Sector Trend Analysis – Foodservice trends in the Philippines

Market overview and consumption trends

With a population of approximately 119.1 million and The Gross Domestic Product (GDP) in Philippines was worth 437.15 billion US dollars in 2023, according to official data from the World Bank. The GDP value of Philippines represents 0.41% of the world economy.

Consumer foodservice

Despite persisting inflationary pressures, consumer foodservice in the Philippines recorded healthy growth in terms of current value and number of transactions in 2023, with the strong recovery of the economy being one of the main contributors to this trend. Sales were further boosted by the greater mobility of Filipino consumers, including the return of in-person working and the revival of international travel (Euromonitor 2024).

Compared with the consumer spending US$13,151.4 million in 2019, consumer spending declined to US$7,030.2 million in 2020, US$8,154.9 million in 2021 and 10,801.3 million in 2022. In 2023, it gradually recovered to US$12,466.9 million but not recovered to the 2019 level.

In 2023, the chained consumer spending US$8,697.9 million surpassed the 2019 level: US$7,840.3 million, 2020 level: US$4,767.0 million and 2021 level: US$5,530.2 million and 2022 level: US$7,517.6.

However independent consumer spending US$3,768.9 million in 2023 was lower than 2019 level: US$5,311.1 million but higher than that in 2020, 2021 and 2022.

Consumer spending is forecast to increase at a CAGR of 8.1% between 2023 and 2027. Among which chained consumer foodservice will grow 7.4% and independent consumer foodservice will grow 9.7% between 2023 and 2027.

Company shares

Top three companies are Jollibee Foods Corp, representing 30.7% market share, McDonald's Corp representing 10.3% market share, Seven & I Holdings Co Ltd, representing 2.7% market share and enjoyed the fastest CAGR growth of 7.8% from 2019 to 2023.

Full-service restaurants

Full-service restaurants sustained positive growth in current value terms in 2023, albeit at a slower rate than the previous year. This was partially due to the normalisation of consumer behaviour, following the eat-in boom experienced in the aftermath of the pandemic. However, with full-service restaurants in the Philippines catering primarily to middle and upper class households, these consumers had more capacity to absorb these price increases than lower-income groups (Euromonitor 2024)

Compared with pre-pandemic year 2019, US$879.9 million, consumer spending on the chained full-service restaurants declined to US$487.3 million in 2020, US$543.4 million in 2021 and US$709.0 million in 2022 respectively, rebounded to US$819.9 million in 2023, but not yet reached 2019 level. Independent full-service restaurants declined to US$761.7 million in 2020, US$895.3 million in 2021, US$1,115.9 million in 2022 and US$1,245.4 million in 2023 respectively from US$1,888.5 million in 2019. Same situation falls on Asian full-service restaurants (chained and independent), European full-service restaurants (chained and independent), North American full-service restaurants (chained and independent) and Other Full-Service Restaurants (chained and independent).

Pizza Full-Service Restaurants compared with 2019 level, all declined in 2020, 2021 and 2022 respectively, but rebound and surpassed 2019 level (US$310.4 million) to US$322.7 million. Same situation fell on pizza chained full-service restaurants but not on independent full-service restaurant.

It is forecast that the foodservice sales will grow at a CAGR of 9.1% between 2023 and 2027 as the Covid-19 dies down and customer choose to enjoy the full service restaurants more often. Chained full-service restaurants will grow at a CAGR of 8.3% and Independent full-service restaurants will grow at CAGR of 9.6% from 2023 to 2027. All the other types of full-service restaurants will be on the same trends from 2023 to 2027.

Company shares

Top three companies are Max's Group Inc, representing 11.3% market share, Shakey's International Inc representing 10.6% market share, Berjaya Corp Bhd representing 4.0% market share in 2023. Berjaya Corp Bhd enjoyed the fastest CAGR growth of 20.5% from 2019 to 2023.

Limited-service restaurants

During 2023, limited service restaurant players implemented various strategies in an attempt to offset the impact of inflation on consumer spending. One such initiative was the introduction of more value-for-money menu options, as exemplified by Jollibee's Mix & Match menu, whereby customers were able to choose a main and a side dish from a range of combinations, at a cheaper price than buying both items individually (Euromonitor 2024).

Health and wellness concerns are likely to have an impact on the market for limited-service restaurants over the forecast period. With obesity considered as a growing problem in the Philippines, the government has proposed plans to impose a higher rate of tax on junk food and sweetened beverages, in order to address this issue. With many products sold by limited-service restaurants, such as burgers, fries, fried chicken, hot dogs and donuts, considered as junk food, players may place a greater emphasis on more healthy and nutritious menu options, moving forward (Euromonitor 2024).

Consumer spending on the limited-service restaurants continued to increase from 2019 to 2023, at a CAGR of 3.1%, reaching US$7,043.7 million in 2023, surpassing 2019 level. Same is true with the chained limited-service restaurants at a CAGR of 3.4%, reaching US$6,921.7 million in 2023 surpassing 2019 level. However independent limited-service restaurants declined to CAGR of −7.8%, still lower than 2019 level from 2019 to 2023.

Chained chicken limited-service restaurants recorded the biggest growth at a CAGR of 5.6% from 2019 to 2023, reaching US$3,447.3 million in 2023, followed by chained Convenience stores limited-service restaurants at a CAGR of 4.2%, reaching US$395.8 million.

Over the forecast period, limited-service restaurants are projected to increase at a CAGR of 7.2% from 2023 to 2027, reaching US$9,294.4 million in 2027. All the subcategories grow between a CAGR of 4.3% (independent ice-cream limited service restaurants) and 14.3% (Chained Other Limited-Service Restaurants) from 2023 to 2027.

Company shares

Top three companies are Jollibee Foods Corp representing 54.0% market share, McDonald's Corp, representing 17.9% market share, Seven & I Holdings Co Ltd representing 4.8% market share and enjoyed the fastest CAGR growth of 3.4% from 2019 to 2023.

Cafés and bars

During 2023, cafés/bars recorded solid growth in terms of both current value and volume of transactions. This was driven to a large extent by an increase in consumer mobility, with locals being keen to make up for the time lost during the pandemic. An increase in inbound tourist numbers also added impetus to the category, with the Singapore Tourism Board bringing SingaPob, a pub crawl featuring a lineup of Singapore bars, to the Poblacion district of Metro Manila (Euromonitor 2024).

Sales of café/bars plummeted in 2020 at US$939.4 million, 2021 at US$1,083.8 million, 2022 at US$1,382.2 million and 2023 at US$1,586.1 million compared with US$2,258.2 million in 2019. The CAGR growth for cafés/bars was −8.5% between 2019 and 2023, in which chained cafes/bars was 0.1% and independent cafes/bars was −10.9%.

Over the forecast period, cafés/bars are projected to increase at a 11.6%, reaching US$2.5 billion in 2027. Although the recovery of cafés/bars is expected to be slower than other consumer foodservice channels, sales of the most categories and subcategories are expected to return to pre-COVID levels in 2024.

Company shares

Top three companies are Starbucks Corp, representing 14.9% market share, Inspire Brands Inc, representing 3.0% market share, McDonald's Corp, representing 1.6% market share and enjoyed the fastest CAGR growth of 18.9% from 2019 to 2023 followed by Nestlé SA at a CAGR of 13.6% and Starbucks Corp at a CAGR of 10.8%.

Street stalls/kiosks

Street stalls/kiosks continued to experience buoyant growth in current value terms in 2023. Sales were boosted by an increase in foot traffic in shopping malls, where a high number of chained outlets are located. Standalone stalls also benefited from an increase in consumer mobility, due to their convenient locations close to offices, transport hubs and schools. Street stalls/kiosk players have also established a presence in home delivery and drive-through, in order to open up new market segments, such as consumers who demand greater convenience to fit in with their busy lifestyles (Euromonitor 2024).

While street stalls/kiosks are notorious for offering a very wide variety of food and beverage options. milk tea outlets continued as permanent fixtures in Filipino shopping malls and other channels in 2023, such as Chatime, RoalTea, Tealive etc (Euromonitor 2024).

The channel remained highly fragmented being dominated by independent street stalls/kiosks, which decreased to US$1,254.5 million in 2023 compared with US$1,432.1 million in 2019. Chained street stalls/kiosks represented US$517.3 million in 2023 increased from US$461.3 million in 2019. CAGR growth for chained street stalls was 2.9% and CAGR growth for independent street stalls was −3.3%.

Over the forecast period, street stalls/kiosks are projected to see a steady CAGR increase of 7.4% from 2023 to 2027, reaching US$2,356.7 million in 2027.

Company shares

Top three companies are Angel's Burger Group, representing 2.6% market share. Shakey's Pizza Asia Ventures Inc representing 2.5% market share. Fruitas Holdings Inc, representing 2.0% market share. Fredley Group of Cos enjoyed the fastest CAGR growth of 15.0% from 2019 to 2023.

Online vs offline ordering

The online consumer service became very popular after the pandemic started. It increased from US$829.5 million in 2019 to US$1,937.5 million in 2023 with the CAGR growth of 23.6% from 2019 to 2023. The takeaway online ordering increased from US$2.2 million in 2019 to US$43.9 million in 2023 with the CAGR growth of 111.4% from 2019 to 2023. Delivery online ordering increased from US$827.3 million in 2019 to US$1,893.5 million in 2023 with the CAGR growth of 23.0% from 2019 to 2023.

For consumer foodservice offline ordering, only delivery offline ordering increased from US$1,335.0 million in 2019 to US$3,152.0 million in 2023 with a CAGR growth of 24.0% from 2019 to 2023. Takeaway offline ordering, Drive-through and eat-in all declined at the CAGR of −32.5%, −1,2% and −4.9% respectively from 2019 to 2023.

It is predicted that all consumer foodservice by ordering platform will grow at a CAGR of 8.2% from 2023 to 2027. The biggest growth among all types is still takeaway online ordering at a CAGR of 21.3% from 2023 to 2027.

Consumer foodservice by location

All CAGR growths were negative from 2019 to 2023 except consumer foodservice through standalone. Consumer foodservice through standalone increased to US$5,452.4 million in 2023, with a CAGR of 0.2% from 2019 to 2023. Consumer Foodservice through leisure decreased to US$631.4 million in 2023, with a CAGR of −4.8% from 2019 to 2023. Consumer service through retail decreased to US$5,012.1 million in 2023, with a CAGR of −2.0% from 2019 to 2023. Consume foodservice through lodging decreased to US$379.0 million in 2023, with a CAGR of −3.8% from 2019 to 2023. Consumer food service through travel decreased to US$991.9 million in 2023, with a CAGR of −2.0% from 2019 to 2023.

All categories' CAGR growths are positive varying from 6.8% (through leisure and lodging) to 9.2% (through retail and travel).

Consumer foodservice through retail and travel locations is expected to see dynamic growth for the rest of the forecast period and their CAGRs will be 9.2% from 2023 to 2027.

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Sector Trend Analysis – Foodservice trends in the Philippines
Global Analysis Report

Prepared by: Hongli Wang, Senior Market Analyst

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