Hong Kong's Food and Beverage Industry: Recovery and New Trends

Hong Kong's food and beverage (F&B) industry is emerging from its most challenging period in decades, with official data indicating a steady, if uneven, recovery. According to the Census and Statistics Department (C&SD), the value of total receipts for restaurants in the second quarter of 2024 was provisionally estimated at HK$26.9 billion, a 1.6% increase compared with the same quarter in 2023. While this growth is modest, it marks the fifth consecutive quarter of year-on-year expansion, signalling that the sector has stabilised after the pandemic-induced contraction.

The recovery, however, is not uniform across all segments. Casual dining and quick-service restaurants (QSRs) are outperforming fine-dining establishments, and operators are adapting their business models to meet new consumer expectations around value, sustainability, and digital convenience. For anyone entering or expanding within this sector, understanding both the market dynamics and the regulatory framework — including HSIC classification and licensing under the Food Business Regulation (Cap. 132X) — is essential.

Corporate Execution Layer

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What Do the Latest Official Figures Tell Us About the Recovery?

The recovery is real but measured, with the C&SD's quarterly survey of restaurant receipts providing the clearest picture of the sector's trajectory. In the second quarter of 2024, restaurants recorded total receipts of HK$26.9 billion, up 1.6% year-on-year, while the volume of transactions rose by a more substantial 4.6% over the same period. This divergence between value and volume is telling: consumers are dining out more frequently but spending less per visit, a pattern consistent with the "value-conscious" behaviour observed across many post-pandemic markets.

Segment-level data reveals a more nuanced story. Chinese restaurants, the largest category by receipts, saw a 1.2% increase in value year-on-year, while non-Chinese restaurants recorded a 2.1% decline. By contrast, fast food outlets and QSRs posted a 3.4% increase in receipts, and bars recorded a notable 6.8% surge. These figures suggest that the recovery is being driven by everyday dining occasions rather than celebratory or premium experiences.

"The value of total receipts of restaurants in the second quarter of 2024 was provisionally estimated at $26.9 billion, representing a 1.6% increase over a year earlier. After discounting the effect of price changes, the volume of restaurant receipts increased by 4.6% in the second quarter of 2024 over a year earlier." — Census and Statistics Department, Restaurant Receipts Survey, Q2 2024

Tourism remains a critical variable. The Hong Kong Tourism Board reported approximately 11.5 million visitor arrivals in the first half of 2024, a 64% increase over the same period in 2023 but still well below the 2018 peak of over 30 million for the full year. Mainland visitors, who historically account for the majority of arrivals, are increasingly travelling independently rather than in tour groups, which has implications for where and how they dine. Operators targeting this demographic must consider location strategy, payment methods (including mainland e-wallets), and menu localisation.

What Are the Defining New Trends in Hong Kong's F&B Sector?

Three structural trends are reshaping the industry: the rise of value-driven dining, the mainstreaming of technology-enabled operations, and a decisive shift toward sustainability and health-conscious offerings. Each trend carries specific operational and compliance implications.

Value-driven dining is not merely a response to economic pressure; it reflects a permanent change in consumer expectations. The "set lunch" culture has expanded beyond business districts into evening dining, with many mid-range restaurants now offering fixed-price menus at HK$200–300 per person. According to a 2024 survey by the Hong Kong Federation of Restaurants & Related Trades, approximately 70% of member establishments reported that customers are spending less per head than in 2019, even as foot traffic recovers. Operators who have responded with smaller portion options, lunchtime promotions, and loyalty programmes are outperforming those who have maintained pre-pandemic pricing structures.

Technology adoption has moved from optional to essential. The Hong Kong Productivity Council's 2023 Digital Transformation Study found that 68% of F&B businesses had adopted at least one digital solution, up from 41% in 2020. The most common applications are online ordering systems, QR-code menus, and delivery platform integration. More sophisticated operators are deploying AI-driven inventory management and predictive demand forecasting to reduce food waste — a significant cost line given that the Environmental Protection Department estimates the F&B sector generates approximately 3,000 tonnes of food waste daily. The government's Food Waste Reduction Good Practice Guide encourages operators to adopt such measures, and some are eligible for funding support under the Recycling Fund.

Sustainability and health are no longer niche concerns. A 2023 consumer survey by the Hong Kong Trade Development Council (HKTDC) found that 61% of Hong Kong consumers are willing to pay a premium for sustainable food options, and 54% actively seek out plant-based alternatives. This has driven a proliferation of vegetarian and vegan menus, as well as a focus on locally sourced ingredients. The government's "Green Kitchen" initiatives, promoted through the Environmental Campaign Committee, provide certification and recognition for establishments that meet specific sustainability criteria. For operators, these trends represent both an opportunity for differentiation and a compliance consideration, particularly regarding accurate food labelling under the Food and Drugs (Composition and Labelling) Regulations (Cap. 132W).

How Should New Operators Classify Their Business Under HSIC?

Selecting the correct Hong Kong Standard Industrial Classification (HSIC) code is a foundational compliance step that affects business registration, statistical reporting, and eligibility for certain government schemes. The current classification, HSIC Version 2.0, was introduced by the C&SD in 2009 and remains the operative framework.

For F&B businesses, the relevant codes fall under Section I — Accommodation and Food Service Activities. The primary categories are:

• HSIC 5611 — Restaurants — covering establishments primarily engaged in selling food and beverages for immediate consumption on the premises
• HSIC 5612 — Fast food outlets and takeaway food services — for QSRs, food stalls, and delivery-focused operations
• HSIC 5613 — Mobile food service activities — for food trucks and similar mobile operations
• HSIC 5614 — Other food service activities — including catering services and industrial canteens
• HSIC 5630 — Bars and other drinking places — for establishments primarily selling alcoholic beverages

The distinction between HSIC 5611 and 5612 is particularly important. A restaurant that offers table service and a full menu should be classified under 5611, while a counter-service operation with limited seating falls under 5612. Misclassification can lead to incorrect statistical reporting and may affect your eligibility for sector-specific support programmes. The C&SD provides a detailed classification guide, and the Business Registration Office at the Inland Revenue Department (IRD) will assign the code based on the business description you provide at registration.

It is worth noting that HSIC codes are not static. The C&SD periodically reviews the classification, and the next major revision is expected to align with the international ISIC Rev. 5 framework. Operators should periodically verify that their classification remains accurate, particularly if their business model evolves — for example, a restaurant that adds a significant delivery component may warrant reclassification under HSIC 5612.

What Licences and Permits Are Required to Operate an F&B Business in Hong Kong?

Beyond business registration under the Business Registration Ordinance (Cap. 310), F&B operators must obtain a food business licence from the Food and Environmental Hygiene Department (FEHD) under the Food Business Regulation (Cap. 132X). The specific licence required depends on the nature of the operation.

The most common licences are:

• Restaurant Licence — for premises selling food for consumption on the premises, with seating provided
• Food Factory Licence — for premises preparing food for sale to other businesses or for off-site consumption
• Food Business (Fresh Provision Shop) Licence — for retail outlets selling fresh meat, fish, or poultry
• Bakery, Food Factory, and Siu Mei and Lo Mei Shop Licence — a combined licence for certain food production operations
• Liquor Licence — required under the Dutiable Commodities (Liquor) Regulations (Cap. 109B) for any establishment selling alcohol for consumption on the premises

The application process for a Restaurant Licence typically takes 8–12 weeks, and the FEHD requires detailed floor plans, a certificate of fire safety, and compliance with the Buildings Ordinance (Cap. 123) regarding ventilation and drainage. The application fee for a new restaurant licence is HK$2,540, with an annual fee of HK$2,180. These figures are set out in the Food Business Regulation and are subject to periodic review.

It is essential to note that a licence is personal to the applicant and the premises. If you change the business structure — for example, converting from a sole proprietorship to a limited company — or relocate, you must apply for a new licence. The FEHD's licensing office provides a pre-application consultation service, which is strongly recommended for first-time operators. The service allows you to discuss your proposed premises and operation with a licensing officer before submitting a formal application, significantly reducing the risk of rejection or costly modifications.

How Should Existing Operators Adapt to the New Market Reality?

For established operators, the recovery presents an opportunity to reassess and reposition. The data suggests that the most successful strategies combine operational efficiency with targeted customer engagement.

Rent renegotiation remains a priority. According to property consultancy JLL, average high-street shop rents in core retail districts declined by approximately 30–40% from their 2019 peaks, and many landlords remain willing to negotiate. Operators should benchmark their current rent against market rates and consider whether relocation to a secondary street offers better economics. The Hong Kong Retail Management Association publishes quarterly rental indices that provide useful reference points.

Menu engineering is another lever. With consumers spending less per visit, operators should analyse which items deliver the highest margins and promote those accordingly. The "value set" model — offering a limited menu at a fixed price — reduces food costs through better inventory management and kitchen efficiency. Data from the HKTDC's 2024 F&B survey indicates that restaurants offering such sets saw average transaction values increase by 8–12% compared with those maintaining à la carte-only models.

Workforce planning requires attention to the ongoing labour shortage. The government's Labour and Welfare Bureau reported that the F&B sector had approximately 18,000 unfilled vacancies as of mid-2024. The introduction of the Supplementary Labour Scheme in September 2023, which allows employers to import workers for specified sectors including food service, has provided some relief, but the application process is rigorous and requires demonstrating genuine efforts to recruit locally. Operators should also explore the Employee Retraining Board's "Special Scheme on Subsidised Training for the Catering Industry," which provides training subsidies for new entrants.

What Should You Do Before Launching or Expanding?

Before committing capital, conduct a thorough feasibility assessment that covers market demand, location economics, regulatory compliance, and operational capacity. The Hong Kong government offers several resources to support this process, including the HKTDC's industry research reports, the FEHD's licensing guidance, and the C&SD's statistical publications.

For those seeking financial support, the SME Financing Guarantee Scheme, administered by the Hong Kong Mortgage Corporation, provides loan guarantees of up to HK$18 million per enterprise. Additionally, the Trade and Industry Department's SME Export Marketing Fund and SME Development Fund offer grants for promotional activities and capability building. Eligibility for these schemes is not contingent on HSIC classification, but accurate business registration details are required.

One practical step that many operators overlook is verifying their HSIC code at the point of business registration. The IRD's Business Registration Office assigns the code based on your stated business nature, and correcting it later requires a formal amendment. Using the HSIC Code Finder tool can help you identify the correct classification before you submit your application, saving time and potential compliance issues down the line.

The Bottom Line

Hong Kong's F&B industry is recovering, but the market that emerges will not resemble the one that existed before 2020. The operators who thrive will be those who embrace value-driven pricing, adopt technology to improve efficiency, and position themselves for the sustainability-conscious consumer. The regulatory framework — from HSIC classification to FEHD licensing — is well-established, and the government has demonstrated a willingness to support the sector through funding schemes and labour initiatives.

The recovery data from the C&SD confirms that the sector has stabilised, but the 4.6% growth in transaction volume against a 1.6% growth in receipts tells the real story: consumers are returning, but they are spending differently. Adapt to that reality, and the opportunity is substantial.

Before you register your F&B business, verify your HSIC classification using our HSIC Code Finder at /hsic-finder — it takes less than a minute and ensures your business registration is accurate from day one.