Required Report - public distribution

**Date:** 2/29/2004

**GAIN Report Number:** NL4010

NL4545

**Netherlands**

**HRI Food Service Sector**

**Hotel, Restaurant and Institutional Sector**

**2004**

**Approved by:**

![](media/image1.wmf)Roger Wentzel

U.S. embassy, The Hague

**Prepared by:**

Marcel Pinckaers

**Report Highlights:**

The Dutch HRI industry remains highly fragmented, and is extremely
competitive. However, increasing consumer spending and the trend toward
consumption of foods from many different countries, provides
opportunities for entry into the market.

Includes PSD Changes: No

Includes Trade Matrix: No

Unscheduled Report

The Hague \[NL1\]

\[NL\]

Table of Contents

[**Executive Summary 3**](#executive-summary)

[Section I: Market Summary 4](#section-i-market-summary)

[Description and comparison of the HRI sub sectors
4](#description-and-comparison-of-the-hri-sub-sectors)

[Value Of The Overall HRI Industry And Sub-Sectors, Past 5 Years
5](#value-of-the-overall-hri-industry-and-sub-sectors-past-5-years)

[Expected Growth Rates Of The HRI Industry And Its Sub-Sectors
6](#expected-growth-rates-of-the-hri-industry-and-its-sub-sectors)

[Number And Type Of HRI Establishments
7](#number-and-type-of-hri-establishments)

[Value Of Imported Versus Domestically Produced Food Products
8](#value-of-imported-versus-domestically-produced-selected-food-products)

[Trends That Effect Dutch HRI Industry 9](#__RefHeading___Toc65574064)

[Advantages And Challenges 10](#advantages-and-challenges)

[Section II: Road Map For Market Entry
11](#section-ii-road-map-for-market-entry)

[Entry Strategy 11](#entry-strategy)

[Market Structure 12](#market-structure)

[Sub sectors profiles 15](#sub-sectors-profiles)

[Section IV: Best Product Prospects
17](#section-iv-best-product-prospects)

[Products Present In The Market That Have Good Sales Potential
17](#products-present-in-the-market-that-have-good-sales-potential)

[Products Not Present In Significant Quantities But Which Have Good
Sales Potential
17](#products-not-present-in-significant-quantities-but-which-have-good-sales-potential)

[Products Not Present Because They Face Significant Barriers
17](#products-not-present-because-they-face-significant-barriers)

[Section V. Post Contact and Further Information
18](#section-v.-post-contact-and-further-information)

# Executive Summary

The Dutch HRI industry remains highly fragmented, and is extremely
competitive. However, increasing consumer spending and the trend toward
consumption of foods from many different countries, provides
opportunities for entry into the market.

# Section I: Market Summary

### Description and comparison of the HRI sub sectors

The Dutch HRI sector encompasses bars, fast-food outlets, full service
restaurants, takeaway, self-service cafeterias, kiosks, hotels and
catering.

Bars: This sector encompasses all establishments where the focus is on
drinking either alcoholic or non-alcoholic beverages and where food is
also served. While a wide variety of snacks and full meals are offered,
it is not uncommon for customers to only order a drink. Bars in Hotels
are in general categorized as bars.

Fast food outlets: Fast food outlets are typically distinguished by the
following characteristics: a standardized and restricted menu; food for
immediate consumption; tight individual portion control on all
ingredients and on the finished product; individual packaging of each
item; a young and unskilled labor force; counter service; franchised
restaurants which operate under a uniform fascia and corporate identity.

Full-service Restaurants: Full-service Restaurants encompass all
sit-down establishments where the focus is on food rather than on drink.
It is characterized by table service and a relatively higher quality of
food offering. It also includes à la carte, all-you-can-eat and sit-down
buffets within restaurants. Restaurants at Resorts and Hotels are in
general categorized as Full-service Restaurants.

Takeaway: They are classified as fixed units that provide no facilities
for consumption on the premises. Food can either be picked up by the
consumer, or delivered, often for an additional charge.

Self-service Cafeterias: Food paid for in advance of sitting down. No
(or limited) service content or cover charge.

Street stalls/Kiosks: Small, mobile foodservice providers characterized
by a very limited product offering and by low prices.

Catering: Contract catering encompasses all establishments at prisons,
companies, hospitals, schools, where specialized companies supply food
and drinks to the personnel and/or visitors. The formula of the catering
depends on the institution, target group and alternatives.

### Value Of The Overall HRI Industry And Sub-Sectors, Past 5 Years

Figure 1: Value of HRI industry sub-sector, past 5 years

![](media/image2.wmf){width="4.509027777777778in"
height="3.0881944444444445in"}Source: Euromonitor

-   Dutch HRI industry grew from 9.4 billion euro in 1999 to 11.4
    billion in 2003;

-   Sales in all sub-sectors have grown in the past 5 years;

-   Growth rates were the highest in the Full Service and Catering
    sectors from 99-01, but the recent economy downturn led to a
    substantial slowing of their growth;

-   Full service restaurants, fast-food outlets, bars and contract
    catering dominate the Dutch HRI industry;

-   Most consistent growth rates were seen in the Fast-Food industry.

### Expected Growth Rates Of The HRI Industry And Its Sub-Sectors

Figure 2: Value of HRI industry sub-sector, coming 3 years

![](media/image3.wmf){width="4.447916666666667in"
height="3.046527777777778in"}Source: Euromonitor

-   The HRI industry is forecasted to grow from 11.4 billion euro in
    2003 by another billion to 12.5 billion euro in 2006;

-   Consistent growth rates are forecast for all sub-sectors;

-   Full service restaurants, fast-food outlets, bars and contract
    catering will continue to dominate the Dutch HRI industry;

-   Companies in all sub-sectors will further change the profile of
    their establishments to adapt to new demands and opportunities. Some
    cafés/bars, for example, may turn into Full Service Restaurants
    (FSR) or self-service cafeterias. Former takeaways units may decide
    to offer seating for eat-in sales. Fast-Food outlets will move more
    towards fruits, vegetables and other healthy side dishes or menus.
    This trend should be kept in mind as we watch the market evolve over
    the next few years.

### Number And Type Of HRI Establishments

The Café and Bar sector was the largest in terms of number of
establishments, accounting for 32% of total consumer foodservice units
in 2002. Yet this sector also saw the number of units fall from 14,486
units in 1998 to 14,150 in 2002. Development in the Café and Bar sector
reflected a structural transformation towards greater concentration of
medium to large establishments.

The decrease in units would have been even more dramatic if not for an
ongoing shift within the Café and Bar sector itself. Over the past 5
years, a significant number of traditional cafés opted to stay in the
business by transforming themselves into more lucrative upscale
"eetcafés" and "grandcafés".

Figure 3: number and type of HRI establishments

![](media/image4.wmf){width="4.4631944444444445in"
height="3.0569444444444445in"}Source: Euromonitor

Full Service Restaurants and Fast-Food outlets were by far the 2^nd^ and
3^rd^ largest sectors, accounting for 27% and 23% respectively, of total
foodservice units in 2002. The two are expected to experience unit
growth of approximately 5% over the coming few years. The steady unit
growth, over the past 5 years, was mainly the result of opening of new
establishments. For Full Service Restaurants, new units were from a
variety of ethnic or foreign cuisines that have yet to fully break into
the Dutch market. For fast food, unit growth was a result of expansion
by big fast food chains, particularly McDonald\'s, Délifrance and Febo.

### Value Of Imported Versus Domestically Produced Selected Food Products

![](media/image5.wmf){width="4.863194444444445in"
height="8.444444444444445in"}Of total availability, almost 25 percent is
imported.

<http://statline.cbs.nl/StatWeb/table.asp?STB=G1,G2&LA=nl&DM=SLNL&PA=7465nr&D1=0-2&D2=0-6,9-16&D3=a&HDR=T>

[]{#__RefHeading___Toc65574064 .anchor}**Trends That Effect Dutch HRI
Industry**

-   This year economic conditions in the Netherlands are expected to
    improve after the recent downturn. This is a promising prospect for
    HRI companies in the Netherlands.

-   The profile of the Dutch consumer shows signs of long-term
    transformation. New consumers are more apt to eat out as leisure or
    social activity or a convenient alternative to home cooking. They
    are also more informed, social and health conscious, and outward
    looking in their consumption attitudes. This offers ample
    opportunities for new product and service concepts to tap these new
    interests.

-   Competition in the Dutch HRI market will remain tough because as
    firms enter the market, including entrants and those from outside
    the industry. Retailers of both food (Makro) and non-food industries
    (V&D, HEMA, IKEA, Gamma) have already claimed prominent positions in
    the market. Operators are always eager to tap into the consumer
    foodservice market. It is necessary to keep an eye on the movement
    of prospective competitors from all fronts.

-   The changing structure of the Dutch population creates three new
    lucrative markets for the HRI industry: the graying population, the
    working household and the ethnic group, all of which are growing.

-   Industry analysts believe the Dutch HRI sector is entering a new
    phase of development and it is generally believed that within the
    next two decades, the industry profile will change to accommodate
    fewer small operators and more medium and large establishments.
    Industry shakeups will occur, with more mergers and acquisitions or
    strategic alliances, and branding success. In addition, there is
    still growth for small independent high-end hotels and restaurants.

### Advantages And Challenges

+-----------------------------------+-----------------------------------+
| Advantages                        | Challenges                        |
|                                   |                                   |
| Sector Strengths & Market         | Sector Weaknesses and Competitive |
| Opportunities                     | Threats                           |
+-----------------------------------+-----------------------------------+
| Expected economic growth is a     | Competition from retailers (food  |
| promising prospect for the HRI    | and non-food)                     |
| industry                          |                                   |
+-----------------------------------+-----------------------------------+
| The consumer is curious and wants | A highly fragmented sector        |
| to try new things which creates   |                                   |
| opportunities for new product and |                                   |
| service concepts                  |                                   |
+-----------------------------------+-----------------------------------+
| When compared to figures in the   | The consumer is more health       |
| UK and the US, the HRI industry   | conscious which will affect his   |
| can still gain some substantial   | purchase behavior when buying     |
| market share in the Netherlands   | food.                             |
+-----------------------------------+-----------------------------------+
| The Netherlands has a good        | The Dutch food supply chain is    |
| infrastructure which offers great | neither vertically integrated nor |
| opportunities                     | consolidated                      |
+-----------------------------------+-----------------------------------+

# Section II: Road Map For Market Entry

### Entry Strategy

Prior to any export, invest in research that analyzes the Dutch food
culture (concepts, flavor, price, requirements). Once the product has
been chosen, be aware of fierce competition on the Dutch market.

There are several tariff and non-tariff trade barriers that complicate
export to the Netherlands. A Dutch importer generally knows the market,
the trade barriers and the required documentation. In addition, The
Office of Agricultural Affairs in The Hague (OAA) offers guidelines on
import regulations for food products that can be found on
<http://www.fas.usda.gov/gainfiles/200312/146085322.pdf>

FAS/Washington and the OAA maintain listings of Dutch importers.

### Market Structure

-   In the Dutch HRI sector, the Fast-Food sector and the Catering
    industry are highly consolidated. A few international and national
    players dominate those sub sectors.

![](media/image6.wmf){width="5.992361111111111in"
height="1.0743055555555556in"}

Figure 4: Leading fast-food companies in the Netherlands

Source: USDA The Hague

![](media/image7.wmf){width="5.998611111111111in"
height="1.038888888888889in"}

Figure 5: Leading caterers in the Netherlands

Source: USDA The Hague

-   The other HRI sub sectors are highly fragmented. In general all
    restaurants, cafes and hotels are independent operating companies
    with their own purchase patterns and decisions.

-   As the chart on page 13 indicates, the small and independent
    entrepreneurs buy their products and ingredients at the wholesaler
    that matches their product requirements. There are approximately 10
    wholesalers in the Netherlands. Some of the bigger are indicated
    below.

![](media/image8.wmf){width="5.998611111111111in"
height="1.0131944444444445in"}

Figure 6: Leading wholesalers in the Netherlands

Source: USDA The Hague

Figure 7: Distribution Channel Flow Diagram

![](media/image9.wmf){width="4.023611111111111in"
height="2.941666666666667in"}Source: USDA The Hague

-   Companies in the HRI industry purchase the imported products in some
    cases directly from importers but in general via wholesalers or
    local suppliers.

-   Fast-food companies are frequently part of a large chain with
    national, regional or global presence. Products are delivered
    through proprietary distributors, who normally purchase products for
    all franchisers.

-   Due to its consolidated structure, the Dutch catering sector has a
    limited amount of dedicated distributors. Distributors buy directly
    from producers. Non-EU products are bought through importers.

-   Independent Restaurants, Bars and Takeaways buy fresh products
    (meat, seafood, dairy products, bread and fruits & vegetables) often
    from local suppliers who in some cases produce those products
    themselves. These relationships are in most cases personal
    relationships between the owner of the restaurant and the supplier.
    For all other products (and non-food) the independent owner goes to
    a wholesaler, except for beer, wine and soft drinks which are
    delivered as well.

-   For bigger Restaurants and/or Restaurant Chains, there are different
    players in the supply chain. The local suppliers have left the field
    and are being replaced by Wholesalers and Distributors.

-   Different product sectors have different supply chains;

A few examples:

> Dutch wholesalers buy specialized products like Jamon Pata Negra in
> small quantities directly from Spanish processors where as pork is
> bought from Dutch slaughterhouses (not directly from Dutch producers).
> Brazilian or Thai poultry products are bought from Dutch meat
> importers.
>
> New World wines are increasingly imported into the EU. In some cases
> the bottled product is imported and sold to distributors and
> wholesalers, however in other cases the wines are imported and bottled
> within the EU and subsequently sold to wholesales and distributors.
>
> The purchase of soft drink is often linked to the supplier of Beer. In
> some cases, especially in the Restaurant and Café & Bar sector, the
> brewery sponsors the bar or other inventory. In return the brewer
> closes a contract where he is the exclusive supplier of all beers and
> soft drinks for a set amount of years.

### Sub sectors profiles

-   From all HRI sub sectors only Fast Food Chains and Caterers are
    consolidated although there are a few big hotel and restaurant
    chains active in the Netherlands.

![](media/image10.wmf){width="5.25in" height="1.9013888888888888in"}

Figure 8: Top 10 Hotel and Restaurant Chains, 2003

Source: [www.zibb.nl/horeca](http://www.zibb.nl/horeca)

![](media/image11.wmf){width="4.986805555555556in"
height="1.0430555555555556in"}

Figure 9: Top 5 Fast Food Chains, 2003

Source: [www.zibb.nl/horeca](http://www.zibb.nl/horeca)

![](media/image12.wmf){width="2.270138888888889in"
height="1.0430555555555556in"}

Figure 10: Major caterers active in the Netherlands in Alphabetic order,
2003

Source: [www.veneca.nl](http://www.veneca.nl/)

-   Company information on the Leading Hotel and Restaurant Chains in
    the Netherlands can easily be found on
    [www.zibb.nl/horeca](http://www.zibb.nl/horeca) and on Leading
    Caterers in the Dutch markets on
    [www.veneca.nl](http://www.veneca.nl/). Some of the information is
    in Dutch, if you need assistance please contact FAS, The Hague.

# Section III: Competition

Knowledgeable traders, Europe's largest port in Rotterdam, a good
distribution system, well organized wholesalers and affluent and open
minded consumers, make the Netherlands an attractive export market. The
Dutch processing industry is very competitive, but the position for
primary producers is somewhat different. Due to high prices for
farmland, high labor costs, high standards for food safety and animal
welfare and multiple rules and regulations, the cost of producing raw
materials is often high. As a result, the Netherlands increasingly
sources from nearby countries. Trade with EU countries is fairly easy
and inexpensive because of the free trade agreement and proximity.

However for some products, the Dutch HRI sector looks outside the
borders of the EU, e.g. for year-round availability of fresh fruit and
vegetables. The Netherlands sources fresh produce from Southern
Hemisphere Countries like Chile, Brazil and New Zealand. In addition to
availability, cost is another important reason to source
internationally. As a result, poultry is sourced from Brazil.

Another reason why importers and wholesalers turn to foreign markets is
to look for unique products or products that improve their existing
product portfolio. This can be either a new product or well-known
products that are produced or packed in a different way and therefore
appeal to Dutch consumers. It can also be a product that Dutch have
tasted abroad and also want to eat back home. However, keep in mind
that, profit margins for the entire food industry and food service
sector are under strong pressure at the moment.

Figure 11 gives an example of two commodities that are imported from
neighboring countries and where the US has a market share of 2 percent.

Figure 11: U.S. Market Share Versus Competitors For The Wine and Seafood
Market

+-------------+--------------+---------------------+-----------------+
| **Product   | **Major      | **Strengths of      | **Adv. &        |
| Category**  | Supply       | Key**               | Disadv. of      |
|             | Sources**    |                     | Local           |
|             |              | **Supply            | Suppliers**     |
|             |              | Countries**         |                 |
+-------------+--------------+---------------------+-----------------+
| **Wine**:   | France: 43%  | Good quality        | No real         |
|             |              |                     | commercial      |
| Total       | Spain: 10%   | Export              | availability    |
| imports:    |              | t                   |                 |
| 689 million | Portugal:    | radition/experience |                 |
| EURO        | 10%          |                     |                 |
|             |              | Proximity           |                 |
|             | United       |                     |                 |
|             | States: 2%   | Popular holiday     |                 |
|             |              | destination         |                 |
+-------------+--------------+---------------------+-----------------+
| *           | Germany: 13% | Unique products     | EU regulations  |
| *Seafood**: |              |                     | limit           |
|             | Denmark: 11% | Fishery Quotas      | additional      |
| Total       |              |                     | catch           |
| imports:    | UK: 10%      | Natural             |                 |
| 1.4 billion |              | circumstance        | The domestic    |
| EURO        | United       |                     | market is a     |
|             | States: 2%   |                     | fresh market    |
+-------------+--------------+---------------------+-----------------+

Source: Product Board of Wine, Product Board of Fish, USDA

# Section IV: Best Product Prospects

### Products Present In The Market That Have Good Sales Potential

-   Wine

-   Seafood

-   Fresh fruit

-   Nuts

-   Certified Non-Hormone Treated Beef

-   Processed Fruit and Vegetables

-   Sauces and Condiments

-   Game meat

### Products Not Present In Significant Quantities But Which Have Good Sales Potential

-   Fruits that are not produced in the EU

-   Innovative Sauces and Condiments

### Products Not Present Because They Face Significant Barriers

-   Red Meat and Meat Preparations (hormone ban)

-   Poultry (sanitary procedures)

-   Processed Products (GMO)

# Section V. Post Contact and Further Information

United States Department of Agriculture's Foreign Agricultural Service

Agriculture Export Service

<http://www.fas.usda.gov/agexport/exporter.html>

Office of Agricultural Affairs at the American Embassy

Postal Address: U.S. Embassy-AGR, PC71, Box 038, APO AE 09715

Visitor Address: Lange Voorhout 102, 2514 EJ The Hague, the Netherlands

Phone: 31-70-3109299,

Fax: 31-70-3657681,

E-mail: <agthehague@fas.usda.gov>

For more information on exporting U.S. Products to the Netherlands,
please visit the FAS website at
[www.fas.usda.gov](http://www.fas.usda.gov/)