The State Of Foodservice, Worldwide

Foodservice Equipment Reports is unique in many ways, but one of the most important is that we are truly a global publication. Since 1999, we have published this Worldwide Buyers Guide, which is mailed to 10,000 operators, distributors and consultants outside the U.S. and Canada in addition to our regular 28,000 subscribers in North America. The Worldwide Buyers Guide also is the core of our website, fermag.com. Last November, we launched our global e-newsletter, FER Worldwide Report, received by nearly 20,000 subscribers.

And because we are global, we like to keep an eye on how the major foodservice markets are doing around the world. To prep for this editorial, I checked in with my friends Joe Pawlak, senior v.p., Technomic Inc., for insight on the U.S. market; Peter Backman, managing director, Horizons, for his perspective on the U.K.; and Bob O’Brien, global senior v.p.-foodservice, The NPD Group, for a global outlook. Here’s a quick overview of what they told me. 

The U.S. market, Pawlak says, “continues to grow at a relatively modest pace, driven primarily by menu price increases, rather than significant traffic growth.” He notes that two segments are bucking the trend in the U.S.: fast casual and supermarkets. Consumers here “are willing to spend ‘more’ for better quality food, service and experiences that are customized to their liking,”—fast casual’s strength. And supermarkets have upgraded their prepared offerings “to where they compete strongly with restaurants.” Technomic forecasts the foodservice market will grow 3.1% in current dollars and 1.2% in real terms in 2015. For information on Technomic research, go to technomic.com.

After five or six years of declining or flat growth, the market in the U.K. is “now beginning to regain its stride,” Backman says. In spite of the difficult situation, “some sectors…have shown great resilience,” including pubs that concentrate on food, branded casual dining and the lunch grab-and-go segments. But margin pressures still are a problem and government-funded segments continue to suffer. Still, the outlook is much improved. Horizons can be found at hrzns.com.

O’Brien was travelling, as usual, but kindly sent us NPD’s global foodservice overview for the second quarter. NPD currently tracks consumer foodservice behavior in 11 markets. The story in most developed markets is similar to that in the U.S.: Flat or slight traffic declines are being offset by rising check averages to create moderate growth. In the second quarter, only the U.K. and Australia showed traffic gains. Among the developing markets, China posted a 2% traffic increase, its second since traffic went negative in the fourth quarter 2013. The young Russian market continued to expand, with a 4% gain in visits.

NPD noted two other key points about the second quarter. Global quick-service operators in both China and Germany experienced supply-chain food-safety crises that undercut sales and traffic. And it appears that the market in Spain finally might be on the verge of recovery. Information on NPD research can be found at npd.com.

We all know foodservice is not an easy business. As foodservice continues to grow around the world, we thank you for letting us be part of it. All of us at FER wish you a spectacularly successful 2015.