The Big Picture The c-store channel is sustaining growth thanks to the strong performance of leading brands Total U.S. Foodservice Industry Food, nonalcohol beverages and nonfoods (Technomic forecast—January 2020)

Segment 2019 Retail Sales Equivalent Potential Contact Nominal Growth Forecast Real Growth Forecast Points, 2019 $ Billions Share 2019 (R) 2020 (F) 2019 (R) 2020 (F)

Total Restaurants and Bars $534.296 65.1% 765,976 4.4% 4.0% 1.3% 1.1% Limited-Service Restaurants $301.329 36.7% 354,287 4.6% 4.4% 1.6% 1.6% Fast Casual $58.984 7.2% 50,218 7.8% 6.9% 4.7% 4.0% Fast Food $242.345 29.5% 304,069 3.9% 3.8% 0.8% 1.0% Full-Service Restaurants $228.751 27.9% 346,832 4.1% 3.4% 1.0% 0.6% Midscale $48.236 5.9% 85,998 3.5% 2.8% 0.5% 0.0% Casual Dining $158.928 19.4% 242,405 4.0% 3.4% 1.0% 0.6% Fine Dining $21.587 2.6% 18,429 5.5% 4.3% 2.4% 1.5%

Retailers $71.853 8.7% 201,966 4.2% 4.5% 1.1% 1.7%

Supermarket Foodservice $35.573 4.3% 44,089 5.3% 6.4% 2.2% 3.5% Convenience Stores $22.646 2.8% 139,547 4.1% 3.2% 1.1% 0.4% All Other Retailers $13.633 1.7% 18,330 1.5% 1.8% (1.5) (1.0) Travel & Leisure $86.084 10.5% 152,784 4.3% 3.8% 1.4% 1.0% Recreation $19.728 2.4% 32,180 2.5% 1.8% (0.5) (1.0) Lodging $43.749 5.3% 56,474 5.3% 4.8% 2.2% 1.9% Transportation $11.890 1.4% 5,285 4.0% 3.8% 1.8% 1.8%

Source: Technomic, Inc. All numbers preliminary and subject to change. ( ) = decline; R = revised; F = forecast The data shown does not reflect the impact of changes in portion sizes and/or sales mix. Numbers may not add due to rounding. Data may not be comparable to previous editions of this chart due to redefinitions, resegmentation and revisions. Nominal growth assumes menu price inflation rate of 3.0% for 2019 and 2.8% for 2020. Menu Developments Growth, decline, innovation and trends to watch Entrees On the menu

Top Categories Fastest-Growing Categories Sandwich Breakfast starch Mexican Mexican Pizza Salad Hot dog Sandwich Pizza Burger

Source: Technomic MenuMonitor, Q3 2018-Q3 2019 Entrees 1,833 By the numbers menu items year-over-year -5.2% growth

1,934 1,833 1,702 1,563

2016 2017 2018 2019

Source: Technomic Ignite Menu, Q3 2018-Q3 2019 Entrees What’s Trending Mexican Dishes 15.5% growth year over year

New seafood quesadillas, empanadas, burritos and taco platters

Example: Rutter’s rolled out seafood-based Mexican quesadillas, including a Fried Shrimp Quesadilla and Alaskan Cod Quesadilla Entrees What’s Trending Entree Salads 10.8% growth year over year

New varieties of chef’s salads

Example: QuickChek’s Italian Chef Salad features pepper ham, pepperoni and fresh mozzarella with roasted red peppers, banana peppers and black olives on a bed of spring mix Entrees What’s Trending Hot Dogs 9.9% growth year over year

Includes LTO hot dogs with specialty toppings

Example: rolled out a line of hot dogs on pretzel buns; its BLT Dog features bacon, lettuce and tomato on a pretzel bun and its Firehouse Dog pairs habanero sauce with pico de gallo Sandwiches On the menu

Top categories Fastest-growing Chicken categories Sandwich/Wrap Cheese Sandwich Sausage, Egg & Cheese Sausage Biscuit Sandwich/Wrap Turkey Sandwich/Wrap Egg & Choice of Protein Mixed Protein Sandwich Sandwich Build Your Own Sandwich Ham/Ham & Cheese Pork Sandwich/Wrap

Source: Technomic MenuMonitor, Q3 2018-Q3 2019 Sandwiches 1,015 By the numbers menu items year-over-year -36.8% growth

1,605

1,015 903 828

2016 2017 2018 2019

Source: Technomic MenuMonitor, Q3 2018-Q3 2019 Sandwiches What’s trending? Pork Sandwiches 36% growth year over year

Includes new rib, pulled pork and bacon sandwiches beyond breakfast

Example: GetGo’s build-your-own rib and pulled pork sandwiches; Capicola sub; and line of barbecue Smokestack sandwiches Sandwiches What’s trending? Sausage & Egg 11% growth year over year

Includes new sausage proteins, from chicken to chorizo

Example: ampm, Kum & Go and QuickChek feature chorizo sausage and egg Sandwiches What’s trending? Mixed Proteins 9% growth year over year

Includes a wide assortment of new Italian subs stacked with multiple meats

Example: Maverik’s line of Italian subs includes the Righteous Italian Sandwich, stacked with turkey, salami, pepperoni and capicola Sides On the menu

Top categories Fastest-growing Breads categories Fruit Other Potato Other Protein Side/Extra Sides/Condiments Fries Other Potato Mixed Side/Extra Non-Breaded Vegetables Bread Sides

Source: Technomic Ignite Menu, Q3 2018-Q3 2019 Sides 472 On the menu menu items year-over-year -7.5% growth

510 467 472 411

2016 2017 2018 2019

Source: Technomic MenuMonitor, Q3 2018-Q3 2019 Sides What’s trending? Other Potato Sides 24% growth year over year

Includes new potato tots, from traditional to loaded and topped varieties

Example: GetGo’s plain and loaded tots, including Bacon Ranch, Buffalo, Cheesesteak, Pulled Pork BBQ and Chili Cheese Tots Sides What’s trending? Breads 9% growth year over year

Includes mini loaves in spicy, savory, sweet and fruit flavors

Example: Maverik’s Bacon Jalapeno Cheesebread; QuickChek’s corn, banana nut, blueberry and orange cranberry nut mini loaves Sides What’s trending? Fries 16% growth year over year

Includes higher-quality fries described as either “fresh” or “hand-cut”

Example: ’ Hand-Cut Western Fries, hand-coated with a seasoned breading Non-alcohol Beverages On the menu

Top categories Fastest-growing Coffee/Filter Coffee categories Soft Drinks/Fountain Iced Coffee Drinks Hot Chocolate Cappuccino Coffee/Filter Latte Coffee Mocha Cappuccino Iced Tea

Source: Technomic MenuMonitor, Q3 2018-Q3 2019 Non-alcohol Beverages 471 On the menu menu items year-over-year -12.2% growth

537 477 471 443

2016 2017 2018 2019

Source: Technomic MenuMonitor, Q3 2018-Q3 2019 Non-alcohol Beverages What’s trending? Iced Coffee 28% growth year over year

Includes iced cold-brew coffee drinks in a wide variety of flavors

Example: Sheetz offers several flavor options for its cold-brew line; standouts include seasonal Salted Caramel, Pumpkin Pe and a s’mores-inspired Campfire Cold Brew Non-alcohol Beverages What’s trending? Specialty Coffee 13% growth year over year

Includes hot and cold coffee beverages in assorted flavors—particularly seasonal flavor profiles

Example: APlus’ seasonal Dulce de Leche; Thornton’s Alpine Mint coffee LTO; Allsup’s White Chocolate Coffee Non-alcohol Beverages What’s trending? Hot Chocolate/Cocoa 12% growth year over year

Includes hot chocolate drinks in unique, dessert-inspired flavors

Example: 7-Eleven offers Regular, Spicy, Oreo Mint and Reese’s Peanut Butter hot chocolate; GetGo promotes Strawberry, Peanut Butter and Cinnabon hot chocolate The Key Takeaway C-store menus are being repositioned toward core signature offerings and promotion of specialty or seasonal LTOs Total Foodservice Retailers All Other (includes Foodservice, Convenience Stores and All Other Foodservice Retailers) (0.6%)… (8.7%) $71.9B

Travel & Leisure (10.5%) $86.1B

2019 Total *Retail sales equivalent includes foods, nonalcohol $821.178B beverages and nonfoods (alcohol beverages excluded) Noncommercial *Noncommercial segment (15.1%) includes business & industry, $124.3B Restaurants & education, healthcare, Bars (65.1%) refreshment services, $534.3B military and corrections

Source: Technomic, Inc. May 2019 Wallchart

26 27

Demand for 43% I would like retail stores to offer more prepared foods that feature new or 45% Healthy Items & unique flavors 41% Unique Flavors 43% I would like retail stores to offer more 47% healthful prepared foods 41% Consumer demand tends to be consistently strong for new/unique flavors, 40% although many consumers I would like retail stores to offer more don’t know exactly what prepared foods that feature ethnic 46% flavors and ingredients they want until operators 37% “wow” them with something unexpected. 23% If offered, I would be likely to order 29% gluten-free prepared foods 20%

Overall 18-34 35+ Flavors & Ingredients to Watch Indian Flavors 34% of consumers have tried Indian food and like it

Technomic Ethnic Food & Beverage Consumer Trend Report Unique Flavors in Familiar Platforms

Naan Tacos Tikka Sauce on Pizza Asian Noodles +2.9% Asian Buns +5.7% Sauce it Up

•29% consider what sauces and condiments are available when deciding where to eat • For younger consumers and males, that number rises to 40% Barbecue Sauce Flavor Explosion

Jalapeno BBQ +11.1% Whiskey BBQ +5.6% Sweet and Spicy Asian Sauces

Honey Sriracha +12.5% Thai Sweet Sauce +7.3% Spice it Up

•Spicy flavor profiles = hot + sweet, salty, smoky or fruity •Digging deeper into the spice shelf and the world Chile peppers on the rise

Guajillo +5.2% Piquillo +5%

M

Mexico Spain Spain Chile peppers on the rise

Peri Peri +15.6% Aji Amarillo +5%

South Africa Peru Global Flavors Trickling Down

Turmeric +12.5% Sumac +8% Tamarind +13.6% Health on the Menu

•63% want C-Stores to offer more healthy options •23% would consider ordering plant-based burgers Plant-based Swaps That’s Not Meat Just Salad Keto Bowl Arooga’s Nachos Zucchini noodles +77.3% Veggies vs. Carbs Chopt’s Cauliflower Rice Bowl Donatos’ Cauliflower Pizza Crust Cauliflower rice +87.5% Lifestyle Burgers

B. Good’s line of Flex Burgers

Turkey-Mushroom Blended Burger Falafel Burger Poblano-Quinoa Burger Beet-Pineapple Burger Lifestyle Bowls

Chipotle’s Lifestyle Bowls Whole30 Salad Bowl Keto Salad Bowl Paleo Salad Bowl Hi Protein Bowl Vegan Bowl Vegetarian Bowl Plants for Breakfast

Just Eggs made from mung beans Dunkin’s Beyond Sausage Snack Smackdown •80% of consumers snack between meals •34% are snacking on healthier foods

Technomic Snacking Consumer Trend Report Snack Opportunity: Second Breakfast

Pret Pots at Pret a Manger Overnight Oats at Corner Bakery Snack Opportunity: Protein

Bon to Go Snack from Au Bon Pain Energii Bites from Freshii Snack Opportunity: Beverages

Berry Smoothie with Collagen Tropical Smoothie at Protein Bar & Café’s Avocolada Kitchen Crafted Coffee •16.6% of restaurant operators menu espresso •43% of 18-34 year olds find mocha appealing and 49% favor caramel Coffee Styles on the Rise

Cold Brew + 10.7% Americano +3.5% Latte +2% Seasonal Coffees

Coffee Bean & Tea Leaf’s Maple Lattes Dunkin’s Girl Scout Cookie Flavors Low-Alcohol Drinks Hard Seltzers/Sparkling Waters +6% in restaurants Flavors with most growth: Berry, Cherry, Lime Flavors on the rise: Cucumber, elderflower, mint Takeaways

• Offer unique flavors in familiar formats (pizza, tacos, BBQ) • Spice it up with bold condiments and chile peppers • Swap in plant-based ingredients beyond burgers • Tie health into lifestyles • Explore snacking opportunities (breakfast, beverages) • Cold brew and seasonal coffees are hot • Expand the hard seltzer flavor selection