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Foodservice growth outstrips retail

THE foodservice industry is growing at twice the rate of retail food sales, according to a recent report by BIS Shrapnel.

The report estimates the $22 billion industry accounts for around 35 per cent of total food sales.

However, many major food companies seem to have failed to recognise its potential.

Report author Sandro Mangosi said foodservice distribution would be subjected to a new round of rationalisation, with home meal replacements creating a major challenge for fast food chains.

“The fast food chains will have to focus on quality, service and product, rather than just price, in order to meet the threat from HMR,” Dr Mangosi said.

“The foodservice industry is driven by people who need meals

on the run and new forms of distribution are the key.

“The foodservice market is looking to one-stop-shop servicing and those distributors that can offer both dry and frozen goods will be the winners.

“This challenge is capital-intensive and not all distributors will be able to meet it.

“The enforcement of a new hygiene and handling regime for the food industry – the HASSA Plan – may compel some of the more financially vulnerable distributors to vacate the market,” he said.

Dr Mangosi said the fast food market was breaking down into

specific segments, with more opportunities for niche products.

“Consumers want ‘indulgence’ food one day and ‘healthy’ products the next,” he said.

Dr Mangosi predicts strong growth in food manufacturing over the next two years.

“Restructuring in the meat industry is likely to constrain growth in the medium term as the sector grapples with the closure of old, inefficient abattoirs, and abolishes uncompetitive work practices,” he said.

“Rationalisation, restructuring and mergers are also likely in flour milling, baking and sugar refining.”

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