Voluntary - Public Date: 8/20/2009 GAIN Report Number: FR9020 France Post: Paris Fast food Sandwich and Snack Sector Report Categories: Product Brief Approved By: Elizabeth B. Berry Prepared By: Roselyne Gauthier Report Highlights: Lifestyle, demographic changes, and the financial crisis have fueled growth in the fast food sector in France, especially sandwich and snack sales, which grew 11 percent in 2008. Best prospects for U.S.
suppliers in the snack segment are chips and crisps, bagels, wraps, ice creams and yogurts, dried fruits and nuts, salads, pastas, confectionary products and chocolate bars, fruit juices and soft drinks, soups and finger foods. General Information: Average Exchange rate: Calendar Year 2007: USD 1 = 0.7312 Euros Calendar Year 2008: USD 1 = 0.683 Euros (Source: Paris Stock Exchange/European Central Bank) SECTION I. MARKET OVERVIEW The fast food sector considered in this report includes not only fast food restaurants (U.S.
and French style), but also take out and delivery, coffee shops, sandwich shops, bakeries and cafeterias, ethnic restaurants, and alternative vendors, such as gas stations, caterers, and supermarkets. 1. Key Macro-Economic Factors Driving Demand in France for Fast Foods: Despite the financial slowdown, fast food sales increased 0.8 percent in 2008, taking market share from traditional ... more. less.
restaurants, especially for lunch.<br><br> All fast food segments, including snack and sandwich sales, represent 72.5 percent of total HRI food service sector sales. New concepts, innovative products and higher quality products have resulted in a better image for the fast food segment. The following factors have fueled growth in the French fast food market: Growing urban population; Increase in the number of working people; Trend toward reduction in length of meal times; Decline in consumption of traditional lunches at home; Growth in the availability and range of ready-to-eat products; Reduced purchasing power resulting in change of habits favoring more fast food at lunchtime and even at dinner for single households.<br><br> 2. The Fast Food Sector in France: Market Share per Outlet Type, and Percentage Change 2008/2007 (in Parenthesis) (*) Ex: Kebab, Indian, Chinese (1) Alternative Circuits: Gas station, caterers, Supermarkets, grocery stores (2) Bakeries and cafeterias Source: NDP Panel Crest Top 10 Companies in the French Fast Food Sector Groups/Brands Total ($1,000) Sales ($1000) % Change 2008/2007 Total Outlets Total Outlets 2008 2007 2008 2007 McDonald 9s Corporation (McDonald 9s) 4,832 4,075 +18.6 1134 1109 Financiere Quick (SAS Quick) 1,072 976 +9.8 354 337 Groupe Holder (334 Paul, 24 Saint Preux) 405 364 +11.2 358 348 Elior/Eliance Restauration rapide (Pomme de Pain, Cafe Route, Station Sandwich, Phileas, Quick &) 404 329 +22.7 378 359 Groupe Yum (73 KFC, 90 Pizza Hut) 395 369 +7.0 163 148 Autogrill (Cia, Spizzico, Pain a la Ligne, Time Cafe, Foodissimo, PastGo, &) 350 316 +10.7 523 510 Groupe Le Duff (La Brioche Doree, Le Fournil de Pierre) 319 293 +8.8 349 333 La Mie Caline (La Mie Caline) 180 146 +23.2 174 164 Lagardere (Relais H Cafe, Relay) 143 122 +17.2 192 189 Domino 9z Pizza Entreprise (Domino 9z Pizza) 129 93 +38.7 146 126 Source: Neo Restauration Magazine Estimates 3. Key Figures for the Fast Food, Snacks and Sandwich: With total sales of 6.5 million euros ($9.5 billion) in 2008, the top 40 fast food companies experienced ten percent sales increase, compared to 2007, and opened 262 new restaurants.<br><br> The economic crisis as well as French consumers reducing the time spent for meals has fueled demand in this sector. According to market analysts, two types of fast food catering dominated this market in 2008: (1) American type fast food: Hamburger, chicken and delivered pizza, which increased an average 11 percent (+10.74 percent for McDonald 9s, +42 percent for KFC, +28.67 percent for Domino 9s); and (2) snacking and sandwich outlets which increased by an average of six percent. The Sandwich Market: A Booming Segment In 2008, approximately 1.8 billion sandwiches were sold in France at an average price of 3.39 euros.<br><br> This is a booming market segment, which showed an increase of 11 percent sales in 2008, compared to the previous year. Currently in France, 8 sandwiches are consumed for each hamburger consumed, while pizzas and pastas are even more popular. Historically, sandwiches were only available in bars, but now can be found in many distribution outlets and almost all locations offering food products, for example: bakeries, stores, supermarkets, etc.<br><br> France is still closely tied to tradition: In 2008, 2 out of 3 sandwiches were made with cheese and ham, and 64 percent were served on cbaguette d bread. 4. Key Strategies for the French Fast Food/Snacks & Sandwich: Adapt to the market, which is sub-segmented by theme and price; Provide low-cost product to adjust to reduced purchasing power; Increase efficiency and rapidity of service to optimize sales; Increase variety of self-service products offered.<br><br> 5. Fast Food/Snacks and Sandwich: Advantages, Opportunities and Challenges Facing U.S. Products in France Advantages/Opportunities Challenges The United States offers a variety of new innovative products Domestic and intra-EU imports dominate the supply chain Changing lifestyles, demographic changes and the economic crisis fuel growth in the fast food and alternate distribution outlets in single portion format Adapt U.S.<br><br> products to French consumers 9 needs regarding price, practicality, variety, quality and packaging Weakness of the U.S. dollar vis a vis the Euro benefits U.S. products Price competition is fierce French consumers demand quality, innovative, healthy products U.S.<br><br> suppliers adapt products to French consumers 9 tastes and expectations Fast food chains, theme restaurants, and the food processing industry are increasing demand for American food products Certain ingredients are banned or restricted from the French market 6. What Changed in 2008 Compared to Previous Years in the French Fast Food/Sandwich and Snack Industry?: a. Consumer behavior evolved rapidly: 2 out of 3 French consumers have lunch outside traditional restaurants.<br><br> b. Purchase locations deeply modified: Historically, the sandwich was consumed at bars ccafe du coin d, you can now buy sandwiches in: Traditional outlets (58 percent market share); Caterers, including bakeries (14 percent market share); Supermarkets, gas stations, automatic distributors (28 percent market share). c.<br><br> While industrial sandwiches are increasing market share thanks to very dynamic manufacturers (Sodebo and Daunat), the demand for chomemade d sandwiches is also likely to increase. d. Supermarkets in city-centers (Daily Monop, etc.) offer fast food at low prices.<br><br> e. Fast food is losing its negative image. SECTION II.<br><br> ROAD MAP FOR MARKET ENTRY 1. Entry Strategy The diagram below indicates product flow in this market segment. The alternative distribution outlets (gas station, caterers, supermarkets, small grocery stores), and sandwich outlets (sandwicheries), dominate the fast food sector, with 49 percent market share, and some 45,000 points of sale in France.<br><br> These points of sale are operated by companies and large corporations or franchises with central buying offices or, for the majority, through cash and carry channels or specialized wholesalers. Cash & Carry wholesalers display a wide selection of food and non-food products in large stores. They sell to food retailers, and the food service sector, (i.e., restaurants and restaurant chains).<br><br> Cash & carry vendors offer competitive prices, a variety of products, extended operating hours and immediate product availability. Major cash & carry groups are Metro (French subsidiary of Metro/Germany) and Promocash (a subsidiary of Carrefour) together representing 75 percent of total sales in the wholesale sector. Specialized Distributors/Wholesalers have, as their main activity, distribution of food products.<br><br> They have dry and cold storage facilities with refrigerator/freezer trucks for deliveries. They buy from processing companies, foreign exporters or importers. 2.<br><br> Market Access U.S. exporters should consider the financial strength, number and location of outlets, product diversification and purchasing policy of the business when targeting major outlets. In addition, U.S.<br><br> exporters should consider the following in formulating their entry strategy: Check EU and French regulations, e.g., hormone-free meat, biotech regulations, etc., and carefully verify the acceptability of each product's ingredients and additives. For information on EU regulations, visit the following website: http://useu.usmission.gov/agri/ o It is also noted that France prohibits the import of products made with enriched flour. o Check EU and French food safety requirements: EU adopted the framework regulation EC/178/2002 laying down general principles and requirements of EU food law: http://useu.usmission.gov/agri/ And France food safety requirements can be found at: http://www.frenchfoodsafety.com/ Verify the price competitiveness of the product compared to local and other imported products; check customs clearance requirements and any additional import charges based on sugar, milk, fat and starch content.<br><br> Identify local agents/distributors, who can promote and distribute U.S. products to the carry-out food and snacking sector, and who order small volumes on a regular basis. You may also refer to the EU and France Food and Agricultural Import Regulations Report (FAIRS) that you may find at the following websites: http://gain.fas.usda.gov/Recent%20GAIN%20Publications/Forms/AllItems.aspx?SortField=LinkFilenameNoMenu &SortDir=Asc&View=%7bCE460CDC%2d9581%2d4832%2dA97A%2d840CC53E9D68%7d The FAIRS Export Certificate Report for EU-27 and France can also be viewed at: http://www.fas.usda.gov/scriptsw/AttacheRep/default.asp 3.<br><br> Duties and Labeling/Packaging Requirements Import Duties The EU applies import duties (which differ according to the type of product), plus variable levies to sugar, milk-fat and milk protein content in the product. The exact amount of duties can be obtained from your importer, your freight forwarder or directly from French Customs which determines the final classification of a product. For additional information, please visit the French customs website at: http://www.douane.gouv.fr/ In addition to the tariff rates, a value-added tax (VAT) of 5 percent is imposed on all processed and non-processed food products.<br><br> Basic Labeling/Packaging/Ingredient Requirements Labels must be written in French and include the following information: Product definition Shelf life: Indicate "used by", and "best before" dates and other storage requirements Precautionary information or usage instructions, if applicable Statement of contents: ingredients, weights, volumes, etc., in metric units. All additives, preservatives and color agents must be noted on the label with their specific group name or "E" number Product's country of origin and name of importer or vendor within the EU Manufacturer's lot or batch number Note that additional information on labeling requirements, including allergen, nutritional/health claims and trade/labeling restrictions related to biotechnology may be found in Post and EU reports: http://www.fas.usda.gov/gainfiles/200708/146291922.pdf http://www.fas.usda.gov/gainfiles/200808/146295548.pdf SECTION III. BEST PRODUCT PROSPECTS The sector uses imported products if local alternatives cannot be found.<br><br> Niche opportunities for U.S. suppliers exist for a range of diverse products such as pizzas, confectionary and chocolate products, nutritional bars, snack foods, bagels, wraps, ice creams, fruit juices and soft drinks (including flavored spring waters), chips and crisps, dried fruits and nuts, fresh fru its including exotic fruits and vegetables for vacuum packaging, beef jerky, soups, and all kinds of finger foods and convenience foods, provided they are innovative, and offer attractive packaging. The ready to eat market in France also provides opportunities for hot drinks (coffee, tea, etc.).<br><br> The new trend in France is: Veggie restaurant/salad restaurant where you can choose and compose your own meals. Italian type panini with different kinds of bread. In general, new products healthy, low calorie and tasty.<br><br> SECTION IV. TRADE SHOWS AND POST CONTACTS AND FURTHER INFORMATION FAS/Paris recommends the following major European and international trade shows in France featuring fast food, sandwich and snacks: Trade Show (International and European) SIRHA 2011 International Hotel Catering and Food Trade Exhibition Eurexpo 3 Lyon, France January 22-26, 2011 Organizer: B-For International Tel: 540 287 5780 Contact: Bjorn Bieneck Email: email@example.com www. Sirha.fr EUROPEAN SANDWICH & SNACK SHOW International Show Palais des Congrès de Paris 3 Porte Maillot February 10-11, 2010 Organizer : Reed Exositions France Tel : (33 1) 47 56 21 85 Contact: Jean-Baptiste Honoré Email: firstname.lastname@example.org www.<br><br> Sandwichshows.com MDD - DISTRIBUTION Salon International des Marques Distributeurs Alimentaires The International Private Label Food Trade Show in France including Ethnic and Halal foods Parc Expo - Paris Porte de Versailles March 25-26, 2009 and March 29-30, 2010 Organizer: Emap-Agor Tel: (33 5) 53 36 78 78 Contact: Gilles Ferrod Email: email@example.com www. mdd-expo.com VAE EXPO - Specialized in Ready-to-Eat and Snacks - Le Salon de la Vente a Emporter et de la Restauration Urbaine et Nomade Paris Expo - Porte de Versailles September 23-24, 2009 And September 2010 Organizer: ComExposium Tel: (33 1) 76 77 11 11 Fax: (33 1) 76 77 12 12 Contact: Catherine Benhammou email: firstname.lastname@example.org SALON INTERNATIONAL DE L'ALIMENTATION SIAL - International Food and Beverage Trade Show (USDA endorsed) October 17-21, 2010 Parc des Expositions - Paris-Nord Villepinte Organizer: Imex Management Tel: (704) 365 0041 Fax: (704) 365 8426 Contact: Kelly Wheatley Email: email@example.com www.sial.fr Post Contacts and Further Information The Office of Agricultural Affairs of the American Emnbassy in Paris can supply any U.S. company with the complete list, addresses, telephone/fax numbers, Emails and contact names of the major players in the Food to Go and Snacking sector.<br><br> Office of Agricultural Affairs American Embassy 2, avenue Gabriel - 75382 Paris Cedex 08, France Tel: (33 1) 43 12 2264 Fax: (33 1) 43 12 2662 Email: firstname.lastname@example.org internet: www.amb-usa.fr/fas/fas.htm For more information on exporting U.S. food products to France, visit our homepage. For more information on exporting U.S.<br><br> agricultural products to other countries, please visit the Foreign Agricultural Service home page of the U.S. Department of Agriculture at: http://fas.usda.gov/ Reports identified below are relevant and complementary information to this report for France: Repo rt Num ber Name Hot Link FR90 16 Retail Food Sector Annual http://gain.fas.usda.gov/Recent%20GAIN%20Publications/RETAIL%20FOOD%20S ECTOR_Paris_France_7-17-2009.pdf FR70 23 Food & Agricultu ral Import Regulatio ns and Standard s Annual http://www.fas.usda.gov/gainfiles/200708/146291922.pdf FR70 U.S. http://www.fas.usda.gov/gainfiles/200712/146293360.pdf 41 Opportun ities in France 9s Ready to Eat & Snack Market FR90 13 HRI Food Service Sector http://gain.fas.usda.gov/Recent%20GAIN%20Publications/HRI%20FOOD%20SER VICE%20SECTOR_Paris_France_7-20-2009.pdf FR80 18 Exporter Guide http://www.fas.usda.gov/gainfiles/200810/146296124.pdf FR80 19 Nuts http://www.fas.usda.gov/gainfiles/200812/146306812.pdf FR80 27 Sweet & Savory Snacks http://www.fas.usda.gov/gainfiles/200812/146306952.pdf FR80 28 Dried Fruit http://www.fas.usda.gov/gainfiles/200812/146306964.pdf FR80 29 Non- Alcoholic Beverage s http://www.fas.usda.gov/gainfiles/200812/146306963.pdf FR80 30 Sauces, Condime nts & Dressing s http://www.fas.usda.gov/gainfiles/200812/146306965.pdf<br><br>