Overview of the U.S. Retail
& Foodservice Market
November 2008
Content
U.S. in Figures
Irish Export Performance
Retail Market Overview
Foodservice Market Overview
Why Target U.S. / Opportunities
Challenges
Bord Bia North America, Services 2009
U.S. Economic Indicators
2008 GDP: €14.5 trillion (est.)
- World’s leading economic power = 24% of world GDP
- 2008 GDP growth: +1.4%
- Forecast Real GDP growth: 2009 -0.4%; 2010 +0.8%
- Largest state economies: (1) California, (2) Texas, (3)
New York, (4) Florida, (5) Illinois
Inflation: 4.2% in 2008 (2.9% in 2007)
- Forecast 0.9% in 2009
ü Exchange Rate: (2008–2013)
- Expected to average US$1.30 – 1.46 : €1
Unemployment: 5.7% in 2008
- Forecast 7.5% in 2009; 8.1% 2010
Source: Economist Intelligent Unit
U.S. Demographics
Population: 304 million
− Forecast to rise to 309m by 2010;
Population Split by Age (2007)
to 336m by 2020
− 4.6% of world population
− White population in decline. Hispanics
fastest growing group, to account for 18%
12.6
27.4
population by 2020
18.5
− 80% live in urban areas (New York; Los
Angeles, Chicago = ‘alpha’ global cities)
− Aging population
60.1
− Immigration boosting population growth
10.7% population claim Irish ancestry (31m)
65+
− Ireland in top 5 ancestries in every state
20-64
except Hawaii
0-19
Sources: Economist Intelligent Unit; US Census, CIA World Factbook
U.S. Population Density
Ireland – US Economic Links
Ireland’s 2nd largest export market (UK no. 1)
€33bn value of total Irish exports to US
Irish companies employ 80,000 in US
Irish companies operate in 1,300 locations throughout US
50 Irish companies opened US offices in last 18 months
350 CEOs of Fortune 500 companies claim Irish ancestry
Source: Enterprise Ireland
Irish Food & Drink
Export Performance
2007 F&D exports to U.S.: €404m (+15% v 2006)
4th largest global market for Irish food & drink
Category
Export Value %Change
€ 2007
v. 2006
Beverages
308m
+19%
Consumer Products
34m
-20%
Dairy
27m
+30%
Meat
6m
-30%
Seafood
5m
+17%
Miscellaneous
23m
+70%
Source: CSO
Key U.S. Consumer
Purchasing Trends
Economic anxiety
Move away from dining out & into eating at home
- spending less; spending clever
Fewer shopping trips; bigger baskets per trip
Growth of supermarket prepared foods
Growth of retailer private label
Demand remains for quality food
Alcohol & Chocolate remain recession resistant
Source: TNS, Supermarket News, Bord Bia
Key U.S. Food Trends
Growth in Ethnic Cuisines
Demand for ‘Honest Food’ (Local, Organic, Fair Trade)
Obesity Concerns (Cals on Menus/100 Cal Pack)
Food as Medicine (Fortified, Enriched)
Food as Emotion (Change your mood)
Food as Status Symbol (Artisan, Celebrity Chefs)
Increase in ‘brown bagging’ i.e. bringing prepared lunch to
work
Shift in alcohol consumption from out-of-home to at-home
Source: Bord Bia, Ogilvy & Maher NY
Channel Developments
Growth of club / warehouse stores e.g. Costco
Growth of small store formats e.g. Tesco Fresh & Easy;
Wal-Mart Marketside
Specialty foods / stores still doing well
Top-end dining outlets suffering; fast casual doing well
Source: Bord Bia
U.S. Food Market Value 2007
$1,060 billion
FS
$541B
51%
Source: Technomic, Inc
Retail
$520B
49%
U.S. Grocery Industry Developments
•
•
•
•
•
2007
Growth of smaller store formats
Increased emphasis on food safety
Organic, natural and healthy no longer niche
Green initiatives playing a major role in corporate responsibility
Busy mergers & acquisitions activity
•
•
•
•
•
•
•
2008
All of above
Growth of club / warehouse type operators
Very active price / promotional activity
Cross promotions with petrol
Very active corporate websites with videos of recipes / meal preparations
Increased focus on Private Label
Slow-down in refurbishments
Source: 2008 Chain Store Guide’s Database of Supermarket & Convenience Store Chains; Bord Bia
U.S. Retail Market by No.
of Units Operated
(% market value share)
2% 3%
6%
16%
2-3 units
4-10 units
11-50 units
51-200 units
201+ units
73%
• 22 companies have 201+ units i.e. 73% market share
• Total number of grocery units: 31,000
Source: 2008 Chain Store Guide’s Database of Supermarket & Convenience Store Chains
Top 10 U.S. Retailers
(by $ grocery sales 2007)
Retailer
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Wal-Mart
Kroger
Safeway
Costco
Supervalu
Sam’s Club
Publix
Ahold
Delhaize
H-E-B
Grocery Sales
No. of US Stores
$111bn
$66bn
$42bn
$35bn
$33bn
$27bn
$23bn
$21bn
$18bn
$13bn
(2,447)
(3,269)
(1,738)
(520)
(2,512)
(587)
(928)
(721)
(1,551)
(337)
Source: 2008 Chain Store Guide’s Database of Supermarket & Convenience Store Chains
U.S. Foodservice Developments
Hugely affected by economy downturn
Unit shut-downs / expansion plans on hold
Fast food / casual dining outlets doing best
Aggressive price / meal promotions
Increased price & product offers around
breakfast, dinner & snacking occasions
Expansion of ‘take-out’ (away)
More health & nutrition focus – more product
offers; effect of NYC & California calorie posting
Intensifying retailer competition
Source: Technomic Inc; Bord Bia
Top 100 U.S. Chains /
Market Shares by Segments
3% 3% 5%
Sandwich
4%
Casual Dining
Contract
5%
41%
6%
Pizza
Chicken
Family
7%
Coffee
Hotel
10%
Beverage-Snack
16%
Source: Nation’s Restaurant News, June 2008
Others
Top 10 U.S. Foodservice Chains
by 2007 Sales Value
Chain
Concept
Parent Company
2007 Turnover
($Bn)
Vs 2006
(%)
No. of U.S.
Outlets end 2007
McDonald’s
Sandwich
McDonald’s
Corporation
28.6
5%
13,862
Burger King
Sandwich
Burger King
Holdings Inc
8.9
4%
7,210
Subway
Sandwich
Doctor’s
Associates Inc
8.2
7%
21,195
Wendy’s
Sandwich
Wendy’s
International Inc
7.9
1.5%
5,936
Starbuck’s
Coffee
Starbuck’s
Corporation
7.2
20%
10,183
Taco Bell
Sandwich
Yum! Brands Inc
6.1
-3%
5,580
Aramark Food &
Support Services
Contract
Aramark Holdings
Corp
6.1
5%
3,486
Pizza Hut
Pizza
Yum! Brands Inc
5.4
4%
7,515
KFC
Chicken
Yum! Brands Inc
5.3
0%
5,358
Dunkin’ Donuts
Beverage-Snack
Dunkin’ Brands Inc
4.75
10%
5,670
Source: Nation’s Restaurant News, June 2008
Why Target U.S.?
Market size
Same language; Similar culture
Several routes to market
Ability to target by retailer group / geographical region
U.S. consumers open to new foods
Growth of private label from small base
Many retailers have ‘international aisles’ with ‘Irish sets’
- trial for mainstream aisle listing
Growth categories such as health & wellness, specialty foods,
whiskey / premium alcoholic beverages
Growing awareness of Ireland as a quality supply base
Mainstream U.S. success of Irish brands – Guinness; Baileys;
Jameson; McCann’s; Kerrygold
Source: Bord Bia
Main Challenges Supplying U.S.
U.S. Economy – turbulent times affecting how, where, what, when US
consumer is spending their food dollar
Bio-Terrorism Act – increased registration, monitoring and recordkeeping of imported products
Food Safety Legislation – recent national food scares have focused
attention on food safety, particularly of imported products. Currently 30
bills proposing changes to food legislation on Capitol Hill
Exchange Rate – fluctuating. Recent strengthening forecast to
continue, improving returns for Irish exporters
Food Labelling – different requirements to EU; different bar codes
Route to Market – Complex (Importers; Brokers; Wholesalers; Key
Accounts)
Bord Bia North America, Services 2009
Market Information
- Retail & Foodservice Industry Monitoring
- US Food Service Trends & Developments Report
- NPD Protein NPD Tracking Report
Trade Development
- 1 to 1 customised services to companies developing business in North America
(U.S., Canada, Mexico)
- Market study group visits
- Individual company itineraries organised
- Retail buyer presentations
- Inward buyer visits to Ireland
Promotion
- Participation at key trade shows (Consumer Foods, Alcohol)
- St Patrick’s Day PR activity focusing on Ireland as a quality food & drink source