Where is the foodservice industry going? - Trends and lessons Presented by Peter Backman 5 June 2015
Things I’ll talk about • The USA and Europe • Who and what is driving the market • London – a case in point • Some conclusions
Europe and the US in 2014 + 400 Food and Beverage Sales: $bn 300 Popular eating out Hospitality Non-commercial 200 US Europe 100 + 0 Sources: Horizons Market Structure and Trends; National Restaurant association
Where is the market going? • Growth Ho hum! • Where is the sun shining? Fast casual ? But … • What do customers want? I want what I want. Now What will you give me?
Europe - The big numbers 773 Popular million eating out $271 bn Foodservice $375 bn Sources: Horizons Market Structure and Trends; Eurostat; CIA
The Potential for Europe + 319 $271 million billion $493 773 billion million + + $310 per person France: $1,544 $697 per person Moldova: £17 Sources: Horizons Market Structure and Trends; Eurostat; CIA
Market drivers
Where the game is being played Popular 5 eating Countries out + Population 41% Hotels 5 Countries 5 = USA Countries 77% $493 bn $185 bn Sources: Horizons Market Structure and Trends; Eurostat; CIA
Where do consumers eat out? Similar patterns across Europe • 100% • Different quantums / quanta 80% $80 60% $60 40% lion Restaurants Billio $40 Quick Service $ B 20% Drinking places Hotels 0% $20 Top 5 Rest of Europe Europe $0 Top 5 Rest of Europe Sources: Horizons Market Structure and Trends; Eurostat; CIA
Where does the inspiration come from? T op 25 US brands dominate T op 25 QSR US McDonald's …. in UK Quick US France Service UK Other France Note the “McDonald’s Other effect” … UK in T op 25 Full Service Full Service UK brands UK 60% of all France European brands Germany US
25 Leading Brands in Europe $22Bn $3.4Bn 2 19% Market share F&B Sales $ Billion Full Service 1 QSR 0 Sources: Horizons; Company information
Top 25 Casual Dining Brands in Europe $800 Top 25 F&B Sales in Europe: $Million latest year end $600 $400 $200 $0 Sources: Horizons; Company information
25 Leading Groups in the UK – the action is hotting up 2,000 Beverage not associated with food Other Beverage Pubs 1,500 QSR Includes Full service • Restaurants, QSR, Pubs £ F&B Sales £ Million • UK only • System-wide sales • Groups sales - not individual 1,000 brands Greene King acquires Spirit • Beverage not associated with food – only applies to Pubs SSP IPO 500 Gondola splits PE, Tragus TGI Jamie’s Ask / Zizzi spins off sale in play Strada 0 Pret Tragus rebrands expands as Casual in US Dining Group Sources: Horizons; Company information
London - An old city with the most youthful eating out market
London • Largest city in Europe • GDP $600 billion • 8.6 million people • 4,700 people/km 2 • 7 th largest country in the EU • 5 th largest city in the world • Still growing 20% Age profile – London ndon vs UK 15% UK 10% London . More of this 5% 0% 0-10 11-20 21-30 31-40 41-50 51-60 61-70 71-80 >81
An international city • 16.8 million international visitors in 2013 • 26 nationalities - with >20,000 people • Poles 110,000; French 69,000; Americans 43,000 • 192 foreign banks • 300+ languages Nigerian Arabic Hindi French Italian German English Punjabi Norwegian Persian Chinese Dutch Pushto Danish Turkish Spanish Urdu
Culture • 300 museums, art galleries • 41 West End theatres • 10 concert halls • London Fashion Week • Notting Hill Carnival • Design
Travel • Underground • 12 lines • 402 kms • 1.1 billion travellers pa • Crossrail • 5 international airports • Buses • 1.2 billion travellers pa • Trams, Rickshaws, Black cabs, Mini-cabs
Modern iconic buildings • Shard • Canary Wharf • Gherkin • Heron Tower • London Eye • Cheesegrater • Walkie Talkie • 02
Sport • 6 Premiership teams • 2 world class cricket grounds • Rugby • O2 • Wembley • Olympics • Wimbledon
Eating out in London • Eating Out in London: F&B Sales 2013 $18.2 billion Source: Horizons • 34% of total UK eating out Restaurants • 13% of UK population QSR Pubs • Grown by 10% since 2007 Hotels F&B Sales 2007-2013 $6 $ Billion Spend $4 2007 • Average: £10.75 ($16) $2 2013 • QSR: £6.80 ($10) $0 • Hotels: £23.33 ($35)
Distinct markets • Type of consumer/shopper • Need state • Male/Female • Convenience • Age 0-100 • Destination • Activity • Hunger • Day part • Office worker • Shopper • Breakfast • Tourist • Lunch • Niche - theatre-goer, stag • Dinner parties … • Spend • Average: £10.75 ($16) • QSR £6.80 ($10) • Hotels £23.33 ($35)
What’s happening? • Competitive pricing • Vouchers – dying out • Meal deals - tactical • Secret menus • Convergence – Pret < > Starbucks
Day parts – the growth of Breakfast Day part vs All-day
Marketing … and • Guerrilla marketing
A landing place for brands from other countries
New venues • Pop Ups • Street food • Food trucks
The Trendsetters Ones to Watch + Bubbling Under = 369 brands 1,856 outlets – 82% in London
The trends T op 5 Trends Store numbers – change in 2014 1. Healthy Quick Service +107 2. Italian Casual +91 3. Mexican Burrito Fast Casual +78 4. Artisan Bakery +74 5. Sandwich bars +74
Lessons to learn
Where is the dynamism? • Countries • Where there are young people • Where the economy is growing • Where there is a culture of innovation • Sectors • Value • Excitement • Fit with changing lifestyles • Companies • Match the above
The Space Race - Trains, Planes and Automobiles
Sweating the assets - in space and time
Retail and Foodservice - blurring and evolving
Service and Technology come together
Global flavours for cosmopolitan consumers Mediterranean / South American US-inspired food Pan Asian Middle Eastern • Hot dogs • • • Katsu curry Halloumi Burritos • ‘New breed’ • • • Korean flavours Dukkah Tacos burgers • • • Wasabi Mezze Chimichurri • Salted caramel • • Teriyaki Chillis • Flavoured slaw • Loaded “Authentic Ethnic” mac’n’cheese How far will this go? • Flat iron steak Fusion, Local, Sustainable and more
Foodservice Large – fragmented Staid – innovative Inspirational – changing
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