The turnover of food service companies increased by 5.5% to a record turnover of more than €20 billion in 2018. Within this main channel for out-of-home consumption, the delivery turnover increased by 13.4% to €1.7 billion. The delivery from Food Retail increased even more rapidly: by 29% to more than €1.4 billion. Within Food Retail, convenience shops have increased the most (by 8%). The remainder of the supermarkets and specialist shops are falling considerably behind on the increase in catering (6.5% on average). The FoodService Instituut Nederland (FSIN) will announce this during their congress at the Horecava today.
Consumers clearly spend more and more out-of-home. “The crowded outdoor cafes of 2018 were illustrative for the growing lifestyle in food and luxury foods, particularly among the younger generations. When consumers do eat at home, they often choose convenience and luxury,” according to FSIN manager Jan-Willem Grievink. Consumers have both their shopping (increase of 29%) and hot meals (increase of 13.4%) delivered at home more often. The traditional supermarket model of weekly shopping is getting under pressure.
Causes of growth
The fact that the average consumer is willing to spend more money on food and luxury foods is caused by seven different factors (not depending on price rises).
- We live in single households more often. Members of larger households live as if they’re a single household about three days a week;
- We go to the shop more often, to quickly buy a convenience product;
- We buy more luxury articles, for at home as well;
- Consumers use food for their lifestyle. They enjoy going to places where something can be experienced, and they eat out-of-home more often;
- Catering has more supply, inspiring consumers;
- We go outdoors more often and spend time in outdoor cafes’
- We consume snacks more often.
Too much catering
The number of locations featuring some type of catering has risen rapidly in recent years. An exponential growth can be seen particularly in large cities. In Utrecht and Amsterdam, the number of locations has grown by more than 30% since 2012, according to figures from Datlinq. That means there are too many tables and chairs for the number of inhabitants. Additionally, the number of outdoor cafes has expanded, and the outdoor cafe season has been extended with covers and heaters. This has resulted in turnover and profitability still being under pressure for the average catering entrepreneur. Catering concepts that continue to do well are multifunctional and have formula-like characteristics. “Formulas do well in the entire food sector. Concepts with a strict cost structure, a lot of self service and high productivity continue to grow. This is leading to a new segment on the market: discount dining - good quality for a low price,” according to Grievink.
Superant successor of supermarket
FSIN expects a breakthrough in the ‘superant’ phenomenon in the next few years. These are a cross between the functions of supermarkets and of restaurants. “In other Anglo-Saxon countries ‘grocerants’ (as they’re called there) are much more developed,” Grievink says. Late last year, the senior executive of Dutch supermarket chain Albert Heijn announced they wanted to add catering to the supermarket. Specialist shops continue to face difficulties. Only the proper specialist shops will grow and continue to have the right to exist.
Online still growing
The turnover of delivery concepts will continue to grow in the coming years. Not just because of delivery platforms as thuisbezorgd.nl, but food retailers are also going to sell more meals and deliver them both at home and at work. That’s why both food service and foot retail will continue to develop their delivery services. The role of online isn’t just increasing because of delivery, mobile ordering in shops and restaurants is also getting more popular following the successful ‘kiosk pillars’ of McDonald’s and the accompanying table service.
Prospects in food continue to be good
The increase of the low VAT rate to 9% should in theory result in a turnover increase of €1.4 billion just in 2019. Keeping in mind all other factors, we expect total turnover of food and luxury foods to grow by 4.5% this year. The out-of-home consumption is expected to grow by more than 6%. This isn’t just due to price rises, but mostly because we’re living out-of-home more and more. The number of outdoor cafes will continue to grow, and the number of events that have ‘food’ as a major component will also continue to rise.
Turnover in food service, FSIN, December 2018.