Bis Shrapnel Foodservice Report
May/June 2003
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Trends
in Foodservice and Eating Out
n its latest study of the Foodservice market, Bis Shrapnel provides
an overview of trends in the industry and forecasts on growth. The Report
also comments on current trends in consumer food choice.
"The $24 billion foodservice market* has begun to emerge from two
years of weak growth with the large fast food chains set to increase
turnover by nearly 6 per cent annually over the next three years,"
says BIS Shrapnel.
The firm's latest study, Fast food and Eating Out in Australia 2003-2005,
warns, however, that the chains will continue to erode the market share
of the small independent fast food shops, which will find it increasingly
difficult to compete.
Foodservice market set to resume
rapid growth
The principal author, food and beverage industry specialist Dr Sandro
Mangosi, said that despite recent weakness, growth in foodservice is
irreversible. "What we have seen in the past two years has been
a temporary setback caused by low consumer confidence. When confidence
recovers, strong growth will resume."
Overall, Australians were eating out less frequently in 2002 - 83 times
a year, compared with 94 times a year in 2000 and for different reasons.
Whereas "convenience" was the main determinant three years
ago, the principal reasons now are "special occasion", "break
in routine" and "meeting friends".
Fast food chains and independents
Fast food chains and takeaway outlets are the most popular places for
buying a full meal or snack, particularly for families with children
under 18. Restaurants are the second most frequently used outlet, and
are strongly patronised by those in higher income brackets. Cafes are
the third, followed by clubs and hotels.
Retail sales of fast food and takeaways increased by 5 per cent in
2002, to reach $6.9 billion. Between 1998 and 2002, sales increased
at an annual rate of 3 per cent. However, when price variations are
taken into account, sales have actually declined by 2.3 per cent annually
since 1998, and only marginally recovered in 2002.
Growth in fast food and takeaways is expected to average only 1.5 per
cent per annum in the period to 2005 (at constant prices). However,
the major chains are expected to average growth of 5.7 per cent per
annum through the introduction of new marketing strategies - such as
more comprehensive menus and a proliferation of smaller stores in shopping
centres, hospitals and convenience stores.
The number of independent outlets has fallen steadily, from 87 per
cent of the total in 1992 to 78 per cent a decade later:
Fast food outlets in Australia
| Year |
Major chains |
Other |
Total |
| 1992 |
1731 |
11,579
|
13,310 |
| 1994 |
2045 |
12,900 |
14,945 |
| 1996 |
2578 |
13,957 |
16,535 |
| 1998 |
2727 |
13,732 |
16,459 |
2000 |
2897 |
14,329 |
17,226 |
| 2001 |
3160 |
12,650 |
15,810 |
| 2002 |
3381 |
11,884
|
15,265 |
From 1998 to 2002, the major chains have shown a growth of 5.5 and
a decline of 3.5 for the other outlets making a total decline of 2%
overall. (% p.a.)
McDonald's has retained its leading position among the fast food chains,
with a slightly reduced market share. Kentucky Fried Chicken and Hungry
Jack's have maintained their market shares at second and third.
Service stations will increasingly turn to fast food outlets to compensate
for the low margins on petrol.
Consumers rate hygiene standards as the most important attribute when
buying fast food, followed by the quality of food, taste and freshness.
Availability of fresh food is a paramount consideration and demand for
lean meat has increased substantially.
Meal solutions
The study found evidence that many consumers have shifted some of their
food budget from fast food to prepared products, either those ready
to heat or requiring cooking. As a result, most meal solutions products
except for some mass-produced home meal replacements - have registered
remarkably high growth.
Increased demand for such products as washed salad mixes, pasta sauces,
fresh pasta, partly prepared meat and poultry products and raw stir
fries is further evidence of consumer concern for a healthy diet.
The future
Growth is expected to accelerate in 2004 with stronger income growth,
low interest rates, and an improvement in consumer confidence. Any decline
in international tourism will be offset by the increased tendency of
Australians to take their holidays domestically. Higher economic growth
is expected to drive continued strong demand in 2005.
The report also heralds a Café Latte Society
The Australian Palate Matures
The report goes on to say that Australians are eating more chicken nuggets
and fewer hamburgers, more Asian takeaways and fewer sandwiches, meat
pies and sausage rolls.
The study identifies the most likely restaurant diner as youngish,
affluent, and probably dining in an Italian, "modern Australian",
or Chinese restaurant. The report follows interviews with nearly 2000
consumers in all mainland states.
Despite a decline in the number of food services outlets over the past
two years, the study forecasts a bright future for the foodservice industry
as soon as consumer confidence recovers.
Fish and chip shops are identified as still the most popular independent
food outlet, but this popularity is declining as more consumers turn
to food courts and pizza shops. Thai, sushi, Indian and "other
Asian" outlets are gaining popularity, while Chinese takeaways,
cooked chicken shops, pie and cake shops and traditional takeaways are
losing market share.
Service station food outlets are also beginning to make significant
inroads.
The figures show that Australians are turning away from hamburgers
and sales per head are also declining for hot dogs, fish burgers, meat
pies and sausage rolls.
Demand for coffee and bottled water has increased substantially over
the past two years. Estimated expenditure on café latte has increased
by 50 per cent in the two years to an estimated $225 million in 2002.
Sandwiches remain the most popular snack with 22 purchases per head
in 2002, down from 25 purchases in 2000, followed by hot potato chips
and hamburgers.
The availability of fresh food is a paramount consideration for consumers.
Lean meat, low fat/fat free and "light" products have increased
in importance since the 2000 survey, and nearly two-in-five of all consumers
consider vegetarian dishes as an important part of the menu.
Consumers rate hygiene standards as the most important attribute when
buying fast food, followed by the quality of food, taste and freshness.
More affluent consumers are eating out much more frequently - 2.5 times
per week compared with 1.4 times in poorer families with younger people
eating out more than older people.
The five most popular food
products, 2002
· Sandwiches
· Hot potato chips
· Hamburgers
· Cakes/pastries
· Pizza
The five most popular beverages,
2002
· Coffee (excluding cappuccino)
· Carbonated drinks
· Bottled water (still)
· Cappuccino
· Milk
(* The foodservice market is defined
as comprising all eating out establishments including restaurants, cafes,
fast food outlets, hotels/pubs, clubs, institutional eating establishments
(prisons, schools, hospitals etc.), and catering.)
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