TRENDS IN EUROPEAN FOODSERVICE
AND CONSEQUENCES FOR THE MEAT
SECTOR
Meat Market Prospects Seminar
8th January 2010
EUROPEAN FOODSERVICE IN A
GLOBAL CONTEXT
Global foodservice: key highlights
The global foodservice market was valued at EUR1.78
trillion in 2009 (estimates), which breaks down into:
Commercial channels EUR 1.48 trillion (83%)
 Institutional channels EUR 0.3 trillion (17%)

Food accounts for 73% of global foodservice value
compared to beverages 27%
The foodservice market remains skewed towards the
developed economies – North America, West Europe and
Japan

These three regions currently account for 56% of global
foodservice value with just 15% of the global population
Foodservice spend per capita is highest in Japan, followed
by the USA and western Europe.
Foodservice market value by region
W. Europe
19%
N America
24%
E. Europe
3%
Latin America
9%
China
13%
India
5%
Japan
13%
Mid East/Africa
5%
Aus/NZ/SE Asia
9%
Although the developed economies continue to dominate the
market, their share has declined in the face of dynamic growth
particularly in China but also India, Latin America and SE Asia.
EUROPEAN FOODSERVICE
DIMENSIONS
West Europe market value by country
Benelux
6%
Nordic
7%
UK
13%
Others
11%
France
16%
Italy
16%
Spain
10%
Germany
21%
The foodservice market in western Europe is valued at EUR343bn at
consumer prices
Europe per capita f/s spend by country
EURO
1200
1000
800
600
400
200
0
Fr
an
ce
Ge
Ita
ly
rm
an
y
Sp
ain
UK
Ne
Sw
Gr
ee
the
ed
ce
en
r la
nd
s
Cz
ec
h
Po
lan
d
Uk
rai
ne
West Europe f/s market value by country
EURO
bn
70
60
50
40
30
20
10
0
Fr
an
ce
Ge
rm
an
y
Ita
ly
Sp
ain
UK
Ne
the
r la
nd
Sw
ed
en
s
Commercial
Institutional
West Europe foodservice channel sizes
- 5 key countries
Sales by channel EUR billion
QSR
33.9
13%
FSR
70.2
27%
Hotels etc
23.4
9%
Café, bars,
bakeries
49.3
19%
Leisure
7.6
3%
Travel
2.8
1%
Vending
4.4
2%
Other (CVS,
street)
19.5
7%
B&I
25.2
10%
Health
14.3
6%
Education
6.6
2%
Government
3.5
1%
UK foodservice dimensions
Channel
Value
£mn
CAGR
2009-2014
QSR
7,850
3.0%
FSR
6,810
0.0%
Hotels etc
5,210
1.6%
Café, bakeries,
bars
9,310
0.8%
Leisure
1,510
3.6%
920
2.9%
Other (CVS,
street)
3,590
2.1%
Vending
1,200
1.1%
Travel
Total Commercial
Business &
Industry
Health
Education
Government
Total Institutional
TOTAL
36,400
2,320
0.8%
920
1.1%
1,200
1.2%
710
1.1%
5,150
41,550
Sales by sub-sector
Institutional
12%
Commercial
88%
Sales by operator type
Independent
68%
Organised
32%
France foodservice dimensions
Channel
Value
EURmn
CAGR
2009-2014
QSR
5,500
2.0%
FSR
20,497
0.4%
Hotels etc
4,600
1.9%
Café, bakeries, bars
5,950
-1.3%
Leisure
1,350
3.2%
450
2.0%
5,387
3.0%
720
3.9%
Travel
Other (CVS, street)
Vending
Total Commercial
Institutional
20%
Commercial
80%
Sales by operator type
44,454
Business &
Industry
4,850
1.2%
Health
3,600
1.6%
Education
2,390
1.0%
513
2.0%
Government
Sales by sub-sector
Total Institutional
11,353
TOTAL
55,807
Organised
18%
Independent
82%
Germany foodservice dimensions
Channel
Value
EURmn
CAGR
20092014
QSR
10,700
3.2%
FSR
13,900
-1.5%
Hotels etc
6,500
1.3%
Café, bakeries, bars
7,900
-1.8%
Leisure
2,670
3.2%
850
2.0%
Other (CVS, street)
5,447
2.8%
Vending
1,115
3.2%
Travel
Total Commercial
49,082
Business & Industry
13,400
1.0%
3,600
1.2%
820
1.0%
1,025
1.5%
Health
Education
Government
Total Institutional
18,845
TOTAL
67,927
Sales by sub-sector
Institutional
28%
Commercial
72%
Sales by operator type
Organised
26%
Independent
74%
Spain foodservice dimensions
Channel
Value
EURmn
CAGR
2009-2014
QSR
3,610
2.6%
FSR
7,600
0.1%
Hotels etc
1,750
2.0%
14,200
0.7%
Leisure
966
2.3%
Travel
180
1.9%
1,860
3.0%
500
3.8%
Café, bakeries, bars
Other (CVS, street)
Vending
Total Commercial
1,900
0.2%
Health
1,710
2.9%
Education
910
0.5%
Government
525
1.9%
TOTAL
Institutional
14%
Commercial
86%
Sales by operator type
30,666
Business & Industry
Total Institutional
Sales by sub-sector
5,045
35,711
Organised
20%
Independent
80%
Italy foodservice dimensions
Channel
Value
EURmn
CAGR
20092014
QSR
5,450
1.2%
FSR
20,750
0.2%
4,820
-0.9%
10.900
1.9%
Leisure
807
1.7%
Travel
230
2.5%
2,880
1.9%
800
3.2%
Hotels etc
Café, bakeries, bars
Other (CVS, street)
Vending
Total Commercial
2,390
-1.0%
Health
4,540
0.8%
Education
1,320
1.3%
710
1.5%
Total Institutional
TOTAL
Institutional
16%
Commercial
84%
Sales by operator type
Organised
9%
46,637
Business & Industry
Government
Sales by sub-sector
8,960
55,597
Independent
91%
East Europe foodservice by country
Other East
Europe
24%
Russia
33%
Hungary
9%
Czech
9%
Poland
17%
Ukraine
8%
The foodservice market in eastern Europe is valued at
EUR37bn at consumer prices
East Europe per capita f/s spend
EURO
per
capita
350
300
250
200
150
100
50
0
Ru
ssi
a
Uk
rai
ne
Po
lan
d
Cz
ec
h
Hu
ng
ary
FOODSERVICE GROWTH
DYNAMICS AND TRENDS
Foodservice growth dynamics
2009 saw a decline in foodservice in all European countries
reflecting the economic recession:
Germany – 3.5% decline
 France – 2.9% decline
 UK – 1.9% decline

In 2010 the foodservice is forecast to start recovery at an
average of 0.8% across the region.
Over the next 5 years there will be slow but increasing growth:
France – 1.3% CAGR
 UK – 1.9% CAGR
 Germany – 0.8 CAGR

The fastest growing channels will be QSR, and CVS
Petrol/Roadside.
The slowest growing channels will be Business & Industry and
Government.
Market trends
Foodservice development is a function of the stage of
national economic development and spread of affluence
There will be a continuing shift in market importance from
the developed to the developing markets
Foodservice will continue to be driven by customer
requirements. A full demand chain perspective will have to
be taken into consideration
Market power will move from operator and wholesaler to
the empowered, informed and affluent consumer
Foodservice is increasingly a commodity and a necessity
rather than luxury in developed markets
Channel & operator trends
Operator consolidation both at an international and
national level plus accelerating wholesaler consolidation
Major national and international chains will continue to
grow at a faster rate than the market
Greater emphasis on meal solutions from suppliers rather
than meal ingredients
Blurring of channel and concept boundaries
The nature of the independent outlet will change
gradually - from family operated to a professional
business focus
Ethical values and standards (covering issues such as
provenance, sustainability, carbon footprint etc) become
an important purchasing criteria for many (large) players
Consumer trends
In the short term consumers will be increasingly price
influenced – either trading down in format or eating out
less frequently

Pressure will be on the middle market outlets/channels

Reduction in “luxury” meal components such as wine or
desserts
Health, nutrition and provenance will stall and be static as
influences for 2-3 years
Key consumer drivers will be different in developing and
developed markets:

Conspicuous consumption will lead growth in in developing
markets (opinion leaders will be important)

Concepts of value will be significant in the developed markets
Understanding customers
and their wants is key
Who are the key customers?
Some basic dimensions
In Europe the organised sector (chains and contract caterers)
accounts for circa 30% of OOH market value
The top 110 foodservice operators account for circa 25% of
foodservice turnover. Of these:

32% are American companies (strong in QSR)

23% are British (strong in pubs and contract catering)

20% are French (strong in contract catering)
The three largest players (McDonald‟s, Compass and Sodexo)
account for one-third of the combined turnover of the top 110
companies
The organised sector is growing at around 5% per annum
Top 10 foodservice operators in Europe
Ranking
Group
Turnover
vs. ‘07
Channel
€ million
1
McDonald’s
2
14,834
10%
Compass Group
6,232
3%
Contract
Catering
3
Sodexo
6,205
5.8%
Contract
Catering
4
Elior
3,457
6.4%
Contract
Catering
5
Yum!Brands
3,184
8.8%
QSR
6
Mitchells & Butlers
2,403
0.7%
Pubs
7
Burger King
2,220
4.3%
QSR
8
Autogrill/HMSHost
2,041
4.7%
Travel
9
Accor
1,764
2.8%
Hotels
SSP
1,606
15%
Travel
10
Source: Foodservice Europe & Middle East
QSR
The largest customers in Europe (2008)
Restaurants
€ million
Pubs
€ million
Travel
€ million
Whitbread
912
M&B
2,403
Autogrill
2,041
Agapes
790
Wetherspoon
1,143
SSP
1,606
SOK
680
Punch Taverns
885
LSG Sky Chefs
1,307
Gondola Group
571
Greene King
717
Gategroup
850
Restaurant
Group
525
Marston‟s
489
Servair
591
€ million
In store
€ million
QSR
McDonald’s
14,834
Contract Catering
Ikea
738
Compass Group
6,232
Yum! Brands
3,184
Migros
428
Sodexo
6,205
Burger King
2,220
Gp Casino
300
Elior
3,457
1,365
Quick
890
Metro
335
Aramark
Subway
850
Marks & Spencer
301
Camst
Source: Foodservice Europe & Middle East
809
What drives foodservice operators?
Food and drink is just part of the customer offering
For 35% of foodservice (travel, hotels, entertainment, education,
in-store cafe…) food & drink is not the central consumer offering,
it is an economic by-product

It amortises overheads and retains customers
For 65% it is why the consumer is at that outlet, and is the
economic driver. But outlet added value is justified by factors
such as:
 Service
 Location
 Consumer experience
 Consumer environment
 Price proposition
That is, food is the product part of the equation to which
intangibles add the value/cost justification
What drives foodservice operators?
Key operator metrics
Traffic
Occasion
Spend per occasion
.. by which business is
measured
Key challenges
Save:




Labour cost
Time
Space
Skills
Reduce waste
Profitability
Consistent quality
What does the operator want?
Key product attributes
• Product quality
Key supplier attributes
• Quality
•
Product stability
•
Consistency
•
Product shelf life
•
Innovation
•
Product security
•
Service
•
Product uniqueness
•
Reputation
•
Product traceability
•
Flexibility
•
Sustainability
•
Speed
You must deliver on these criteria to get to the starting post
IMPLICATIONS FOR
MEAT SUPPLIERS
Challenges and opportunities
Foodservice is a huge market place – but it is not unified
or simple
It is also under serviced by most food companies who
view it as an extension of retail
For all players understanding, insight, segmentation and
focus are key

„One size fits all‟ will not lead to success
Misconceptions will need to be re-evaluated
 Chains simplify routes to market – but “every man
and his dog” has seen the same and it is a crowded
route to take
 Centralised customers are cost driven (contract
caterers and the social elements) and ultra low costs
are needed to be successful
Challenges and opportunities
Consumers drive foodservice and vote with both their feet
(reducing traffic in unpopular outlets/concepts) and their
wallets (reducing prices)
Many (most) foodservice suppliers are divorced from
consumers and consumer impact
A pro-active consumer demand driven strategy will have
considerable competitive advantage
Food and drink in foodservice is a currently part of a
delivery system for ambiance, experience and sociability.
It will need to re-invent its added value benefits to
encompass factors such as fashion, leisure and health
Developing product and service propositions based on
consumer and operator needs is key for success
Imperatives and success factors
Build knowledge and understanding at customer,
channel, market and consumer level
Focused approach

Prioritise channels, cherry pick key customers

Focus on your core competences – stick to what you excel at

Answer the critical question – in what ways do these
competences add value, and to which customers
Flexibility & speed of response are key competencies for
success

Time scales condense and speed of reaction becomes a core
competence
Imperatives and success factors
Listen and respond to ‘operator voice’:
„Demonstrate knowledge of my business‟
„Do not send me a man with a catalogue‟
„Share your consumer knowledge with me‟
„Let‟s develop and grow the business together‟
„A joint long term vision and growth strategy‟
For further information please
contact:
Pro-Intal
Helen Doring, Chief Executive
email hdoring@pro-intal.co.uk
Tel: +49 3312008716
Mob: +49 174 1726026