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Where is the foodservice industry going? - Trends and lessons
Presented by Peter Backman
5 June 2015
• The USA and Europe
• Who and what is driving the market
• London – a case in point
• Some conclusions
Things I’ll talk about
0
100
200
300
400
Food a
nd B
eve
rage
Sal
es:
$bn
US
Europe
Europe and the US in 2014
Sources: Horizons Market Structure and Trends; National Restaurant association
+
+
Popular eating out
Hospitality
Non-commercial
• 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?
Where is the market going?
Europe - The big numbers
773
million Popular
eating out
$271 bn
Foodservice
$375 bn
Sources: Horizons Market Structure and Trends; Eurostat; CIA
The Potential for Europe
773
million
319
million
+
$271
billion
$493
billion
+
France:
$697
Moldova:
£17
$310
per
person
$1,544
per
person
Sources: Horizons Market Structure and Trends; Eurostat; CIA
+
Market drivers
Where the game is being played
5
Countries
41%
Popular
eating
out +
Hotels 5
Countries
77%
Population
5 Countries
= USA
$493
bn
$185
bn
Sources: Horizons Market Structure and Trends; Eurostat; CIA
Where do consumers eat out?
$0
$20
$40
$60
$80
Top 5 Rest of
Europe
$ B
illio
n
Restaurants
Quick Service
Drinking places
Hotels0%
20%
40%
60%
80%
100%
Top 5 Rest of
Europe
Europe
Sources: Horizons Market Structure and Trends; Eurostat; CIA
• Similar patterns across Europe
• Different quantums / quanta
Top 25 Full Service
UK
France
Germany
US
… UK in
Full
Service
US brands
dominate
Where does the inspiration come from?
Top 25
US
McDonald's
UK
France
Other
Top 25 QSR
US
UK
France
Other
…. in
Quick
Service
Note the
“McDonald’s
effect”
UK brands
60% of all
European
brands
0
1
2
F&
B S
ales
$ B
illio
n
Full Service
QSR
19%
Market
share
25 Leading Brands in Europe
Sources: Horizons; Company information
$22Bn $3.4Bn
$0
$200
$400
$600
$800
F&B S
ales
in E
uro
pe: $
Mill
ion la
test
year
end
Top 25 Casual Dining Brands in Europe
Sources: Horizons; Company information
Top 25
0
500
1,000
1,500
2,000
£ F
&B S
ales
£ M
illio
n
Other Beverage
Pubs
QSR
Full service
Beverage not
associated
with food
25 Leading Groups in the UK – the action is hotting up
Includes
• Restaurants, QSR, Pubs
• UK only
• System-wide sales
• Groups sales - not individual
brands
• Beverage not associated with
food – only applies to Pubs
Tragus
spins off
Strada
SSP
IPO
TGI
sale
Sources: Horizons; Company information
Greene King
acquires Spirit
Gondola
splits PE,
Ask / Zizzi Jamie’s
in play
Tragus rebrands
as Casual
Dining Group
Pret
expands
in US
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/km2
• 7th largest country in the EU
• 5th largest city in the world
• Still growing
0%
5%
10%
15%
20%
0-10 11-20 21-30 31-40 41-50 51-60 61-70 71-80 >81
Age profile – London vs UK
UK
London .More of
this
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
English
French
Spanish
Italian Arabic
Hindi
Urdu
Chinese
Turkish
Nigerian
Punjabi Persian
Pushto Dutch Danish
Norwegian
German
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
• Gherkin
• London Eye
• Walkie Talkie
• Canary Wharf
• Heron Tower
• Cheesegrater
• 02
Sport
• 6 Premiership teams
• 2 world class cricket grounds
• Rugby
• O2
• Wembley
• Olympics
• Wimbledon
F&B Sales 2013
Restaurants
QSR
Pubs
Hotels
Eating out in London
• Eating Out in London:
$18.2 billion
• 34% of total UK eating out
• 13% of UK population
• Grown by 10% since 2007
Source: Horizons
$0
$2
$4
$6$ B
illio
n
F&B Sales 2007-2013
2007
2013
Spend
• Average: £10.75 ($16)
• QSR: £6.80 ($10)
• Hotels: £23.33 ($35)
Distinct markets
• Type of consumer/shopper • Male/Female
• Age 0-100
• Activity • Office worker
• Shopper
• Tourist
• Niche - theatre-goer, stag parties …
• Need state • Convenience
• Destination
• Hunger
• Day part • Breakfast
• Lunch
• Dinner
• 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
Top 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
• 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
Where is the dynamism?
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
South American
Mediterranean /
Middle Eastern
Pan Asian
US-inspired food
• Hot dogs
• ‘New breed’
burgers
• Salted caramel
• Flavoured slaw
• Loaded
mac’n’cheese
• Flat iron steak
• Katsu curry
• Korean flavours
• Wasabi
• Teriyaki
• Halloumi
• Dukkah
• Mezze
• Burritos
• Tacos
• Chimichurri
• Chillis
“Authentic Ethnic”
How far will this go? Fusion, Local,
Sustainable and more
Foodservice
Large – fragmented
Staid – innovative
Inspirational – changing
