Foreign Agricultural Service
GAIN Report
Global Agriculture Information Network
Voluntary Report - public distribution Date: 4/3/2000
GAIN Report #AS0012
Australia
HRI Food Service Sector
Hotel, Restaurant, Institutional Food Service Sector
Report
2000
Approved by:
Randolph H. Zeitner
U.S. Embassy
Prepared by:
Hassall & Associates Pty Ltd
Report Highlights:
Australians spend 30% of their food budget on takeaway or dining out. The food
service sector in Australia was worth US$13.7 billion in 1998/99, accounting for around
35% of total food sales and is growing at twice the rate of retail food sales.
Includes PSD changes: No
Includes Trade Matrix: No
Unscheduled Report
Canberra [AS1], AS
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UNCLASSIFIED Foreign Agricultural Service/USDA
This report was drafted by consultants:
Hassall & Associates Pty Ltd
GPO Box 4625
Sydney, NSW 1044
Tel: +61-2-9241-5655
Fax: +61-2-9241-5684
E-mail: [email protected]
Disclaimer: As a number of different sources were used to collate market information for this
report, there are areas in which figures are slightly different. The magnitude of the differences is, in
most cases, small and the provision of the data, even though slightly different, is to provide the U.S.
exporter with the best possible picture of the Australian Retail Food Sector where omission may
have provided less than that.
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TABLE OF CONTENTS
SECTION I: MARKET SUMMARY ...........................................2
SECTION II: ROAD MAP FOR MARKET ENTRY ...............................6
A. Entry Strategy ......................................................6
B. Market Structure ....................................................7
C. Sub-sector Profiles ..................................................9
SECTION III: COMPETITION ..............................................17
SECTION IV: BEST PRODUCT PROSPECTS ..................................17
SECTION V: POST CONTACT & FURTHER INFORMATION ....................20
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1%
7%
11%
15%
16%
17%
32%
Supermkt prepared meals
Caterers
Self operators
Major Fast Food Chains
Hotels/Clubs
Other Fast Food
Restaurants/Cafes
Australian Foodservice Sub-Sector Sales 1999
Source: "The Australian foodservice market 1998-2000", BIS Shrapnel
SECTION I: MARKET SUMMARY
The Australian food service sector consists of three main sub-sectors - Hotels and Resorts,
Restaurants, and Institutional Contracts. Larger hotel and resort restaurants are increasing their profile
by attracting internationally renowned chefs and developing interesting menus. A gap that existed in the
fine dining sector in Australia is being filled with improvements in the quality of hotel/resort restaurants
and the development of new hotels. There are many smaller hotels, which generally don’t have in-house
restaurants, but exist in suburbs with a proliferation of places to eat. The restaurant sub-sector is
characterized by independently owned restaurants. Within the restaurant sub-sector, the traditional
fast-food chains, mainly US branded, have lost 3% market share over the last three years, partly to
cafes and through the transfer of business to ethnic cuisine fast-food outlets. The institutional contract
sub-sector is dominated by three main caterers/distributors.
Australians spend 30% of their food budget on takeaway or dining out, spending on average US$18.86
(AUD = USD$0.64) per week on meals away from home of which US$7.70 is spent on takeaway
food. A further US$5.14 is spent on non-alcoholic beverages. The food service industry served nearly
4.2 billion meals in 1998 or 222 meals per head compared with 216 in 1996, according to a study by
BIS Shrapnel (1999). There is potential for substantial growth particularly if we look at the US where
consumers eat out at hotels and restaurants twice as often as Australians. The study forecasts the
number of meals served will increase by 4% annually over the next 2 years, with restaurants, cafes and
fast-food chains reaping the benefits.
The food service sector in Australia was worth US$13.7 billion in 1998/99 (AUD = USD$0.625),
accounting for around 35% of total food sales, and is growing at twice the rate of retail food sales (BIS
Shrapnel, 1999). The following graph provides a breakdown of the Australian Food Service market
sub-sectors. Restaurants / Cafes accounted for A$7 billion (US$4.4 billion) of the market in 1998,
increasing from A$6.3 billion (US$4.6 billion) in 1996-97, representing a growth rate of 11%.
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Imported foods accounted for approximately 12% of total food costs in 1998. Of the total value of
food imported to Australia US imports contributed US$256 million in 1994, increasing to US$321
million in 1998 (AUD = USD$0.63). Of this, US$26 million was imported as seafood or seafood
preparations in 1998.
Value of Imported Food vs Domestic Products (USD Million)
1994 1995 1996 1997 1998
ROW Imported Food Products 2,299 2,534 2,620 2,569 2,370
US Imported Food Products 256 307 281 309 321
Domestic Food Products 36,265 36,994 39,165 36,056 30,650
Total value of Food Products in
Australia
38,819 39,835 42,066 38,933 33,342
Source: Australian Bureau of Statistics, Cat Nos. 5422 / 5206
The food service market consists of 76,000 outlets, nine per cent more than recorded in the survey of
1996. 60,000 are commercial (restaurants, hotels, fast-food chains, clubs and cafes), and 16,000
institutional (schools, hospitals and prisons). The increase in outlets has been driven by growth in
restaurants and fast-food outlets (FoodService News September 1999).
The number of cafes, restaurants and bars in Australia increased from 14,000 to 20,000 in the past
three years. The coffee sector is now one of the highest ranking in terms of the food industry’s annual
turnover. Australia imports more than 40,000 tons of coffee annually and Australian coffee production
is expanding.
The distribution of the food service sector across Australia can be seen in the following chart. NSW /
ACT is the leaders in all four divisions.
States Share of Retail Food Sales 1998 (Percentage)
States Takeaway
Outlets
Other Food Outlets Cafes &
Restaurants
Supermarkets &
grocery
NSW/ACT 36.9 40.9 37.1 33.2
Vic 20.8 21.3 23.8 25.4
Queensland 20.8 15.2 19.8 18.6
SA/NT 9.8 9.8 6.9 9.3
WA 9.2 11 11.7 10.8
Tas 2.4 1.8 1.2 2.7
Source: Retail World ACNielsen Report, Food Retailing, Jun 21-2July 1999, ABS 8501.0
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The key demand drivers and macro-economic factors affecting the food service sector include:
•
Trend towards healthy food choices: A recent consumer survey found that 78% of Australians
believe diet influences health; 65% of people worry about chemicals in food; 53% worry about
out-of-season produce; and more than 40% are concerned about genetic engineering. Australians
are also increasing their consumption of fresh produce with fruit and vegetables accounting for
57% of total food intake. BIS Shrapnel confirmed this trend in their 1999 survey of food service
operators where 51% of respondents agreed that fresh produce popularity was reducing demand
for processed products. Additionally 80% of respondents agreed that customers are demanding
more healthy foods (e.g. low fat, vegetarian, organic).
•
Emphasis on quality: Restaurants enlist dedicated suppliers to produce fruit and vegetables to
their quality specifications of variety and freshness. The success of gourmet delis / sandwich bars is
also based on the presentation of high quality fresh produce.
•
Menu diversification & ethnic diversity influencing food choices: Multiculturalism has had,
and will continue to have, a major impact on the food service industry with around 75% of
Australians eating ethnic foods regularly. More than 30% of first courses in restaurants in Australia
can be classified as ethnic dishes. Cuisine represented includes Mediterranean, African, European,
South American, South East Asian, North East Asian, Indian, and Middle Eastern.
•
Adventurous palates: Most Australians have traveled overseas and/or grown up in a multicultural
society and as a result have been exposed to a variety of flavors. Also, Australians are developing
more of a taste for spicy food using around 68% more spices in food preparation than a decade
ago.
•
European influence: A report in ‘EuroWow!’ on the latest innovative retail concepts in Europe
considers European concepts are more relevant for Australia than concepts developed in America.
Restaurant menus are increasingly taking on classic French principles.
•
Domestic demand buoyant: Australian consumers are confident in the Australian economy due
in part to growth in real incomes and employment. This has lead to an increase in disposable
incomes available for dining out.
•
Longer working hours and two income families: Both men and women spend increasing
number of hours at work dictating the trend of people looking for convenience and value for
money. In the Murdoch Magazines Food in Focus study, 90% of Australians eat more than three
non-home-prepared meals per week, 45% of which are eaten at home.
•
Internet: Food service companies including caterers, home-service, food distributors and
specialist manufacturers are turning to the Internet to increase sales and improve distribution.
www.nafda.com.au, www.wineplanet.com.au, www.greengrocer.com.au, and
www.richmondhillcafe&larder.com.au:affiliated, are examples.
•
Product Innovation: Australians are prepared to try innovative foods and international chefs
consider it easier to experiment in Australia and break with tradition.
•
Lifestyle: Eating out is playing an increasing role in socializing and entertainment.
•
Growth in International Conventions: Sydney, and Australia, has experienced substantial
growth in the number of international conventions held partly due to an increase in advertising and
appropriate venues.
•
Indulgence: The market is breaking down into specific segments with consumers demanding
“indulgence food one day, and healthy products the next”.
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A conclusion from these trends is that the Restaurant sub-sector will continue to grow, in particular we
will see an expansion of ethnic cuisine restaurants offering high quality, value for money food and coffee
shops.
Advantages and Challenges Facing U.S. Products in Australia
Advantages Challenges
Growing confidence in Australia’s economic
fundamentals with 33 quarters of expansion.
Australian dollar has depreciated against the US
dollar making imports relatively more expensive.
US fruit producers will have a seasonal
advantage in supplying fresh fruits, particularly
blueberries, strawberries, raspberries and
blackberries.
Many competitive U.S. products are prohibited
entry or face rigid SPS regulations, e.g. of the
berry fruits, only strawberries are currently allowed
entry (see section IV, B)
US suppliers are able to supply specialty
seafood products including species from North
America to the food service industry.
As most products are available in Australia for the
food service industry, US products have to
compete on price in an extremely competitive
market.
Tariffs on imported food products are low -
0% for canned or minced salmon, citrus,
grapes, condiments, chilled beef, almonds, and
stone fruit.
With the emphasis on quality Australian chains and
restaurants are likely to buy fresh produce locally
as it is viewed as fresher by consumers.
Australian consumers are experimental and
desire authentic, restaurant quality taste
sensations. Innovative products that make it
easier for food service operators have
potential.
US suppliers have to compete with the popularity
of South East Asian, Italian, and European cuisine.
During Olympics most food service
wholesalers in NSW expected an increase in
business, as did one third of respondents in
other sates. 60% expected the boom to last
no more than 3 months.
In 1998, 75% of consumers “always” or
“sometimes” prefer domestic products up from
61% in 1996. Melbourne and Sydney residents
are some of the strongest supporters of
protectionist policies (i.e. "Buy Australian").
The Australian food service industry has access to
one of the widest and freshest supplies of food in
the world.
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SECTION II: ROAD MAP FOR MARKET ENTRY
A. Entry Strategy
Channels
• US Exporters will need to establish local and US representation.
• For most food product categories, wholesalers are the main source of supply to food service
operators in terms of the flow of goods as reported by BIS Shrapnel in 1999. This is with the
exception of bread, meat, fresh poultry, fresh fruit and vegetables, and dairy products, which are
mostly supplied by specialist retailers, distributors or manufacturers. However, specialist food
service distributors distribute many products developed specifically for the food service industry.
• Specialist distributors or importers may be more successful for these product categories. For
example Simped Food is a manufacturer/supplier of desert ingredients and sources fresh fruit in the
off season from major specialist distributors in the US.
• Exporters may find more success by targeting distributors and wholesalers that stock a wide range
of items as the food service market is looking to one-stop-shop servicing distributors that can offer
a range of dry and frozen goods.
• Use Australian food service supplier Internet sites to locate specialist/generalist distributors. For
example www.nafda.com.au provides interesting industry links to www.supplysite.com and
www.foodservice.net.au. Many of the linked sites are international allowing you to advertise your
products to Australian buyers as well as to the rest of the world. Also look at
http://www.ausfoodnews.com.au/foodcomp.htm and
http://www.ausfoodnews.com.au/foodserv.htm
Product Promotion
• Build brand awareness through advertising and promotion. A recent survey determined that: 89%
of marketing executives believed promotional products effectively built brand awareness; 53%
used promotional products; and 30% believed such products were more memorable than
mainstream advertising. The most popular promotional products are calendars, items that can be
worn and office accessories.
• Educate potential customers of industry product endorsements your products may have received.
Australian consumers respond positively to a quality product endorsement. If your product has
won awards in US ensure adequate advertising. Also if restaurants/caterers you supply have won
awards, ensure your products include educational material advertising successes.
• Exhibit at trade fairs in Australia (see Section V).
• Make it easier for distributors/caterers to use your products by packaging products into menu
suggestions that target school canteens for example.
• Depending on the nature of your product, whether it is geared towards the institutional, restaurant
or hotel/resort sub-sectors, different food service suppliers should be targeted. For example:
• larger wholesalers are dominant in the institutional sector (except for non-boarding schools);
• smaller suppliers appear to be dependent on the trade from restaurants;
• coffee shops, clubs and hotels, fast food and restaurant chains rely mostly on the large
wholesalers and distributors; and
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• function and contract caterers appear to use suppliers of all sizes.
Food Safety
•
Ensure your product meets the food safety requirements of each sector. The Institutional Sector
has particular requirements, as does the seafood industry.
School Canteens
•
Products must meet the Federation of Canteens in Schools (FOCIS) standards on nutrient criteria
and be registered with FOCIS.
•
Register with the School Canteen Association in the relevant state (see Section V).
•
The Western Australia School Canteens Association (WASCA) is developing the Star Choice
Canteen Buyer’s Guide which includes all products registered nationally as “Healthy Kids”
products as well as those registered with WASCA as Star Choice. As such, register your product
as a “Healthy Kids” product and with Star Choice where possible.
•
Registered products should include industry logos in their promotion.
•
Register with the Australian National Heart Foundation where possible.
B.
Market Structure
Independent distributors dominate the food service network in Australia. The industry is fragmented
and is represented by over 750 distributors nationally who service an estimated 73,000 outlets. The
fragmented nature of the industry means food service operators need to deal with a large number of
distributors and wholesalers to meet their requirements. In a survey conducted by BIS Shrapnel (1999)
nearly half of the food wholesalers interviewed used five or more suppliers. This percentage increases
to 62% in the case of larger companies. However, the results suggest there is a trend towards a
decrease in the number of suppliers used. Importers are more likely to succeed by targeting the main
distributors, buyer groups and wholesalers that generally have national coverage or specialist
distributors of a particular product.
Most distributors are small (five employees or less) and located mainly in rural towns while the largest
(up to 600 employees) are found primarily in the key capital cities, especially Sydney and Melbourne.
The industry fragmentation is driven by the high expectations of customers who expect virtual 24-hours,
7-days a week, service.
In order to compete more effectively, some small distributors have banded together to form buying
groups, such as Countrywide and NAFDA, two of the largest distribution networks in Australia.
Countrywide is mainly located in country areas, with a membership of 96, and NAFDA is largely
metropolitan based, with a membership of 54.
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Most large food producers or manufacturers still distribute a large proportion of their own products,
particularly for bread, cold beverages, dairy products and fresh/frozen meats. Coca-Cola, Arnott’s,
George Weston’s bakery division, and Goodman Fielder Foodservices maintain their own in-house
distribution network.
The food service distribution network services the traditional food service outlets such as hotels, clubs,
restaurants and institutional and business canteens, caterers, delicatessens and specialty food stores.
The McDonalds and PepsiCo chains employ individual distributors FJ Walker services McDonald’s
and Tricon services KFC and Pizza Hut.
The structure of the Australian Food Service distribution network as shown below, shows the flow of
product from the US exporter through to the food service sub-sectors.
Hotels Restaurants
Institutions
eg PDF supplies Spotless
Catering in some states
US Exporter
Importer Broker Direct Local
Wholesale
US
Distributor
Internet/ Integrator Large Wholesale
(Davids, AIW, Foodland)
Food Service Distributors
(NAFDA, Country Wide,
John Lewis Foodservice)
Independent Food
Service Distributors
The Internet is emerging as a player in the distribution of fresh produce to restaurants with the flow of
goods moving from the manufacturer via the Internet/Integrator to the consumer. Greengrocer.com is a
distributor of fresh produce to homes and is developing a market in the restaurant sub-sector. The flow
of goods is from the manufacturer, Internet/Integrator, to the consumer or if possible manufacturer to
consumer. Wineplanet.com is another example of Internet selling. The major distributors and
wholesalers also have Internet capability.
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C.
Sub-sector Profiles
Abbreviations used in this section: NT = Northern Territory; SA = South Australia; WA = Western Australia;
VIC = Victoria; QLD = Queensland; NSW = New South Wales; TAS = Tasmania; ACT = Australian Capital
Territory.
1.
Hotels and Resorts
Company Profiles
Name of
Hotel/Resort
Food
Sales*
Number Location Purchasing Agent
Park Royal Hotels
& Resorts
25% of total
turnover
20 National, Capital Cities
and Tourist Destinations
Internal buyers/
wholesaler
Hyatt International 25% of total
turnover
8 National except NT &
TAS
Internal buyers/
wholesaler
Sheraton Hotels &
Resorts
50% of total
turnover
12 National except NT/SA
and TAS
Internal buyers/
wholesaler
Accor (Novotel) NA 18 National NA
Accor (IBIS) NA 6 Major capital cities NA
Source: Based on advice from industry.
*Due to competitive nature of the sector not able to divulge turnover figures.
The Hotel sub-sector represents 16% or US$2.19 billion of the food service sector. The major chain
hotels are listed in the table above, however the market is expanding with new chains opening including
the US chain Westin Hotels opening in Sydney and Melbourne’s CBD.
There are a number of challenges, which face US suppliers in this sector:
• Hotel chains and independent hotels generally serve food which is localized; and
• Australian products are more prevalent than imports and US products are not common.
Despite these challenges the following growth trends offer opportunities to US suppliers:
• Hotels and Resorts are increasing their push into the growing business convention and function
sector. Australia, and Sydney in particular, is a popular destination for international conventions
suggesting an expanding market.
• The market for breakfast is growing in Australia. Offerings include continental breakfasts, fruit
platters, hash browns, pancakes with maple syrup, sausages etc. Hotels have the largest share of
the market serving approximately 70 million breakfasts each year, while cafes and food outlets
serve approximately 21 million breakfasts.
• The serviced apartments and bed and breakfast accommodation market is gaining rapidly on the
four and five-star hotel sector. Opportunities exist with portion controlled, easy to heat dinners
such as high quality cook-chill or ‘heat in the bag’ meals.
• The demand for healthy food applies to the Hotel sector. Some hotels have implemented the
Harvard Health Program promoting the health of traveling people in the business and leisure
market. Seafood is a natural choice for the program presenting opportunities for suppliers of
specialty products.
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2.
Restaurants
Fast Food Company Profiles
Company
Name
Sales
(AUS$
Mil)
Number
of Outlets
Location Nationality Purchasing Agent
Type
McDonald’s
Australia
$1,037
(1998)
672 National Local
franchise
F J Walker Distributor
KFC NA 430 National US Tricon Services
Pizza Hut $341
(1998)
372 National US Tricon services
Sub Way NA 223 National
(50% in
QLD)
US, local
franchise
Local Wholesaler/
Distributor
Pizza Haven
(ranked 2 in
Pizza market)
$75.4
(1998)
220 National Local Local Wholesaler/
Distributor
Eagle Boy’s
Pizza
NA 142 National Local Local Wholesaler/
Distributor
Domino’s Pizza 136 National US local
franchise
Local Wholesaler/
Distributor
Arnold’s Ribs
& Pizza
$5
(1998)
20 NSW,
QLD,
ACT
Local Local Wholesaler/
Distributor
Hungry Jacks NA National US Local
franchise of
Burger King
Local Wholesaler/
Distributor
Import Agent
Wendy’s NA 300 National US Local Wholesaler/
Distributor
Importer Agent
Pure & Natural
Diners
NA 34 Major
Cities/Tow
ns
Local Local Wholesaler/
Distributor
Fancy Fillings $6.3
(1998)
21 NSW,
VIC,
QLD, WA
Local Local Wholesaler/
Distributor
Hokka Hokka
(Asian fast
food)
$12.6
(1998)
30 NSW,
VIC, QLD
Local Local Wholesaler/
Distributor
Import Agent
Source: Corporate web-sites; Franchise Council of Australia (1999) Franchising Yearbook & Directory 1999; Industry
Advice.
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Major fast-food chains represent 15% of the total food service industry.
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Pizza and hamburger franchises are the backbone of the Australian fast food industry with Australians
consuming over 100 million pizzas per year. The market for pizzas is highly competitive in Australia,
with menu diversification, product innovation and low prices vital for success. Fast-food chains are
also offering reduced-fat menu options, showing that the trend towards healthy eating has influenced
chains.
Although the traditional fast-food restaurant sub-sector in Australia is substantial, a number of
challenges face US suppliers:
•
Australia sells the cheapest pizzas in the world, at half the price of US pizzas.
•
The majority of fresh produce is supplied locally.
•
The majority of US fast-food chains are locally franchised.
•
The sub-sector is facing competition from a developing up-market convenience food sector.
•
Ethnic quick service restaurants are growing in number and popularity.
Family Style/Mid-Level Company Profiles
Company
Name
Sales
(US$ Mil)
Number of
Outlets
Location Nationality Purchasing Agent
Type
Sizzler NA 87 National US Local Wholesaler/
Distributor
Import Agent
Hog’s Breath
Café (Australia)
Pty Ltd
$25
(1998)
36 National Local
franchise
Local Wholesaler/
Distributor
Import Agent
The Keg
Restaurant &
Bar
NA 17 VIC,
NSW,
QLD
Local Local Wholesaler/
Distributor Import
Agent
Montezuma’s
(Mexican)
NA 18 NSW,
QLD, VIC,
SA
Local Local Wholesaler/
Distributor
Import Agent
Taco Bill
Mexican
Restaurant
NA 21 National Local Direct
Source: Corporate web-sites; Franchise Council of Australia (1999) Franchising Yearbook & Directory 1999; industry
advice.
Australian family-style/medium level restaurants are for the most part independently owned. Restaurants
and specialty food service shops predominantly serve modern-Australian, Italian, seafood, Japanese,
Chinese, Thai, Indian and Mexican cuisine. For example Australia has over 3,000 Chinese restaurants.
Independent and franchise restaurants deal with distributors and wholesalers and often visit fresh
produce and meat markets. To tackle this market, targeting wholesalers and distributors will be more
successful and beverages and quality condiments are likely to be the most successful products.
Trends in family-style/medium level restaurants include:
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•
An increase in Asian food outlets.
•
An increase in the total number of restaurants.
•
Consumers willing to pay more for quality products.
•
Continuation of multicultural flavors dominating, reflecting the ethnicity of Australia.
•
New ideas will continue to flow from Asia and Europe.
•
Food festivals are popular events and provide a good idea of trends.
Coffee Shops Company Profiles
Company Name Sales
(US$m)
Number
of Outlets
Location Nationality Purchasing Agent
Type
Donut King (US,
local franchise)
NA 146 Australia US Local
Franchise
Local Wholesaler/
Distributor
Import Agent
Muffin Break NA 105 National Local Local Wholesaler/
Distributor
Import Agent
Michel’s
Patisserie
NA 68 National Local Direct
Local Wholesaler/
Distributor
The Coffee Club NA 46 QLD Local Direct
Local Wholesaler/
Distributor
Importer Agent
Coffee DCM
Donuts (local
franchise)
NA 29 NSW,
VIC, QLD
Local Direct
Local Wholesaler/
Distributor
Importer Agent
Source: Corporate web-sites; Franchise Council of Australia (1999) Franchising Yearbook & Directory 1999; industry
advice.
As with family style restaurants the majority of coffee shops in Australia are independent and locally
owned. However, franchises are popular with expansions planned. McDonald’s has also expanded
into the café industry with a chain of up market stand alone cafes, Serious About Coffee – SACs.
Coffee shops and fast food outlets represent the fastest growing segment in the breakfast market,
recording 8% growth per annum in 1995-97 (BIS Shrapnel 1999). Business breakfasts are also
becoming common place. McDonald’s is the only quick service restaurant with a significant share of
the breakfast market. As for Hotels this sub-sector represents opportunities for US suppliers.
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Specialty Shops Company Profiles
Ice cream is an area of growth in the food service market with many coffee shops providing an ice
cream bar. During 1998 Australians spent more than US$943 million on ice cream. Most ice-cream is
sold through supermarkets, convenience stores, milk bars, delicatessens, petrol stations, news agencies
and other stores. However a small growing market of franchised ice cream parlors accounted for
US$107-126 million of the total market in 1998, representing an increase of 8% over 1997. Premium
ice cream parlors represent the biggest area of growth in the industry worldwide. In Australia there are
more than 600 franchised ice cream outlets and growth of 6% is expected in 1999. Opportunities for
US suppliers would be in the boutique end of the market and catering industry where new flavors using
quality ingredients enjoy a premium and popularity.
3.
Institutional
This sub-sector’s business - cafeterias, military (defense), schools/universities, hospitals,
nursing/retirement homes, function catering (sporting, entertainment, conventions, Olympics) and
Internet home delivery services - present opportunities to US suppliers. The companies listed in the
following table are the primary suppliers to these sectors.
Company Profiles
Company Name Sales
(US$m)
Sector Location Purchasing
Agent Type
Spotless Catering
(caterer)
NA Functions (stadiums,
conventions,
Olympics)
National Local wholesaler/
Distributor
Import Agent
Direct
Nestle Foodservices
– National
(distributor)
NA Schools/universities,
restaurants, hotels,
functions
National Local wholesaler/
Distributor
Import Agent
Direct
PFD Food Services
(distributor)
NA 23 outlets supplying
hotels, restaurants and
caterers.
VIC, TAS,
SA, NSW
Local wholesaler/
Distributor
Import Agent
Direct
NAFDA (buying
group, distributor)
NA Nursing/retirement
homes, hospitals, fast-
food chains and hotels
National Local wholesaler/
Distributor
Import Agent
Direct
John Lewis Food
service (distributor)
NA Fast-food chains
Hotels
Catering Companies
National Local wholesaler/
Distributor
Direct
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Eurest
Australia/Eurest
Whizz Kids (caterer,
distributor)
$92
(1999)
Business cafeterias 3
Defense industry 1
School cafeterias 4
University 3
(Function catering,
healthcare)
VIC/NSW Local wholesaler/
Distributor
Import Agent
Direct
BidVest (distributor) NA Nursing/retirement
homes, hospitals, fast-
food chains and hotels
National Local wholesaler/
Distributor
Import Agent
Direct
Grinners Buffet
Catering (caterer)
NA 61 (functions) NSW Local wholesaler/
Distributor
Direct
The Essential
Ingredient
(wholesaler)
NA Supplier of
wineplanet.com/
home delivery
NSW Manufacturer
Import Agent
Wholesaler
Valcorp Fine Foods
(wholesaler)
NA Function caterers,
hotels
National Import Agent
Local Wholesaler
Direct
Countrywide Australia
(buying group,
distributor)
NA Catering companies,
hospitals, fast-food
chains, hotels
National Local wholesaler
Import Agent
Direct
GEMA Catering
(caterer)
NA Function catering
(conventions,
entertainment)
NSW Local wholesaler/
Distributor
Direct
Springett’s Wholesale
Pty Ltd
NA 600 outlets incl
Hospitals, schools,
hotels, service
stations)
NSW Local distributor
Direct
Importer
Laissez-Faire NA Function Catering
(Olympic contracts)
NSW Local distributor
Direct
Source: Corporate web-sites; industry advice; Food service News magazine, 1999 editions.
Supplier Information
•
PFD Food Services, is an Australia-wide catering/distributor specialist, supplying hotels,
restaurants and functions. PFD is a member of NAFDA PFD Food Services.
•
Australian Foodservice Distribution (AFD), a division of NAFDA (www.nafda.com.au),
distributes products for NAFDA including its own private label products.
•
John Lewis Food Service is a division of grocery wholesaler Davids and is one of the top three
catering distributors in NSW, promoting a range of over 8,000 items nationally.
•
Spotless Services is a catering company and the preferred supplier for the Olympics (contract not
yet signed).
GAIN Report # Page 17 of 24
UNCLASSIFIED Foreign Agricultural Service/USDA
GAIN Report # Page 18 of 24
UNCLASSIFIED Foreign Agricultural Service/USDA
•
Wineplanet.com, www.wineplanet.com.au, online liquor retailer, offers a range of 4,000 wines,
350 competitively priced spirits and liqueurs and at least 1,300 food products including tea, coffee,
oils and non-perishables. They have recently launched a Spirits & Liqueurs section of the site
which is soon to include imported wines, opening opportunities for US exporters. Sydney Food
Wholesaler, The Essential Ingredient, is currently the sole supplier of Wineplanet.
•
Eurest Australia is the newest entrant in the food service catering market and has expanded into
education catering services with acquisition of Melbourne catering company Whizz Kids. Also
recently acquired P&O Catering.
Military (Defense)
Each State and Territory in Australia has a Department of Defense. In terms of size it is substantially
smaller than that of the US. However, if US suppliers have developed suitable products they can target
suppliers to the Defense industry. For large contracts the Department has to advertise through open
tenders. Food stuffs commonly sought include the basics such as bacon and ham, biscuits, bread and
bread rolls, butter, cheeses, coffee and tea, cordial, eggs, fish, frozen vegetables, fresh fruit and
vegetables, ice cream, fruit juice, small goods, poultry and meat.
School / University Cafeterias
The following trends apply to this sector:
•
The sale of fresh fruit has expanded in schools.
•
Balancing the diets of Australian children with low fat and low sugar products is a priority.
•
School cafeteria operators demand foods that are healthy, exciting, colorful and tasty.
•
Vegetarian dishes are becoming popular.
•
There is increased demand for ‘Healthy Kids’ registered products by cafeteria operators.
•
The sale of chips, sweets, carbonated drinks, and chocolate has fallen dramatically.
•
The bottled water market continues to grow strongly.
•
Suppliers are offering complete menus to cafeterias.
Nursing / Retirement Homes
Australia has an aging population of a generation used to satisfying their nutritional needs. Opportunities
will continue to grow therefore in the nursing home and retirement care market.
Hospitals
‘Healthier Food Choices for Hospitals’, an initiative of NSW Hospitals, is a nutrition strategy to
promote safer and more nutritious food choices for people in the State. Other states have similar
programs highlighting the trend towards healthy food in institutional catering.
There are 1,236 hospitals in Australia with 764 public and 472 private hospitals. The following table
shows the distribution of establishments across Australia.
GAIN Report # Page 19 of 24
UNCLASSIFIED Foreign Agricultural Service/USDA
States Number of Hospitals Percentage Share
New South Wales 389 31
Victoria 270 22
Queensland 261 21
South Australia 133 11
Western Australia 132 11
Tasmania 35 3
Australian Capital Territory 10 0.1
Northern Territory 6 0.1
Source: Australian Institute of Health and Welfare (1999).
Hospitals (public and private) provide food for patients, staff, and Meals on Wheels clients in the
community and make up 3% of food service outlets. Across the hospital system there were 22.5
million patient days for 1997/98 (Australian Institute of Health and Welfare, 1999) and more than
900,000 patients enter NSW hospitals per year, suggesting a large market for institutional food service
(NSW Health Department 1996). Examples of distributors who serve the industry include NAFDA,
BidVest, Countrywide Australia, and Springett’s Wholesale.
Function Catering
Function catering is an expanding market in Australia. The Sydney Convention and Visitors Bureau
(SCVB) advise there is currently US$429 million worth of work in progress, which is the highest work-
in-progress figure in the 30-year history of the Bureau. This may be related to an increase in the
number of venues catering for functions of various sizes. In particular the US$200 million Superdome
on Olympic Boulevard offers a variety of facilities. Planned pre and post-Olympic uses include live
entertainment, concerts, opera, circus spectaculars, ice shows, private functions, banquets, trade shows
and a multitude of sporting events.
The special event catering industry is highly competitive and menu management systems have been
implemented by most catering firms. Portion and quality control are important factors allowing control
from both a quality and cost perspective. Menu Management Systems will be employed for the
Sydney 2000 Olympics, particularly by Spotless Catering Services, a preferred supplier for the
Olympics (contract not yet signed). Spotless Catering has developed portion control systems in
conjunction with seafood suppliers in Tasmania, such as Tassal and Aquatas. Opportunities could open
for US suppliers of portion controlled seafood products.
Spotless Catering Services is also responsible for catering at the enormous Colonial Stadium
development at the Docklands in Melbourne. 19 concession stands have stand-alone cooking facilities
with each outlet serving at least 3,000 patrons. Meals have to be blast chilled and ‘regenerated’ on
demand and be identical in size. Opportunities exist therefore for US suppliers of products to event
catering companies.
GAIN Report # Page 20 of 24
UNCLASSIFIED Foreign Agricultural Service/USDA
SECTION III: COMPETITION
The primary competition for US suppliers are Australian suppliers, particularly as the trend is towards
the consumption of fresh produce including meat, fruit, vegetables and dairy. In general food service
distributors are indecisive about the purchase of products made in Australia, however the large majority
of food service operators indicate that they prefer Australian products although perceived as being
more expensive than imports (BIS Shrapnel 1999).
US products are not generally seen as price competitive by food distributors. In particular, the
depreciation of the Australian dollar against the US dollar is a major competitive challenge for US
products. As a result imports from North America are generally specialty products such as canned fish
(60% of all fish fillets eaten in Australia are imported), chocolate (i.e. Hershey’s), and beverages (US
Sport drinks). Additionally US imports are at a disadvantage at present with the Australian dollar
having depreciated against the US dollar.
US suppliers also face competition from major food service trends. BIS Shrapnel (1999) found that
the types of cuisine considered to be the fastest growing were Italian (23% of respondents), Other
Asian (16%), Thai (14%), Australian/English (12%), Mexican (9%), Chinese (6%), Vegetarian (3%),
Seafood (1%), Other (2%) and Don’t know (14%). Queensland and Western Australia registered
Italian as the most mentioned with 32% and 31% respectively.
On the positive side, Australia has low (3-5%) to zero tariffs on imported food products and imports
are well presented in the market place.
Ethnically, US suppliers are at a disadvantage with Australians having strong ethnic links to the
Mediterranean, Europe and Asia and a tendency to favor such foods. US products that capture these
flavors will be more able to compete.
SECTION IV: BEST PRODUCT PROSPECTS
Distributors to the food service industry, chefs and caterers advise that Australia produces and
processes basically all food products required by the food service industry. Because of the diversity of
local product and that domestic substitutes exist for most imports, US imports face significant
competition from Australian products. That being said, there are some products which have good sales
potential in Australia and these have been discussed in previous sections of this report.
GAIN Report # Page 21 of 24
UNCLASSIFIED Foreign Agricultural Service/USDA
A.
Products Present in the Market Which Have Good Sales Potential
1.
Healthy products which are convenient for use in food service
Savory Finger Foods are increasing in popularity with the introduction of savory baby potatoes by
Chefs Pride (half a baby potato, filled). Asian snacks are also expanding market share. A gap in the
hospitality industry for a low cost, high quality, convenient mini-savory snack provided Patties Bakery
with an opportunity to develop bite-sized mini-party pies, sausage rolls, and vegetable triangles
specifically for the hospitality industry. This gap suggests there is room to expand in this segment.
Patties Bakery is the national market leader in the party segment of the frozen savory snack category.
Mediterranean cuisine remains a regular feature on catering menus providing opportunities
for easy to use, low preparation, high quality products. Sandhurst Fine Foods explains antipasto is
always popular in catering because of the low preparation costs. Artichokes, dolmades, sun-dried
tomatoes and specialty olives are in high demand. Eggplant paste is developing rapidly as a substitute
for tomato paste with gourmet pizzerias. Basil pesto and olive paste are now popular alternatives to
traditional garlic and herb bread, and capers are also in demand.
2.
Products Suitable for Large Events
At the Olympic Stadium there is the largest installation of Pitco Fryers in the world with 200 installed.
Most people in the stands will consume pies, chips and drinks, and a range of Asian styles, hamburgers,
chicken and pizzas offering opportunities for US exporters.
3.
Bottled Water: increased use in hospitality industry
Sales of bottled water have increased by 30 percent since June 1998 due to concern about Sydney’s
water supply. Water lists are appearing next to wine lists at restaurants. Coca-Cola’s Mount Franklin
has been the dominant brand of water in Australia, and Nestle owns dozens of international water
brands including Perrier. Southcorp (Australian company) has released a bottled water product
branded ERA. Bottled water is regarded as the fasted growing category of the non-alcoholic beverage
market in Australia.
4.
International Catering Trade Fair (Sydney, May 2000)
Qualified buyers at the ICTF are seeking:
Asian food products, cooking oils, baked goods, fish products, bakery ingredients, beverages, frozen
foods, canned foods, fruit juices, cheese & dairy, herbs & spices, coffee, ice cream & yoghurt,
convenience foods, liquor, portion control products, seafood, sauces & seasonings, soups, wines.
GAIN Report # Page 22 of 24
UNCLASSIFIED Foreign Agricultural Service/USDA
B:
Products Not Present in Significant Quantities but Which Have Good Sales Potential
Specialty Seafood
•
A distributor to the food service industry advised that specialty seafood products are sought after
such as tinned or processed North American fish species.
•
Seafood is very popular during the Easter and Christmas periods. Christie Seafoods, a wholesaler
supplying the hospitality industry, predicts demand for 2000 will be at an all time high. Lobster (as
more affordable), oysters, crabs, prawns and other shellfish are popular with more interest in fresh
products. Competition is fierce between hotels all vying for the top specialty seafood products.
Spiraling demand may create opportunities for exotic (but affordable) products.
Imported Salmon
•
The recent change in Australia’s quarantine restrictions for fresh salmon, opens a potentially
lucrative market for fresh/frozen salmon cutlets, fillets, etc. US product was very well received at a
recent Alaska Seafood Marketing Institute reception in Sydney.
Exotic Cuisines
•
Australia presents opportunities for the introduction of new cuisines and ingredients prepared to
assist with their introduction. Predictions for cuisine developing include a resurgence of traditional
Chinese roasting ships, which offer cheap, tasty meals at a low cost, and foods of the West Indies,
and Seychelles. Cajun cuisine also has potential suiting Australia’s spicy palate. Palm hearts,
which come from baby palm trees are also popular suggesting Spanish and South American dishes,
in which they are used, are becoming more widespread.
C.
Products Not Present Because They Face Significant Barriers
Industry advice suggests that where products are not present in a market it is primarily because the
distribution channel is not yet developed for a particular area, or demand for the product is not large
enough to warrant supply. Generally everything required in Australia is available so much so that
Australia exports culturally specific products to originating countries (e.g. exporting Asian cuisine to
Asia).
GAIN Report # Page 23 of 24
UNCLASSIFIED Foreign Agricultural Service/USDA
Berries
•
Wild blueberries are extremely popular with innovative chefs around the world and have not been
easy to source in Australia. Competition exists from locally grown blueberries with consumption
increasing dramatically, however there is significant interest in wild berries. Chefs Pride in Australia
sells frozen wild blueberries on their dietary benefits and flavor. Blueberry Farms of Australia, is
Australia’s largest producer of fresh blueberries with 70 percent of the market or 1,100 tons. In
Australia, in one NSW supermarket alone, demand for fresh blueberries has grown 700 percent in
seven years.
•
Of the berry fruits, currently only US strawberries have access to the Australian market. This is
because Australia prohibits entry of any plant products until an Import Risk Analysis (IRA) has
been carried out. At this time, no applications have been made for other berry fruit to be
imported. Until an application is made by US exporters and Australian importers, no progress will
be made on this issue.
SECTION V: POST CONTACT & FURTHER INFORMATION
Import Regulations & Food Safety Regulations
Food Law and Policy can be obtained through links located on the www.ausfoodnews.com.au web
site.
Food Standards are under the control of the Australia New Zealand Food Authority (ANZFA),
http://www.anzfa.gov.au.
Food safety import regulations can also be found at www.aqis.gov.au and in this Post’s Food and
Agriculture Import Regulations and Standards (FAIRS) report for Australia which contains detailed
information on Australia’s food standards, labeling requirements, import regulations, etc. This report
can be viewed/downloaded at the following Internet site and conducting a “AGR Number” search for
report number AS9033: http://www.fas.usda.gov/scriptsw/attacherep/default.htm.
Our report on the Retail Sector can also be downloaded at the same site by conducting a search for
report number AS9055.
Australian Maximum Residue Limits are in Standard A-14 of the Food Standards Code. The Internet
version of the Code can be obtained from Health Communication Network Ltd
http://www.hcn.net.au/anzfa/. A subscription of A$350 applies for new members. To become a
subscriber the following Internet site will guide you through subscribing.
http://www.anzfa.gov.au/FoodStandards/New_Format_For_Food_Standards_Code.htm
GAIN Report # Page 24 of 24
UNCLASSIFIED Foreign Agricultural Service/USDA
Industry Information
Table of Industry Bodies and Contact Phone Numbers for the School Catering Sector.
Abbreviation Name Phone Number
FOCIS Federation of Canteens in Schools 612 9798 6505
NSWSCA NSW School Canteen Association 612 9798 6505
QAST Queensland Association of School Tuckshops 617 3235 4191
WASCA Western Australia School Canteen Association 618 9244 1992
SASCA South Australian School Canteen Association 618 8411 1060
TSCA Tasmania School Canteen Association 613 6224 2722
ACTSCA ACT School Canteen Association 612 6282 2158
NTSCA Northern Territory School Canteen Association 618 8999 6209
Trade Shows
May 7-10, 2000
Sydney International Catering Trade Fair, Sydney Convention Center (Reed
Exhibition Companies 61-2 9442 2567 – 1 food and beverage hall, 1 hospitality
and 2 equipment halls). Will feature the Great Aussie Meat Pie Competition.
Nov 17-20 2000
Fine Food Australia, Melbourne (Trade Show), Food and Drink exhibition,
Melbourne Exhibition Center, Melbourne, Australia, 613 9261 4500
Seafood Services Australia is the single contact for people in farming, processing, transporting,
wholesaling, retailing, exporting, and importing seafood. The organization provides guidance on food
safety, quality management, standards and advice on technical issues. A publication that may be of
interest is ‘The seafood catering manual’.
Post Contact
Randolph Zeitner
Agricultural Counselor
U.S. Embassy
APO AP 96549
Tel: +61-2-6214-5854
Fax: +61-2-6273-1656
e-mail: [email protected]
