food and beverage services industry report - inx software · 3 food and beverage services industry...

Food and Beverage Services Industry Report2017

Based in part on Bankwest Economic Updates, Australian Bureau of Statistics data used pursuant to the Creative Commons Attribution 2.5 Australia license (available online at: http://creativecommons.org/licenses/by/2.5/au/) and the following H4511A Restaurants in Australia Industry Report (May 2016), H4511B Cafes and Coffee Shops in Australia Industry Report (August 2016), H4512 Fast Food Services in Australia Industry Report (July 2016), H4513 Catering Services in Australia Industry Report (May 2016), H4520 Pubs, Bars and Nightclubs in Australia Industry Report (May 2016), H4530 Social Clubs in Australia Industry Report (June 2016).

2

Industry Division Industry Class Accommodation and Food Services Cafes and Restaurants Takeaway Food ServicesIndustry Subdivision Catering ServicesFood and Beverage Services Pubs, Taverns and BarsIndustry GroupCafes, Restaurants and Takeaway Food ServicesPubs, Taverns and BarsClubs (Hospitality) The ANZSIC is a hierarchical classification with four levels, namely Divisions (the broadest level), Subdivisions, Groups and Classes (the finest level). At the Divisional level, the main purpose is to provide a limited number of categories which provide a broad overall picture of the economy and are suitable for the publication of summary tables in official statistics. The Subdivision, Group and Class levels provide increasingly detailed dissections of these categories for the compilation of more specific and detailed statistics.Data referenced in reportAll data referenced in this report has been updated with the latest available figures when prepared as at October 2016. Figures may vary from previous reports due to revision by providers (ABS, RBA, IBIS, etc.) or updated calculations by CoreData.

Data sources used include: › ABS: 8165.0 Counts of Australian Businesses, including Entries and Exits, Jun 2011 to Jun 2015

released 26/02/16 › ABS: 8155.0 Australian Industry, 2014-15 released on 27/05/16 › ABS: 6291.0.55.003 Labour Force, Australia, Detailed, Quarterly, May 2016 released on 23/06/16 › ABS: 6427.0 Producer Price Indexes, Australia, Jun 2016 released on 30/07/2016

IBISWorld Reports: › Restaurants in Australia Industry Report (May 2016) › Cafes and Coffee Shops in Australia Industry Report (August 2016) › Fast Food Services in Australia Industry Report (July 2016) › Catering Services in Australia Industry Report (May 2016) › Pubs, Bars and Nightclubs in Australia Industry Report (May 2016) › Social Clubs in Australia Industry Report (June 2016)

3

Food and Beverage Services Industry SubdivisionIndustry OverviewThis industry group comprises businesses that provide meals, snacks, and beverages for consumption by customers both on and off site, including restaurants, cafes and coffee shops, fast food outlets, catering services, pubs, bars and nightclubs, as well as social clubs. It sits within the larger industry division of Accommodation and Food Services.

The food and beverage services industry is often assessed in conjunction with the accommodation industry because many of these services are provided by the same businesses.

The food and beverage services industry is a significant contributor to the Australian economy, providing employment for 847,000 Australians, and generating $73.3 billion in revenue annually. Geographically the industry group is closely aligned to the Australian population, with the largest number of employees and businesses based in NSW, followed closely by Victoria.

Industry RevenueFY2014-15

$73.3 billion

Number of Food and Beverage Services Workers

(June 2015)847,000

Number of Food and Beverage Services Businesses

(June 2015)74,588

Wages FY2014-15$19 billion

Proportion of Food and Beverage businesses that exited market in

FY2014-1514.2%

Proportion of businesses with more than $2 million in turnover

(June 2015)12.3%

Food and Beverage Services Industry

› Employment in the Food and Beverage Services industry subdivision has increased by 7.2% between FY2013-14 and FY2014-15, adding 57,000 jobs. This is on the back of a slight decline of 1.4% between 2012-13 and 2013-14 and follows flat growth in previous years.

› The industry subdivision’s total income represents 2.5% of all industries. Total income has increased by 1.1% in the last year off the back of a 5.2% growth the previous year. The growth in income over the last two years continues the reversal of a marginal decline in industry revenue from FY2011-12 to FY2012-13.

› Profit margins for the food and beverage industry are consistently lower than the all industry average, with operating profit before tax only 7.4% of total income, compared to 10.9% for all industries.

Food and Beverage Services Employment

646 692761 772 803 803 790 847

0

200

400

600

800

1,000

2007–08 2008–09 2009–10 2010–11 2011–12 2012–13 2013–14 2014–15

'000

Em

ploy

ed

Source: ABS


4

Food and Beverage Services Total Income

55.8 55.7 58.765.7 70.4 70.3 75.4 76.3

0.0

20.0

40.0

60.0

80.0

100.0

2007–08 2008–09 2009–10 2010–11 2011–12 2012–13 2013–14 2014–15

$ B

illio

n

Source: ABS

Industry Drivers › Time With consumers living increasingly busy lives, demand will be driven by their desire for convenient

food and beverages. Time poor consumers are likely to be attracted to more fast service cafes than formal dining options, allowing these venues to take up a larger portion of market share.

› Health Consumers are being made more aware about the adverse impact bad diet has on their health. Consequently, consumers are increasingly looking for healthier and premium quality options in the food and beverage market. The composition of food and beverage businesses in Australian markets is likely to change in the future, with producers needing to adapt their products to a growing health conscious segment.

› Real household disposable income Australians’ real wages have declined by 2% between 2012 and 2016, representing a decrease in consumer purchasing power. However, total income in the industry has risen over this period, meaning that other drivers have had a more significant impact.

› Competition The café, restaurant and fast food market has seen a 20.4% rise in the number of business operating in the 12 months to June 2015. Fierce industry competition, particularly on price, will be the main factor limiting growth. Price increases for restaurant meals and take away and fast foods have moved closer to the CPI (Australia’s weighted average price increases), meaning that restaurants and take away services have less room to add a mark up to inflation.

› Preferences Australian consumer preferences from food and beverage markets are evolving. A growing food and beverage culture has meant cafes must adapt to more trendy menus. Traditional pubs that have existed within capital cities are being substituted for new smaller bars. A growing portion of consumers appear willing to pay the extra dollars for a boutique product.

› Technology Further enhancing the changing consumer preferences has been review applications such as Zomato, as well as delivery services such as Foodora, Deliveroo and UberEats. These applications have reduced information asymmetry in the market, giving more power to the consumer.

› Off Peak Incentives Mobile applications such as Clipp and Scoopon are also impacting the nature of the industry by attempting to bring in customers in non peak periods. Larger group based discounts have allowed businesses to increase revenue while sacrificing part of their margin.

5

Producer Price Index Selected Industry Groups (2006-2016)

60.0

80.0

100.0

120.0

140.0

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Accomodation

Cafes, restaurants and takeaway food services

Source: ABS

Price growth Restaurant Meals, Take Away and Fast Foods and Overall Inflation (CPI) (2006-2016)

0.00%

2.00%

4.00%

6.00%

8.00%

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Restaurant meals

Take away and fast foods

Source: ABS

Annual Real Wage Growth (2006 – 2016)

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016Source: ABS


6

Industry Performance

› The food and beverage industry’s revenue is expected to grow 1.7% per annum from FY2015-16 to FY2020-21 to $66.6 billion, from its current $61.2 billion. This will be driven by growth in the catering, café and coffee shop sectors.

› The Food and Beverage Services industry employs roughly 8.0% of the total workforce, showing steady year on year employment growth between 2007-08 and 2011-12, and between 2013-14 and 2014-15. Some 20.4% growth in the number of cafés and restaurants in the 12 months to June 2015 has directly driven this increased employment.

› The industry division’s total income represents 2.5% of all industries, indicating that it plays a smaller role in the economy than is represented by the number of workers alone. Total income has increased steadily since 2009-10, when the effects of the global financial crisis were impacting the industry, with the exception of a marginal decline experienced in 2013-14.

› Profit margins for the food and beverage industry are consistently lower than the all industry average, with operating profit before tax only 7.4% of total income, compared to 10.9% for all industries. Growth in profit margins has remained stagnant since 2010-11.

Food and Beverage Services Profit Margin

5.02%

7.66%

9.71%

7.66% 7.98% 7.91% 7.40% 7.44%

12.01%10.96%

12.22%13.23% 12.86%

11.19% 11.41% 10.86%

0.0%

5.0%

10.0%

15.0%

2007–08 2008–09 2009–10 2010–11 2011–12 2012–13 2013–14 2014–15

Food and Beverage Services All industry

Source: ABS

Please note ‘All Industry’ includes all industries with the exception of Insurance and Financial Services.

7

Industry Performance: Cafes, Restaurants & Takeaway Food and Beverage Services › Cafés, restaurants, and takeaway food and beverage services currently employ more than 715,100 workers,

an increase of 29,800 since 2015.

› South Australia is the standout state for growth, with the number of workers in the state increasing by 17.0% year on year. Victoria has also seen growth, with its workforce increasing by 7.6%, while Tasmania (-6.5%) and the ACT(-6.9%) have seen a decrease.

› By state, the largest proportion of the workforce is in NSW, where 232,600 Food and Beverage Services workers are based. This is followed by Victoria, Queensland and Western Australia.

› NSW has the largest number of café, restaurant and takeaway food and beverage services chains with more than 200 employees.

Cafes and Restaurants & Takeaway Food and Beverage Services In Operation (State, Turnover)

Operating at the end of FY 2014-15

Zero to less than $50k

$50k to less than $200k

$200k to less than $2m

$2m or more Total

New South Wales 2,095 6,654 13,653 1,699 24,101

Victoria 1,895 5,831 11,237 1,132 20,095

Queensland 1,087 3,160 7,672 1,038 12,957

South Australia 395 1,201 2,584 397 4,577

Western Australia 548 1,650 4,007 610 6,815

Tasmania 115 346 809 93 1,363

Northern Territory 35 100 298 64 497

Australian Capital Territory

104 266 806 81 1,257

Total 6,274 19,208 41,066 5,114 71,662

Source: ABS

Number of Workers Cafes, Restaurants & Takeaway Food and Beverage Services (August 2016)

224.7

171.2

134.4

39.3

79.2

15.8 7.7 13

232.6

184.2

136.3

4681.3

15.4 7.2 12.1

0

50

100

150

200

250

NSW VIC QLD SA WA TAS NT ACT

('000

Wor

kers

)

2015 2016

Source: ABS


8

Number of Workers Cafes, Restaurants & Takeaway Food and Beverage Services (2006 - 2016)

0

200

400

600

800

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016Source: ABS

Cafes and Restaurants & Takeaway Food and Beverage Services In Operation (State, Employees)


Non Employing

1-19 Employees 20-199 Employees

200+ Employees

Total

New South Wales 5,811 17,515 1,900 85 25,311

Victoria 5,313 13,883 1,324 60 20,580

Queensland 3,198 8,997 1,333 45 13,573

South Australia 1,206 3,138 441 10 4,795

Western Australia 1,610 4,600 818 20 7,048

Tasmania 300 1,029 115 6 1,450



245 899 142 6 1,292

Total 17,789 50,401 6,163 235 74,588

Source: ABS

9

Industry Performance: Pubs, Taverns & Bars

› Pubs, taverns and bars currently employ more than 97,500 workers.

› Employment rates have soared in the past 12 months, increasing by 6.3%. The ACT recorded the highest growth of 200%, followed by South Australia (87.8%) and NSW (26.1%). Western Australia on the other hand recorded the largest contraction, shedding 51.4% of its workforce, impacted by the end of the mining boom and weaker local economy. Queensland also saw employment loss in this sector, experiencing a year on year decline of 5.5%.

› By state, the largest proportion of the workforce is in NSW, where 35,300 workers are based. This is followed by Victoria, Queensland and South Australia. South Australia overtook Western Australia in 2016 due to its strong employment growth and Western Australia’s decline.

› The need to provide customer service over extended hours and for seven days per week means labour costs are the second biggest expense for operators in the industry. Superannuation, payments to employment agencies for staff and employee insurance are also part of this category. Wages and associated labour costs account for 24.9% of industry revenue.

› Queensland has the highest proportion of non employing pubs, taverns and bars. Self operated establishments account for 29.6% of the total number of Queensland pubs, taverns and bars.

Pubs, Taverns and Bars In Operation (State, Employees)


Non Employing

1-19 Employees 20-199 Employees

200+ Employees

Total

New South Wales 547 1,056 406 7 2,016

Victoria 383 879 239 4 1,505

Queensland 309 496 234 5 1,044

South Australia 165 308 160 3 636

Western Australia 158 296 169 3 626

Tasmania 34 114 36 0 184



12 42 17 0 71

Total 1,616 3,210 1,283 22 6,131

Source: ABS

Number of Workers Pubs, Taverns & Bars (August 2016)

2822

18.3

4.9

14.6

3.10.5 0.3

35.3

23.5

17.3

9.2 7.13.4

0.8 0.9

0

10

20

30

40

NSW VIC QLD SA WA TAS NT ACT

('000

Wor

kers

) 2015

2016

Source: ABS


10

Number of Workers Pubs, Taverns & Bars (2006 - 2016)

0

20

40

60

80

100

120

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016Source: ABS

Pubs, Taverns and Bars In Operation (State, Turnover)


Zero to less than $50k

$50k to less than $200k

$200k to less than $2m

$2m or more Total

New South Wales 168 251 918 679 2,016

Victoria 136 220 837 312 1,505

Queensland 101 147 463 333 1,044

South Australia 61 89 272 213 635

Western Australia 59 78 269 219 625

Tasmania 15 25 104 41 185



4 10 38 19 71

Total 547 823 2,922 1,840 6,132

Source: ABS

11

Industry Outlook

› Of the selected group of Food and Beverage industry groups*, total revenue is expected to grow by 8.8% from FY2015-16 through to FY2020-21.

› Revenue for the café, restaurant and takeaway industry broadly is expected to grow by 8.2% and increase from $37.9 billion to $41.0 billion in FY 2020-21. Cafes and restaurants are predicted to drive growth within the Food and Beverage Services industry.

› Revenue for fast food services is expected to increase over the next 4 years to June 2020 to $20.8 billion. However, changing consumer preferences due to growing health consciousness are expected to eventually take its toll on fast food revenue in the year ending June 2021, with revenue predicted to begin its decline.

› The Pubs, Bars and Nightclubs industry group is expected to grow by 7.0% in the five years to FY2020-21, with revenue growing from $16.8 billion to $17.9 billion. However, the industry faces problems in the future with tighter regulation of gaming facilities and falling beer consumption. The market is expected to shift towards smaller, more niche bars, as well as family friendly venues.

*Based on projected and actual revenues for the following food services industries: restaurants; cafes and coffee shops; fast food services; social

clubs; catering services; pubs, bars and nightclubs.

Projected and Actual Industry Group Revenue ($ million)

Cafes and Coffee Shops

Fast Food Services

Restaurants Pubs, Bars and Nightclubs

Total Selected Industry Groups

2006-07 3,260 14,286 10,022 14,372 46,738

2007-08 3,299 14,702 9,583 14,692 47,187

2008-09 3,725 16,655 8,690 14,572 48,431

2009-10 3,773 16,173 9,666 14,740 49,203

2010-11 3,885 15,891 9,685 14,843 49,335

2011-12 4,204 16,361 10,204 15,209 51,221

2012-13 4,721 16,716 10,943 15,654 53,417

2013-14 4,944 17,966 11,939 16,116 56,866

2014-15 5,150 18,719 12,804 16,587 59,651

2015-16 5,505 19,281 13,097 16,759 61,219

2016-17 5,532 19,507 13,188 17,010 62,055

2017-18 5,665 20,026 12,938 17,217 62,909

2018-19 5,892 20,522 13,092 17,506 64,157

2019-20 6,039 20,810 13,676 17,680 65,577

2020-21 6,203 20,716 14,067 17,925 66,598

Source: IBISWorld

BWA-02 121116Bankwest, a division of Commonwealth Bank of Australia ABN 48 123 123 124 AFSL/ Australian credit licence 234945

The information contained in this publication is of a general nature and is not intended to be nor should it be considered as professional advice. You should not act on the basis of anything contained in this publication without first obtaining specific professional advice. To the extent permitted by law, Bankwest, a division of Commonwealth Bank of Australia ABN 48 123 123 124 AFSL/Australian credit licence 234945, its related bodies corporate, employees and contractors accepts no liability or responsibility to any persons for any loss which may be incurred or suffered as a result of acting on or refraining from acting as a result of anything contained in this publication.

food and beverage services industry report - inx software · 3 food and beverage services industry...

Documents