HRI Food Service Sector in Poland

An Expert's View about Travel, Tourism and Food Services in Poland

Posted on: 11 Mar 2010

Although there are challenges facing the U.S. exporter in light of Poland’s EU membership, U.S. exporters should certainly explore opportunities in Poland. Poland is the only EU Member State that is expected to achieve positive GDP growth in 2009. If you sell to one of EU 27 member states your business should be advertising and promoting products in Poland.

THIS REPORT CONTAINS ASSESSMENTS OF COMMODITY AND TRADE ISSUES MADE BY USDA STAFF AND NOT NECESSARILY STATEMENTS OF OFFICIAL U.S. GOVERNMENT POLICY Required Report - public distribution Date: 12/29/2009 GAIN Report Number: Poland HRI FOOD SERVICE SECTOR HRI Food Service Sector Approved By: Piotr Rucinski Prepared By: Jolanta Figurska, Pawel Flakiewicz Report Highlights: Although there are challenges facing the U.S. exporter in light of Poland?s EU membership, U.S. exporters should certainly explore opportunities in Poland. Poland is the only EU Member State that is expected to achieve positive GDP growth in 2009. If you sell to one of EU 27 member states your business should be advertising and promoting products in Poland. America is highly regarded in this region and products displaying their American heritage with a flag or geographic emphasis are popular. Poland?s hotel, restaurant and institutional sectors are growing and offer sales opportunities for U.S. suppliers of a wide array and input. Many consumer ready and high value food products, such as baking ingredients, seafood, wine and spirits, pet food, almonds, pistachios, sunflower seeds, protein isolates, grapefruit and cranberries are popular. The American exporter should also take note of the market access barriers in Europe. Poland joined the EU five years ago and with its high tariffs, subsidies, and dated approach to food safety, Poland no longer imports U.S. beef, poultry or corn. Exporters are advised to carefully ascertain the market access to the EU for their product before making a sale to Europe. Post: Warsaw Executive Summary: Poland, with a population of almost 39 million, where consumers spend about 23 percent of their income on food and beverages, is a significant market for diverse food products offered by the hotel, restaurant and institutional food sector (HRI). Revenues from activities in these sectors, both private and public were valued at about $2.7 billions in 2008. In larger cities which house about 30 percent of Poland?s population, the number of two or more-income households is high (about 56 percent of all households). Warsaw, the capital, boasts a variety of low- cost eateries and high-end restaurants and its consumer?s tastes are becoming similar to those in Western Europe and the United States. Mediterranean, French, Italian, Middle Eastern and Asian cuisines are becoming more popular and more visible in local neighborhoods as well as high traffic areas. New smaller ethnic group restaurants such as Georgian or restaurants serving typical Polish fare from specific regions of Poland are also increasing in popularity. It is now considered trendy to know celebrity chefs, and individual meetings and cooking sessions with VIP's are being arranged in hotels and restaurants. The hotel sector has seen dynamic growth since 2006 and this tendency should continue till 2012. In 2007 - 2009, 75 hotels were built in Poland and construction of around 250 ? 260 more is planned during the next 3-5 years. The majority of future investments will concentrate on 2-3 stars hotels (70% of all planned construction). If all investments are carried out, the number of hotel beds in Poland will increase by 22,500 (14 percent). By the end of 2008 there were 6,718 lodging units in Poland, of which 4,575 were operating year-round offering some 357,000 beds. Hotels constitute the biggest group ? 1,370 of the lodging units. Over the last eight years two of the main reasons that the Polish hotel market has continued solid growth is the continual increase in international tourists and businessmen, and also that the Poles themselves have been travelling more and staying at hotels in areas of Poland that cater to recreational activities. The fact that Poland is one of the two hosts (the other being Ukraine) of the European Soccer Championship in 2012 will influence the luxury class hotel sector, and hence the dynamic growth should continue in the larger cities of Poland. The growth in this sector could last for 2 or even 4 years after the event. It is estimated that around 12 million additional visitors will use hotel services in 2010 ? 2011, compared with an estimated 660,000 people in 2009. The market concerning restaurants, fast foods, cafeterias and bars was valued at USD5.6 billions in 2008, this is a 6.6 percent increase compared to 2007. Poles spend over 5 percent of their discretionary budget in restaurants, and from 2005 to 2008 sales in this market saw an increase of 19 percent. One third of the polish population dined out in a restaurant, bar or pub at least once in every 2 months during 2008. On average 20 percent of the Polish population spends USD 28/month and 10 percent USD 57/month on eating out. The most stimulating changes occurring in the Polish economy, supporting development of this sector are: increasing salaries, change of dietary habits, changes in life styles requiring longer working hours, an increasing number of singles and expansion of shopping centers and malls. Hotel and restaurant experts predict that close to 500 restaurants and bars will be opened in the next five years. Coffee bars and coffee houses offer the best profits and their numbers increased by 30 percent during 2008. The Costa Coffee chain intends to open at least 100 coffee bars by the end of 2011. Starbucks recently entered the Polish market. Poles like to visit fast-food restaurants, and most international chains already have a presence in Poland. Pizzerias are also gaining in popularity with over 350 outlets already operating in larger cities and well known American brands still coming in to the Polish market as well, e.g. Papa John?s plans to open 40 restaurants during the next 5 to 8 years. Basic economic indicators for Poland are as follows: POLAND 2007 2008 2009*e 2010*f Population, mln 38.00 38.00 38.00 38.00 Nominal GDP, PLNbn 421.70 481.80 430.20 434.70 GDP per capita, US $ 11.082 12.662 11.322 11.439 Real GDP growth, % change y-o-y 6.6 4.9 1.0 3.4 Industrial production index, % y-o-y, ave 9.6 8.5 -6.5 2.1 Budget balance % of GDP -1.5 -1.9 -2.9 -2.6 Consumer prices % y-oy 4.0 3.2 2.8 2.7 Exchange rate PLN/US$ 5.00 5.00 2.80 3.75 (November 2009) Exchange rate PLN/EUR 2.47 2.96 4.20 3.24 (November 2009) Import, EURbn 118.48 138.81 97.17 102.02 Export EURbn 106.03 121.08 93.23 96.03 Trade balance, EURbn -12.44 -17.73 -3.93 -5.99 Current account, % of GDP -4.77 -5.58 -0.76 -1.50 Foreign reserves ex gold, US$bn 62.97 59.30 65.00 68.00 Total external debt stock, % of GDP 55.27 60.80 65.40 61.80 *e - estimate *f - forecast Source: Emerging Europe Monitor: Central Europe and Baltics, November/December 2009 I. THE HRI MARKET DESCRIPTION Number of Food Service Establishments 2005, 2006, 2007, and 3 quarters of 2008 (permanent and seasonal) Source: Central Statistical Office (GUS) Types of Food Service Establishments in 2008 Source: Central Statistical Office (GUS) Total revenues earned in the food service sector including catering, commodity sales, and other activities increased from $6.5 to $8.9 millions during 2005-2007, then decreased to $4.7 millions in the third quarter of 2008. The last decrease resulting from world economy slow down. As Polish economy shows signs of moderate continued growth through out 2009 this sector should also report positive sales increases. Total revenues From the Food Service Sector Source: Central Statistical Office (GUS) Hotel Occupancy rate(%) Category 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 ***** 67,4 58,9 55,9 51,3 49,5 50,6 52,1 63,9 63,7 **** 57,6 52,0 48,9 44,8 43,3 48,0 52,4 53,7 56,0 *** 49,5 48,0 49,9 42,5 40,0 37,9 38,7 41,3 44,0 44,6 46,2 ** 40,4 39,5 40,8 36,9 34,7 34,3 32,8 36,3 39,3 41,1 43,7 * 37,0 35,5 36,9 29,9 29,4 29,1 31,1 37,1 39,1 41,1 43,9 Average 46,1 45,0 46,7 40,6 38,5 36,0 36,0 39,8 43,1 44,9 47,1 Source: Central Statistical Office (GUS) Advantages of and Challenges to American products on the Polish market Advantages Challenges Low labor costs when investing in the food The trend by major food chains to use mainly service sector in Poland compared with the materials and semi-products of Polish origin lowers fierce competition on world markets; the demand for imported commodities; Growth in personal income and changes in Demographic changes resulting from a drop in the consumption, life, and work standards will birth rate will decrease the population of the most support development of food services; prominent fast food consumers (i.e. children and young people); Economic growth and development of tourism, from and to Poland, makes Integration with the European Union has made food Western food consumption standards more ingredients from this area easily accessible and has popular. limited the demand for imports from other countries including the USA. II. ROAD MAP FOR MARKET ENTRY A. DISTRIBUTION CHANNELS Entering the Polish market is a challenge for exporters of raw materials intended for the food service sector. The main obstacle is the use of low cost Polish products. Imports are used only when less expensive domestic products are not available. I. Some companies in the HRI sector purchase imported products directly from importers but in general they buy via wholesalers or local suppliers. II. Some of the largest organizations in the food service sector (mainly hotel chains) have their own supply units. III. Local wholesalers and importers import materials, semi-processed products and commodities for other food service firms. To be successful in Poland exporters must have a local representative or agent and personal contact with Polish businesses. To be competitive exporters must have a thorough knowledge of current laws, the local culture, tax and customs regulations, market structures, local exhibitions and trade fairs, implications of EU accession, and non-tariff barrier. B. MARKET STRUCTURE Distribution Flow C. SUB-SECTOR PROFILES Top 10 Revenue Generating Hotels in Poland in 2008 Hotel name City Chain number of Average Occupancy room Rate price US$ 2008 (%) 2008 Rooms Beds Marriott Warsaw Marriott Lodging 522 612 365 68 Sheraton Warsaw ITT Sheraton 350 470 140 67 Sobieski Warsaw Accor 429 800 180 70 Forum Nowotel- Acc Warsaw Accor 733 1158 205 65 ord Sofitel Victoria Warsaw Accor 341 453 180 65 Holiday Inn Warsaw Accor 336 498 175 64 Le Royal M Warsaw Le Meridien 206 400 350 68 eridien Bristol Poznan Poznan Accor 369 571 140 67 Mercure Warsaw Accor 250 361 170 65 Radisson SAS Szczecin Radisson 311 431 420 52 Hilton Warsaw Hilton Hotels 314 412 140 68 Campanile Warsaw Louvre Hotels 345 481 145 65 Hotel 500 Warsaw J.W.Construction 182 254 70 35 Holding SA Rialto Warsaw Preferred Hotels 354 420 170 64 Hyatt Regency Warsaw Hyatt Regency Hotels 388 496 180 68 Hotel and Resort Company Profiles 2008 Company Name & Sub- Outlet Name, Type & Location Purchasing Agent(s) Sector Type Number of Outlets Acc Hotels - 63, hotel Direct; Importers, or, hotels with restaurants-60 National Local suppliers restaurants Gromada, hotels w Direct; Importers, ith Hotels - 17, hotel National Local suppliers restaurants restaurants-17 Q Direct; Importers, ubus, hotels with Hotels - 12, hotel South-West of Poland Local suppliers restaurants restaurants-12 L Warsaw, Kraków, Pozna?, Direct; Importers, ouvre Hotels, hotels with Hotels - 10, hotel Lublin, Szczecin, Katowice, Local suppliers restaurants restaurants-8 Wroc?aw, ?ód? B Direct; Importers, est Western International, Hotels -5 , hotel Bia?owie?a, Bia?ystok, Kraków, hotels with restaurants Restaurants-5 O?arów Mazowiecki, Wro Local suppliers c?aw Ra Direct; Importers, disson SAS, hotels with Hotels - 4, hotel Warsaw, Szczecin, Kraków, restaurants restaurants-7 Wro Local suppliers c?aw Starwood, hotels with Hotel - 6, hotel Warsaw, Kraków, Pozna?, Direct; Importers, restaurants restaurants -13 Sopot, Local suppliers Each hotel has at least one large restaurant (usually two) and a snack bar. Often larger hotels have restaurants which specialize in international cuisines (Chinese, Italian, etc.). There are a number of smaller hotels which normally have a café or small restaurant on the premises. Top Food Service Chains According to Number of Outlets Chain owner 2005 2006 2007 Mc Donald?s Polska 201 209 213 Mc Donald?s (American capital) 2008 YTD ? 215 restaurants Pizza Hut American-Restaurants 52 52 50 KFC (Dutch capital) 76 79 85 T TelePizza Poland 95 92 101 elePizza (Spanish capital) 2008 ? 104 restaurants Sphinx Polska 79 90 105 Sphinx (Polish capital 2008 YTD - 122 + Enterprise Investors) restaurants B American-Restaurants 0 0 4 urger king (Dutch capital) 2008 ? 6 restaurants Mr. H Mr. Hamburger 20 21 21 amburger (Polish capital) 2008 - 26 restaurants Da Grasso 90 120 141 Da Grasso (Polish capital) 2008 ? 168 pizza restaurants P izza Dominium 25 42 60 izza Dominium P (Polish capital) Pizza Express Polska 7 7 7 Pizza Express (International capital) pizza restaurants Institutional Company Profile in 2008 Company Name & Sub-Sector Outlet Name, Type & Location Purchasing Agent(s) Type Number of Outlets Sodexho Polska, institutional Sodexho Food Service (CS) National Direct; Importers, Local catering (70) suppliers Direct; Importers, Local Impel Catering, institutional Impel Food Service (CS) (28) National suppliers catering Direct; Importers, Local Eurest Food Service (CS) suppliers Eurest Poland, institutional (87) National catering Direct; Importers, Local suppliers Dussmann Food Service(20) Dussmann Poland, National institutional catering LOT Food service Sp. z o.o., ?LOT? Polish Airlines Warsaw, Gdansk, Direct; Importers, Local institutional catering (CS)(29) Krakow supplier WARS , institutional catering Restaurants & bars in trains National Direct; Importers, Local (CS) supplier SECTION III. COMPETITION 2008* 2008 5 Yr Market Polish Average Size in Imports Import Product mln $ mln $ Growth Import Tariff Category % Rate Key constraints Market attractiveness for USA Salmon 283.00 283.0 29.00 2&8 U.S. product is considered to be expensive. Polish market is interested in the following varieties (H&G): salmon (keta, gorbusha). Wine 191.00 191.0 6.30 9.9-32?/ hl depending on U.S. product is considered to be expensive. Polish consumers like quality wines. a lcohol content Almonds 12.00 12.00 13.00 3.50 U.S. product is considered to be expensive. Polish importers consider U.S. product to be of high quality and import it for usage in high end food products. 0 for bitter almonds Active competition from Spain. Pistachios 13.00 13.00 19.90 1.60 U.S. product is considered to be expensive. Polish importers consider U.S. product to Active competition exists from Iran. be of high quality and import it in order to supply delicatessen customers. Recently hypermarkets also expressed interest in this product. Sunflower 30.00 30.00 4.50 0 U.S. product is considered to be expensive. Polish bakery industry is becoming Seeds Active competition exists from Hungary increasingly interested in using this product. and China. Raisins 23.00 23.00 1.70 2.40 U.S. product is considered to be expensive. Polish bakery industry is becoming Active competition exists from Iran. increasingly interested in using high quality product from the U.S. Ground nuts $15.00 15.00 14.90 19.42 U.S. product is considered to be expensive. Polish food processing is interested Active competition exists from Argentina. in using U.S. product in high end products. Protein 36.00 36.00 3.40 123.50 EUR / 100 kg B elgian and Chinese producers are Polish food processing industry isolates actively promoting their product on the Polish as well as producers of supplies market. for body build ing are increasingly interested in the U.S. products. Whiskey (incl. 55.00 55.00 36.80 61.29 Belgian and Chinese producers are actively Polish food processing industry B ourbon) promoting their product on the Polish market. as well as producers of supplies for body building are increasingly interested in the U.S. products. Grapefruit 33.00 33.00 3.10 14.49 Competitively priced imports available, esp. form Strong position of American Turkey suppliers, growing market. SECTION IV. BEST PRODUCT PROSPECTS A. PRODUCTS WHICH HAVE BEST SALES POTENTIAL: - Seafood: salmon, butterfish, herring, mackerel, black cod - Alcoholic beverages: wines, whiskey/bourbon, vodkas - Dried Fruit: prunes, cranberries - Nuts: almonds, pistachios, peanuts - Food processing ingredients: dairy isoglucose concentrates, high quality spices and mixes (tex- mex), vegetable fat for process - Food ingredients for the HRI food service sector: certain spices and mixes Detail Import statistics can be located at the following internet site: Please select Poland as importing country. B. PRODUCTS NOT PRESENT IN SIGNIFICANT QUANTITIES BUT WHICH HAVE GOOD SALES POTENTIAL: Restaurants and bars that offer international cuisines, such as Italian, Greek, Spanish and Middle Eastern could find success in Poland. American chain restaurants such as TGI Friday and Subway are gradually establishing a presence but not in significant numbers. There are opportunities to develop restaurants that offer "healthy" and organic foods. Snacks with low fat or low-sugar content and made with natural ingredients have good sales potential. Restaurants that offer a vegetarian menu may also tap into the growing demand for such food. More and more Polish families own microwave ovens nowadays, so microwaveable and ready-to-eat food products also have good potential, particularly in larger urban areas, and among institutional food services, e.g., schools, hospitals and nurseries. SECTION V. POST CONTACT AND FURTHER INFORMATION If you have any questions or comments regarding this report, or need assistance in exporting to Poland, please contact the Office of Agricultural Affairs in Warsaw, at the following address: Office of Agricultural Affairs American Embassy Al. Ujazdowskie 29/31 00-540 Warsaw Poland ph: 48-22 504 2336, fax: 48-22 504 2320 e-mail: homepage: For additional information on exporting U.S. food products to Poland, including ?The Exporter?s Guide?, ?The Food Processing Sector Report?, ?The Retail Food Sector Report? please visit the Foreign Agricultural Service home page: Importer lists are also available from our office to exporters of U.S. food products. Author Defined: Foreign Companies Which Invested in the Hotel and Restaurant Sector Rec. Country of num Investor name ntry of origin Activities Comments registration Cou Hotels and 1. Accor SA France France restaurants; 40,5% stake in Orbis S.A. Hotels and Mc Donald's Polska Sp. z o. o. ? 2. McDonald USA USA restaurants; Warsaw Construction; Hotels Strabag Sp. z o. o. 80% stake in 3. Bau Holding Strabag AG Austria Austria and restaurants; Hotele Warszawskie "Syrena" Hotels and Hotele G.E. Polska Sp. z o. o. - Main 4. LOUVRE HOTELS SAS France France restaurants; office in Warsaw. Hotels in Warsaw, Hotels and 5. Trusthouse Forte United Kingdom United Kingdom restaurants; Le Royal Meridien Bristol Sp. z o. o. Hotels and Radisson SAS Centrum Hotel ? 6. BRC Holding Developments USA USA restaurants; Warsaw Hotels and Sheraton Warsaw Hotel Sp. z o. o. ? 7. Sheraton Warsaw Cooperation USA USA restaurants; Warsaw Hotels and Cosmar Polska Sp. z o. o. - Hyatt 8. Cosmar S. r. l. Italy Italy restaurants; Regency Warsaw Hotel American Restaurants Sp. z o. o. - Hotels and Office in Wroc?aw, Pizza Hut & KFC 9. Am-Rest Holding N.V. The Netherlands USA restaurants; brands Qubus Hotel Management - Zielona Góra, Qubus Hotel Sp. z o. o. - Gliwice, Gorzów Wikp., G?ogów. Hotels and Legnica, Wa?brzych, Wroc?aw, Zielona 10. Qubus Hotel System Norway Norway restaurants; Góra, Z?otoryja Porr Polska S.A. - Warsaw, Porr Hotels and International AG - Warsaw, Chopin 11. Porr International/Chopin Austria Austria restaurants; Sp. z o. o. - Kraków Hotels and Min Hoong Development Co. Pte. Ltd. 12. Min Hoong Development Co. China China restaurants; Poland Sp. z o. o. ? Sopot International Fast Food Hotels and International Fast Food Polska Sp. z 13. Corporation USA USA restaurants; o. o. ? Warsaw Intersnack Knabber Gebaeck Hotels and Syrena International Sp. z o. o. ? 14. GmbH & Co. K.G. Austria Austria restaurants; Warsaw Hotels and Telepizza Poland Sp. z o. o. ? 15. TelePizza S.A. Spain Spain restaurants; Warsaw Hotels and Hotel Jan III Sobieski Sp. z o. o. ? 16. Rogner GmbH Germany Germany restaurants; Warsaw Hotels and Pizzerie Pan Smak Sp. z o. o. - Pizza 17. Pan Smak Pizza Inc. Canada Canada restaurants; resturants Hotels and Hotel New Skanpol Sp. z o. o. ? 18. Scanpol International ApS Denmark Denmark restaurants; Ko?obrzeg Hotels and 19. Marriott USA USA restaurants; Hotel Mariott ? Warsaw Hotels and Pizza Express Polska Sp. z o. o. ? 20. Ceneu Pizza BV The Netherlands The Netherlands restaurants; Piaseczno Hotels and Kochleoffel Polska Sp. z o. o. ? 21. Kochloeffel GmbH Germany Germany restaurants; Katowice Hotels and 22. Sodexho Alliance France France restaurants; Sodexho Polska Sp. z o. o. ? Warsaw 22% stake in Best Eastern-Plaza Hotels S.A. - Office in Warsaw, HP Best Eastern Plaza Hotels Hotels and Park - Pozna?, Olsztyn, HP Park 23. International Luxembourg Luxembourg restaurants; Plaza - Wroc?aw Compass Group International Hotels and 100%stakes in Eurest Poland Sp. z 24. B.V. United Kingdom United Kingdom restaurants; o.o. - Warszawa
Posted: 11 March 2010

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