Overview of the French Retail
& Food Service market
November 2008
CONTENTS
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France in Figures
Irish Export Performance
Retail Market Overview
Foodservice Market Overview
Why Target France/Potential Hurdles
Bord Bia Paris Services in 2009
FRANCE IN FIGURES
ü 2007 GDP: €1.86 trillion
− 3rd largest EU economy in terms of GDP
− 2007 GDP growth: 2.1%
− Expected 2008 growth: 0.9%*
ü Inflation: 3.2% 2008 (1.5% in 2007)
− Sept 2007 – Sept 2008: 3.0%
ü Unemployment: 8.0% (August 2008)
– increasing (May 2008 – 7.2 %)
*Source: Insee
FRANCE IN FIGURES
ü Population: 63 million
− 18% of population lives in greater Paris
area; 10% in Rhône-Alpes; 8% in
Provence-Alpes-Cote d’Azur
− Age profile: 25% < 20 years old; 21% >
60
− Immigrant population 12 million
ü 25 million households
− 10 million single households
Sources: Insee; French Dept of Ag; ANIA, IGD
Population Split by Age (2006)
18.5
16.4
65.3
65+
15-64
0-14
IRISH EXPORT
PERFORMANCE
ü 2007 F&D exports to France: €591 m (- 2% Vs 2006 due
to decrease in lamb consumption in France)
ü Largest Eurozone market for Irish food & drink
ü 2nd largest global market for Irish food & drink
ü Largest export market for Irish lamb, 55% of Irish
lamb exports to France
ü 2nd largest market for Irish beef
ü 2nd largest Cont. EU market for CFD
ü 15% of global Irish whisky exports to France (2006)
IRISH EXPORT
PERFORMANCE 2007
(€591 million value)
Confectionary
3%
Seafood
14%
Drinks Others
4%
7%
Meat
57%
Dairy Products
15%
Source: CSO
KEY CONSUMER
TRENDS
ü Shopping patterns
− 80 grocery shopping trips/year on average in 2007,
compared to UK (204), ROI (176)
− Grocery basket size increasing: €30.10 in 2007 (€27.50 in
2006), compared to UK (€21.30), ROI (€33.40)
− Consumers shopped in 5.4 different retail outlets in 2006
− Frozen food more acceptable than elsewhere in Europe
− Proximity important: hypermarket sales down in 2008
Source: Linéaires, Periscope 2006, Europanel, TNS
KEY CONSUMER TRENDS:
FOOD CONSUMPTION
ü Increased appeal of ready to eat food; preference for easy to prepare foods over ready meals
ü Time pressure more evident: 78% of French find ready meals a good substitute for home
cooking when time is limited
ü Ready meals and prepared deli food/ sandwiches are becoming more popular – especially
among those under 45 years
ü Still enjoy cooking, but fewer preparing meals from scratch: only 44% on a daily basis (vs.
29% in ROI, 63% in Spain)
ü Cooking has taken on more importance due to diet/health concerns
ü Preference for fresh ready meals over frozen
Source: Continental PERIscope 2008
Health vs Obesity
•16.9% of French people are obese
•20% of children are overweight
•Stricter food advertising laws –
www.mangerbouger.fr
•Government encouraging 5 fruit & veg per day
through ad campaign.
KEY CONSUMER TRENDS
ü Purchasing Power has changed shopper patterns
− Consumer morale low – purchasing power No.2 preoccupation of the
French population, after unemployment
− Hard Discount and Private label benefiting from downturn
French Shopper Trends 2006/ 2007
% households
11
11
Living life to the full
Comfort Zone
18
18
Smart Shopper
18
20
15
15
Foodie
22
23
Lower prices
14
15
Bargain Hunters
0
5
2006
Source TNS Worldpanel 2008
2007
10
15
20
25
FRENCH RETAIL MARKET
RETAIL MARKET
OVERVIEW
ü Food retail market = €208 billion (2007)
ü Food = 15.1% household expenditure
ü Highly regulated sector, but change planned
− No Sunday trading “officially”
− Loi de Modernisation de l’Économie
(brings more flexibility in price negotiation with buyer)
− Move towards triple net pricing
ü Discount & Convenience sectors driving growth
Sources: TNS, Linéaires, IGD
RETAIL MARKET
OVERVIEW
ü Hard discounters market share 14.3% in 2008 (13.6% in
2007); forecast to grow to 15% in 2009
ü Lidl: +0.3% market share 2007, best performer in
multiple retail
Private label
ü PL share 25.2% in value (versus 40% in UK), aiming for
35% in 2015*; reduced purchasing power has had
positive impact
ü Retailers have segmented the private label offer: entry
price, premium, organic/fair trade, kids, healthy.
* Source: Eurostaf
MAJOR RETAIL
BUYING GROUPS
(% market share)
Système U
8.7%
Cora
4.2%
Others
6.7%
Carrefour
26%
Intermarché
12.8%
Auchan
12.4%
Source: Lineaires Planogramme 2008 (AC Nielsen data)
Casino
13.1%
Leclerc
16%
STRUCTURE OF MARKET
BY RETAIL FORMAT
(% market share)
Convenience & freezer centres
9%
Others
7%
Independent retailers
17%
Hypermarkets
34%
Source: TNS Marketing Book 2007
Note: Independent retailers = butchers, bakeries, cheese shops etc..
Supermarkets
33%
PRIVATE LABEL
PENETRATION
(TNS 2006, % value)
45%
41.4%
40%
35.6%
35%
30%
25%
24.2%
22.2%
25.3%
26.5%
26.9%
31.7% 33.1%
28.7% 29.7%
27.4%
Segmentation
67% standard
29% economy
4% themed
20%
Avg. private label
penetration has
increased 2% since
2004.
15%
10%
5%
Source: TNS Marketing
Book 2008
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RETAIL PRICE INDEX
JAN-JUN 2007
Monoprix
110.2
115
Leclerc
Casino
110
105.2
105
Auchan
Atac
100
95.7
> 15% gap between
Leclerc & Monoprix
103.8
95
97.1
90
Intermarché
85
97.6
103.4
Match
98
101.8
98
Carrefour
99
Cora
98.9
Super U
Champion
Source: Lineaires – September 2007
Géant
FRENCH FOOD SERVICE MARKET
FOODSERVICE MARKET
OVERVIEW
ü Market valued at € 89billion in 2007* - 250,000 outlets
ü Food Cost: €30bn (70% food / 30% drink)
ü Fragmented market with competitive mix of domestic & foreign players
ü Top 10 groups = 14% market, compared to 25% in UK
ü Market dominated by independent restaurants but growth led by chains
ü Traditional restaurants predominantly family owned, independent outlets represent
73% of the market in value (58% in volume)
ü Quick service restaurants take market share from restaurants in major cities
ü Introduction of smoking ban in Jan 2008 to cover restaurants, night clubs and bars
– resulting in a 15 to 25% drop in alcohol consumption.
* Food & drink sales in hotels, restaurants & cafés
FRENCH MARKET
LED BY CHILLED
PRODUCT
Frozen (incl. Ice-cream)
Butter, eggs,
cheese
22%
Meat & poultry
20%
26%
56%
18%
22%
Fish & seafood
Chilled
Products
13%
12%
Fruits and vegs
Grocery
Source : Estimations presses /
FSV / PHP
Univers : CHD
Bakery
11%
Delicatessen
MARKET SHARE OF
LEADING OPERATORS
% value
Groups
Trade Name
2006 Turnover
(M€)
Vol vs 2005 (%)
Number of
Outlets
McDonald’s France
McDonald’s
2 700
+12,5%
1 085
France Quick
Quick
807
+6,11%
410
Agapes Restauration
Flunch, Pizza Pai, Amarine, Les 3
Brasseurs, Sogood Cafén Pizza Pai, Il
Ristorante
610
+6,27%
407
Elior
Philéas, Arche
523
+8,89%
734
Servair
Servair
452
+0,89%
14
Buffalo Grill SA
Buffalo Grill
420
+8,94%
274
Groupe Flo
Hippopotamus, Bistro Romain,
Brasseries, Tablapizza
385
+7,09%
165
Le Duff
Brioche Dorée, Fournil de Pierre, Caffé
del Arte, Pizza del Arte
321
+19,50%
398
Casino Cafétéria
Casino Cafeterias, Cœur de Blé
314
+1,1%
332
Holder
Paul, St Preux, Ladurée
282
+7,67%
333
Source: Food Service Vision - 2008
FOODSERVICE SEMENTATION 2007
(% value)
Train,
Travel
airlines,
boats,
petrol
station...
9%
Fast Food
24%
Hotel
Restaurants
17%
Self service
4%
Source: Foodservice Vision 2008
Traditional
restaurants
46 %
TRADITIONAL FOODSERVICE
ü The historical heart of the Food Service in France
ü A stable segment – yet decreasing slightly
ü Represents 34% of meals served in the commercial
foodservice sector and 46% of its turnover
ü Mainly independent establishments (98%)
ü Increasingly segmented consumer demands
ü Rising trend of using semi-finished products with high
added-value
ü Fragmented supply: Cash & Carry, general and specialist
distributors, local producers…
THEMED RESTAURANTS
(excl. brasseries, grills and
pizzerias)
ü Segment dominated in France by Asian restaurants,
creperies, Northern African and Oriental restaurants.
ü Booming sector, led by innovation and new marketing
concepts
ü Represents 5% of meals and 10% of turnover in the
commercial sector
ü Mainly independent outlets (84%) with the emergence of
chains such as Blue Elephant or Paradis du Fruit…
ü Demand for trendy, exotic products
ü Suppliers: theme specialist distributors and general
wholesalers.
PIZZERIAS
ü Leading foodservice concept in France
ü Stable sector, diversifying towards a more general Italian cuisine
ü Represents 5% meals served and 8% of the turnover in the
commercial foodservice sector
ü Mainly independents: 88%, however some chains operate on
the French market (Pizza Hut, Dominos, Pizza del Arte…)
ü Consumers seek to purchase Italian deli & fine food products
in their local Italian restaurant
ü Suppliers: Cash & Carry, frozen specialists, some distributors
specialised in pizzeria ingredients & Italian products.
CAFETERIAS
(Self-service restaurants)
ü Well-established segment seeking to modernise itself
ü A stable sector – yet decreasing slightly, facing strong
competition from the fast-food sector
ü Represents 5% of meals and 4% of turnover in the
commercial sector
ü Segment dominated by chains such as Flunch and Casino
ü Demand for prepared products ready to be re-heated
ü Suppliers: logistics platforms, frozen-food wholesalers or
general wholesalers.
FAST-FOOD HAMBURGERS
ü Leading fast-food segment in France
ü Has grown significantly, mature segment
ü Represents 18% of meals purchased and 8% of turnover in the
commercial sector
ü McDonalds and Quick monopolize this market (98% market
share)
ü Demand for innovative snacking concepts and prepared
products for assembly with a high level of standardisation.
ü Suppliers: logistics platforms, directly from producers or via
partnerships with local producers.
FRENCH FAST-FOOD,
Confectionary / Sandwich
Shops
ü 2nd largest category in the fast-food segment in France
ü Growing segment despite competition from bakery sector
ü Represents 9% of meals and 6% of the turnover in the commercial sector
ü Segment divided between the independents (45%) and major chains (Brioche
Dorée, Paul, Mie Câline…)
ü Demand for prepared products for assembly and ingredients
ü Fragmented supply: Cash & Carry and bakery-confectionary wholesalers
WHY TARGET FRANCE?
üMarket size + proximity
üSeveral routes to market
üFood culture, respect for “fine food”
üFastest growing private label market in Europe
üTime lag on UK trends - Irish expertise
an advantage
üFood imports worth €25.4 billion in 2007 (+ 7.6% Vs 06)
üImproved awareness of Ireland as a supply base
üConcentrated wholesale foodservice market
Source: ANIA
MAIN CHALLENGES
IN SUPPLYING
FRANCE
ü
ü
ü
ü
ü
ü
ü
ü
ü
ü
ü
« Franco-français » preference
Cautious nation: reluctant to take risks/change supplier
Competitively priced market
Taste and cultural differences
> 1/3 of retail market = independents
Fragmented foodservice market
Relatively high cost to build brand identity
Minimum 1 year time lead for listings
Market size deceptive: already wide range of suppliers
High buyer turnover
Poor planogramme implementation at store level
BORD BIA SERVICES IN
FRANCE FOR 2009
ü Business development programme
ü Participation in the French Private Label Trade Show (25/26th March)
ü Retailers Day (April/May)
ü Bord Bia stand at SIRAH
ü Bord Bia stand at Vinexpo
ü Customised individual client services
ü Gap analysis
ü PR
ü In-store promotions
ü Store audits
ü Distributor searches
ü Knowledge hub
ü Buyer Newsletter
ü Confectionary Inspiration Expedition France & Belgium
ü Ready-meal seminar in Dublin (February)
ü Updated Foodservice Operators Directory France & Belgium 2008
ü Christmas Trade Reception