11/26/2019 A taste of the country’s food service industry

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A taste of the
country’s food
service industry
May 25, 2018 | 9:00 am

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11/26/2019 A taste of the country’s food service industry

The country’s food service industry has continued to improve over the
past years due to the stronger consumers’ purchasing power, in uenced
by today’s fast-paced lifestyle. Food service players are increasing their
network to cater to more Filipinos who demand for more convenience.

Different types of food establishments are being set-up across the

country to provide Filipino consumers with their needs. Based on the
nal results of the 2015 Annual Survey of Philippine Business and
Industry (ASPBI) released by the Philippine Statistics Authority (PSA)
last October, a total of 27,028 establishments in the formal sector of the
economy were engaged in accommodation and food service activities.

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Restaurants led the sector with 6,652 establishments, which accounted
for 24.6% of the total number of establishments. Fast food chains
ranked second with 4,477 establishments (16.6%), followed by
refreshment stands, kiosks and counters with 3,772 establishments
(14%). We'd like to notify you
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Other industries with more than a thousand number of establishments
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include cafeterias with 3,748 establishments, hotels and motels with
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2,276 establishments, bars and cocktail lounges with 1,445
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11/26/2019 A taste of the country’s food service industry

establishments, and other restaurants and mobile food service activities

with 1,353 establishments.

The same report showed that the total income generated by the sector
amounted to P471.3 billion. Among the industries, restaurants
contributed the major share with P158.1 (33.5%), followed by fast food
chains with P144.8 billion (30.7%). On the other hand, these two
industries incurred more than half of the total expense for all
accommodation and food service activities, with restaurants amounting
to P126.7 billion (32%) and fast food chains with P125.4 billion (31.7%).

In addition to food service industry’s contributions to the Philippine

economy in terms of value sales, outlets and transactions, it also
generates employment to many Filipinos. As data in 2015 ASPBI
showed, the total employment generated by the sector engaged in
accommodation and food service activities reached 433,260 workers.
Among the industries, fast food chains employed the most number of
workers with 130,304, or 30.1% of the total number, followed by
restaurants, and hotels and motels with 116,556 (26.9%) and 62,392
workers (14.4%), respectively.

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Globally, chicken fast food was the strongest retail format in 2016,
according to Stephen Dutton, a consumer food service associate in
global market research rm Euromonitor International.

“The strongest performing format in 2016 was chickenWe'd fast food,

likewhich
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grew 8% by value to reach $65.6 billion in total global sales. As a menu
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offering, chicken enjoys universal appeal, and unlike more regional-
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speci c items such pizza or burgers, chicken can be found on menus in
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all world markets and is highly adaptable to local consumer
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11/26/2019 A taste of the country’s food service industry

preferences,” Mr. Dutton said in an article posted in Euromonitor’s Web

site.

Relatively, this format is highly observable in the Philippine market. As

showed on a 2014 report by Euromonitor, the Philippine market
continues to be led by Jollibee Foods Corp., with sales totalling to $1.67
billion in 2012. McDonald’s Corp. came second with a total sales
of $533 million (5.5%), followed by Yum! Brands, Inc. with $200.8
million (2.1%) sales.

Aside from chicken fast food format, specialist coffee shop was the
second fastest growing format in 2016 by value. Mr. Dutton said that it
continued to perform well in all world regions. The specialist coffee
shop format grew fastest in Latin America and Asia Paci c regions,
which demand for coffee shops is driven by a consumer base with
greater access to disposable income who can afford the relative luxury
of specialty beverages.

In the Philippines, Starbucks Corp. is also joining the list of top

companies in the food service industry. The company posted a total
sales of $107.4 million or 1.1% of the total food service market in 2012.

With the growing urbanization across the country, Filipinos are having
more busy lifestyles that pushed them to buy cooked foods or simply
dine out. Also, those who are residing or working in key cities are also
facing a worsening traf c and transportation issues which resulted to
the growth of home delivery or takeaway outlets.
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Convenience store is another format to watch, Mr. Dutton said, noting
that convenience stores grew 6.1% by value in 2016.

“The food service offerings at convenience stores continue to improve

We'd
as operators increasingly look to food service to attract like to notify you
customers.
about theprices
With a blend of on-trade and off-trade offerings at value-oriented latest updates
that appeal on variety and convenience, c-stores are becoming the food
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c-stores
increasingly offer more healthful menu offerings and in-storeAllow
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options,” Mr. Dutton said.
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11/26/2019 A taste of the country’s food service industry

Of all the food service outlets in the country, chained operators still lead
in value terms. “Chained operators accounted for the majority value
share in 2017 as they capitalized on consumer familiarity and brand
loyalty. Chained operators also bene t from Filipinos’ increasing
interest in franchising,” Euromonitor’s 2018 report on consumer food
service in the country noted.

At present, food service players focus on attracting millennials who

comprised one third of the country’s population and are recognized as
the biggest spenders. Given this, this consumer group continues to
inspire innovations within the food service industry. More digital
initiatives will be seen from the industry players to extend their reach,
especially on social media. — Mark Louis F. Ferrolino

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