State of Technomic Inc.

Transcription

1 State of Technomic Inc.

2 Today s agenda Retail foodservice performance in 2016 Consumer attitudes and behaviors Retail foodservice menu trends Emerging channels: opportunity or threat? What s next? 2017 Technomic Inc. 2

3 Retail Foodservice Performance 2017 Technomic Inc. 3

4 Foodservice segment performance (2016) Supermarket foodservice Senior living Catering Fast casual 8.6% 7.9% 7.8% 7.5% Lodging Fine dining Hospitals Recreation C-store foodservice Fast food Full service restaurants 5.3% 5.2% 4.8% 4.8% 3.9% 3.9% 3.5% 2017 Technomic Inc.

5 Supermarket FS performance by tier Tier Definition CAGR ( 14-16) 1 Foodservice specialists blur the line between supermarkets and restaurants. Gourmet menu items, limited table service, a warm atmosphere, and restaurant-type amenities likely exist. 11.3% 2 Destination supermarkets have a comprehensive perimeter that offers extensive choice across cuisine types. The perimeter often contains MTO stations, café seating, and well-trained service. 10.5% 3 Prepared Foods Departments have generally shifted focus away from meats and cheeses and to ready-to-eat or ready-to-heat meals. In most cases, shoppers have the ability to customize orders and there may be some basic in-store seating. 7.6% 4 Extended Delis, while still emphasizing sliced meats and cheeses, typically offer customers several hot meal alternatives as well as a ready-to-eat cooler selection. 6.5% 2017 Technomic Inc.

6 Tier descriptions: c-store FS BASIC Traditional hot/cold beverages Limited roller grill, grab-and-go, condiments Limited merchandising/signage PREMIUM Some specialty beverages Broader roller grill, grab-andgo, condiment offerings Prominent FS merchandising SUPER-PREMIUM Made-to-order, on site preparation Fresh, quality ingredients FS a focal point of store design Technomic Inc. 6

7 Convenience store FS evolution Basic Premium Superpremium 88% 9% 3% Year over Year Change Technomic Inc. 7

8 Consumer Attitudes and Behavior 2017 Technomic Inc. 8

9 Retail FS attribute importance 92% Store is clean 91% Taste/flavor of the food 90% Food quality 88% Good value through low prices 88% Convenient location/ access

10 What else is important to heavy users? Good value through prepared foods deals Handles payment in timely fashion Convenient store hours Convenient parking Knowledgeable staff

11 Supermarket FS food perceptions When you think of supermarket prepared foods, which of the following first come to mind? Item Primary Rotisserie chicken 48% Fried chicken 28 Sandwich (cold) 20 Potato salad 16 Salad bar 14 Pasta salad 13 Pizza (by the slice) 12 Chicken wings 11 Soup (station) 11 Sushi 10 Baked goods 10 Prepared green salad 9 Pizza (take and bake) 8 Baked pasta 7 Baked chicken 7 Item Primary Potato sides (mashed, baked) 7% Sandwich wrap 7 Soup (grab-n-go) 7 Sandwich (hot) 6 Fruit salad 6 Mexican entrees 5 Mediterranean foods 4 Chicken fingers 4 Asian foods 3 Beef/steak 3 Breakfast entrees 3 Fish/shrimp/shellfish 3 Antipasto salad 2 Pork 1

12 Supermarket FS food needs In which of the following would you like to see more variety in what prepared foods department offer? Top 10 Mexican foods 22% Asian dishes Pasta Fish/shrimp/shellfish Pizza by the slice Breakfast entrees Mediterranean foods Chicken wings Beef/steak Baked goods 17% 16% 16% 16% 14% 13% 12% 11% 11%

13 Supermarket FS - purchase behavior How would you BEST describe your MOST RECENT prepared foods purchase from a supermarket? 9% My prepared foods purchase was completely unplanned 9% 31% I planned to buy an item but didn t know exactly what I was going to get 19% I planned to buy a specific item and that is all that I bought I planned to buy a specific prepared entrée but my purchase of additional side item(s) was unplanned 33% I planned to buy a specific prepared foods meal (I knew the entrée and the sides I wanted)

14 Supermarket FS - purchase behavior When had you decided that you were going to purchase that specific item(s) from the prepared foods department? 13% 5% 27% Earlier in the week Early in the day On my way to the store but before I arrived 55% On my way into the store

15 1 Supermarket FS - purchase behavior On this most recent prepared foods purchase occasion, what was the top reason you purchased the main item that you did? I was in the mood for that type of food 18% Looked like it would taste really good 14% It looked freshly made 13% It is my usual purchase 11% The price was right 11% It was grab-n-go; I didn't have to ask for help 11%

16 1 Fresh perceptions - consumers Is your perception of fresh based more on the appearance of the food or any description provided 20% Appearance 80% Menu description

17 C-store FS - purchase behavior How would the following descriptors influence your decision to purchase a prepared food item at c-stores? Gluten-free 52% 19% 30% Non-GMO 38% 26% 36% Type of frying oil 28% 33% 38% Made-to-order 11% 27% 62% Freshness information 9% 30% 61% Not factor into decision More likely to purchase, but not pay more for More likely to purchase and pay more for

18 Retail Foodservice: Menu Trends 2017 Technomic Inc. 18

19 Reinventing chicken sparking interest in a legacy category with health, flavor innovations Fairway Market now offering antibiotic-free, vegetarian-fed rotisserie chicken New Seasons Market now promoting organic whole roasted chicken Antibiotic-free free range all-natural and organic

20 2 FORECAST: Spicy chicken sandwiches

21 Flavor synergy uncommon flavor combinations that make a surprisingly good mix H-E-B bacon-wrapped jalapeños filled with barbecue-marinated chicken QuickChek sausage, egg and cheese on a honey butter biscuit with grape jelly QuikTrip seasonal milkshake flavored with maple and bacon bold flavors ethnic ingredients mashup appeal

22 FORECAST: Multiple flavor callouts On trend: Wawa s Wacky Wildwood hoagie with Old Bay seasoning, ranch and chipotle

23 Outside-the-box pizza from premium to playful, operators amp up pizza game Rutter s Farms Stores now offering customizable bakedto-order pies Dorothy Lane Market premium LTO with clams and Calabrese peppers QuikTrip breakfast pizza with egg, sausage, bacon, cheese and sausage gravy all-day occasions made-to-order custom built

24 FORECAST: Built for the season On trend: Kwik Trip s Oktoberfest-style Bratwurst Pizza with cheese, onions and mustard cream sauce

25 Meal planning Promoting meal solutions that offer flexibility throughout the week I would like more retail stores to offer options that help me plan future meals. 56% 48% 42% 43% 44% 51% 38% 47% 32% 39% 39% % 2016

26 FORECAST: Meal kits On trend: Whole Foods partnering with plant-based meal solutions company Purple Carrot

27 Emerging Channels: Opportunity or Threat? 2017 Technomic Inc. 27

28 Transformative decade s First known restaurant 1971 Starbucks first location 1955 Ray Kroc joins McDonald s 1993 Chipotle founded Early 2000 Fast casual takes off 1917 Snacking takes off 1947 First restaurant drive-thru Today On-demand gains momentum 2010ish RMS makes impact 1921 First drive-in restaurants 2013 Foodservice everywhere

29 Life moves pretty fast. If you don t stop and look around once in a while, you could miss it Technomic Inc. Image credit to answers.com 29

30 Meal kit subscription market 51% CAGR Consumer Expenditures Forecast ($ million) Household Exposure (households receiving at least one $8.8B order per year) 13% $1B %

31 What is 3rd party delivery? ORDERED ONLINE OR VIA MOBILE APP NOT DELIVERED BY THE RESTAURANT DRIVERS DON T WEAR RESTAURANT UNIFORM NOT JUST PIZZA INDUSTRY DISRUPTOR

32 Meal kits and third party provide unique differentiators Meal kits Can try new foods Fresh ingredients Third-party delivery Can try new foods To satisfy a craving Allows me to try a restaurant I would not have before

33 Non-users gravitate to grocery delivery, though familiarity is a factor Would consider using in the future 60% 58% 56% 54% 47% Grocery Delivery Delivery-Only Restaurants Third-Party Delivery Prepared Meal Services Meal Kits

34 Emerging alternatives: consumer response 10% 8% Good fit for my daily life 8% 14% 9% Meal kits Third-party delivery A prepared meal service Grocery delivery Delivery only restaurant kitchen Way to help me add variety Good to use sometimes, but not everyday Good for my long-term diet 8% 8% 6% 7% 4% 3% 23% 14% 18% 16% 20% 22% 20% 23% 28%

35 What s Next? 2017 Technomic Inc. 35

36 Supermarkets will double down on foodservice based on performance 8.6% 2016

37 changing shopper behavior Monthly usage 10+ times 7-9 times 9% 11% 8% 12% times 23% 25% times 42% 38% -4 1 time 17% 14%

38 and customer feedback How important is the prepared foods department in your choice of supermarket to shop at? 6% 2% 15% 36% Very important Important 41% Neither important or unimportant Unimportant Very unimportant 2017 Technomic Inc.

39 Supermarket FS will pursue breakfast

40 Major supermarket banners will continue to transform

41 Traditional departments will transform All departments in it together /lines blurring Fresh meat Fresh seafood Produce Prepared foods

42 Questions? Wade Hanson Principal