Food Service

Food Service

Two decades of European food service industry growth temporarily paused by Covid-19

Supported by strong fundamentals, the restaurant industry has been consistently demonstrating steady growth in the past

  • Secular European industry growth up to 2019
    • 2.4% CAGR in 2016-2019 period
    • 1.6% of the growth attributable to transactions and traffic (i.e. more meals consumed out-of-home) and the rest to average ticket size increase
  • Sector expansion in the recent years driven mainly by favourable demographics and changing consumer habits, supporting growth of take-away, delivery increasingly realised through digital platforms
  • Emerging trends continuing to have an increasing influence on consumer preferences:
    • Healthy diet and functional foods
    • Environmental consciousness
    • Sensory experience
    • Food provenance
  • Brands has been the most important growth driver and continues to be the largest segment
  • Despite Covid-19, food service industry has demonstrated both the significant adaptability to rapidly changing circumstances, impending uncertainty, and changing customer needs, as well as great resilience throughout the Covid-19 crisis

Growth to resume post Covid-19 recovery

Decline in the restaurant sector volumes driven by inability to operate (lock-downs and restrictions) rather than underlying decline in demand. Future growth expected to be fast paced with less competition

  • Given government restrictions, hospitality and food have been the hardest hit service industries across Europe
  • Turnover in Q4’2020 lower by 50% compared to Q4’2019 (QoQ)
  • Total service sector down by only 9% in the same period
  • Industry expected to recover rapidly as restrictions and limitations are lifted
  • Food service business expected to bounce back and reach 2019 levels within 12-18 months after pandemic measures are lessened
  • Steady growth of 2.6% p.a. on average expected during the next 5 years, sustaining an overall demand for restaurants and out-of-home food consumption
  • Brands have consistently been taking market share away from independent operators over the past 25 years. It is expected that this trend will now accelerate as bigger players are expected to emerge from the pandemic stronger.

Source: Eurostat and MarketLine (as of October 2020).

Europe defined as Austria, Belgium, the Czech Republic, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Netherlands, Norway, Poland, Portugal, Russia, Spain, Sweden, Switzerland, Turkey, and the United Kingdom.

Unique opportunity to take advantage of a rapidly evolving industry, becoming the partner of choice for restaurant brands and operators, and to meet and anticipate changing customer preferences and demands.

Clear investment criteria and portfolio building focus

Key Target Selection Criteria

Omnichannel
Ability to offer compelling offline and online experiences for customers
1
Central Kitchen Compatibility
Capacity to improve consistency, distribution and margins by using central kitchens
2
Opportunity to Stretch the Brands
Ability to expand offered product ranges and internationalize brand’s footprint
3
Opportunity to Bounce Back
Operators in sectors that will bounce back quickly; not turn-arounds, but brands stalled by Covid
4
Fast Growth Categories
Opportunities in fastest growing food categories (e.g. Asian, Italian, sandwich, healthy bowls)
5

Hands-on approach creating value throughout the investment period

  • Well positioned to be the partner-of-choice for companies, investors and management teams alike
  • Exceptional reputation and hands-on approach of McWin team
  • Proven ability to create value through seamless execution of acquisitions and integrations
  • Experience building partnerships within restaurant sector spanning across several continents
  • Capacity of building organizations that create lasting value for all stakeholders (investors, employees, customers, etc.)
  • Ample track-record of team’s ability to arrange successful exits from investments (incl. IPOs and trade sales)