Sector Report

Philippine food services – Let’s eat!

by May 23, 2019

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Filipinos’ love of food and family is a tasty incentive for full-service restaurant chains eager to expand their footprint. Solid demographics support a large and growing domestic consumer base, with discretionary spending on an upswing. Property and infrastructure developments bode well for foodservice players beyond metro areas; rising digitalisation supports online orders and deliveries; while M&A and joint ventures fuel brands’ global expansion.

Dining-out culture
Philippine per-capita GDP posted a 6.7% Cagr over 2013-18, almost in lockstep with the 6.1% per-capita sales Cagr in the foodservice industry. In 2018, the sector recorded P652bn in sales, almost double the P351bn a decade ago, according to Euromonitor. Hectic lifestyles are leading Filipinos to seek out foodservice players that offer convenient meal options, unique dining experiences and comfortable surroundings.

Room for more growth
Filipino consumers’ rising propensity to spend is the key positive driver in the sector, while three additional trends are encouraging industry growth: developments in emerging tier-2 and 3 cities, or zoomtowns, which support store-network expansion; online ordering and delivery services; and M&A deals that complement organic expansion.

Feeding overseas Filipinos’ appetites
Capitalising on their strong brand equity, major homegrown foodservice brands are expanding overseas and establishing stores in areas with large Filipino populations. They are capturing demand from the 10.2m citizens abroad who yearn for a taste of home. Throw in the increasing appreciation for the country’s national dishes worldwide and you have a strong secular growth story that has a long runway for investors to capitalise on.

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