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Food Industry

How Millennial Will Shape Future of Restaurants in the Philippines

These heavy restaurant users demand convenience, like trying new foods and want more delivery, research shows
How Millennial Will Shape Future of Restaurants in the Philippines
Image credit: Pixabay
Senior Research Manager (Global), Technomic, Inc.
5 min read
Opinions expressed by Entrepreneur contributors are their own.

A plethora of data points to young adults as key to development of the restaurant industry in the Philippines, and in particular as a demographic ripe for tech-enabled delivery options.

Millennials’ ascendancy: Of the 104 million-plus Filipinos scattered among some 7,100 islands off the coast of Southeast Asia, one-third were born between 1980 and 2000. These young adults are now the country’s prime working-age population.

Rising incomes, especially among millennials: The Philippines are a rapidly developing lower-middle-income country, with a 2017 GDP per capita of U.S. $8,360 in purchasing power parity—up more than 50 per cent from 2010. Hardworking millennials are rising with the tide.

When Technomic polled Filipino Millennials, a third (33 per cent) reported that they’re living comfortably, another 53 per cent said they’re getting by okay, and only 10 per cent said they’re struggling.

Urbanisation: Almost eight out of 10 Filipino Millennials (78 per cent) reported living in a city of over 100,000 inhabitants. The archipelago is one of the fastest-urbanizing regions in Asia, and Metro Manila teems with more than 12 million inhabitants.

Since infrastructure investment has lagged growth in population and incomes, Philippine cities—particularly Metro Manila—are known for nightmarish traffic congestion, increasing consumer demand for delivery as well as for conveniently walkable eateries. Nearly 70 per cent of Filipino millennials say a convenient location is important to them in choosing a restaurant, a higher proportion than in other countries.

Connection through social media: Filipinos spend more time each day connected than inhabitants of any other nation. Fully 95 per cent of Filipino millennials report that they own a smartphone with internet access, while 70 per cent have access to a desktop or laptop computer.

Family-centric millennial lifestyles: Typical Filipino millennials aren’t carefree singles. As per data, 58 per cent live with their spouse or significant other, 55 per cent live with children age 12 and under, and 49 per cent live with other adult family members, such as a parent or grandparent.

Having another adult in the house to help with the kids can be important, since more and more young Filipino families include dual-career couples.

A youthful, urban, upwardly mobile, time-pressed population of two-career families with kids means heavy use of restaurants and foodservice, and in particular points to increased usage of takeout and delivery in coming years.

How Young Filipinos Dine Today

Filipino millennials are heavy users of restaurants. On average, these young diners report purchasing more than a third of their breakfasts, half of lunches and four out of 10 dinners away from home.

In a typical month, millennials source food from fast-food restaurants (85 per cent), street-food carts or kiosks (82 per cent), office-building cafeterias (81 per cent), prepared-foods areas at retail stores (80 per cent), cafes specializing in beverages and baked goods (76 per cent), sit-down restaurants (74 per cent), even vending machines (56 per cent).

Further, nearly half (48 per cent) patronage street-food carts and office lunchrooms weekly, and significant numbers pay weekly visits to retailers’ prepared-foods sections (42 per cent), cafes (41 per cent) and fast-food eateries (32 per cent).

Almost all millennial Filipinos (84 per cent) say they like to try new foods and flavours, and 43 per cent also say they like to try new places to eat.

When millennials were asked what types of cuisine they would choose at restaurants at least occasionally, eight out of 10 expressed preferences for Filipino dishes (83 per cent) and American fare (78 per cent). Six out of 10 would opt for Korean or Japanese foods. Chinese cuisine is favoured by almost half.

But many young Filipinos are also receptive to Italian, Mexican, French, Spanish and Caribbean fare—indicating that new restaurant brands offering less-familiar cuisines or dishes could readily find a receptive audience in the market. Inexpensive, full-flavoured street foods that are handheld or easy to eat on the run might find particular favour.

The Future of Tech-Enabled Takeout and Delivery

On average, Filipino millennials report dining in the restaurant for just over half of their food-away-from-home occasions. Three out of 10 purchases are for takeout and the other two occasions are delivery.F

Currently, young Filipinos dine in more than millennials across Asia in general, and use delivery less. Considering the fast-paced, family-centric, urban culture of the Philippines, that suggests plenty of room for growth in both takeout and delivery. Indeed, 72 per cent of Filipino millennials say they wish more of the restaurants in their area would offer delivery.

Two-thirds of millennials (66 per cent) say restaurants should integrate tech into the food ordering process, from in-store touch-screen kiosks to online ordering. Other tech amenities that Filipino millennials want include order tracking systems (85 per cent), chatbot-enabled ordering (64 per cent), and artificial intelligence-based personal ordering assistance (62 per cent).

Young Filipinos’ connected and tech-mediated lifestyles mean that restaurant chains will not succeed in building takeout and delivery market share without standout, even attention-grabbing tech amenities. That suggests important development opportunities in Manila and other Philippine cities for homegrown, regional and global chains that have both the deep pockets and the innovation-forward mindsets necessary to pair tech-centric dine-in, takeout and delivery systems with fresh, innovative, relatively inexpensive cuisine.

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