February 2, 2021

State of the FES Industry: Interpreting Trends Through AQ Data

AQ, along with industry veteran Kevin Eaton, recently presented a webinar providing data-driven insights into the FES market in 2020 and what these trends mean for our industry moving forward. Read on for a recap of the presentation.


The last 12 months have proven challenging as restaurants faced unprecedented operational restrictions due to COVID-19 exposure risks. Business strategies were adjusted to reduce the negative impact on revenue, which was evident in our findings from AQ’s overall 2020 data analysis. AQ’s David Demres and James Eby alongside Kevin Eaton, President of Eaton Marketing and outgoing President of MAFSI, presented data findings and forecast projections for 2021.

Data & Pricing Analysis

AQ’s analysis begins with data cleanup; we removed outlier quotes to retain as much of the “real” data as possible. This heavily decreased quoting volume with regards to total volume and units, but only marginally decreased the total products/categories/customers analyzed. Our team aggregated quotes by product, month, and various category levels. Through this method, we were able to pinpoint pricing trends and compare price points.

Our findings indicate that the analyzed products had an average change in prices significantly higher when reaching a selling price, with an average of around 4%. For comparison, the 2019 average change was below the 2% threshold. While the trajectory is consistent with projected trends, the timeline has moved faster than expected. A growth percentage of 2% is more in line with the original projections for the market. Still, the above results indicate that businesses opted to reset in 2020 to recoup losses. Overall, selling prices varied by segment, but all saw a considerable uptick between April and June as restaurant reopenings began impacting markets across the United States.

We saw a couple of significant data points in the product markups with considerable differences between the most quoted and least quoted categories. While the most popular categories saw an expected 3% increase, the markups for least quoted categories spiked to 9%. Tabletop and smallwares carried the highest marginal change at a 5% increase, putting its markup rate at 14%. This is another indication of COVID effects driving dealers and manufacturers to make changes to counteract the effects of lost revenue.

2020 AQ Quoting Activity

Industry sales varied overall, with performance fluctuating in accordance with pandemic-related restrictions. Q1 was the exception, having benefitted from a period of normalcy before the initial outbreak. The largest downturn took place in Q2 2020 after the initial  temporary closure announcements mandated throughout the U.S. followed bypolicies that dictated  a phased reopening. Quote activity initially signaled a dim outlook driven by the uncertainty of a rebounding economy, but we began to see signs of market stability  by analyzing Q4 results.

Curiously, the trajectory of sales throughout 2020 followed the same seasonal path as that of 2019. 2020 saw a drop in significant margin changes due to an already depressed market, making the previous year appear more volatile. While overall quoting totals shifted down in 2020, it will be interesting to follow market behavior in early 2021 as FES players seek a way out of muted volumes. Results also varied by region, with Canada seeing a spike in September and a downturn in the UK quoting volumes at the end of 2020. These findings are consistent with revolving lockdown restrictions and should not be deemed as long-term projections.

When analyzing categories, our team found that smallwares consistently quoted more units than initially projected. Warewashing and refrigeration categories remained steady, with the former including COVID-19 products that resulted in spikes throughout the year.

The impact of COVID was notable, creating operator uncertainty and reduced cash flow that resulted in market volatility. As expected, the lowest-performing weeks were around holidays, but if removed, the rest of the year had a steady performance of 30% below capacity.

What to expect in 2021

The outlook for 2021 is much more optimistic than this past year, regardless of uneven timelines based on locations. We will also see significant differences in sales by segment, with quick-serve showing the most growth. Non-chain restaurants are seemingly optimistic about returning to normalcy as their market already showed an increase in equipment orders in Q4. This represents a shift in activity as restaurant owners seemed more interested in repair options earlier in the year.

Additionally, digital trends will be a growing theme for the FES industry, as more businesses will look to cut costs through solutions that optimize their operational needs. While it’s safe to say that 2021 won’t be a completely normal year, there are many positive trends that signal a road to recovery.

These and more findings are accessible to AQ customers through the full recording of the January 2021 State of the Industry webinar via MyAQ. Additionally, you can submit questions and comments to marketing@AQ-FES.com.

Related Links: State of the FES Industry: A Data-Driven View, Investing in the Future of FES

Alex Cruz - Communications Specialist

Alex is a Communications Specialist at Revalize, AQ's parent company. Her focus is on delivering innovative content to our clients through our digital platforms. She brings with her years of experience in various B2B industries that enable her to provide a fresh perspective to our customers.

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