A developing market creates new opportunities
Duni conducts operations in Europe and Asia. The main market consists primarily of Western and Central Europe. The West European market for single-use table setting products, which is estimated to be worth approximately EUR 9.6 billion, is growing at approximately 2% per year1. The market is fragmented and Duni is estimated to have a total market share of approximately 4%.
Duni is a leader within, primarily, the napkin and tablecovering product segments, with a market share of approximately 20%. Despite this leading position, there is great potential to gain additional market shares. Competitors mainly comprise of relatively small, local companies, as well as a number of larger paper and pulp companies. Some of these companies have concepts and product ranges which, like Duni’s, focus on the HoReCa market (hotels, restaurants and catering firms).
THE MARKET FOR PAPER-BASED PRODUCTS
The European market for paper-based table top products is estimated to be worth approximately EUR 1.6 billion2 and can be divided into two main channels – HoReCa and the consumer retail trade. Most retail trade sales comprise private labels.
Duni is one of the largest brands on a fragmented market, with its strongest foothold within the HoReCa segment. After a number of years of growth, the market for paper products has stagnated somewhat in recent years. Western Europe is considered to be a mature market, while Eastern Europe shows significantly higher growth, albeit from lower levels.
Within the retail grocery trade, the share represented by private labels has increased in recent years, so much so that they are overrepresented within the tabletop product category. Duni is well positioned to provide the market with effective production solutions for customers’ private labels. All the same, Duni is able to supplement the range with unique, premium-based product concepts under its own brand, aimed at quality-conscious consumers.
Standard products account for approximately 45% of total estimated sales on the European napkin and tablecovering market, while premium products account for approximately 55%. The percentage of premium products varies between countries. On those markets where the premium segment dominates – such as in northern Europe, Germany and the Benelux countries – Duni is the clear market leader. In Southern and Eastern Europe, where simpler paper products are still more common, Duni perceives great potential for growth. Standard products account for approximately 45% of total estimated sales on the European napkin and tablecovering market, while premium products account for approximately 55%. The percentage of premium products varies between countries. On those markets where the premium segment dominates – such as in northern Europe, Germany and the Benelux countries – Duni is the clear market leader. In Southern and Eastern Europe, where simpler paper products are still more common, Duni perceives great potential for growth.
THE EUROPEAN RESTAURANT MARKET
The West European restaurant market turns over approximately EUR 500 billion3 annually, a figure that remains unchanged during the past year as a result of recession on a number of main markets. However, the market is expected to return to growth during the coming five-year period. The largest markets are Italy, the UK, Spain, France and Germany. Duni operates on all of these markets.
The restaurant market is traditionally divided up into a consumer market and a market comprising staff restaurants and industrial kitchens serving as care homes, schools and hospitals. Full service restaurants, cafes, bars, and fast food outlets account for the largest share of the market. The fast food segment accounts for approximately 16% and is steadily increasing over time at the expense of other types of restaurants along with meals at home. Restaurant chains are also increasing their share of the market, particularly within the fast food segment.
The market for staff restaurants and industrial kitchens has grown on average by 3% per year over the past five years despite the recession, and it is particularly within the care sector that larger shares of the segment have been gained. However, the changes are strongly dependent on the geographic region. Here, there is clear potential for Duni to generate growth.
MEGATRENDS HAVE AN IMPACT
In recent years, the restaurant market has undergone clear changes and is continuing to develop. Continued urbanization, higher disposable incomes, the online society, and an increasing number of single-person households are resulting in ever greater demands for mobility and flexibility, also when it comes to food and restaurants. There is a general trend towards an increasing number of restaurants offering take-away food or quick food and drink on the spot, at the same time as the quality of the food is improving. Thus, fast-food need not be equated with unhealthy food or characterized by the simplest solutions. Restaurant chains with a fast casual profile are increasingly expanding, albeit from relatively low levels. Similar trends are taking place also in Eastern Europe and Asia. Duni has a broad range of products well-suited to meet this trend.
RESTAURANTS AS BRANDS
Restaurants – irrespective of type – are increasingly developing unique brand concepts. It is becoming ever more important to market a clear, cohesive profile. Communication increasingly covers the products that the end consumer encounters. Table top products such as plates, napkins and tablecoverings thereby play an important role. Herein lies great potential for a company such as Duni, which through its concepts is able to assist in providing customers with the appropriate type of profiling.
SUSTAINABILITY – AN INCREASINGLY IMPORTANT FACTOR
Restaurants are becoming increasingly environmentally conscious and making more exacting demands regarding single-use articles having an evironmentally conscious profile. Duni stands out within the area by having one of the broadest range of environmentally-profiled products in the industry. Compostability, products made from renewable materials and the ambition to achieve exclusively fossil-free energy use in future production processes represent some of the other factors which Duni is working with methodically.
Duni’s relevant markets1)
Duni’s relevant markets are worth approximately EUR 9.6 billion, with Germany being the largest geographic market. The largest categories – which also have the highest rate of growth – are serving products, packaging solutions and candles. Duni’s total market share in Western Europe is approximately 4%.
1 Duni’s relevant markets in 2014 including candles, serving products and packaging solutions for take-away. Figures are based on MSP, Manufacturer Selling Price. Source: Euromonitor, ECA Statistics and Freedonia World Food Disposables.
Table top products2)
The Western European market for table top products is worth approximately EUR 1.6 billion and comprises paper napkins and paper tablecoverings. The market can be divided into two channels: “Away from home” (HoReCa and the public sector) and the retail grocery trade (the consumer market). Private labels dominate the extremely fragmented retail grocery trade.
2 Source: Euromonitor, ECA Statistics and Freedonia World Food Disposables.
Market growth per year
3 Sales which include Consumer Foodservice and Social Foodservice 2014. Source: Euromonitor and CDH Expert.
Market growth per year
3 Sales which include Consumer Foodservice andSocial Foodservice 2014. Source: Euromonitor and CDH Expert.
Infografik (Source: Euromonitor and Duni.)
Duni’s customer categories
The professional market
Are divided into three types: bars, lounge bars and wine bars, with a focus on the sale of alcoholic beverages. The food offering is limited to simple food. Beer halls and pubs, where beer is the most important beverage. Nightclubs and discotheques.
Cafes usually offer a wider range of food and drink, with waiter service. Focus is on alcohol-free beverages, with more than half of sales being derived from non-alcoholic beverages.
Event and catering
Catering provides food for parties, banquets, events and institutions. Usually catering to a large number of people.
Fast food has limited menus and quickly prepared food. Customers order, pay and take food and drink with them. They tend to specialize in hamburgers, pizza or chicken, as well as salads and simple deserts such as ice cream. Food preparation is usually simple.
Full service restaurants
Restaurants with waiter service and where focus is placed on the food. The quality of the food is generally high. Menus offer several choices and may include breakfast, lunch and dinner.
Staff restaurants provided by the employer. The restaurants are managed by external companies such as Sodexo, Kompass or by the company itself. On average, approximately 70% of the employees eat in the staff restaurant. The larger the company, the more likely it is that there is a staff restaurant.
The hotel industry is less fragmented than the restaurant industry. Hotel operations – usually with integrated restaurant operations – are often conducted in chains with centralized purchasing. Hotels on higher quality and price levels account for the overwhelming majority of purchasers of Duni’s premium products.
Conferences and trade fairs
Exhibition centers and conference halls. Wide range of food and drink. The number of attendees can vary from small to very large groups. Hotels with conference centers are included in the hotel category.
The hospital category includes all hospitals and clinics, both public and private, which offer long-term and short-term care. Senior housing/care housing covers patients and employees within all institutions which are characterized as nursing homes.
The food is collected by the customer or delivered, usually at an extra cost. The food offered normally comprises, e.g. pizza or Chinese, Indian, Mexican, West Indian or North African food. Do not offer food and drink to be consumed on the premises.
The consumer market
Retail grocery trade
The European retail grocery trade is concentrated in the hands of a small number of large players in each country, such as Tesco (UK), Aldi (Germany), Carrefour (France) and ICA (Sweden). The larger players have centralized purchasing and some of them have joined forces in international purchasing organizations.
Retail outlets comprise pharmacies, various types of specialty stores, garden centers, gas stations, as well as department stores and home furnishing chains.