A developing market creates new opportunities
Duni conducts operations mainly in Europe, Asia and Oceania. The main market consists primarily of Western and Central Europe. The West European market for single-use table setting products is estimated to be worth approximately EUR 9.6 billion. 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 table cover 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 relatively small, local companies as well as a number of larger paper and pulp companies. Some of these companies have concepts and product ranges that, like Duni’s, focus on the HoReCa market (hotels, restaurants and catering firms).
THE MARKET FOR PAPER-BASED PRODUCTS
The Western European market for paper-based table top products has an estimated value of approximately EUR 1.6 billion1 and can be divided into two main channels – HoReCa and the consumer retail sector. Most retail sector sales comprise private labels.
Duni is one of the largest brands in 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 sector, the share represented by private labels has increased in recent years, so much so that they are overrepresented within the table top 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 in the European napkin and table cover market, while premium products account for approximately 55%. The percentage of premium products varies between countries. In 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 dominate, Duni perceives great potential for growth.
THE EUROPEAN RESTAURANT MARKET
The West European restaurant market turns over approximately EUR 500 billion. 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 at 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 and meals at home. Restaurant chains are also increasing their share of the market, particularly within the fast food segment.
The healthcare sector is taking an increasingly share of the market segment for serving food to companies and institutions. However, this change varies by geographic market. Here, there is clear potential for Duni to create 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 also taking place 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 table covers 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 cus- tomers 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 environmentally-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 continuous efforts to reduce energy and raw material consumption are just some of the areas that Duni is working methodically with.
1 Source: Euromonitor, ECA Statistics and Freedonia World Food Disposables.
The Western European market1)
EUR 9.6 billion in total
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%.
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Table top products2)
EUR 1.6 billion in total
The Western European market for table top products is worth approximately EUR 1.6 billion and comprises paper napkins and table covers. 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.
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1 Duni’s relevant market in 2014 including candles, serving products and packaging solutions for take-away. Figures are based on MSP, Manufacturer Selling Price.
2 Source: Euromonitor, ECA Statistics and Freedonia World Food Disposables.
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.
Events 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 or Compass Group, 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.
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, that offer long-term and short-term care. Senior housing/care housing covers patients and employees within all institutions that 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 European grocery sector 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.