Food service sector seen to hit over P1 trillion by 2027

MANILA, Philippines — The country’s food service sector is expected to grow to P1.08 trillion by 2027, as consumer confidence continues to recover and tourism activity picks up, according to data and analytics firm GlobalData.

In a statement yesterday, GlobalData said the Philippines’ food service sector is projected to grow at a compound annual growth rate (CAGR) of 13.7 percent to P1.08 trillion in 2027 from P568.8 billion last year.

“With the rebound of tourism activity, the food service profit sector is expected to witness significant growth in value sales through 2027,” GlobalData consumer analyst Savitha Kruttiventi said.

The bulk or 55.8 percent of the sector’s total sales last year was accounted for by quick service restaurants (QSRs).

From 2017 to 2022, the Philippine food service sector’s revenue declined at a negative CAGR of 6.3 due to lower transactions and outlets amid pandemic-induced restrictions in 2020 and 2021.

GlobalData said all channels registered a decline in sales from 2017 to 2022 as economic uncertainties hampered consumer spending.

Among the different channels, the pub, club and bar segment registered the sharpest decline in value sales, at a negative CAGR of 15.3 percent, due to lower customer inflow given restrictions on operational hours and occupancy.

The workplace and leisure channels posted declines of 15 percent and 13.8 percent, respectively.

“The COVID pandemic sparked a significant shift in consumer behavior, as people have become increasingly health conscious and are demanding products that promote well-being. Simultaneously, the economic uncertainty resulting from high inflation and unemployment has led consumers to seek out value-for-money options,” Kruttiventi said.

As such, operators focused on offering healthy menu options to consumers and various promotional activities and loyalty programs.

GlobalData said all profit sector channels in the Philippines are expected to grow and see an increase in outlet count through 2027.

It also sees chain operators growing at a higher rate compared to independent operators across restaurant channels.

Kruttiventi said the preference for healthy and nutritious food options made with fresh and natural ingredients is expected to rise on channels such as QSR and full-service restaurants.

“As a result, operators in the country need to respond by adapting their strategies, such as introducing healthier products or menu items at discounted prices, to cater to the needs of consumers who seek affordable, yet nutritious choices,” Kruttiventi said.