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Consumer Foodservice Tracking via CREST

Proprietary and Confidential

CREST: Daily interviews with 1,700+ consumers to ask about yesterday’s foodservice use– Where they went, what they ate, who they were with, how much

they spent– What motivated the visit, how they felt about the visit

Annually data on over 450,000 commercial and non-commercial foodservice visits to mine


Today’s look at the Industry

State of the Industry– How the economy has affected Foodservice– Americans’ attitudes about healthy eating– Actions taken by restaurants to incorporate health

Growth Opportunities


The Economy and its Influence on Spending


High inflation and high unemployment hindered consumer

spending

3.5 3.00.9 1.2

9.4 63.4

1.50.1

5.9

2.6

8.5 64.5

GDP DPI Inflation at home Inflation awayfrom home

Unemployment ConsumerConfidence

2010 2011

Economic recovery is technically underway.But, many Americans are still struggling

Unemployment decreased in Dec,

the lowest level since Mar ‘09

Food at home inflation

increased,making food

more expensive for many

Americans

Consumer Confidence increased in

December; the index is ending the year

exactly where it began

Continued growth, but at a slow pace

Economic Metrics

Food away from home prices

continued to rise

Source: Bureau of Economic Analysis/Bureau of Labor Statistics/Confidence Board

3rd Quarter Dec.


The unemployment rate has doubled among younger consumers and it’s changing the non-commercial user base

4.7

17.9

11.4

4.73.3 3.1 3.5

9.6

30.5

19.4

9.97.9 7.4 7.0

9.1

28.3

19.2

9.67.3 6.8 6.8

TotalConsumers

16-17 18-24 25-34 35-49 50-64 65+

Q3 2007Q3 2010Q3 2011

Unemployment Rate by Age Group

Source: Bureau of Labor Statistics

Pre‐recession


Consumer confidence remains at very low levels, inhibiting spending everywhere, not just foodservice

0

20

40

60

80

100

120

140

160

Dec '03 Dec '04 Dec '05 Dec '06 Dec '07 Dec '08 Dec '09 Dec '10 Dec'11

Present Situation Expectations Consumer Confidence Index

Index: 1985 = 100

Dec ’11Confidence Index 64.5Present 46.7Expectations 76.4

Source: The Confidence Board


How are Non-Commercial Channels performing compared to Commercial Restaurants?


68%

19%

8%2%

2%1%

0%

2%

-2%

-1%

US Foodservice Industry Traffic

Quick-Service Restaurants

All Other Non-Commercial*

Total Foodservice68 Billion Visits

YE Sep ‘11 Traffic 0%

Total Foodservice68 Billion Visits

YE Sep ‘11 Traffic 0%

* All Other Non-Commercial includes Vending

In the past year, key channels of interest have performed better than other Non-Commercial channels

1%

Business & Industry

Source: The NPD Group/CREST OnSite®/YE Sep ’11

Hospitals

College & University

B&I, C&U, and Hospital channels exclude vending

(excl. patient feeding)

Full-Service Restaurants

-2%


Over one-quarter fewer visits made to B&I cafeterias since 2007; C&U and Hospital cafeterias have held up better

YE

Mar

'07

YE

Jun

'07

YE

Sep

'07

YE

Dec

'07

YE

Mar

'08

YE

Jun

'08

YE

Sep

'08

YE

Dec

'08

YE

Mar

'09

YE

Jun

'09

YE

Sep

'09

YE

Dec

'09

YE

Mar

'10

YE

Jun

'10

YE

Sep

'10

YE

Dec

'10

YE

Mar

'11

YE

Jun

'11

YE

Sep

'11

Cafeteria Traffic (000s)

C&U Cafeteria

B&I Cafeteria

Hospital Cafeteria

Source: The NPD Group/CREST OnSite®

‘Official’ start of recession

Since 2007C&U: ~50% of gains sourced to Lunch

B&I: ~40% of declines sourced to Morning Meal; ~40% to LunchHospital: gains at Lunch offset declines at Morning Meal and P.M. Snack


B&I cafeteria users are getting older; little change at C&U and Hospital cafeterias

B&I C&U Hospital

YE Sep '07 YE Sep '11 YE Sep '07 YE Sep '11 YE Sep '07 YE Sep '11

Under 25 7 5 86 85 9 8

25-34 21 20 5 6 20 1935-49 41 40 4 4 32 3250+ 31 35 5 5 39 41

Who is the Cafeteria Consumer?Share of Traffic


Are your food offerings changing along with your customers?


. . . And these B&I cafeteria visitors are utilizing morning meal more; what do you menu in the morning?

Morning Meal LunchYE Sep'07 YE Sep'11 YE Sep'07 YE Sep'11

B&I Cafeteria

Under 35 29% 25% 25% 24%

35-49 40% 37% 42% 42%

50+ 31% 38% 33% 34%

Commercial RestaurantsUnder 35 40% 37% 44% 41%

35-49 28% 26% 27% 25%

50+ 32% 37% 29% 34%


Age Distribution by Daypart


50+ year olds are more inclined to seek out a healthy meal than other age groups

33 3824 29

24 22

2223

16 16

1411

27 2440 37

Total Visits Healthy/Light Meal

Total Visits Healthy/Light Meal

Under 25

25-34

35-49

50+

Share of Visits at Total Restaurants

Source: The NPD Group/CREST OnSite®/Jan-Jun’11Cafeterias = B&I, C&U, and Hospital Cafeterias

Commercial Restaurants Cafeterias


The average age of the population will continue to get older; the importance of those 50+ will continue to grow

LT1 4 8 12 16 20 24 28 32 36 40 44 48 52 56 60 64 68 72 76 80 84 88 92 96 100

F201920092004

Today & Ten Years from Now

*Source: U.S. Census Bureau – 2009 vs. 2019

Age:

No. o

f Indiv

iduals

in th

e Pop

ulatio

n

Distribution of the Population by Age*

Are you planning ahead for this change?


Americans’ Health Statusand Health Concerns

17


Despite all the effort and educational resources, much of America is overweight or obese

Note: Sample is approximately 3,700 adults per year of which 90% provide food and beverage intake, height, and weight information. Overweight is BMI of 25- 29.9, Obese is BMI of 30+

Source: The NPD Group/HealthTrack /Years Ending Feb.

Percent of Adults Overweight/Obese

1990 19902010 2010

31%34%

32%

16%

Overweight Obese


Yet “Health” seems to be everywhere these days …

However…


54

56 5755

5657

59 59 59

6263

6361 61 61 60 61

5961 62

'91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10

“I would like to lose at least 20 pounds.” Percent of Homemakers Completely/Mostly/Somewhat Agreeing with the Statement

Despite our collective weight issues, there seems to be little change in Americans’ interest to lose weight

Source: The NPD Group/National Eating Trends®/Year Ending Feb.


0%

10%

20%

30%

40%

50%

60%

Clearly older Americans are dieting more than younger adults

65+

55-64

45-54

35-44

18-34

Source: The NPD Group/National Eating Trends® Weekly Diet Survey

Percent of Adults By Age on Any Diet


We seemed to be more concerned about our health in the ’80s than we are today

“A person should be very cautious in serving foods with ...”Percent of Respondents that Completely Agree (Top Box) with the Statement:

Source: The NPD Group/National Eating Trends® Nutrition Survey/Years Ending Feb.

Late ’80s Early ’90s Late ’90s Early ’00s

… at least in terms of concerns about harmful substances in our diet!

Late ’00s

FatSalt

Trans Fat

CholesterolSugarCaffeine

Carbohydrates

0

10

20

30

40

50

60

'85 '86 '87 '88 '89 '90 '91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 ‘10


How Does This Carry Over to Restaurants?


Always Or Most Of The Time

About Half The Time

When You Eat At Home

Consumers Describe Away-From-Home and At-Home Eating Habits

Americans are less concerned about eating healthy meals away from home than when they eat at home

When You GoOut To Eat

Sometimes

Rarely/Never

I Eat Healthful Meals:

Source: The NPD Group/Consumers Define Healthy Eating When They Go Out To Eat/Dec ‘10


8%

6%

5%

17%

6%

23%

13%

14%

9%

41%

10%

12%

14%

13%

20%

20%

24%

32%

36%

43%

Healthy Choices/Wanted a Light Meal

Good Variety of Foods to Choose

Other's Choice/I Didn't Decide

Did Not Have Time/Hurry

Quality of Food

Always/Regularly Go There

Good Price

I Like It There

Special Taste/Craving/Specific Menu Item

Convenient Location

CommercialRestaurants

Non-CommercialOutlets

Source: The NPD Group/CREST OnSite®/Jan-Jun’11

Reason for Visiting – Total Foodservice

Consumer motivation for healthy/light meals ranks among the lowest drivers of foodservice traffic


64%

30%

28%

20%

16%

12%

10%

10%

9%

8%

Convenient Location



Good Price

I Like It There



Quality of Food


Family Member/I Work There

Reason for Visiting – Total Occasions

Convenience, habit, and in a hurry more important drivers of B&I cafeteria usage than seeking healthy/light meals

B&I Cafeteria

Source: The NPD Group/CREST OnSite®/Jan-Jun‘11

M

LM = more important to Morning Meal = more important to Lunch

L

M

M

M


53%

39%

20%

16%

10%

10%

8%

7%

7%

6%

Convenient Location


I Like It There


Good Price



Quality of Food


Other's Choice/I Didn't Decide


Convenience, habit, and in a hurry also most important drivers of C&U cafeteria usage

C&U Cafeteria


L = more important to Lunch

L

S

S = more important to Supper


57%

25%

24%

22%

19%

14%

10%

8%

8%

7%

Convenient Location



Family Member/I Work There

Good Price

I Like It There


Quality of Food




Convenience, habit, and in a hurry also most important drivers of Hospital cafeteria usage

Hospital Cafeteria


LM = more important to Morning Meal = more important to Lunch

L

L

M

L

L

M

L

L


Quality Portion Size Salads Fat Content Beverage ChoicesBalanced Meal Cooking Method Protein Low Calorie Sugar Content

Natural

Organic

Nutritious

Local source

W/Vitamins

Smaller portions

No overeating

Eat some/ leave rest

More vegetables

w/meal

Well balanced food groups

More fruit

Grilled

BroiledRoasted

Baked

Good fats/oils

low fat items

No fatty food

Lean meat

Chicken

Beef

Right portions

Add salad

No fried food/

Fresh ingredients

Follow portion control

Steamed

No greasy foods

Fish

TurkeyBeans/

tofu//pork/ shellfish

Stir friedRaw/uncooked

Less protein or meat Boiled/fried

Water

No sugary drinks

Coffee

TeaNo soda/popNo alcohol

Sugar subs.

Limit sweets

Less sugar

No high fructose syrup

No sugar

Total Non-Commercial – Healthy Eating Definition as Described by Consumers

Salads

Low Calorie

The feature of greatest importance to consumers in defining “Healthy” eating when they use a Non-Commercial outlet is food quality, which is further defined as fresh ingredients



Quality Portion Size Cooking Method Fat Content Low CalorieBalanced Meal Salads Protein Lighter Fare Bev. Choices

Same general order of importance for Work Place Cafeterias

Natural

Organic

Nutritious

Local source

W/Vitamins

Smaller portions

No overeating


More vegetables

w/meal


More fruit

BroiledRoasted

Baked

Raw/uncooked

Good fats/oils

Low fat items

No fatty food

Lean meat

Chicken

Beef

Right portions

Add salad

Less protein or meat

No fried food

Fresh ingredients


Steamed No greasy foods

Fish

Turkey

Pork/beans/ tofu

Shellfish/none

Grilled

Fried/stir fried

Boiled

No heavy sauces/gravy

Sauces/gravy on side

No mayo

No cheese/ sauces

No breading

No cream sauces/gravy

Coffee

Water

No sugary drinks

No alcohol

Tea

No soda/pop

Work Place Cafeteria – Healthy Eating Definition as Described by Consumers

Salads

Low Calorie



Quality Portion Size Salads Protein Low CalorieBalanced Meal Cooking Method Fat Content Beverage Choices Carbohydrates

College Cafeteria – Healthy Eating Definition as Described by Consumers

The concept of Fresh is most important in C&U locations; does this play out as locally sourced?

Natural

Organic

Nutritious

Local source

W/Vitamins

Smaller portions

No overeating


More vegetables

w/meal


More fruitBroiled/ Roasted

Baked

Raw/uncooked

Good fats/oils

Low fat items

No fatty food

Lean meat

Chicken

Beef

Right portions

Add salad

No fried food

Fresh ingredients


Steamed

No greasy foods

Fish

Turkey

Pork/tofu

Grilled

Fried/stir friedBoiled

Water

No soda/pop

No sugary drinks

Coffee

Tea

No alcohol

Whole grains/wheat

Beans/legumes Less carbs/starches

No carbs/ starches

High fiberShellfish/none

Salads

Low Calorie



Which Chains Rank High When Customers are Looking for a Healthy/Light Meal?


1. Sweet Tomato/Souplantation 52%

2. Jamba Juice 35%

3. Subway 32%

4. El Pollo Loco 29%

5. Boston Market 23%

6. McAlister's Deli 22%

7. Panera 22%

8. Chipotle 17%

9. Jason’s Deli 17%

10. Mimi’s Café 15%

Top Ten Chains Reason for Visit Rating: Healthy/Light Meal

Source: The NPD Group/CREST®/Jan-Jun’11

The chains that rank highest for healthy/light meal as a visit motivator offer the greatest customization

IndustryAverage

10%

Chains ranked on share among respondents seeking a healthy/light meal


No real surprises on the top healthy foods and beverages at Commercial Restaurants

Top 10 FoodsSalads (Main Dish + Side)

Salty SnacksNon-Fried Vegetables

Turkey/Turkey Club SandwichGrilled Chicken Sandwich

Cold Cut ComboMexican

SoupRiceFruit

Top BeveragesBottled Water

SmoothiesHot Tea

Top Foods and Beverages Purchased on a Healthy/Light Occasion at Commercial Restaurants

Foods ranked on menu importance among respondents seeking a healthy/light mealSource: The NPD Group/CREST®/Jan-Jun’11


And, no real surprises on the top healthy foods and beverages at Cafeterias

Salads (Main Dish + Side)

Sandwiches (excl. burgers)

Tap WaterNon-Fried Vegetables

SoupBottled Water

CoffeeDiet CSDsIced Tea

Fruit

Non-Fried VegetablesSalads (Main Dish + Side)


Tap WaterCoffee

Diet CSDsSoupEggs

Salads (Main Dish + Side)


Tap WaterNon-Fried Vegetables

MilkFruitJuice

Bottled WaterTea (Hot + Iced)

Top Foods and Beverages Purchased on a Healthy/Light Occasion

C&U CafeteriaB&I Cafeteria Hospital Cafeteria

Foods ranked on menu importance among respondents seeking a healthy/light mealSource: The NPD Group/CREST OnSite®/Jan-Jun’11


How are Perceived Healthy Foods Performing vs. Commercial Restaurants

In the Morning and at Lunch

A Few Examples


Healthy: Hot Cereal is more important in Cafeterias

5.45.9 5.8

6.3

7.45.4

8.5

5.8

7.7 8.0

0.3 0.40.8 1.0

2.0

YE Sep'07 YE Sep'08 YE Sep'09 YE Sep'10 YE Sep'11

Hot Cereal Menu Importance at Morning Meal

*Commercial excluding Retail Source: The NPD Group/CREST OnSite

Menu importance = % of meals that include item

B&I Cafeteria

Hospital Cafeteria

Commercial*


Healthy: Snack Bars more important in Non-Commercial than in Commercial outlets

5.2

5.15.4 5.1

5.9

1.4 1.3 1.3 1.2 1.3

5.8

4.8

6.05.5

5.8


Cereal/Snack/Granola/Energy Bars Menu Importance at Morning Meal

**Commercial including Retail All channels include Vending Source: The NPD Group/CREST OnSite


B&I

C&U

Commercial**


Healthy: Yogurt more important at Non-Commercial than Commercial outlets

3.3

2.22.6 2.8 3.0

0.7 0.9 0.8 1.0 1.0

5.04.4

5.2

6.9


Yogurt Menu Importance at Morning Meal

Source: The NPD Group/CREST OnSite


B&I Cafeteria

Commercial*

C&U Cafeteria

*Commercial excluding Retail


Healthy: Overall importance of Vegetarian meals remains low, but still more important at Cafeterias

1.1

1.6 1.5 1.61.9

0.9 1.1 1.11.3 1.2

2.2

2.83.0

2.7 2.8


Vegetarian (Entrees & Meatless Burgers/Sandwiches) Menu Importance at Lunch



B&I Cafeteria

Commercial*

C&U Cafeteria


Healthy: Main Dish Salad importance higher at Cafeterias.Does ‘local sourcing’ help?

23.224.9 25.2 24.6 24.7

21.323.0

22.021.1 21.0

14.2 13.5 12.9 12.7 12.3

19.3 20.0

18.017.1 17.5


Total Salads Menu Importance at Lunch



B&I Cafeteria

Hospital Cafeteria

Commercial*

C&U Cafeteria


Healthy: Bottled Water more important at Cafeterias

12.7

12.8

11.0 11.210.2

11.5

9.8 10.7 10.3

11.9

3.5 3.5 3.1 3.3 3.3

14.7

12.211.3 11.1

12.6


Bottled Water Menu Importance at Lunch



B&I Cafeteria

Hospital Cafeteria

Commercial*

C&U Cafeteria


Healthy: Iced Tea least important at C&U Cafeteria

8.4

10.8 9.811.5 11.411.4

12.3 10.7

13.212.111.7

12.4 12.613.2 13.3

6.7

8.49.3

9.8

8.5


Iced Tea Menu Importance at Lunch



B&I Cafeteria

Hospital Cafeteria

Commercial*

C&U Cafeteria


Opportunities for GrowthHave you thought about . . .


$5.14

$12.30

$4.17

$5.47

$3.90

QSR

FSR

B&I Cafeteria

C&U Cafeteria

Hospital Cafeteria

Avg. Eater Check (Paid Occasions)

Average check at B&I and Hospital is lower than Fast Food restaurants – do your patrons know that? They should!

$4.11

$8.59

$3.03

$5.06

$3.10

$5.67

$10.79

$4.80

$5.55

$4.30

Source: The NPD Group/CREST OnSite®/YE Sep’11

$6.32

$14.63

$4.58

$6.01

$4.50

Morning Meal Lunch Supper


7% 8% 8% 7% 8%


Restaurants do a better job of promoting ‘value’;How can Cafeterias create a better value proposition?

% of Visits on Retail Type Deals*

QSR

B&I Cafeteria

*Retail Type Deals: Coupons, Combos, Daily Specials, Discounted Price, Value Menu, Buy Some/Get Some & Merchandise Offer


C&U Cafeteria

Hospital Cafeteria

9% 10% 9% 9% 9%

18% 19% 21% 21% 21%

7% 9% 8% 8% 8%


You have a great opportunity to capitalize on

growing interest in eating Breakfastaway from home


Why we choose to have a Morning Meal prepared by others?

It’s convenient Increased availability…both venues

and products Low cost I can sleep later


So what’s been going on in Morning Meal?Innovation and Promotion continue to grow

Burger King turns to Seattle's Best coffee and new menu items

IT’S ALL ABOUT COFFEE IN THE MORNING!


QSR Morning Meal promotions seem to be enticing consumers back at the expense of B&I cafeteria

-2%-5%

-10%-13%

-24%-21%

-1% 0%

-4%

1%-2%

0%

-6%

-11%-8%

-7%-5%

4%

Apr-Sep'07 Oct-Mar'08 Apr-Sep'08 Oct-Mar'09 Apr-Sep'09 Oct-Mar'10 Apr-Sep'10 Oct-Mar'11 Apr-Sep'11

B&I Cafeteria QSR Prior at Work/On the way to Work

Morning Meal Traffic Percent Change vs. Year Ago 6 Month Trend



In the most recent year, B&I cafeteria visits have outpaced Fast Food at Lunch

-2%1%

-4%

-13%-17%

-7% -1%

1% 1%4% 3%

-3%-5%

-11%-9%

0%

-1%-3%

Apr-Sep'07 Oct-Mar'08 Apr-Sep'08 Oct-Mar'09 Apr-Sep'09 Oct-Mar'10 Apr-Sep'10 Oct-Mar'11 Apr-Sep'11

B&I Cafeteria QSR Prior at Work/On the way to Work

Lunch Traffic Percent Change vs. Year Ago 6 Month Trend



Despite a difficult economic situation, consumers continue to Snack in the afternoon. What do you offer after Lunch?

Daypart Traffic Distribution

PCYA = Percent Change vs. Year Ago Source: The NPD Group/CREST OnSite

22%

34%

27%

17%

Morning MealLunchSupperP.M. Snack

QSR

26%

52%

16%

6%

Cafeterias

Cafeterias = B&I, C&U, and Hospital Cafeterias


Top Foods and Beverages at Fast Food Afternoon Snack

Afternoon Snacks include many ‘Main Meal’ foods and beverages

Ranked on Menu Importance = servings/traffic

Source: The NPD Group/CREST OnSite®/YE Sep’11

FoodsSalty Snacks 12.0Ice Cream 8.5Burgers 8.3French Fries 7.8Candy/Candy Bar 5.7Cookies 4.1Mexican (incl Nachos) 3.9Donuts 3.4Chicken Nuggets/Strips 3.0Breaded Chicken Sandwich 2.7

BeveragesRegular CSDs 15.8Iced/Frozen/Slush Coffee 6.8Iced Tea 6.1Diet CSDs 6.0Bottled Water 5.7Traditional Coffee 5.3Cappuccino/Espresso/Latte 5.1Frozen/Slushy Soft Drinks 4.0Non-Carb Soft Drinks 3.4Shakes/Malts/Floats 3.0Smoothies 3.0

Avg. Eater Check Paid Occasions: $3.36


Some Final Thoughts


As You Think About the Future . . .

Employment will grow marginally through 2012 – your captive base of users will not return to levels seen in 2007/2008 for years, if ever– It’s a share fight for visits – your competition is primarily Fast Food

restaurants– How can you better position yourself to potential users?

How much “healthy” food do you have on your menu?– There is a growing interest among older visitors

Focus on Value: But, value does not mean discount– Time and convenience are your advantages– Show potential visitors the value of the meal they get at your location

Do you menu the right foods to compete? – How do you innovate and does anybody notice?– Are you watching what restaurants are doing?– Coffee in the Morning is a deal breaker

Source: The NPD Group/CREST® & CREST OnSite®


Thank You!

Warren SolochekVice President

The NPD Group847-692-1783

[email protected]

Documents

All copyrightable text and graphics, the selection, arrangement, … · 2018. 4. 4. · Proprietary and Confidential 4 Consumer Foodservice Tracking via CREST Proprietary and Confidential