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2018: an outstanding year for growth

Voor het blad FoodService Europe & Middle East schreven wij een Engelstalige analyse van onze FSIN Food500. Voor de liefhebbers publiceren we het artikel ook op onze website, vanwege de nieuwe analyses.

3 september 2019 - Lees het originele artikel in FoodService Europe & Middle East hier.

2018 was a spectacular year for the Dutch foodservice sector. Chains remain dominant and the biggest 500 food chains (retail and foodservice) in the Netherlands had a combined sales growth of 4.5%, according to the Dutch FoodService Institute (FSIN). Inga Blokker takes a look at the recent report.

Sales growth was exceptionally high in 2018. A beautiful, warm spring and summer led consumers to eat out even more often than they usually do. The Dutch foodservice sector undoubtedly had its best year since the financial crisis in 2008. Of the 500 biggest food chains in The Netherlands, 341 are foodservice players representing a total sales revenue of €11.631 bn. When we remove new players from the list, we see a revenue growth of 4.7% for the foodservice operators. Delivery was one of the top growth markets with a sales increase of 13.4%.


About the ranking

The Netherlands-based FoodService Institute (FSIN) publishes a yearly ranking of the 500 biggest food chains in The Netherlands. The ranking encompasses 341 foodservice-players, whose total revenue adds up to €11.6 bn, as well as 159 of the major food retailers. In 2018, the total sales volume of the Top 500 amounted to €48.982 bn. The biggest foodservice player is McDonald’s, with a confirmed total sales revenue of exactly €949,909,105 in 2018. The smallest player is Heinde & Ver with a confirmed revenue of €4,367,164. In total, the Top 50 foodservice companies reported combined sales of €7.8 bn. The research was carried out by The Food Research Company. 

Development threats for the coming 5 years

Based on the FSIN Food500
N=91


Growth champions

Overall, the biggest share of growth comes from what the FoodService Institute defines as the convenience segment, which encompasses quickservice players, delivery providers and platforms, foodservice in travel and at gas stations. Exempting foodservice providers at petrol stations, these players had a combined growth of 8.4%. When we remove newcomers and delivery platforms for a more accurate reading, we see a growth of 5.5% for convenience- foodservice players versus a growth of 5.1% for classic foodservice (full- service restaurants, hotels, leisure and cafés – in the Netherlands this sector is called ‘horeca’).


Convenience foodservice vs. classic foodservice

Taking a closer look at convenience foodservice versus classic foodservice (horeca), the former seems to be showing healthier growth than the horeca-segment. When we compare the number of new units opened in 2018 to the sales growth, it becomes clear that in order to achieve growth, players in the horeca-segment needed to open a lot more locations than the convenience foodservice players. Convenience foodservice reached a sales increase of 5.5%, compared to 0.7% unit growth. Horeca reported a sales growth of 5.1%, but the number of units rose by 6%.

Development opportunities for the coming 5 years

Based on the FSIN Food500
N=96

The clearest example for the success of the convenient foodservice segment in the Netherlands is McDonald’s: the QSR chain grew by an impressive 10.3%, to a confirmed total sales revenue of exactly €949,909,105, while opening only two new locations, bringing the total number of Dutch units to 247. Hence, most growth came from a significant rise in same-store-sales. Within the horeca-segment, we see the biggest unit-growth in cities. The figures from location-database company Datlinq show that the number of horeca locations grew exponentially in cities between 2012-2017. Since revenue didn’t grow at the same rate as the number of locations in that period of time, it is clear that profit shares are under pressure, even though the total revenue is still increasing rapidly.

Unit openings horeca 2012-2017

Source: Datlinq


Human Resources

Though the foodservice sales increase was extremely high in 2018, managers and entrepreneurs of the Netherland’s top 500 food chains have worries as well. 80.2 % of the organizations that answered, indicated that they worry about employee shortage in the coming years. Many of the bigger chains have dozens and even hundreds of vacancies within their organization. Finding and keeping the right employees is therefore becoming the biggest challenge in the Dutch food landscape.


Retail competition

Interestingly enough, the second biggest challenge mentioned by our survey participants was the growing competition coming from supermarkets. Very understandably, since supermarkets are entering the foodservice market at high speed in many different ways. In 2018, supermarket chain Spar opened 100 new locations at motorway petrol stations, thus increasing its sales by 1,360 %. Supermarket chain Jumbo is opening big supermarkets with crowded restaurants located inside. In the Northern part of the Netherlands, a small chain called Poiesz acquired the meal delivery service Van Smaak – and is now able to deliver both groceries and meals to consumers.

Unit growth vs. sales growth for convenience foodservice vs. horeca

Excluded newcomers, petrol and platform revenue
Source: FSIN Food500 2019


Opportunities

According the survey responses, the growing convenience market as well as rising demand for healthy foods offer the biggest opportunities for the coming five years. As a research institute, we see these two separate trends combined in one larger trend that we call ‘mental convenience’. Convenience is not only about saving time anymore. It’s just as much about simplifying life and food choices, reducing hassle and stress. And most of all, it’s about making healthy choices accessible. These elements combined are what we call ‘mental convenience’. Granted – our consumer research shows that health is still less of an issue out of home than it is at home, but with a growing number of health-focused consumers it is becoming more important to have a decent and convenient healthy offering – also out of home.

 

Pizza

The growing revenue of big pizza chains stands in stark contrast to the health trend. Pizza is the ultimate example of convenience food. Pizza delivery chains like Domino’s (+29%) and New York Pizza (+12%) are growing fast. At platform Thuisbezorgd (Takeaway.com; +22%), pizza was the best-selling product in 2018. Pizza chain Pizzabakkers grew by 51% (opening many new units) and pizza and pasta concept Vapiano reported a growth rate of 22%. The popular position of pizza has not gone unnoticed by foodservice entrepreneurs: horeca entrepreneur Herman Hell has acquired Sugo Pizza and is planning to conquer the world with the healthy square variant of this universally-loved food. In late 2018, the Entourage Group launched the high-end pizza concept ‘Toni Loco’. 
 

The full report - FSIN Food500 2019 - is downloadable for members of the FoodService Institute. 
 

ABOUT THE AUTHOR

Inga Blokker is director of The Food Research Company, closely connected to the FoodService Institute Netherlands (FSIN). FSIN is run as a non-profit association with a membership that covers the entire food chain, both in the food retail and foodservice sectors. FSIN publishes reports of numerous studies conducted by The Food Research Company.

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