Buoyed by high levels of urbanization and increasing disposable incomes, Australia’s foodservice profit sector is expected to grow at a compound annual growth rate (CAGR) of 2.6% and reach a market value of AUD$80.8bn over the period 2016-2021, according to leading data and analytics company GlobalData.
Australia’s strong economy has made foodservice market an attractive proposition for new operators. Having not experienced a recession in over 25 years, consumer confidence is markedly robust, with consumers both able and willing to spend on non-essential food offerings.
The company in its latest report, ‘Australia – The Future of Foodservice to 2021’, forecasts the value growth to continue, predominantly driven by the rising number of transactions, as opposed to outlet expansion.
Within the profit sector, quick service restaurants (QSR) was the largest channel with AUD$25.8bn value and 36.4% of sales in 2016, followed by full service restaurants (FSR) with AUD$17.9bn value, ‘pubs, clubs and bars’ with AUD$13.5bn value and coffee and tea shops with AUD$3.3bn.
Earlier, global chain operators used to treat the Australian foodservice market as an extension of the US/ Europe. However, it is set to undergo significant changes as global brands are expected to view the market as a ‘laboratory’ to introduce experimental and innovative products to differentiate from each other.
GlobalData reveals that a global trend towards fresh, natural and pure foods has materialized within the QSR channel. This has placed pressure on traditional QSR operators, like McDonald’s and Hungry Jacks to, in turn, improve their food offerings.
Kambu Ninad, Foodservice Analyst at GlobalData, says: “It is vital for QSR operators to remember that visits to the channel remain predominately driven by the convenience offered. Established brands should not risk dramatically changing their brand message and alienating their core audience in order to chase the latest food fads.”
The advent of social media and improved connectivity has created a ‘conversation culture’ surrounding food in Australia. Consumers are willing or even keen to share their food ‘experiences’ on social media platforms such as Instagram, Facebook or Twitter.
GlobalData in its consumer survey found that 13% of Australians share a picture of the food/drinks they eat/drink weekly. These consumers, often young, are expected to ‘lead’ opinion shifts within their friendship groups, potentially benefiting the foodservice operators.
Modern consumers are displaying more complex and personal desires when it comes to food. Their consciousness of health in food is higher and they seek greater control over what they choose to eat. Against this backdrop, Kambu Ninad explains: “As consumer desires become more complex and personal, operators can benefit by opening up their menus and allowing ‘al la carte’ access.”
“Overall, profit sector channels will see increasing average transaction prices fuel the majority of future value growth in the country’s foodservice market. Transactions will also rise, driven by Australia’s growing population”, continues Ninad.
Australia’s total cost sector buying was valued at AUD$2.4bn in 2016. GlobalData forecasts the cost sector to reach AUD$2.6bn over the period 2016-2021.
Analysts available for comment. Please contact the GlobalData Press Office at email@example.com.