Foodservice Profile – Taiwan

Macroeconomic profile and consumer foodservice trends

In 2021, Taiwan's total population was 23.6 million people. The country's gross domestic product (GDP) was US$774.8 billion with a real GDP growth of 6.6%. Consumer per capita expenditure on foodservice (food and drink) decreased by −12.1% from US$1,087 in 2019 to US$955.1 in 2021.

Taiwan managed to economically fair well in response to the COVID-19 pandemic in 2020, thanks to its strong epidemiological response, however, the outbreak in the country did hit the foodservice sector hard in May 2021. On-site dining and drinking at restaurants and stores across the country were restricted and not eased for up to six months. If foodservice outlets were unable to implement customer contact tracing details, dine-in capabilities were banned until November of that year when restrictions were eased, resulting in significant increased sales within the food delivery and takeaway distribution channels.^{Footnote 1}

Commercial cooking facilities such as cloud kitchens, also known as ghost or dark kitchens, began to be created to meet rising demand by offering food preparations via home delivery. Some restaurants closed their stores, shifting to delivery-only and adopting emerging business models with multiple variations.^{Footnote 1}

The foodservice market

In 2021, Taiwan's consumer foodservice sales totalled US$22.5 billion (year-over-year rates). Between 2016 and 2021, foodservice sales increased by a CAGR of 2.1%, despite a negative annual dip in drink sales during the COVID outbreak (2021/2020). Foodservice sales in Taiwan via delivery or take-out distribution managed to continuously increase in food sales over the pandemic reaching US$15.1 billion in 2022, while drink sales (US$9.0 billion) began to recover over the same year. Both food and drink foodservice categories are expected to register moderate growth over the forecast period (2021 to 2026).

In Taiwan, standalone foodservice outlets accounted for 82.9% of sales (US$18.7 billion) in 2021, followed by 14.2% in retail (US$3.2 billion), and 1.3% in lodging (US$294.8 million) locations. Retail outlets was the only channel registering a growth between 2016 and 2021 at a CAGR of 2.8%, while lodging (−11.4%), leisure (−4.8%), travel (−3.9%), and standalone (−0.9%) locations reported 5-year declines over this period. Over the forecast period (2021-2026), all foodservice channels are expected to report growths with lodging recovering the most by a CAGR of 7.3%.

To overcome dine-in restrictions implemented during the pandemic, operators of FSRs invested in central kitchens and expanded their delivery services to meet the growing demand from Taiwanese households. At the same time, specialist coffee and tea shops benefited from the growing coffee-drinking culture amongst Taiwanese consumers, while offering delivery and subscription plans to meet the demand from consumers working from within their homes. Local households favoured takeaway service meals such as bento and dumplings that were offered by Asian LSR chains.^{Footnote 1}

In 2021, Taiwan's largest foodservice channel in terms of sales were from within FSRs at a total registered value of US$9.0 billion. Asian FSRs accounted for 54.5% of sales, compared to North American FSRs (7.3%), European FSRs (3.8%), and pizza FSRs (0.5%) in 2021.

In Taiwan, sales in LSRs were the 2nd largest channel at a value of US$7.7 billion in 2021. Top Taiwanese LSR foodservice channels were from within convenience stores (29.1%), followed by Asian LSRs (21.4%), burger LSRs (10.7%), chicken LSRs (3.4%), and pizza LSRs (2.8%). Other smaller Taiwanese LSR categories that reported sales were bakery product, ice cream, and fish restaurants.

In 2021, other Taiwanese foodservice outlets by type consisted of street stalls/kiosks at a sales value of US$3.5 billion, cafés/bars (US$2.1 billion), and self-service cafeterias (US$183.0 million). Sales from within bars or pubs and self-service cafeterias suffered the most over the 2020 and 2021 period.

Foodservice sales: chained franchises versus independent operators

In 2021, independent operators (59.2%) were the largest foodservice providers over chained franchises (40.8%) in Taiwan with value sales of US$13.3 billion and US$9.2 billion, respectively. However, chained franchises remained more stable during the pandemic at a CAGR of 0.7%, while independent operators experienced slight declined sales at a CAGR of −0.9% between 2016 and 2021. Sales within independent operators are forecast to recover in sales at a rate of 3.4% and continue to slightly decline in market share (−0.2%), while chained franchises is expected to grow by 3.9% in value and 0.3% in percent breakdown compared to both categories (2021 to 2026).

In 2021, Taiwanese independent operators of FSRs registered total sales of US$7.7 billion, followed by sales in LSRs (US$2.6 billion), street stalls/kiosks (US$1.7 billion), cafés/bars (US$1.2 billion), and self-service cafeterias (US$109.0 million). Due to the pandemic, those independent foodservice categories that adjusted well to additional food delivery options and that showed period growth (2016 to 2021) were pizza FSRs, LSRs mostly serving chicken, ice cream or fish, cafés, and specialist coffee & tea shops. Nevertheless, all independent operator foodservice outlets are forecast to recover and report positive growth (2021 to 2026).

Taiwanese chained franchises of LSRs was the largest foodservice segment at sales of US$5.1 billion, followed by sales in chained FSRs (US$1.3 billion), street stalls/kiosks (US$1.8 billion), cafés/bars (US$941.8 million), and self-service cafeterias (US$73.9 million) in 2021. During the pandemic, those chained foodservice categories that adjusted well to providing new/existing food delivery options and that showed period growth (2016-2021) were Asian LSRs and FSRs, LSRs in general such as convenience store, chicken and pizza restaurant franchises, along with pizza FSRs, and specialist coffee & tea shops. Nevertheless, all chained franchise foodservice outlets are forecast to recover and report positive growth between 2021 and 2026.

Eat-in versus delivery and to-go sales

In 2021, eat-in foodservice sales managed to recover to remain at the highest value of US$10.0 billion^{Footnote 2}, followed by takeaway (US$8.1 billion), home delivery (US$4.4 billion), and drive-through (US$8.5 million) services. In particular, consumers chose to eat-in within FSRs 74.8% of the time versus 15.2% takeaway and 9.9% in home delivery services from FSRs. Cafés/bars also, had more eat-in customers (50.0%) versus 42.4% takeaway and 7.6% in home deliver services from cafés or bars.

Within LSRs takeaway services registered the highest sales (38.4%), followed closely by home delivery (37.7%), eat-in (23.8%), and drive-through (0.1%) LSR services in 2021. Street stalls and kiosks also, had higher takeaway sales (79.2%) versus 11.5% in home delivery and 9.3% in eat-in services from temporary stalls or kiosks. From within self-service cafeterias: 57.6% of sales were takeaway, 29.3% eat-in, and 13.1% from home delivery services. Between 2021 and 2026, takeaway and home delivery services are expected to decline, while foodservice outlets will return more to the provision of eat-in or drive-through services to its consumers.

Foodservice sales: Offline versus online

In Taiwan, offline foodservice sales totaled US$19.7 billion (year-over-year rates) (87.5%) versus online sales of US$2.8 billion (12.5%) in 2021. E-commerce sales accounted for 14.2% from within Taiwanese FSRs, in LSRs (11.4%), street stalls/kiosks (8.9%), cafés/bars (15.5%), and self-service cafeterias (4.7%) over the year. Growth in online sales occurred respectively in FSRs (+98.2%), cafés/bars (+77.3%), streets stalls/kiosks (+52.9%), LSRs (+27.6%), and self-service cafeterias (22.7%) between 2016 and 2021.

Top 10 chained foodservice companies in Taiwan

Company sales and shares from within the foodservice sector is highly diversified within Taiwan. In 2021, Seven and I Holdings Company Limited was Taiwan's top chained foodservice company with value sales of US$1.4 billion, representing a 6.4% share of the foodservice market. FamilyMart Company Limited was the second largest foodservice company with value sales of US$639.4 million, followed by McDonald's Corporation (US$554.5 million), Starbucks Corporation (US$418.2 million), and Yum! Brands Incorporation (US$315.0 million). These top 5 company's, accounted for only 15% of the total foodservice market in Taiwan.

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Resources

• Euromonitor International, 2022
• Euromonitor Intelligence. May 2022. Country Report: Consumer Foodservice in Taiwan

Foodservice Profile – Taiwan
Global Analysis Report

Prepared by: Erin-Ann Chauvin, International Market Research Analyst

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