Food & Drink Industry Austria Bord Bia, Frankfurt November 27 th 2008
Austrian Market Overview Population: 8.26 million (OECD, 2008) Capital: Vienna (1.65 million), Graz (244,537), Linz (188,407) and Salzburg (148,549). Inflation rate 3.8% (Statistik, 2008). GDP-real growth rate 3.3% (OECD, 2006). Unemployment is falling, currently at 3.4% (Statistik, Q2 2008). 62.1% of the population are aged between 15-59 (Statistik, 2008).
Austrian Market Overview Currency: Euro VAT on goods & services: 20% VAT on Food: 10% Global Exports (2007): 114.8 billion (Statistik, 2008) Imports (2007): 114.25 billion (Statistik, 2008) Top Import partners in 2006: Germany (40.8%), Italy (7%), France (4.8%), USA (4%), Switzerland (3.3%) and Czech Republic (3.3%) (OECD, 2008).
Irish Food Export Performance 2007 Irish Food Exports to Austria for 2007 Miscellaneous edible 38% Beverages 18% Fish 3% Meat 3% Dairy 21% Total Exports: 11.2 mn Other* 5% Source: CSO Food and Drink Statistics 2007 Sugars 12% * Includes cereals, extracts, animal feeds, fruit and vegetables.
The Retail Market 2006 2007 2008e Consumer Spend ( bn) 137.4 143.5 148.8 Total Retail Market ( bn) 45.48 45.60 47.62 Total Grocery Market ( bn) 18.07 18.60 19.06 Grocery as a % of Retail 39.7% 39.8% 40.02 Source: IGD Data centre estimates Austria is one of the world s wealthiest countries, with a CIA (Central Intelligence Agency, America) ranking of number 16 in terms of GDP per capita (PPP). It has above average per capita income, and is the 4 th wealthiest country in the EU with a purchasing power 23% higher than the EU average (Business Location Austria, 2007).
European & Global Grocery Retail Market Sizes Top 10 Western European Markets Top 10 Global Markets Country Grocery Retail Market ( bn) Country Grocery Retail Market (US$bn) 1. France 208.03 1. USA 785.85 2. United Kingdom 3. Germany 4. Italy 5. Spain 6. Greece 7. Switzerland 8. Netherlands 9. Belgium 10. Sweden 11. Austria 185.70 144.19 123.80 97.55 34.58 32.29 30.68 30.03 24.20 18.56 2. China 3. Japan 4. France 5. United Kingdom 6. India 7. Germany 8. Russia 9. Italy 10. Spain 33. Austria 450.14 394.45 278.33 249.20 249.11 192.92 188.02 165.64 130.51 24.83 Source: IGD Country Presentations (2007)
Austria: Top 10 Retailers 2006 Retailer Total Sales ( m) Grocery Sales ( m) % Change Grocery Sales 2006 v 2005 Grocery Retail Market Share *(%) No. of Stores Sales Area (sqm) Rewe 4,842 4,145 +2.4 22.33% 1,401 1,383,800 Spar International 4,500 4,500 +4.5 24.25% 1,417 972,502 Aldi 2,674 2,674 +4.1 14.40% 410 287,000 Metro 1,744 791 +2.9-12 95,604 Adeg 1,443 1,443 +2.7 6.23% 750 285,083 Zev Markant 1,281 765-4.12% 1,246 288,427 Tengelmann 1,000 579 +4.0 3.12% 375 183,455 Lidl 510 510 +9.7 2.75% 170 110,500 M- Preis 440 440 +2.3 2.37% 140 210,200 Source: IGD Country Presentations Austria *Grocery Retail Market Shares exclude cash and carry operations.
Retail Market Share 2006 Spar 28% Aldi 16% ZEV Markant 3% Lidl 4% Other 3% Tengelmann 5% Metro 2% Edeka 3% Source: IGD Country Presentations Austria Rewe 36%
Retail Grocery Market Austrian grocery retail market is worth 19.1billion (2008 est.), accounting for 40% of total retail market (IGD, 2008). The discount sector remains one of the fastest growing sectors in Austria and Aldi is the clear leader. Others in the market include Plus/Zielpunkt, Penny/Mondo and Lidl. The Austrian consumer now looks for quality in their discounters while previously they simply looked for price (Euromonitor, 2008). The market is dominated by German retailers with Tenglemann, Rewe, Aldi, Lidl, Metro and Edeka all present in the market. This is due to the linguistic, cultural and historical links between the two countries.
Key Consumer Trends in the Market Growing concern over health and well being Retail market for health and wellness food in Austria grew by 5% in value in 2006 and 18% of all revenues from food sales and 44% of all money consumers spent on drink in Austrian shops was derived from healthier varieties. Organic becoming increasingly important highest percentage of organic farmland in the EU, Italy in second place (Eurostat, 2007). 13% of all farmland is organically cultivated (Bio Austria, 2007) 87% of Austrians regularly purchase organic food (Lebensministerium Austria, 2008)
Foodservice in Austriafacts and figures Sales in consumer foodservice in 2006 amounted to 7.85bn, which was a growth of 1.7% on the 2005 value (Euromonitor, 2008). The total number of foodservice outlets in Austria in 2006 was 49,231 and of these only 1,568 were part of a chain or 3.2% (Euromonitor, 2008). The total average annual expenditure on café, restaurants, and hotels per household makes up 5.5% of total expenditure or 1,676 per annum Consumer foodservice in Austria is forecast to grow at a rate of 8.5% in the period 2006-2011 or a CAGRate of 1.7% in the same period.
Foodservice in Austria Trends There are three major trends currently shaping the consumer foodservice market. These are: 1. Ever-increasing pace of living - leading to demand for faster services and the need for greater convenience. The number of hours spent working per week has increased steadily since 2002 which is also fuelling this faster lifestyle (Euromonitor, 2008). 2. Long term trends toward single person households who are unwilling to cook for one person - driving the sales of 100% home delivery or takeaways. Approximately 25% of all households in 2006 were single person households. This leads to opportunities across all aspects of foodservice from take-aways to full service restaurants (Euromonitor, 2008). 3. The Health and wellness trend is leading to healthier food, fresh ingredients and smaller portions. Fish and seafood are becoming increasingly more popular and poultry schnitzel s have been successfully launched. Low carbohydrate dishes are becoming sought after e.g. salad (Euromonitor, 2008).
Foodservice in Austria Trends Greater acceptance of foreign cuisine Consumers are becoming more exposed to international trends and more experimental in terms of choice of cuisine. This has led to an increase in sales for full service restaurants that serve Japanese, Chinese and Oriental food in particular. This is expected to continue (Euromonitor, 2008). Chains play a minimal role in the overall Austrian foodservice industry. Independent outlets generate the majority of sales. Only McDonald s and Tchibo Holding play a significant role in terms of presence and sales. Austrian s are sceptical about new international chains due to their conservative tastes. This has led to fast food being underdeveloped with only McDonald s having significant market share (Euromonitor, 2008).
Foodservice Establishments Chained Consumer Foodservice Brand Shares by % Value. Company McDonald s Tchibo Nordsee Burger King Pizza Mann Petit Bistro Aida Schnitzel Haus Testa Rossa Caffee Coffeeshop Company 2005 39.1 15.5 4.5 3.7 2.4 2.3 2.4 1.9 1.6 1.3 2006 38.4 15.4 4.6 4.0 2.4 2.3 2.3 1.9 1.7 1.4 Source: Euromonitor. 2008 Consumer Food Service Austria.
Foodservice Establishments McDonald s In 2006 they had a 38.4% market share and were the only international food service chain with a significant market share. In 2007 they had 163 outlets which generated a turnover of 365 million. There were 117 million visits to McDonald s Austria in 2007 which was up 10.4% on 2006 and they employ around 7,000 people.
Foodservice Establishments Tchibo Operates under the fascia Eduscho in Austria This is a shop which specialises in coffee and bedding. They have weekly special offers for coffee and other household items. This is a German brand and its brand awareness is extremely high in Germany at 98% awareness (Tchibo website, 2008) Their food selection now also covers Tchibo branded chocolate. Now offers travel packages.
Foodservice Establishments Nordsee Have benefited from the health trend in Austria and have furthered this with their advertising of Fisch verliebt or in love with fish in English. They operate 44 stores in Austria but turnover is not available though they do make up 4.6% of the chained consumer foodservice brand share by value.
Reasons for targeting Austria Part of German language speaking zone along with Germany and Switzerland with similar consumer habits Good opportunity for targeted premium/niche brands Strong economy
Barriers/challenges in supplying Austrian market Self sufficient in main agricultural product categories Strong support for locally produced/sourced dairy and meat products
Bord Bia services 2009 Bord Bia Austrian market visit June 2009 Market queries handled by Bord Bia office in Frankfurt staffed by Liam MacHale & Fiona O Toole Services include: Itinerary Development, Category Analysis, Media review and translation services, Product Price auditing and tracking, Product retrieval, Buyer networking, Distributor search Bord Bia Wöhler str. 3-5 60323 Frankfurt Germany Tel: +49 69 710 423 255 Fax: +49 69 710 423 200 Email: liam.machale@bordbia.ie