HoReCa is a short for hotel / restaurant / catering and encompasses the whole food service industry. The term HoReCa includes everything that happens at places like restaurants, cafés, clubs, pubs, hotels etc. (called outlets or points of sale from the business perspective) and is a common denominator for this sector-related jobs like chefs, waiters or restaurant managers. You can also come across the term HoReCa when dealing with producers and vendors like Coca-Cola or Heineken who sell their products to various HoReCa outlets.
HoReCa industry is one of the most important and biggest in size. It is estimated that before the Covid-19 crisis, it was worth about 260 billion USD and is expected to increase annually after the worst of the covid aftermath is behind us. Just in Europe, the HoReCa sector employs almost 8 million people. In the USA it was almost 10 million people before the covid crisis.
HoReCa is called by different names in different parts of the world. For example, in the U.S., the most common variant is "hospitality sector" and HoReCa is almost an unknown term. The situation is reversed in some European countries, mostly Belgium and Netherlands or Czechia, where HoReCa is prevalent. In the "international English" the most common name seems to be on-trade, which is what SharpGrid is using as well. But you can also come across names like "on-premise" or "food service" in other countries. For complete overview of the HoReCa naming conventions, read our article explaining the various names and definitions of the HoReCa channel.
Since the HoReCa market is so big, there are loads of producers and vendors competing for market share. They are usually classified as being part of 3 basic categories:
Each category also has a lots of subcategories. Take spirits, for example. There is rum, vodka, whiskey, gin and many other types of drinks, all with their own competing brands and products. Think Amundsen vs. Finlandia, Captain Morgan vs. Bacardi or Jameson vs. Tullamore Dew.
To sum up, the HoReCa drinks market is made up of the most famous brands in the world. Even though HoReCa doesn’t actually make up the most sales for these companies, it’s in their best interest to grab as much market share as possible. Because what it lacks in sales, it makes up with brand building and supporting customer loyalty by associating a product or brand with pleasant emotions and time spent with friends or family.
HoReCa outlet is a place to go out for drinks or food. Sometimes called a point of sale or an establishment (again, for total clarity check our article with HoReCa definitions and wording explained), it is a place where food & drinks are being served to customers who went out for a lunch, a cocktails-fuelled party or to meet their friends.
A HoReCa outlet can be anything from local family-owned cafés, office canteens or hotel eateries to sprawling, multi-storey restaurants or global fast-food franchises. These places are the backbone of the HoReCa industry and vendors or producers compete to get their products on their menus. Imagine Coca-Cola and Pepsi competing for a slot on a famous New York club menu or Jameson trying to push out Tullamore Dew from a popular London whiskey bar and you will get the picture.
Some HoReCa outlets offer delivery services, which was especially important during the harshest Covid-19 waves. Some even don’t offer any service on-premise and rely solely on deliveries. These are called ghost kitchens.
To put it plainly, HoReCa customers are people like you and me who want to eat out or have some drinks with friends. In business terms, HoReCa producers compete to get their products to outlets frequented by more affluent customers as it increases their chances of selling more products with higher margins.
Why is HoReCa so important from a general point of view? Business aside, it simply brings people together and serves as a foundation for social interactions that keeps our society functional. Moreover, it has been proven many times that meeting people and being socially active has a long-term positive effect on mood and generally prolongs life. It also serves as a source of income for many families and keeps the wheels of the economy running smoothly.
HoReCa is one of the best inventions we as humans have come up with. SharpGrid is in the HoReCa data & insights business, reinventing the HoReCa market research and making life easier for producers and vendors like Coca-Cola, PepsiCo or Heineken. If you’re interested in finding out what kind of HoReCa data we have and how you can utilize it in your business, contact us to learn more or find a solution to your problems.
March 24, 2023
March 24, 2023