Growth and Profitability through Strategic Partnerships · 2019-05-21 · coffee market Co-create the right snacks for women. Collaborate to change behavior in the coffee market

Growth and Profitability through Strategic Partnerships

2

The market is getting more competitive - in the growing segments current chains have rapidly expanded their store count

YOY sales contribution growth

Source: Aggregate Foodservice Monitor data from

Q4 2016 to Q3 2018 n = 17581

▲ 40+ stores

▲ 5 stores

▲ 7 stores

▲ 4 stores

43%

59%

51%

0%

10%

20%

30%

40%

50%

60%

70%

BBQ Hotpot Japanese

▲ 40+ stores

3

In declining segments the growth of chains is even more fierce – as these channels are still big in the OOH market

YOY sales contribution growth

Source: Aggregate Foodservice Monitor data from

Q4 2016 to Q3 2018 n = 17581

-35%

-25%

-42%

-29%

-50%

-40%

-30%

-20%

-10%

0%

Coffee/Tea Fast Food

Italian

Kitchen Bakery

▲ 14 stores

▲ 11 stores

▲ 14 stores(expansion to additional

2 provinces and Hanoi)

▲ 16 stores(expansion to South

Korea)

▲ 4 stores

▲ 40+ stores(expansion to additional

10 provinces)

▲ 13 stores

Yet consumers are not going out to eat exponentially more every year

147

Source: Decision Lab Foodservice Monitor Data from Q4 2016 to Q3 2018 n = 27591

AVG. ANNUAL V IS ITS PER CAPITA

154 6%

Amid the heated competition, operators also have to face stagnant consumer spending

Source: Decision Lab Foodservice Monitor Data from Q4 2016 to Q3 2018 n = 27591

59,903đ 8%

Average spending per head per visit with voucher – in VND

Even promotion is not helping Operators either as voucher spending continues on a downward trend

n = 2062Source: Decision Lab Foodservice Monitor Data from Q4 2016 to Q3 2018

147K139K

127K120K

124K

105K95K

114K105K

0K

40K

80K

120K

160K

Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3

2016 2017 2018

-15%

-16%

Q4 2017 – Q3 2018

Total Retail: +1.2%

Department Store: +2.3%

AVERAGE ASKING RENT GROWTH IN HANOI

Q4 2017 – Q3 2018

Total Retail: +7.6%

Department Store: +0.8%

AVERAGE ASKING RENT GROWTH IN HCMC

With steadily growing rental costs, the pressure on profits are mounting

Source: Cushman & Wakefield Hanoi & Ho Chi Minh City Retail Marketbeats from Q4 2017 to Q3 2018

n = 14252 n = 13339

The Issue

Manufacturers often suffer from transactional

relationships with foodservice operators. They risk

depending primarily on discounts rather than value

adding offers and differentiation.

We need to move towards more strategic

partnerships.

+ Consumer Understanding

+ Distribution Network

+ Global Support

+ World-class Marketing

+ Dynamic Business Model

+ Direct Customer Feedback

+ Endless F&B Combinations

+ Sales-focused Marketing Model

+ Loyalty Programs

Manufacturers Operators

What can we offer each other?

vs.

TARGET WISELY

Assess lucrative categories, channels, occasions,

target consumer, best food/drinks pairings etc before

investing

We see the best-in-class moving towards data driven partnerships

ITERATE & IMPROVE

Customize and manufacture the right foodservice

solutions, develop brand strategies, decide on

marketing tactics

DATA DRIVEN PARTNERSHIPS

Sell value: Higher customer satisfaction, higher

spending, higher margins

How can Manufacturers and Operators partner up?

Customized drink pairings as a competitive advantage in growth segments

Collaborate to change behavior in the milk coffee market

Co-create the right snacks for women

Collaborate to change behavior in the coffee market

Coffee in total - % servings

n=2316

Coffee with milk occupied the majority of coffee consumption

Coffee with fresh milk has room to grow

Coffee with milk - % servings

n=1613

Source: Decision Lab’s Foodservice Monitor Aggregate data from Q4 2016 to Q3 2018

50%

27%

15%

8%

Coffee with milk

Coffee without milk

RTD Coffee

Flavored/Blended Coffee

706 million

servings

17% 21%

83% 79%

0%

25%

50%

75%

100%

Q4 2016 to Q3

2017

Q4 2017 to Q3

2018

Coffee with condensed milk

Coffee with fresh milk

161 million

servings

194 million

servings

• Milk coffee distribution in different channels

Coffee with fresh milk is concentrated in QSR

Coffee with Condensed milk - % servings

36%

22%

17%

12% 12%

0%

10%

20%

30%

40%

50%

60%

QSR FSR CVS Street food Canteen

n=1481

Coffee with Fresh milk - % servings

n=367


55%

16%14%

10%

5%

0%

10%

20%

30%

40%

50%

60%

QSR FSR CVS Street food Canteen

• Top reasons for choosing Coffee - % visits

16

Devoted to their favorite beverage, Coffee drinkers are loyal to the outlet as well as very sensitive to changes in coffee taste / quality

Top reasons for choosing Coffee - % visits

58%FAVORITE DRINK

28%TO RELAX

27%CONVENIENCE

n=2316

• n=2,805

Net Promoter score for Coffee Consumption

3

17 17

20

17

0

5

10

15

20

25

No

Coffee

Coffee

with milk

Coffee

without

milk

RTD

Coffee

Blended/

Flavored

coffee

Net Promoter score for Coffee with Milk Consumption

17

21

15

16

17

18

19

20

21

Coffee with

condensed milk

Coffee with fresh

milk

n=1631


n= (25278) (1631) (572) (96) (121)

This creates opportunities for manufacturers to get involved

Market potential for coffee with fresh milk

Product development capabilities

Collaboration opportunities

64M60M

74M

103M

120M

95M100M

90M

4M 7M11M

16M 18M 16M 18M 16M

0M

20M

40M

60M

80M

100M

120M

Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018

Total Coffee consumption (n=2,316) RTD Coffee Consumption (n=479)

Coffee consumption in million servings

(These are just the out-of-home

numbers)

In Vietnam, RTD Coffee is a growing trend in the overall coffee consumption

1% y-o-y

13% y-o-y

• STARBUCKS x ARLA

Starbucks x Arla: A coffee giant tapped into RTD territory with a strong partner

Starbucks is a renowned coffee giant with more than

27,000 stores across more than 75 markets, based in the

US.

Arla Foods is the largest producer of dairy products in

Scandinavia.

In 2010, Starbucks chose Arla as a license partner to

manufacture and distribute its milk-based RTD coffee

across Europe, the EMEA and Asia.

Since then, Starbucks’ RTD business has grown by 40%

each year.

Their partnership will extend until 2039.

Customized drink pairings as a competitive advantage in growth segments

-17%

46%

23%

37%

-40%

49%

-6%

-61%

-80%

-60%

-40%

-20%

0%

20%

40%

60%

Fast Food BBQ Other

Asian

Hotpot Italian

Kitchen

Japanese Korean Western

n = 2962

YOY Traffic growth of foreign cuisines

Source: Aggregate Foodservice Monitor data from Q4 2016 to Q3 2018

21

BBQ, Hotpot and Japanese cuisine have been growing rapidly in the past 4 quarters

They all boast a high level of drinking

41%

70%

49%59%

44%

71% 71% 75%

0%

20%

40%

60%

80%

Total Cuisine BBQ Hotpot Japanese

Q4 2016 - Q3 2017 Q4 2017 - Q3 2018

Eat & Drink percentage of visits

n = 2962Source: Aggregate Foodservice Monitor data from Q4 2016 to Q3 2018

40%

21%

34%33%

30%

16%

53%

43%

15%

8%

12%

7%

0%

10%

20%

30%

40%

50%

60%

Convenient

location

Didn’t want to

cook

Socialising Treat myself &

close ones

Atmosphere Try something

new

BBQ, Hotpot & Japanese Vietnamese

n = 10756

Reason of restaurant choice by cuisines - % visits


People see these cuisine outlets as the destination for excitement, gatherings and to try new things

These 3 cuisines have the highest average spending per visit

Average spending per head per visit in year ending 2018 (VND)

n = 6339Source: Aggregate Foodservice Monitor data from Q4 2016 to Q3 2018

280K 271K

225K210K 209K

199K 191K

133K

105K

62K

0K

50K

100K

150K

200K

250K

300K

Japanese BBQ Hotpot Italian

Kitchen

Western Chinese Korean Asian Fast Food Vietnamese

CL ICK TO EDIT MA S TER TEX T S TY L ES

24%

21%

17%

15%

11%

13%

Beer/Cider Tea

Juice CSD

Water Other

This creates opportunities for high margin focused drinks partnerships

Drink servings in Japanese cuisine

n=202

Drag picture to placeholder or click icon to add

Introduction of Brooklyn Kaedama Ale, brewed just for IPPUDO’s ramen to heighten its flavors

Serving RooiboisTea as a water substitute as its clean taste fits IPPUDO’s pork bone broth

Source: Aggregate Foodservice Monitor

data from Q4 2016 to Q3 2018

And creating combined offering that elevates the value of both manufacturers and operators

CASS Lager x Korean BBQ

Utilization of celebritychef Gordon Ramsay as a quality stamp of the F&B pairing

YO! SUSHI x MIDORI

Creating exclusive Japanese-oriented cocktails that pair well with sushi

Co-create the right snacks for women

A few un-busted myths about female diners

Variety Customiza-tion

Value-based marketing

Daytime snacking

Sourcing transpa-rency

32%

11%

30%

9%

12%

6%

31%

14% 24%

18%

9%

3%Breakfast Morning snack Lunch Afternoon snack Dinner Late night snack

Male Female

Women crave for snacking and leave the evenings for the men

3.7 billions VISITS TO OOH OUTLETS IN

YEAR ENDING Q3 2018

Male visits are concentrated on

Breakfast and Lunch, while

female visits are more spread out

across occasions.


Consumption type by occasions among women - % visits

Looking at snacking: Drinks are essential in women’s snacking choice

n=5235Source: Aggregate Foodservice Monitor data from Q4 2017 to Q3 2018

3%14%

39%

50%

58%

36%

0%

20%

40%

60%

80%

100%

Daytime main meals Daytime snacking occasions

Food only

Food & Drinks

Drinks only

• Top food items by occasion among women

Besides typical snacks, women give in to their cravings during snacking occasions

23%

15%

5% 4% 5% 4%6%

0%

5%

10%

15%

20%

25%

Noodle Sandwich/

Bread

Rice Vegetables Meat Springroll/

Savory Cake

Sweet cakes Fruit Ice cream/

yogurt

Packaged

snacks


Top food types by occasion among women - % servings


Women’s beverage choice during snacking hours are more likely to be driven by self-indulgence and a desire to relax. As such, health is less important during snacking

Reasons to choose drink items among women - % responses


6%

12%14%

24%21%

27% 26%

31%

54%

4%6%

13%17%

20%24%

30% 31%

48%

0%

10%

20%

30%

40%

50%

60%

To try a new thing To treat myself Good value for

money

To relax To energize Thirst Health Convenience Favorite drink

Daytime snacking occasions Daytime main meals

• Top food items by occasion among women

Tea, Milk and Coffee are enjoyed the whole day while Smoothies and Yogurt are preferred during snacks

19%

10%

7%

0%

5%

10%

15%

20%

25%

Tea Milk Coffee Juice Water Carbonated

soft drinks

Smoothies Drinking

Yogurt

Energy drinks Beer/ Cider Wine/ Spirits/

Liquor


Top beverage types by occasion among women - % servings


Operators need new items to fuel this typically low traffic day-part

Collaboration withFonterra to expand the best-selling range of cream cheese tea

Developing a summer exclusive S’mores Donutrecipe with Hershey’s to deliver a ‘campfire experience’

Operators can leverage the expertise of Manufacturers in snacks, while Manufacturers can explore new flavor combinations in OOH market

Reinventing the Taco Bell’s menu items to target young consumers: the result is Doritos Locos Tacos

Customizing Burger King side dishes into limited-time offer snacks: Mac n’ Cheetos nuggets

We are here to help!

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Documents

Growth and Profitability through Strategic Partnerships · 2019-05-21 · coffee market Co-create the right snacks for women. Collaborate to change behavior in the coffee market