Food & Drink IndustryAustria

Bord Bia, Frankfurt

November 27th 2008

Austrian Market Overview

• Population: 8.26 million (OECD, 2008)

• Capital: Vienna (1.65 million),

Graz (244,537), Linz (188,407) and

Salzburg (148,549).

• Inflation rate 3.8% (Statistik, 2008).

• GDP-real growth rate 3.3% (OECD,

2006).

• Unemployment is falling, currently at

3.4% (Statistik, Q2 2008).

• 62.1% of the population are aged

between 15-59 (Statistik, 2008).

Austrian Market Overview

• Currency: Euro

• VAT on goods & services: 20%

• VAT on Food: 10%

• Global Exports (2007): €114.8 billion (Statistik, 2008)

• Imports (2007): €114.25 billion (Statistik, 2008)

• Top Import partners in 2006: Germany (40.8%), Italy (7%), France

(4.8%), USA (4%), Switzerland (3.3%) and Czech Republic (3.3%)

(OECD, 2008).

Irish Food Export Performance 2007

Source: CSO Food and Drink Statistics 2007

Fish

3%

Sugars

12%Other*

5%

Dairy

21%

Meat

3%

Beverages

18%

Miscellaneous

edible

38%

Irish Food Exports to Austria for 2007

* Includes cereals, extracts, animal feeds, fruit and vegetables.

Total Exports:

€11.2 mn

The Retail Market

• Austria is one of the world’s wealthiest countries, with a CIA (Central Intelligence Agency, America) ranking of number 16 in terms of GDP per capita (PPP).

• It has above average per capita income, and is the 4th wealthiest country in the EU with a purchasing power 23% higher than the EU average (Business Location Austria, 2007).

40.02

19.06

47.62

148.8

2008e

39.8%

18.60

45.60

143.5

2007

39.7%Grocery as a % of Retail

18.07Total Grocery Market (€bn)

45.48Total Retail Market (€bn)

137.4Consumer Spend (€bn)

2006

Source: IGD Data centre estimates

European & Global Grocery Retail Market Sizes

24.2010. Sweden

123.804. Italy

18.5611. Austria

34.586. Greece

32.297. Switzerland

30.688. Netherlands

30.039. Belgium

97.555. Spain

144.193. Germany

185.702. United Kingdom

208.031. France

Grocery Retail Market(€bn)

Country

Top 10 Western European Markets

165.649. Italy

249.116. India

130.5110. Spain

192.927. Germany

24.8333. Austria

278.334. France

249.205. United Kingdom

188.028. Russia

394.453. Japan

450.142. China

785.851. USA

Grocery Retail Market(US$bn)

Country

Top 10 Global Markets

Source: IGD Country Presentations (2007)

Austria: Top 10 Retailers 2006

Source: IGD Country Presentations Austria

210,2001402.37%+2.3440440M- Preis

288,4271,2464.12%-7651,281Zev Markant

95,60412-+2.97911,744Metro

110,5001702.75%+9.7510510Lidl

287,00041014.40%+4.12,6742,674Aldi

972,5021,41724.25%+4.54,5004,500Spar International

183,4553753.12%+4.05791,000Tengelmann

+2.7

+2.4

% Change

Grocery Sales

2006 v 2005

285,0837506.23%1,4431,443Adeg

1,383,8001,40122.33%4,1454,842Rewe

Sales Area

(sqm)

No. of

Stores

Grocery Retail

Market Share *(%)

Grocery

Sales

(€m)

Total

Sales

(€m)

Retailer

*Grocery Retail Market Shares exclude cash and carry operations.

Retail Market Share 2006

Source: IGD Country Presentations Austria

Spar

28%Metro

2%Edeka

3%

Other

3%

Tengelmann

5%

Lidl

4%

ZEV Markant

3%

Aldi

16%

Rewe

36%

Retail Grocery Market

• Austrian grocery retail market is worth €19.1billion (2008 est.),

accounting for 40% of total retail market (IGD, 2008).

• The discount sector remains one of the fastest growing sectors in

Austria and Aldi is the clear leader. Others in the market include

Plus/Zielpunkt, Penny/Mondo and Lidl. The Austrian consumer now

looks for quality in their discounters while previously they simply looked

for price (Euromonitor, 2008).

• The market is dominated by German retailers with Tenglemann, Rewe,

Aldi, Lidl, Metro and Edeka all present in the market. This is due to the

linguistic, cultural and historical links between the two countries.

Key Consumer Trends in the Market

• Growing concern over health and well being

– Retail market for health and wellness food in Austria grew by 5% in value in 2006 and 18% of all revenues from food sales and 44% ofall money consumers spent on drink in Austrian shops was derivedfrom healthier varieties.

• Organic becoming increasingly important

– highest percentage of organic farmland in the EU, Italy in second place (Eurostat, 2007).

– 13% of all farmland is organically cultivated (Bio Austria, 2007)

– 87% of Austrians regularly purchase organic food (Lebensministerium Austria, 2008)

Foodservice in Austria-facts and figures

• Sales in consumer foodservice in 2006 amounted to €7.85bn,

which was a growth of 1.7% on the 2005 value (Euromonitor,

2008).

• The total number of foodservice outlets in Austria in 2006 was

49,231 and of these only 1,568 were part of a chain or 3.2%

(Euromonitor, 2008).

• The total average annual expenditure on café, restaurants, and

hotels per household makes up 5.5% of total expenditure or €1,676

per annum

• Consumer foodservice in Austria is forecast to grow at a rate of

8.5% in the period 2006-2011 or a CAGRate of 1.7% in the same

period.

Foodservice in AustriaTrends

• There are three major trends currently shaping the consumer foodservice market. These are:

1. Ever-increasing pace of living - leading to demand for faster services and the need for greater convenience. The number of hours spent working per week has increased steadily since 2002 which is also fuelling this faster lifestyle (Euromonitor, 2008).

2. Long term trends toward single person households who are unwilling to cook for one person - driving the sales of 100% home delivery or takeaways. Approximately 25% of all households in 2006 were single person households. This leads to opportunities across all aspects of foodservice from take-aways to full service restaurants (Euromonitor, 2008).

3. The Health and wellness trend is leading to healthier food, fresh ingredients and smaller portions. Fish and seafood are becoming increasingly more popular and poultry schnitzel’s have been successfully launched. Low carbohydrate dishes are becoming sought after e.g. salad (Euromonitor, 2008).

Foodservice in AustriaTrends

• Greater acceptance of foreign cuisine

– Consumers are becoming more exposed to international trends and more experimental in terms of choice of cuisine. This has led to an increase in sales for full service restaurants that serve Japanese, Chinese and Oriental food in particular. This is expected to continue (Euromonitor, 2008).

• Chains play a minimal role in the overall Austrian foodservice industry. Independent outlets generate the majority of sales. Only McDonald’s and Tchibo Holding play a significant role in terms of presence and sales. Austrian’s are sceptical about new international chains due to their conservative tastes. This has led to fast food being underdeveloped with only McDonald’s having significant market share (Euromonitor, 2008).

FoodserviceEstablishments

1.41.3Coffeeshop Company

1.71.6Testa Rossa Caffee

1.91.9Schnitzel Haus

2.32.4Aida

2.32.3Petit Bistro

2.42.4Pizza Mann

4.03.7Burger King

4.64.5Nordsee

15.415.5Tchibo

38.439.1McDonald’s

20062005Company

Chained Consumer Foodservice Brand Shares by % Value.

Source: Euromonitor. 2008 Consumer Food Service Austria.

Foodservice Establishments

• McDonald’s

– In 2006 they had a 38.4% market share and were the only

international food service chain with a significant market share.

– In 2007 they had 163 outlets which generated a turnover of €365

million.

– There were 117 million visits to McDonald’s Austria in 2007 which

was up 10.4% on 2006 and they employ around 7,000 people.

Foodservice Establishments

• Tchibo

– Operates under the fascia Eduscho in Austria

– This is a shop which specialises in coffee and bedding. They have

weekly special offers for coffee and other household items.

– This is a German brand and its brand awareness is extremely high

in Germany at 98% awareness (Tchibo website, 2008)

– Their food selection now also covers Tchibo branded chocolate.

– Now offers travel packages.

Foodservice Establishments

• Nordsee

– Have benefited from the health trend in Austria and have furthered

this with their advertising of “Fisch verliebt” or “in love with fish” in

English.

– They operate 44 stores in Austria but turnover is not available

though they do make up 4.6% of the chained consumer foodservice

brand share by value.

Reasons for targeting Austria

• Part of German language speaking zone along with Germany and

Switzerland with similar consumer habits

• Good opportunity for targeted premium/niche brands

• Strong economy

Barriers/challenges in supplying Austrian market

• Self sufficient in main agricultural product categories

• Strong support for locally produced/sourced dairy and meat products

Bord Bia services 2009

• Bord Bia Austrian market visit June 2009

• Market queries handled by Bord Bia office in Frankfurt staffed by Liam MacHale & Fiona O’Toole

Services include: Itinerary Development, Category Analysis, Media review and translation services, Product Price auditing and tracking, Product retrieval, Buyer networking, Distributor search

Bord BiaWöhler str. 3-560323 FrankfurtGermanyTel: +49 69 710 423 255Fax: +49 69 710 423 200Email: liam.machale@bordbia.ie