17 January, 2008 - France is the EU's most competitive producer, processor and exporter of food and agricultural products with a wide variety of stores - although the sector is heavily dominated by hypermarkets and supermarkets.
Overview
Over the last five years consumption of fresh fruits, mineral water, yoghurts and vegetables have all risen slightly, while that of wine, cheese and milk have decreased. Consumption of meat, poultry and seafood has remained the same.
In 2006, food sales rose by 2.5 pct in France over the previous year, and the average family’s expenditure on food and beverages rose to 15 pct of the household budget. Non-alcoholic drinks, dairy products, breads, cereals, fresh fruit and vegetables as well as fish and seafood have all shown strong growth.
Imports
French imports of foods are increasing year on year, rising from US$17.1 billion in 2001 to US$41.9 billion in 2006. In this year, 70 pct of its imports came from within the EU from Italy, Spain Germany, UK, the Netherlands, Belgium and Luxembourg.
Brazil is the main non-EU provider of foods, supplying bulk products such as soy, soy protein, orange juice, meat and poultry. Imports from the US to France made up just 2 pct of the country’s total and were worth US$871 million in 2006.
Trends in Retail Distribution
The retail distribution network in France is diverse and falls into six main categories: hypermarkets; hard discounters, convenience, gourmet centres in department stores and traditional outlets. (see definitions below)
Definitions
(a) Hypermarket: Stores with more than 2,500 sq.m. (25,000 sq.ft) selling a wide variety of food and non-food items.
(b) Supermarket: Stores with between 400 m2 and 2,500 m2 (4,000 to 25,000 sq ft) selling a wide variety of foods and non-food household goods
(c) Superette: Stores with less than 400 m2 (4,000 sq ft) selling food and basic non-food household goods.
(d) City-center stores: Stores located within cities selling a wide variety of food, specialty foods and non-food items
(e) Hard discounters: Small supermarkets with a limited range of low cost products, often private label.
(f) Gas Marts
(g) Frozen Food Centers: A unique concept of retail store selling only frozen foods from entrees/hord d'oeuvres to desserts.
The first five categories account for 75 pct of the country’s retail and food market while the sixth, which includes specialised and neighbourhood food stores has a 25 market share.
Hypermarkets are increasing production of ready-to-eat meals in a bid to recapture market share from restaurants and fast food outlets.
French major retailers in 2006 were Carrefour; Leclerc; ITM Entreprises (Intermarché); Auchan; Casino; Systeme U; and Cora (Louis Delhaize).
In this year, sales of this top six totalled US$217 billion, a rise of 1.3 pct over 2005. Hypermarkets and supermarkets had a combined share of 81 pct of food sales, followed by hard discounters on 11 pct. Private label sales reached an all-time high of 32 pct. Total E-commerce food and beverage sales represented $275 million in 2005.
Although market share among distribution channels has remained relatively stable since 1999, supermarkets have gained market share mainly from hypermarkets and traditional stores.
In 2006, hypermarkets and supermarkets each had 33.1 pct of market share distribution, traditional stores 16.1 pct, smaller self-service and freezer centres 8.5 pct, with the remaining 8.5 pct for other outlets such as open-air markets, catalogues and e-commerce.
Convenience Stores
These fall into the category of small supermarkets (superettes) and are generally located in city centres. In 2005, there were 15,000 of these outlets, which are often affiliated to larger companies, and the numbers are predicted to grow. Main operators are:
* Francap (Coccinelle,Coccimarket, G20, Colruyt, Viveco, Diagonal, Sitis, Panier
Sympa, Atoo, Votre Marché)
* Carrefour (Shopi, 8 à Huit, Marché Plus, Proxi, Sherpa, ED)
* Casino (Spar, Vival, Eco Service, Petit Casino, Casitalia)
* Franprix (Casino group)
* Systeme U (Marché U)
Petrol Stations
Petrol companies, who have lost around 60 pct of their gasoline sales to hypermarkets, are increasingly adding food stores to their operations. In 2006, there were over 400 and accounted for 1 pct of total food sales.
Internet Sales
In large cities this sector is growing slowly. Food and beverage sales accounted for 4 pct (US$275 million) of the US$6.8 billion E-commerce sales in France in 2006.
Frozen Food Products – Strong Growth Potential
In 2006, French frozen food sales were US$9.5 Billion, a 3.8 pct increase from the previous year. In 2006, home consumption of frozen foods was valued at $5.6 billion, an increase of 2.3 percent compared to 2005, and represented 59 percent of total frozen food consumption.
In 2006, home consumption of frozen foods was valued at $5.6 billion, an increase of 2.3 percent compared to 2005, and represented 59 percent of total frozen food consumption.
Consumption by the restaurant/institution and food service sectors was estimated at US$3.9 billion in 2006, an increase of six percent compared to 2005 – some 41 percent of the total French frozen food consumption. The rise in frozen food sales shows the sector is dynamic and has strong growth potential.
France ranks second for sales of frozen food products after Spain, and before Italy and the United Kingdom. Best-selling frozen food products in 2006 were fish and seafood, meat, vegetables (especially potato base), entrees/hors d'oeuvre (pizzas, quiches, tarts, etc.), prepared meals, and desserts.
Frozen foods in France are purchased in hyper/supermarkets and also through frozen food stores. These stores are unique retail outlets selling only frozen foods from entree/hors d'oeuvre to desserts. Although frozen food centres and independent stores face tough competition from hyper/supermarkets, their respective market shares continue to increase.
Picard Surgeles is France’s top frozen food retailer with 14 pct market share. It has almost 700 outlets and sales of over US$1 billion.
Picard sells high-end frozen products and offers opportunities to US suppliers of fish and seafood, frozen fruits and vegetables, fruit juices, and prepared specialty meals.
The second largest retailer in this sector is Toupargel/Agrigel. It is the leader for frozen food home deliveries, before Thiriet, Maximo and Argel. In 2006, Toupargel/Agrigel sales were US$476 million, an increase of 0.6 percent over the previous year. Toupargel/Agrigel offers opportunities primarily for U.S. suppliers of fish and seafood.
The major distributors of frozen food for the food service sector are: Promona, Brake, Davigel, Mikogel and Aviko.
There are approximately 100 wholesalers/distributors of frozen food products in France. The top products imported in this category are vegetables, fish and seafood products.