Professional Documents
Culture Documents
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.
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CONSUMER FOODSERVICE IN 2015 AND BEYOND
INTRODUCTION
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CONSUMER FOODSERVICE IN 2015 AND BEYOND
INTRODUCTION
GLOBAL PERFORMANCE
THE WAY FORWARD
COMPETITIVE LANDSCAPE
REGIONAL HIGHLIGHTS
CASE STUDIES
GLOBAL PERFORMANCE
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CONSUMER FOODSERVICE IN 2015 AND BEYOND
GLOBAL PERFORMANCE
Value growth strengthens but still lags behind outlets and traffic
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GLOBAL PERFORMANCE
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.
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GLOBAL PERFORMANCE
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)
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CONSUMER FOODSERVICE IN 2015 AND BEYOND
GLOBAL PERFORMANCE
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CONSUMER FOODSERVICE IN 2015 AND BEYOND
GLOBAL PERFORMANCE
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.
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CONSUMER FOODSERVICE IN 2015 AND BEYOND
GLOBAL PERFORMANCE
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CONSUMER FOODSERVICE IN 2015 AND BEYOND
GLOBAL PERFORMANCE
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.
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GLOBAL PERFORMANCE
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.
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CONSUMER FOODSERVICE IN 2015 AND BEYOND
INTRODUCTION
GLOBAL PERFORMANCE
THE WAY FORWARD
COMPETITIVE LANDSCAPE
REGIONAL HIGHLIGHTS
CASE STUDIES
THE WAY FORWARD
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CONSUMER FOODSERVICE IN 2015 AND BEYOND
THE WAY FORWARD
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.
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CONSUMER FOODSERVICE IN 2015 AND BEYOND
THE WAY FORWARD
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THE WAY FORWARD
Global value will continue flowing toward fast food, with the category expected to see US$107 billion in new
value over 2014-2019. This is being driven by consumer preferences shifting toward the more flexible, more
informal and more value-driven dining, resulting in strong growth in low-priced, limited-service categories in
developed and emerging markets alike.
That said, full-service categories are also gaining some momentum, based on rising demand in key
markets in Asia Pacific and Latin America. Higher income consumers in China, Brazil and Mexico, among
others, are also seeking out chained full-service experiences that offer a cosier and more social alternative
to fast food. In particular, this trend is benefiting premium casual dining chains, such as the Cheesecake
Factory, Outback Steakhouse and PF Chang’s. It should be noted that more than half of the full-service
growth expected will come from China alone; however, the trend is apparent in many emerging markets.
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CONSUMER FOODSERVICE IN 2015 AND BEYOND
THE WAY FORWARD
Largest Regional Opportunities by Absolute Value Growth Local specialities will drive growth over
the forecast period, particularly in Asia
Growth 2014-2019 Pacific, where growth in Asian concepts
Region Category
(US$ 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.
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CONSUMER FOODSERVICE IN 2015 AND BEYOND
THE WAY FORWARD
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CONSUMER FOODSERVICE IN 2015 AND BEYOND
THE WAY FORWARD
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.
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CONSUMER FOODSERVICE IN 2015 AND BEYOND
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.
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CONSUMER FOODSERVICE IN 2015 AND BEYOND
THE WAY FORWARD
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.
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CONSUMER FOODSERVICE IN 2015 AND BEYOND
INTRODUCTION
GLOBAL PERFORMANCE
THE WAY FORWARD
COMPETITIVE ENVIRONMENT
REGIONAL OPPORTUNITIES
CASE STUDIES
COMPETITIVE ENVIRONMENT
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.
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COMPETITIVE ENVIRONMENT
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.
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COMPETITIVE ENVIRONMENT
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
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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.
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CONSUMER FOODSERVICE IN 2015 AND BEYOND
INTRODUCTION
GLOBAL PERFORMANCE
THE WAY FORWARD
COMPETITIVE LANDSCAPE
REGIONAL HIGHLIGHTS
CASE STUDIES
REGIONAL HIGHLIGHTS
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
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REGIONAL HIGHLIGHTS
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.
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REGIONAL HIGHLIGHTS
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.
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REGIONAL HIGHLIGHTS
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REGIONAL HIGHLIGHTS
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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.
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CONSUMER FOODSERVICE IN 2015 AND BEYOND
REGIONAL HIGHLIGHTS
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REGIONAL HIGHLIGHTS
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
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Middle East and Africa growth is all about the Middle East – for now
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REGIONAL HIGHLIGHTS
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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
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CONSUMER FOODSERVICE IN 2015 AND BEYOND
INTRODUCTION
GLOBAL PERFORMANCE
THE WAY FORWARD
COMPETITIVE LANDSCAPE
REGIONAL HIGHLIGHTS
CASE STUDIES
CASE STUDIES
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CASE STUDIES
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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.
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CASE STUDIES
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.
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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.
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CASE STUDIES
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CASE STUDIES
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CONSUMER FOODSERVICE IN 2015 AND BEYOND
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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