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HoReCa beverage to reach $351.191 bn in 2027
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Thursday, 16 January, 2025, 08 : 00 AM [IST]
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A Saranya
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Bars, restaurants, hotels, and other hospitality establishments are part of the largest hospitality industry distribution channel known as HoReCa. An acronym for Hotels, Restaurants and Catering, this original term encompasses all the trends of a sector that has enormous social and economic relevance.
The HoReCa beverage market is expected to increase at a compound yearly growth rate of 4.35% to reach $351.191 billion in 2027 from $260.681 billion in 2020. Some of the major factors propelling the HoReCa beverage market are the increase in the number of food outlets and restaurants, and the rising demand for junk food and processed foods among millennials. Additionally, increased consumer expenditure on food delivery and the requirement to deliver orders on time is also aiding in driving global demand.
Additionally, the advent of the travel and tourism sector is accelerating the market’s expansion. A major factor behind the growth of the global HoReCa beverage market is the expansion and development of restaurants and food outlets. For instance, according to JLL’s Hotel Momentum India (HMI) Q4, 2021, the Indian hospitality industry saw revenue per available room (RevPAR) growth of 100.3 per cent year on year in the fourth quarter of 2021. RevPAR for the fourth quarter (October-December) was 41.9%. Additionally, according to the National Restaurant Association, US restaurant business sales rose 10.2% to $548.3 billion in 2021 in response to pent-up customer demand for service experiences that were banned during pandemic.
In addition, enhanced partnerships between restaurants and major beverage companies are expected to contribute to the expansion of the market during the forecast period. Similarly, an increase in sales contracts is expected to drive the growth of the HoReCa beverage market.
In addition, the integration of digital payments and marketing technology to provide contactless services, increase operational efficiency, and adapt to rapid changes in the market will also drive the market during the forecast period. The gastronomy and hotel industry has experienced rapid growth in recent years. As the wealth of consumers in developing countries increases and people rapidly adapt to modern lifestyles, HoReCa beverage business will continue to grow. Due to the wide range of products on the menu, the restaurant category holds a large marketshare. Families, business meetings, and social groups prefer dining in the full-service restaurant, which offers a wide variety of cuisines. With the increase in family outings, the number of catering establishments is also increasing.
Also, the number of restaurants serving alcohol is increasing. Alcohol consumption is increasing year by year, and more and more shops of this kind are popping up to meet that demand. To meet consumer demand and expand their offerings, leading brands invest in R&D and innovation. Each location has its own culture that greatly influences the market. Consumers around the world are ready to try new environments and services. Additionally, while franchising remains one of the most popular growth methods, unprecedented growth in store formats across both developed and developing regions around the world is gaining momentum. Restaurant spending is skyrocketing as the majority of millennials prefer fast food.
The Covid-19 pandemic has negatively impacted his HoReCa beverage market globally. Lockdowns, capacities and movement restrictions were introduced in 2020 due to the outbreak of the novel corona virus disease (Covid-19). The pandemic not only strained beverage manufacturing resources, but also paralysed the HoReCa sector (hospitality, restaurants and cafes) as demand has been greatly affected. By 2020, the hospitality market as a whole, including each sector of restaurants, hotels, and cafes, had a highly unfavourable performance.
The increasing number of working professionals combined with busy and hectic daily lives has led to the growth of the HoReCa market. According to Statista, the market size of the quick service restaurant industry continues to grow every year around the world. In 2019, the sector was valued at approximately $875.26 billion, up from $862.58 billion the year before. However, the industry was expected to decline in 2020 due to lockdowns implemented around the world to curb the spread of the Coronavirus.
The novel Coronavirus disease has affected all sectors around the world, and the HoReCa industry is one of the hardest hit. Some quick service restaurants (QSRs) are seeing increased demand for takeout and delivery. And while several US pizza chains have hired thousands of workers as orders surged, sales at most other quick-service restaurants have plummeted. Some have permanently closed their doors. In addition, some restaurants have already filed for bankruptcy, while others have announced that they will soon be unable to cover rent and staff costs. According to the National Restaurant Association, up to 7 million restaurant workers in the United States alone could be out of work.
In recent years, the European hospitality industry has been affected by a number of factors, including economic downturns, changing consumer tastes and increasing competition. The Covid-19 pandemic has had a particularly severe impact on the industry, forcing many companies to close or significantly scale back their operations. Despite these challenges, Europe’s hospitality industry remains a major source of employment, with millions of people working in hotels, restaurants and cafes across the continent. Moreover, they contribute significantly to the GDP of many countries and play an important role in shaping the cultural identity of European cities and regions. The hospitality industry is very diverse and many small businesses dominate the sector.
Online delivery platforms and online ordering systems have had a major impact on the hospitality industry in recent years. This trend will continue, making it especially important for restaurateurs to remain open despite restrictions and lockdowns during the pandemic. Overall, the European catering industry remains an important and dynamic part of the European economy despite the challenges it faces. The future of the hospitality industry will be shaped by many trends and factors, including technological advances, changing consumer preferences, and changing global economic conditions.
One trend that will likely continue is the use of technology in the hospitality industry. For example, many restaurants and hotels already use online ordering systems or mobile apps to allow customers to make reservations and orders. In the future, technologies such as artificial intelligence, virtual reality, and augmented reality are expected to become more prevalent, helping businesses increase efficiency, reduce costs, and improve customer experience.
Another trend that could shape the future of the HoReCa sector is changing consumer preferences. As more and more people become more conscious of their health and the environment, the demand for organic, local and sustainable food is expected to grow.
Economic factors will also play a role in shaping the future of the hospitality industry. As the global economy recovers from the impact of the Covid-19 pandemic, demand for travel and tourism will increase, which in turn will increase demand for hotel and restaurant services. However, it remains unclear whether the recovery will be rapid or gradual, depending on how the situation evolves.
All of these trends and factors will shape the future of the hospitality industry, so companies that can adapt and stay ahead of the curve will be well-positioned to thrive in the years to come.
(The author is assistant professor, Department of Nutrition and Dietetics, Vellalar College for Women, Erode)
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