Welcome NRA s Fast Casual Industry Council Presents Lessons From Leaders 1
Agenda 1. Welcome 2. Overview of Today s Session 3. State of the Fast Casual Industry 4. CEO Introductions 5. Lessons From Leaders 6. Audience Participation
Defining Fast Casual 3
Defining the Fast Casual Operator Full View Preparation Food Quality Fine Ingredients Flexible Offerings Friendly Employees Fast Casual Appeals Fitter, Wholesome Food Fresh Fast Service Fair Price First-Rate Décor Source: Technomic 4
Fast Casual Drivers Demographic Alignment Strong Consumer Appeals Unique Positioning Source: Technomic 5
Fast Casual Is a Subset of Limited Service FCR $31B 14% QSR Fast food <$9.00 check Fast service system Strong takeout orientation QSR $192B 86% 2012 Total LSR: $223B* FCR Better quality offerings $9-13 check Fair price Even split: takeout / on-premise *Sales, including alcohol. Source: Technomic 6
Fast Casual Performance 2012 Fast Casual Industry Total = $31B 2012 FCR Sales Growth All Other FCRs* $6.8B 22% 60 FCRs Within Chains #101-500 $7.1B 23% 18 FCRs Within Top 100 $17.1B 55% 16% FCRs Within Top 100 8% FCRs Within Chains #101-500 13% All FCRs Key Insights The largest fast casual chains continue to grow the fastest *Restaurant independents, chains with <$36MM in sales Source: 2012, 2011 Technomic Top 500 Chain Restaurant Reports 7
Fast Casual Over-Indexes on Higher Income Groups and Younger Consumers Consumer Brand Comparison: Taco Bell vs. Chipotle Monthly+ Customers Demographic Taco Bell Chipotle Difference Income <$50k 60 44-16 Income >$50k 40 56 +16 Age: 18 24 16 22 +4 Age: 25 34 23 33 +10 Age: 35 44 22 23 +1 Age: 45 54 20 14-6 Age: 55 64 12 6-6 Age: 65+ 7 2-4 Taco Bell Survey Base: 11,510 ; Chipotle Survey Base: 3,704 Source: Technomic Consumer Restaurant Brand Metrics 8
Food Quality/Craveability Fast Casual in an Attractive Position Polished CDR $20-50 Fast Casual $8-$12 Traditional CDR $12-20 Fast Food <$8 Family Style $8-13 Price Source: Technomic 9
The Fastest Growing Chains in 2012 Are Fast Casual Chain 12 Sales ($MM) 12 Sales Growth 12 Unit Growth Positioning $249 47% 40% Barbecue Pit 380 34 19 Fireman Themed Sub Shop 348 26 15 Jersey Style Subs 260 26 26 Chicken Fingers 1,263 25 17 Gourmet Sandwiches Growth rates nominal. Source: Technomic Top 500 Report; Chains > $200 Million US Sales 10
7 of 10 Fastest-Growing Chains over the Past Five Years Are FCRs Total % Growth 2007-2012 470% 140% 263 139 160 132 157 128 142 126 Chains over $200MM in sales Source: 2008-2013 Technomic Top 500 reports 11
FCR Has Taken Share from Limited Service FCR Share of LSR $8B $18B $31B 14% 6% 9% 2002 2007 2012 = Fast Casual Sales Source: Technomic 12
FCR Will Represent 35% of LSR Dollar Growth 2017(F) LSR: $278B Share of 12 17 LSR $ Growth FCR $50B 18% FCR 35% QSR $228B 82% QSR 65% Key Insights FCR continues to be a major growth engine To gain 4 share points on QSR Source: Technomic 13
FCR Transformation Continues Pioneers 2 nd Generation Today s Leaders Next Generation Evolution 1980s 1990s 2000s 2010s Source: Technomic 14
FCR to Outpace QSR Growth 2012-2017 CAGR Forecast 4.5% 10.0% 3.5% 12.0% FCR Subsegments 10.0% 9.5% 9.0% 7.0% 6.5% Total LSR FCR QSR Burger Specialty Mexican Bakery Café Sandwich Chicken Key Insights Expect more innovation, new concept development in specialty FCRs (e.g., Italian, BBQ, Asian) Nominal; assumes 2.5% inflation. Source: Technomic 15
Questions? Darren Tristano Executive Vice President 312-506-3850 dtristano@technomic.com 16
Welcome Leaders 17
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CORNER BAKERY CAFE May 2013
Corner Bakery Cafe A Strong Heritage, Evolving Over 22 Years Began in 1991 on the Corner of Clark & Grand, Chicago Huntington Beach, 2003 Longview, Texas, May 6, 2013
Corner Bakery Cafe A Neighborhood Gathering Place
Corner Bakery Cafe Points of Differentiation Signature scrambled-toorder breakfasts The Panini Authority Hand-crafted pastas cooked over an open flame Healthy Halo, including 100 Under 600 and all dishes customizable to order Fresh from the oven sweets and signature beverages, hand-crafted to order Ingredient-inspired menu with over 40 types of fresh produce every day Best in Class Catering, fresh, flavorful and delivered. Last minute orders welcome Neighborhood Gathering Spot, offering a warmth, familiarity and genuine hospitality not found elsewhere 22
Positioned for Success Right Brand Right Time for Growth Right Segment Right Economic Model Right Team
Proven Portability & Room To Grow 0/0/18 0/0/6 0/3/51 0/0/16 X 0/6/10 0/1/34 33/0/0 X 6/0/0 35/3/38 0/3/4 0/5/9 0/0/11 5/0/0 5/0/0 DC market) 0/2/15 0/2/3 4/0/0 21/12/53 0/3/22 109/41/288 Open Company Open Franchises Franchises under Development Cafes not yet open, but Area Development Agreement in place.
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Follow the conversation #fcic 28