A Roundup of Noteworthy Foodservice Findings for the Week of Aug. 17, 2020 ECONOMIC IMPACT NAVIGATOR

Industry Insights A roundup of noteworthy foodservice findings for the week of Aug. 17, 2020 ECONOMIC IMPACT NAVIGATOR

YEAR-OVER-YEAR RESTAURANT RESERVATION PERCENT CHANGE Dine-In Reservations 0 Stalled -20 -40

Although restaurant reservations in late June. Off-premise will began making a strong comeback continue to be the main driver of -60 across the nation in late May and orders for the foreseeable future. early June, a resurgence of COVID- 19 cases has led to increased consumer caution, as well as the -80 reimplementation of restaurant and bar restrictions as well as closures in places like California and Texas. -100 These factors have caused the recovery of dine-in service to stall in many parts of the country, which can -120 be seen in the graph in the flattening May May Jun Jun Jun Jun Jul Jul Jul Jul of restaurant reservations beginning 22 29 5 12 19 26 3 10 17 24

Arizona California Florida New York State Texas United States

Sources: Technomic Economic Impact Navigator Program, OpenTable

LARGEST U.S. CONVENIENCE-STORE OPERATORS SYSTEMWIDE LOCATION COUNT Top C-Store Chains 7-Eleven 9,112

Alimentation Couche-Tard 8,989 Combine Forces (Circle K)

Speedway 3,898 In a deal that combines the No. 1 7-Eleven’s largest deal had and No. 3 largest convenience-store previously been the 2018 acquisition Casey's General Stores 2,146 chains in the U.S., 7-Eleven Inc. has of 1,030 convenience stores from entered into an agreement to Sunoco LP. Acquired banners EG America 1,679 purchase Speedway LLC from included Stripes, Aloha and APlus. Marathon Petroleum Corp. Earlier in 2020, 7-Eleven Inc. Murphy USA 1,489 7-Eleven will add nearly 3,900 finalized the purchase of 7-Eleven Speedway stores to its network for Stores, an independent operator of GPM Investments 1,272 the purchase price of $21 billion in more than 100 7-Eleven-branded cash. Speedway currently has a convenience stores in Oklahoma. presence in 35 states. BP America (ampm) 1,017 Prior to its purchase of Speedway, ExtraMile 942

Wawa 880

Note: Location counts reflective of year-end 2019 Sources: Technomic Ignite company data, CSP Daily News

BREAKFAST ITEMS WITH HIGHEST POTENTIAL TO DRIVE TRAFFIC Comforting, Premium % MORE OR MUCH MORE LIKELY TO VISIT FOR Ingredients Boost Entree Banana Pudding Doughnut (Krispy 78% Kreme) Cinnamon Toast Crunch Pancakes Morning Traffic 77% (IHOP) We know from Technomic’s doughnuts to premium beverages Loaded Smoked Salmon Bagel 77% Foodservice Impact Monitor 12th such as matcha bubble tea. (First Watch) Edition—Week Ending June 5, 2020 With many consumers working or that 30% of consumers are tired of Average 64% learning remotely, operators may eating the same foods at home, need to pivot from offering routine which could explain why the items coffees and breakfast sandwiches most likely to draw them to designed for commuters to menuing restaurants in the morning are a Nonalcohol Beverage attractive indulgent and quality step up from traditional oatmeal and offerings worth leaving the house for orange juice. Consumers are Iced Golden Ginger Drink (or paying a delivery premium for). 74% seeking meals they can’t easily (Starbucks) recreate at home, from comfort Cooler Matcha Tea With Bubbles 73% foods such as dessert-style (Caribou Coffee)

Chocolate Frosty-ccino (Wendy's) 73%

Note: Items are rated on name and description (in slide notes) and are tested unbranded Average 65% Base: 54 breakfast entrees and 42 breakfast nonalcohol beverages tested between April and July; potential purchasers (varies by concept) Q: If a restaurant were to introduce any of the following as a new [insert daypart/mealpart] item, how much more or less likely would you be to visit this location? Source: Technomic Ignite menu data

Majority Still Prefer ONLINE ORDERING PREFERENCE

Restaurant Direct, 68% But… 54% Digital ordering gained traction prior While the number of consumers who to 2020, but there were signs that prefer third-party ordering has not 38% the third-party business model was grown, there has been a significant struggling as profitability was scarce. jump in those who are now comfortable with both ordering However, COVID-19 has hit the 23% accelerator on several trends, and a channels. great many consumers relied upon third-party ordering platforms and 9% 8% delivery providers as local lockdowns and stay-at-home orders took effect. Prefer restaurant No preference Prefer third party Prior to the pandemic, more than app/website (e.g. Grubhub, Uber two-thirds of consumers expressed Eats, etc.) a preference for dealing directly with restaurants when ordering online. Q2 2019 Q3 2020

Q: When ordering online, do you have a preference for ordering directly from a restaurant's website/app or through a third-party website/app? Base: 1,000 consumers ages 18+ per period Source: Technomic Ignite consumer data

EMERGING BEVERAGE CHAINS IN ASIA

Similar Traits Unite Heytea | #20 China Asia’s Rising Stars 455 units | +21% YOY unit growth | Born 2012 Tealive | #2 Malaysia

Beverage chains are thriving in Asia. Affordability. Positioned above low- 505 units | +15% YOY unit growth | Born 2017 Among new entrants to Technomic’s priced operators, many of these top 25 lists in Asian countries, 35% players offer an aspirational product are coffee or tea. That’s outsized often associated with higher-end Kopi Kenangan | #9 Indonesia growth relative to other menu imported chains but at everyday categories. Let’s look at what these price points. 205 units | +45% YOY unit growth | Born 2017 players have in common. Rapid Innovation. Intense Youth. The average time that these competition puts new products at a Asian beverage chains have existed premium. It’s no shock to see Fore Coffee | #18 Indonesia is just over four years. Heytea—distinguished in this area— 105 units | +133% YOY unit growth | Born 2018 launch more than 20 items in a Reinvention. The aim is to re- energize traditional drinks such as given month. tea in China or coffee in Indonesia by infusing innovation, contemporary Maxx Coffee | #21 Indonesia flavors and new preparations. 80 units | +18% YOY unit growth | Born 2018

Source: Technomic Global Foodservice Navigator Program

COVID-19 Disruption Index is requirements, population densities powered by Shortest Track, utilizing and mobility, group size limitations AI, machine learning and disparate and lifestyle risk factors contributing COVID-19 PERCENT PERCENT sets of data resources to quantify to spread. More information is DISRUPTION INDEX CHANGE CHANGE TOP 5 DISRUPTED MARKETS the potential risks that U.S. available HERE. (MAX: 1.00, HIGH VERSUS VERSUS businesses face from the spread of DISRUPTION) LAST WEEK LAST MONTH the COVID-19 virus at the market Change Versus Previous Week level. and Month Change versus previous 1 Houma-Thibodaux 0.959 0.05% 0.24% The highest index possible is 1.00, week/month allows users to see if 2 Lafayette 0.865 0.25% 1.12% which is not good and reflects the market is becoming more or less markets that are extremely disrupted over time. Changes that Tampa-St. Petersburg- disrupted. The index is updated on a are positive (+) show a move toward 3 0.834 1.67% 14.32% Clearwater weekly basis. becoming increasingly more impacted by COVID-19 (not good). 4 Panama City 0.833 2.42% 19.59% The COVID-19 Disruption Risk Changes that are negative (-) show Index shares weekly updates a trend toward being less impacted Houston-The through a business lens, rather than by COVID-19 (good). 5 0.828 0.91% 3.76% Woodlands-Sugar Land a health lens, and incorporates more than 20 different data signals to Ignite Subscribers: Download full measure disruption and predict market report future impact. These signals include infection rates, deaths, state-level restrictions and social distancing

Notes: Data updated August 14, 2020 Source: Shortest Track

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