A Look at the Leading Markets of EU, US, and Asia
The global market outlook has been cautiously optimistic for the last couple of years, and this has reflected in the restaurant industry around the world. The larger markets of the United States, Europe, and Asia have all shown steady positive growth from 2015 to 2017 and forecasts suggest that this trend will continue for 2018 as well.
America is lagging behind the rest of the world though as restaurant sales are at 3.4%, a lot lower than overall global sales which are growing at an annual rate of 5.6% (not adjusted for inflation).
Technomic presented their findings at the end of 2017, estimating the current size of the international foodservice market (including US sales) to be 3 trillion dollars. The US remains the leading contributor to the restaurant market in terms of sales at 872 billion dollars, ahead of China’s $624 billion annual intake. But this may not be the case for long with Chinese restaurant revenues growing at a rate of 10.9% per year, the highest in the world by a long way.
At the end of 2017 revenue generated by the restaurant industry in the US was estimated at 799 billion dollars. The restaurant industry employs more than 14.7 million people (10% of the overall US workforce) and represents almost 4% of the US GDP. Measuring industry growth by sales, 2016 to 2017 showed growth of approximately 4.3%. Americans are now spending nearly 48 percent of their food budgets eating out rather than at home.
Though the growth may not seem strong, according to the NRA, over the past decade the industry has shown a 3.7% compound annual growth rate. A figure that is better than most industries in the US.
A study released by Deloitte showed that there are now more than 620 000 eating and drinking establishments across America (with restaurants growing at a rate of twice the population), other estimates put the figure at over 1 million in 2017.
In 2017, the market value for consumer foodservice reached 508 billion dollars. Hospitality is one of the leading industries in Europe and can be a key driver for job creation, figures from 2000 to 2010 show that the number of jobs in the EU grew by just 7.1%, compared with the 29% increase in jobs in the hospitality sector.
Leading countries such as the United Kingdom, France, Netherlands, and Germany have shown consistent growth post-2014. In 2017 the restaurant industry in France was worth 50 billion euros, Germany 40 billion euros, and 19 billion euros in the Netherlands. In the UK the market value for consumer foodservices reached 73.6 billion euros.
In the UK the market value for consumer foodservices reached 73.6 billion euros in 2017. In 2016 there were approximately 83,635 businesses operating in the restaurant and mobile foodservice industry in the UK, a number that has been increasing steadily since 2009.
In the Netherlands, the restaurant industry is 19 billion euros annually, and this is expected to grow to over 20 billion euros in 2018. The number of restaurants in the Netherlands continues to grow year on year. Between 2015 and 2017, 750 restaurants opened in the Netherlands (to a total of 14900) which is consistent with the industry volume growth which is around 5 to 6% annually.
The robust growth in recent years has made the hotels and restaurants sector more important for the Dutch economy. Its total value share in the GDP rose to 1.8 percent in 2015 (up from 1.7 percent in 2007.) There are 374 000 people employed in the restaurant sector, approximately 4.3% of the employed population which is just below the EU average of 4.8 percent.
The Asia-Pacific region, which includes Asia and Oceania had foodservice sales in 2014 that totaled 1.1 trillion dollars with a growth rate of close to 10% annually, making this market a good opportunity for foodservice operators.
According to a study by Dianping and Meituan, China spent 507 billion dollars on dining out in 2016. Add this to the latest statistics from China’s restaurant industry which showed a 9.7% increase from 2013 to 2014 to reach 445.5 billion dollars according to China Cuisine Association (CCA); and the growth prospects for the country look very exciting.
Future Trends and Growth Prospects for the Global Restaurant Industry
Global Foodservice Trends
Foodservice trends differ from country to country, but the two that are consistent across all countries are conscious dining, and the need to include technology as an important part of doing business.
Conscious dining is a growing trend in the Europe, America, and Asia and includes a focus on local and seasonal food that is sustainably and organically farmed. There is also a move towards vegetarian and vegan dining as the numbers of vegans in developed countries is growing quickly. Globally, 69% of consumers cited the availability of healthy options as being a very important factor in choosing where to buy a meal. Over 50% in each market surveyed cited the importance of healthy options as a deciding factor on where to buy a meal. Healthy was defined as food that contains ‘natural’ ingredients by 44% of respondents.
Food ordering services and apps, the importance of social media (particularly Instagram) and online restaurant review sites have taken the already intensely competitive restaurant space to the next level. Globally, with the exception of France, dine-in visits are in the minority being replaced by delivery and takeout options, and this trend is expected to continue.
Future Growth for the Restaurant Industry
Overall for Europe, the foodservice industry is expected to show steady growth at a compound annual growth rate of 2.1% between 2018 and 20121, with a forecasted 525 billion dollars for 2018. Some countries such as the Netherlands are forecasting higher growth of 3.5 percent. In the UK, consumer foodservices are expected to increase in 2018 to 77 billion euros (from 73.6 billion euros the previous year) continuing the trend of steady growth.
The Asia-Pacific region sales (Asia and Oceania) are forecast to rise by 38.7% to 1.5 trillion dollars between 2015 and 2019. Looking further ahead, the restaurant industry in China is expected to grow at a CAGR of 7.3% between 2018 and 2023. China leads the Asia-Pacific region in foodservice sales, and although expansion has slowed down somewhat, it is expected to remain the largest Asian market for the next five years.
With the restaurant industry showing steady growth worldwide, the need to adapt to emerging trends is clear. Diners are savvy, and with the proliferation of review sites, and online ordering options coupled with a move towards conscious dining, restaurant owners will need to take into account current consumer preferences to ensure that they stay ahead in an increasingly competitive landscape. Asia, and China, in particular, offers an exciting opportunity for expansion and has seen the entrance of a number of international chains hoping to capitalise on the projected growth for the region.
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