The global catering equipment manufacturing industry remains highly fragmented, but three of the most prominent players — Ali Group, Middleby and Manitowoc Foodservice — collectively account for just over 11% of market share.
That’s the verdict of research house Future Market Research, which values the worldwide foodservice equipment market at $28 billion (£20 billion) for 2015.
Essien Jae, senior analyst at Future Market Insights, told FEJ that the share amassed by the likes of Manitowoc, Middleby and Ali Group was down to their dominance in mature markets.
“In the North American market, these companies collectively contributed over 15% to the overall FSE market in the same year,” he explained. “Furthermore, if we dissect the financial performance of these multinationals, they collectively generate 50% to 60% of revenue from just the North American market, which clearly implies they do not have such a strong presence in emerging markets.”
Jae said one of the challenges for the larger players endeavouring to increase their global footprint was the fragmented structure of the market, with a high concentration of regional players operating in almost all geographies.
“Since there are nearly a thousand small and large manufacturers engaged in this business, multinational companies face a challenge in anchoring into any market. The foodsevrice equipment market, at least in matured markets, is relatively more organised and global companies have marked substantial presence.
“Diametrically, when we look at the emerging markets, every country hosts numerous small and medium scale foodservice equipment manufacturer, especially China, which not only accounts for about half the concentration of all FSE manufacturers in Asia-Pacific, but also caters to the majority of the demand originating from the eastern countries of Europe to the Far East and Taiwan. Chinese foodservice equipment suppliers have also forayed in to the Indian markets and have substantial presence in ASEAN countries. However, most of these players are small and mid-scale with annual revenues limited to under $10m (£7m).”
The foremost strategy of the leading players in the foodservice equipment market is to expand through acquisition of regional players that have strong distribution networks, FMI noted. Furthermore, key players are using online platforms, including websites, apps, and social media to connect with their end-users, it said.
Foodservice equipment market revenues are predicted to witness another year of stable growth in 2016, with FMI forecasting that the size of the industry will increase by 4.4% to $28.9 billion (£20.3 billion).
In North America, which includes the US and Canada, the market will continue its upward momentum in 2016, driven by declining unemployment rates and prevailing low crude oil prices. Growing popularity of quick-service restaurants will also create growth opportunities in the region, according to FMI.
Low crude oil prices will also influence demand in Europe and Asia Pacific, with these regions set to grow 3.6% and 7.1% respectively in 2016. Gains from lower shipping costs, combined with higher sales, on account of steadily improving employment rate, will continue to positively influence the market in these two markets.
By product type, cooking and baking equipment are set to lead the way in terms of revenue, whereas food preparation equipment will witness robust growth rate of 6.1% in 2016. Full-service restaurants will remain the largest end-users, with total demand expected to reach $19.1 billion (£13.4 billion) in 2016.
Mushrooming of quick-service restaurants will have a favourable impact as far as overall demand is concerned, whereas caterers and hotels and club restaurants will provide additional support to sustain favourable growth for another year.