News Food
Food sector will also receive a big blow in 2021
Even if the lockdown is lifted, companies in the food service channel will still have a difficult period. Due to restrictive measures and various structural effects, turnover will also remain under pressure in 2021. Restaurants and caterers take the biggest blow.
In a recent update, Rabobank outlines the developments in the food sector. The bank makes no secret of the fact that the second lockdown of food and beverage outlets in the Netherlands has a major impact on suppliers in the food chain. Great uncertainty also plays a role in the subsequent period, which has repercussions on the turnover expectations for 2020 and 2021.
Turnover restaurants halved
It should come as no surprise that the catering industry has been hit hard by the second corona wave. On takeout and delivery after, food and beverage outlets are closed until at least December. As a result, the catering industry loses roughly €250 million in turnover per week compared to a 'normal' week in 2019. Rabobank estimates that restaurants have 50% less turnover throughout the year than last year.
Fast food restaurants are also seeing their turnover decline, but less rapidly (-34%). At suppliers and wholesalers, the turnover contraction in 2020 is expected to be -29%. Catering companies will not be hit even harder by the corona crisis. Their turnover decline varies from -36% (company catering) to even -61% (airline catering). This has an effect, among other things, on the chips industry and the sales of sugary drinks en dairy.
But every medal has a flip side, so this crisis also has winners in the food segment. Total growth in supermarket sales is expected to amount to an unprecedented plus of 9%. For online supermarkets there is even a growth of 29% and in 2021 this will only increase to a turnover growth of 35% compared to 2019. For the physical supermarket the growth will then still be 2,5%.
Structural Effects
According to Rabobank, these prospects have everything to do with the 'new normal'. First of all, as soon as the lockdown is lifted, major restrictive measures will still apply in the food service. Companies in this segment are facing an uncertain start to the new year. More structural effects are forecast for the second half of 2021. This concerns, among other things, the impact of the economic recession, more working from home, fewer intercontinental tourists and consumer caution to visit the hospitality industry.
For restaurants, this will again mean a turnover contraction in 2021 that amounts to -2019% compared to 24. A contraction of -7% and -15%, respectively, is forecast for fast food restaurants and suppliers. An exception is made for companies that focus on home delivery. They are already seeing their turnover increase by an average of 23% this year and in 2021 that will even be 29%. Meal box deliverer Hello Fresh is taking it a step further and recently announced that this year it will be based on a doubling of turnover.
Sales losses elsewhere in the EU
In other EU countries, Rabobank also sees considerable pressure on foodservice turnover in the coming year. Motivated by the fact that government aid is being phased out in most countries and economic recession is looming. For 2021, a turnover contraction of between 16% and 22% is expected in countries such as France, Germany, Italy, Spain, Great Britain and Ireland. In the longer term, consumption outside the door in Western Europe will recover.
Jeanette Pennings
© DCA Market Intelligence. This market information is subject to copyright. It is not permitted to reproduce, distribute, disseminate or make the content available to third parties for compensation, in any form, without the express written permission of DCA Market Intelligence.
