sample report consumer foodservice fast food

W W W . E U R O M O N I T O R . C O M SAMPLE REPORT FOR ILLUSTRATION ONLY

E u r o m o n i t o r I n t e r n a t i o n a l

LIST OF CONTENTS AND TABLES

Fast Food in Australia - Category analysis ..................................................................................... 1 Headlines ........................................................................................................................................ 1 Trends ............................................................................................................................................. 1 Competitive Landscape .................................................................................................................. 2 Prospects ........................................................................................................................................ 4 Category Data ................................................................................................................................. 5

Table 1 Fast Food by Category: Units/Outlets 2005-2010 ......................................... 5 Table 2 Fast Food by Category: Number of Transactions 2005-2010 ....................... 7 Table 3 Fast Food by Category: Foodservice Value 2005-2010 ................................ 8 Table 4 Fast Food by Category: % Units/Outlets Growth 2005-2010 ........................ 9 Table 5 Fast Food by Category: % Transaction Growth 2005-2010 ........................ 10 Table 6 Fast Food by Category: % Foodservice Value Growth 2005-2010............. 10 Table 7 Sales of Bakery Products Fast Food by Type 2007-2010 ........................... 11 Table 8 Global Brand Owner Shares of Chained Fast Food 2006-2010 ................. 11 Table 9 Brand Shares of Chained Fast Food 2007-2010 ......................................... 12 Table 10 Forecast Sales in Fast Food by Category: Units/Outlets 2010-2015 .......... 13 Table 11 Forecast Sales in Fast Food by Category: Number of Transactions

2010-2015 .................................................................................................... 14 Table 12 Forecast Sales in Fast Food by Category: Foodservice Value 2010-

2015 ............................................................................................................. 15 Table 13 Forecast Sales in Fast Food by Category: % Units/Outlets Growth

2010-2015 .................................................................................................... 17 Table 14 Forecast Sales in Fast Food by Category: % Transaction Growth

2010-2015 .................................................................................................... 17 Table 15 Forecast Sales in Fast Food by Category: % Foodservice Value

Growth 2010-2015 ....................................................................................... 18 Fast Food in Australia - Company Profiles ................................................................................... 20 Franchised Food Group in Consumer Foodservice (australia) .................................................... 20

Strategic Direction ..................................................................................................................... 20 Key Facts................................................................................................................................... 20

Summary 1 Franchised Food Group: Key Facts ............................................................. 20 Summary 2 Franchised Food Group: Operational Indicators ......................................... 20

Company Background ............................................................................................................... 20 Suppliers .................................................................................................................................... 21 Competitive Positioning ............................................................................................................. 22

Summary 3 Franchised Food Group: Competitive Position 2010 .................................. 22 Quick Service Restaurant Holdings in Consumer Foodservice (australia) .................................. 22


Summary 4 Quick Service Restaurant Holdings: Key Facts ........................................... 23 Summary 5 Quick Service Restaurant Holdings: Operational Indicators ....................... 23


Summary 6 Quick Service Restaurant Holdings: Competitive Position 2010 ................ 25



Retail Food Group Ltd in Consumer Foodservice (australia) ....................................................... 26 Strategic Direction ..................................................................................................................... 26 Key Facts................................................................................................................................... 26

Summary 7 Retail Food Group: Key Facts ..................................................................... 26 Summary 8 Retail Food Group: Operational Indicators .................................................. 26


Summary 9 Retail Food Group: Competitive Position 2010 ........................................... 28 the Retail Zoo Pty Ltd in Consumer Foodservice (australia) ....................................................... 29


Summary 10 The Retail Zoo Pty Ltd: Key Facts ............................................................... 29 Summary 11 The Retail Zoo Pty Ltd: Operational Indicators ........................................... 29


Summary 12 The Retail Zoo Pty Ltd: Competitive Position 2010 ..................................... 31 Consumer Foodservice in Australia - Industry Overview ............................................................. 32 Executive Summary ...................................................................................................................... 32

Consumers Upgrade During Economic Slowdown .................................................................. 32 Taking It Away ........................................................................................................................... 32 Mcdonalds Still the Big Mac ..................................................................................................... 32 Chains Continue Takeover ....................................................................................................... 32 Bright Future for Consumer Foodservice .................................................................................. 32

Key Trends and Developments .................................................................................................... 33 Consumer Foodservice Sales Higher Than Ever ..................................................................... 33 Domestic Brands See Greater Success ................................................................................... 36 All Just A Little Bit Fancy........................................................................................................... 38 Ifood ........................................................................................................................................... 40 A Time and A Place for Everything ........................................................................................... 42 Fast Food Diet ........................................................................................................................... 44

Market Data ................................................................................................................................... 46 Table 16 Units, Transactions and Value Sales in Consumer Foodservice: 2005-

2010 ............................................................................................................. 46 Table 17 Units, Transactions and Value Sales in Consumer Foodservice: %

Growth 2005-2010 ....................................................................................... 46 Table 18 Consumer Foodservice by Independent Vs Chained Outlets:

Units/Outlets 2010 ....................................................................................... 47 Table 19 Consumer Foodservice by Eat in Vs Takeaway 2010 ................................ 47 Table 20 Consumer Foodservice by Food Vs Drinks Split 2010 ................................ 47 Table 21 Sales in Consumer Foodservice by Location 2005-2010 ............................ 47 Table 22 Leading Chained Consumer Foodservice Brands by Number of Units

2010 ............................................................................................................. 48 Table 23 Chained Consumer Foodservice Company Shares 2006-2010 ................. 49 Table 24 Chained Consumer Foodservice Brand Shares 2007-2010 ....................... 50



Table 25 Forecast Units, Transactions and Value Sales in Consumer Foodservice: 2010-2015 .............................................................................. 52

Table 26 Forecast Units, Transactions and Value Sales in Consumer Foodservice: % Growth 2010-2015 ............................................................. 52

Appendix ....................................................................................................................................... 52 National Consumer Expenditure ............................................................................................... 52

Table 27 Consumer Expenditure on Consumer Foodservice 2007-2009 .................. 53 Table 28 Consumer Expenditure on Consumer Foodservice 2004-2010 .................. 53

Trade Association Statistics ...................................................................................................... 53 Operating Environment ................................................................................................................. 53

Franchising ................................................................................................................................ 53 Definitions...................................................................................................................................... 56

Summary 13 Research Sources ........................................................................................ 56



FAST FOOD IN AUSTRALIA - CATEGORY ANALYSIS

HEADLINES

Fast food grows 7% in current value terms in 2010 to reach A$13.5 billion Number of outlets rises 3% to 17,294 With trend towards gourmet fast food, spend per transaction rises from A$9.26 in 2009 to

A$9.60 in 2010 Latin American fast food grows fastest with 47% current value terms increase in 2010 McDonalds brand dominates with 21% value share Fast food predicted to see steady constant value CAGR of 4% over forecast period

TRENDS

Despite the economic slowdown fast food had a particularly successful year in 2010, growing 7% in current value terms, down from the 9% increase of 2009. There were several reasons for this continued strong growth, including consumers reducing expenditure and thus trading down during the economic slowdown. At the same time, the boundaries between fast food and full-service restaurants are increasingly blurred. This is due to the growth of chains that follow the fast casual concept, and a gourmet trend, which is particularly evident in pizza fast food and burger fast food. In pizza fast food, this was driven by new players such as Crust Gourmet Pizza and Pizza Capers, while burger fast food has a new gourmet player: Grilld. Meanwhile, established players, including leader McDonalds, have added value through such offerings as the Grand Angus and Mighty Angus, and its gourmet M Selections range. Each of these trends also contributed to the strong growth of 2009, but their influence was still felt in 2010.

Fast casual has begun to emerge in Australia, with Nandos the primary champion of this trend. Outlets were renovated and new outlets designed that were larger than typical fast food establishments, and with a more authentic atmosphere. Emerging player Salsas Fresh Mex Grill is also developing its fast casual offerings, opening more stores in this format, while Grilld introduced this trend into burger fast food. Although, with the except of Nandos, each of these brands are rapidly expanding emerging players, so is fast casual growing especially fast with 61% current value terms growth in 2010.

Outlet growth lagged behind value growth in 2010, growing only 3% as difficulties in obtaining finance during the economic slowdown discouraged Australians from embracing franchising, which is the primary means of expansion for fast food operators. This has represented a boon for existing franchisees, however, as not only does it mean that sales per outlet increased from A$739,000 in 2009 to A$763,000 in 2010, but much of the expansion came from existing franchisees buying an additional franchise. Thus, fast food was a particularly profitable industry in 2010.

Latin American fast food has not previously represented a major part of Australias fast food culture, largely due to a lack of Latin American immigrants. However, two chains Salsas Fresh Mex Grill and Zambrero Fresh Mex Grill as well as several smaller players, emerged in 2010. Some of these had considerable financial support from major players in the



Australian consumer foodservice industry. Salsas Fresh Mex Grill, for example, is backed by Janine Allis, who established the Boost Juice chain, and Guzman y Gomez, the founder of McDonald Australasia. Consumers who also had their interest spiked by other aspects of Latin American cuisine, such as churros and paella, have embraced Latin American fast food. This segment saw 47% value growth in 2010, albeit from a low base, up from A$52 million in 2009 to A$76 million in 2010 (compared with almost A$4 billion for burger fast food).

Even during tough economic times, consumers want to indulge themselves, and have consequently embraced affordable indulgences. They are willing to spend an extra couple of dollars on something special, with the result being a rise in spend per transaction from A$9.26 in 2009 to A$9.60 in 2010. It is this embracing of affordable indulgences that has underpinned the gourmet fast food trend, with consumers willing to spend A$10.00 on a burger from Grilld, or A$25.00 on a gourmet pizza from Crust Gourmet Pizza. The pizza category has benefited most from this trend, growing 27% in current value terms in 2010.

Bakery products fast food has shifted towards sandwich specialists, which accounted for a 55% value share in 2010. This was not only due to the strength of category leader Subway, but consumers attempting to shift to healthy eating options such as the sandwiches sold by Healthy Habits and Fancy Fillings. Meanwhile Krispy Kreme saw over a third of its outlets close in 2010 after it failed to make a significant dent in Donut Kings share.

Despite long-term discussion of the growing popularity of healthfood, this finally appears to have gone mainstream, with several franchised chains, such as SumoSalad, reaching critical mass required to both reach high brand awareness and take advantage of economies of scale. Sumo Salad is now the largest player in other fast food, as well as leading in healthy fast food a position it reinforced in 2010 by replacing its white bread rolls with healthier multigrain, soy and linseed rolls.

Chains of Asian Fast Food have not performed well in Australia, despite the popularity of Asian food in Australia in general. This is largely due to the availability of inexpensive Asian food in full-service restaurants, thus negating the need for an even cheaper fast food option. As a result, Asian fast food is largely confined to food courts in shopping centres. However, with a number of small but rapidly growing chains such as Wok Me and Red Rock Noodle Bar, as well as more established players such as Noodle Box and wokinabox, this may soon change. Asian fast food experienced 6% current value terms growth in 2010.

Chicken fast food have represented one of the strongest performing categories in recent years, with 8% current value growth in 2010. This reflects trends not only in consumer foodservice but also in consumption trends in general. This is partially due to its low price, but also the variety of ways chicken can be prepared crumbed, fried or grilled for example. The increasing attraction of Australian consumers to chicken is therefore likely to continue over the forecast period.

Breakfast is growing particularly rapidly for fast food in Australia. This is underpinned by the success of McCaf, which other fast food operators are attempting to replicate to some extent. Hungry Jacks has rolled out opening for breakfast across Australia a process that was completed by the middle of 2010, while also expanding the number of outlets open on a 24/7 basis. Subway also produced a breakfast offering, and has in general expanded its business hours.

COMPETITIVE LANDSCAPE

McDonalds remains by far the largest player in fast food in Australia, holding a value share of over 30% in chained fast food, and an incredible 78% in chained burger fast food. This has



long been one of the strongest global markets for McDonalds. One of the reasons for this is that the improvements in the McDonalds brand in terms of health, for example were initiated by McDonalds in Australia, which made it more acceptable to consumers, many of whom previously considered McDonalds offerings as simply junk food. Many consumers still do hold this perception, but increasingly McDonalds is reaping the benefits of its improved brand image. These initiatives include the integration of McCaf initially invented in Australia in 1993, and since adopted by McDonalds around the world into McDonalds outlets, and its offering of free wi-fi. These efforts represented an important part of the companys attempt to move away from its fast food image towards creating a more stylish environment in which consumers want to spend more time. As a result, not only has McCaf contributed to rising spend per transaction within the combination of McDonalds/McCaf, but it has also served to take share from other competitors. However, spend per transaction within McDonalds itself has edged down as consumers choose a coffee instead of a Coke, for example.

Content removed from sample



PROSPECTS

Much of the success of fast food in recent years has been due to the popularity of the Angus burger, the emergence of both gourmet burgers and gourmet pizzas, as well as the fast casual concept. The impact of these is likely to fade over the forecast period. Even though Grilld, with a less than 1% value share in burger fast food, could potentially gain a couple of extra percentage points as it expands across Australia, it remains only a minor player, and would have only a minor impact on the overall fast food category. Furthermore, fast casual is unlikely to have a major impact on Australia, as the market already has a wide variety of




inexpensive eating options, typically referred to as cheap eats. Although many fast food operators, ranging from Nandos to McDonalds with its incorporation of McCaf, are renovating their outlets to make them more attractive and encourage consumers to spend more, such additional expenditure is likely to be marginal. As a result, fast food is expected to experience a solid constant value CAGR of 4% over the forecast period, while the premiumisation trend will increase spend per transaction from A$9.60 in 2010 up to A$10.06 in 2011.

CATEGORY DATA

Table 1 Fast Food by Category: Units/Outlets 2005-2010

outlets 2005 2006 2007 2008 2009 2010




Chained Fast Food Independent Fast Food Asian Fast Food - Chained Asian Fast Food - Independent Asian Fast Food Bakery Products Fast Food - Chained Bakery Products Fast Food - Independent Bakery Products Fast Food Burger Fast Food - Chained Burger Fast Food - Independent Burger Fast Food Chicken Fast Food - Chained Chicken Fast Food - Independent Chicken Fast Food Convenience Stores Fast Food - Chained Convenience Stores Fast Food - Independent Convenience Stores Fast Food Fish Fast Food - Chained Fish Fast Food - Independent Fish Fast Food Ice Cream Fast Food - Chained Ice Cream Fast Food - Independent Ice Cream Fast Food Latin American Fast Food - Chained Latin American Fast Food - Independent Latin American Fast Food Middle Eastern Fast Food - Chained Middle Eastern Fast Food - Independent Middle Eastern Fast Food Pizza Fast Food - Chained Pizza Fast Food - Independent Pizza Fast Food Other Fast Food - Chained Other Fast Food - Independent Other Fast Food Fast Casual Dining Fast Food Source: Euromonitor International from official statistics, trade associations, trade press, company research,

trade interviews, trade sources

Data removed from sample



Table 2 Fast Food by Category: Number of Transactions 2005-2010

Mn transactions 2005 2006 2007 2008 2009 2010 Chained Fast Food Independent Fast Food Asian Fast Food - Chained Asian Fast Food - Independent Asian Fast Food Bakery Products Fast Food - Chained Bakery Products Fast Food - Independent Bakery Products Fast Food Burger Fast Food - Chained Burger Fast Food - Independent Burger Fast Food Chicken Fast Food - Chained Chicken Fast Food - Independent Chicken Fast Food Convenience Stores Fast Food - Chained Convenience Stores Fast Food - Independent Convenience Stores Fast Food Fish Fast Food - Chained Fish Fast Food - Independent Fish Fast Food Ice Cream Fast Food - Chained Ice Cream Fast Food - Independent Ice Cream Fast Food Latin American Fast Food - Chained Latin American Fast Food - Independent Latin American Fast Food Middle Eastern Fast Food - Chained Middle Eastern Fast Food - Independent Middle Eastern Fast Food Pizza Fast Food - Chained Pizza Fast Food - Independent Pizza Fast Food Other Fast Food - Chained Other Fast Food - Independent Other




Fast Food Fast Casual Dining Fast Food Source: Euromonitor International from official statistics, trade associations, trade press, company research,


Table 3 Fast Food by Category: Foodservice Value 2005-2010

A$ million 2005 2006 2007 2008 2009 2010 Chained Fast Food Independent Fast Food Asian Fast Food - Chained Asian Fast Food - Independent Asian Fast Food Bakery Products Fast Food - Chained Bakery Products Fast Food - Independent Bakery Products Fast Food Burger Fast Food - Chained Burger Fast Food - Independent Burger Fast Food Chicken Fast Food - Chained Chicken Fast Food - Independent Chicken Fast Food Convenience Stores Fast Food - Chained Convenience Stores Fast Food - Independent Convenience Stores Fast Food Fish Fast Food - Chained Fish Fast Food - Independent Fish Fast Food Ice Cream Fast Food - Chained Ice Cream Fast Food - Independent Ice Cream Fast Food Latin American Fast Food - Chained Latin American Fast Food - Independent Latin American Fast Food Middle Eastern Fast Food - Chained Middle Eastern Fast Food - Independent Middle Eastern Fast Food Pizza Fast Food





- Chained Pizza Fast Food - Independent Pizza Fast Food Other Fast Food - Chained Other Fast Food - Independent Other Fast Food Fast Casual Dining Fast Food Source: Euromonitor International from official statistics, trade associations, trade press, company research,


Table 4 Fast Food by Category: % Units/Outlets Growth 2005-2010

% Units/Outlets growth Chained Fast Food Independent Fast Food Asian Fast Food - Chained Asian Fast Food - Independent Asian Fast Food Bakery Products Fast Food - Chained Bakery Products Fast Food - Independent Bakery Products Fast Food Burger Fast Food - Chained Burger Fast Food - Independent Burger Fast Food Chicken Fast Food - Chained Chicken Fast Food - Independent Chicken Fast Food Convenience Stores Fast Food - Chained Convenience Stores Fast Food - Independent Convenience Stores Fast Food Fish Fast Food - Chained Fish Fast Food - Independent Fish Fast Food Ice Cream Fast Food - Chained Ice Cream Fast Food - Independent Ice Cream Fast Food Latin American Fast Food - Chained Latin American Fast Food - Independent Latin American Fast Food Middle Eastern Fast Food - Chained Middle Eastern Fast Food - Independent Middle Eastern Fast Food Pizza Fast Food - Chained Pizza Fast Food - Independent Pizza Fast Food Other Fast Food - Chained Other Fast Food - Independent Other Fast Food Fast Casual Dining Fast Food Source: Euromonitor International from official statistics, trade associations, trade press, company research,






Table 5 Fast Food by Category: % Transaction Growth 2005-2010

% transaction growth 2009/10 2005-10 CAGR 2005/10 TOTAL Chained Fast Food Independent Fast Food Asian Fast Food - Chained Asian Fast Food - Independent Asian Fast Food Bakery Products Fast Food - Chained Bakery Products Fast Food - Independent Bakery Products Fast Food Burger Fast Food - Chained Burger Fast Food - Independent Burger Fast Food Chicken Fast Food - Chained Chicken Fast Food - Independent Chicken Fast Food Convenience Stores Fast Food - Chained Convenience Stores Fast Food - Independent Convenience Stores Fast Food Fish Fast Food - Chained Fish Fast Food - Independent Fish Fast Food Ice Cream Fast Food - Chained Ice Cream Fast Food - Independent Ice Cream Fast Food Latin American Fast Food - Chained Latin American Fast Food - Independent Latin American Fast Food Middle Eastern Fast Food - Chained Middle Eastern Fast Food - Independent Middle Eastern Fast Food Pizza Fast Food - Chained Pizza Fast Food - Independent Pizza Fast Food Other Fast Food - Chained Other Fast Food - Independent Other Fast Food Fast Casual Dining Fast Food Source: Euromonitor International from official statistics, trade associations, trade press, company research,


Table 6 Fast Food by Category: % Foodservice Value Growth 2005-2010

% value growth 2009/10 2005-10 CAGR 2005/10 TOTAL Chained Fast Food Independent Fast Food Asian Fast Food - Chained Asian Fast Food - Independent Asian Fast Food Bakery Products Fast Food





- Chained Bakery Products Fast Food - Independent Bakery Products Fast Food Burger Fast Food - Chained Burger Fast Food - Independent Burger Fast Food Chicken Fast Food - Chained Chicken Fast Food - Independent Chicken Fast Food Convenience Stores Fast Food - Chained Convenience Stores Fast Food - Independent Convenience Stores Fast Food Fish Fast Food - Chained Fish Fast Food - Independent Fish Fast Food Ice Cream Fast Food - Chained Ice Cream Fast Food - Independent Ice Cream Fast Food Latin American Fast Food - Chained Latin American Fast Food - Independent Latin American Fast Food Middle Eastern Fast Food - Chained Middle Eastern Fast Food - Independent Middle Eastern Fast Food Pizza Fast Food - Chained Pizza Fast Food - Independent Pizza Fast Food Other Fast Food - Chained Other Fast Food - Independent Other Fast Food Fast Casual Dining Fast Food Source: Euromonitor International from official statistics, trade associations, trade press, company research,


Table 7 Sales of Bakery Products Fast Food by Type 2007-2010

% value 2007 2008 2009 2010 Sandwich Specialists Sweet Bakery Goods Specialists Other Including Mixed Bakery Fast Food Total 100.0 100.0 100.0 100.0 Source: Euromonitor International from official statistics, trade associations, trade press, company research,

store checks, trade interviews, trade sources

Table 8 Global Brand Owner Shares of Chained Fast Food 2006-2010

% value Company 2006 2007 2008 2009 2010






Others 16.5 5. 5.2 3.2 Total 100.0 100.0 100.0 100.0 100.0 Source: Euromonitor International from official statistics, trade associations, trade press, company research,


Table 9 Brand Shares of Chained Fast Food 2007-2010

% value Brand Global Brand Owner 2007 2008 2009 2010





Total 100.0 100.0 100.0 100.0 Source: Euromonitor International from official statistics, trade associations, trade press, company research,


Table 10 Forecast Sales in Fast Food by Category: Units/Outlets 2010-2015

outlets 2010 2011 2012 2013 2014 2015 Chained Fast Food Independent Fast Food Asian Fast Food - Chained Asian Fast Food - Independent Asian Fast Food Bakery Products Fast Food - Chained Bakery Products Fast Food - Independent Bakery





Products Fast Food Burger Fast Food - Chained Burger Fast Food - Independent Burger Fast Food Chicken Fast Food - Chained Chicken Fast Food - Independent Chicken Fast Food Convenience Stores Fast Food - Chained Convenience Stores Fast Food - Independent Convenience Stores Fast Food Fish Fast Food - Chained Fish Fast Food - Independent Fish Fast Food Ice Cream Fast Food - Chained Ice Cream Fast Food - Independent Ice Cream Fast Food Latin American Fast Food - Chained Latin American Fast Food - Independent Latin American Fast Food Middle Eastern Fast Food - Chained Middle Eastern Fast Food - Independent Middle Eastern Fast Food Pizza Fast Food - Chained Pizza Fast Food - Independent Pizza Fast Food Other Fast Food - Chained Other Fast Food - Independent Other Fast Food Fast Casual Dining Fast Food Source: Euromonitor International from trade associations, trade press, company research, trade interviews,

trade sources

Table 11 Forecast Sales in Fast Food by Category: Number of Transactions 2010-2015

Mn transactions 2010 2011 2012 2013 2014 2015 Chained Fast Food Independent Fast Food Asian Fast Food - Chained Asian Fast Food





- Independent Asian Fast Food Bakery Products Fast Food - Chained Bakery Products Fast Food - Independent Bakery Products Fast Food Burger Fast Food - Chained Burger Fast Food - Independent Burger Fast Food Chicken Fast Food - Chained Chicken Fast Food - Independent Chicken Fast Food Convenience Stores Fast Food - Chained Convenience Stores Fast Food - Independent Convenience Stores Fast Food Fish Fast Food - Chained Fish Fast Food - Independent Fish Fast Food Ice Cream Fast Food - Chained Ice Cream Fast Food - Independent Ice Cream Fast Food Latin American Fast Food - Chained Latin American Fast Food - Independent Latin American Fast Food Middle Eastern Fast Food - Chained Middle Eastern Fast Food - Independent Middle Eastern Fast Food Pizza Fast Food - Chained Pizza Fast Food - Independent Pizza Fast Food Other Fast Food - Chained Other Fast Food - Independent Other Fast Food Fast Casual Dining Fast Food Source: Euromonitor International from trade associations, trade press, company research, trade interviews,

trade sources

Table 12 Forecast Sales in Fast Food by Category: Foodservice Value 2010-2015

A$ million




2010 2011 2012 2013 2014 2015 Chained Fast Food Independent Fast Food Asian Fast Food - Chained Asian Fast Food - Independent Asian Fast Food Bakery Products Fast Food - Chained Bakery Products Fast Food - Independent Bakery Products Fast Food Burger Fast Food - Chained Burger Fast Food - Independent Burger Fast Food Chicken Fast Food - Chained Chicken Fast Food - Independent Chicken Fast Food Convenience Stores Fast Food - Chained Convenience Stores Fast Food - Independent Convenience Stores Fast Food Fish Fast Food - Chained Fish Fast Food - Independent Fish Fast Food Ice Cream Fast Food - Chained Ice Cream Fast Food - Independent Ice Cream Fast Food Latin American Fast Food - Chained Latin American Fast Food - Independent Latin American Fast Food Middle Eastern Fast Food - Chained Middle Eastern Fast Food - Independent Middle Eastern Fast Food Pizza Fast Food - Chained Pizza Fast Food - Independent Pizza Fast Food Other Fast Food - Chained Other Fast Food - Independent Other Fast Food Fast Casual Dining Fast Food




Source: Euromonitor International from trade associations, trade press, company research, trade interviews, trade sources

Table 13 Forecast Sales in Fast Food by Category: % Units/Outlets Growth 2010-2015

% Units/Outlets growth 2010-15 CAGR 2010/15 TOTAL Chained Fast Food Independent Fast Food Asian Fast Food - Chained Asian Fast Food - Independent Asian Fast Food Bakery Products Fast Food - Chained Bakery Products Fast Food - Independent Bakery Products Fast Food Burger Fast Food - Chained Burger Fast Food - Independent Burger Fast Food Chicken Fast Food - Chained Chicken Fast Food - Independent Chicken Fast Food Convenience Stores Fast Food - Chained Convenience Stores Fast Food - Independent Convenience Stores Fast Food Fish Fast Food - Chained Fish Fast Food - Independent Fish Fast Food Ice Cream Fast Food - Chained Ice Cream Fast Food - Independent Ice Cream Fast Food Latin American Fast Food - Chained Latin American Fast Food - Independent Latin American Fast Food Middle Eastern Fast Food - Chained Middle Eastern Fast Food - Independent Middle Eastern Fast Food Pizza Fast Food - Chained Pizza Fast Food - Independent Pizza Fast Food Other Fast Food - Chained Other Fast Food - Independent Other Fast Food Fast Casual Dining Fast Food Source: Euromonitor International from trade associations, trade press, company research, trade interviews,

trade sources

Table 14 Forecast Sales in Fast Food by Category: % Transaction Growth 2010-2015

% transaction growth 2010-15 CAGR 2010/15 TOTAL Chained Fast Food Independent Fast Food Asian Fast Food - Chained Asian Fast Food





- Independent Asian Fast Food Bakery Products Fast Food - Chained Bakery Products Fast Food - Independent Bakery Products Fast Food Burger Fast Food - Chained Burger Fast Food - Independent Burger Fast Food Chicken Fast Food - Chained Chicken Fast Food - Independent Chicken Fast Food Convenience Stores Fast Food - Chained Convenience Stores Fast Food - Independent Convenience Stores Fast Food Fish Fast Food - Chained Fish Fast Food - Independent Fish Fast Food Ice Cream Fast Food - Chained Ice Cream Fast Food - Independent Ice Cream Fast Food Latin American Fast Food - Chained Latin American Fast Food - Independent Latin American Fast Food Middle Eastern Fast Food - Chained Middle Eastern Fast Food - Independent Middle Eastern Fast Food Pizza Fast Food - Chained Pizza Fast Food - Independent Pizza Fast Food Other Fast Food - Chained Other Fast Food - Independent Other Fast Food Fast Casual Dining Fast Food Source: Euromonitor International from trade associations, trade press, company research, trade interviews,

trade sources

Table 15 Forecast Sales in Fast Food by Category: % Foodservice Value Growth 2010-2015

% value growth 2010-15 CAGR 2010/15 TOTAL Chained Fast Food Independent Fast Food Asian Fast Food - Chained Asian Fast Food - Independent Asian Fast Food Bakery Products Fast Food - Chained Bakery Products Fast Food - Independent Bakery Products Fast Food Burger Fast Food - Chained Burger Fast Food - Independent Burger Fast Food Chicken Fast Food - Chained Chicken Fast Food - Independent Chicken Fast Food Convenience Stores Fast Food - Chained Convenience Stores Fast Food - Independent Convenience Stores Fast Food





Fish Fast Food - Chained Fish Fast Food - Independent Fish Fast Food Ice Cream Fast Food - Chained Ice Cream Fast Food - Independent Ice Cream Fast Food Latin American Fast Food - Chained Latin American Fast Food - Independent Latin American Fast Food Middle Eastern Fast Food - Chained Middle Eastern Fast Food - Independent Middle Eastern Fast Food Pizza Fast Food - Chained Pizza Fast Food - Independent Pizza Fast Food Other Fast Food - Chained Other Fast Food - Independent Other Fast Food Fast Casual Dining Fast Food Source: Euromonitor International from trade associations, trade press, company research, trade interviews,

trade sources




even includes a smile. Although the mutual acquisitions of 2009 and 2010, would be a lot for such a relatively small company, Franchised Food is also on the look out for other acquisitions, making offers for Baskin-Robbins and the remnants of the crumbling Souvlaki Hut in 2010. Franchised Foods greatest risk, therefore, is possibly to resist getting too carried away and becoming too large, too fast.

Nutshack, one of the major brands that Franchised Food owns, is outside Euromonitors definition of consumer foodservice, as it sells only nuts. Franchised Food is likely to make some changes over the forecast period, however, most notably the establishment of co-branded stores, such as those combining Nutshack and Cold Rock Ice-Creamery ingredients.

Prior to the formation of Franchise Foods, and crucially, the acquisition of Cold Rock Ice-Creamery, the company, under the name of Debley Food Group, gained the licensed of Mr Whippy. This was previously the primary ice cream van brand in Australia, although there have been no official Mr Whippy vans since the 1970s, and instead it operates from just six stores

As might be expected by its name, Franchise Foods is in the business not so much of consumer foodservice, but managing franchises. It therefore intends not only to grow the brands it already owns, but also make acquisitions of additional franchises from which it can gain synergies. Given the failure of Allied Brands, which attempted a similar business model but decided to expand its operations outside consumer foodservice, this may seem a risky strategy. As can be seen by its plans to co-brand its outlets however, the company also plans to maximise synergies, maximising revenue per outlet by offering a wider variety of branded products. This is likely to be a more successful strategy.

Of all its brands, Franchised Food is especially focusing on Cold Rock Ice-Creamery, which it acquired in September 2009, believing that its selling proposition selling ice cream with additional ingredients, so that every ice cream is customised with over 3,000 potential variations will prove attractive to Australian consumers. Also being the Australian brand owner of Mr Whippy suggests that the long-anticipated return of Mr Whippy to Australia will predominately include Cold Rock Ice-Creamery products. The primary risk of concentrating on Cold Rock Ice-Creamery is that the American brands Cold Rock Ice-Creamery is based on Cold Stone Icecreamery and Marble Slab are planning to enter the Australian market during the forecast period. With the competitive environment about to become tougher, Franchised Food needs to rapidly expand the presence of Cold Rock Ice-Creamery, not just in its home state of Queensland, but throughout Australia.

The company plans to maximise the potential of its acquisitions, not only in relation to economies of scale and supply chains, but also by combining the two chains into single outlets such as a combination of Cold Rock Ice-Creamery and Nutshack, thereby doubling the number of potential purchases for each shop. This is quite a revolutionary approach to exploiting the opportunities opened up by acquisitions. Similarly, a Cold Rock Ice-Creamery/Pretzel World store has been opened in Queensland, and considered a success. This is because it increases the potential times consumers are likely to visit the store, pretzels being more popular in the morning and ice cream in the afternoon and evening.

Suppliers

The most important ingredient for Cold Rock Ice-Creamery, other than the ice cream, are the mix-ins. These are typically branded confectionery products such as Snickers, M&Ms and Maltesers from Mars Australia, KitKat from Nestl, and Flake and Caramello Koalas from Cadbury.



Suppliers





million. This deal should provide Retail Zoo with the opportunity to increase its international presence.

Suppliers





CONSUMER FOODSERVICE IN AUSTRALIA - INDUSTRY OVERVIEW

EXECUTIVE SUMMARY

Consumers Upgrade During Economic Slowdown Although performing far better than other economies around the world, the Australian

economy, particularly the retail category, was virtually stagnant throughout 2010. Consumer foodservice appeared to be a major exception, with consumers deciding that food was an affordable indulgence, where for just a couple of dollars extra they could enjoy something special. This trend was especially visible in fast food, where such concepts as gourmet pizza, championed by Crust Gourmet Pizza, and Pizza Capers, and gourmet burgers, championed by Grilld, was the most notable feature in consumer foodservice in 2010.

Taking It Away

While consumers embraced consumer foodservice in 2010, they still prefer to eat in the comfort of their own home, where they can watch television and do not have to get dressed up. 100% HDTA therefore represented the fastest growing category in consumer foodservice, while other chains which do offer dine-in options have seen their takeaway component increase in recent years. As consumer foodservice slowly shifts to being a 24-hour industry, drive-thru outlets have proven particularly successful.

Mcdonalds Still the Big Mac

Although Subway has more outlets, when it comes to value share McDonalds is the largest player in Australia consumer foodservice, even if the additional share provided by McCaf outlets is not included. The popularity of McDonalds in Australia, where its popularity is greater than most other markets around the world, is due in part to having spent the last decade improving its reputation through such measures as a Healthy Choice menu, and the introduction of McCaf, both of which were Australian innovations. In 2010, however, continued growth was largely due to the popularity of McDonalds range of Angus burgers

Chains Continue Takeover

Although they make up only around a third of the total value of consumer foodservice in Australia, chains continue to grow in importance, as emerging players in consumer foodservice embrace the franchise system as a means of expanding their brands as rapidly as possible. This system slowed down considerably during the economic slowdown due to the highly publicised failures of Krispy Kreme and Souvlaki Hut, uncertainty regarding proposed legislation, and difficulties in obtaining finance from the banks.

Bright Future for Consumer Foodservice

Although the difficulties involved in sourcing new franchisees during the economic slowdown will act as something of a suppressing force over at least the early years of the forecast period, consumer foodservice as a whole is likely to perform well. Specifically, the trend towards affordable indulgences will ensure that the consumers who embraced gourmet pizzas and



gourmet burgers during the economic slowdown embrace them to an even greater degree as the economy recovers.

KEY TRENDS AND DEVELOPMENTS

Consumer Foodservice Sales Higher Than Ever

Current impact





Outlook

Future impact






Latino trending in 2010

Current impact

Outlook







Future impact

Domestic Brands See Greater Success






Current impact

Outlook






Future impact

All Just A Little Bit Fancy

Current impact







Outlook

Future impact






Ifood





Current impact

Outlook

Future impact






A Time and A Place for Everything





Current impact

Outlook

Future impact






Fast Food Diet

Current impact






Outlook





Future impact

MARKET DATA

Table 1 Units, Transactions and Value Sales in Consumer Foodservice: 2005-2010

2005 2006 2007 2008 2009 2010 Units ('000) Transactions (mn) A$ billion current prices A$ billion constant prices Source: Euromonitor International from official statistics, trade associations, trade press, company research,


Table 2 Units, Transactions and Value Sales in Consumer Foodservice: % Growth 2005-2010

% growth 2009/10 2005-10 CAGR 2005/10 TOTAL Units Transactions Value current prices Value constant prices







Source: Euromonitor International from official statistics, trade associations, trade press, company research, trade interviews, trade sources

Table 3 Consumer Foodservice by Independent Vs Chained Outlets: Units/Outlets 2010

outlets Independent Chained Total Cafs/Bars 100% Home Delivery/Takeaway Full-Service Restaurants Fast Food Street Stalls/Kiosks Pizza Consumer Foodservice Self-Service Cafeterias Consumer Foodservice Source: Euromonitor International from official statistics, trade associations, trade press, company research,


Table 4 Consumer Foodservice by Eat in Vs Takeaway 2010

% value analysis Eat in Takeaway Total 100% Home Delivery/Takeaway Cafs/Bars Full-Service Restaurants Fast Food Street Stalls/Kiosks Self-Service Cafeterias Consumer Foodservice Source: Euromonitor International from official statistics, trade associations, trade press, company research,


Table 5 Consumer Foodservice by Food Vs Drinks Split 2010

% value analysis Food Drink Total 100% Home Delivery/Takeaway Cafs/Bars Full-Service Restaurants Fast Food Street Stalls/Kiosks Self-Service Cafeterias Consumer Foodservice Source: Euromonitor International from official statistics, trade associations, trade press, company research,


Table 6 Sales in Consumer Foodservice by Location 2005-2010

% value 2005 2006 2007 2008 2009 2010






Leisure Lodging Retail Travel Stand-Alone Total Source: Euromonitor International from official statistics, trade associations, trade press, company research,


Table 7 Leading Chained Consumer Foodservice Brands by Number of Units 2010

Brand Global Brand Owner outlets





Source: Euromonitor International from official statistics, trade associations, trade press, company research, trade interviews, trade sources

Table 8 Chained Consumer Foodservice Company Shares 2006-2010

% value Company 2006 2007 2008 2009 2010





Total 100.0 100.0 100.0 100.0 100.0 Source: Euromonitor International from official statistics, trade associations, trade press, company research,


Table 9 Chained Consumer Foodservice Brand Shares 2007-2010

% value Brand Global Brand Owner 2007 2008 2009 2010





Total 100.0 100.0 100.0 100.0 Source: Euromonitor International from official statistics, trade associations, trade press, company research,


Table 10 Forecast Units, Transactions and Value Sales in Consumer Foodservice: 2010-2015

2010 2011 2012 2013 2014 2015 Units ('000) Transactions (mn) A$ billion Source: Euromonitor International from trade associations, trade press, company research, trade interviews,

trade sources

Table 11 Forecast Units, Transactions and Value Sales in Consumer Foodservice: % Growth 2010-2015

% growth 2010-15 CAGR 2010/15 TOTAL Units Transactions Constant value Source: Euromonitor International from trade associations, trade press, company research, trade interviews,

trade sources

APPENDIX

National Consumer Expenditure

The ABS Business Demography figures measures businesses not outlets per se, so consequently the figures are significantly lower than Euromonitors.

Also those outlets retailing baked goods are excluded from ABS figures, thereby excluding the bulk of bakery products fast food.

Although this is a comparatively minor issue, the ABS does not include businesses that open and then quickly close again, within the same financial year. Due to the low start up costs






associated with establishing some consumer foodservice outlets, this issue is especially important for this industry. Also a minor issue is the ABSs exclusion of theatre restaurants.

ABS Retail Trade data, on the other hand, does not include pubs and bars.

Table 12 Consumer Expenditure on Consumer Foodservice 2007-2009

No. of outlets 2007 2008 2009 Cafs and restaurants Takeaway foodservice Pubs, taverns and bars Clubs (Hospitality) Total Source: Australian Bureau of Statistics Business Demography

Table 13 Consumer Expenditure on Consumer Foodservice 2004-2010

A$ million 2004 2005 2006 2007 2008 2009 Cafes, restaurants and catering services Takeaway foodservice Total 2010 Cafes, restaurants and catering services Takeaway foodservice Total Source: Australian Bureau of Statistics Retail Trade

Trade Association Statistics

While Australia does have a variety of associations covering consumer foodservice both national and state-based such as the Restaurant & Catering Association none of these publish data on either the size or state of the industry.

OPERATING ENVIRONMENT

Franchising

According to the World Franchise Council, Australia is the most franchised nation in the world, with three times as many franchises per capita than the United States. This is partly due to an urge among Australians to work for themselves, along with a middle class affluent enough that they can afford to make such a leap. Probably the most crucial reason for franchising being so popular in Australia, however, is to avoid Payroll Tax, which is applicable to






businesses that pay wages of over A$600,000. Since each franchise is owner-operated, it is legally its own business, thereby avoiding payroll tax.


sample report consumer foodservice fast food

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