The world we know today is not the same one that existed 20 years ago. The invention of the Internet and the pervasiveness of social media has made this vast planet seem just a little smaller. There’s also the universal view that as chains expand into different markets, the eating habits of the world will become “Americanized.”
In fact, this is not the case. According to Bob O’Brien, global senior vice-president of Foodservice at The NPD Group, “There remain a great many differences in the way people eat when looking at different countries and regions. Recognizing those differences allows operators to more effectively penetrate new regions as they look to expand,” he says.
For instance, compared to other countries, Canada’s foodservice market is dominated by chains. Seventy-five per cent of restaurant visits in Canada are to a chain, while only 25 per cent are to independents. By contrast, in the U.S., a little more than 60 per cent of visits are to a chain restaurant. In China, a country considered to have the largest growth opportunity by virtue of its massive population, chains capture only 36 per cent of visits, which means 64 per cent belong to independents.
So what does this mean? Canada, by comparison, has a well-developed foodservice industry mostly serviced by a selection of chains. In order to make inroads into the Canadian foodservice market, operators have to be at the top of their game to compete from an operational and marketing perspective, while understanding what the Canadian consumer wants.
China, which is dominated by independents, holds a different set of challenges for new entrants. It consistently shows the most growth in foodservice of any market globally, and with a population of 1.3 billion, it represents an enticing opportunity for a number of operators. Keep in mind, however, that at $2.76 (USD), the average Chinese consumer spends less than one-half what the average Canadian does per restaurant visit. Therefore, in China, it’s about capturing volume.
The foodservice morning meal is also distinctly more important in China. In Canada, morning meals make up one quarter of visits. In China, that number is substantially higher at just under 40 per cent, with much of the traffic going to vendor carts. Clearly it’s critical to develop a relevant breakfast offering when going into China in order to make a splash in what is a fractious market.
There is also a common misconception that U.S. chains dominate the foodservice market globally. But this is not the case. For example, have you ever heard of Quick, Gran Café or Ba Be Mantou? These are the number 2 operators in France, Italy and China, respectively. In fact, when examining the top chains across different countries, local chains tend to dominate the foodservice market.
As our globalized world becomes seemingly smaller through travel and technology, it’s important to keep in mind consumers’ taste in various countries remain diverse. Understanding these differences and thinking locally can provide insight on how to expand into other countries, and also provide perspective and insight into one’s own nation.