund Salonica Maroon also acquired a further shareholding in Creams this January.

Creams has "no intention to seek additional funding or additional owners as we move forward at this stage", but the company is prepared to diversify its franchise partners due to "investor sentiment starting to come back and therefore us seeing a much more robust pipeline of potential franchisees moving forward".

"Now, we have this ability to bring in other franchisees as well, which is a fantastic mix," Fieldgate explained, making nods to the Tesco and Park Garages partnership, which was completed in April this year and resulted in restaurant openings in Wigan and Blackburn.

"Our current estate has very much a south England towards south east focus, so that leaves a massive opportunity for us to grow in the north and the west. It's a huge opportunity so we really divided our growth aspirations into two: traditional high street bricks and mortar and more corporate partnerships," he says. "We have three, maybe four others in the pipeline at the moment which are not in competing segments with Park Garage or Tesco, but kind of expand the brand even further into those types of locations."

But growth in the dessert sector does come with a cost. "We face a lot of plagiarism in the context of the category and that manifests itself in an inability to drive our USP, because there's a lot of consumer confusion around which stores are or are not Creams," Fieldgate admits. "We've got a lot of work that's coming through that will certainly drive some differentiation between ourselves and our competitors."

American pie

Amid tight competition in the market, Incipio Group, which operates nine restaurants and bars across London since it was founded in 2015, launched the 411 in Angel in September. The latest neighbourhood bar from the group has been inspired by the American milkshake parlours of the 1950s and 1960s. Crucially, it is heavily "experience-led".

Anthony Knight, marketing and sales director of Incipio Group, which owns Lost in Brixton and Pergola Paddington, says the 411 is based on "retro Americana, which is very classic" to attract a younger crowd yearning for nostalgic experiences infused with competitive socialising. "It's got that late night dessert café aspect to it, and we'll be serving things like warm cookies and milk over quiz nights."

Alongside these monthly quiz nights, the 400-cover venue hosts Wall Street Wednesdays, where prices for drinks rise and fall as they would on a live stock market, and 411 Fridays, its version of a house party featuring free pizza slices at 9pm. The latter initiative grew out of the group placing "a lot more attention on what a Friday night looks like" after it noticed that footfall had fallen on Fridays by between 25%-30% compared to pre-pandemic levels.

While these late-night dessert cafes with a twist are entering the market, and the more traditional outlets continue to enjoy their extended hours (most Badianis close at 10pm and Creams in London's Marble Arch stays open until 3am), figures from the Night Time Industries Association (NTIA) in August revealed that 100 independent night clubs have permanently closed over the past year.

"We're seeing interest in night clubs on a much lower scale for a younger audience and I think a massive part of it is night life just hasn't evolved quick enough – it's still the same offering that it was 10 or 15 years ago," Knight explained. The sector is also facing increasingly strict legislation over noise pollution, which means that music venues are being moved further out of the city.

"There are some sensational late-night venues like Drumsheds doing some great things. Could I imagine them trading and operating in central London? I think it's becoming more and more hard for them to do so. It's why that type of venue wouldn't appeal to Incipio in the future."

And if Incipio, too, a business striving to create "vibrant atmospheres" in whatever form they may take, is shifting gears into cloudy lemonades, salted caramel sundaes and New York cheesecakes, then perhaps the dessert trend is here to stay.