Consumer Foodservice 2017: Key Insights

Euromonitor International’s 2017 edition of Consumer Foodservice is now live and available to access on Passport, including updated figures for 2016, forecasts that now extend to 2021, and size and share data for 54 different countries. Below are some key findings from the new data.

1. Steady global value growth expected, emerging regions driving growth

In 2016, total foodservice value sales grew by 4.6% with similar expected growth for 2017. Expected value growth through the forecast period remains steady in current prices, having long recovered from the global financial crisis when consumers opted to cut unnecessary spending on services such as dining out. Even with the effects of inflation removed, transactions and value (at constant 2016 prices) move consistently through the forecast period. This suggests the industry is stabilizing, meaning consumers remain willing to spend on foodservice when it is affordable, and more consumers are doing so. With the exception of the US market, value growth is buoyed by emerging markets. Over the next five years, consumers are expected to spend nearly twice as much on foodservice in China as the US. The Chinese market will remain central to many corporate global growth strategies.

Global Consumer Foodservice by Value (Current vs Constant 2016 Prices) and Transactions: 2006-2021

Source: Euromonitor International, Passport Consumer Foodservice

2. Chicken fast food fastest growing global format in 2016

The strongest performing format in 2016 was chicken fast food, which grew 8.0% by value to reach USD65.6 billion in total global sales. As a menu offering, chicken enjoys universal appeal, and unlike more regional-specific items such pizza or burgers, chicken can be found on menus in all world markets and is highly adaptable to local consumer preferences. While chicken is a familiar offering, demand for modern chicken fast food concepts is driven by a set of increasingly influential players. KFC still dominates the global market, but has consistently lost share to competitors like Popeyes Famous Fried Chicken, a US-based chain purchased by Restaurant Brands International in 2016. The acquisition is evidence of the format’s potential, and RBI will hope to take the concept to new markets where the demand is high.

Global Chicken Fast Food Rankings by Value: 2016

Source: Euromonitor International, Passport Consumer Foodservice

3. Growth in specialist coffee shops remains strong

Specialist coffee shops was the second fastest growing format in 2016 by value. The specialist coffee shop format continued to perform well in all world regions, evidence of the format’s increasingly universal appeal, but specialist coffee shops have become particularly attractive to consumers in emerging markets. In Latin America and Asia Pacific where the format grew fastest, demand for specialist coffee shops is driven by a consumer base with greater access to disposable income who can afford the relative luxury of specialty beverages. The category’s third-place format offers additional reprieve for consumers in emerging regions that increasingly lead busier, more urban lifestyles.

4. Tech-driven chains pressure top players for share of global foodservice

Technology has become an integral part of global growth strategies and the fastest growing global chains have also become leaders in tech-driven foodservice. With an effective mobile strategy, popular rewards program, and modern payment options, Starbucks, for example, grew 11.6% by value in 2016 to close the gap with leading operators McDonald’s Corp, Yum! Brands Inc and Restaurant Brands International Inc. No company in the top 10 global rankings grew faster than Domino’s Pizza Inc, which grew 13.9% by value in 2016 and continued to grow its share of the global market. Domino’s Pizza continued to invest in technology that enhances the convenience in ordering, preparation, and delivery, all aspects of the modern foodservice experience that consumers in all world markets increasingly prefer.

5. Impressive 2016 for 7-Eleven; c-stores is a format to watch

Convenience stores fast food grew 6.1% by value in 2016. Posting USD18.8 billion in 2016 foodservice sales, Japan-based Seven & I Holdings Co Ltd (7-Eleven) overtook Doctor’s Associates Inc (Subway) to become the world’s fifth largest foodservice company by value in 2016. The foodservice offerings at convenience stores continue to improve as operators increasingly look to foodservice to attract customers. With a blend of on-trade and off-trade offerings at value-oriented prices that appeal on variety and convenience, c-stores are becoming the foodservice format that modern consumers need. Modern c-stores increasingly offer more healthful menu offerings and in-store dining options.

6. New concepts in consumer foodservice

During this edition of the research, analysts in all 54 countries were asked to submit the most interesting and most relevant new restaurant concepts in their market. These new concepts will form the basis of two new global briefings that seek to uncover the most important foodservice trends emerging across global markets. The typical global consumer leads an increasingly modern, urban, more digitally connected lifestyle, and restaurants are learning how to provide a modern experience that consumers need, as well as one that suits consumers’ evolving dining preferences. Ranging from vegan comfort food street stalls in Finland to food parks in the Philippines, this year’s new concepts highlight how novelty and innovation in all forms are critical to the greater foodservice experience that consumers seek.