Australia’s foodservice profit sector is expected to register a noticeable growth, reaching A$88.7bn (US$65.7bn) in 2025 from A$57bn (US$39.6bn) in 2020 at a compound annual growth rate (CAGR) of 9.3%. The growth in home deliveries is likely to be instrumental in driving the foodservice growth, says GlobalData, a leading data and analytics company.

Growing demand for convenience, owing to busy lifestyles of consumers and an increasing number of transactions, will drive the industry’s growth.

GlobalData’s report, ‘Australia – The Future of Foodservice to 2025’, reveals that at around 45% of the market share, the quick service restaurant (QSR) channel remained the most popular foodservice profit sector channel in 2020. The channel’s growth was largely attributed to its convenience and value for money attributes and safe delivery services.

In terms of growth, QSR was the only channel to record growth among all foodservice channels, albeit at a moderate CAGR of 1.4%. The QSR channel also led the industry growth in terms of the number of outlets in 2020.

Bijayalaxmee Pradhan, Consumer Analyst at GlobalData, says: “The declining performance of the Australian foodservice profit sector was mainly due to decreasing number of transactions. Home deliveries and takeaways performed significantly in 2020, leading to a surge in businesses for food-delivery provider.”

GlobalData forecasts that depending on the economic recovery in the next five years, all the foodservice profit sector channels will experience growth in outlets and transactions by 2025.

The travel channel is expected to record the steepest CAGR at 22.7%. As the economic sentiment returns to normalcy, workplace is expected to record the highest growth in outlets, at a CAGR of 1.3%, during 2020–2025.

Ms Pradhan concludes: “Changing the lifestyles and eating patterns led to the prevalence of home deliveries in Australian foodservice channels. Going by the vegan and vegetarianism trend, QSR operators are increasingly adopting menu items made of plant-based ingredients. Operators are focusing on modernizing and digitizing their operations with an online presence to meet the customer demand. Aiming to be a viable alternative to FSR, the coffee and tea shop channel is introducing non-traditional food offerings that include local ingredients and seasonal menus.

“During the forecast period, operators will depend more on deliveries to reduce their real estate expenses, leading to the emergence of new formats (such as the virtual kitchen) in the country. QSR operators are investing in virtual or dark kitchens to provide a variety of cuisines to consumers and gain from online food ordering.”