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Foodservice
The foodservice (or food service) industry generally encompasses those
places, institutions, and companies responsible for any meal eaten away
from home. This industry includes restaurants, school and hospital
cafeterias, catering operations, and many other formats. Major
foodservice providers include Compass Group, Sodexho, Aramark, and the
Crown Group.
The companies that supply foodservice operators are called foodservice distributors.
Some companies manufacture products in both consumer and foodservice
versions. The consumer version usually comes in individual-sized
packages with elaborate label design for retail sale. The foodservice
version is packaged in a much larger industrial size and often lacks
the colorful label designs of the consumer version.
The industry's largest frequent-buyer program is called Foodservice
Rewards. The program helps over 60,000 restaurateurs reward and retain
their best employees and earn free restaurant equipment.Foodservice
Rewards is sponsored by over 65 leading foodservice brands including
Nestle, General Mills, and Hormel.
The 307 billion peso (US$7.6 billion) Philippines foodservice
market will grow faster than the nation's economy in the next two years
-- providing opportunities for foreign suppliers.
A new study, "Food-service in the Philippines 1999-2001+" by research
firm BIS Shrapnel, claims quick service restaurants are set to boom as
consumer confidence improves among lower-income groups.
Author Sandro Mangosi said a strong correlation exists between growth in the economy and growth in the foodservice sector.
"The Philippines economy is expected to grow by 4.5 per cent this year
and at 5 per cent in 2001. The foodservice industry, by comparison,
will grow by 5.5 per cent in both years," he said.
"Some 60 million Filipinos are major supporters of the fast-food
industry and when they have a little discretionary income they spend it
on eating out."
Mangosi estimates the proportion of disposable income on eating out
will increase from 4.7 per cent to 5 per cent over the next two years.
"Local and multinational food manufacturers are beginning to realise
the enormous potential. Companies such as Pure Foods, Alaska Milk, Del
Monte, Universal Food and California Manufacturing have established
foodservice divisions with separate product lines, field forces and
distribution networks," Mangosi said.
"All are growing strongly and finding this market much more profitable than retail."
It's not all good news, however, with the study finding that
foodservice operators desperately need an improved distribution
industry.
Fine-dining restaurants are also faring badly, with as many restaurants closing as opening.
The study shows that new restaurants, especially those marketing a new
gimmick, are strongly supported for a time but -- since cuisine
standards need not necessarily be high -- people move on to the next
new concept very quickly.
"It's not uncommon for the life of a restaurant to be less than 12 months," Mangosi said.
But quick service restaurants (QSR) are the exception to the rule, with
the Philippines having one of the most developed QSR segments in Asia.
Manila alone is home to around 50 chains with outlets numbering from
five to 250. BIS Shrapnel estimates a total of about 2000 QSR outlets
in the Philippines.
Mangosi said QSRs have been successful because they tailor products specific to customer needs.
He said Jollibee, with 302 outlets, is the clear market leader, making
the Philippines one of only two countries in the world where McDonald's
is not the market leader.
"Jollibee has deviated from McDonald's in one important aspect -- taste," he said.
"Jollibee developed their patties, buns and chicken to exploit the
Filipino preference for sweeter and spicier foods and has done so with
huge success."
Coffee shops such as Starbucks and Delifrance are also prospering.
Mangosi forecasts continuing strong demand for milk, cheese and seafood. Chicken is the fastest-growing food category.
FOODSERVICE OUTLETS IN THE PHILIPPINES
Number % of Total
Coffee/tea/snack bars 3000 2.3
Boarding houses/hostels 2142 1.7
Other hostels 2100 1.6
Clubs/bars/discos 3165 2.4
Hawker stalls 60,000 46.1
Fast food outlets 2000 1.5
Other restaurants 57,660 44.4
(including fine dining)
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