Australian food industry over-serviced

- Last updated on GMT

Related tags: Restaurant, Food

The Australian food industry is over-serviced and the number of
customers per food outlet is too low, according to a new report
from BIS Shrapnel's, writes IndustrySearch.com.

The Australian food industry is over-serviced and the number of customers per food outlet is too low, according to a new report from BIS Shrapnel's, writes IndustrySearch.com.

The principal author of the report, foodservice industry consultant Dr Sandro Mangosi, notes that around 750 distributors are targeting 79,000 food outlets, 105 outlets per distributor, and this is too few to generate sufficient margins to sustain growth and capital investment.

Among the distributors, the top five companies, Combined Food Services (including PFD Food Services), Bidvest Australia (including John Lewis Food Services), Countrywide, NAFDA and Metcash Trading, command together a market share of less than 30 per cent by value.

Mangosi said this is a reversal of normal markets where the top three or four firms control in excess of 70 per cent of the business.

The study values the foodservice industry at more than $24 billion a year at retail prices, a figure expected to increase to $32 billion by 2011.It says the sector is growing faster than the total market for retail food and turnover per outlet will remain low unless some rationalisation takes place. In Australia, where 30 per cent of meals are eaten out, the community is serviced by nearly 15,000 restaurants, or 7.5 restaurants per 10,000 people.

This compares with Hong Kong and Singapore, where 60 per cent of meals are eaten out, and there are 10.3 and 6.8 restaurants per 10,000 respectively.

"All the signs are in place for an inevitable and significant rationalisation,"​ Mangosi said. The study is based on more than 1500 interviews with foodservice operators in the institutional and commercial sectors, and with wholesalers and distributors.

Sales of food and beverages to the foodservice industry sales are around $9 billion at wholesale prices.

The largest suppliers are identified as Coca Cola, Simplot, Inghams, Goodman Fielder, Barter Steggles, Nestle, Masterfoods, Unilever, Bonland and Dairy Farmers.

Related topics: Market Trends

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