THE AUSTRALIAN FOODSERVICE MARKET FUTURE IN FOODSERVICE SEPTEMBER 11, 2017

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2 THE AUSTRALIAN FOODSERVICE MARKET FUTURE IN FOODSERVICE SEPTEMBER 11, 2017

3 AUSTRALIAN FOOD INDUSTRY 3

4 CONSUMER MARKETS RETAIL FOODSERVICE $115 Billion + $57 Billion $172 Billion 4

5 ECONOMIC CONTRIBUTION 5

6 THE FOODSERVICE DOLLAR In the last two decades Australians have made eating out a way of life. Nearly two thirds of the population over the age of fourteen eat out at least once a month. 6

7 THE FOODSERVICE DOLLAR 7

8 AUSTRALIAN FOODSERVICE MARKET EATING OUT A WAY OF LIFE FOR AUSTRALIANS IN CITIES AND IN COUNTRY TOWNS AUSTRALIANS EAT OUT FOR BREAKFAST, BRUNCH, LUNCH & DINNER EVEN DURING UNCERTAIN ECONOMIC TIMES AUSTRALIANS TRADE DOWN IN CHOICE OF OUTLET 8

9 AUSTRALIAN FOODSERVICE MARKET UNIQUE DYNAMIC VIBRANT DIVERSIFIED EVOLVING Plethora of Cuisines Fastest Changing Food Market A Market of Independent Outlets Huge Variety of Eating Out Options Continual Growth 9

10 CUISINE OUR NATIONAL FOOD PALATE IS BOLD AND OPEN NO REAL NATIONAL CUISINE 10

11 SIX FOODSERVICE REGIONS 1. NEW SOUTH WALES Sydney centric diverse & dynamic Many other large urban areas & cities, wine districts, holiday destinations 2. VICTORIA Melbourne still the coffee capital of Australia Tourism critical to regional Victoria and its foodservice market More of a Southern European dining scene in Melbourne the Greeks & Italians 11

12 SIX FOODSERVICE REGIONS 3. QUEENSLAND Brisbane has developed into a sophisticated dining out market in the past decade Regional Queensland still a steak & seafood society 4. WESTERN AUSTRALIA Perth an isolated island Supply problems linger The institutional sector ahead of the game A huge tourist region 12

13 SIX FOODSERVICE REGIONS 5. SOUTH AUSTRALIA Significant supplier of fresh produce Still largely reigned by English & German food traditions Adelaide is not a strong tourist destination in itself 6. NORTHERN TERRITORY Closer to Asia than the rest of Australia All about casual dining Problem of availability and continuity of supply 13

14 COMMERCIAL OUTLETS ,099 1% 20% OUTLETS 9% 7% 33% 2% 26% 2% COMMERCIAL SECTOR % SHARE OF TOTAL OUTLETS 76 ANNUAL GROWTH RATE

15 INSTITUTIONAL OUTLETS ,540 1% 19% OUTLETS 10% 7% 36% 2% 23% 2% INSTITUTIONAL SECTOR % SHARE OF TOTAL OUTLETS 24 ANNUAL GROWTH RATE

16 COMMERCIAL OUTLETS 16

17 INSTITUTIONAL OUTLETS 17

18 FOODSERVICE MARKET SIZE Title TOTAL MARKET SIZE BY VOLUME 3 Units Kilos 2.9 Billion Detail Broken down by product sub-category 4 Title Units Detail COMMERCIAL MARKET SIZE BY VOLUME Kilos Broken down by category and commercial channel COMMERCIAL MARKET SIZE BY VOLUME 5 Title Units Detail INSTITUTIONAL MARKET SIZE BY VOLUME Kilos Broken down by category and institutional channel INSTITUTIONAL MARKET SIZE BY VOLUME Title TOTAL MARKET VALUE 6 Units Wholesale Price in AUD $19 Billlion Detail Broken down by product sub-category Title COMMERCIAL MARKET VALUE 7 Units Wholesale Price in AUD COMMERCIAL MARKET VALUE Detail Broken down by category and commerical channel Title INSTITUTIONAL MARKET VALUE 8 Units Wholesale Price in AUD INSTITUTIONAL MARKET VALUE Detail Broken down by category and institutional channel 18

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20 MAIN GENERAL DISTRIBUTORS $7.2 Billion 20

21 CHEFS OPERATING ENVIRONMENT AUSTRALIANS TRADING DOWN TO MORE CASUAL EATING OUT EXPERIENCES 21

22 CHEFS ARE DRIVEN BY 22

23 CHEFS ARE IMPACTED BY the lack of skilled staff both front & back-of-house rising food costs rising utility costs strong competition 23

24 FULL SERVICE RESTAURANTS Fine Dining Only 2-3% of Australia s total number of restaurants All foodstuffs made from scratch Working with sophisticated latest equipment Passion for the ultimate fresh produce 24

25 FULL SERVICE RESTAURANTS Upper Middle/ Middle/Casual replacing fine dining/growing Pressure to differentiate themselves from competitors signature dishes Demanding customers requesting menu changes 25

26 FULL SERVICE RESTAURANTS Lower End Suburban & Regional Plateaued but still vibrant Less pressure to vary menus most of the time making their standard fare Chef often the owner carries the financial burden 26

27 CAFÉS Not usually a trained chef Less foodstuffs made-from-scratch Many menu items made in advance CAFÉS Coffee no longer the product to rely on 27

28 PUBS & TAVERNS PUBS & TAVERNS Pubs steadily grown in popularity over the past three years the in channel Many pubs have become gastro pubs 28

29 HOTELS Functions private & business - greater importance than the dining room Great focus on the breakfast meal segment little on dinner in comparison HOTELS 29

30 INSTITUTIONAL KITCHENS Budgetary constraints much greater than in the commercial sector INSTITUTIONAL KITCHENS Majority of back-of-house staff are cooks & kitchen hands Bulk food offering in most institutions large food quantities & simpler menus 30

31 FOODSERVICE EQUIPMENT $5 Billion 31

32 FOODSERVICE EQUIPMENT 1.4 million units installed 32

33 LIQUOR IN FOODSERVICE Total Number of Glasses per Year Red Wine White Wine Beer 211 million 184 million 225 million

34 LAST TWO YEARS TEMPORARY DECLINE IN FOOD & NON ALCOHOLIC BEVERAGES PLATEAUING IN QSR CHAIN VOLUME SHARP DECLINE IN FOODSERVICE EQUIPMENT INSTALLED BASE 34% DECLINE IN NUMBER OF ESPRESSO COFFEES CONSUMED 5 WINNERS: CAFÉS - PUBS/TAVERNS - INDEPENDENT QSRs 34

35 OPPORTUNITIES IN A GROWING MARKET 1 HEALTHY EATING STILL ON THE RISE 2 BREAKFAST & BRUNCH 3 PARTLY & FULLY PREPARED FOODSTUFFS 4 CAFÉ & PUB DINING 35

36 OPPORTUNITIES IN A GROWING MARKET 5 6 THE RISE & RISE OF THE HAMBURGER GLUTEN FREE STEADY GROWTH FROM LOW BASE 7 HOSPITALS & NURSING HOMES 8 NEW & INNOVATIVE PRODUCTS 9 HIGHER SUPPLIER MARGINS WITHIN FOODSERVICE 36

37 LOOKING TO THE FUTURE AUSTRALIA NEW ZEALAND 37

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