International Markets Bureau

MARKET INDICATOR REPORT | AUGUST 2012

Foodservice Profile The Philippines

Source: Shutterstock.

Source: Shutterstock.

Foodservice Profile The Philippines

EXECUTIVE SUMMARY
In 2010, an improved economic backdrop contributed to the recovery of the consumer foodservice industry in the Philippines. During that year, the consumer foodservice sector grew by 5%, compared to 2009. The 2010 national election also helped boost spending among middle- and lower- income consumers through increased government stability. The availability and popularity of lower-priced offerings, from 100% home delivery/takeaway, fast food, full-service restaurants, and street stalls/kiosks, provided affordable alternatives for more price-sensitive consumers. Industry players also opened more outlets in untapped geographies. This was supported by the building of shopping centres in new, provincial locations, including Cebu, Ilocos Region, and Bulacan. Overall, foodservice outlets climbed by 1% in 2010. Consumer foodservice also witnessed improvements in the number of transactions. With a more optimistic view of the economy, customers, especially the middle-class, returned to dining out. Transactions grew by 2% in 2010, outpacing the 1% recorded in 2009. Some restraint among customers was evident in the slight decline of price per transaction. Even though customers were dining out, they remained cautious in their spending, making lower-priced menus and value meals more attractive. An environment historically dominated by independents, consumer foodservice in the Philippines is experiencing an increase in chained players, who have launched expansion strategies to capture customers in developing cities in the various provinces. Assisted by the vibrant performance of regional tourism (brought about by lower air fares), and the location of business process outsourcing hubs in growing cities, the industry will continue to observe the growth of chained brands in cafs/bars, fast foods and full-service restaurants. Consumer foodservice will continue to experience sustained, positive growth from the increasing number of chained brands that will cater to the faster-paced lifestyles of Filipino consumers. Even though the metropolis of Manila will continue to account for the bulk of consumer foodservice sales, opportunities abound in key cities nationwide. The fastest growth is predicted to come from 100% home delivery/take-away and fast food.

INSIDE THIS ISSUE

Executive Summary Country Overview Eating habits Foodservice Data Consumer Foodservice Channel Trends Foodservice Channel Trends by Location Institutional Foodservice by Location On-Board Foodservice Travel and Tourism Foodservice Travel and Tourism Foodservice Food Value by Market 2 3 6 7 8 14 16 17 17 18

DID YOU KNOW?

The fast food foodservice segment experienced double-digit growth in 2009 and 2010a trend that is forecast to continue. Pork is expected to surge in popularity amongst Filipinos.

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COUNTRY OVERVIEW
Economy The Philippine economy has been enjoying growth since 2010, however, the countrys economy is smaller than those of its Southeast Asian counterparts in terms of gross domestic product (GDP) and GDP per capita (nominal). The country enjoys sound macroeconomic fundamentals and a strong domestic demand, however it could be hurt by the escalating debt crisis in Europe, the continuing weak United States labour market, and the risk of a slowdown in China. At the moment, trends are rather positive. The first nine months of 2011 saw economic growth at 3.6%. The Philippine government is projecting steady growth between 5% and 6% for 2012. The country is a founding and active member of the Association of Southeast Asian Nations (ASEAN), an organization designed to strengthen relations and promote economic and cultural growth among states in the Southeast Asian region. The ASEAN -China Free Trade Area, launched January 1, 2010, is the largest regional emerging market in the world. In the World Economic Forums Global Competitiveness Report 2011 to 2012, the Philippines posted one of the largest improvements in the years rankings, rising 10 spots to 75 th. The country, however, continues to have poor public institutions. Corruption and physical security concerns are also rated as acute by the organization. The Philippines infrastructure has improved slightly, but is still ranked 113 th overall. This ranking particularly reflects the countrys low-quality seaports and airports. According to the Philippine Labour Force Survey, conducted in October 2011, the Philippines unemployment rate was 6.4%, a drop from 7.1% in October of 2010. This falling unemployment rate should contribute to improving consumption rates and consumer foodservice spending. Data from the National Statistics Office of the Philippines indicates that the inflation rate for the country, which was steady from May until November 2011 at 4.8%, fell in December 2011 to 4.2%. This is another positive sign for future consumer confidence, which may lead to further consumer spending. The Philippine economy is the 45th-largest in the world and is considered both a secondary emerging economy and a newly industrialized country that is transitioning from being primarily agriculturally based. The Philippines is a net importer of merchandise. Top exports are made up mainly of semiconductors, electronics, transport equipment, garments, petroleum, copper, fruit, and coconut oil. The Philippine GDP was worth an estimated US$394 billion in 2010. The annual GDP growth rate from 2009 to 2010 was 7.6%. This represents the highest growth rate the country has experienced in the last 30 years. While this year-on-year growth rate is impressive, it is still below the East Asia and Pacific regions average growth rate for 2010, which was 9.7%. The service sector was identified as the main source for this growth and continues to be the main driver of job creation. Manila dominated the Philippine economy and generated over one -third of the countrys GDP in 2010. It is the wealthiest region in the country, with a per capita income that is above the national average. In fact, the economic growth enjoyed in the Luzon -Metro Manila area has come at the expense of other regions. The Government is attempting to correct this inequality by promoting investment in other areas of the country. Demographics

The Philippines has a population of approximately 94 million, and is the worlds 12 th-most populous
country. English is listed among the countrys official languages, giving the population a strong affinity for Western culture. Quezon City, with a population of 2.7 million, is the countrys largest individual city, however, Manila is the capital. The national capital region of Metropolitan Manila encompasses 16 cities and boasts a population of 11.5 million.

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COUNTRY OVERVIEW (continued)

Demographics (continued)

The Philippine culture is a mixture of East and West in both custom, religion, tradition and language.
The country was a colony of Spain for almost 400 years and was occupied by the United States for 50 years, before becoming independent in 1945.

The Philippines urban population as a percentage of the countrys total population was 49.35% in
2010. Datamonitor predicts the urban population will grow, eventually reaching 51.30% of the total population by 2016.

The PhilippinesFood Consumption Market Valueby Age% of Total Age Breakdown 0-14 15-24 25-34 35-44 45-54 55+ 2010 24% 22% 20% 16% 10% 8%

The PhilippinesFood Consumption Consumer DemographicMarket Value by Status% of Total Status 2010 Married/Living as Married 45% Single 43% Widowed 9% Divorced 2%
Source: Datamonitor, Market Data Analytics, January 2012.

Source: Datamonitor, Market Data Analytics, January 2012.

Income Levels

The Philippines is considered a middle-income country by the World Bank. In 2009, the average Filipino family income was US$4,675.83 per annum. In 2010, 45% of the Philippine population lived on $2.00 a day and 22.6% lived on $1.25 a day. In
2009, 26.5% of the population still lived below the national poverty line. The Asian Development Bank has identified poverty-reduction as a priority in its Country Partnership Strategy with the Philippines for 2011-2015. This strategy is intended to reduce the proportion of people whose income is less than that of the national poverty line to 16% by 2015.

Household expenditure on food in the Philippines was US$1,652 in 2003, rising to US$2,075 in 2006,
and US$2,658 in 2009 (Datamonitor, 2012).

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COUNTRY OVERVIEW (continued)

The Philippines2010 Household Incomeby Bracketby % Indicator Percentage of Households in Income Bracket, $0-$1,999 (Absolute) Percentage of Households in Income Bracket, $2,000 -$3,999 (Absolute) Percentage of Households in Income Bracket, $4,000 -$9,999 (Absolute) Percentage of Households in Income Bracket, $10,000 -$19,999 (Absolute) Percentage of Households in Income Bracket, $20,000 -$39,999 (Absolute) Percentage of Households in Income Bracket, $40,000 -$74,999 (Absolute) Percentage of Households in Income Bracket, $75,000+ (Absolute)
Source: Datamonitor, Market Statistics, January 2012 .

2010 9.03 23.08 40.58 14.79 10.86 1.33 0.33

The PhilippinesFood ConsumptionConsumer DemographicMarket Value by Incomein US$% of Total Income 2005 2006 2007 2008 2009 2010 US$ 0 - 1,399 17% 17% 17% 17% 17% 17% US$ 1,400 - 1,699 19% 19% 19% 19% 19% 19% US$ 1,700 - 2,599 21% 21% 21% 21% 21% 21% US$ 2,600 - 5,899 20% 20% 20% 20% 20% 20% US$ 5,900 + 23% 23% 23% 23% 23% 23%
Source: Datamonitor, Market Data Analytics, January 2012.

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EATING HABITS A Nielsen Out-of-Home Dining Report (May 2009) found that consumers across the Asia Pacific
region ate out more often than their counterparts in other regions (especially in Hong Kong where 31% eat at restaurants on a daily basis). The explanation for this is that many Asian countries place an emphasis on out-of-home socializing, as opposed to the European culture which is focused on sharing a family meal together.

Generally speaking, in harder economic times, time-constrained Asia-Pacific consumers increase their
need for takeaways, which offer a favourable cost/quality compromise for eating at home versus dining out. Time-constrained consumers are also spending less time preparing meals at home.

Philippine cuisine is a blend of Hispanic, Chinese, American and other Asian influences. Some
common ingredients include: calamondins, coconuts, saba, mangoes, milkfish and fish sauce. Filipino consumers favour robust flavours, but their cuisine is not as spicy as that of neighbouring countries, such as Thailand and Singapore.

Filipino customers perceive food as something to be savoured and enjoyed, and something that
satisfies their need for indulgence. In response, manufacturers in full -service restaurants and fast food outlets have developed strategies to provide more indulgent menu options in the form of more toppings, more flavours, and better ingredients.

Filipinos have a penchant for sweet food, and often consume sweet bakery goods for brunch or
a snack.

Natural, organic and nationalist movements are converging to launch a greater appreciation for rustic
flavours, such as wood-fired, claypot or slow-cooked, or smoked and leaf-wrapped dishes.

The following food items are expected to gain popularity in the Philippines in the near future:
Noodles, especially those variations found in remote towns. Large cuts of steak, mainly for sharing, as they provide a wider area for searing on the outside, while maintaining a thick, deep, moist layer on the interior. Pork, especially variants such as Iberian pigs fed with Acorns (which possess antioxidant properties), the Japanese Kuro -bota which has similar qualitites, and wild boar farmed in Souther Luzon and fed natural vegetables and grass. Maskara is a popular dish made from young pig heads. It is essentially the head, without bone, and is most commonly imported from Europe and North America. As a side note, all parts of a pig are cooked and consumed in Philippine traditional dishes, including organ meats and other parts.

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FOODSERVICE DATA

The PhilippinesFood Service Market ValueHistoricby Salesin US$ Market Measure Units 2005 2006 2007 2008 2009 2010 CAGR* Foodservice Sales Millions 4,438.16 4,776.16 5,181.96 5,579.46 5,981.21 6,394.96 7.06% Food Sales Sales Millions 3,459.71 3,727.59 4,042.79 4,330.08 4,628.61 4,945.92 7.08% Drink Sales Sales Millions 978.45 1,048.57 1,139.17 1,249.39 1,352.60 1,449.04 6.98% Foodservice Transactions Millions 1,525.3 1,575.21 1,635.46 1,695.71 1,753.59 1,808.87 3.14% Foodservice Outlets Number 98,643.00 100,004.00 102,105.00 104,209.00 106,194.00 107,936.73 1.66%
*CAGR = Compound Annual Growth Rate Source: Datamonitor, Foodservice Analyzer, January 2012.

Market Foodservice Food Sales Drink Sales Foodservice Foodservice

The PhilippinesFood Service Market ValueForecastby Salesin US$ Measure Units 2011 2012 2013 Sales Millions 6,829.52 7,282.05 7,745.60 Sales Millions 5,290.95 5,654.31 6,028.81 Sales Millions 1,538.57 1,627.74 1,716.79 Transactions Millions 1,864.35 1,919.96 1,975.44 Outlets Number 109,676.00 111,415.00 113,154.00

2014 8,220.03 6,418.18 1,801.85 2,023.42 114,706.00

Source: Datamonitor, Foodservice Analyzer, January 2012.

The Philippines Consumer Foodservice by Independent vs. Chained Outlets: Units/Outlets 2010 Outlets Independent Chained Cafes/Bars 15,208 576 100% Home Delivery/Takeaway 395 2,127 Full-Service Restaurants 17,168 1,055 Fast Food 509 4,902 Street Stalls/Kiosks 29,863 7,600 Pizza Consumer Foodservice 505 952 Self-Service Cafeterias 0 0 Consumer Foodservice 63,143 16,260
Source: Euromonitor, Foodservice in the Philippines, January 2012.

The Philippines Consumer Foodservice by Food vs. Drinks2010% value Analysis Food Drink 100% Home Delivery/Takeaway 78 22 Cafs/Bars 22 78 Full-Service Restaurants 67 33 Fast Food 73.5 26.5 Street Stalls/Kiosks 81 19 Self-Service Cafeterias 0 0 Consumer Foodservice 61.4 38.6
Source: Euromonitor, Foodservice in the Philippines, January 2012.

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CONSUMER FOODSERVICE CHANNEL TRENDS

Takeaways/Delivery

Both chained and independent companies have embarked on innovative strategies in a bid to improve
sales. These strategies include flat-rate delivery fees to eliminate minimum order requirements, expanded menus, stores that are open 24 hours, and online ordering options.

The improved Philippine economy helped create a favourable environment for the introduction of
indulgent food products by industry players. As an example, Pizza Hut now offers Lechon Pizza, which includes the crispy skin and meat of traditional Philippine roasted pig.

This segment of the foodservice industry experienced double -digit growth in 2009 and 2010.
Forecasters predict this trend will continue in the next five years.

Philippine independent operators in this sector are in the minority, with chained players accounting for
an 84% share of total outlets and 75% of total value sales.

The PhilippinesMarket SizeHistoric/Forecast100% Home Delivery/Takeaway Type Transactions - '000 transactions Foodservice Value RSPUS$ millionsCurrent Prices Fixed 2010 Exchange Rates Units/outlets
Source: Euromonitor, Market Size Statistics, as of January, 2012.

2005 40,661.7 158.4 1,120.0

2010 59,653.8 263.5 2,522.0

2015 72,566.6 396.2 3,729.0

The Philippines FoodserviceTakeaways and Deliveryby Brand Shares and by Chain Historic Market Value% breakdown Brand Chooks to Go Pizza Hut Ang Lechon Manok ni Sr. Pedro Andoks Baliwag LotsA Pizza LotsA Pizza Dominos Pizza Others Company name (GBO*) Bounty Agro Ventures, Inc. Philippine Pizza Inc. Anakciano Inc. Andoks Litson Corp Baliwag Lechon Manok Inc. Various franchisees Cristy Ortiz Pizzavest Transnational Corp Others 2007 0 18.8 17.7 21.8 11.3 10.5 0 2.5 17.4 2008 1.8 16.1 18.1 19.9 12.2 10.9 1.4 2.4 17.3 2009 15.7 15.3 16.2 14.9 11.8 9.2 1.1 1.7 14.1 2010 21.3 15.9 15 14 10.7 9.3 1 0 12.7

*GBO = Global Brand Owner Source: Euromonitor, 100% Home Delivery/Takeaways, January 2012.

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CONSUMER FOODSERVICE CHANNEL TRENDS (continued)

Cafs/Bars

In 2010, the number of cafs/bars in the Philippines was 3,593. Datamonitor is predicting that number
to grow to 3,804 by the end of 2014. The number of chained caf/bar outlets in 2010, was 185, and is predicted to reach 194 by the end of 2014.

Young professionals are the target market for this foodservice sector. Chained specialist coffee shops were the sectors jewel -in-their-crown, maintaining double-digit growth
of 10% in 2010. Additional offerings of broader food lines, cold drinks, and Wi-Fi are bolstering the amount of time and frequency consumers spend at these locations.

Most players in this sector are independents and cater to middle - and lower-income demographics. Bars in the Philippines sell food as well as alcoholic drinks, with drinks accounting for approximately
90% of total sales. Finger foods are the favorite fare for customers of bars and pubs, with the most popular being fried peanuts and a pork dish served sizzling and seasoned with Philippine lime, onions, and pepper.

Caf and bar chains in the Philippines mostly operate in cities, while the presence of independents is
more pronounced in provincial areas.

The Philippines FoodserviceChained Cafes and Barsby Brand Name HistoricMarket Value% breakdown Brand Company name (GBO*) 2007 2008 2009 Starbucks Rustan Coffee Corp. 44.7 48.6 49.7 Figaro Coffee Figaro Coffee Co. 17 14.4 12.8 Gloria Jeans Specialty Beans Philippines Inc. 4.3 5 4.2 Coffee Bean 7 Tea Leaf Coffee Bean & Tea Leaf Philippines Inc. 3.2 3.5 3.8 Pier One Pier One Bar & Grill Holdings Corp. 5 4 4.1 Padis Point Padis Philippines Corp. 2.2 2.1 2.2 Delifrance Fresh N Famous Foods Inc. 2.6 2.3 2.2 Seattles Best Coffee Coffee Masters Inc. 1.8 1.6 1.8 McCaf Cowboy Grill Dome Coffee Experience Coffee Beanery Caf Adriatico Delifrance Caf Havana Others Golden Arches Dev Corp. Golden Pizza Inc. Dome Caf Franchise Corp. CX Food Enterprises Inc. Coffee Beanery Ltd. LJC Restaurant Group Various franchisees LJC Restaurant Group Others 1 1.6 2.6 0.9 0.7 0.7 0.5 0.5 10.8 1 1.5 0.8 0.8 0.7 0.3 0.4 0.2 12.7 1.2 1.5 0.9 0.8 0.5 0.3 0.3 0.2 13.5

2010 50.5 12.8 4.1 4 3.7 2.7 1.9 1.6 1.2 1.2 0.9 0.8 0.5 0.3 0.3 0.2 13.3

*GBO = Global Brand Owner Source: Euromonitor, Cafs/Bars, January, 2012.

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CONSUMER FOODSERVICE CHANNEL TRENDS (continued)

PhilippinesCafs/BarsMarket SizeHistoric/Forecast Type Transactions'000 transactions Foodservice Value RSPUS$ millionsCurrent Prices Fixed 2010 Exchange Rates Units/outlets
Source: Euromonitor, Market Size Statistics, January 2012.

2005 322,969.0 1,629.5 15,971.0

2010 308,078.3 1,922.0 15,784.0

2015 296,269.5 2,329.7 15,598.0

Full-Service Restaurants

In 2010, there were 18,223 full-service restaurants in the Philippines. Datamonitor predicts that number
to grow to 22,075 by the end of 2014. In 2010, there were 5,204 chained, full -service restaurants, and that figure is predicted to reach 5,491 by the end of 2014.

Full-service restaurants in the Philippines showed growth of 3% in 2010, up from only 1% total growth in
2009.

Full-service pizza restaurants had the best performance in 2010 with sales up by 7%, making it the
fastest growing segment of this sector.

Many companies are using customer loyalty cards to boost activity. Most chained restaurants have a casual dining format to better identify with middle -income consumers.
This segment is gaining in popularity with the middle -aged demographic, due to its affordable pricing, menu (which is better than whats offered by fast food establishments), and overall dining experience.

Within this segment, Asian, independent, full-service restaurants are the most popular, accounting for
70% of total full-service restaurant sales in 2010. Casual dining restaurants were the next most popular choice of Philippine consumers, followed by North American, independent, full -service restaurants. The one anomaly in this segment are full-service pizza restaurants, where chained outlets garnered 97% of sales over their independent competition.

Independent players dominate the Philippine full-service segment, with an 86% share of total revenue,
generated by 18,223 outlets in 2010.

The PhilippinesFull-Service RestaurantsMarket SizeHistoric/Forecast Type 2005 2010 Transactions'000 transactions 359,484.0 362,814.8 Foodservice Value RSPUS$ millionsCurrent PricesFixed 2010 1,738.9 2,143.0 Exchange Rates Units/outlets
Source: Euromonitor, Market Size Statistics, January 2012.

2015 347,462.9 2,563.8 18,202

17,977

18,223

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CONSUMER FOODSERVICE CHANNEL TRENDS (continued)

The Philippines FoodserviceTop 10 Chained Full-service Restaurantsby Brand Name HistoricMarket Value% breakdown Brand Company name (GBO) 2007 2008 2009 2010 Maxs Maxs Inc. 13.8 13.9 14.8 14.8 Pizza Hut Philippine Pizza Inc. 11.9 11.7 11.6 12 Kenny Rogers Roasters Roasters Philippines Inc. 9.3 9.7 9.8 10 Shakeys Intl Family Food Services Inc. 6 5.9 5.7 5.5 Teriyaki Boy Pancake House Inc. 4.7 5 5.2 5 Gerrys Grill Gerrys Grill Group of Restaurants Inc. 3.7 4.1 4.6 4.9 Shakeys Various franchisees 4.4 4.4 4.2 4.1 Pancake House Pancake House Inc. 3.7 4.4 3.8 3.9 Lydias Lechon Lydias Lechon Inc. 3.1 2.7 2.7 2.7 Denicos Pancake House Inc. 2.3 2.3 2.4 2.4
Source: Euromonitor, Brand Shares, December 2011.

Fast Food

Philippine fast food outlets enjoyed growth of 9% in 2010, with consumers demand for value -for-money
driving sales.

Within this segment, chicken fast food saw the greatest growth in value sales, with an impressive 23%
increase in sales for 2010. The domestic chain Mang Inasal was the segment driver, due to its aggressive expansions.

The most popular fast food item in the Phillipines is the burger, as seen with this segments 59% share
of sales in 2010.

Fast, casual dining, while a small segment within the fast food industry, is dominated by international
operators such as Dairy Queen, Olivers Super Sandwiches, and Yellow Cab Pizza.

Sweet bakery specialists like Mister Donut, Dunkin Donuts, Krispy Kreme, Mrs. Fields, and Goldilocks,
accounted for the highest share of outlets with 93% in 2010.

The fast food sector in the Philippines is dominated by chained players, which accounted for a 91%
share of total sales generated in 2010. Both Jollibee and McDonalds are strong players and unmatched by independents.

In 2010, eat-in fast food was credited with 63% of sales, versus take-away, which had 37% share. Euromonitor forecasts the greatest growth in this segment to be chained, chicken fast food outlets,
which are expected to experience 46.9% value growth from 2010 to 2015. Chained convenience store fast food will have the next largest value growth over the same period, with 27.6%.

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CONSUMER FOODSERVICE CHANNEL TRENDS (continued)

The PhilippinesFast Food Market SizeHistoric/Forecast Type 2005 2010 Transactions'000 transactions 496,315.3 635,712.8 Foodservice Value RSPUS$ millionsCurrent 1,451.0 2,148.4 PricesFixed 2010 Exchange Rates Units/outlets
Source: Euromonitor, Market Size Statistics, as of January 2012.

2015 716,114.7 2,913.8 6,467

3,876

5,411

The Philippines FoodserviceTop 10 Chained Fast Food Restaurants by Brand NameHistoricMarket Value% breakdown Brand Jollibee Jollibee McDonalds Chowking McDonalds Mang Inasal KFC Chowking Greenwich Greenwich Company name (GBO) Various franchisees Jollibee Foods Corp. Golden Arches Dev. Corp. Various franchisees Various franchisees Mang Inasal Phils Inc. Ramcar Inc. Fresh N Famous Foods Inc. Fresh N Famous Foods Inc. Various franchisees 2007 22 18.9 10.2 7.9 4.1 0.8 3.8 4.8 3.6 2.8 2008 21.9 19 10.4 8 4.3 1.7 3.9 4.5 3.3 2.5 2009 21.5 19.2 9.5 7.5 5 2.9 4.2 4.2 3.4 2.5 2010 21.9 19.5 9.5 6.9 5.6 4.3 4 3.8 3.4 2.6

Source: Euromonitor, January 2012.

Street Stalls/Kiosks

In 2010, the number of street stalls/kiosks in the Philippines was 73,048 outlets. Datamonitor is
predicting that number to grow to 77,159 by the end of 2014. There was no information available for chained street stalls/kiosks at the time of analysis.

Stready growth was experienced by this segment in 2010, with value sales up by 5%. Price is of utmost importance to customers of street stalls and kiosks in the Philippines. While food products sold in these venues vary from snacks to meals, it is local, traditional foods that
are predominantly available.

Items in this segment, such as ice scramble (a local, cold beverage of crushed ice, food colouring, and
various toppings), re-entered the category through price reductions, causing demand to grow. Steamed pork dumplings were another favourite for on-the-go patrons.

Tourism is an important factor in this segments performance.

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CONSUMER FOODSERVICE CHANNEL TRENDS (continued)

Street Stalls/Kiosks (continued)

Independents dominate in this market, with chained players usually confined to places with high foot
traffic, like malls. Chained stalls/kiosks offer burgers, potato chips, fruit drinks, rice cakes, hot dogs, waffles and doughnuts.

Food items bring in the majority of sales for street stalls and kiosks. In 2010, food accounted for 81% of
total sales.

Growth in this sector will be slow in the coming years, however, expect consumers to increase their
demand for innovative products. Street stalls/kiosks focused on Asian cuisine will be particularly sought after by Filipino consumers who are increasing their exposure to Korean culture. Players should focus on middle-income and more adventurous, younger demographics.

Much of the growth in this segment will come through the establishment of more shopping centres and
neighbourhood supermarkets in provincial areas.

The PhilippinesStreet stalls/KiosksMarket SizeHistoric/Forecast Type 2005 2010 2015 Transactions'000 transactions 1,761,163.2 2,064,273.5 2,127,303.4 Foodservice Value RSPUS$ millions 1,152.4 1,694.4 2,180.0 Current PricesFixed 2010 Exchange Rates Units/outlets
Source: Euromonitor, Market Size Statistics, January 2012.

30,486.0

37,463.0

39,242.0

The Philippines FoodserviceTop 10 Chained Street Stalls and Kiosksby Brand NameHistoric Market Value% breakdown Brand Mister Donut Burger Machine Dunkin Donuts Waffle Time Kiss King of Balls Zagu Tender Juicy Hotdog Smokeys Royal Caribbean Jamaican Patties Fruit Magic Company name (GBO) Ramcar Inc. Burger Machine Inc. Various franchisees Various franchisees Various franchisees Zagu Foods Corp. San Miguel Pure Foods Co. Inc. San Miguel Pure Foods Co. Inc. Various franchisees Fruit Magic Co. 2007 10.3 14.2 7.4 4.6 5.6 1.9 2.5 2.9 1.4 1.2 2008 13.9 14.1 7.3 5.9 4.9 3.1 2.7 2.7 1.5 1.6 2009 13.8 12.8 7.6 7.6 4.4 3.2 3 2.9 1.8 1.7 2010 14 11.2 9.9 7.8 4.3 3.4 3.1 3 1.8 1.8

Source: Euromonitor, Brand Shares, December 2011.

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FOODSERVICE CHANNEL TRENDS BY LOCATION

The PhilippinesFoodservice Market SizesHistoric/Forecastby ValueUS$ millions Segments Consumer Foodservice Through Standalone Consumer Foodservice Through Leisure Consumer Foodservice Through Retail Consumer Foodservice Through Lodging Consumer Foodservice Through Travel
Source: Euromonitor, Market Share, December 2011.

2005 2904.4 339.8 2324.9 209.1 352.0

2010 3493.6 474.2 3317.8 286.4 599.3

2015 4,153.0 608.3 4,385.3 386.8 850.2

The PhilippinesConsumer Foodserviceby LocationMarket Size Historic/Forecast Segments Stand-alone Leisure Retail Lodging Travel Measurement Transactions - '000 transactions Units/outlets - outlets Transactions - '000 transactions Units/outlets - outlets Transactions - '000 transactions Units/outlets - outlets Transactions - '000 transactions Units/outlets - outlets Transactions - '000 transactions Units/outlets - outlets 2005 2,017,669.5 41,790.0 86,757.6 3,173.0 739,249.5 19,784.0 17,215.7 1,089.0 119,700.8 3,596.0 2010 2,172,531.3 45,180.0 103,667.7 3,564.0 940,970.2 24,075.0 21,928.0 1,356.0 191,436.0 5,231.0 2015 2,143,446.0 45,509.0 107,606.6 3,734.0 1,058,076.5 26,290.0 25,204.7 1,568.0 225,383.4 6,139.0

Source: Euromonitor, Market Statistics, January 2012.

Stand-Alone

Stand-alone outlets in the Philippines comprise the largest portion of consumer foodservice stores, with
a 57% share in 2010, and accounted for the most transactions.

The most lucrative locations for stand -alone stalls were shopping centres, hypermarkets, supermarkets
and wet and dry markets, due to steady, high foot traffic. In 2010, retail locations accounted for a 30% share of outlets, 41% of value sales, and 27% of transactions.

Expect to see the number of stand-alone outlets in the metro Manila area grow . The greatest outlet growth within this category came from 100% home delivery through stand -alone,
with 110.3% from 2005 to 2010.

Euromonitor is predicting that stand-alone outlets will continue to lead the segment in growth, and
experience the most transactions from 2010 to 2015.

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FOODSERVICE CHANNEL TRENDS BY LOCATION (continued)

Leisure

Most outlets in this category were full-service restaurants, followed closely by cafs/bars. Fast food restaurants in leisure outlets garnered the highest growth from 2005 to 2010, with 99.1%, and
the highest value growth over the same period, with 109.8%.

Full-service restaurants are predicted to have the greatest number of outlets in this sector from 2010
to 2015. Retail

Fast food outlets in retail locations edged out the competition in this category, with the most value sales
in 2010.

There were more cafs/bars in retail locations than full -service restaurants in 2010. The highest outlet growth in retail locations was in the 100% home delivery sector, growing 199.3%
from 2005 to 2010. Also, 100% home delivery outlets held the highest value growth, with 122.9%, over the same period.

Consumer foodservice outlets in retail locations are expected to consistently produce the most
value sales from 2010 to 2015.

Lodging

Cafs/bars accounted for the most foodservice outlets in lodging locations, and the most transactions,
in 2010.

Full-service restaurants located in lodgings consistentely edged out cafs/bars for value sales from
2005 to 2010, despite the fact that cafs/bars experienced greater growth in the number of outlets.

Consumer foodservice through lodging locations is forecast to experience the second -highest value
growth from 2010 to 2015, with 11%. Travel

In 2010, the fastest outlet growth in the segment was in travel, experiencing a 5% increase over 2009.
Regional tourism is a key driver for this growth.

Travel locations accounted for 7% of outlets, 6% of transactions, and 7% of value sales. Airports,
seaports and bus terminals rebounded fastest in 2010 (over the other sub -categories of leisure, retail and lodging), due to increased travel by young, middle -income Filipinos.

Consumer foodservice outlets in travel locations are forecast to experience the highest value growth
from 2010 to 2015, with 16.6%.

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INSTITUTIONAL FOODSERVICE BY LOCATION

The Philippines Institutional Foodservice - Historic/Forecast by Sales in US$ Millions 1200 1000 800 e u l 600 a V 400 200 0
Workplace 2005 2010 2014 201.92 290.76 361.06 Education 52 0.21 69 5.32 85 2.76 Hospitals 74.98 99.95 120.19 Welfare & Services 664.8 879.37 1,070.39

Source: Datamonitor, Foodservice Analyzer, January 2012.

Workplace

Foodservice outlets in Philippine workplaces totaled 1,148 in 2010, and are forecast to reach 1,200 by
2014. Industrial outlets totalled 718, and retail, financial and office -based outlets totaled 332 that same year. The remaining 98 outlets were listed as other. Education

In 2010, foodservice outlets in the educational sector equalled 488. This number is expected to rise to
504 by 2014. Hospitals

Philippine hospital foodservice outlets totaled 71 in 2010 and are forecast to see modest growth,
reaching 75 outlets by 2014. Welfare and Services

In 2010, armed services foodservice outlets equalled 208, residential care outlets totaled 171, welfare
meal outlets numbered 10, and detention foodservice outlets numbered, 28. Minimal growth will be seen in this sub-sector up to 2014, averaging only 1.13% from 2005 to 2014.

Value

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ON-BOARD FOODSERVICE TRAVEL AND TOURISM

The PhilippinesOn-Board Foodservice Market Value historic/Forecastby Salesin US$ millions Market On-board Air Rail Sea 2005 20.97 19.33 1.14 0.5 2010 29.83 27.67 1.5 0.66 2014 37.65 35.08 1.78 0.79 CAGR 6.73% 6.86% 5.08% 5.10%

Source: Datamonitor, Foodservice Analyzer, January 2012.

FOODSERVICE TRAVEL AND TOURISM

The PhilippinesTourism StatisticsHistoric/Forecastby Indicator Indicator Business Travel and Tourism Spending (Absolute) Domestic Travel and Tourism Spending (Absolute) Leisure Travel and Tourism Spending (Absolute) Travel and Tourism as a % of GDP (Absolute) Travel and Tourism Spending, Domestic Visitors (Absolute) Travel and Tourism Spending, International Visitors (Absolute) Unit US$ millions US$ millions US$ millions Percentage US$ millions US$ millions 2005 5,076.00 10,121.00 7,842.00 8.63 10,121.00 2,755.00 2010 2,399.00 12,806.00 14,433.00 6.10 12,806.00 3,934.00 2016 4,115.00 19,868.00 24,381.00 n/a 19,868.00 8,505.00

Source: Datamonitor, Country Insight, Country Statistics, January 2012.

The Philippines welcomed a total of 3.52 million visitors from January to November 2011. This number surpasses the year-end total of 3.5 million for 2010. The East Asian region was the most popular destination within the Philippines, claiming 47.55% of total tourism traffic. This figure represents a 19.15% increase over the same period in 2010. South Korea was the top visitor market, followed by the U.S., Japan, China, Taiwan, Australia, Singapore, Hong Kong, Canada, and the U.K. Tourists from South Korea and the U.S. equalled 39.95% of the total market from January to September, 2011. According to the National Statistical Coordination board, the tourism sectors share in Philippine gross domestic product averaged 5.8% from 2009 to 2010. On January 5, 2012, the Philippines Department of Trade and Industry announced plans to focus tourism investment promotion efforts in the eastern seaboard area of the country in an effort to help alleviate poverty in that region.

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FOODSERVICE FOOD VALUE BY MARKET

The PhilippinesFoodserviceFood and Drink Market Analysisby Salesin US$ millions
Market Bakery and cereals Bread and rolls Breakfast cereals Cakes and pastries Cereal bars Cookies (sweet biscuits) Crackers (savoury biscuits) Morning goods Canned food Canned desserts Canned fish/seafood Canned fruit Canned meat products Canned pasta and noodles Canned ready meals Canned soup Canned vegetables Chilled food Chilled bakery Chilled fish/seafood Chilled fresh pasta Chilled meat products Chilled pizza Chilled ready meals Chilled soup Deli food Sandwiches/salads Confectionery Chocolate Gum Sugar confectionery Dairy food Cheese Chilled desserts Cream Fromage frais Milk Spreadable fats Yogurt Dried food Dessert mixes Dried soup Dried pasta Dried ready-meals Rice
Source: Datamonitor, January, 2012.

2010 23.13 10.63 0.32 9.15 0.0 1.66 0.53 0.84 141.25 0.06 17.13 10.90 99.84 3.72 2.82 5.51 1.27 94.75 0.0 10.09 1.08 45.73 4.62 13.14 0.0 20.09 0.0 0.21 0.18 0.02 0.02 106.21 3.83 0.0 0.72 0.0 93.67 7.36 0.63 23.04 0.05 0.59 8.82 1.77 11.81

2014 28.60 13.23 0.38 11.30 0.0 2.01 0.66 1.02 169.88 0.08 20.55 13.61 118.92 4.51 3.57 7.10 1.54 121.59 0.0 12.12 1.35 61.06 5.60 16.34 0.0 25.13 0.0 0.26 0.21 0.02 0.02 132.08 4.73 0.0 0.87 0.0 116.83 8.84 0.80 29.64 0.05 0.71 11.33 2.17 15.37
Continued on the following page... PAGE 18

FOODSERVICE FOOD VALUE BY MARKET (continued)

The PhilippinesFoodserviceFood and Drink Market Analysisby Salesin US$ millions (continued)
Market Drink Total Beer Cider FABs Brandy Gin Liqueurs Rum Specialty spirits Tequila and mezcal Vodka Whiskey Fortified wine Sparkling wine Still wine Champagne Hot drinks Coffee Tea Other hot drinks Soft drinks Bottled water Carbonates Concentrates Functional drinks Juices Ready-to-drink (RTD) tea and coffee Fresh food Fresh fish Meat - beef Meat - lamb Meat - pork Meat - poultry and other Fresh vegetables - potatoes Fresh vegetables - other Frozen food Frozen bakery products Frozen desserts Frozen fish/seafood Frozen fruit Frozen meat products Frozen pizza Frozen potato products Frozen ready meals Frozen vegetables
Source: Datamonitor, January, 2012.

2010 1,449.04 336.57 0.00 0.00 17.22 194.74 0.29 437.64 4.59 12.82 28.87 15.89 1.32 0.06 15.38 0.26 56.36 51.58 0.63 4.14 327.04 13.22 240.80 0.00 14.97 56.66 1.40 1,624.56 350.47 131.78 29.55 726.79 257.61 6.24 122.13 1,121.88 13.11 8.18 27.81 34 1,000.73 2.94 9.69 18.74 6.68

2014 1,801.85 441.90 0.00 0.00 21.63 229.83 0.36 517.78 5.65 15.06 35.29 19.86 1.60 0.08 18.97 0.31 69.54 63.75 0.75 5.04 423.99 16.81 319.70 0.00 18.80 66.93 1.75 2,124.64 460.24 167.68 38.86 979.56 318.21 8.05 152.04 1,398.09 15.93 9.49 33.51 39.27 1,253.77 3.77 11.85 22.07 8.43

Continued on the following page...

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FOODSERVICE FOOD VALUE BY MARKET (continued)

The PhilippinesFoodserviceFood and Drink Market Analysisby Salesin US$ millions (continued)
Market Ice cream Artisanal Frozen yogurt Impulse Take-home Oils and fats Oils Solid fats Sauces, dressings and condiments Dry cooking sauces Condiment sauces Dips Dressings Pickled products Seasonings Table sauces Wet cooking sauces Savoury snacks Nuts and seeds Popcorn Potato chips Processed snacks Other savoury snacks Sweet and savoury spreads Chocolate spreads Nut-based spreads Jam/jelly/marmalade Savoury spreads Honey
Source: Datamonitor, January, 2012.

2010 19.80 1.08 1.26 6.08 11.38 77.20 75.44 1.76 29.63 2.74 6.69 0.0 6.19 0.0 0.0 13.47 0.54 37.88 19.33 0.82 8.59 6.82 2.32 10.08 1.94 7.31 0.39 0.38 0.06

2014 24.26 1.29 1.54 7.71 13.73 99.61 97.37 2.24 36.64 3.35 8.51 0.0 7.69 0.0 0.0 16.42 0.69 46.10 22.99 1.00 10.84 8.28 2.98 12.09 2.36 8.69 0.48 0.48 0.07

PAGE 20

The Government of Canada has prepared this report based on primary and secondary sources of information. Although every effort has been made to ensure that the information is accurate, Agriculture and Agri -Food Canada assumes no liability for any actions taken based on the information contained herein.

Foodservice Profile The Philippines Her Majesty the Queen in Right of Canada, represented by the Minister of Agriculture and Agri -Food Canada, 2012. ISSN 1920-6615 AAFC No. 11764E Photo Credits All photographs reproduced in this publication are used by permission of the rights holders. All images, unless otherwise noted, are copyright Her Majesty the Queen in Right of Canada. For additional copies of this publication or to request an alternate format, please contact: Agriculture and Agri-Food Canada 1341 Baseline Road, Tower 5, 4th floor Ottawa, ON Canada K1A 0C5 E-mail: infoservice@agr.gc.ca Aussi disponible en franais sous le titre : Profil du secteur de la restauration Philippines