1. MACRO-DEMOGRAPHICS
- Malaysia GDP growth remains positive at 5.5% this year
- Selangor has the highest GDP output due to high concentration of commercial and industrial activity
- Growth has recovered since the 1997 crisis
- Wholesale & retail trade, restaurants & hotels contributed >13% to Malaysia’s economy
- Population growth expected to stablise at ~2%
- High proportion of young population key contributor in tomorrow’s consumer market
2. OVERVIEW OF FOOD WHOLESALE MARKET
- Total F&B purchases estimated at RM7 billion
- Two-third of total purchases sourced from wholesalers
- Average growth of ~7% estimated over 3-year period
- Restaurants largest customer group
- Meat forms the largest segment
- Intense competition from hypermarkets likely to slow future growth for wholesalers
3. COMPETITIVE LANDSCAPE
- F&B wholesalers generally very specialized
- Each region has its own key players.............but each product segment dominated by few big players
- POK Brothers a well-known player in frozen food segment
- Bigger vegetable wholesalers differentiate by offering imported vegetables
- Piau Kee an established name in seafood segment
- Chuan Yee a more prominent wholesaler in dry goods segment
- Alcoholic and non-alcoholic beverages dominate by different players
- Overall, meat and seafood experienced highest volume growth over the past 5 years
- Margin provided varies depending on product types
- Similar margin provided to all customer types
- Margin likely to be further squeezed
- Wholesalers threatened by both manufacturers and hypermarkets
- Centralised procurement makes hypermarket very price competitive
- Carrefour the leading hypermarket
- Price remains the key competitive tool….
- Typical credit term 30 – 60 days
- Discounts/incentives not very frequent
- Most wholesalers provide free delivery services
- Minimum purchase commonly required
- Collection emerged as the key challenge faced
- ‘Halal’ becoming a pressing issue in F&B industry
- 7 factors to be successful in food wholesale
- Overall, existing players deem the market to be less and less profitable
4. OVERVIEW OF CUSTOMER SEGMENTS
- Most restaurants located on West Coast
- Restaurants categorised into 8 key segments
- Various types of restaurants
- KFC has the most number of outlets
- Hotels rated according to Star and Orchid system
- Cafes & FSRs found in all 3 – 5 star hotels
- Bulk of star-rated hotels are 1-star outlets
- KL has most 5-star hotels
- West Coast hotels have lower occupancy rate, possible due to high supply
- Most hotels located in city areas
- Catering industry is fairly fragmented
5. CUSTOMERS ANALYSIS
- Wholesalers key source of F&B supply
- Most customers have between 1 to 5 wholesalers
- Many customers would like to purchase from only one wholesaler as it would be convenient
- Most customers have >1 supplier for same item
- Most customers have used their current wholesalers for more than 10 years
- Word-of-mouth important source of recommendation
- Owner key decision maker for smaller restaurants
- Purchasing department key decision maker for Chain Restaurants (>3 outlets)
- Chefs have say in food items needed for hotels
- Owner also main decision maker for caterers
- Chefs have big influence on choice of suppliers
- Purchasing Dept consolidate Hotels’ purchases
- Chain Restaurants pick from approved supplier list
- Rapport with wholesalers is important
- Independent Restaurants/Small Caterers often pick up their own supplies
- There are many advantages of using wholesalers
- Customers spend most on meat and seafood
- Most customers order perishable goods on a daily basis
- Many caterers prefer to purchase from the wet market
- Customers mainly purchase vegetables/fruits, seafood and meat from wet market
- More caterers tend to favour hyper/supermarkets compared to restaurants and hotels
- Restaurants mainly purchase condiments and beverages from hyper/supermarkets
- Hotels mostly purchase soft drinks from hyper/supermarkets
- Caterers mainly purchase rice/grains and soft drinks from hyper/supermarkets
- Most customers prefer to pay by cheque
- Larger customers prefer lower prices rather than incentives/discounts
- Quality and price most important factors for restaurants
- Hotels find quality and range most important
- Quality and price equally important for caterers
- Caterers mostly cater for private events
- Most customers believe that larger wholesalers can offer a wider range
- Key complaint: wholesalers do not inform customers when food run out of stock
- Key suggestion: wholesalers to maximize the use of the internet
6. STRATEGIC CONCLUSION
Overall, attractiveness for traditional wholesale is medium
Nevertheless, growth prospect for F&B remains bright
7. APPENDIX
PROFILE OF SELECTED KEY WHOLESALERS
- Key Player: Lucky Frozen
- Key Player: Pok Brothers
- Key Player: Angliss
- Key Player: CVS Vegetable Supply
- Key Player: Chuan Yee
- Key Player: Albert Wines & Spirits
- Key Player: Deligreen Food Industries
- Key Player: Permanis Sandilands
- Key Player: Chop Tong Guan
CASE STUDIES RESTAURANTS
- Malay restaurant: Ideal Restaurant
- Malay restaurant: Pulau Pinang Kayu Nasi Kandar
- Malay restaurant: Mohd Yusof Ramli Restaurant
- Malay restaurant: Tawakwaf
- Chinese restaurant: Chinese Restaurant
- Chinese restaurant: Four Seasons Restaurant
- Chinese restaurant: Ming Restaurant
- Chinese seafood restaurant: Restoran Sea View
- Indian restaurant: Ravi Canai & Such
- Western restaurant: Fisherman’s Grill
- Chain Café: Déli France
- Chain western restaurant: San Francisco Steak House
- Chain Japanese restaurant: Dontaku Restaurant
- Chain Italian restaurant: Piccolo Mondo
- Chain fast food restaurant: Nando’s
- Chain fast food restaurant: A&W
- Chain fast food restaurant: Kyros Kebabs
- Sundanese restaurant: Sundanese Restaurant
- Nyonya restaurant: Baba Restaurant
CASE STUDIES: HOTELS
- Hotels 1-2*: Yao Han
- Hotels 1-2*: Hoover Hotel & Tea House
- Hotels 1-2*: Seri Malaysia Negeri Sembilan
- Hotels 2*: Straits View Hotel Sdn Bhd
- Hotels 3*: Bukit Bendera Resort
- Hotels 3*: Hotel Seri Malaysia
- Hotels 3*: New Coco Hut Chalet
- Hotels 3*: Swiss Inn Kuala Lumpur
- Hotels 4*: Concorde Hotel Kuala Lumpur
- Hotels 4*: D’ Coconut Lagoon Resort
- Hotels 4*: Hotel Villa Langkawi
- Hotels 4*: Puteri Pan Pacific Hotel
- Hotels 5*: Crown Princess Hotel KL
- Hotels 5*: The Andaman
CASE STUDIES: CATERERS
- Caterers: Frankfurter Party
- Caterers: Jaha Enterprise
- Caterers: Bamboo Catering and Event Planning
- Caterers: Eden Catering
- Caterers: Home Spicy Rice Sdn Bhd
- Caterers: Hutsahana Japanese Cuisine
- Caterers: Java Catering (M) Sdn Bhd
- Caterers: JJ Catering
- Caterers: Le Yean Air Cond. Restaurant
- Caterers: Kuala Lumpur Airport Services (KLAS)
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