A New Era of Growth and Competition Global Consumer Foodservice in 2015 and Beyond

A NEW ERA OF GROWTH AND COMPETITION:
GLOBAL CONSUMER FOODSERVICE IN 2015 AND

BEYOND
August 2015
INTRODUCTION
GLOBAL PERFORMANCE
THE WAY FORWARD
COMPETITIVE LANDSCAPE
REGIONAL HIGHLIGHTS
CASE STUDIES
INTRODUCTION
Scope
 This report covers new product development and new concepts in all Disclaimer
categories of global foodservice. Much of the information in this
briefing is of a statistical nature and,
 All values are in US dollars, at fixed 2014 exchange rates, unless otherwise while every attempt has been made
to ensure accuracy and reliability,
specified. Euromonitor International cannot be
held responsible for omissions or
 Historical value data are expressed in current terms; forecast data are errors.
expressed in constant terms. Figures in tables and analyses are
calculated from unrounded data and
may not sum. Analyses found in the
briefings may not totally reflect the
companies’ opinions, reader
Consumer Foodservice discretion is advised.
by Type
Global consumer foodservice
in 2015 can be characterised by
100% strong growth at the global
Self- Street level, with significant
Home Cafés/ Full-Service Fast
Service Stalls/ competitive challenges in major
Delivery/ Bars Restaurants Food markets. Operators struggled
Cafeterias Kiosks
Takeaway with changing consumer
preferences, macroeconomic
pressures, and the constant
threat of new and mounting
competition, particularly from
local operators. Nonetheless,
2015 was also a year of new
opportunities—new long-term
growth markets, new growth
categories, and new demand
drivers in key markets.
© Euromonitor International CONSUMER FOODSERVICE: A NEW ERA OF GROWTH AND COMPETITION - GLOBAL PASSPORT 3
CONSUMER FOODSERVICE IN 2015 AND BEYOND
INTRODUCTION
Key insights in 2015 consumer foodservice
Key finding Insights

Steady growth, Global growth at the highest level is steady, showing an improvement over previous years.
with local However, these figures camouflage very real challenges facing operators in nearly every
turbulence major market, from the fast-casual shift in the US to the rise of powerful local competitors—
and demand for local cuisine—in key emerging markets.
Long-term Global growth prospects have changed along with competitive conditions. China offers very
prospects have real opportunities, but they are strongest in local cuisines rather than in formerly dominant
shifted growth categories like chicken and burger fast food. Operators are now re-evaluating their
long-term strategies, focusing on a broader range of long-term targets in Latin America,
Asia Pacific, and the Middle Eastern Gulf States.
High value is One strategy that has become somewhat universal across regional barriers is the need to
paramount offer high-value in every category and at every price-point. The pursuit of value is now a
key demand driver in emerging and developed markets alike, as consumers limited by
price-sensitivity, macroeconomic pressures, or low disposable incomes seek to make the
most of each of their dining purchases.
Local cuisine is Demand is growing for chained versions of local cuisines, creating powerful long-term
up next in opportunities in some of the most important markets. This has created a challenge for
chains leading multinational operators which have built their positioning on international appeal.
Online, mobile, Global consumers are also universally looking for more convenience and more simplicity
delivery for all when it comes to dining out. Online ordering, mobile payments, and delivery service are
coming to play integral roles in the dining experience, a trend that will only accelerate.
INTRODUCTION
GLOBAL PERFORMANCE
THE WAY FORWARD
REGIONAL HIGHLIGHTS
CASE STUDIES
GLOBAL PERFORMANCE
Global growth gains momentum through 2015
 The global consumer foodservice industry

grew to over US$2.7 trillion in annual sales in
2014, recording its most successful year of
growth in recent history. 2014 saw real terms
growth increase to over 2%, with a further rise
projected for 2015.
 This strong top-line growth camouflages some
more interesting shifts in growth happening
beneath the surface. While China is still very
important in regards to the global foodservice
landscape, current terms growth in the market
continues to slow, remaining in the single-
digits in 2014, at just under 9%.
 As operators have looked beyond the largest
markets in Asia Pacific, much stronger growth
ha been seen in Latin America and the Middle
East and Africa, based on more stable local
economies and international investment. After
learning their lesson in China, operators are
seeking out more diverse international
expansion opportunities, particularly in
markets that are in the earlier stages of
chained foodservice development.
GLOBAL PERFORMANCE
Value growth strengthens but still lags behind outlets and traffic
 While traffic growth has been strong in

emerging markets, ongoing stagnation in
developed markets has conspired to keep
value sales growth in check in recent years.
Value growth did accelerate in 2014, to just
over 2% in constant terms (5% in current
terms); however, growth in sales is still slower
than growth in outlets and transactions by a
significant degree.
 The decline in sales per transaction has been
driven by a number of trends, both in higher
and lower income markets. As more and more
lower income consumers in emerging markets
begin eating out on a regular basis, average
transaction value has moved steadily
downward. At the same time, the median
global consumer has steadily become younger,
with a lower average income and an eagerness
to try new concepts within the constraints of
affordability.
 As a result, the ―quest for value‖ has become a
global imperative, with nearly every consumer
looking to save at a range of price points.
GLOBAL PERFORMANCE
Asia Pacific leads in size, while Latin America dominates growth
 Asia Pacific remains the epicentre of the global foodservice industry, contributing 41% of total spending
and double that of the next largest region. Asia Pacific is home to more than half of the global population,
and while income levels remain modest on average, dining out is a very important part of the social
landscape. This is particularly true in China, where a wide variety of affordable dining options can be found,
even in relatively small villages. As a result, per capita traffic levels are quite high compared to other
markets with similar levels of income.
 That said, the fastest growth opportunities have moved elsewhere. Latin America and the Middle East both
saw double-digit value growth in 2014, albeit from much smaller bases. Both have become important long-
term growth targets for multinational chains, which are looking to diversify their holdings. The lack of well-
developed traditional informal eating-out cultures in both regions (as opposed to fine dining) has provided
scope for rapid expansion in many markets, as international chains flock to satisfy rising demand.
GLOBAL PERFORMANCE
The balance of growth shifts even further toward emerging markets
 As chained operators’ attention moves toward emerging markets for strategic reasons, the balance of
global growth is shifting in terms of share as well. China is not only the largest foodservice market, but it is
growing its share significantly each year, despite any slowing in its growth rate. Meanwhile, every
developed market among the top 10 is losing ground nearly as quickly.
 It follows that the fastest growing major markets heavily favour emerging regions, each of which offers
opportunities for global chains.
Largest Foodservice Markets by Value in 2014
Market Value % Share Change
China 560,431 20.7 0.7
USA 506,217 18.7 (0.4)
Japan 204,073 7.5 (0.3)
Brazil 144,606 5.3 0.3
India 102,773 3.8 0.2
Spain 99,755 3.7 (0.2)
Italy 98,239 3.6 (0.3)
UK 93,080 3.4 (0.2)
South Korea 72,618 2.7 -
France 63,672 2.3 (0.2)
GLOBAL PERFORMANCE
Category growth highlights quick and affordable – in most markets
 Category growth in 2014 told a complex story,

highlighting shifting growth patterns in some of the
largest global markets. While street stalls/kiosks
and fast food – quick, affordable, informal and
typically inexpensive options – were still among the
fastest growing categories, full-service restaurants
outperformed fast food for the first time since 2010.
 As with nearly all things global foodservice, this
shift can be traced back to China. In 2014, full-
service restaurants grew faster than in 2013, by
9%, while fast food faltered, due to a number of
high-profile food safety and public relations
scandals. While these scandals had particularly
strong consequences for the largest chains, they
also undermined public trust in chained fast food
as a whole.
 Outside China, fast food continued to outperform
full-service. Along with very high growth rates in
street stalls/kiosks, these figures serve to reinforce
the idea that consumers all over the world, both in
higher and lower income areas, are being drawn to
lower price points, a high value positioning and
more flexible formats.
GLOBAL PERFORMANCE
Growth by location shows favour for non-traditional outlets
 Standalone outlets continue to be the dominant presence in global foodservice, at 76% of 2014 value.
However, the global share of non-traditional locations is growing, increasing from less than 21% to 24%
over the last decade. This growth has been led by retail locations, which are popular both in developed and
emerging markets. In the former, such locations keep costs low by requiring less extensive build-outs and
often smaller footprints. They also allow chains additional expansion opportunities in markets nearing
saturation. In developing countries, retail locations are in high demand as developments like shopping malls
offer higher security, clean conditions, in some cases air conditioning, and a social, high-traffic
environment. These locations also allow operators to reach a large pool of potential consumers, as they
often serve as gathering spaces patronized by customers from a large surrounding radius.
 In 2014, value through retail locations grew by 8%, with their strongest growth in Latin America, and the
Middle East and Africa. Travel locations followed with 7% growth, while standalone lagged at 5%. Leisure
locations were the only non-traditional outlet type to trail behind standalone outlets in value growth, at 5% in
2014.
GLOBAL PERFORMANCE
Demand for delivery service is increasing exponentially
 Non-traditional service channels have been growing in popularity, as

consumers seek out ways to maximise convenience and save time in
their busy schedules. The home delivery, takeaway and drive-through
channels all grew faster than dine-in in 2014 value terms, with home
delivery leading the group with 11% sales growth worldwide.
 Delivery, in particular, has become a major source of focus and
momentum in higher income foodservice markets, as technology has
brought unprecedented levels of access for both consumers and
restaurant operators.
 This has been due in part to more widely available order-receiving
technology, especially through sites like GrubHub and JustEat, but also
through access to internet-connected devices. In the highest demand
markets, such as the US, this has even led to the development of an
entirely new industry of third-party delivery businesses. These include
services like PostMates, DoorDash and UberEats, which pick up food
from restaurants and deliver it to consumers for a fee, as well as
―virtual restaurants‖, which deliver meals without any real bricks-and-
mortar presence, and services like Blue Apron and Hello Fresh which
deliver ingredients for a home-cooked meal.
 While many of these services benefit smaller operators which do not
have the resources to fund their own delivery fleets, it has also helped
bring delivery to chains in unlikely categories. PostMates will begin a
delivery partnership with Starbucks in the US in late 2015.
GLOBAL PERFORMANCE
Consumer preferences have become surprisingly universal
 While every global market has its own unique conditions, there have been steadily increasing similarities
between what higher income, urban consumers all over the world are looking for from their dining
experiences. This has been driven by two main factors, the first being greater awareness of global trends
through the spread of internet connectivity, entertainment and social media culture that celebrates the
sharing and discussing of restaurant experiences. The second is greater access to those experiences,
through the spread of chained foodservice and rising incomes, that make purchasing them possible.
 As a result, the kinds of experiences being sought out by consumers in New York and London are now
closely mirrored by those in Mexico City, Tokyo, Shanghai and São Paulo. These consumers want distinct,
high-quality dining experiences that are worth talking about with friends and on social media. They want to
feel good about the value they are getting for their money. They are interested in freshness, variety of
cuisines, simplicity in preparations and flexibility in formats. Finally, they are interested in convenience and
affordable luxury, in whatever forms those two benefits may take.
 While these wealthier, urban consumers are not the mass consumers in most markets, they nonetheless
represent a particularly lucrative and vocal group that indicate where mass-market trends may be headed
over the long term.
New High Quality Simplicity Affordable

Freshness Convenience
Experiences and Value and Flexibility Luxury
GLOBAL PERFORMANCE
Key takeaways for current strategy
Steady global growth with Opportunities are moving to the Better, healthier, more
shifting dynamics value end of the spectrum modern, more convenient
 Global growth was very strong in  Consumers all over the world are  Other consumer preferences
2014, reaching a high of 5% with demonstrating a decisive change are shifting as well,
even stronger rates expected in in preferences. Those in higher necessitating an evolution in
2015. That said, growth for many income, more developed regions, global strategies even for the
individual operators – especially such as North America and largest chains. With the need
leading fast food chains – has Western Europe, have emerged for high value has come a
been challenging, as the global from years of macroeconomic need for improvement in every
growth story has been shifting struggles with a new baseline part of the dining experience.
rapidly and decisively beneath price sensitivity that demands Consumers are constantly
their feet. While China and the maximum value for all of their seeking out newer, more
US still offer very real foodservice purchases. In interesting and more exciting
opportunities, the majority of emerging markets, a high-value foodservice experiences, and
global growth has moved positioning is also very they want those experiences
elsewhere – to Latin America, appealing, as many consumers to live up to their expectations
the Middle East and Southeast still view chained foodservice as on every level. Ingredient
Asia. At the same time demand an occasional indulgence rather quality is as important to
has also shifted in the most than a practical everyday consumers in China as it is in
developed markets, as higher purchase. As a result, lower the US and in Brazil, and
income consumers change their priced, higher value categories consumers extend that level of
habits and seek out more are gaining global share – albeit care to evaluating every part
innovative options. at a range of actual price points. of the dining experience.
INTRODUCTION
GLOBAL PERFORMANCE
THE WAY FORWARD
REGIONAL HIGHLIGHTS
CASE STUDIES
THE WAY FORWARD
Long-term growth will be steady, with no booming recovery
 2014 was a strong year for global foodservice

overall, but that is not necessarily indicative of
growing momentum. Rather, foodservice growth is
expected to continue at a moderate pace as key
emerging markets mature.
 While value growth will continue at a rate of about
2-3% in constant terms, outlet growth and
transactions growth are both expected to slow.
This will be due in part to slowing growth in Asia
Pacific, where the double-digit growth seen over
the last decade is nearing its limits. In China, in
particular, the already vast outlet base means that
large-scale net outlet gains over the forecast period
are unlikely.
 That said, this steady, stay-the-course growth and
short-term improvement camouflages significant
internal upheaval in many key markets. Chained
foodservice continues to make share gains based
on advantages in marketing, site selection and
outlet design, and modern, convenient, highly
versatile categories like fast food continue to
outperform more traditional categories, like cafés
and bars/pubs.
THE WAY FORWARD
Growth opportunities are still a regional game
 Asia Pacific will contribute the majority of global growth over 2014-2019, with 56% of absolute foodservice
value growth. China will be a major driver of that growth, despite the country’s more difficult recent market
conditions. Many other markets, including India, Vietnam, South Korea and Indonesia, will see absolute
value growth of over US$5 billion between 2009 and 2014.
 Latin America will continue to be a strong source of growth as well, though the Middle East and Africa will
offer the highest rate of increase, at an annual average of over 4% in constant terms. This will be driven in
large part by international operators investing heavily in key markets in the Middle Eastern Gulf states, as
well as ramped-up investment in early growth-stage markets in Sub-Saharan Africa by operators looking to
maximise their long-term growth opportunities.
 Notably, a mild recovery in Western Europe will see the region bouncing back from many years of declining
sales, though on the individual market level, competition for that growth will still be fierce.
THE WAY FORWARD
Transactions per capita offer a clear view of untapped demand
 A look at projected growth in transactions per capita suggests room

to grow in some key markets. For example, while China is already
the largest foodservice market in sales terms, transactions per capita
are expected to increase by a margin of 16 transactions by 2019.
While the market’s largest cities are becoming quite saturated with
options, and top-line growth has slowed, there are still hundreds of
millions of lower income consumers in China who will soon be seeing
foodservice become more readily available. Growth in the country will
undoubtedly continue over the long term, though not at the sky-high
rates it once experienced. This growth will extend to other countries
in Asia Pacific as well, including Vietnam, which will show the largest
transactions per capita increase in the world over 2014-2019.
 The pace of expansion in some Latin America markets is expected to
be similarly impressive. Transactions in Chile and Peru will expand
by more than 20 per capita over 2014-2019. While much of this
demand will be served by very low-priced local players, such growth
suggests opportunities for chained players, which need to begin
building a presence now in order to invest in long-term growth.
 Spain will also see a sizable increase over the forecast period, as
economic recovery finally comes to the downtrodden market.
Consumers are beginning to feel more comfortable spending on non-
essential purchases, and are making much more frequent trips to
restaurants, in accordance with traditional Spanish culture.
THE WAY FORWARD
Growth continues in quick and casual, but full-service is on the rise
 Global value will continue flowing toward fast food, with the category expected to see US$107 billion in new
value over 2014-2019. This is being driven by consumer preferences shifting toward the more flexible, more
informal and more value-driven dining, resulting in strong growth in low-priced, limited-service categories in
developed and emerging markets alike.
 That said, full-service categories are also gaining some momentum, based on rising demand in key
markets in Asia Pacific and Latin America. Higher income consumers in China, Brazil and Mexico, among
others, are also seeking out chained full-service experiences that offer a cosier and more social alternative
to fast food. In particular, this trend is benefiting premium casual dining chains, such as the Cheesecake
Factory, Outback Steakhouse and PF Chang’s. It should be noted that more than half of the full-service
growth expected will come from China alone; however, the trend is apparent in many emerging markets.
THE WAY FORWARD
Growth opportunities by size highlight a challenge for multinationals
Largest Regional Opportunities by Absolute Value Growth  Local specialities will drive growth over
the forecast period, particularly in Asia
Growth 2014-2019 Pacific, where growth in Asian concepts
Region Category
(US$ mn)
will dwarf absolute value increases in all
Asian Full-Service other categories.
Asia Pacific 132,683
Restaurants
 This represents a challenge for
Asia Pacific Asian Fast Food 24,310 international operators. While there is still
North America Burger Fast Food 12,640 plenty of room to grow in categories like
burgers and fried chicken, the potential
Other Full-Service
Latin America 9,007 opportunity in serving local demand for
Restaurants
local cuisine is substantially greater, and
Latin America Bars/Pubs 8,251 localisation of foreign brands can only go
Bakery Products Fast so far.
North America 7,757
Food  At the same time, the quality and appeal
Other Full-Service of local chains in key markets continues
North America 7,050
Restaurants to grow, and local franchise partners are
Asia Pacific Chicken Fast Food 6,104 increasingly experimenting with their own
local brands. What this means is that the
Asia Pacific Street Stalls/Kiosks 5,847
era of un-challenged growth for
North American Full- international chains – based heavily on
North America 5,656
Service Restaurants the appeal of global brands and premium
outlets – is likely to be over.
THE WAY FORWARD
While opportunities by rate show strength in modern formats
Largest Regional Opportunities by CAGR  A look at the fastest growing

categories paints a more nuanced
% CAGR
Region Category picture, highlighting changes in
2014-2019
consumer behaviour and preferences.
Australasia Juice/Smoothie Bars 12.7 From this view, it is clear that limited-
Latin America Juice/Smoothie Bars 11.6 service categories are still rapidly
gaining momentum as global
Pizza Full-Service
Asia Pacific 11.5 consumers continue seeking out more
Restaurants
casual, flexible dining experiences,
Middle East and Africa Burger Fast Food 9.5 and new cuisines to try.
Pizza 100% Home  Even more so than any particular
Middle East and Africa 9.2
Delivery/Takeaway category, though, the Middle East and
Australasia Latin American Fast Food 7.5 Africa stands out as the most
Convenience Stores Fast significant opportunity, showing high
Eastern Europe 7.0 growth rates in multiple formats and
Food
cuisine types. This will be driven in
Middle East and Africa Ice Cream Fast Food 7.0
part by seemingly unquenchable
Middle East and Africa Bars/Pubs 6.6 demand for premium international
brands, thriving dining-out cultures in
Asia Pacific Other Fast Food 6.2
key markets like the UAE, and eager
Middle East and Africa Specialist Coffee Shops 6.2 investment from global operators
looking to diversify their presence
beyond China and Latin America.
THE WAY FORWARD
Retail and travel locations will continue to claim share
 Non-traditional locations will continue to edge their way toward a larger share of global growth. While the
transition is gradual, the share of standalone locations is predicted to decline from 76% of global
foodservice sales in 2014 to 75% in 2019.
 The shift will be most noticeable in Western Europe, Eastern Europe, and the Middle East and Africa,
where non-traditional locations will be responsible for more than 50% of value growth. In Western Europe,
this will be the result of operators looking to retail and travel locations as new expansion targets in overly
saturated markets. In Eastern Europe and the Middle East and Africa, such locations represent a converse
opportunity: in markets where the local foodservice industry is earlier in its development, shopping malls
and transportation hubs offer secure, high-traffic, high-prestige locations with access to higher income
consumers. Such developments are now perceived to be valuable launching pads for new concepts, with
maximum visibility for the most lucrative segments of a new market’s population.
THE WAY FORWARD
Online, mobile and delivery demand will affect the entire industry
 Demand for online and mobile ordering and payments, as well as for increasingly convenient and
accessible options for delivery, will continue to grow. In the most developed markets, operators are
experimenting with new ways technology can play a role in the dining experience – for takeaway, delivery
and even dine-in customers. Some are experimenting with redefining the dining-in experience entirely,
replacing traditional servers with interactive touchscreens in full-service, or using kiosks and mobile phones
to replace counter ordering in fast food. Fast-casual dining chain Panera Bread so far offers the best
example, in which the chain is experimenting with ―Panera 2.0‖ outlets, designed to better serve modern
consumers. Customers can order online before they arrive, from touchscreen kiosks at the counter, from
traditional cashiers, or even from mobile phones while sitting at a table in the dining room.
 On the customer side, this has meant that consumers are loosening up their expectations for what the
experience should look like when they go to a restaurant, not just at a wider range of formats but also for a
wider range of occasions. This opens the door for operators to experiment even further with what it means
to be a restaurant, including going to such extremes as meal delivery services and even virtual restaurants,
which serve only delivery occasions and have no outlet at all. While this extreme is still very much a niche
trend, confined to major cities in higher income markets, the key takeaway is that technology’s role in
foodservice is growing, and it will continue to become even more central to the experience by 2019.
Online and Online Third-Party

In-store Virtual
Mobile Ordering Delivery
Technology Restaurants
Ordering Hubs Services
THE WAY FORWARD
Key takeaways for long-term growth
The growth story has changed, Consumers want chained local Online, mobile and delivery is
but opportunities still abound experiences too the universal future
 The changes in global growth  One of the largest long-term  Demand for online and mobile
prospects may appear limiting, growth opportunities in global ordering, mobile payment and
but in reality they have simply foodservice is in local cuisines convenience-based services like
diversified. Rather than all of the in emerging markets. While delivery are coming to play a
long-term opportunities being there is still plenty of demand for larger role in the foodservice
concentrated in a handful of burgers and fries in Asia Pacific landscape all over the world.
markets, there are now very real and Latin America, consumers Technology has changed the
opportunities to be had in a range who are seeing their incomes accessibility of such
of markets, categories and price rise and gaining more frequent programmes, making them as
points. Latin America is still access to chained foodservice much a possibility in early-stage
seeing rapid growth, and the are also driving demand for emerging markets as in mature
Middle East has become a centre chained foodservice versions of ones, and it has also changed
for expansion for premium their own local favourites. Asian consumer expectations when it
international chains. Asia Pacific fast food and Asian full-service, comes to what they are looking
offers plenty of opportunities in particular, will offer a for from a dining experience.
beyond China, including in higher combined US$167 billion in new Operators now have greater
income markets like South Korea. foodservice growth over 2014- demands on them when it
Meanwhile, China still offers very 2019. Multinational chains are comes to such services, but
real opportunities, including some scrambling to capture this they also have greater creative
of the largest in the world in demand, but so far it remains leeway when it comes to finding
absolute value terms. largely untapped. new ways to implement them.
INTRODUCTION
GLOBAL PERFORMANCE
THE WAY FORWARD
COMPETITIVE ENVIRONMENT
REGIONAL OPPORTUNITIES
CASE STUDIES
The independent segment outperforms chains in two key regions
 Chained consumer foodservice value is growing faster than

independent with two very notable, and seemingly opposing,
exceptions: Asia Pacific and North America. In both of these
regions, the independent segment outpaced chains in 2014, albeit
for very different reasons.
 In Asia Pacific, strong growth in China’s dominant independent
segment was enough to boost growth at the regional level, while
continued difficulties for leading chained concepts similarly
dragged down chained rates. It is notable that both segments in
China have seen slowing growth in recent years, but
independents saw a small growth improvement in 2014 that put
them ahead.
 In North America, the independent segment outperformed chains
for the first time in over a decade, due to an unusually strong year.
Many factors contributed to this, including steadily building
momentum since the economic recovery, which has finally trickled
down to smaller and medium sized businesses. In addition,
interest among consumers in higher quality, more authentic dining
experiences has favoured independent outlets and boutique
chains (those with fewer than 10 outlets, which are counted
among the independent segment). Finally, especially strong
headwinds facing the largest chained players have dampened
growth in the chained category as a whole, significantly narrowing
the performance gap that has been widening for years.
But growth by category highlights room to grow in fast food
 A look at chained and independent growth in value terms shows a clearer picture of where the
opportunities still lie. Despite its slowdown, fast food saw by far the largest value increase in sales for
chains 2014, at more than US$20 billion. Asia Pacific, Latin America and North America each contributed
around US$5 billion to that figure, though Latin America’s contribution was by far the most meaningful in
strategy terms. Chained fast food in the region grew by 22% in 2014, the result of strong investment by
international players looking to balance their global presence, and rapid expansion by local giants like Alsea
and FEMSA, which are fighting to get ahead of external competitors.
 Chained street stalls and kiosks had the strongest performance among chained categories in rate terms,
increasing by US$1.2 billion at an annual rate of 12%. 90% of this increase came from Asia Pacific and
Latin America, where chained street stalls have become a powerful way to reconcile the high appeal of
branded concepts with the lower prices and more accessible format desired by lower income consumers.
Moderate growth for leading chains, with one exception
 Growth was moderate to strong among the top 10 companies in 2014, led by 7-Eleven parent Seven & I
Holdings at 10%. More notable than the strongest performance was the weakest. McDonald’s Corp saw
just 3% value growth, alongside similar growth in outlets, citing declining guest counts, overly complicated
menus, operational inefficiencies and difficulties with declining public brand perception.
Top 10 Global Foodservice Companies by Value

Value (US$ Sales Growth Outlet Growth
Company Outlets
mn) 2013/2014 (%) 2013/2014 (%)
McDonald’s Corp 91,605 41,767 2.8 3.4
Yum! Brands 45,811 42,463 4.8 3.6
Restaurant Brands International 24,994 18,555 6.6 3.0
Seven & I Holdings Co Ltd 21,415 55,138 10.3 5.3
Doctor’s Associates Inc 20,691 43,027 7.6 4.8
Starbucks Corp 19,097 21,371 9.2 7.5
Wendy’s Co, The 10,618 6,672 4.3 1.0
Dunkin’ Brands Group Inc 9,557 18,694 3.5 2.6
Domino’s Pizza Inc 8,995 12,660 9.1 8.4
Darden Restaurants Inc 8,574 2,221 2.4 1.8
The fastest growth chains are in Asia Pacific
 The fastest growing global chains are concentrated in Asia Pacific, and overwhelmingly favour low-priced,
limited-service concepts. Four of the top 10 concepts are convenience stores, and most are value players
which compete heavily on price. For example cnHLS is building its business based on the idea of offering
high-quality fast food from a Chinese company, at more competitive prices than Western chains.
Fastest Growing Global Chains in 2014 With Sales Over US$100 million
% Growth Domestic
Brands Value (US$ mn) Primary Category
2013/2014 Market
Ediya Espresso 372 40 South Korea Specialist Coffee Shops
CU 457 38 South Korea Convenience Stores Fast Food
GS25 646 37 South Korea Convenience Stores Fast Food
Grido 190 30 Argentina Ice Cream Fast Food
Coco 182 27 Taiwan Street Stalls/Kiosks
cnHLS 658 24 China Chicken Fast Food
Chay Si Ba Mee Kaew 149 22 Thailand Street Stalls/Kiosks
ampm 158 21 USA Convenience Stores Fast Food
Bob’s 875 19 Brazil Burger Fast Food
Family Mart 4,418 17 Japan Convenience Stores Fast Food
Performance of top chains continues to stall
 2014 and 2015 have been extremely challenging for

both McDonald’s and Yum! Brands, with the leading
two global operators battling serious problems in
their most important markets.
 McDonald’s continues to struggle with changing
consumer preferences in the US, seeing same store
sales falling consistently every quarter as consumers
seek out more exciting, higher quality dining
experiences, particular in fast casual dining.
 Even within traditional fast food, McDonald’s appears
to be losing customers to newer players like Five
Guys and Chick-Fil-A, both of which have been
expanding rapidly on a positioning of a better fast
food experience at a similarly low price.
 These challenges also extend to China, where
consumers continue to shy away from both chains
after a string of supplier and food safety scandals
undermined public trust.
 Even high-growth stalwart Subway saw consistently
declining growth rates throughout the review period,
as rapid outlet growth in key emerging markets
becomes less sustainable.
More flexible brands have found a way through the storm
 While some of these results can be attributed to a

generally difficult environment, it is notable that many
other chains among the top 10 have fared better despite
facing similar headwinds. Starbucks continues to ride the
wave of the global coffee shop boom, posting
consistently strong comparable-store sales both in the
US and internationally. This is despite unrelenting
competition from up-and-coming local chains in India,
South Korea, Colombia and many other key markets,
and a growing swell of smaller, ―third wave‖ coffee shops
fighting for share.
 Burger King has also enjoyed steady expansion,
particularly in Latin America, while 7-Eleven has soared
into the double-digits driven by rising demand for
extreme convenience and extreme value in fast food.
 Taken together, it is clear that the industry has reached
a turning point, in that consumers in the largest markets
are more discerning than ever, and the models which
worked during the global recession are seeing rapidly
diminishing returns. Those chains that have adapted
quickly and found new paths to growth are reaping the
rewards, while those resistant to change have fallen
behind.
Key competitive takeaways
Major regions proving Now is the time for middle-tier The fastest growing chains are
challenging for chains players to take chances in Asia Pacific
 North America and Asia Pacific  These struggles at the highest  The Asia Pacific region is home
were the only two regions to levels have opened up the to many of the fastest growing
show faster growth in the playing field somewhat and chains in 2014. The top three
independent segment in 2014. provided an opportunity for chains came from South Korea,
In North America, this was due lower ranking chains. In burger including the locally-owned
to an unusually strong year for fast food, for example, Burger Ediya Espresso, which opened
independents, as a result of a King, Wendy’s and fast casual nearly 400 new outlets in 2014.
number of consumer-driven chains like Shake Shack have  Convenience stores fast food
trends, while in Asia Pacific this been able to navigate the also had a particularly strong
was due to substantial growth in difficult consumer environment showing among growth leaders,
China’s very large and rapidly in the US more successfully, including chains from South
expanding independent full- quickly adapting to new Korea and Japan. These chains
service restaurants category. preferences. have found rising demand for
 The common thread in both of  In Asia Pacific, a large number very low-priced, very convenient
these regions was that leading of modern, fast-growing and foodservice options that can
chains were also facing well-funded local operators are serve as alternatives to other
significant hardships, with rising up to take on international limited-service categories. Retail
McDonald’s and Yum! Brands leaders. These chains are foodservice in general has seen
being forced to make major finding immense opportunities rapid growth, gaining share over
strategic changes. for long-term growth in Asia and other location types.
beyond.
INTRODUCTION
GLOBAL PERFORMANCE
THE WAY FORWARD
REGIONAL HIGHLIGHTS
CASE STUDIES
REGIONAL HIGHLIGHTS
Major Asian markets will offer steady but moderate growth
 Projected increases in Asia Pacific indicate Forecast Growth by Market in Asia Pacific 2014-2019
steady, strong yet not booming growth across
the region. While China continues to lead, the Chained Independent
Total CFS
Growth Growth,
projected absolute growth in constant terms Market % CAGR,
2014/2019 2014/2019
over 2014-2019 is expected to be 21% less 2014/2019
(US$ mn) (US$ mn)
then that seen from 2009-2014. This reflects
both a maturing Chinese market and real China 20,836 121,622 4.6
headwinds facing the industry India 845 16,546 3.2
 While every Asian market is expected to
Vietnam 627 6,677 6.9
continue growing, the days of dizzying, 20%
or more growth year after year appear to be in South Korea 3,745 3,180 1.8
the past. Newcomers should be prepared for Indonesia 1,333 5,390 3.4
a sustained, years-long ramp up before
gaining significant scale. This is particularly Thailand 2,281 1,056 2.8
true in markets like Indonesia and Vietnam, Japan 4,905 2,474 0.2
where small independents will lead growth for
Malaysia 1,466 347 3.2
the foreseeable future.
 Notably, there are plenty of opportunities to Taiwan 621 908 1.5
be had beyond emerging markets. For Philippines 865 222 2.0
example, the more mature South Korean Hong Kong,
market will still see US$3.7 billion in new 360 361 1.1
China
value in the chained segment, led by its
booming specialist coffee shops category. Singapore 211 228 1.0
REGIONAL HIGHLIGHTS
Category-level opportunities highlight a region-wide shift
 Slowing economic growth in many of Asia’s largest markets has led consumers across the region to cut
back on luxuries – including consumer foodservice. This is particularly true in China, where the high end of
the market has been hit particularly hard by a national anti-corruption drive, forcing many operators to pivot
aggressively towards the mass market. The push for value can also be seen in markets like South Korea,
Taiwan, India and long-suffering Japan, where a consumption tax rise in 2014 put an end to the mini-boom
seen in 2013. All told, decades of booming, export-led growth in many Asian markets have given way to a
more muted demand environment, led by value-conscious domestic consumers.
 As with all discussions of Asia Pacific, this comes with the caveat that slowing growth does not mean no
growth at all. Strong growth in fast food and other value-focused categories will offer opportunities, heavily
favouring those concepts that offer real value at an array of price points for a range of income levels.
REGIONAL HIGHLIGHTS
China in 2015: What is the way forward for chains?
 While much of the talk of China has focused on the  Those players looking to grow in China will not
negative aspects of the market – slowing growth, succeed without a change in strategy that reflects
consumer spending cut-backs, and anti- current preferences. Chinese consumers are now
extravagance sentiments that are stunting growth less concerned with iconic Western brands and
in the premium segment – it is important not to lose more concerned with quality in every part of the
sight of the long-term picture, and the larger role experience. As a result, 2014 saw fast food losing
China is still playing in terms of the global growth momentum to specialist coffee shops, cafes and
story. Alongside this narrative of China losing some even full-service, as consumers sought out
of its significance as a growth target is the strong healthier food and cosier environments.
indication that China still offers the largest long-  Consumers also looked beyond Western cuisine
term potential value increase in global foodservice and sought out other kinds of international dining
over the forecast period. experiences, particularly Korean food. This has
 Within the context of China’s recent growth rates, also been driven by growing interest among young
opportunities there look less appealing; however, people in Korean culture as a whole, including
relative to all other markets – and freed from the music and other entertainment
harsh comparison of its own historic successes –  Chinese consumers are eager for the same
China is still a very real, and very lucrative long- convenience- and experience-based services
term opportunity. growing all over the world, including online and
 While China may not be the opportunity it once mobile ordering and payments, third-party delivery
was, it is still one of the primary engines driving services, and social media involvement within the
foodservice growth at the global level, and it dining experience. This has led to opportunities in
cannot, and should not, be ignored. all of these areas, especially for services that
combine these benefits in new ways.
REGIONAL HIGHLIGHTS
Latin America demand surges ahead, offering diverse opportunities
 Latin America is set to continue

to be a primary long-term target
for international chains. 2014
was a year of new entrances, as
operators scrambled to gain a
foothold in all of the region’s
major markets – and some
minor ones, as well.
 Brazil remains far and away the
largest market and the most
important driver of growth, but
many other countries offer
opportunities for expansion as  It is important to remember, however, that Latin America is a diverse
well. region necessitating highly localised strategies. For example in
 Soaring incomes and rapid Argentina, high inflation in 2013 and 2014 affected consumer
poverty reduction in Peru, confidence and dampened spending, while putting strain on
Colombia, Venezuela and Brazil restaurant operators, which are struggling to remain profitable. At the
have created growing demand same time, Argentinean consumers are looking to make healthier
for more varied offerings, while dining decisions and maximise the quality of their foodservice
the number of consumers able purchases, all within the context of price sensitivity. This has
to afford regular eating out has translated to momentum for chained bakery fast food concepts and
expanded by millions over the French bakery-café chains that emphasise high quality and premium
last decade. experiences at relatively low cost.
REGIONAL HIGHLIGHTS
Yet again, growth favours value-focused concepts and formats
 Given how much expansion in Latin America has been concentrated

on lower income consumers, it is no surprise that informal options are
expected to lead growth. Fast food will see the strongest growth
region-wide, at a 4% CAGR in constant terms, with self-service
cafeterias following closely behind. Self-service cafeterias’ growth can
be attributed entirely to Brazil, where ―kilo restaurants‖ continue to
see strong growth as high-quality, affordable dining options. Such
outlets serve local cuisine at very low prices and by weight, and are
made up almost entirely of independent operators.
 This leads to a broader insight about Latin America in general, in that
growth in many markets may be strong, but much of it will continue to
be claimed by independent operators at the low end of the pricing
scale. Over 2014-2019, only 21% of the total value growth in
foodservice will go to chained players, with some markets, like Chile,
seeing a share as low as 10%.
 This does not mean that chains cannot find growth; rather,
competition will remain strong from local, informal options, such as
Brazil’s small bakeries or Mexico’s network of street stalls. Instead of
displacing such options, chains will remain a complement to these
operators in the medium term. As a result, chains must recognise that
while there is clearly demand for indulgence, as well as variety and
more premium experiences, consumers also have plenty of readily
available options, and a balanced, high-value positioning is key.
REGIONAL HIGHLIGHTS
Local concepts, local cuisines are the next chained frontier
 Amidst the competition from Largest Locally Owned Brands in Latin America 2014
independents, there has also
been a clear pattern of 2014
Growth
investment in locally-owned Brand Global Brand Owner Value
2013/2014
chains and concepts featuring (US$ mn)
local cuisine. In the most notable OXXO FEMSA 883 14%
example, Mexico saw two of its
Bob’s Brazil Fast Food Corp 875 19%
largest operators investing in
such chains in 2013 and 2014. Al Saraiva
Alsea acquired casual dining Empreendimentos
Habib’s 865 13%
chain VIPs, while FEMSA Imobiliários e Participações
purchased Latin American fast Ltda
food chain Gorditas Dona Tota. Giraffa’s Restpar Alimentos Ltda 427 18%
Other local operators have also
Arturo’s PAICA Arturo's CA 403 70%
developed their own concepts,
such as Grupo Gigante’s full- VIPs Alsea 386 4%
service Tok’s chain. Norky’s Grupo Norky’s 294 15%
 These moves reflect both the
Spoleto Grupo Trigo 293 26%
growing power of local players
and demand for chained Restaurante
Gigante SA de CV, Grupo 234 6%
versions of local favourites, a Sanborns
trend which is expected to Toks CPQ Brasil S/A 233 5%
continue over the long term.
REGIONAL HIGHLIGHTS
North America growth will be surprisingly steady
 Despite the well-publicised struggles of leading

operators – much of which has been blamed on
generally difficult market conditions – the long-
term prognosis for growth in North America is
strong. Consumer foodservice value in the
region is expected to grow at an average annual
rate of 2% over 2014-2019, more than three
times faster than the average rate of growth in
constant terms seen during the previous five
years. This is the result of the continued
recovery, which has sent average transactions
per capita soaring past pre-recession levels.
 Within that recovery, dynamics at the market
level have changed. Consumers have more
options than ever, and a residual concern for
value has left behind increasingly discriminating
preferences. The idea of an appealingly
utilitarian foodservice experience no longer
exists for the majority of higher income
consumers, and in its place is the constant need
for more, better and more highly varied at all
times. This means that opportunities abound,
but successful strategies have changed.
REGIONAL HIGHLIGHTS
Led by surging demand for fast-casual dining
 Fast food accounts for six of the top 10 fastest growing categories in North America over 2014-2019,
reflecting both ongoing consumer demand for value, and continued innovation and investment in the space.
Leading the way is fast-casual dining, which continues to be the focal point of growth in the US. The
premium yet value-focused category is expected to add US$9.9 billion in new value between 2014 and
2019, a full 32% of the total increase expected in fast food. To put the significance of this figure in context,
fast-casual dining claimed just 9% of fast food sales in North America in 2014.
 Other fast-growing categories are expected to benefit from demand for both affordable luxury and simplicity
in preparation methods, menus and formats. This includes both Asian and Latin American fast food, which
offer fresh yet adventurous takes on Mexican, Chinese, Japanese and Southeast Asian cuisines.
Note: Fast-casual is calculated separately from the breakdown of total fast food by cuisine type; all sales through fast casual are also attributed to other “by
type” categories
REGIONAL HIGHLIGHTS
Middle East and Africa growth is all about the Middle East – for now
 Sub-Saharan Africa is one of the most important

regions for very long-term foodservice growth, and
many chained players have tentatively started to
expand in the most promising markets beyond the
comparatively mature South Africa. Subway, for
example, now has multiple outlets in Kenya, while
Yum! Brands’ KFC has a presence in over a dozen
sub-Saharan markets.
 That said, over 2014-2019, MENA markets will
contribute the vast majority of sales in the region,
with the most significant contributions coming from
the wealthy states in the Gulf Cooperation Council
(GCC). The latter group alone is expected to reach
US$46 billion in annual foodservice sales by 2019,
nearly double the Sub-Saharan total.
 Luckily for global chains, the GCC is also
particularly conducive to international chained
growth, offering strong infrastructure, high incomes
and a wide array of potential local franchise
partners. However, along with these conditions
comes fierce competition, not just from local
operators but from every operator looking for the
next big thing in international growth.
REGIONAL HIGHLIGHTS
GCC markets are the ideal ―emerging developed‖ growth targets
 Taken together, the Gulf states represent the 16th

largest foodservice market in the world, with much
higher forecast value growth rates than any market
of similar size. This places the market comfortably
alongside Indonesia and Venezuela in terms of
size, with growth closer in speed to smaller
markets like Vietnam or Peru.
 The GCC states also differ from other high growth
markets in one very distinct – and very important –
area: disposable income. The GCC collectively has
much higher disposable income averages than
other key emerging markets, and much stronger
forecast growth rates than other wealthy markets.
While income inequality is significant in the region,
there is nonetheless enormous potential for growth
in the same modern chained concepts currently
enjoying brisk expansion in markets such as the
US and the UK. Adding to these benefits, some
key metropolitan areas like Dubai have particularly
strong demand for chained foodservice, due to
local social life revolving around high-end shopping
malls that double as dining districts and leisure
centres.
REGIONAL HIGHLIGHTS
Key regional takeaways
Asia Pacific
• Growth has slowed and the years of double-digit growth are over, most notably in China;
however, opportunities still exist
• Success will come from a lengthy, sustained effort
• Price-sensitive consumers mean value-oriented categories have the strongest prospects
Latin America
• Diverse conditions at the market level mean strategies must be highly localised
• As in Asia Pacific, value-focused categories are most conducive to long-term success
• Demand is strong for local cuisines, even in the chained segment, and many powerful
local operators are already investing in local chains
North America
• Leading chains struggled in North America in 2014, most notably McDonald’s
• However, beyond the headlines, North America had a strong performance
• Fast casual growth was very strong, demonstrating a long runway for growth for the right
concepts
Middle Eastern and Africa

• The Middle Eastern Gulf states are a major expansion target for all multinational operators
• The region offers a unique blend of significant growth opportunities, higher income
consumers, a strong dining-out culture and highly experienced local franchise partners
INTRODUCTION
GLOBAL PERFORMANCE
THE WAY FORWARD
REGIONAL HIGHLIGHTS
CASE STUDIES
CASE STUDIES
Six brands illustrating global trends and challenges
• Chained full-service in China

Xiabu Xiabu • Modern bar-style hot pot marries traditional benefits with modern amenities
• Chained burger fast food in the US

Shake Shack • Clever positioning finds national growth amidst fierce competition in a
crowded category
• Online ordering and delivery hub in Egypt

Engezni • Illustrates demand for delivery even in less developed markets – along with
the logistical challenges that can get in the way
• Third-party online restaurant delivery service in the US

PostMates • Part of the new tier of companies growing in response to demand for even
more convenient and accessible delivery options
• Asian fast food from Japan, expanding to Latin America

Sukiya • Capitalising on demand for Asian foodservice experiences at value prices
• Specialist coffee shops in South Korea

Ediya Espresso • Finding opportunities for growth in more mature, higher income markets in
Asia Pacific
CASE STUDIES
Xiabu Xiabu finds chained full-service success in China
 Up-and-coming chain Xiabu Xiabu exemplifies

Local
the opportunity in China for locally owned but Cuisine
thoroughly modernised concepts that serve
demand for traditional cuisine with a twist. The
chain competes in Asian full-service restaurants,
Ingredient Modern
which offers one of the largest long-term growth
Quality Format
opportunities in the world in absolute value terms. Success
 Hot pot is very popular in China, and it is a Factors
fiercely competitive segment populated by both
chained and independent concepts that compete
strongly, based on price.
Custom- Social
 Amidst this, Xiabu Xiabu has managed to offer
isability Dining
something a little different, a ―bar-style‖ hot pot
that offers individually customisable bowls of
broth, rather than the typical communal bowl.  Xiabu Xiabu also emphasises the quality of its
This blend of the modern and traditional appeals ingredients, which is a powerful differentiator amidst a
to Chinese consumers’ love of the social dining landscape of discount competitors. With this
experience, while still catering to young people’s’ positioning, Xiabu Xiabu has experienced an explosive
desire for greater control of their own dining growth trajectory, growing at an average annual rate
experience. It offers the social benefits of a full- of 40% in value and 34% in outlets over 2009-2014. In
service concept with the customisability of fast early 2015, the company filed for an initial public
casual – combining to create a very appealing offering (IPO), undoubtedly with plans to fund even
package. broader expansion across China and beyond.
CASE STUDIES
Shake Shack sets its sights on global ―fresh casual‖ burger demand
 Shake Shack helps to answer the question of where all of the demand for traditional fast food could be
going. Some of it is dispersing to other categories and cuisines entirely, especially Latin American and
Asian fast food, but much of it is staying right within the burger fast food category – albeit with changing
allegiances. Shake Shack is yet another of the long line of better burger chains attempting to gain
international success, and it has taken some promising steps toward this goal.
 Shake Shack’s appeal to modern restaurant consumers does not stop at its service model. The chain has
placed itself at the intersection of some of the strongest consumer trends in developed market foodservice.
Its positioning is not just fast casual, but ―fresh casual‖ or ―fine casual‖, an emerging upper tier populated by
premium fast casual chains as Vapiano, Chipotle’s Pizzeria Locale and Lyfe Kitchen. In this tier, ingredients
are a major focus, food is prepared fresh in-house, and there are fewer limitations on pricing than would
typically be seen in limited-service formats. It also strikes a balance between wholesome and indulgent –
burgers and frozen custard ―concretes‖ are hardly low-calorie, but they are made fresh and do not include
hormones or artificial ingredients. This balance resonates well with consumers, allowing them to feel like
they are gaining an experience worthy of the cost of dining out, while still feeling good about their purchase.
 Shake Shack focuses strongly on ethical issues, checking all of the moral boxes that appeal to millennials,
including building outlets with sustainably sourced materials, donating to various causes, and fostering a
community-focused environment, both virtually and within the outlets. To achieve this, Shake Shack has an
active social media presence, chooses locations that can function as ―community centres‖ and even hosts
group events such as running clubs at some urban outlets.
 In 2015, Shake Shack filed a successful initial public offering on the New York Stock Exchange. The
company has pledged to open hundreds of outlets within the US (up from 41) and has made steady
progress towards an international presence, with 30 outlets in the Middle East, Russia, Turkey and the UK.
CASE STUDIES
Engezni and PostMates: Two markets, two solutions
 One of the more notable aspects of rising delivery demand has been its consistency across markets. While
the level of demand varies with income levels and access to the service, consumers across the spectrum of
maturity have demonstrated a growing need for extreme convenience and affordable luxury. However,
varying conditions have meant that catering to this demand has proved far easier in some markets than in
others.
 In Egypt, consumers want delivery – and operators  Operators have recognised that there is still
want to offer it – but the market is lagging in terms untapped delivery demand in the US as well, albeit
of access to technology. Not all restaurants have a for very different reasons. While delivery is readily
computer through which to accept online orders, available through many platforms, consumers are
not to mention the software and computer savvy to still not quite satisfied. Delivery can be slow or
set up such functionality. As a result, some of the expensive, and in some categories, like specialist
online ordering hubs already operating in Egypt coffee shops and fast food, the service is still rare.
bridge this gap by offering call centres that take in  As a result, companies like PostMates have
online orders from customers via their ordering emerged to offer even better, even more
hub, then call the restaurants manually to place the convenient and more innovative delivery. The
order on the customer’s behalf. While this is an company is not just a middle-man; rather, they
effective enough short-term solution, it is inefficient, handle the delivery themselves, picking up and
expensive and very difficult to scale up. Start-up dropping off orders. This shifts all of the costs of
hub Engezni seeks to address this problem by delivery onto the customer and effectively opens
offering an easy to use interface for both up the possibility of delivery service to any
customers and restaurant partners, and providing restaurant a customer chooses. For example, in
tablets with which restaurants can receive the 2015, PostMates will begin a delivery partnership
orders. with Starbucks.
CASE STUDIES
Sukiya combines high value and Asian fast food in Latin America
 Asian fast food is growing rapidly all over the world, most notably (and unsurprisingly) in Asia Pacific itself.
However, there is also very real demand for Asian dining experiences in Latin America, where Asian fast
food and Asian full-service are the fastest growing cuisine types within their respective categories.
 In particular, there is demand for Asian foodservice that offers options beyond what is already readily
available in major cities, such as sushi or Chinese fast food. This has led to new concepts offering
southeast Asian food, riffs on Asian street food, or non-sushi Japanese food concepts such as ramen or
gyudon. Sukiya is one such concept that has begun expanding to capitalise on this growth. Owned by
major Japanese operator Zensho Co, the concept began expanding to Latin America in 2010, with outlets
in Brazil, and in 2014, it began building a presence in Mexico as well.
 Sukiya offers many of the benefits typically associated with Asian fast food – the perception of healthier
cuisine and often, higher quality ingredients, and the promise of bold flavours and a unique dining
experience. However, one of the primary factors driving Sukiya’s growth in Latin America is its value
pricing. A meal with salad and a drink at Sukiya in Brazil costs around R420 (US$6.30), similar to the price
of a hamburger at a local Burger King outlet.
CASE STUDIES
Ediya Espresso demonstrates room to grow in South Korea
 The largest growth opportunities in Asia Pacific are

Cozy
in emerging markets, but there are opportunities in environment
higher income areas as well. South Korea’s
specialist coffee shop category has been growing
rapidly for at least five years, with annual growth Social Premium
rates consistently well into the double-digits. Over Occasions Success Coffee
2009-2014, specialist coffee shops in South Korea Factors
grew by US$1.9 billion in absolute value, even
higher than China. This growth has not been the
result of new coffee drinking demand, but rather Competitive Rapid
from clever positioning that encouraged changes in Pricing Expansion
consumer habits.
 Coffee consumption has long been high, but
consumers have only recently been switching from  While most of the top specialist coffee shop chains
low-quality instant coffee to more premium in Korea share a similar positioning – premium
espresso-based drinks in modern environments coffee and bakery goods in a cosy, premium
that are conducive to socialising. Starbucks led this setting – the key to Ediya’s recent success has
charge and is currently the largest player, with a been outlet expansion. Over 2009-2014, the chain
19% share; however, Ediya Espresso has been grew from 229 outlets to 1,265, with nearly 400 of
rapidly rising in the ranks. As of 2009, the chain those outlets having opened in 2014 alone.
accounted for 5% of the market but has since risen  More recently, South Korea has seen a boom in
to 13% in 2014. In that year, the chain overtook more diverse coffee shop and café concepts,
local operator Caffé Bene to take second place. including themed fruit and dessert cafés.
CASE STUDIES
Five growth opportunities for the next five years
Opportunity Evolution through 2019

China – for the With the amount of attention given to China’s slowing growth rates, it has been easy to
right player forget the very real opportunities that still exist in the massive market. China’s 2014 growth
rate of 9% still topped most other major foodservice markets, and it will see the largest
absolute value increase in the world over 2014-2019.
Value Latin America offers very strong opportunities, especially in value-oriented segments.
positioning in Many local consumers are eager to spend on chained foodservice, but are price-sensitive,
Latin America and seeking to maximise the value of each of their dining-out purchases.
Fast casual in Fast casual continues to show very strong growth in the US, which is expected to continue.
developed Fast casual appeals to some of the strongest consumer-led trends in global foodservice,
markets including a higher quality experience, fresh ingredients, simple preparation methods and
strong branding. Amidst major challenges facing fast food leaders, the success of fast
casual points the way forward for new concept innovation.
Local chains, Some of the largest long-term growth opportunities in all of foodservice are actually in local
local concepts cuisines, especially in Asia Pacific and Latin America. Consumers are eager to try chained
versions of local favourites, especially at value prices.
Online, mobile Online and mobile channels are becoming integral to the chained foodservice experience,
and delivery and this evolution will continue. Delivery is also more popular than ever, and consumers
have demonstrated that they still want more – more convenience, more variety and more
options for how to get their food exactly how they want it, when they want it and through
the most satisfying experience possible.
FOR FURTHER INSIGHT PLEASE CONTACT
Elizabeth Friend
Senior Foodservice Analyst
Elizabeth.Friend@euromonitor.com
@ElizabethF_EMI
RELATED ANALYSIS
New Product Development in Consumer Foodservice: Asian Flavours, Freshness,
and Value Above All Else – June, 2015
Master Franchisees: The New Power Players in Global Foodservice – March, 2015
Beverages in Consumer Foodservice: Tools For Branding, Profitability, and Appeal
– December, 2014
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A New Era of Growth and Competition Global Consumer Foodservice in 2015 and Beyond

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A NEW ERA OF GROWTH AND COMPETITION:

GLOBAL CONSUMER FOODSERVICE IN 2015 AND

Key insights in 2015 consumer foodservice

Key finding Insights

Global growth gains momentum through 2015

 The global consumer foodservice industry

 While traffic growth has been strong in

Asia Pacific leads in size, while Latin America dominates growth

The balance of growth shifts even further toward emerging markets

Category growth highlights quick and affordable – in most markets

 Category growth in 2014 told a complex story,

Growth by location shows favour for non-traditional outlets

Demand for delivery service is increasing exponentially

 Non-traditional service channels have been growing in popularity, as

Consumer preferences have become surprisingly universal

New High Quality Simplicity Affordable

Key takeaways for current strategy

Long-term growth will be steady, with no booming recovery

 2014 was a strong year for global foodservice

Growth opportunities are still a regional game

Transactions per capita offer a clear view of untapped demand

 A look at projected growth in transactions per capita suggests room

Growth continues in quick and casual, but full-service is on the rise

Growth opportunities by size highlight a challenge for multinationals

While opportunities by rate show strength in modern formats

Largest Regional Opportunities by CAGR  A look at the fastest growing

Retail and travel locations will continue to claim share

Online and Online Third-Party

Key takeaways for long-term growth

The independent segment outperforms chains in two key regions

 Chained consumer foodservice value is growing faster than

But growth by category highlights room to grow in fast food

Moderate growth for leading chains, with one exception

Top 10 Global Foodservice Companies by Value

The fastest growth chains are in Asia Pacific

Performance of top chains continues to stall

 2014 and 2015 have been extremely challenging for

More flexible brands have found a way through the storm

 While some of these results can be attributed to a

Key competitive takeaways

Major Asian markets will offer steady but moderate growth

Category-level opportunities highlight a region-wide shift

China in 2015: What is the way forward for chains?

Latin America demand surges ahead, offering diverse opportunities

 Latin America is set to continue

Yet again, growth favours value-focused concepts and formats

 Given how much expansion in Latin America has been concentrated

Local concepts, local cuisines are the next chained frontier

North America growth will be surprisingly steady

 Despite the well-publicised struggles of leading

Led by surging demand for fast-casual dining

 Sub-Saharan Africa is one of the most important

GCC markets are the ideal ―emerging developed‖ growth targets

 Taken together, the Gulf states represent the 16th

Key regional takeaways

Middle Eastern and Africa

Six brands illustrating global trends and challenges

• Chained full-service in China

• Chained burger fast food in the US

• Online ordering and delivery hub in Egypt

• Third-party online restaurant delivery service in the US

• Asian fast food from Japan, expanding to Latin America

• Specialist coffee shops in South Korea