The Foodservice Equipment & Supplies Market: … Equipment Reports 1 ©2014 The Foodservice...
Transcript of The Foodservice Equipment & Supplies Market: … Equipment Reports 1 ©2014 The Foodservice...
Foodservice Equipment Reports ©20141
The FoodserviceEquipment & Supplies Market:
Size, Scope & Outlook
By Robin Ashton, PublisherFoodservice Equipment Reports
Nov. 13, 2014 Emerson E360 Summit
Columbus, Ohio
Foodservice Equipment Reports ©2014
A Market Overview And A Look At The State Of The Industry
• Today, we’ll try to give you the 45-minute version of the foodservice and foodservice equipment markets.
• We’ll look at how they are structured, both in the U.S. and globally, and how equipment gets to market.
• We’ll look at some of the big players, both operators and equipment manufacturers.
• We’ll also look at the outlook this year and next for operators and for the equipment industry.
• We’ll give you plenty of time for questions.
Foodservice Equipment Reports ©2014
U.S. Foodservice & Equipment Markets
• The foodservice market in the United States is huge, complex, diverse and relatively mature.
• Chicago-based research firm Technomic Inc. estimates U.S. market at the end-user level at $703 billion in 2014.
• Technomic details 20 foodservice “segments,” purchasing $251 billion of food, beverages and non-foods in ’13.
• NAFEM/FER estimates equipment and supplies market at $10.1 billion in 2014 at manufacturer level.
• Equipment accounts for 82% of total U.S./Canada E&S market; durable supplies and tabletop account for 18%.
Foodservice Equipment Reports ©2014
U.S. Foodservice Market By Segment
31%
29%
9%
8%
7%
5%
3% 8%
Food & Beverage Purchases, 2014Total: $251.295 Billion
Source: Technomic
LSRFSR/BarsLodging/Rec.RetailEducationHealthcareBusinessAll Other
Foodservice Equipment Reports ©2014
U.S. Foodservice Market By Segment
25%
25%
8%
18%
12%
7%
0%5%
Unit Distribution, 2014Total: 1,136,220
Source: Technomic Inc.
LSRFSR/BarsLodging/Rec.RetailEducationHealthcareBusinessAll Other
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Operator Market Structure—U.S.• There are 1.3 million foodservice kitchens in the U.S., but
“it’s a multiunit world.”• U.S. foodservice is dominated by chain and other
“multiunit” operators including foodservice management companies and big institutional operators.
• Top 500 chain concepts control nearly 60% of restaurant sales and 40% of all units.
• On the institutional side of foodservice, management companies operate 20% to 80% of key segments.
• U.S. more “chain” dominant than most other developed and developing foodservice markets.
Foodservice Equipment Reports ©2014
Operator Market Structure—Global
• Big chain, institutional and other multiunit foodservice operators also rule global markets.
• They continue to grow and gain market share everywhere, though chain penetration varies by market.
• In the U.S. market, multiunit operators clearly purchase a majority of all new equipment and supplies.
• As multiunit operators, they have unique needs and much more complex specification and purchasing processes.
• Markets outside North America and Europe are growing faster, but remain significantly smaller.
Foodservice Equipment Reports ©2014
Top 500 Chains’ Market Share 2013
59%
41%
Share Of Restaurant SalesTotal: $449 Billion, 2013
Source: Technomic Inc.
Top 500
Rest of Industry
41%
59%
Share of Restaurant UnitsTotal: 522,060, 2013
Source: Technomic Inc.
Top 500
Rest of Industry
Foodservice Equipment Reports ©2014
Global Foodservice Market Share:NPD Group, 2011
USA42%
Canada5%
Australia4%
Great Britain8%
Germany9%
France6%
Spain5% Italy
8%
Japan11%
China1%
Russia2%
Foodservice Equipment Reports ©2014
NPD: Traffic Share Of Chain Vs. Independent Restaurants, 2010
61.875.4
44.256.3
25.9
45.1
22.916.6
59.3
36.3
64.0
38.224.6
55.843.7
74.1
54.9
77.183.4
40.7
63.7
36.0
USA Canada Australia Great Britain Germany France Spain Italy Japan China Russia
ChainsIndependents
Share of Visits
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62% 63% 64% 64%
11% 11% 11%
28% 27% 26% 25% 25%
61%
11%11%
2009 2010 2011 2012 2013
Major Chain Traffic Share, NPD
PCYA = % Change vs. Year Ago
Traffic Distribution - OND
Major Chains
Small Chains
Indepen-dents
PCYA CAGR
1%-1%
-1%-1%
-2%-2%
CAGR= Cumulative Annual Growth Rate 2009 to 2013
Total RestaurantsOND'13 Traffic -
1%
11Source: CREST / ReCount®
Foodservice Equipment Reports ©2014
Operator Market Structure
• A few thousand organizations—chains, FS mgmt. companies, big institutions—are keys to U.S. market.
• They not only control a majority of operator sales, but account for an estimated 70-75% of new E&S purchases.
• They don’t purchase E&S like independent operators.• They are the most brand sensitive and have complex
specification, evaluation and distribution processes.• This is particularly true of the big QSR brands, but is also
true of other chains and big institutions.
Foodservice Equipment Reports ©2014
U.S. Equipment & Supplies Market Structure
• The U.S. market for E&S is very large, diverse and fragmented. More than $10 billion in sales annually.
• Manufacturers’ association, NAFEM, has more than 600 members. Most companies remain privately held.
• FER Worldwide Buyers Guide has more than 1,500 U.S. companies selling E&S; more than 5,000 worldwide.
• While big E&S conglomerates dominate, many U.S. companies in $10-$20 million range.
• The North American market is only 40% of worldwide market. • NAFEM breaks market into nine big product categories; we
list 760 product categories in our Worldwide Buyers Guide.
Foodservice Equipment Reports ©2014
U.S. E&S Market By Product
20%
23%
7%13%4%
9%
6%
7%
11%
E&S Market Share By Product Category, 2014Total: $10.145 Billion
Source: NAFEM & FER Estimates
Cooking Equip.Refrig./IceStorage & Hand.Serving Equip.Food Prep Equip.Warewash & San.Cust.Fab/Furnish.SmallwaresTabletop
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FER E&S Market Forecast—2014(Base market numbers, NAFEM, 2011)
Nom. Real $$$Growth Growth Millions
Total Equipment 4.4% 2.5% $8,375
Total Supplies 3.9 1.8 $1,770
Total Industry 3.3 1.5 $10,145Rounding affects totals
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FER E&S Forecast—2014
Nom. Real $$$Growth Growth Millions
Primary Cooking 4.6% 2% $2,068
Refrigeration & Ice 4.8 2.4 $2,336
Storage & Handling 3.7 2.2 $ 710
Serving Equipment 4.4 2.3 $1,292
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FER E&S Forecast—2014
Nom. Real $$$ Growth Growth Millions
Prep. Equipment 4.3% 2% $ 442
Warewash & Ventil. 4 2.2 $ 885
Furn. & Custom Fab. 3.6 1.9 $ 642
Smallwares 4.5 2.2 $ 655
Tabletop & Serv. 4.5 2.1 $1,114
Foodservice Equipment Reports ©2014
Top 100 E&S Manufacturers: 1-25Top 100 E&S Manufacturers
Estimated Estimated Estimated13 vs. 12 ($MM) ($MM) ($MM)
Company % Change 2013 2012 20111 Manitowoc FS 3.8% 1542.2 1486.2 1453.52 ITW Foodservice NA 6.0% 1473.5 1389.7 1347.93 Middleby 13.9% 895.5 786.4 723.34 Ali Group FS NA 61.4% 660 409.0 395.05 Hoshizaki /Lancer FS 12.7% 445 395.0 360.06 Libbey FS -1.0% 433.9 438.2 417.57 Standex Foodservice -1.4% 388.1 393.8 380.48 Vollrath 4.1% 356 342.0 232.09 IMI Cornelius -3.4% 337 349.0 337.410 Captive Aire 6.5% 321.4 301.8 269.511 True Foodservice -0.5% 315 316.6 305.012 Cambro 13.8% 278.1 244.3 229.013 Carrier Foodservice 9.8% 269 245.0 265.014 Carlisle FS -1.8% 238.8 243.3 235.815 Bunn O Matic 6.1% 221.5 208.8 200.816 Dover Unified Brands 7.8% 200 185.6 176.017 Franke Contract Group 4.0% 184.5 177.4 162.018 Rubbermaid FS 3.4% 177.7 171.8 165.019 Henny Penny -2.2% 174 178.0 155.020 Pentair / Everpure FS 5.8% 157.7 149.0 105.021 Duke Mfg 7.0% 154.1 144.0 129.222 H&K International -5.5% 135 142.9 131.823 Hatco 9.4% 134.8 123.2 110.024 Marmon Retail Group 4.6% 130 124.3 8725 EveryWare -1.5% 126.5 128.4 100
Top 25 Mfrs. 7.4% $9,749.3 $9,073.7 $8,473.1
Foodservice Equipment Reports ©2014
U.S. E&S Buyer, Specification & Distribution Channels
• The paths and influences in operator E&S buying, specifying and logistics decisions are multi-faceted.
• The “normal” path is OEM manufacturer to independent multi-line sales rep to dealer to operator.
• Big institutional operators usually also employ an independent design or concept consultant.
• Many chain and big institutional operators generally follow these “normal” paths and channels.
• But there are also many side paths, “direct” relationships and other outside influences.
Foodservice Equipment Reports ©2014
U.S. E&S Buyer, Specification & Distribution Channels
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Chain Functions That Evaluate E&S Suppliers
• No matter the size or structure of a chain, multiple functions have some input into selecting suppliers.
• Almost always, operations management have significant input as do senior execs and culinary.
• But when it comes to the most say in supplier choice, senior execs are key, especially in smaller chains.
• About one in five respondents name purchasing or operation management as the key “chooser.”
• In larger chains, R&D personnel, both equipment engineers and culinary are named more often, along with other specialist titles.
Foodservice Equipment Reports ©2014
Chain Functions That Evaluate E&S Suppliers
64%76%
26%34%
39% 39%
61%
Have Some Input(All That Apply)
41%
21%
0%6%
10%
2%
21%
Have Most Input(Name One Only)
Foodservice Equipment Reports ©2014
Criteria Influencing Chain BuyersChoice of E&S Products/Suppliers
• Many different criteria are involved in chain buyers E&S product and supplier choices.
• Labor savings, ease of use, energy efficiency, both initial and lifecycle cost, speed and previous experience with the supplier are all named by more than 50% of buyers.
• But the most critical criteria is clearly the product’s and supplier’s impact on food and menu product quality.
• Ease of use, initial cost and labor savings are the next most commonly mentioned criteria.
• Unique technology, water savings and availability are cited by the fewest respondents as important.
Foodservice Equipment Reports ©2014
Criteria Influencing Chain BuyersChoice of E&S Products/Suppliers
46%72% 85%
58% 78% 68%41%
72% 54% 40% 59%11%
35%62%
17%
42%17%
0%
42%23%
11%17%
Criteria Influencing Product/Supplier Choice Some Influence (Name All) Most Influence (Name 3 or Fewer)
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Other Testing & Evaluation Procedures
31%
52%
3% 4% 5% 3% 4%
On-Site Test Kitch.
Operating Unit
Mfrs. Test Kitch.
Mfrs. Rep. Test Kitch.
Dealer Test Kitch.
Consult. Test Kitch.
Food Supplier Kitch.
Where Do You Test New E&S Products?
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General Economy Overview• It was a tough first quarter 2014, thanks to the weather.• General economy tanked and Technomic estimates winter
cost foodservice 1.5 points in growth this year.• But that’s was then. All general economy foodservice
drivers have been very positive since.• GDP surged to 4.2% annualized growth 2Q; advance 3Q
estimate 3.5%.• Disposable income and consumer spending improving.• Employment trends, consumer confidence, and gasoline
prices are very positive for foodservice.• The forecasts are for an even better 15 on all fronts.
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Operator Sales Recent History• After falling 7.5% during 2008-10 period, total industry
operator real sales have been positive since 2011.• After moderate gain in 11, Technomic estimates in 12
industry sales grew 1.9% real, 4% nominal. • 12 was by far best year since 2006 and best of recovery.• NRA has it a bit different, with 11 up 1.7% real and 12
industry growth slightly slower at 1.5% real.• The NPD Group reports overall traffic rose 1% in 12, first
year-over-year increase since Great Recession.• But with population increase, per capita visits still falling.• Young people and those less well off eating out less.
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Operator Forecasts 2013-2015• Technomic final 13 estimate: 3.1% nominal, 1.1% real.• NPD reported flat year for traffic in 2013.• NRA’s estimate for 13 matches Technomic’s: 3.2% nominal
and 1% real growth.• Technomic revised 14 forecast down twice thanks to winter
impact: now 3.3% nom., 0.1% real. Menu prices rising.• NRA forecast was 3.6% nominal, 1.2% real, but that was
before impact of winter was known.• NPD forecast 1% traffic gains for 14, but expects flat visits.• Technomic’s preliminary 2015 forecast is for 3.1% nominal
and 1.2% real increase.
Foodservice Equipment Reports ©2014
Technomic Operator Sales Changes
-8
-6
-4
-2
0
2
4
6
8
10Nom. Sales Real Sales
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Technomic Operator Sales Changes
4
5.8 6 5.76.8
-3.9 -3.7
0.6
2.44
3.1 3.3 3.12.4 2.3 2.8 2.6 3
0.4
-6.9
-0.60.1
1.91.1
0.11.2
-8
-6
-4
-2
0
2
4
6
8
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014F2015F
Nom. Sales Real Sales
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NPD Per Capita Visits: 1984-2013
167171
174177
181 180 179 181 182 183187
192 193196
202205
208 210 208204 205 205
207 208 208206
197 195 193 192
198419851986198719881989199019911992199319941995199619971998199920002001200220032004200520062007200820092010201120122013
Source: The NPD Group/ 26th Annual Eating Patterns of America
Annual Commercial Foodservice Meals Per Person In the USA
Promise & Challenge
Foodservice Equipment Reports ©2014
Current Sales & Traffic Trends
• Data from Technomic, NPD and NRA show 2013 was an up and down year, ending on a down note.
• Technomic chain same-store sales trended lower in the last quarter 2013 as winter began to take hold.
• They fell again in 1Q/14 as winter hit with full force.• Full-service chains continue to struggle; same-store sales
have been negative three of last five quarters.• Limited-service chains were still positive 1Q/14, up 1.7%
less McD’s. Add McD’s, only 0.7% LSR gain.• Still, 41 chains up 1Q versus 26 down.
Foodservice Equipment Reports ©2014
3.63
1.651.781.550.84
2.762.05
0.690.460.33‐0.61‐0.78
‐1.93‐2.3‐3.1‐3.3
‐0.10.5
1.8
4
1.21.52.3
3.74.74.9
43.3
1.92.72.82.4
1.7
3.34.1
2.8
0.4‐0.1‐0.7‐0.8
0.40.7
‐0.9‐0.3
‐1
‐3.3
‐4.7‐3.89
‐2.2‐2.7
‐1.8‐1.5‐0.4
0.60.90.91.30.90.9
2.9
1.21.7
0.6‐0.1
1.6
‐0.10.7
‐0.30.4
2.4
‐6
‐4
‐2
0
2
4
6
8 LSR w/o McDs FSR
Technomic Same-Store Sales IndexWeighted Avg. Change, Excluding McDonald’s
Foodservice Equipment Reports ©2014
Sales & Traffic Trends
• NPD’s CREST traffic numbers have been flat or negative since the 3Q/13.
• Overall traffic fell 1% in 1Q/14, thanks to harsh winter, but moved to flat in 2Q.
• QSR traffic was up 1% in 2Q/14 after two quarters flat. Segment controls 79% of visits.
• Casual-dining traffic was not negative for first time since 2008 2Q/13, but has been negative since.
• Fine dining continues to do well on strong business travel but accounts for less than 2% of total visits.
Foodservice Equipment Reports ©2014
NPD Traffic By Segment
35
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NPD Traffic By Segment
-4%-4%-3%-3%-2%-2%-2%-2%-3%
0%0%0%1%1%0%1%1%1%
-2%-2%-3%-2%
0%
-1%-1%-3%-2%
Traffic % Change vs. Year Ago
QSR( )
Midscale( )
Casual Dining( )
Fine Dining/Upscale Hotel( )
(Share of Traffic AMJ'14)
79%
9%
10%
2%
5% 0% 4% 5% 6% 6% 4% 2% 2%
AMJ'12 JAS'12 OND'12 JFM'13 AMJ'13 JAS'13 OND'13 JFM'14 AMJ'14
Total RestaurantsAMJ'14 Traffic 0%
The NPD Group, Inc. | Proprietary and Confidential Source: CREST ®
Foodservice Equipment Reports ©2014
Sales & Traffic Trends
• NRA’s overall Restaurant Performance Index has been in expansion territory for 19 consecutive months.
• Traffic per NRA went negative in December 2013 and remained negative through February 14, thank to winter.
• Beginning March, the index rebounded sharply.• But the RPI has waffled since summer, down slightly in
June and July, up in august and down in September. • Operators are worried about increased food and labor
costs cutting margins.• Their outlook in September RPI fell sharply.
Foodservice Equipment Reports ©2014
NRA Restaurant Performance Index September 2014
Foodservice Equipment Reports ©2014 39
NRA Restaurant Performance IndexSeptember 2014
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“Beyond Restaurants” Operator Trends
• Nearly all “spec” market segments are growing again. • Technomic forecasts real growth for every “Beyond
Restaurants” segment save transport and corrections.• Hospitals, long-term care, senior living, colleges, and
military foodservice showing strong growth in “sales,” with real growth of 1.5% or more, per Technomic.
• Supermarket foodservice continues to surge, forecast to grow 6% nominal, 2.4% real in 14, 3.9% real in 15.
• Lodging foodservice growing fast with 5.5% forecast nominal growth both 14 and 15.
Foodservice Equipment Reports ©2014
“Beyond Restaurants” Operator Trends
• NPD CREST Onsite has noncommercial segments and lodging seeing increased traffic. Traffic rose 1% in 13.
• Consultants are seeing more activity from all spec segments, according to the MAFSI Barometer.
• Tax receipt trends are slowing, as impact of 2012-13 fiscal front-loading effect plays out.
• Wealthy taxpayers moved capital, dividend gains into 2012.• Both income tax and sales tax growth have slowed, though
property tax receipts nudging toward positive. • Preliminary 2Q data shows another quarter of lower receipts.
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State & Local Tax Trends,Four-Quarter Moving Average
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Operator Unit Trends
• During the three years of the recession, independents lost units while chains continued to add units.
• For the three-year period 2009-11, chains added 4,511 units while independents lost 7,158, per NPD’s ReCount.
• More than 75% of all lost units were full service.• Net loss, in a universe of 600,000 units, was only 2,647,
an incredibly small number given big sales drop.• But there was plenty of churn, as CHD numbers show.• Technomic, NPD and CHD all report net unit growth
returned in 2011 and 2012.
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NPD ReCount Unit Changes, 2009-11
44
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CHD Unit Trends 2009-2013
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CHD Unit Trends 2009-2014
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Operator Unit Trends, NPD ReCount
• NPD’s ReCount Census shows a net gain of 5,000 to 6,000 restaurants a year since 2012.
• Total restaurant units grew 0.9% for year ended spring 2013 (March 31 ending) versus 2012.
• Market added another 5,002 units in the past year. Total: 635,494.
• Chains added 3,718 net units 13 to 14, up 1.3%.• Independents added 1,284 net units, up 0.4%.• In ReCount, chains control 44.7% of total restaurants.
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Operator Unit Trends, NPD ReCount
Spring 2010 Spring 2011 Spring 2012 Spring 2013 Spring 2014
616,257 619,481 624,896 630,492 635,494
NPD ReCount Restaurant Units, Revised Totals
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Operator Unit Trends, NPD ReCount
Spring '13 to '14
2010 Spring 2011 Spring 2012 Spring 2013 Spring 2014 Spring 14 PCYA Unit Change
Total 616257 619481 624896 630492 635494 0.8% 5002
CHAIN 270245 272363 275608 280417 284135 1.3% 3718
INDEPENDENT 346012 347118 349288 350075 351359 0.4% 1284
Source: The NPD Group/Spring 2014 ReCount®
Foodservice Equipment Reports ©2014 50
Operator Capital Expenditure Outlook
• Operator spending on equipment and supplies is quite healthy despite tough winter.
• Many older chains continue to spend for renovation and replacement, younger chains adding units.
• Three years of positive sales have helped smaller and independent operators spend for E&S, too.
• Spec markets are finally beginning to spend again after nearly five-year lull.
• Operators surveyed by NRA are quite optimistic about sales and business conditions six months out.
Foodservice Equipment Reports ©2014 51
Operator Capital Expenditure Outlook
• Harsh winter appears to have dampened operators’ sales more than their capital spending.
• Pent-up demand for E&S among operators remains high. • In May RPI, 62% planned a capital purchase in the next
six months matching levels not seen since 07.• Credit and cash-flow/capital formation are normal.• However, margin squeeze from rising food and labor
costs are worrisome.• Publicly funded segments seeing improvement in
availability of capital for facilities projects.• Technomic’s forecasts moderately better 2015 growth.
Foodservice Equipment Reports ©2014
NRA Index Of OperatorsMaking Capital Expenditure Purchase
Past Three Months, 09/2014
94
95
96
97
98
99
100
101
102
103
Aug. 06
Dec‐06
May‐07
Oct‐07
Mar‐08
Aug‐08
Dec‐08
May‐09
Sep‐09
Jan‐10
May‐10
Sep‐10
Jan‐11
May‐11
Sep‐11
Jan‐12
May‐12
Sep‐12
Jan‐13
May‐13
Sep‐13
Jan‐14
May‐14
Sep‐14
Current Situation Index‐‐Cap Ex
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NRA Index Of OperatorsPlanning Capital Expenditure Purchase
Next Six Months, 09/2014
94
95
96
97
98
99
100
101
102
103
104
Aug‐06 Aug‐07 Aug‐08 Aug‐09 Aug‐10 Aug‐11 Aug‐12 Aug‐13 Aug‐14
Expectations Index‐‐Cap Ex
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2015 FEREquipment & Supplies
Market Forecast
Foodservice Equipment Reports ©2014 55
E&S Market & Forecast Overview• The foodservice equipment and supplies market is in the
fifth year of recovery from the recession.• The growth of the E&S market has been quite remarkable
given that operator sales growth has been moderate.• Recovery began 2Q/10 (public companies) to 4Q/10
(MAFSI Business Barometer, reflecting broader market.)• 2011 was a strong bounce-back year for E&S.• The market’s rate of growth slowed beginning 2Q/12
through 1Q/2013.• Then, the remainder of last year, growth accelerated. 2013
turned out to be a surprisingly good year.
Foodservice Equipment Reports ©2014
The E&S Market—2013• Very slow 1Q/13 fooled us as we forecast last year.• The payroll tax increase and an unusual winter run-up in
gasoline prices hurt operators first half of year.• But then the E&S market, in spite of sluggish operator sales
and traffic, really took off.• MAFSI Barometer 2Q hit post-recession high, up 6.1%.• MAFSI Barometer average for 2013 was gain of 4.5%.• Public companies showed similar pattern with bounce back
2Q to 4.1% growth and great 4Q 8.4% gain.• In March this year, we boosted our 13 estimate to 4.5%
nominal gain, 2.4% real, up more than a point.
56
Foodservice Equipment Reports ©2014
Top 100 Mfrs., Change vs. Prior Year
8.7%
3.0%
-9.6%
3.9%
6.4% 5.7%7.0%
-10.0%-8.0%-6.0%-4.0%-2.0%0.0%2.0%4.0%6.0%8.0%
10.0%
2007 2008 2009 2010 2011 2012 2013
Foodservice Equipment Reports ©2014 58
FER E&S Forecast—2014
• E&S sales slowed in the first half in the broad market, but big public equipment companies are doing well.
• Rest of the year looks very good; MAFSI reps forecast 5.7% 3Q growth; still forecast 4.9% for year, a record.
• All the basic macroeconomic factors are looking as good as they have since the recession, especially jobs growth.
• The spec markets, a third to 40% of total E&S market, are recovering with many projects on line.
• MAFSI quotation, consultant activity numbers very good. • Operator food and labor cost run-ups are a worry.• Given all this, we took our original 2014 forecast up.
Foodservice Equipment Reports ©2014
MAFSI Barometer History, 2Q/14
59
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-25
-20
-15
-10
-5
0
5
10
15
20
25
3Q/0
74Q
/07
1Q/0
82Q
/08
3Q/0
84Q
/08
1Q/0
92Q
/09
3Q/0
94Q
/09
1Q/1
02Q
/10
3Q/1
04Q
/10
1Q/1
12Q
/11
3Q/1
14Q
/11
1Q/1
22Q
/12
3Q/1
24Q
/12
1Q/1
32Q
/13
3Q/1
34Q
/13
1Q/1
42Q
/14P
Equipment
Supplies
Total
Public E&S Company Blended Sales,Quarterly % Changes Vs. Year Prior
60
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MAFSI Barometer—2Q/14
61
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MAFSI Barometer—2Q/14
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Revised FER E&S Forecast—2014
Nom. Prices RealGrowth Growth
Total Equipment 4.4% 2.1% 2.3%
Total Supplies 4.5 2.4 2.1
Total Industry 4.4 2.1 2.3Rounding affects totals
Foodservice Equipment Reports ©2014 64
FER E&S Forecast—2014
Nom. Prices RealGrowth Growth
Primary Cooking 4.6% 2.0% 2.6%
Refrigeration & Ice 4.8 2.4 2.4
Storage & Handling 3.7 1.5 2.2
Serving Equipment 4.4 2.1 2.3
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FER E&S Forecast—2014
Nom. Prices Real Growth Growth
Prep Equipment 4.3% 2.3% 2.0%
Warewash & Ventil. 4.0 1.8 2.2
Furn. & Custom Fab. 3.6 1.7 1.9
Smallwares 4.5 2.3 2.2
Tabletop & Serv. 4.5 2.4 2.1
Foodservice Equipment Reports ©2014
FER E&S Forecast—2015• The macroeconomic forecasts for 2015 look as good as
they have anytime since the Great Recession.• Europe is recovering and most Asian growth rates are
stronger. Export ever bigger part of U.S. E&S market.• Operator forecasts call for improved sales environment
and lower food-price inflation.• MAFSI numbers on rep quotation and consultant activity
are stronger than they’ve been in years.• E&S price increases will probably go higher given
materials price run-ups.• We forecast stronger E&S market growth in 2015.
66
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FER E&S Forecast—2015
Nom. Prices RealGrowth Growth
Total Equipment 4.9% 2.3% 2.5%
Total Supplies 4.5 2.2 2.3
Total Industry 4.8 2.3 2.5Rounding affects totals
Foodservice Equipment Reports ©2014 68
FER E&S Forecast—2015
Nom. Prices RealGrowth Growth
Primary Cooking 5.2% 2.4% 2.8%
Refrigeration & Ice 5.0 2.5 2.5
Storage & Handling 4.4 2.0 2.4
Serving Equipment 4.9 2.3 2.6
Foodservice Equipment Reports ©2014 69
FER E&S Forecast—2015
Nom. Prices Real Growth Growth
Prep Equipment 4.5% 2.3% 2.2%
Warewash & Ventil. 4.6 2.2 2.4
Furn. & Custom Fab. 4.2 2.0 2.2
Smallwares 4.7 2.3 2.4
Tabletop & Serv. 4.4 2.1 2.3
Foodservice Equipment Reports ©2014
The E&S Market—2001-2015
‐15
5
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Real Change
Nom. Change
70
Foodservice Equipment Reports ©2014
The E&S Market—2011-2015
4.7
3.8
4.5 4.44.8
2.9
1.8
2.4 2.3 2.5
0
1
2
3
4
5
6
2011 2012 2013 2014 2015
Nom. ChangeReal Change
71
Foodservice Equipment Reports ©2014 72
The FER E&S Forecast—2015Final Thoughts
• 2015 could well be the peak of the current cycle.• Stronger operator environment should combine with
rebound of the spec markets to boost growth.• Mature U.S. market will remain driven by the four “R”s:
renovation, replacement, (menu) roll-outs and repair.• There are hundreds of thousand of existing units and
facilities that need constant renovation and re-equipping.• U.S. chain brands (and their suppliers) are dominant in
the global race and they are building units like crazy.• International growth is in part why U.S. E&S market
growth exceeds core U.S. operator growth.
Foodservice Equipment Reports ©2014
FER E&S Market Forecasts2013-2018
Real and nominal percentage changes in E&S market growth 2013-2018.All numbers are FER forecasts.
2.4 2.3 2.5 2.3 2.2 2
4.5 4.44.8 4.6
4.34
0
1
2
3
4
5
6
2013 2014 2015 2016 2017 2018
Real Change
Nom. Change
73
Foodservice Equipment Reports ©2014
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