The fast good market - France

1.2 The foodservice market

According to the report published by Allied Market Research, the global fast casual food market generated $***.* billion in ****, and is expected to reach $***.* billion by ****, representing a CAGR of around **% throughout the period.

Global fast good market World, ****- *****, in billions of dollars Source: ****

Demand for new flavors and premium foods is on the rise. Changing lifestyles and increasing demand for ready-to-eat foods is an important trend that will further stimulate growth in the fast good market.

In addition, the rise of fast food, lower barriers to entry, high profits and home delivery services are fuelling growth in the global fast casual market. However, their high cost compared with fast-food restaurants is holding back market growth. On the other hand, the adoption of new technologies and a hygienic kitchen environment should open up new opportunities in the coming years.

1.3 The French fast-goods market

Unlike the fast-food sector, the traditional foodservice sector in France has been stagnating since at least the beginning of the decade. Indeed, from **** to ****, the traditional foodservice market was worth around ** billion euros. However, since ****, the sector seems to be regaining momentum, with the traditional foodservice market reaching **.*** billion euros in ****.

Size of the traditional foodservice market France, ****-****, in billions of euros INSEE

Since ****, however, traditional foodservice seems to be holding up better, as evidenced by the sales indices provided by INSEE. Alongside the decline in theme restaurants and cafeterias, the performance of the major cafés/bars/breweries segment is helping to limit losses.

A closer look at the monthly sales index reveals a cyclical pattern in sales growth. In particular, July and the winter periods following the December festivities seem to be unfavorable for the traditional foodservice market. On the other hand, August appears to be an exceptionally good month for traditional French foodservice.

Monthly sales index for traditional restaurants France, ****-****, base *** in **** INSEE

More than **,*** businesses were registered in URSSAF databases as traditional restaurateurs or cafeterias, representing average sales of around €***,*** per establishment. [***]

Independent restaurateurs dominate the market, with nearly **% of establishments and **% of sales. [***] The ...

1.4 The effect of the COVID-19 pandemic

Measures affecting the catering sector

The main measures linked to the epidemic that paralyzed the catering sector were set out in the arrété of March **, ****.

It prohibits the reception of the public for several categories of activity, including category N, i.e. "restaurants and drinking establishments", and therefore more specifically traditional catering NAF Code: ****A)

Restaurants are finally authorized to reopen on June *, ****, totally in the green zone and for terasses only in the orange zone. [***]

The consequences of confinement

The coronavirus epidemic particularly affected the traditional restaurant market, which was one of the hardest hit sectors, along with the hotel and tourism industries. In fact, restaurants and cafés account for ** billion euros in annual consumption in France.

Accordingto a study byOFCE, the confinement in France led to an **% drop in demand in the restaurant and accommodation market, which accounts for *% of actual household consumption.

The restaurant sector saw its sales plummet by -*% in January, -*% in February, -**% between March * and **, and -**% between March ** and **, the latter figure corresponding to the start of the lockdown. However, while fast-food and hotel-licensed restaurants recorded sales declines of between **% and **%, the traditional restaurant segment suffered the most from the ...

2.1 Changing eating habits, a growth driver

The changing eating habits of the Frenchis attracting a new clientele (***) with chains such as Cojean, Bioburger and Exki.

Better eating" through products consumed France, ****, in Source: ****

In order to better understand the plethora of "alternative" and "healthy" offerings on offer in the sector today, it's necessary to define these terms in more detail:

Fast-Casual: a hybrid creation between fast food and conventional catering, this type of offering offers fast, but tasty, cuisine made in the "rules of the art". This concept can be applied to any product: for burgers, for example, brands such as Big Fernand are proving that it is possible to transform a product that is often overlooked and neglected by restaurateurs into a real delicacy. the emphasis is on the product, on the restaurant's particular approach, and on the federated "community".this doesn't necessarily allow fast-food devotees to move up market (***), but it does open the way to a new clientele disenchanted with the time-consuming and costly classic restaurant experience. Slow-snacking : derived from slow-food, an Italian concept revived a few years ago that advocates a "slower", more conscious lifestyle, slow-snacking defends a vision of the lunch break that rejects the imperative of urgency. The idea is to ...

2.2 The emergence of "consumer-actors" as a vector for transforming demand

Consumers are increasingly sensitive to the composition of cosmetics and food products, some of whose ingredients and additives may be harmful. Consumers are increasingly wary of the cosmetics and food industries, and are paying more and more attention to product quality and the sustainability of the value chain.start-up Yuka meets consumers' need for transparency by, for example, enabling cosmetics and food products to be scanned and ranked according to their harmfulness to the body, had *.* million users in January ****(***). This app recommends products that are better for your health.

what do the French pay attention to before buying their cosmetics? France, **** Opinionway

According to a **** OpinionWay survey, product composition is the second most important criterion for choosing beauty products for French women, after price. aises, after price, and **% of French women looked at the ingredients and composition of their beauty product before buying it. We can also see that the brand's reputation, the label and the various commitments made by the brands, particularly in terms of ESG standards, are important criteria for choice, and are taken into account by **%, **% and **% of French women respectively.

A similar trend can be observed when it comes to choosing food products. Indeed, according to ...

2.3 Delivery drives demand for fast-good restaurants

According to figures published by Food Service Vision,One French person in two has already had a meal delivered, and the proportion rises to two out of three among Millennials. These figures, taken from the Revue Stratégique de la Livraison published by Food Service Vision, illustrate the importance of home delivery in France. A market destined for growth, since a quarter of consumers surveyed plan to order more in the next twelve months. Still according to the Food Service Vision study, **% of orders are placed by telephone, **% online on a computer and **% on a cell phone. Another strong trend: more than two out of three orders are already placed through an aggregator such as Deliveroo, Uber Eats or Just Eat, or a virtual restaurant such as Nestor or FoodChéri. Deliveroo, which arrived in France in ****, is already known by one in two French people.

As you can see from the graph below, Food Service Vision has estimated the French market at *.* billion euros in ****, and forecasts annual growth of **% over the next * years. The market is therefore set to double by ****.

Growth in the home meal delivery market France, **** - *****, in € billions Source: ****

In **** in France, *** million deliveries were ...

3.1 A growing number of players

According to ACOSS (***), the number of companies in the French fast-food sector rose from **,*** in **** to **,*** in ****, an increase of **% over the period. It should be borne in mind, however, that several establishments may belong to the same chain. As a result, the number of establishments in this market is increasing, leading to a sharp rise in competition, particularly price competition, which is driving down the price of the most standard products.

Number of fast-food outlets France, ****-****, in units Source: ****

The trend is similar for the number of employees, which reached ***,*** in **** (***), we see that there are on average * employees per establishment.

Fast food workforce France, ****-****, in thousands of units Source: ****

Fast-food chains

Groupe Flo data show that the number of fast-food chains in France rose from *** in **** to *** in ****. They have almost doubled their presence in the country with the arrival of many new chains on the market, such as Five Guys in ****. The burger has thus become an essential part of the French diet, on a par with pizza and sandwiches. Fast-food chains are very attentive to new consumer trends, attracting consumers with constantly evolving recipes. The example of tacos, which have been popularized in recent years, ...

3.2 Very uneven supply and population densities by region

A comparison of the number of businesses in relation to the population and surface area of the various French regions for **** reveals that Corsica is the region with the most restaurants in relation to its population (***). [***]

France counted a total of **,*** restaurants and cafeterias in ****, an average of one restaurant for every *** inhabitants on average. [***]

Geographical distribution of restaurants and cafeterias

France, ****, in units

Source: ****

Source: ****

3.3 The franchise model

In terms of distribution, the sector relies heavily on the principle of franchising (***).

In ****, there were *** franchise chains in the restaurant sector.

The big chains manage this network and ensure product consistency across the various outlets. One of the strategies adopted to face up to the competition from supermarkets is to set up shop within the supermarkets themselves: Sushi Shop at Monoprix, Starbucks at Casino....

Another point of differentiation for this sector is customer service (***) and outsource the delivery part, in return for a commission as a percentage of the sale.

The development of online sales

The battle between fast-food brands now also involves online sales. Given the trend towards at-home snacking, professionals are seeking to capture this burgeoning demand. This is being done by developing online ordering and delivery services and in-store collection (***).

In early ****, Planet Sushi embarked on a vast transformation plan to develop online and self-service sales by installing linear distribution systems in its restaurants and strengthening its digital strategy (***).

Many players are turning instead to distribution platforms to develop these advantages. For example, McDonald's signed an exclusive partnership with Uber Eats in **** and now offers a delivery service in nearly ** French cities. For its part, Burger King ...

4.1 An increasingly diversified offering

The fast-food sector is expanding rapidly, driven by significant diversification. In fact, as we saw earlier, consumer habits are changing, and fast-food restaurants must now follow nutritionists' recommendations as closely as possible, to offer a range that is in tune with the times. This is a real underlying trend, and customers want to do good by eating. As a result, * out of ** consumers regularly eat vegetarian dishes, and * of them opt for vegan dishes from time to time. The nutritional quality of food is a concern for almost **% of those questioned. There is therefore a strong demand for quality, but customers are also increasingly sensitive to the fact of eating locally and/or organically.

Today's fast-food industry has taken on board the desire to "eat better". It aims to be healthier and more ecological, with formulas that even offer organic, vegan or even gluten- and lactose-free dishes, while giving priority to short supply chains, thus minimizing the impact of CO* emissions. Today's consumers want to be sure of the irreproachability of a food product, and even of its positive effects on health. These criteria go far beyond price, quality of service or taste.

Since its creation, the Cojean brand has been ...

4.2 The different fast-food chains

Although **% of restaurateurs are independent, the remaining **% operate under chains or franchises, and account for around **% of sales. The following table gives an overview of the main restaurant chains in France. It also includes fast-food chains and catering outlets.

Source: ****

Source: ****

Note: the above lists are not exhaustive, as other players are also present on the French fast-food market

4.3 Rising prices and the trend towards premiumization

Prices are generally very low compared to traditional foodservice offerings, due to lower costs and fierce competition.classification can also be made according to product "quality" (***), with prices significantly higher for the former: an average order at Cojean - premium positioning - comes to €**.

The product is often offered in different formulas: sandwich/main course on its own or accompanied by a drink and/or a side dish (***); all at well-considered prices, averaging between €* and €**.

However, according to INSEE, fast-food consumer prices are set to rise by over *% between **** and **** . Despite continued fierce competition from bakeries and supermarkets, restaurateurs have managed to revalue their prices by continuing their efforts to move upmarket and position themselves in the fast-growing casual segment.

Consumer price index - Foodservice France, **** - ****, base *** Source: ****

However, the relatively low prices of fast food remain one of the main criteria of choice for consumers. According to Gira Consulting in a study of French opinion on the importance of affordable prices in a fast-food establishment in ****, around **% of French people consider that having low prices is important for a good fast-food establishment, and **% consider it "very important". Only *% of French people do not consider it important for fast food ...

4.4 The profitability of the fast-good model

With over **,*** fast-food outlets in France, the fast-food sector is booming and continues to attract new entrepreneurs. Alongside the classic fast-food offer (***), fast-good models are also experiencing significant growth.

The market is dominated by chain networks, which are pursuing intensive territorial coverage strategies, leading to saturation of supply in certain areas. As a result, two strategies coexist in this market: "cheap" and "very good". The table below compares the main elements of profitability for the two leading fast-food and fast-good chains in France.

Source: ****

Due to the numerous ramifications of the McDonald's France organization, the holding company (***) may post figures that are disconnected from those of its subsidiaries. In order to compare margin levels, an article in the French newspaper Capital indicates an average gross margin rate of **% for the restaurant sector in France. McDonald's margin varies from one product to another, but the gross margin is higher than this for most products, reaching **% for large fries sold in France. [***] Exki France's gross margin is slightly lower than the sector average.

5.1 Current regulations

The nature of the activity of fast-food establishments can be either artisanal or commercial, as described on the bpifrance website.

Hygiene and safety regulations for commercial fast-food outlets are similar to those for traditional restaurants. The rules are detailed on the public service website and cover the following points:

Premises, materials and equipment Staff hygiene Drinking water supply Food storage and preservation Waste Health declaration Controls

Fast food outlets must comply with the requirements of regulation ***/**** of April **, **** on health safety for perishable products.

6.1 Positioning the players

Source: ****

• Prêt à manger
• Côme
• McDonald’s France
• Subway France
• KFC France
• Bertrand Groupe
• Le Kiosque à Pizza
• Starbucks Coffee France
• Starbucks Coffee
• Exki
• Bioburger
• Chicken Street
• Domino's Pizza
• Eat Salad
• Five pizza
• Fresh Burritos
• King Marcel
• Mezzo Di pasta
• Pitaya (Bertrand Groupe)
• Roomies Burger