Benelux Food Service Market

An Expert's View about Food and Beverage Services in the Netherlands

Posted on: 9 Jul 2012

The Benelux HRI sector covers cafés/bars, fast-food outlets, full service restaurants, 100% home delivery/takeaway, self-service cafeterias and street stalls/kiosks.

USDA Foreign Agricultural Service GAIN Report Global Agriculture Information Network Template Version 2.09 Scheduled Report - Public distribution Date: 01/22/2009 GAIN Report Number: NL9002 NL9002 Netherlands HRI Food Service Sector Benelux 2009 Approved by: Steve Huete, FAS/The Hague U.S. Embassy Prepared by: Marcel Pinckaers, FAS/The Hague Report Highlights: This report in combination with the Benelux Exporter Guide and FAIRS Report provides an important road map for U.S. exporters who wish to enter the Benelux HRI market Includes PSD Changes: No Includes Trade Matrix: No Annual Report The Hague [NL1] [NL] GAIN Report - NL9002 Page 2 of 13 Table of Contents Section I. MARKET SUMMARY ...............................................................................3 Description And Comparison Of The HRI Sub Sectors ................................................. 3 Value Of The Overall Benelux HRI Industry And Sub-Sectors, Past 5 years ..................... 4 Expected Growth Rates Of The Benelux HRI Industry And Its Sub-Sectors, Coming Years . 5 Number And Type Of Benelux HRI Establishments ..................................................... 5 Value Of Imported Food Versus Domestic Products Over The Past 5 Years...................... 5 Developments/Trends That Affect The HRI Industry ................................................... 6 Advantages And Challenges................................................................................... 7 Section II. ROAD MAP FOR MARKET ENTRY...........................................................7 Entry Strategy .................................................................................................... 7 Market Structure ................................................................................................. 7 Sub sectors profiles ............................................................................................. 9 Section III. COMPETITION...................................................................................9 Section IV. BEST PRODUCT PROSPECTS ..............................................................12 Products Present In The Market Which Have Good Sales Potential............................... 12 Products Not Present In Significant Quantities, But Which Have Good Sales Potential ..... 12 Products Not Present Because They Face Significant Barriers ..................................... 12 Section V. POST CONTACT AND FURTHER INFORMATION.....................................12 UNCLASSIFIED USDA Foreign Agricultural Service GAIN Report - NL9002 Page 3 of 13 Section I. MARKET SUMMARY Description And Comparison Of The HRI Sub Sectors The Benelux HRI sector covers cafés/bars, fast-food outlets, full service restaurants, 100% home delivery/takeaway, self-service cafeterias and street stalls/kiosks. Cafés/bars: This sector encompasses all establishments where the focus is on drinking both alcoholic or non-alcoholic beverages and where food is also served. While a wide variety of snacks and full meals are offered, it is not uncommon for customers to only order a drink. Fast food outlets: Fast food outlets are typically distinguished by the following characteristics: a standardized and restricted menu; food for immediate consumption; tight individual portion control on all ingredients and on the finished product; individual packaging of each item; a young and unskilled labor force; counter service. Full-service restaurants: Full-service Restaurants encompass all sit-down establishments where the focus is on food rather than on drink. It is characterized by table service and a relatively higher quality of food offering. It also includes à la carte, all-you-can-eat and sit- down buffets within restaurants. Restaurants at resorts and hotels are in general categorized as Full-service Restaurants. Takeaway: Fixed units which provide no facilities for consumption on the premises. Food can either be picked up by the consumer, or delivered, often for an additional charge. Common offerings include: pizzas, Chinese, Indian, Mexican, and other local national offerings. Self-service cafeterias: They provide no (or limited) service content. Food is presented on counters or available made-to-order. The customer chooses the items they want and pays for everything at a separate pay station or check-out. Street stalls/kiosks: Small, mobile foodservice providers characterized by a very limited product offering and by low prices. Exchange rates, average: 2006: 2007: 2008: 1 USD 1 USD 1 USD 0.804 € 0.731 € 0.684 € Source: U.S. Embassy UNCLASSIFIED USDA Foreign Agricultural Service GAIN Report - NL9002 Page 4 of 13 Value Of The Overall Benelux HRI Industry And Sub-Sectors, Past 5 years Figure 1: value of HRI industry sub sectors, 2002-2007 9,000 Cafés/bars 8,000 7,000 Full-service restaurants 6,000 Fast food 5,000 4,000 100% home delivery/takeaway 3,000 Self-service cafeterias 2,000 1,000 Street stalls/kiosks 0 2002 2003 2004 2005 2006 2007 Source: Euromonitor • Benelux HRI industry grew from 14.9 billion euro in 2002 to 17.0 billion in 2007. • Generally, sales in all sub-sectors have grown between 2002-2007. • Growth rates were the highest in the full service restaurant and fast food sectors. • Full service restaurants, fast-food outlets and cafés/bars dominate the Dutch HRI industry. UNCLASSIFIED USDA Foreign Agricultural Service '000 Euro GAIN Report - NL9002 Page 5 of 13 Expected Growth Rates Of The Benelux HRI Industry And Its Sub-Sectors, Coming Years Figure 2: expected value of HRI sub sectors, 2007-2011 10,000 Cafés/bars 9,000 8,000 Full-service restaurants 7,000 6,000 Fast food 5,000 100% home 4,000 delivery/takeaway 3,000 Self-service cafeterias 2,000 1,000 Street stalls/kiosks 0 2007 2008 2009 2010 2011 Source: Euromonitor • The HRI Industry is forecast to grow from 17.0 billion euro in 2007 to 17.8 billion in 2011. • Whereas the total market grew by approximately 3% per year up until 2007, it is forcast that in the coming 3 years the annual growth rate will only be a mere 1%. • The main reason behind this is the decrease in the annual growth for the Full service restaurants and cafés/bars. Also the forcast shrinking market for Street stalls/kiosks will have some impact. Fast food on the other hand is forecast to demonstrate higher growth rates. Number And Type Of Benelux HRI Establishments The Full service restaurants and cafés/bars are the largest sectors in terms of number of establishments, both accounting for roughly a third each. Fast food is the third largest sector. Value Of Imported Food Versus Domestic Products Over The Past 5 Years • The Netherlands continues to be a leading trading nation; it is after the US the largest exporter and the 6th largest importer of agricultural products in the world. • After a couple of years of shrinking agricultural production, since 2005 production is up again, mainly driven by a growing turnover in the potato, dairy and flower & plants sector. UNCLASSIFIED USDA Foreign Agricultural Service '000 Euro GAIN Report - NL9002 Page 6 of 13 • Both import and export figures continue to grow at a fast pace, on average 5-7% per year. • Belgium is due to its location and infrastructure, also an important trader of ag products. Both imports and exports continue to increase. Developments/Trends That Affect The HRI Industry • As of July 1st, 2008 it is no longer allowed to smoke in restaurants, cafés, or any other HRI outlets. Small cafés are affected most since sales have dropped by a quarter. Restaurants are also losing customers but, at the same time, are gaining new clients because of the smoking ban. Preliminary research shows that the smoking ban overall does not affect the HRI industry a great deal. • The recent financial crisis, on the other hand, is expected to hit the restaurant sector hard. In his annual New Year article in the Economics and Statistics Bulletin (ESB) Ministry of Economic Affairs Secretary General Chris Buijink stated that 2009 will be an exceptionally difficult year. He mentioned that the situation had worsened extremely quickly and the growth predictions had dropped fast. • "The lower inflation offers possibilities to wage moderation. The quickly rising unemployment in 2010 calls for moderate wage demands", Buijink writes. Although lower inflation also means that people will have more to spend next year than the cabinet had expected, consumer confidence in the economy is very low. In these uncertain times, consumers are not spending but saving money and one way of doing that is cutting expenditure on eating out. Faced with a significant drop in revenue, restaurant owners will need to adapt to changing market conditions in order to survive. Figure 3: Annualized inflation 2008, by month in % Source: Central Bureau of Statistics • Competition in the Benelux HRI market will remain tough, as new firms enter the market. Retailers of both food (Makro) and non-food (V&D, HEMA, IKEA, etc.) have already claimed prominent positions in the market. • The changing structure of the Benelux population creates three new lucrative consumer markets for the HRI industry: the graying population, the double income households and ethnic minority groups, all of which are growing. • Industry analysts believe the Benelux HRI sector is entering a new phase of development and it is generally believed that within the next two decades, the industry profile will change to accommodate fewer small operators and more medium and large establishments. Industry shakeups will occur, with more mergers and acquisitions or strategic alliances, and branding success. In addition, there is still growth for unique, independent, high-end hotels and restaurants. UNCLASSIFIED USDA Foreign Agricultural Service GAIN Report - NL9002 Page 7 of 13 Advantages And Challenges Sector Strengths & Sector Weaknesses & Market Opportunities: Competitive Threats: • The industry is very fragmented • Since eating out is more (often family run businesses) and expensive than staying home, the can therefore adjust itself easily to HRI industry is expected to be hit the changing consumer demands. hard due to the current economic crises. • The Benelux consumer is curious • The small cafés that are especially and wants to try new things; this affected greatly by the smoking creates opportunities for new ban face an uncertain future. product and service concepts. • When compared to the US and some European markets, the Benelux HRI industry has the opportunity to enhance its share of total food sales. Section II. ROAD MAP FOR MARKET ENTRY Entry Strategy Prior to any export, FAS/The Hague suggests US companies invest in research analyzing the Benelux food culture (concepts, flavors, price, and product requirements). Once the product has been chosen, be aware of fierce competition from not only EU suppliers but also those from outside the EU. There are several tariff and non-tariff trade barriers that complicate export to the Benelux. An experienced and specialized importer knows the industry, the dynamics, the trade barriers and the required documentation. In addition, the Office of Agricultural Affairs in The Hague (OAA) offers guidelines on import regulations for food products that can be found on http://www.fas.usda.gov/gainfiles/200312/146085322.pdf. Market Structure • The Benelux fast-food sector and Catering sector are highly consolidated, dominated by a few international and national players. Figure 4: Leading fast-food companies in the Benelux Source: FAS/The Hague Figure 5: Leading caterers in the Benelux UNCLASSIFIED USDA Foreign Agricultural Service GAIN Report - NL9002 Page 8 of 13 Source: FAS/The Hague • The other HRI sectors are highly fragmented. In general, all restaurants and cafés are independently operated companies with their own purchase patterns and buyers. • As the chart on the next page indicates, small and independent entrepreneurs buy their products and ingredients from wholesaler/distributors. There are approximately 10 wholesalers in the Benelux. The leading onces are indicated below. Figure 6: Leading wholesalers in the Benelux • Deli XL • Hanos • ISPC • JAVA • Kweker • Sligro • Makro Source: FAS/The Hague Figure 7: Distribution Channel Flow Diagram Fast-Food Outlets Takeaway Bars Full Service Restaurants Catering Source: FAS/The Hague • Some companies in the HRI industry purchase imported products directly from importers but in general they buy via wholesalers or local suppliers. • Fast-food companies are frequently part of a large chain with national, regional or global presence. Products are delivered through proprietary distributors, who normally purchase products for all franchisees. • Due to its consolidated structure, the Benelux catering sector has a limited number of dedicated distributors. Distributors buy directly from producers. Non-EU products are bought through importers. • Independent restaurants, bars and takeaways buy fresh products (meat, seafood, dairy products, bread and fruits & vegetables) often from local suppliers who in some cases produce those products themselves. These relationships are in most cases personal relationships between the owner of the restaurant and the supplier. For all other products (and non-food) the independent owner generally goes to a wholesaler, except for beer, wine and soft drinks which are delivered. • For bigger restaurants and/or restaurant chains, there are different players in the supply chain. Local suppliers are not competitive and are replaced directly by wholesalers and distributors. UNCLASSIFIED USDA Foreign Agricultural Service IImmppoorrtteerr DDiissttrriibbuuttoorr WWhhoolleessaalleerr LLooccaall SSuupppplliieerr GAIN Report - NL9002 Page 9 of 13 Sub sectors profiles Figure 8:Top 15 largest HRI Companies in the Netherlands, 2008 Company Name Sales* Outlet Name, Type, Number of Outlets 1 Van de Valk 520 Van der Valk, hotels & restaurants, 55 2 McDonalds 497 McDonalds, fast-food, 220 3 Golden Tulip (GTHG) 350 Golden Tulip, hotels & restaurants, 83 4 Center Parcs 299 Center Parcs, resort (holiday cottages & restaurants), 8 5 Servex 278 Kiosk/Smullers/etc., restaurants/kiosks/shops, 319 6 NH Hotels 251 NH Hotels, hotels & restaurants, 31 7 Accor 245 Accor hotels, hotels & restaurants, 44 8 Landal Greenparks 223 Landal, resort (holiday cottages & restaurants), 44 9 Maxeda 209 Les Halles/La Place (V&D), department store restaurant, 105 10 Sjoerd Kooistra 122 3 Gezusters, cafés/restaurants, 82 11 Best Western 117 Best Western, hotels & restaurants, 48 12 Bilderberg 109 Bilderberg, hotels & restaurants, 20 13 Hampshire (HH&L) 93 Independent hotels & restaurants, 50 14 Intercontinental Hotels 90 Crown Plaza/Holiday Inn/etc. hotel & restaurants, 10 15 HMS Host 82 restaurants at Schiphol Airport,1 * million € Source: Misset Horeca Section III. COMPETITION Figure 9: competition, the Netherlands Product Category Major Supply Strengths of Key Advantages and Sources Supply Countries Disadvantages of local suppliers Wine France (38%) Good quality No real commercial Germany (10%) Export availability in the Benelux Total Imports: Spain (9%) tradition/experience 1,159 (million USD) Italy (8%) Proximity 382 (million L) USA (3%) Popular holiday destination Peanuts Argentina (65%) China and India are No local supply USA (13%) the largest suppliers; Total Imports: China (12%) the U.S., Argentina 279 (million USD) Brazil (3%) and Brazil are 275 (‘000 MT) leading exporters. Almonds USA (62%) Spain is an EU MS No local supply. Spain (22%) which makes trade The Dutch food Total Imports: with the Netherlands processing industry 100 (million USD) easier. needs more almonds 18 (‘000 MT) The US dominates than Spain can supply. the international The production in the almonds trade U.S. continues to grow and increasingly supplies Europe with high and consistent quality of almonds Pistachios USA (74%) The US dominates Although China, Iran and China (4%) the international the US are all non-EU Total Imports: trade in pistachios countries, the first two 99 (million USD) experience problems with 17 (‘000 MT) the level of aflatoxin on pistachios UNCLASSIFIED USDA Foreign Agricultural Service GAIN Report - NL9002 Page 10 of 13 Fish fillets (030429) Iceland (21%) Iceland and to a No local availability of Vietnam (17%) lesser extent Russia, price competitive fish Total Imports: China (16%) Norway and China fillets 553 (million USD) Russia (8%) are suppliers of cod; 139 (‘000 MT) USA (5%) Vietnam dominates the trade in pangasius; the U.S. leads the supply of Alaska pollack; Iceland and China supply respectively coalfish and saltwater fish Milk powder not Germany (42%) Increasing prices of Due to increased exceeding 1.5% fat France (17%) dairy products on the competition on bulk (HS 040210) Poland (10%) EU market induced products on the world Belgium (9%) imports from outside market, the EU sector is Total Imports: Ireland (5%) the EU, including the increasingly focusing on 396 (million USD) UK (4%) U.S. added value; this gives 110 (‘000 MT) USA (2%) opportunities for U.S. producers to supply the EU market with bulk dairy products Fats and oils derived Belgium (51%) Belgium is a major Belgium and Germany from milk (HS USA (24%) butter oil producer are EU countries and 040590) Germany (8%) and trader Germany is a New Zealand (5%) neighboring country with Total Imports: the advantage of 31 (million USD) distance 7 (‘000 MT) Butter (HS 040510) New Zealand (51%) New Zealand uses a Germany (17%) tariff quota for their Total Imports: Belgium (11%) butter exports to the 213 (million USD) Poland (4% EU 2 (‘000 MT) USA (3%) Processed fruit Costa Rica (19%) The vast majority is No local availability of (200899) India (19%) mixed processed fruit price competitive fruit Ecuador (10%) with added sugar Total Imports: Poland (9%) from predominantly 188 (million USD) USA (7%) Costa Rica, India and 213 (‘000 MT) Thailand Snack foods Germany (33%) Unique products Belgium (29%) Excellent Total Imports: France (10%) quality/taste 1,414 (million USD) UK (6%) Availability 389 (‘000 MT) USA (1%) Fruit and vegetable Germany (20%) Half of Dutch fruit No local availability of juices Brazil (18%) juices imports is fruit and vegetable juices China (5%) citrus juice with Total Imports: USA (5%) Brazil and to a lesser 1,094 (million USD) extent Israel, the 570* (‘000 MT) U.S. and Cuba as UNCLASSIFIED USDA Foreign Agricultural Service GAIN Report - NL9002 Page 11 of 13 leading suppliers. The other half is dominated by pineapple juice imports from Thailand and Costa Rica and apple juice imports from China. Source: Globe Trade Atlas Figure 10: competition, Belgium Product Category Major Supply Strengths of Key Advantages and Sources Supply Countries Disadvantages of local suppliers Wine France (73%) Good quality No real commercial Italy (5%) Export availability in the Total Imports: Portugal (4%) tradition/experience Benelux 1,435 (million USD) Spain (4%) Proximity 311 (million L) USA (0.25%) Popular holiday destination Almonds USA (50%) Spain is also an EU The Belgian food (080212) Spain (25%) country which makes processing industry trade with Belgium needs more almonds Total Imports: easier, the US than Spain can supply. 82 (million USD) dominates the The production in the 15 (‘000 MT) international almonds U.S. continues to grow trade. and increasingly supplies Europe with high and consistent quality of almonds Pistachios (080250) USA (67%) The US dominates the Although Iran and the Iran (20%) international trade in US are both non-EU Total Imports: pistachios countries, Iran 53 (million USD) experiences problems 9 (‘000 MT) with the level of aflatoxin on pistachios Fruit and vegetable Brazil (55%) Belgium’s import of No local availability of juices France (15%) fruit juices is fruit and vegetable Germany (13%) dominated by citrus juices Total Imports: Netherlands (6%) juice imports from 908 (million USD) Italy (2%) Brazil 883* (‘000 MT) Spain (2%) Ireland (1%) USA (1%) Snack foods France (28%) Unique products Netherlands (27%) Excellent quality/taste Total Imports: Germany (21%) Availability 1,139 (million USD) Italy (7%) 314 (‘000 MT) USA (0.2%) Fish fillets (030429) China (16%) Iceland and to a lesser No local availability of Vietnam (14%) extent China and price competitive fish Total Imports: Chile (8%) Denmark are suppliers fillets 253 (million USD) Ireland (7%) of cod; Vietnam and 46 (‘000 MT) Denmark (6%) also China dominate UNCLASSIFIED USDA Foreign Agricultural Service GAIN Report - NL9002 Page 12 of 13 USA (2%) the trade in freshwater fish (pangasius); the U.S. and China lead the supply of Alaska pollack; Chile and China supply respectively pacific salmon and saltwater fish Source: Globe Trade Atlas Section IV. BEST PRODUCT PROSPECTS Products Present In The Market Which Have Good Sales Potential • Nuts: almonds, peanuts, pistachios, walnuts, hazelnuts, pecans • Seafood: pollack, cod, monkfish, haddock, halibut, scallops, lobster, etc. • Processed Fruit and Vegetables • Fruit juice concentrates: orange juice, cranberry, grapefruit Products Not Present In Significant Quantities, But Which Have Good Sales Potential • Dairy products: milk powder, milk fats and oils, butter • Ingredients for the natural or healthy foods industry Products Not Present Because They Face Significant Barriers • poultry and non-NHTC beef • GMO derived ingredients that are not EU approved Section V. POST CONTACT AND FURTHER INFORMATION If you have questions or comments regarding this report, or need assistance exporting to the Benelux, please contact the U.S. Office of Agricultural Affairs in The Hague, the Netherlands: U.S. Department of Agriculture’s Foreign Agricultural Service Marcel Pinckaers Embassy of the United States Lange Voorhout 102 2514 EJ The Hague Phone: +31 (0)70 3102 305 Fax: +31 (0)70 365 7681 marcel.pinckaers@fas.usda.gov www.fas.usda.gov www.usembassy.nl/fas.html Please view our website for more information on exporting U.S. food products to the Benelux. Importer listings are available at the Office of Agricultural Affairs in The Hague. Please find below reports of interest to U.S. exporters that are exploring the opportunities to start exporting to the Benelux food service market. These reports can be downloaded from the following FAS website: http://www.fas.usda.gov/scriptsw/attacherep/default.asp UNCLASSIFIED USDA Foreign Agricultural Service GAIN Report - NL9002 Page 13 of 13 Title Date Report Number Benelux frozen potato report 11/26/2008 NL8025 Exporter guide 10/17/2008 NL8023 FAIRS export certificate guide 10/23/2008 NL8022 FAIRS report 09/11/2008 NL8017 Food processing ingredients 06/06/2008 NL8012 EU fishery marketing report 05/06/2008 NL8009 Retail food sector 11/05/2007 NL7028 Dutch specialty foods market 09/10/2007 NL7021 Benelux beef market 04/16/2007 NL7008 Benelux tree nuts market 01/29/2007 NL7002 UNCLASSIFIED USDA Foreign Agricultural Service
Posted: 09 July 2012