Food is getting faster and more international. But the food industry cannot take success for granted in all markets. What works in one country may not work in another.
The UK fast-food market has experienced growth throughout the period between 1993 and 1997, increasing 28.6 per cent to reach 2.2bn in 1997. Growth has been driven by the growing appetite among consumers for convenience eating combined with improved economic circumstances. This has encouraged major players to expand the number of chains and step up advertising and promotional activity. Particularly successful have been fast-food style sandwich chains such as Pret A Manger, where sales have increased by 158 per cent over the survey period.
Per capita expenditure through fast-food pizza outlets stood at nearly 6 in 1997, while expenditure on burgers was a much higher 27. Expenditure on burgers, although still growing, is under pressure with stiff competition coming from other fast foods, notably traditional products such as sandwiches. Per capita spending on pizzas on the other hand is rising as the number of outlets grows and the variety of products offered is extended.
UK spending through burger and pizza outlets is behind only the US and Japan. US consumers spent almost 180 per head on burgers and pizzas in 1997, which was approaching six times the level of expenditure for consumers in Japan and the UK.
In the US, the dominant burgers sector continues to set the benchmarks for industry-wide prices and standards, although fierce competition has led to lower prices. The pizza sector, on the other hand, has struggled with the need for product quality improvement and innovation.
American-style fast food has apparently found a comfortable home in Japan, with spending in burger outlets standing at almost 30 per head.
Burgers and pizzas through fast food type outlets have found the least acceptance in Italy, where regional preferences remain strong, with a total per capita spend of only 5.10. Although the burger market is largely undeveloped, it will be interesting to watch the future of McDonald’s in Italy, which holds a monopolistic position.
Across most countries, it is the pizza sector which has been one of the most dynamic in the fast food market, as the convenience of the product on offer, home delivery and take-away services gains further consumer acceptance.
There are a number of issues at stake here which define the consumer of the Nineties, driving or in some cases (notably Italy) restricting growth across fast-food markets. These include the seemingly contradictory pull between health and convenience which influences many of our purchasing decisions. The other main trend is the move towards the internationalisation of eating habits, a development which has been tempered by a concurrent urge to hang on tightly to regional and local cuisines.
The countries included in the survey on food products and catering markets all show an acceptance of international food influences. Undoubtedly, the concept of fast food is a particularly effective way of introducing people to new tastes. This trend started some 15 years ago with the opening of hamburger chains, followed by pizza outlets and most recently with the opening of ethnic food outlets, for example Mexican or Japanese. However, while this trend is common to all the countries surveyed, it is taking place at very different speeds in different countries.
One of the most important factors in determining the rate of acceptance within individual markets is the attitude of younger consumers, who are particularly keen to try different types of food and generally have a higher level of disposable income.
Moreover, changes in lifestyles have altered traditions. Long lunches for the Italians and Spanish are on the wane and consequently they are more likely to experiment with fast foods.
The burger sector has experienced remarkable growth over the past five years particularly in countries such as Italy, Spain, Germany and France which traditionally have a very low acceptance of such food. It is interesting to see how big the difference is across the countries surveyed. There are over 25 burger outlets for 100,000 habitants in the US compared with 0.3 outlets in Italy. The smallest markets after Italy are Spain, Germany and France.
In these countries, the chains have adopted various strategies to improve sales. For example, service stations have become the most recent form of location for the expansion of fast food chains in Spain. Moreover, the majority of existing shopping centres are characterised by a high concentration of fast food outlets, and it is often the case that rival outlets are located side by side. France is the country that experienced the highest growth of burger outlets recently, following massive expansion by McDonald’s, which opened many new outlets in provincial areas in the last two years. In Italy it will be interesting to see how McDonald’s progresses. It may well follow similar location strategies already adopted in Spain and France.
The UK is undoubtedly the most international of all European markets in terms of acceptance of foreign foods. This is attributable to the international nature of British people and the high number of foreign people who live here. Another factor is that unlike countries such as Italy, where the mother cooks for the family well into their twenties, people in the UK tend to leave home at an earlier age and spend less time cooking for themselves.
This data proves that despite a favourable trend towards internationalisation of eating habits, careful thought must be given by multinational players in the food and catering industry as to how best to appeal to a country’s individual tastes and needs. Without it they will inevitably fail.