Foodservice in Western Europe: Targeting Growth Areas in a Region in Decline

January 2014

Consumer foodservice value in Western Europe continues to decline, with no recovery in sight; nevertheless, growth opportunities remain. Chained segments are experiencing growth in all categories, and key limited-service formats, such as fast casual and specialist coffee shops, show the potential for long-term opportunities. Strategy in Western Europe is now entirely about targeting these growth areas and, within them, finding ways to appeal to the particular preferences of European consumers.

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Growth is present, but hidden

Despite continually contracting regional figures, with no sign of significant improvement over the long term, growth can still be found within this difficult environment. The key to this strategy is looking beyond the masking effects of markets like Greece and Portugal that have been hit the hardest, to uncover areas of smaller, yet lucrative, growth underneath.

Individual markets, individual categories

This means strategy in Western Europe is now very much about precise targeting rather than expansion on a grand scale. Those concepts seeing the fastest growth are present in key markets and key categories that are still thriving while others flounder. Key growth markets include Sweden, Turkey and France, with limited-service categories like fast food, specialist coffee shops and 100% home delivery takeaway coming out ahead.

All growth is going to chains

Unequivocally, all growth in the markets over the forecast period will belong to chained segments. Indeed, the distinction between chained and independent operators continues to be the most important indicator of long-term success in the region. Over 2012-2017, chained segments in every single major foodservice category will see positive growth in Western Europe, while every corresponding independent market will contract.

Above all, understand the consumer

This is not to say that growth among chains will come easily. Rather, the spoils will go to those operators best able to cater to the unique and rapidly evolving preferences of modern Western Europeans. These consumers are older, comparatively wealthy yet price-conscious, highly concerned with ingredient quality and responsible sourcing, and willing to spend on foodservice if the experience delivers high value for their money.

Positioning is key

In order to appeal to these preferences, operators are offering brands that combine a full-service experience with limited-service prices, and bringing ingredient quality, freshness and environmental responsibility into the centre of their brand positioning.

What this report includes

  • Top-level strategic analysis of how major consumer trends will influence global markets
  • Consumer insight
  • Impact across all relevant consumer markets
  • Unique graphics and case studies
  • Key market snapshots
  • Accompanying presentation to synthesise main findings

Why buy this report

  • Identify factors driving change now and in the future
  • Understand motivation
  • Forward-looking outlook
  • Briefings and presentation should provoke lively discussion at senior level
  • Take a step back from micro trends
  • Get up to date estimates and comment

Introduction

Scope
Key insights in Western Europe foodservice

The Western European Consumer

Western Europe still world’s second largest foodservice market
A region built on leisurely, traditional meals…
…. and wealthy consumers willing to spend on foodservice
Europeans not averse to chains
Eating frequency varies widely
Plenty of opportunity through digital channels
Ingredient quality is a major concern – and always has been
Old, and getting older
The “median” Western European

Regional Overview

Top-line contraction is a continued concern
Recovery has yet to occur – and will it?
Fast food leads, but still struggles
Biggest winners and losers
Individual markets paint a clearer picture
Lack of recovery has affected major markets differently
Consumers cut down on frequency in Spain and Italy
Key takeaways: Regional overview

Competitive Landscape

Chained share remains small, but is growing fast
Very strong chained presence in fast food
In a region of independents, the UK is a chained hotspot
Global fast food brands dominate rankings
Most leaders thrive while a select few decline
Fastest growing brands skewed towards local limited-service
Keys to growth in Western Europe
Declines aside, where is the growth?
Growth in Sweden, as well as France, Germany and the UK
Key takeaways

Case Study: Fast Casual Finds a Foothold

Case Study: Fast Casual Finds a Foothold
Western Europe has the size but not yet the growth in fast casual
Current leaders are widely varied and ingredient-focused
Niche movements shed light on new opportunities
Success is for those who target the extreme high end
More extreme positioning, more extreme appeal

Case study: a level playing field in specialist coffee shops

Case Study: A Level Playing Field in Specialist Coffee Shops

Case Study: A Level Playing Field in Specialist Coffee Shops

Healthy opportunities and high competition
Many brands in play, but ultimately it is a one-on-one fight
A new strategy for the global leader
Any turnaround will be slow; for now, growth belongs to Costa
Two case studies, one unifying trend

Regional Prospects

No end in sight for contraction, but lesser declines ahead
Despite regional woes, chained growth still significant
All growth will go to chains
Six markets to watch
Six categories to watch
Key takeaways: Factors driving long-term growth
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