Market Vision Commercial Foodservice Market in Italy
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Market Vision Commercial foodservice market in Italy Strictly private and confidential November 2018 Contents Executive Summary Reference market Competitive landscape Executive Summary 3 Contents Reference market 6 1 Italian consumers – «out-of-home» food consumption 7 2 The commercial food service market in Italy 12 2.1 Commercial food service on motorways 21 2.2 Commercial food service in airports 24 2.3 Commercial food service on train stations 27 2.4 Commercial food service in city centres 30 2.5 Commercial food service in hospitals 32 Competitive landscape 35 Market Vision November 2018 PwC 2 Contents Executive Summary Reference market Competitive landscape Executive Summary Market Vision November 2018 PwC 3 Contents Executive Summary Reference market Competitive landscape Executive Summary – Market Assessment In Italy, “Out-of-home” Food consumption spending by Italian households, excluding consumption has progressively expenditure on alcoholic beverages, was estimated around gained market share as a €227.1 billion in 2016. Expenditure of Italian households on OK consequence of significant food services (so-called “Out-of-home” food consumption) cultural and structural amounted to approx. €80 billion in 2016, 35.3% of the total changes that can support the consumption sector in the long run It is estimated that the commercial food service market in Italy will The commercial food service market in Italy is estimated at grow by +1.5% CAGR 18-22 Market approx. €73 billion, the bar and cafeteria sector contributes to driven both by the growth in the assessment around €17 billion, fast food to about €3.9 billion and Travel to OK number of “Out-of-home” €3.6 billion transactions as well as an increase in average receipt Some of the main trends in the Italian market are: i) continued Growth potential for the growth of franchising, ii) higher consumption of healthy / chains that will be able to quality foods, iii) market entry and penetration of fashion OK propose innovative formats brands, and iv) increasingly important role of digital systems and meet new consumption (e.g. payments) habits Market Vision November 2018 PwC 4 Contents Executive Summary Reference market Competitive landscape Executive Summary – Competitive landscape • Over 329,000 food service operators were active in Italy in Italy is an unsaturated 2016 market, the smaller • In this highly fragmented market, the share of "chains" independent restaurants are appears to be less significant than the European average: The OK joining restaurant chains, "chains" penetration rate in Italy in 2017 was 6.8%, growth potential for below the European average of 22%, highlighting chained food service opportunities for further growth in this segment operators • The competitive landscape of "branded" chains is currently characterized by the presence of multiple players with In the coming years the different business models consolidated players could be Competitive • Concession food service presents a fragmented competitive ~ threatened by new chains landscape landscape characterized by the presence of both small and with innovative formats that large players active mainly in the mass food services show high growth rates • Strong growth of small chain players in recent years, consolidated players show a moderate growth • Mass food service operators generally have lower Mass food service operators are EBITDA margins % and higher incidence of personnel facing some entry barriers when costs compared to commercial food service operators moving in adjacent concessions for ~ • Mass food service operators are increasing their presence commercial food service, due to the in high-margin adjacent concessions for commercial necessity to compete with the food service businesses (e.g. hospitals commercial food innovative PoS formats service, and travel commercial food service) proposed by incumbents Market Vision November 2018 PwC 5 Contents Executive Summary Reference market Competitive landscape Reference market Market Vision November 2018 PwC 6 1 Italian consumers – «out-of-home» food consumption Contents Executive Summary Reference market Competitive landscape Italian consumers – «out-of-home» food consumption Market Vision November 2018 PwC 7 1 Italian consumers – «out-of-home» food consumption Contents Executive Summary Reference market Competitive landscape In 2016, total “out-of-home" food expenditure incurred by Italian families was worth approx. €80B Food consumption of Italian families • Expenditure on food consumption of Italian households totalled €227.1B Food in 2016, excluding expenditure on 35,3% alcoholic beverages consumption of Italian • The expenditure of Italian households for the purchase of families in catering services (so-called “Out-of- 2016 home“ food consumption) amounted to approx. €80B in 2016, 35.3% of 64,7% the total consumption for the year €227.1B • The expenditure for food consumption at home sustained by Italian families was approx. €147B, 64.7% of total expenditure incurred in 2016 Food consumption - at home Food consumption - out of home Source: FIPE Market Vision November 2018 PwC 8 1 Italian consumers – «out-of-home» food consumption Contents Executive Summary Reference market Competitive landscape Starting from 2013, the food consumption of Italian families showed a recovery. Increase in "Out-of-home" consumption Food expenditure of Italian families (2007-2016, Base 2007=100) 110 105 100 95 90 85 80 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Food consumption - at home Food consumption - out of home Source: ISTAT, FIPE Market Vision November 2018 PwC 9 1 Italian consumers – «out-of-home» food consumption Contents Executive Summary Reference market Competitive landscape In Italy, “Out-of-home” consumption has progressively gained market share, thanks to a significant cultural and structural change that can support the sector in the long run Food consumption at home and «out-of-home» (2001-2016, Share %, constant prices) Main drivers of «out-of- home» consumption 100% Higher Quick lunch attention to break food 31,6% 35,4% 80% Increase in the # of Change in the families (of average small lifestyle dimension) 60% Increase in the # of More working families women composed by outside home one person 40% Busier 68,4% lifestyle and 64,2% Urbanization less time available 20% Request for higher quality and value food 0% 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 Food consumption - out of home Food consumption - at home Source: ISTAT, FIPE Market Vision November 2018 PwC 10 1 Italian consumers – «out-of-home» food consumption Contents Executive Summary Reference market Competitive landscape In 2017, approx. 60% of Italians consumed daily meals out (breakfast, lunch and dinner) with alternating regularity Eating Habits Breakdown in Italy (2017, %) 2,5% • Up to 63.8% Italians consume 10,7% 10,8% 4,2% breakfast out, although with 16,4% different time profile, whereas up 14,9% 14,2% to 36.2% regularly have breakfast at home. 9,9% 16,5% 15,6% • During the week, up to 67.4% of 7,6% Italians have lunch out. 6,6% 27,9% • 60.9% of Italians dine out, 15,0% 19,0% although with different time profile, whereas up to 39.1% of people consume their dinner 39,1% regularly at home. 36,2% 32,9% Breakfast Lunch Dinner (During the week) Never Once or twice a month Once every 15 days At least 1 or 2 a week At least 3 or 4 a week Everyday Source: FIPE Market Vision November 2018 PwC 11 2 The commercial food service market in Italy Contents Executive Summary Reference market Competitive landscape The commercial food service market in Italy Market Vision November 2018 PwC 12 2 The commercial food service market in Italy Contents Executive Summary Reference market Competitive landscape Trade of commercial catering in Italy accounts for €73B, the cafe and bar sector contributes to approximately €17B, fast food for about €3.9B and travel for about €3.6B Dimension and segmentation of the commercial food service industry in Italy (€B) 73.2 73.2 Street Stalls/Kiosks ; €0,5B Leisure; €3,2B Fast Food ; €3,9B Retail; €3,5B Travel ; €3,6B 100% Home Delivery/Takeaway; €10,1B Lodging; €7,7B Cafés/Bars & Self-Service Cafeterias ; €17,0B Standalone; €55,1B Full-Service Restaurants ; €41,6B Location Category N° Transactions 10.9 10.9 (estimates, # billions)(*) Notes (*): PwC estimates Source: PwC analysis on Euromonitor data Market Vision November 2018 PwC 13 2 The commercial food service market in Italy Contents Executive Summary Reference market Competitive landscape The commercial food service market in Italy is expected to grow with a CAGR of +1.5% between 2018 and 2022, driven by the increase of both the number of “Out-of-home” transactions and the value of the average receipt Commercial food service in Italy – growth estimates (2016 - 2022, €B, %) ESTIMATES 80,5 76,9 78,1 79,3 73,2 74,4 75,7 10,9 11,0 11,1 11,2 11,3 11,4 11,5 E2016 F2017 F2018 F2019 F2020 F2021 F2022 Value of commercial food service market in Italy N° transactions CAGR 2018-2022 YoY % Value €B 1.7% 1.7% 1.6% 1.6% 1.5% 1.5% +1.5% YoY % n° transactions 0.9% 0.9% 0.8% 0.8% 0.8% 0.8% +0.8% Source: PwC estimates Market Vision November 2018 PwC 14 2 The commercial food service market in Italy Contents Executive Summary Reference market Competitive landscape In 2016 over 329,000 food service companies were active in Italy. It is a Highly fragmented market Food service operators in Italy (2016,#) • Among the Italian regions, Lombardy holds the largest number of companies in the food service sector (50,675), followed