2016 Restaurant Industry Forecast Annika Stensson Director Research Communications National Restaurant Association Washington, D.C. Food & Culinary Professionals Academy of Nutrition and Dietetics State of the Plate: Food and Menu Trends in 2017 Webinar Feb. 24, 2017 Agenda State of the Restaurant Industry Consumer trends Food and menu trends 1 2 2016 Restaurant Industry Forecast DEFINITION: Restaurant Industry Food Away from Home STATE OF THE RESTAURANT INDUSTRY All meals/snacks prepared away from home, including all takeout meals and beverages. 3 4 1
Restaurant Industry 2016 An Economic Powerhouse Sales: Employees: Locations: $783 billion 14.4 million 1+ million Annual sales are larger than 90% of the world s economies. Sales projected to advance by $37 billion in 2016 more than double Hollywood s annual domestic box office sales. 5 6 Where Do Consumers Spend? SPENDING CATEGORY PERCENT OF TOTAL Housing 33% Transportation 17% Food 13% Insurance/pensions 11% Health care 8% Entertainment 5% Contributions 3% Clothing 3% Other 7% Total 100% Poll question 1 Source: Bureau of Labor Statistics, 2015 Consumer Expenditure Survey; National Restaurant Association 7 7 8 2
Restaurant Industry s Share of the Food Dollar U.S Economic Outlook Potential for stronger growth ahead INDICATOR 2016 2017 2018 1955 Present Real Gross Domestic Product 1.6% 2.7% Real Disposable Personal Income 2.7% 2.2% Consumer Price Index 1.2% 2.5% 3.0% 2.5% 2.8% Total U.S. Employment 1.7% 1.5% 1.5% 1955: 25% Now: 47% 9 projections as of January 2017 10 Wholesale Food Prices Declined for Second Straight Year Annual growth in Producer Price Index All foods Headwinds Continue Into 2017 GDP growth in 2016 was the weakest since 2011. Disposable income growth slowed in 2016. Real household income is rising but remains below pre recession levels. Gas and diesel prices projected to rise in 2017. Source: Bureau of Labor Statistics *Year to date through November 2016 11 12 3
2016 Restaurant Industry Forecast Top Challenges Facing Operators DECEMBER 2014 DECEMBER 2015 DECEMBER 2016 Food Costs 31% Government 20% Government 19% Recruiting Employees 19% Recruiting Employees 22% Labor Costs 20% CONSUMER TRENDS Sales Volume 14% Labor Costs 16% Government 13% Recruiting Employees 13% The Economy 14% Sales Volume 12% The Economy 8% Food Costs 11% The Economy 12%, Restaurant Industry Tracking Survey 13 14 Quality Time Unique Experiences Consumers who say dining out is a better use of time than cooking and cleaning up. Consumers who say restaurants provide tastes and flavors that aren t easily duplicated at home. 15 16 4
Top Attributes for Choosing a Restaurant Poll question 2 Favorite items on the menu Healthy menu items Innovative/creative food Food you haven t tried before Local and eco friendly food 17 18 Noticing Healthful Options Healthy Options = Important Factor Consumers who say there are more healthful options on restaurant menus now than two years ago. Consumers who say they are ordering more healthful options in restaurants now than two years ago. 19 20 5
Interest in Diet Specific Food Restaurant operators who say their guests are more interested in diet specific food now than they were two years ago Opting for Local Sourcing Consumers who say they are more likely to visit a restaurant that offers locally sourced food items. 21 21 22 Eco Friendly Matters Sourcing Matters Restaurant operators who say their guests pay more attention to food sourcing and production than they did two years ago Consumers who say they are more likely to visit a restaurant that offers organic or environmentally friendly food. 23 24 24 6
Food Knowledge Higher Expectations Restaurant operators who say their guests are more knowledgeable about food and dining than they used to be. Restaurant operators who say their guests have higher expectations of food quality than two years ago. 25 26 2016 Restaurant Industry Forecast FOOD TRENDS What s Hot in 2017 FOOD AND MENU TRENDS 1. New cuts of meat 6. Ethnic inspired breakfast 2. Street food dishes 7. House made condiments 3. Healthful kids meals 8. Authentic ethnic cuisine 4. House made charcuterie 9. Heirloom fruit/vegetables 5. Sustainable seafood 10. African flavors 27, What s Hot in 2017 chef survey 28 7
CONCEPT TRENDS What s Hot in 2017 BEVERAGES What s Hot in 2017 1. Hyper local sourcing 6. Locally sourced meat 1. Artisan spirits 6. House made soft drinks 2. Chef driven fast casual 7. Food waste reduction 2. Onsite barrel aged drinks 7. House brewed beer 3. Clean menus 8. Meal kits 3. Local beer/wine/spirits 8. Edible cocktails 4. Environmental sustainability 9. Simplicity 4. Regional signature cocktails 9. Gourmet lemonade 5. Locally sourced produce 10. Nutrition 5. Culinary cocktails 10. Food liquor pairings, What s Hot in 2017 chef survey 29, What s Hot in 2017 chef survey 30 Perennial Favorites in 2017 TABLESERVICE RESTAURANTS 1. Fish and chips 6. Comfort food 2. French toast 7. Shellfish 3. Bacon 8. Cannoli Poll question 3 4. Mashed potatoes 9. Bread pudding 5. Barbecue 10. Zucchini, What s Hot in 2017 chef survey 31 32 8
TRENDS COOLING DOWN Movers & Shakers in 2017 TRENDS HEATING UP Trends to Watch 2017 Quinoa Sodium conscious cuisine Black rice Vegetarian cuisine Vegan cuisine Poke House made charcuterie Street food dishes Food halls Ramen Local as the new normal?: While still a hot trend, local sourcing is slowly moving toward perennial favorite. Next generation global: Non traditional ethnic cuisines and flavors becoming more mainstream. Street food getting fancy: Tableservice restaurants are getting in the game of elevated tacos, bao and kebobs. Fun with grains: Quinoa might be trending down, but other ancient grains are trending up., What s Hot in 2016 chef survey 33 34 Top Cuisines In terms of familiarity, trial and frequency of eating Top Cuisines In terms of familiarity, trial and frequency of eating Italian Regional American Mexican Mediterranean Chinese Japanese other than sushi 35 36 9
Least Known Cuisines In terms of familiarity, trial and frequency of eating Ethiopian Brazilian/ Argentinian Eating at a tableservice restaurant = Sushi Eating at a quickservice restaurant = Mexican Takeout or delivery from a restaurant = Chinese Top Cuisines for Korean Takeout from a convenience/grocery store = Ethiopian 37 38 Trending Cuisines *Growth in number of consumers who have tried these cuisines at least once Poll question 4, Global Palates: Ethnic Cuisines and Flavors in America, 2015; Ethnic Cuisines II, 1999 39 40 10
Global Palates Global Palates 80% of consumers eat at least one ethnic cuisine per month. 66% eat a wider variety of ethnic cuisines now than five years ago. 17% of consumers eat seven or more cuisines per month. 29% tried a new ethnic cuisine in the last year. Restaurants are the primary point of access for trying new cuisines, and the source where frequent eaters typically get their ethnic food. 25% like trying unconventional ingredients, like insects, brains and snails. 41 42 Global Palates Global Palates 43% say the ethnic foods they like to eat are tied to their family s ancestry or heritage. 85% of consumers say they prefer to eat ethnic cuisine in a restaurant focused on that cuisine 82% typically start with traditional staple dishes when trying a new cuisine. 69% don t really care if ethnic food is truly authentic as long as it tastes good. 75% say they like it when restaurants with mainstream menus also serve ethnic cuisine. 43 44 11
Summary Challenging operating environment in 2017, but growth opportunities exist. Consumers are more engaged in their food choices than ever. Food trends are becoming more concept based than ingredient based. Strong, evolving trends include hyper local sourcing and onsite production, diet specific food, and international cuisines. Restaurant.org/Research @WeRRestaurants /RestaurantDotOrg /NationalRestaurantAssociation Annika Stensson Director Research Communications National Restaurant Association Washington, D.C. astensson@restaurant.org 45 46 12