The Philippine foodservice profit sector is set to grow at a compound annual growth rate (CAGR) of 17.5% from PHP451.1 billion ($9.2 billion) in 2021 to PHP1,009.7 billion ($20 billion) in 2026, predicts GlobalData, a leading data and analytics company.

GlobalData’s latest report, “Philippines Foodservice Market Size and Trends by Profit and Cost Sector Channels, Consumers, Locations, Key Players, and Forecast, 2021-2026,” reveals that the foodservice profit sector revenue declined at a negative CAGR of 9.2% during 2016–21, led by a drop in number of transactions and outlets.

Profit sector outlets were shut for most of 2020 to curtail the spread of COVID-19, leading to a decrease in the number of dine-in occasions in the sector. Home delivery and take-away sales played a crucial role in supporting the sector to revive in 2021, following the impact from the COVID-19 pandemic.

Anjali Singh, Consumer Analyst at GlobalData, comments: “Owing to the rise in inflation and unemployment, consumers’ purchasing power declined amid the pandemic. As a result, they curtailed their spending on eating out in casual and fine dining restaurants. Furthermore, international tourism, which plays a key role in driving restaurants’ sales, was hampered due to cross-border restrictions, which in turn, impacted profit sector sales.”

According to GlobalData’s report, quick-service restaurants (QSR) remained the largest foodservice profit sector channel in 2021, accounting for 56.1% of the Philippines’s total profit sector revenue. Though the channel declined at a negative CAGR of 5.4% during 2016–21, it proved to be more resilient than other profit sector channels due to its higher penetration of take-aways and an established delivery network even before the pandemic.

Jollibee Foods Corporation was the leading QSR operator in 2021 with approximately 2,500 outlets. The chain continues to expand its footprint in the Philippines and strive to open 500 new outlets in 2022. The operator launched its online ordering application in August 2020.

All channels recorded decline in their transaction numbers during 2016–21, as economic uncertainties rose amid the pandemic, hampering consumer spending in the profit sector. Travel recorded the steepest decline in the number of transactions at a negative CAGR of 19.9% during 2016–21, followed by the workplace channel, registering a negative CAGR of 15.6%. However, all profit sector channels are projected to register growth through 2026 in line with a rebound in consumer confidence and resumption of outlet operations at full capacity.

GlobalData forecasts all foodservice profit sector channels in the Philippines to experience growth in outlet count during the forecast period. Chain operators will grow at a higher rate compared to independent operators across restaurant channels.

Singh concludes: “The COVID-19 pandemic acted as a catalyst for the proliferation of ghost kitchens as many operators decided to open smaller stores than traditional dine-in locations to cater to the growing consumer need for convenient and flexible out-of-store options.

“Furthermore, inclination towards healthy and nutritious food options made with fresh and natural ingredients will be on the rise in channels such as QSR and full-service restaurants (FSR). As a result, operators need to constantly innovate their menus with health-focused and quality dishes. The key target demographics for healthy indulgence will be the youth and millennials in the Philippines.

“Additionally, the reopening of borders from February 2022 will boost the ailing tourism industry which will positively impact the sector’s sales.”