Required Report: Required - Public Distribution Date: October 04, 2023

Report Number: RP2023-0062

Report Name: Food Service - Hotel Restaurant Institutional

Country: Philippines

Post: Manila

Report Category: Food Service - Hotel Restaurant Institutional

Prepared By: Marie Christine Del Castillo

Approved By: Mark Hanzel

Report Highlights:

FAS Manila projects the food service sector to grow at 20 percent as the tourism and hotel industry
improves in 2023. Dining in restaurants, catering, and events will continue to boost sales while food
deliveries offer convenience. As the seventh-largest market for U.S. consumer-oriented exports, the
Philippine food service sector provides strong opportunities for meat products, dairy products, fruits,
vegetables, bakery products, chocolate and sugar confectionery, sauces, condiments, seasonings, non-
alcoholic beverages, and wines.

THIS REPORT CONTAINS ASSESSMENTS OF COMMODITY AND TRADE ISSUES MADE BY USDA STAFF AND NOT NECESSARILY
STATEMENTS OF OFFICIAL U.S. GOVERNMENT POLICY
MARKET FACT SHEET: PHILIPPINES convenience. Restaurant chains continue to open new
MARKET OUTLOOK local and international stores and franchises.
Slower economic growth, estimated at 6 percent, is Philippines: Quick Facts C.Y. 2023
expected for 2023, with lower local demand and Demographics
113 million population (Jan 2022 est.)
household consumption, and still-elevated inflation. 1.63% population annual growth (Dec 2021 est.)
AGRICULTURAL EXPORTS TO THE 52% under 24 years old & median age of 24 years old
48% urbanization rate
PHILIPPINES 12% reside in Metro Manila (capital city)
The United States 76% speak English & 98% literacy rate
2022 AG EXPORTS TO THE
remained the largest PHILIPPINES Household Income Classification (2023)

single-country China Low-Income Household (0-25k PP US$) 72%

15%
exporter to the United EU Middle-Income Household (25-100k PPP US$) 22%
States 11%
Philippines in 2022, 19% High-Income Household (100k+ PPP US$) 6%
with a 19 percent Others Gross Domestic Product (GDP)
10% Brazil ASEA GDP: $422 billion (est.) GDP per capita: $3,797 (est.)
market share. The N GDP growth rate: 6% (est.) GDP PPP: $1 trillion (est.)
4%
Philippines ranked as 33%
Australia
Agricultural & Related Trade (2022)
the seventh-largest 8%
Exports to PH: $19.9 billion PH Exports: $8.9 billion
2022 CONSUMER-ORIENTED AG
U.S. agricultural EXPORTS TO THE PHILIPPINES Consumer-Oriented Agricultural Products:
export market in 2022, - Pork, beef, poultry - Sauces and condiments
China - Dairy products - Fruits and vegetables
reaching a record high 13% - Food preparations - Biscuits and baked products
United EU
of $4.2 billion. States 18% Top Fast-Food Chains
FOOD PROCESSING 17% Jollibee, Mc Donald’s, Chowking, Shakey’s, and KFC

SECTOR Top Supermarkets

Others New ASEA Robinson’s, SM, Savemore, Puregold, Waltermart, Metro, Marketplace
Food and beverage 17% Zealand N
5% Top Convenience Stores
manufacturing sales Australia 26% 7-Eleven, Alfamart, Uncle John’s, Familymart, All Day, and Lawson
4%
increased through Top Warehouse Clubs
Source: Trade Data Monitor S&R and Landers
broader distribution
coverage and the launching of new products. Higher Top Online Grocery Delivery Platforms
raw material costs remain because of inflationary MetroMart, GrabMart, LazMart, and Shopee Supermarket

pressures. Sources: Euromonitor, Global Agricultural Trade System, International

Monetary Fund, The World Factbook, Trade Data Monitor, The
RETAIL FOOD SECTOR Economist, World Bank, Philippine Statistics Office, Department of
As revenge spending ends, FAS Manila sees slower Trade and Industry, National Economic and Development Authority,
S&P Global-IHS Markit, and FAS Manila research
growth in retail sales for convenience stores,
Strengths Weaknesses
groceries, hypermarkets, and warehouse clubs in Strong preference for U.S. Less competitive shipping
2023. Both food and beverage inflation remain ingredients and perceived higher costs and tariffs than
standard and quality ASEAN, China, and AU-NZ
elevated as more consumers spend prudently. Opportunities Challenges
FOOD SERVICE SECTOR A service-based economy with a Revenge spending ends as
young, tech-savvy working-age tightening consumer
FAS Manila anticipates the sector will grow as the population, and resilient domestic purchasing power continues.
tourism and hotel industry improves. Dining in demand
restaurants, catering, and events will continue to Contact: USDA-FAS Manila, U.S. Embassy, Philippines
E-mail: [email protected]
provide growth while food deliveries offer
SECTION I. MARKET SUMMARY Figure
Figure 1.
1. Consumer
CONSUMER Food Service
FOOD Sales (million
SERVICE SALES USD)

After robust growth in 2022, FAS Manila projects 14,000

20%
consumer food service sales to increase at a lower rate 12,000
of 20 percent in 2023. Although limited-service 10,000
restaurants still form a majority of food service, street
8,000
kiosks outperformed limited-service restaurants, full- In million
6,000
service restaurants, cafés, and bars in sales growth. By USD

early 2024, the food service industry is estimated to 4,000

recover to pre-pandemic levels. 2,000
in million
Some restaurants experience queues of customers -
USD 2017 2018 2019 2020 2021 2022 F2023
dining in, and event bookings are starting to fill up hotel Cafés/Bars Full-Service Restaurants
venues. While most food establishments are launching
Limited-Service Restaurants Street Stalls/Kiosks
new restaurant concepts, some restaurant chains fast-
tracked store openings to meet local and international Source: Euromonitor International and FAS Manila
franchise agreements. Though not as frequent as during Figure 2. 2022 CONSUMER FOOD SERVICE
the pandemic, use of online delivery platforms, drive-
throughs, and curbside pickups will continue to appeal Full-service
Street Stalls/Kiosks,
Restaurants,
to customers. Elevated food inflation and higher fuel 1,578 , 15%
1,823 , 17%
costs contributed to higher restaurant menu prices. Café and
Bars, 1,381
Based on research, FAS Manila foresees full-service , 13%

restaurants’ sales growth overtaking limited-service Limited-service

restaurant sales. Most top restaurants sell chicken, Restaurants,
5,716 , 55%
pizza, and burgers, providing opportunities for U.S.
food and beverage exports.
Source: Euromonitor International
MARKET DYNAMICS Figure 3. CHAINED AND INDEPENDENT FOOD
SERVICE (in percentage share)
With the recovery in the service industry, restaurants
Chained Independent
and hotels are expected to become more profitable in
2023. After school classes resumed, increased consumer
43%
mobility and improved employment rates bolstered 42%
27%
restaurant and hotel spending. The Philippine Statistics
21%
Authority reported that the employment rate as of 18%
August 2023 increased to 94.7 percent versus 91.9 58% 64% 57%
percent in August 2022. 39% 45%

As restaurant chains open more company and franchise-

2018 2019 2020 2021 2022
owned stores, they will continue to outpace independent
restaurants. Chains have more financial leverage to Source: Euromonitor International
expand, efficiency in operations, and capacity to order bulk purchases compared to independent stores. Most
food chains such as Jollibee and Potato Corner focused on faster store openings locally and abroad.

The popularity of dine-in and the continued increase in deliveries promoted growth in food service sales. Most
popular restaurants experience full dine-in capacity along with customer queues during weekends. On the other
hand, more company websites and mobile applications provide online selling. With the Philippines topping
global rankings for social media and internet usage, Instagrammable food establishments attract more dine-in
customers for social media posts. In 2022, the Philippines topped the highest population of vlog watchers and
influencer followers, which include food influencers promoting restaurants. Philippine restaurants have received
recognition in Asia’s 50 Best Restaurants and Tatler Asia.

The price increases and scarcity of ingredients of rice, fruits, and vegetables resulted in higher menu prices,
smaller servings, or alternative ingredient options for customers. At the same time, other restaurants use
software systems and technology for better inventory management.

The National Economic and Development Authority (NEDA) reports the food and beverage inflation rate
remains elevated at 8.4 percent, resulting in increased food costs in food establishments, especially quick
service restaurants and kiosks. Though the inflation rate is estimated at 6 percent in 2023, Bangko Sentral ng
Pilipinas expects an easing of inflation to 3 percent in 2024. The government recently launched the Philippine
Plan of Action for Nutrition (PPAN) to help improve food and nutrition security.

The Department of Tourism and Hotel Associations started working on the Philippine Hotel Industry Strategic
Action Plan to map out the needed hotel infrastructure and update standard systems in the industry. Fueled by
local demand, hotel occupancy rates reached 80 percent in January 2023. Once international tourism recovers,
the hotel industry will present further growth. The Philippine Hotel Owners Association, Inc. (PHOA) members
announced opening of 30 new hotels, giving opportunities to supply premium ingredients from the United
States.

ADVANTAGES AND CHALLENGES

ADVANTAGES
- Food service establishments, including American restaurant chains, prioritize quality and food sanitation
standards found in U.S. ingredients.
- Resumption of face-to-face classes, work, and events boosts food service sector sales.
- Unavailability of certain local ingredients provides an opportunity for exports.
- U.S. trade associations, state and regional trade groups, and the State Departments of Agriculture extend
support to U.S. exporters, Philippine importers, hotels, and restaurants.

CHALLENGES
- Higher food costs force some restaurants to order smaller volumes, substitute cheaper alternatives or look for
other sources.
SECTION II. ROAD MAP FOR MARKET ENTRY
ENTRY STRATEGY AND MARKET STRUCTURE
Most restaurants and hotels order from Philippine importers. Opening new hotels presents an opportunity for
direct importation while restaurant chains and groups order volumes of food and beverages. U.S. Exporters
should coordinate with Purchasing Directors and Food and Beverage Managers who usually approve new food
ingredients and beverages for hotel use. U.S. food and beverage trade organizations provide support and offer
menu promotions and product sampling.
FULL-SERVICE RESTAURANTS
Based on research, FAS Manila sees full-service Figure 4. FULL-SERVICE RESTAURANT SALES
restaurant sales experiencing more robust growth
compared to limited-service restaurants in 2023. Last
3,000 2,803
year, pizza stores contributed the most, with a 24-percent 25%
sales increase, followed by Asian restaurants. Philippine 2,500 2,279
food establishments such Max’s form of majority of
1,823
Asian restaurants. 2,000
1,457
American restaurants like Shakey’s, Kenny Rogers, and 1,500 1,265
Pizza Hut, which form most of full-service restaurant
1,000
sales, prioritize sourcing some U.S. ingredients to meet
the quality standards of their brands. Max’s Restaurant 500
and Pancake House are famous for serving chicken. in million
USD-
Shakey’s provided free loyalty rewards cards and family 2019 2020 2021 2022 F2023

deal promotions to encourage large group orders and

frequency in ordering. Max’s Restaurant offered Source: Euromonitor International and FAS Research
unlimited dishes and snacks to attract more customers, Figure 5. 2022 FULL-SERVICE RESTAURANT
while Kenny Rogers Roasters eyed aggressive store SALES BY CATEGORY (in percentage share)
expansion since 2020, adding 22 stores.
European
Table 1. Top Full-Service 2021 2022 2022 5%
Restaurants in 2022 Mil Mil Store
North
Sales* Sales* No.
American
1 Shakey’s –Shakey’sPizza Asia 402 521 358 Asian 17%
Ventures Inc. 59%
2 Max’s Restaurant -Max’s 235 319 170
Group Inc.
133
Pizza
3 Kenny Rogers -Berjaya Corp 191 91
16%
Bhd.
4 Pizza Hut -Yum! Brands Inc. 157 188 144
5 Pancake House -Max’s Group 85 111 11 Others
3%
Inc.
*Annual sales are based on percentage share in the industry and Source: Euromonitor International
may differ from reported annual sales.
LIMITED-SERVICE RESTAURANTS
Figure 6. LIMITED-SERVICE RESTAURANT
After key players surpassed pre-pandemic sales in
SALES 20%
2022, FAS Manila estimates that limited-service 6,859
restaurants will see slower growth compared to full- 7,000 6,302
5,716
service restaurants in 2023. Forming more than half the 6,000
4,478
number of restaurants here, limited-service restaurants 5,000 3,877
present volume opportunities for U.S. ingredients, 4,000
especially chicken leg quarters. 3,000
2,000
Known for delivery, pick-up, and drive-through 1,000
formats, limited-service restaurants utilized e- in million
-
USD 2019 2020 2021 2022 F2023
commerce companies (i.e., Lazada and Shopee) and
continued using community resellers in villages (i.e.,
Chooks to Go). While food establishments continue to Source: Euromonitor International and FAS Research
innovate through touchscreen ordering stations and
robot servers, other food establishments like Figure 7. 2022 LIMITED-SERVICE
McDonald’s showcased sustainable practices in stores. RESTAURANTS SALES BY CATEGORY
(in percentage share)

Jollibee Foods Corporation, Inc., representing half of Bakery 9%

Burger 21%
the industry, will open 600 stores in 2023, a record-high
Asian 8%
expansion. Aside from opening owned and franchise Others, 140,
stores locally, Jollibee Food Corporation, Inc. also 2%
intensified store expansions abroad. The company Pizza, 363,
7%
acquired and managed international brands such as
Burger King, Yoshinoya, and Panda Express. Three out Conv. Stores, 244, Chicken
5% 47%
of five of the top limited-service restaurants belong to
Jollibee Food Corporation.

Table 2. Top Limited-Service 2021 2022 2022 Source: Euromonitor International

Restaurants in 2022 Mil Mil Store
Sales* Sales* No.
1 Jollibee -Jollibee Foods Corp. 463 605 1,400

2 Mc Donald’s -Mc Donald’s Corp 277 348 668

3 Mang Inasal -Jollibee Foods Corp. 104 135 570

4 Chowking -Jollibee Foods Corp. 103 128 640
5 7-Eleven -Seven & i Holdings Co.
57 75 2,287
Ltd.
*Annual sales are based on percentage share in the industry and
may differ from reported annual sales.
CAFÉS AND BARS
Figure 8. CAFÉS AND BARS SALES
As more cafés and bars opened, café and bar sales
2,500 2,286
reached 26-percent growth last year. FAS Manila
20%
foresees further café and bar sale growth in 2023, 2,000 1,657
though far from the pre-pandemic level. 1,381
1,500
951 1,097
Starbucks continues to lead café sales with a 56
1,000
percent share in 2022, offering more coffee options
with Starbucks Reserve stores. As cafés open more 500
stand-alone stores with drive-throughs, Bo’s Coffee in million
-
opened its first drive-through store in 2022. More USD 2019 2020 2021 2022 F2023
café kiosks opened in malls like The Coffee Bean &
Tea Leaf and Mary Grace. Others opened up stores Source: Euromonitor International and FAS Research
located in office building lobbies, i.e., Dot Coffee.
Figure 9. 2022 CAFÉS and BARS SALES BY
Store chains like Dunkin’ Donuts opened drive-
CATEGORY (in percentage share)
through stores in gas stations for customers traveling
to work or group riders in motorbikes or bicycles
while Krispy Kreme provides 24/7 drive-through
Bars/Pubs
services. To add, more international brands such as 40%
Elephant Grounds, Greyhound Café, The Coffee
Specialist Coffee
Academics, Omotesando, and Café Kitsune opened and Tea Shops
stores in the Philippines. 30%

Many bars in the Philippines provide local and Cafés

30%
international food and drinks, presenting
opportunities for U.S. pork jowls, beef cuts,
California wines, distilled spirits, and others. Source: Euromonitor International

Table 3. Top Cafés in 2021 2022 2022 Table 4. Top Bars in 2022 2021 2022 2022
2022 Mil Mil Store Mil Mil Store
Sales* Sales* No. No.
Sales* Sales*
1 Starbucks -Rustan’s 1 Barcino Wine Resto Bar
590 775 420 11 14 5
Coffee Corp. -Tarraco Group Inc.
2 Dunkin’ Donuts 106 142 800 2 Padi’s Point 10 12 25
3 McCafé - McDonald’s 49 3 Cowboy Grill
67 86 3 4 4
Corp -Golden Pizza Inc
4 Mary Grace - Mary Grace *Annual sales are based on percentage share in the
56 64 50
Foods Inc industry and may differ from reported annual sales.
5 The Coffee Bean & Tea
60 62 139
Leaf -Jollibee Corporation
*Annual sales are based on percentage share in the
industry and may differ from reported annual sales.
STREET STALLS/KIOSKS
FAS Manila estimates street stalls and kiosks sales Figure 10. STREET STALLS/KIOSKS SALES
will reach 25-percent growth in 2023 after
outperforming all categories last year. Due to the 2,500 25%
higher cost of raw materials and thrifty spending of 1,973
1,926
consumers, a slower increase this year is expected. 2,000
1,578
Street stalls and kiosks provide convenience and
1,500 1,185
budget food to commuters in transportation hubs and 1,027
malls. With the face-to-face resumption of classes and 1,000
work, street stalls and kiosks selling potato fries, hot
dogs, milk teas, and fruit shakes will contribute to 500

sales growth. in million

-
USD 2019 2020 2021 2022 F2023
Table 5. Top Street 2021 2022 2022
Stalls/Kiosks in 2022 Mil Mil Store
Sales* Sales* No.
1 Angel’s Burger Source: Euromonitor International and FAS Research
107 134 1,300
-Angel’s Burger Group
2 Tender Juicy Hotdog -San
84 110 1,100
Miguel Food and Beverage, Inc.
3 Turks - Zenarosa Food Corp 65 93 600
4 Infinitea - First Origin LLP 59 88 300
5 Zagu - Zagu Foods Corp 58 76 446
*Annual sales are based on percentage share in the industry
and may differ from reported annual sales.

SECTION III. COMPETITION

The Philippines ranked as the seventh-largest U.S. consumer-oriented agricultural export destination in
the world and the highest in Southeast Asia. The United States, however, and Europe face pricing, high
tariffs, and market access challenges. ASEAN countries, China, New Zealand, and Australia benefit
from lower shipping costs and preferential market access.
The food service sector continuously depends on U.S. food products to provide quality, variety, and
healthier options, while local food production, 80 percent of the market, provides most of the supply.

Figure 11. 2022 CONSUMER-ORIENTED Figure 12. U.S. CONSUMER-ORIENTED

AGRICULTURAL EXPORTS TO THE AGRICULTURAL EXPORTS TO THE
5%
PHILIPPINES (in percentage share) PHILIPPINES
United 1,632
New Others, 1,800 1,554
States , 1,600 1,340
Zealand, 1,547 , 17% 1,081 1,090 1,097
1,637 , 17% 1,400 963
492 , 5% 1,200
1,000
Australia, EU, 1,689 , 800
405 , 4% 18% 600
400
China, 200
1,204 , 13%
in -
ASEAN , million
2,411 , 26%
USD

Source: Trade Data Monitor Source: Trade Data Monitor and FAS Research
SECTION IV. BEST PRODUCT PROSPECTS CATEGORIES
Table 6. Best Product Prospects Categories

PRODUCTS PRESENT IN THE PRODUCTS NOT PRESENT IN PRODUCTS NOT PRESENT

MARKET WHICH HAVE GOOD SIGNIFICANT QUANTITIES BUT BECAUSE THEY FACE
SALES POTENTIAL WHICH HAVE GOOD SALES SIGNIFICANT BARRIERS
---------------------------- POTENTIAL -------------------------------
- meat products ---------------------------- - seafood
- dairy products - turkey - whole chicken birds
- fruits/vegetables - lamb and sheep - fresh chilled tomatoes
- bakery products - olive oil
- chocolate and sugar - vegetable oil
confectionery - eggs
- sauces, condiments and - distilled spirits
seasonings
- beer
- non-alcoholic beverages
- wines

Sources: Trade Data Monitor, Global Agricultural Trade System, and USDA-FAS Research

SECTION V. KEY CONTACTS AND FURTHER INFORMATION

World Food Expo Hotel & Foodservice Suppliers Manila Food and Beverage Expo
World Trade Center, Manila Show 2023 World Trade Center, Manila
SMX Convention Center, Manila SMX Convention Center, Manila
July 31- August 3, 2024 September 21 -23, 2023
Cold Chain Philippines International Food Exhibition Asia Food Expo
World Trade Center, Manila (IFEX) Philippines Next Food Asia World Trade Center, Manila
World Trade Center, Manila April 24-27, 2024
FOODEX Japan FHA-HoReCa Thaifex Anuga Asia
Tokyo Big Sight, Tokyo, Japan Singapore Expo, Singapore Impact Muang Thong Thani,
March 5-8, 2024 October 22-25, 2024 Bangkok, Thailand
May 28-June 1, 2024

USDA Manila Department of Trade and Industry Philippine Chamber of

E-mail: [email protected] (DTI) Commerce and Industry (PCCI)
Tel: (632) 5301-2000
American Chamber of Commerce Hotel and Restaurant Association Association of Purchasing
of the Philippines (AMCHAM) of the Philippines Managers of Hotels and
Restaurants of the Philippines
Food Caterers Association of the Food Caterers Association of the Philippine Franchise Association
Philippines (FCAP) Philippines
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