The airport catering industry – restaurants, bars and cafes operated within airport terminals – has some attractive characteristics, with captive customers, who are skewed towards higher income groups, spending significant time in airport buildings, unable to eat elsewhere.
Hence prices are generally high and sales per square metre can be up to four times normal restaurant levels.
Demanding environment
However, airports represent a demanding environment in which to operate with challenges including security and space restrictions, the need to run dispersed international operations on a 24/7 basis, significant daily and seasonal variations in customer volumes, and time-pressured customers.
The challenge for catering operators
Is to deliver ongoing improvements in performance so that they can earn returns in excess of what they need to pay to their two strategic suppliers: the owners of their high-footfall sites, and high-performing brands.
Apex Insight study
This study by Apex Insight finds that, although there are 600 airports in Europe with more than 15,000 passengers per year, the largest airports are critical to the sector. The top 15 account for around 40% of total passenger volumes and the catering revenues of a single large hub airport can be in excess of €100m.
Key market trends
Key market trends discussed in the report include:
- the demand from passengers for healthier food
- the growth of low-cost airlines – which has led to fewer passengers receiving a free in-flight meal
- increasing commercialisation of airports with airport operators looking to earn more money from sources such as catering and retail
- the increasing importance of strongly-branded catering offers capable of driving higher sales
- the impact of airport changes such as enhanced security operations and on-line check-in on the time available for passengers to eat.
€2bn market
The Apex Insight report concludes that the market is now well over €2bn in size, having grown rapidly in recent years. It has been driven by both increases in the number of passengers using European airports, which bounced back strongly since the post-credit crunch dip in 2009, and spend per passenger trends.
The largest markets are in northern Europe with the UK and, relative to population, the Nordic countries being particularly prominent.
Concession operators
The market is supplied by a combination of specialist concessioners with portfolios of in-house and licensed brands, branded food service groups and other catering providers. The main concession operators are SSP, Autogrill and Elior.
While many leading foodservice brands, such as Burger King, Starbucks Pizza Hut and Quick, license their brands to the concession operators, others, such as McDonalds, Subway, JD Wetherspoon and Pret a Manger generally operate outlets directly rather than via concessions groups.
Growth forecast for next 5 years
Apex Insight’s forecasts are for the market to continue to grow in the next five years, encouraged by strengthening European economic performance, growing numbers of passengers, and continued innovation and quality improvements on the part of operators leading to increased spend per passenger.
Fastest growth is forecast in Eastern Europe, as those markets catch up, and slowest in Southern Europe, where economic conditions remain more challenging – although holiday travellers from Northern Europe provide an element of protection.
About Apex Insight
Apex Insight is an independent provider of research, analysis and consulting services covering transport, logistics and other markets in the UK and Europe.
In addition to Airport Catering it has recently researched and published market reports covering sectors including e-Fulfilment and Contract Catering.
Further information on the report: “European Airport Catering: Market Insight Report 2014”, is available from apex-insight.com/research.
Frank Proud – frank.proud@apex-insight.com
020 7100 7239/07904 486 525
For more information click here
Companies mentioned in the report
- Areas
- Autogrill
- BAA
- Caffe Nero
- Compass
- Elior
- Heathrow Airport Limited
- HMSHost
- J D Wetherspoon
- Pret a Manger
- SSP
- TRG Concessions
- World Duty Free