Do you want to go out to eat? People around the world are saying “yes” to this answer, but are finding different venues to satisfy their hunger. In fact, you might be surprised to hear that 20% of the world’s food venues are street vendors! Did you know that of the 10 largest markets in the world in the food services industry, five are in East Asia? The industry is making some major shifts which are also specific to geographic location.
Many who have traveled around the world have experienced the significant price differences in food. In Vietnam, a customer can purchase a full meal for just $1.00. In Germany however, to get a meal of substance, you must pay about $4.00 or more. Research indicates that in less developed countries, there is less legislation restricting street markets, thereby decreasing the barrier to entry and increasing competition. Instead of an established fast food joint representing the lowest price in the market, street vendors are able to set up shop without food safety regulations and overhead expenses.
As a result of the global economic crisis, there is an expected contraction in the food services industry. Some say that next year there will be a shift in which the growth of the number of outlets will drop below the growth in the amount of sales. Looking forward, BRIC countries (Brazil, Russia, India, China) which now represent some of the largest markets in the world, will begin to take notice of the more fragmented food service industry. With the increase in disposable income, there will be a corresponding increase in regulations and eventually the final price to the consumer.
As international business people, many of us take pride in the unique foods and experiences we gain as we do business abroad. Take special note as you conduct business in other countries and keep watch for smaller, but more officially established food kiosks. These are expected to take the place of the less regulated street vendors we often see today.