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Growth and Profitability through Strategic Partnerships
2
The market is getting more competitive - in the growing segments current chains have rapidly expanded their store count
YOY sales contribution growth
Source: Aggregate Foodservice Monitor data from
Q4 2016 to Q3 2018 n = 17581
▲ 40+ stores
▲ 5 stores
▲ 7 stores
▲ 4 stores
43%
59%
51%
0%
10%
20%
30%
40%
50%
60%
70%
BBQ Hotpot Japanese
▲ 40+ stores
3
In declining segments the growth of chains is even more fierce – as these channels are still big in the OOH market
YOY sales contribution growth
Source: Aggregate Foodservice Monitor data from
Q4 2016 to Q3 2018 n = 17581
-35%
-25%
-42%
-29%
-50%
-40%
-30%
-20%
-10%
0%
Coffee/Tea Fast Food
Italian
Kitchen Bakery
▲ 14 stores
▲ 11 stores
▲ 14 stores(expansion to additional
2 provinces and Hanoi)
▲ 16 stores(expansion to South
Korea)
▲ 4 stores
▲ 40+ stores(expansion to additional
10 provinces)
▲ 13 stores
Yet consumers are not going out to eat exponentially more every year
147
Source: Decision Lab Foodservice Monitor Data from Q4 2016 to Q3 2018 n = 27591
AVG. ANNUAL V IS ITS PER CAPITA
154 6%
Amid the heated competition, operators also have to face stagnant consumer spending
Source: Decision Lab Foodservice Monitor Data from Q4 2016 to Q3 2018 n = 27591
59,903đ 8%
Average spending per head per visit with voucher – in VND
Even promotion is not helping Operators either as voucher spending continues on a downward trend
n = 2062Source: Decision Lab Foodservice Monitor Data from Q4 2016 to Q3 2018
147K139K
127K120K
124K
105K95K
114K105K
0K
40K
80K
120K
160K
Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
2016 2017 2018
-15%
-16%
Q4 2017 – Q3 2018
Total Retail: +1.2%
Department Store: +2.3%
AVERAGE ASKING RENT GROWTH IN HANOI
Q4 2017 – Q3 2018
Total Retail: +7.6%
Department Store: +0.8%
AVERAGE ASKING RENT GROWTH IN HCMC
With steadily growing rental costs, the pressure on profits are mounting
Source: Cushman & Wakefield Hanoi & Ho Chi Minh City Retail Marketbeats from Q4 2017 to Q3 2018
n = 14252 n = 13339
The Issue
Manufacturers often suffer from transactional
relationships with foodservice operators. They risk
depending primarily on discounts rather than value
adding offers and differentiation.
We need to move towards more strategic
partnerships.
+ Consumer Understanding
+ Distribution Network
+ Global Support
+ World-class Marketing
+ Dynamic Business Model
+ Direct Customer Feedback
+ Endless F&B Combinations
+ Sales-focused Marketing Model
+ Loyalty Programs
Manufacturers Operators
What can we offer each other?
vs.
TARGET WISELY
Assess lucrative categories, channels, occasions,
target consumer, best food/drinks pairings etc before
investing
We see the best-in-class moving towards data driven partnerships
ITERATE & IMPROVE
Customize and manufacture the right foodservice
solutions, develop brand strategies, decide on
marketing tactics
DATA DRIVEN PARTNERSHIPS
Sell value: Higher customer satisfaction, higher
spending, higher margins
How can Manufacturers and Operators partner up?
Customized drink pairings as a competitive advantage in growth segments
Collaborate to change behavior in the milk coffee market
Co-create the right snacks for women
Collaborate to change behavior in the coffee market
Coffee in total - % servings
n=2316
Coffee with milk occupied the majority of coffee consumption
Coffee with fresh milk has room to grow
Coffee with milk - % servings
n=1613
Source: Decision Lab’s Foodservice Monitor Aggregate data from Q4 2016 to Q3 2018
50%
27%
15%
8%
Coffee with milk
Coffee without milk
RTD Coffee
Flavored/Blended Coffee
706 million
servings
17% 21%
83% 79%
0%
25%
50%
75%
100%
Q4 2016 to Q3
2017
Q4 2017 to Q3
2018
Coffee with condensed milk
Coffee with fresh milk
161 million
servings
194 million
servings
• Milk coffee distribution in different channels
Coffee with fresh milk is concentrated in QSR
Coffee with Condensed milk - % servings
36%
22%
17%
12% 12%
0%
10%
20%
30%
40%
50%
60%
QSR FSR CVS Street food Canteen
n=1481
Coffee with Fresh milk - % servings
n=367
Source: Decision Lab’s Foodservice Monitor Aggregate data from Q4 2016 to Q3 2018
55%
16%14%
10%
5%
0%
10%
20%
30%
40%
50%
60%
QSR FSR CVS Street food Canteen
• Top reasons for choosing Coffee - % visits
16
Devoted to their favorite beverage, Coffee drinkers are loyal to the outlet as well as very sensitive to changes in coffee taste / quality
Top reasons for choosing Coffee - % visits
58%FAVORITE DRINK
28%TO RELAX
27%CONVENIENCE
n=2316
• n=2,805
Net Promoter score for Coffee Consumption
3
17 17
20
17
0
5
10
15
20
25
No
Coffee
Coffee
with milk
Coffee
without
milk
RTD
Coffee
Blended/
Flavored
coffee
Net Promoter score for Coffee with Milk Consumption
17
21
15
16
17
18
19
20
21
Coffee with
condensed milk
Coffee with fresh
milk
n=1631
Source: Decision Lab’s Foodservice Monitor Aggregate data from Q4 2016 to Q3 2018
n= (25278) (1631) (572) (96) (121)
This creates opportunities for manufacturers to get involved
Market potential for coffee with fresh milk
Product development capabilities
Collaboration opportunities
64M60M
74M
103M
120M
95M100M
90M
4M 7M11M
16M 18M 16M 18M 16M
0M
20M
40M
60M
80M
100M
120M
Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018
Total Coffee consumption (n=2,316) RTD Coffee Consumption (n=479)
Coffee consumption in million servings
(These are just the out-of-home
numbers)
In Vietnam, RTD Coffee is a growing trend in the overall coffee consumption
1% y-o-y
13% y-o-y
• STARBUCKS x ARLA
Starbucks x Arla: A coffee giant tapped into RTD territory with a strong partner
Starbucks is a renowned coffee giant with more than
27,000 stores across more than 75 markets, based in the
US.
Arla Foods is the largest producer of dairy products in
Scandinavia.
In 2010, Starbucks chose Arla as a license partner to
manufacture and distribute its milk-based RTD coffee
across Europe, the EMEA and Asia.
Since then, Starbucks’ RTD business has grown by 40%
each year.
Their partnership will extend until 2039.
Customized drink pairings as a competitive advantage in growth segments
-17%
46%
23%
37%
-40%
49%
-6%
-61%
-80%
-60%
-40%
-20%
0%
20%
40%
60%
Fast Food BBQ Other
Asian
Hotpot Italian
Kitchen
Japanese Korean Western
n = 2962
YOY Traffic growth of foreign cuisines
Source: Aggregate Foodservice Monitor data from Q4 2016 to Q3 2018
21
BBQ, Hotpot and Japanese cuisine have been growing rapidly in the past 4 quarters
They all boast a high level of drinking
41%
70%
49%59%
44%
71% 71% 75%
0%
20%
40%
60%
80%
Total Cuisine BBQ Hotpot Japanese
Q4 2016 - Q3 2017 Q4 2017 - Q3 2018
Eat & Drink percentage of visits
n = 2962Source: Aggregate Foodservice Monitor data from Q4 2016 to Q3 2018
40%
21%
34%33%
30%
16%
53%
43%
15%
8%
12%
7%
0%
10%
20%
30%
40%
50%
60%
Convenient
location
Didn’t want to
cook
Socialising Treat myself &
close ones
Atmosphere Try something
new
BBQ, Hotpot & Japanese Vietnamese
n = 10756
Reason of restaurant choice by cuisines - % visits
Source: Aggregate Foodservice Monitor data from Q4 2016 to Q3 2018
People see these cuisine outlets as the destination for excitement, gatherings and to try new things
These 3 cuisines have the highest average spending per visit
Average spending per head per visit in year ending 2018 (VND)
n = 6339Source: Aggregate Foodservice Monitor data from Q4 2016 to Q3 2018
280K 271K
225K210K 209K
199K 191K
133K
105K
62K
0K
50K
100K
150K
200K
250K
300K
Japanese BBQ Hotpot Italian
Kitchen
Western Chinese Korean Asian Fast Food Vietnamese
CL ICK TO EDIT MA S TER TEX T S TY L ES
24%
21%
17%
15%
11%
13%
Beer/Cider Tea
Juice CSD
Water Other
This creates opportunities for high margin focused drinks partnerships
Drink servings in Japanese cuisine
n=202
Drag picture to placeholder or click icon to add
Introduction of Brooklyn Kaedama Ale, brewed just for IPPUDO’s ramen to heighten its flavors
Serving RooiboisTea as a water substitute as its clean taste fits IPPUDO’s pork bone broth
Source: Aggregate Foodservice Monitor
data from Q4 2016 to Q3 2018
And creating combined offering that elevates the value of both manufacturers and operators
CASS Lager x Korean BBQ
Utilization of celebritychef Gordon Ramsay as a quality stamp of the F&B pairing
YO! SUSHI x MIDORI
Creating exclusive Japanese-oriented cocktails that pair well with sushi
Co-create the right snacks for women
A few un-busted myths about female diners
Variety Customiza-tion
Value-based marketing
Daytime snacking
Sourcing transpa-rency
32%
11%
30%
9%
12%
6%
31%
14% 24%
18%
9%
3%Breakfast Morning snack Lunch Afternoon snack Dinner Late night snack
Male Female
Women crave for snacking and leave the evenings for the men
3.7 billions VISITS TO OOH OUTLETS IN
YEAR ENDING Q3 2018
Male visits are concentrated on
Breakfast and Lunch, while
female visits are more spread out
across occasions.
Source: Aggregate Foodservice Monitor data from Q4 2017 to Q3 2018
Consumption type by occasions among women - % visits
Looking at snacking: Drinks are essential in women’s snacking choice
n=5235Source: Aggregate Foodservice Monitor data from Q4 2017 to Q3 2018
3%14%
39%
50%
58%
36%
0%
20%
40%
60%
80%
100%
Daytime main meals Daytime snacking occasions
Food only
Food & Drinks
Drinks only
• Top food items by occasion among women
Besides typical snacks, women give in to their cravings during snacking occasions
23%
15%
5% 4% 5% 4%6%
0%
5%
10%
15%
20%
25%
Noodle Sandwich/
Bread
Rice Vegetables Meat Springroll/
Savory Cake
Sweet cakes Fruit Ice cream/
yogurt
Packaged
snacks
Daytime main meals Daytime snacking occasions
Top food types by occasion among women - % servings
n=5235Source: Aggregate Foodservice Monitor data from Q4 2017 to Q3 2018
Women’s beverage choice during snacking hours are more likely to be driven by self-indulgence and a desire to relax. As such, health is less important during snacking
Reasons to choose drink items among women - % responses
n=5235Source: Aggregate Foodservice Monitor data from Q4 2017 to Q3 2018
6%
12%14%
24%21%
27% 26%
31%
54%
4%6%
13%17%
20%24%
30% 31%
48%
0%
10%
20%
30%
40%
50%
60%
To try a new thing To treat myself Good value for
money
To relax To energize Thirst Health Convenience Favorite drink
Daytime snacking occasions Daytime main meals
• Top food items by occasion among women
Tea, Milk and Coffee are enjoyed the whole day while Smoothies and Yogurt are preferred during snacks
19%
10%
7%
0%
5%
10%
15%
20%
25%
Tea Milk Coffee Juice Water Carbonated
soft drinks
Smoothies Drinking
Yogurt
Energy drinks Beer/ Cider Wine/ Spirits/
Liquor
Daytime main meals Daytime snacking occasions
Top beverage types by occasion among women - % servings
n=5235Source: Aggregate Foodservice Monitor data from Q4 2017 to Q3 2018
Operators need new items to fuel this typically low traffic day-part
Collaboration withFonterra to expand the best-selling range of cream cheese tea
Developing a summer exclusive S’mores Donutrecipe with Hershey’s to deliver a ‘campfire experience’
Operators can leverage the expertise of Manufacturers in snacks, while Manufacturers can explore new flavor combinations in OOH market
Reinventing the Taco Bell’s menu items to target young consumers: the result is Doritos Locos Tacos
Customizing Burger King side dishes into limited-time offer snacks: Mac n’ Cheetos nuggets
We are here to help!
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