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FOOD SERVICE MARKET IN NORWAY

Oslo, January 2012

Business Sweden

2012-02-10

AGENDA

Market overview Value and growth Wholesalers Operators Trends

Business Sweden
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2012-02-10

THE FOOD SERVICE SEGMENT IS AN IMPORTANT DISTRIBUTION CHANNEL FOR FOOD PRODUCTS IN NORWAY

- Due to Norwegian legislation, only outlets with an area of up to 100 m2 are permitted to stay open on Sundays - The majority of grocery stores are due to this fact closed on Sundays. The food service segment is hence the only sales channel for food and beverages

Grocery stores in Norway are closed on Sundays

Active, sporty, impulsive, convenient, status oriented, eager to spend, time-efficient

- Leisure activities such as hobbies, outdoor activities and spending time with family and friends are highly valued - There is therefore a great demand for convenient, time-saving food products that require little preparation

Norwegian consumers prioritize leisure activities

- Norwegians are impulsive consumers that value convenience and availability highly - They have a strong purchasing power and spend a greater part of their disposable income on food and beverages than Swedish consumers
Source: STC Analysis

Norwegian consumers have a high purchasing power

Business Sweden
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2012-02-10

THE FOOD SERVICE SEGMENT IN NORWAY HAS EXPERIENCED A GROWTH IN SALES

- The segment has experienced a steady growth in sales and value in spite of the economic downturn in 2008 - Growth rates were lower than the year before: the industry experienced a total growth of two percent in 2009 - The food service segment had a total growth of 18,8 percent during the period 2004 - 2009

The food service segment is an important sales channel for food products in Norway

- Full-service restaurants experienced a decline in sales in favor of less expensive take-away outlets

Due to the economic uncertainty, a shift in consumption patterns could be identified

- A constantly increasing part of this is consumed in cafs and restaurants

Norwegian households approximately spend 11 percent of their income on food and drinks

Sources: Euromonitor, Virke, STC Interview

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2012-02-10

THE NORWEGIAN FOOD SERVICE MARKET HAS A TOTAL VALUE OF NOK 32 BILLION

GROCERY RETAIL MARKET NOK 134 billion

SERVICE RETAIL MARKET NOK 15 billion

FOOD SERVICE MARKET NOK 32 billion

Service retail is an important distribution channel in Norway

Sources: Virke, Euromonitor, Statistisk Sentralbyr

Business Sweden
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2012-02-10

AGENDA

Market overview Structure Wholesalers Operators Trends

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2012-02-10

THERE ARE OVER 12 000 FOOD SERVICE OUTLETS IN NORWAY

5% 2% 2% 7%

Outlets
Fast food Full-service restaurants Cafs/Bars Self-service cafeterias Pizza consumer food service 100% Home delivery/take away

29%

27% 28%

Street stalls/kiosks

Cafs, fast food outlets and full service restaurants represent 54 percent of total food service outlets
Source: Euromonitor

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2012-02-10

AGENDA

Market overview Wholesalers Operators Trends

Business Sweden
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2012-02-10

TWO KEY PLAYERS HOLD 94 PERCENT OF THE WHOLESALE FOOD SERVICE MARKET

Nationwide wholesalers
Asko Storhusholdning, owned by Norgesgruppen, is the leading wholesaler towards the food service sector in Norway Servicegrossistene is an organization of 22 regional wholesalers that together stand for 24 percent of total distribution to the food service sector in Norway Positive to launching new products when there is a firstmover advantage

Regional wholesalers

Specialist wholesalers
There are several niche operators on the Norwegian market, generally focused on premium delicacies A few of these companies have their own distribution channel, but generally they distribute their products through larger wholesalers Laks & Vilt centralen and Oluf Lorentzen are well-known suppliers of premium products

In addition to the nationwide wholesalers, there are also several regional operators, generally operating on a local scale within their county (fylke) Among these wholesalers, Gilberg Engros and Furuset Engros can be mentioned as examples

Source: NHO Reiseliv, Virke, Markedsfakta.no

94 %

6% Business Sweden
10 2012-02-10

AGENDA

Market overview Wholesalers Route to entry Operators Trends

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2012-02-10

A NORWEGIAN IMPORTER IS MANDATORY WHEN EXPORTING FOOD TO NORWAY

Agent

Full service restaurants Cafs, bakeries and lunch restaurants Premium retail sales channels

SWEDISH PRODUCER

Certified importer in Norway

Distributor

Wholesaler

Direct sales

Due to custom regulations, a Norwegian importer is required for Swedish food suppliers
Source: STC Analysis

Business Sweden
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2012-02-10

AGENDA

Market overview Wholesalers Operators Trends

Business Sweden
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2012-02-10

FIVE MAJOR OPERATORS STAND FOR 57,4 PERCENT OF THE NORWEGIAN FOOD SERVICE MARKET (1/2)

Chain concept
Peppes pizza Burger King
Umoe Catering AS 17,2%

Outlets
45 29 4 28 22 8 11 68

Brand value
8,1% 4,1% 2,1% 2,2% 1,3% 0,3% 0,3% 14,3%

Turnover NOK
609 259 000 419 184 000 203 719 000 N/A 21 995 000 21 995 000 N/A 197 331 000

TGI Fridays Caf Opus La Baguette Fattigmann Pubcompagniet McDonalds

McDonalds Norge AS 14,3%

McDonald's is the single largest chain concept in terms of market share and brand value
Source: Euromonitor

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2012-02-10

FIVE MAJOR OPERATORS STAND FOR 57,4 PERCENT OF THE NORWEGIAN FOOD SERVICE MARKET (2/2)
Chain concept
Mix JaFs!
Norgesgruppen ASA 12,4%

Outlets
793 43 28 25 13 13 94 476 289 116

Brand value
6,1% 2,5% 0,9% 1,1% 1,3% 0,6% 7,9% 4,6% 5,1% 1,0%

Turnover NOK
78 309 000 N/A 103 336 000 N/A 43 873 000 N/A 83 667 000 1 051 516 000 1 051 516 000 1 051 516 000

Deli De Luca Bon Appetit Le Caf Pizza & Kina expressen Dolly Dimples Narvesen 7Eleven XY

PAM AS 7,9% Reitangruppen AS 5,6%

The service retail concepts Mix, Narvesen and 7Eleven have the highest number of outlets and rank high in brand value
Source: Euromonitor

Business Sweden
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2012-01-23

AGENDA

Market overview Wholesalers Operators Premium restaurants Trends

Business Sweden
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2012-02-10

OSLO HAS A WIDE SELECTION OF RESTAURANTS DEMANDING HIGH QUALITY PRODUCTS

OSLO ST Ekebergsrestauranten Le Benjamin Klosteret Solsiden Sult Michelin restaurants in Norway Restaurant FROGNER/ MAJORSTUEN Bygdy all restaurant Alex Sushi Palace Grill Nodee
Source: Aftenposten, VisitNorway,

Michelin stars

SENTRUM/ AKER BRYGGE Onda by Pal&Ness Argent Fine Dining Dinner Ylajali Oro
17

Restaurant Oscarsgate Haga restaurant Statholdergaarden Feinschmecker Bagatelle (closed 2009, re-opened 2011)
2012-02-10

Business Sweden

AGENDA

Market overview Wholesalers Operators Premium Retail sales channels Trends

Business Sweden
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2012-02-10

PREMIUM RETAIL CHANNELS ARE MAINLY LOCATED IN OSLO

Jacobs p Holtet (www.jacobs.no) Norways finest selection of premium food products. Premium grocery store in the outskirts of Oslo owned by Norgesgruppen Centra/Ultra (www.centra.no/www.ultra.no) Norgesgruppens premium grocery retail concepts with a wide selection of delicacies and premium food Mathallen (opening 2012) Planned to open in October 2012 in Grnerlkka, Oslo. Several delicacy stores as well as restaurants are starting up premises at this covered food market designed to offer a unique food experience Various independent grocery stores with a premium selection of food products are located in the Oslo area, e.g. Food Story, Fjelbergs fisk & vilt, Hotel Havanna and Gutta p Haugen

Sources: STC Analysis

Business Sweden
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2012-02-10

AGENDA

Market overview Wholesalers Operators Trends

Business Sweden
20

2012-02-10

AN INCREASE IN CONSUMPTION THROUGH FOOD SERVICE CHANNELS IN NORWAY IS EXPECTED

Dining out: part of a fashionable lifestyle Increased interest in healthy food
-

Norwegians are expected to increase their consumption of food and beverages outside of the home environment Dining out is considered as part of a trendy and urban lifestyle, and is also seen as a status statement, especially in the metropolitan areas

Interest in premium coffee

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TRENDS
-

Recent studies show that Norwegians have begun to consume healthy food to a greater extent when ordering take-away and when dining out Food service outlets have therefore introduced healthy options such as salads and fruit smoothies - This trend is expected to continue in the future

Coffee house concepts are increasing in popularity in Norway and the segment is experiencing a continuous growth The concepts are still mainly focused to the Oslo area, but expansion to other large cities in Norway is expected Consumers are also demanding premium coffee through specialist retail and grocery retail channels

Custom regulations are an implication for foreign suppliers

There are custom duties related to import of food products to Norway due to a protective agricultural policy Hence, imported products generally imply a higher cost This can also be seen as an advantage as there are fewer competitors on the Norwegian market than in the EU

Source: Euromonitor, STC Analysis

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2012-02-10

DRIVERS AND CONSTRAINTS

DRIVERS CONSUMER + Convenience and accessibility are highly valued factors in food consumption + Consumers with high purchasing power that are willing to spend their income on food consumption + Increasing trend in dining out: considered to be a status statement MARKET + Contiuous growth in market value and an increase in sales is expected + Swedish products are well reputed and generally known by consumers and operators DISTRIBUTION + Increasing interest in innovative, premium products
Source: STC Analysis
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CONSTRAINTS CONSUMERS Strong brand-awareness and high loyalty to domestic brands MARKET Custom regulations lead to higher import for foreign products costs Premium operators are still mainly located in larger cities such as Oslo, Stavanger, Bergen DISTRIBUTION - A few nationwide wholesalers hold a large part of the market - A certified importer in Norway is required for import of food products

Business Sweden

2012-02-10