MenuTrends Keynote | Non-Alcoholic Beverages 2015 Contact Datassential: 312-655-0594 1 SAMPLE SLIDES get the full report: 312-655-0594 or [email protected]

THE KEYNOTE REPORT MENUTRENDS KEYNOTE May 2015

Brian Darr 312-655-0594 NON-ALCOHOLIC BEVERAGES [email protected] MenuTrends Keynote | Non-Alcoholic Beverages 2015 Contact Datassential: 312-655-0594 2 For the first time Datassential’s MenuTrends Keynote Series is leveraging the power of MenuTrends, our trend- tracking database, and combining it with extensive consumer and operator survey data, from motivations to behaviors to opportunities, in order to bring together trends, data, and insights in a comprehensive report that dives deep into key industry topics and categories.

For more details, please contact Brian Darr at: 312-655-0594 or [email protected]

The new MenuTrends Keynote on Appetizers details what consumers are already ordering, what they are interested in trying, and how that compares to the appetizers that operators are menuing. We asked consumers for their thoughts on a wide range of appetizer options, flavors, trends, and ingredients, uncovering preferences and motivations with direct implications for both foodservice and retail segments. We combined this with operator data on menuing, purchases, and brand preferences, and leveraged the power of MenuTrends, our trend-tracking menu database, for this one-of-a-kind MenuTrends Keynote series that comprehensively explores topics and categories central to the industry.

The MenuTrends Keynote Appetizer report will be an invaluable resource to help you understand the away-from-home and at-home, appetizer landscape detailing consumers’ behavior, motivations, and preferences.

Every week, two out of three Americans eat pizza. In fact, the average consumer orders pizza away-from- home five times a month. Datassential's MenuTrends Keynote on Pizza is a comprehensive overview of this consumer favorite, from the types of pizza consumers are eating to where they are eating it - and the barriers that prevent them from choosing pizza. We cover how operators are currently menuing pizza, break down daypart consumption, and look at the pizza products that matter most to operators.

In this report we also bring you menu data and growth, plus consumer interest, on trending pizza ingredients and concepts, including premium meats and cheeses, unique vegetables and greens, gluten- free crusts, ethnic influences, innovative sauces, flatbreads, and so much more.

* Burgers * Kids Menus Upcoming Topics * BBQ & Southern * Salads 2015 * The New Healthy * Side Dishes * Alcoholic Beverages MenuTrends Keynote | Non-Alcoholic Beverages 2015 Contact Datassential: 312-655-0594 3 CONTENTS click to jump to a section

OBJECTIVES & KEY INSIGHTS LANDSCAPE MEGATRENDS METHODOLOGY 12 15 24 32

INGREDIENT SODA & TEA SPOTLIGHT CSDs 48 72 118 150

BOTTLED ENHANCED WATER ENERGY JUICE WATER & SPORTS DRINKS 171 194 204 217

BEVERAGE SMOOTHIES & PRODUCT MILK TOPPERS & OPPORTUNITIES SHAKES FLAVORS 230 250 259 261

APPENDIX OPERATORS SUPPLEMENTAL DATA 263 340 MenuTrends Keynote | Non-Alcoholic Beverages 2015 Contact Datassential: 312-655-0594 4

SHOW, BUT DON’T GIVE OR LEAVE BEHIND This report can be presented live or via webinar, but can not be distributed to outside companies. If your company has purchased this report, you are encouraged to excerpt key exhibits and build them into your own presentations. However, you should not provide significant sections of this report to any outside company without express written consent from Datassential. MenuTrends Keynote | Non-Alcoholic Beverages 2015 Contact Datassential: 312-655-0594 5 EXHIBIT GUIDE

Landscape Ingredient Spotlight (cont’d) Beverages Penetration by Segment 25 Greens, Time Trend 52-53 Beverage Menu Avg. Sizes 26 Lavender, Time Trend 54-55 Average Beverage Prices 27 Coconut Water, Time Trend 56-57 Beverage Timeline 28 Ginger Beer, Time Trend 58-59 BUZZ Daily Beverage Incidence 29 Matcha, Time Trend 60-61 BUZZ Beverage Incidence by Daypart 30 Mint, Time Trend 62-63 BUZZ Beverage Appeal by Need State 31 Pomegranate, Time Trend 64-65 Nostalgic Dessert Flavors, Time Trend 66-67 MegaTrends 32 Pineapple, Time Trend 68-69 MAC: Beverages 33 Beverages: Seasonal Ingredients & Flavors 70 MegaTrends Interest Rating, by Age 34, 335 Cold Beverage Interest 71, 321-322 Hot Broth / Bouillon 35 Latin Specialties 36 Hot 72 Mexican Hot Chocolate 37 MAC: Hot Coffee 73 Green Juices / Smoothies 38 Penetration by Segment 74 Mocktails 39 Menu Avg. Sizes 75 Natural Sweeteners 40 Avg. Prices 76 Non-Dairy Milks 41 Top Varieties/Flavors 77 Premium Ingredients 42 Top Varieties by Segment 78 Small Batch / Craft Sodas 43 Top Varieties by Region 79 Vitamin / Superfood Supplements 44 Varieties: Fastest Growing 80 Seasonal Soda Flavors 45 Trending Coffee Terms 81 NA Fruit Ciders 46 Seasonal Coffee & Tea Flavors 47 Hot Specialty Coffee Penetration by Segment 82 Ingredient Spotlight 48 Menu Avg. Sizes 83 MAC: Beverage Flavors 49 Avg. Prices 84 Blood Orange, Time Trend 50-51 Top Varieties/Flavors 85

MenuTrends Keynote | Non-Alcoholic Beverages 2015 Contact Datassential: 312-655-0594 6 EXHIBIT GUIDE Hot Specialty Coffee (cont’d) Coffee Consumption (cont’d) Top Varieties by Segment 86 Coffee & Specialty Coffee: Frequency 108 Top Varieties by Region 87 Hot Coffee & Specialty Coffee: AH vs. AFH 109 Varieties: Fastest Growing 88 & Specialty Coffee: AH vs. AFH 110 Trending Terms 89 Coffee & Specialty Coffee: Attribute Importance 111, 268 Coffee & Specialty Coffee: Overall Perceptions 112, 269 Iced Coffee Coffee & Specialty Coffee: Barriers AH vs. AFH 113, 270-271 MAC: Iced Coffee 90 Coffee & Specialty Coffee; Drivers AH vs. AFH 114, 272-273 Penetration by Segment 91 Coffee Varieties Interest 115, 310-311 Menu Avg. Sizes 92 Coffee Brands Interest 116-117, Avg. Prices 93 312-315 Top Ingredients/Terms 94 Top Ingredients/Terms by Segment 95 Hot Tea 118 Top Ingredients/Terms by Region 96 MAC: Flavors & Ingredients 119 Ingredients/Terms Fastest Growing 97 Penetration by Segment 120 Menu Avg. Sizes 121 Specialty Iced Coffee Avg. Prices 122 Penetration by Segment 98 Top Varieties/Flavors 123 Menu Avg. Sizes 99 Top Varieties by Segment 124 Avg. Prices 100 Top Varieties by Region 125 Top Ingredients/Terms 101 Varieties: Fastest Growing 126 Top Ingredients/Terms by Segment 102 Top Flavors: by Segment & Region 127 Top Ingredients/Terms by Region 103 Noteworthy Trending Ingredients & Terms 128 Ingredients/Terms: Fastest Growing 104 Iced Tea 129 Coffee Consumption MAC: Flavors & Ingredients 130 Coffee: Incidence 105 Penetration by Segment 131 Hot Coffee: Incidence by Daypart 106 Menu Avg. Sizes 132 Iced Coffee: Incidence by Daypart 107 Avg. Prices 133 Top Brands/Flavors 134 MenuTrends Keynote | Non-Alcoholic Beverages 2015 Contact Datassential: 312-655-0594 7 EXHIBIT GUIDE

Iced Tea (cont’d) Soda & Carbonated Soft Drinks (cont’d) Top Brands/Flavors by Segment 135 Top Menued Flavors: by Segment & Region 160 Top Brands/Flavors by Region 136 Noteworthy Trending Ingredients & Terms 161 Brands/Flavors: Fastest Growing 167 Trending Terms 138 Soda & Carbonated Soft Drinks Consumption Incidence 162 Tea Consumption Incidence by Daypart 163 Incidence 139 Frequency 164 Incidence by Daypart 140 AH vs. AFH 165 Frequency 141 Attribute Importance 166, 286 AH vs. AFH 142 Overall Perceptions 167, 287 Attribute Importance 143, 274 Barriers: AH vs. AFH 168, 288-289 Overall Perceptions 144, 275 Drivers: AH vs. AFH 169, 290-291 Barriers: AH vs. AFH 145, 276-277 Brands Interest 170, 323-324 Drivers: AH vs. AFH 146, 278-279 Tea Varieties Interest 147-148, Juice & Lemonade 171 317-318 Juice Penetration by Segment 172 Tea Brands Interest 149, 319-320 Juice Menu Avg. Sizes 173 Juice Avg. Prices 174 Soda & Carbonated Soft Drinks 150 Top Menued Juice Varieties 175 MAC: Brands 151 Top Menued Juice Varieties by Segment 176 MAC: Flavors & Ingredients 152 Top Menued Juice Varieties by Region 177 Penetration by Segment 153 Juice Varieties: Fastest Growing 178 Menu Avg. Sizes 154 Juice Trending Terms 179 Avg. Prices 155 Lemonade Penetration by Segment 180 Top Menued Brands 156 Avg. Lemonade Prices 181 Top Menued Brands by Segment 157 Top Lemonade Flavors/Terms 182 Top Menued Brands by Region 158 Trending Lemonade Flavors/Terms 183 Brands: Fastest Growing 159 MenuTrends Keynote | Non-Alcoholic Beverages 2015 Contact Datassential: 312-655-0594 8 EXHIBIT GUIDE Juice & Lemonade Consumption Enhanced Water & Sports Consumption Incidence 184 Incidence 209 Incidence by Daypart 185 Incidence by Daypart 210 Frequency 186 Frequency 211 AH vs. AFH 187 AH vs. AFH 212 Attribute Importance 188, 280 Attribute Importance 213, 292 Overall Perceptions 189, 281 Overall Perceptions 214, 293 Barriers: AH vs. AFH 190, 282-283 Barriers: AH vs. AFH 215, 294-295 Drivers: AH vs. AFH 191, 284-285 Drivers: AH vs. AFH 216, 296-297 Juice Interest 192, 325-326 Juice & Smoothie Brands Interest 193, 327-328 Energy Drinks 217 Penetration by Segment 218 Bottled Water 194 Avg. Prices 219 Penetration by Segment 195 Top Flavors/Terms 220 Avg. Prices 196 Trending Flavors/Terms 221 Top Menued Brands 197 Top Menued Brands by Segment 198 Energy Drink Consumption Top Menued Brands by Region 199 Incidence 222 Brands: Fastest Growing 200 Incidence by Daypart 223 Frequency 224 Water Consumption AH vs. AFH 225 Incidence 201 Attribute Importance 226, 298 Incidence by Daypart 202 Overall Perceptions 227, 299 AH vs. AFH 203 Barriers: AH vs. AFH 228, 300-301 Drivers: AH vs. AFH 229, 302-303 Enhanced Water & Sports Drinks 204 Sports Drink Penetration by Segment 205 Blended Beverages / Smoothies & Shakes 230 Avg. Sports Drink Price 206 Blended Beverages Penetration by Segment 231 Top Sports Drink Flavors/Terms 207 Trending Sports Drink Flavors/Terms 208 MenuTrends Keynote | Non-Alcoholic Beverages 2015 Contact Datassential: 312-655-0594 9 EXHIBIT GUIDE

Blended Beverages / Smoothies & Shakes Milk Consumption Blended Beverage Menu Avg. Sizes 232 Incidence 255 Blended Beverage Avg. Prices 233 Incidence by Daypart 256 Top Blended Beverage Flavors/Terms 234 At Home vs. AFH 257 Top Blended Beverage Flavors/Terms by Segment 235 Varieties Interest 258, 329-330 Top Blended Beverage Flavors/Terms by Region 236 Top Blended Beverage Flavors/Terms: Fastest 237 Beverage Toppers & Flavor Boosts 259 Growing Topper & Flavor Boosts Interest 260, 333-334 Trending Blended Beverage Flavors/Terms 238 Product Opportunities 261-262 Smoothies & Shakes Consumption Incidence 239 Appendix 263 Incidence by Daypart 240 Consumer Profiles 264 Frequency 241 AFH Dining Selection Criteria 265-266 At Home vs. AFH 242 AFH Dining Opinions 267 Attribute Importance 243, 304 Coffee: Attribute Importance by Age 268 Overall Perceptions 244, 305 Coffee: Perceptions by Age 269 Barriers: At Home 245, 306 Coffee Barriers by Age Drivers: At Home 246, 308 At Home 270 Barriers: AFH 247, 307 AFH 271 Drivers: AFH 248, 309 Coffee Drivers by Age Smoothie & Shake Ingredient Interest 249, 331-332 At Home 272 AFH 273 Milk 250 Tea: Attribute Importance by Age 274 Penetration by Segment 251 Tea: Perceptions by Age 275 Avg. Prices 252 Tea Barriers by Age Top Flavors/Terms 253 At Home 276 Trending Flavors/Terms 254 AFH 277

MenuTrends Keynote | Non-Alcoholic Beverages 2015 Contact Datassential: 312-655-0594 10 EXHIBIT GUIDE Appendix (cont’d) Appendix (cont’d) Tea Drivers by Age Energy Drinks: Attribute Importance by Age 298 At Home 278 Energy Drinks: Perceptions by Age 299 AFH 279 Energy Drinks Barriers by Age Juice: Attribute Importance by Age 280 At Home 300 Juice: Perceptions by Age 281 AFH 301 Juice Barriers by Age Energy Drinks Drivers by Age At Home 282 At Home 302 AFH 283 AFH 303 Juice Drivers by Age Smoothies & Shakes: Attribute Importance by Age 304 At Home 284 Smoothies & Shakes: Perceptions by Age 305 AFH 285 Smoothies & Shakes Barriers by Age Soda: Attribute Importance by Age 286 At Home 306 Soda: Perceptions by Age 287 AFH 307 Soda Barriers by Age Smoothies & Shakes Drivers by Age At Home 288 At Home 308 AFH 289 AFH 309 Soda Drivers by Age Coffee Varieties: LOVE IT by Gender & Age 310 At Home 290 Coffee Varieties: LOVE IT by Income & Ethnicity 311 AFH 291 Coffee Brands: LOVE IT by Gender & Age 312-313 Enhanced Water & Sports Drinks: Attribute 292 Coffee Brands: LOVE IT by Income & Ethnicity 314-315 Importance by Age Hot vs. Iced Tea: LOVE IT by Gender, Age, Income & 316 Enhanced Water & Sports Drinks: Perceptions by 293 Ethnicity Age Tea Varieties: LOVE IT by Gender & Age 317 Enhanced Water & Sports Drinks Barriers by Age Tea Varieties: LOVE IT by Income & Ethnicity 318 At Home 294 Tea Brands: LOVE IT by Gender & Age 319 AFH 295 Tea Brands: LOVE IT by Income & Ethnicity 320 Enhanced Water & Sports Drinks Drivers by Age Cold Beverages: LOVE IT by Gender & Age 321 At Home 296 Cold Beverages: LOVE IT by Income & Ethnicity 322 AFH 297 MenuTrends Keynote | Non-Alcoholic Beverages 2015 Contact Datassential: 312-655-0594 11 EXHIBIT GUIDE

Appendix (cont’d) Operators (cont’d) Soda & CSDs: LOVE IT by Gender & Age 323 Coffee Formats Purchased 345 Soda & CSDs: LOVE IT by Income & Ethnicity 324 Coffee Formats: Brand Importance 346 Juice Varieties: LOVE IT by Gender & Age 325 Coffee Brands Offered 347 Juice Varieties: LOVE IT by Income & Ethnicity 326 Tea Beverages Offered 348 Juice & Smoothie Brands: LOVE IT by Gender & 327 Tea Formats Purchased 349 Age Tea Formats: Brand Importance 350 Juice & Smoothie Brands: LOVE IT by Income & 328 Tea Brands Offered 351 Ethnicity Other Hot Beverages Offered 352 Milk: LOVE IT by Gender & Age 329 Challenges to Selling Hot Beverages 353 Milk: LOVE IT by Income & Ethnicity 330 Cold Beverages Offered 354 Smoothie & Shake Ingredients: LOVE IT by Gender 331 Cold Beverages: Brand Importance 355 & Age Soda Formats Purchased 356 Smoothie & Shake Ingredients: LOVE IT by Income 332 Soda Brands Offered 357 & Ethnicity Juice & Smoothie Formats Purchased 358 Toppings & Flavors: LOVE IT by Gender & Age 333 Juice & Smoothie Brands Offered 359 Toppings & Flavors: LOVE IT by Income & Ethnicity 334 Bottled & Enhanced Water Formats Purchased 360 MegaTrends Interest: by Age 335 Bottled & Enhanced Water Brands Offered 361

Sports & Energy Drink Formats Purchased 362 Appendix MenuTrends Sports & Energy Drink Brands Offered 363 Beverages: QSR 336 Challenges to Selling Cold Beverages 364 Beverages: Full Service Restaurants 337

Beverages: Independents 338 Beverages: Chains 339

Operators 340 Operator Profiles 341 Average Beverage Cost % 343 Coffee Beverages Offered 344

MenuTrends Keynote | Non-Alcoholic Beverages 2015 Contact Datassential: 312-655-0594 12 NON-ALC. BEVS IN TIME

The Coca-Cola PepsiCo acquires McDonald’s expands Trendy coconut water Caribou, Peet’s, and Company releases IZZE Sparkling juice McCafe line with new continues to gain market launch Coke Zero and Naked Juice beverages share rapidly lighter roasted

McDonald’s Burger King Starbucks Starbucks The green juice introduces introduces rolls out its enters the juice movement hits their Premium ICEE Floats market through the chains as Roast Coffee and Mocha line - VIA its acquisition Jamba Juice, Iced Coffee Ready Brew of Evolution Chick-Fil-A, and Fresh Starbucks serve kale and spinach

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

The craft cocktail movement gives Dunkin Donuts New smoothies Caribou Coffee unveils birth to more unique releases its new appear at Caribou their Signature Iced mocktails with fresh line of smoothies Coffee, Cold Stone, Teas with flavors like juices, savory herbs, “made with real Jack in the Box, and Rooibos Lemonade drinking vinegars, fruit and yogurt” Starbucks and Peach Black and artisan soda/tea According to Beverage PepsiCo launches the Coca-Cola’s new Taco Bell’s new breakfast Digest, soda consumption new G2 line – the lower Freestyle machine lets menu features Mtn Dew begins to decline in 2005 calorie version of classic consumers mix-and- A.M. – Mountain Dew with and continues to do so up Gatorade match drinks and flavor Tropicana Orange Juice through today combinations MenuTrends Keynote | Non-Alcoholic Beverages 2015 Contact Datassential: 312-655-0594 13

Tap water / ice water 53% Brewed coffee 43% Bottled water 39% Daily Beverage Incidence Juice / juice drink 33% (% drinking in a given day) Regular CSD 32% Brewed coffee is the most Milk 31% consumed beverage… after tap Iced tea 25% water. Top 10 Diet CSD 23% Over 40% of all adult Americans drink brewed Hot tea 17% coffee on any given day, resulting in a daily incidence rate that surpasses that of bottled Punch / lemonade 11% water, juice, and both regular and diet CSD’s. Specialty coffee 11% Brewed coffee today can be regarded as a staple beverage. Iced coffee 10% Iced and hot tea also both make the list of the Sports drink 10% top 10 most consumed beverage types.

Hot chocolate 9% Smoothie 8% Consumption rates for specialty, iced, and frozen coffee are also quite robust, rivaling or Energy drink 7% surpassing that of sports drinks, smoothies, and Milkshake 7% a variety of other common beverages. Frozen coffee 6%

Source: Datassential BUZZ Coffee & Tea Tracker n=13820 MenuTrends Keynote | Non-Alcoholic Beverages 2015 Contact Datassential: 312-655-0594 14

MEGATRENDSSoup Varieties: Detailed factorsProfiles shaping the future of non-alcoholic beverages

14 MenuTrends Keynote | Non-Alcoholic Beverages 2015 Contact Datassential: 312-655-0594 15 MENU ADOPTION CYCLE NON-ALC. BEVERAGE MEGATRENDS

Seasonal Coffee & Tea Flavors Homemade Sodas

Non-Alcoholic Fruit Ciders

Seasonal Soda Flavors Green Juices / Smoothies

Small-Batch / Craft Sodas Latin Mocktails Specialties Vitamin / Superfood Supplements Mexican Hot Natural Sweeteners Chocolate Premium Ingredients Hot Broth / Bouillon Non-Dairy Milks

INCEPTION ADOPTION PROLIFERATION UBIQUITY Contact Datassential: 312-655-0594 16 MenuTrendsAs consumers Keynote | Non move-Alcoholic toward Beverages 2015 healthy beverage choices, premium ingredients and natural sweeteners are highly interesting. While seasonal flavors continue to show strong interest, ciders and nutritional beverage supplements may be areas worth exploring.

Premium Ingredients 42%

Natural Sweeteners 39%

Non-alcoholic fruit ciders 36%

Seasonal coffee & tea flavors 35%

Vitamin or super food beverage supplements 31%

Non-Dairy Milks 31% Interest Rating: Green Juices or Smoothies 30% MegaTrends (Top 2) Homemade sodas 28%

Mexican Hot Chocolate 27%

Small-batch or craft sodas 27%

Hot Broth or Bouillon 27%

Seasonal soda flavors 26%

Latin Specialties 23%

Mocktails 21%

QC1: Described below are some non-alcoholic beverage trends you might not already be familiar with. Please indicate n=1020 how interested you are in trying that type of beverage. 5-point scale. MenuTrends Keynote | Non-Alcoholic Beverages 2015 Contact Datassential: 312-655-0594 17

Greens Kale, spinach, parsley, and more! since These greens are mentioned on 1-2% +133% 2010 of non-alcoholic beverage menus Kale: 1% of menus; +422% since 2010 Spinach: 1% of menus; +167% since 2010

DATASSENTIAL Menu Adoption Cycle inception MenuTrends Keynote | Non-Alcoholic Beverages 2015 Contact Datassential: 312-655-0594 18

Coconut Water since The trendy beverage for ‘hydration’ Currently on 1% of non-alcoholic +233% 2010 beverage menus Featured most often on its own and in blended beverages

DATASSENTIAL Menu Adoption Cycle adoption MenuTrends Keynote | Non-Alcoholic Beverages 2015 Contact Datassential: 312-655-0594 19

Matcha since The super-beverage of the year Currently on 1% of non-alcoholic +50% 2010 beverage menus Featured most often as a tea and in blended beverages

DATASSENTIAL Menu Adoption Cycle adoption MenuTrends Keynote | Non-Alcoholic Beverages 2015 Contact Datassential: 312-655-0594 20

COFFEESoup Varieties: Detailed the Profilescurrent state of coffee and specialty coffee today

20 MenuTrends Keynote | Non-Alcoholic Beverages 2015 Contact Datassential: 312-655-0594 21 MENU ADOPTION CYCLE HOT COFFEE

Peppermint Decaf Vanilla

Seasonal Mocha

Skinny Offerings Brewed coffee Hazelnut

Cappuccino White Chocolate Pumpkin

Caramel Espresso Macchiato Fair Dessert Inspired Trade House Blends Organic Americano Micro Cinnamon Roasting Dark Light Roast Roast Alternative Milks Spiced Coffee Beverages

Berry Butter Coffee Salted Caramel Flavors

INCEPTION ADOPTION PROLIFERATION UBIQUITY MenuTrends Keynote | Non-Alcoholic Beverages 2015 Contact Datassential: 312-655-0594 22 One-quarter of all operators with hot brewed coffee menu a ‘decaf’ option. Beyond decaf, other terms describing hot brewed coffee are not found frequently on menus.

Top Hot Brewed Coffee Varieties/Flavors Overall

24%

12%

9% 6% 3% 3% 2% 2% 1% 1% 1% 1% 1%

1% 1% 1% 1% 1% 1% 1% 1% 1% 1% 1% 1% 1%

Dark

Local

Black

Fresh Blend

Decaf

Vanilla

French

Arabica

Regular Organic

Medium

Brazilian

Flavored

Hazelnut

Premium

Ethiopian

Columbia American

Chocolate

Fair Trade Fair

Cinnamon

Colombian

House Blend House

Press Coffee Press French Roast French

MENU PENETRATION: of all restaurants with hot brewed coffee, % that serve… Source: Datassential MenuTrends MenuTrends Keynote | Non-Alcoholic Beverages 2015 Contact Datassential: 312-655-0594 23 Local and house blends, along with more labeling of sources, have increased their hot brewed coffee menu penetration within the past year.

Penetration % Growth

Local 1% +40% Ethiopian 1% +25% Brazilian 1% +25% French 3% +24% Press Coffee 1% +22% Black 1% +20% Hot Brewed Coffee Varieties: French Roast 1% +18% Fastest Growing American 1% +18% Vanilla 1% +17% Arabica 1% +14% Fair Trade 1% +10% Organic 3% +9% House Blend 2% +5% Blend 6% +2% Regular 12% +1%

MENU PENETRATION: of all restaurants with hot brewed coffee, % that serve… MENU GROWTH: % relative change over the past year Source: Datassential MenuTrends MenuTrends Keynote | Non-Alcoholic Beverages 2015 Contact Datassential: 312-655-0594 24 Sourcing and flavor descriptors make up the majority of the fastest growing terms for hot brewed coffee.

Trending Hot Brewed Coffee Terms

+61%

+43% +40% +35%

+26% +25% +25% +24% +22% +20% +18% +18% +17% +17% +17% +14%

+10%

Bold

Local

Black

Vanilla

French

Arabica

Blended

Certified

Brazilian

Ethiopian

American

Cinnamon Trade Fair

Vietnamese

Intelligentsia

Press Coffee Press French Roast French

MENU GROWTH: % relative change over the past year Source: Datassential MenuTrends MenuTrends Keynote | Non-Alcoholic Beverages 2015 Contact Datassential: 312-655-0594 25 and espresso shots are the most commonly served hot specialty coffees. , mochas, and Americanos round out the top five hot specialty coffee varieties/flavors.

Top Hot Specialty Coffee Varieties/Flavors Overall

84% 83%

51%

32%

18% 13% 12% 12% 12% 11% 11% 10% 9% 9% 8% 6% 5%

5% 4% 3% 3% 3% 3% 3% 3% 3% 3%

Chai

Latte

Blend

Syrup

Decaf

Italian

Vanilla

Mocha

Double

Regular

Caramel

Flavored

Hazelnut

Espresso

Chocolate

Macchiato

Cinnamon

Americano

Cappuccino

Cafe Mocha Cafe

Cafe Au LaitAu Cafe

Steamed Milk Steamed

French Vanilla French

Dulce De De Leche Dulce

Cafe Con LecheCon Cafe

White Chocolate White Double Espresso Double

MENU PENETRATION: of all restaurants with hot specialty coffee, % that serve… Source: Datassential MenuTrends MenuTrends Keynote | Non-Alcoholic Beverages 2015 Contact Datassential: 312-655-0594 26 Americanos and Chai lattes are hot specialty coffee beverages on the rise, as well as flavor additions like caramel, white chocolate, hazelnut, and vanilla.

Penetration % Growth

Chai 3% +16%

Americano 18% +15%

Caramel 9% +11%

Italian 3% +8%

Hot Specialty Coffee Varieties: White Chocolate 4% +8% Fastest Growing Regular 6% +7%

Decaf 10% +6%

Hazelnut 5% +4%

Dulce De Leche 3% +3%

Steamed Milk 11% +1%

Vanilla 12% +1%

MENU PENETRATION: of all restaurants with hot specialty coffee, % that serve… MENU GROWTH: % relative change over the past year Source: Datassential MenuTrends MenuTrends Keynote | Non-Alcoholic Beverages 2015 Contact Datassential: 312-655-0594 27 Cuban espresso/coffee beverages are among the fastest growing in the hot specialty coffee menu category.

Trending Hot Specialty Coffee Terms

+39% +39%

+22% +21% +21% +21%

+17% +16% +15% +13% +12% +11% +11% +8%

+6% +6%

Soy

Chai

Blend

Decaf

Cuban

Biscotti

Freshly

Creamy

Organic

White

Drizzled

Caramel

Premium

American

Chocolate

Americano Full Bodied Full

MENU GROWTH: % relative change over the past year Source: Datassential MenuTrends Contact Datassential: 312-655-0594 28 HotMenuTrends coffee Keynote and | Non hot-Alcoholic specialty Beverages coffee2015 consumption are clearly concentrated during morning hours. Although consumption tapers off dramatically after breakfast, it is continuous throughout the day suggesting coffee opportunities at lunch, snack, and dinner times.

54% Hot Coffee 50%

36% Hot Coffee: Incidence by Daypart 26% 26% Hot Specialty Coffee of those who consume 21% 18% 14% 15% 13% 11% 8% 6%

6%

Mid Mid

Lunch

Dinner

Early Early

Morning

Morning Morning

Breakfast

Afternoon Late Night Late

QA2: Still thinking about hot coffee / hot specialty coffee you had yesterday, what time of day did you consume them? n=628 Please select all times of day you had each beverage. n=160 MenuTrends Keynote | Non-Alcoholic Beverages 2015 Contact Datassential: 312-655-0594 29 Consumers choose coffee for its great taste, but also for the wake-up jolt. Temperature is also a consideration with nearly 30% of consumers who seek coffee as a warming beverage.

Overall Coffee Perceptions

It tastes great 48% It wakes me up, keeps me up 42% I drink it to stay warm 28% It's worth the money 26% It's refreshing 23% It is appropriate to drink at any time of day 21% Specialty coffee drinks are an indulgence or treat 20% It's great to serve at gatherings 19% It's ok to drink once in a while, but not daily 16% I only drink it when I need to a pick-me-up 15% It pairs well with any type of food 15% It's thirst quenching 11% It's a healthy choice 9% It has nutritional benefits 8% Everyone in my home can drink, adults and kids 8%

QE2: What are your perceptions of coffee or specialty coffee beverages? Select all. n=736 MenuTrends Keynote | Non-Alcoholic Beverages 2015 Contact Datassential: 312-655-0594 30

Love- Love It Like It Neutral Avoid Avoid Ratio Starbuck’s 29% 27% 21% 23% 1.3 Folgers 27% 33% 24% 15% 1.8 Dunkin' Donuts 27% 34% 26% 14% 2.0 23% 28% 33% 15% 1.5 21% 32% 31% 16% 1.3 Gevalia 19% 30% 35% 15% 1.3 Coffee Brands Interest Green Mountain / Tully's 19% 29% 37% 15% 1.3

among those familiar with that item Seattle's Best Coffee 18% 36% 32% 14% 1.3 Community Coffee 17% 26% 40% 17% 1.0 Superior Coffee 17% 20% 45% 17% 1.0 16% 19% 49% 16% 1.0 Caribou Coffee Company 16% 29% 42% 13% 1.2 Royal Cup Coffee 16% 19% 48% 17% 0.9 Metropolitan 16% 19% 47% 18% 0.9 Cafe Bustelo 16% 22% 47% 15% 1.0 Trader Joe's 16% 23% 48% 14% 1.1

Higher ratios indicate greater net affinity

QC3: What are your favorite brands of coffee? n=varies MenuTrends Keynote | Non-Alcoholic Beverages 2015 Contact Datassential: 312-655-0594 31 WE KNOW FOOD DATASSENTIAL is your best source for food industry insights – from the latest menu trends to the products shoppers want at the grocery store.

for more information, contact BRIAN DARR at 312-655-0594 or [email protected] MenuTrends Keynote | Non-Alcoholic Beverages 2015 Contact Datassential: 312-655-0594 32 DATASSENTIAL INNOVATION TOOLS The industry’s most accurate FS system for identifying, tracking, MenuTrends and predicting flavor trends CPG 10x larger than other menu and flavor databases

15 million menu examples from more than 100k menus LTOs new and limited-time items updated weekly MenuTrends Keynote | Non-Alcoholic Beverages 2015 Contact Datassential: 312-655-0594 33 DATASSENTIAL INNOVATION TOOLS On-demand analysis of new FS item and LTO activity at LTO Analytics hundreds of restaurant chains CPG

benchmark detailed activity reports for each chain versus its competitive set weekly new items and LTOs are updated each week historic track over 100 months of LTO activity, dating back to 2006 MenuTrends Keynote | Non-Alcoholic Beverages 2015 Contact Datassential: 312-655-0594 34 DATASSENTIAL INNOVATION TOOLS Fill your retail innovation process FS with an ongoing stream of consumer- CPG FLAVOR+ tested new product ideas

INNOVATION FUNNEL. Flavor+ is the first step for meaningful, process-drive innovation. New product-flavor combinations are METRICS Excitement assessed each period, prioritized by market opportunity. Appeal Frequency EARLY DETECTION SYSTEM. Trends start first at restaurants and today are transitioning to retail faster than ever. Flavor+ Uniqueness Brand fit utilizes the Menu Adoption Cycle to detect early stage trends and then tracks them over time.

Each period, emerging flavors are Those flavors and are then paired Legacy and new flavors are tracked identified through MenuTrends and with your specific product categories longitudinally, with full reporting by the Menu Adoption Cycle. and tested with consumers. shopper segments and demography. MenuTrends Keynote | Non-Alcoholic Beverages 2015 Contact Datassential: 312-655-0594 35 DATASSENTIAL SALES TOOLS The first true universal operator database, FS Firefly verified by 5 million phone calls each year CPG

census phone-validated profiles for every FS location in the US – restaurants, on- site, and retail food sell better generate target lists by segment, menu type, operational attributes, or even what’s on the menu analytics analyze local markets, brand performance, and more than 10,000 chains MenuTrends Keynote | Non-Alcoholic Beverages 2015 Contact Datassential: 312-655-0594 36 DATASSENTIAL CUSTOM RESEARCH Extraordinary eater and FS shopper insights that reveal Consumer the “why” behind the “what” CPG

foodservice Segmentation target users of specific Concept testing restaurants, c-stores, and other segments Proprietary flavor trackers Category / AAU Brand strength retail / cpg Market entry analysis survey shoppers by store Customer satisfaction type or specific brand TURF analysis Price optimization global reach execute research in more than 70 countries, with full translation capability MenuTrends Keynote | Non-Alcoholic Beverages 2015 Contact Datassential: 312-655-0594 37 DATASSENTIAL CUSTOM RESEARCH Expert insights from the FS industry’s largest panel of Operator foodservice decision makers CPG

40k panelists by far the industry’s largest operator panel, with 40,000 purchase Concept testing decision makers Category management Category AAU all segments Brand tracking reach operators from all In-store testing segments – LSR, FSR, lodging, healthcare, K-12, Market entry analysis C&U, B&I, and more Package testing true feedback a panel built exclusively for research, balanced and unbiased MenuTrends Keynote | Non-Alcoholic BeveragesCALL MAEVE 2015 WEBSTER AT 312-655-0596 OR EMAIL AT [email protected] Datassential: 312-655-0594 38

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ON THE MENU TIPS brings you WORLD BITES CREATIVE DINE AROUND INTERNATIONAL keeps you up-to- deep analysis of bring you foods, CONCEPTS is your takes you on a CONCEPTS, date, covering six trends at different flavors, and trends monthly, in-depth trendspotting launching in 2014, key trends every stages along the from around the look at the latest tour of the brings you chain month, each with menu adoption globe. Each issue trends in country. Each activity from consumer data, cycle. Each issue is covers 10+ restaurant and month we focus around the globe, menu examples, packed with authentic dishes foodservice on one city, with highlighting up- and expert extensive from a single concepts. Each an overview of the and-coming commentary. Plus, research, cuisine, with issue includes city and region’s concepts, trends, we gather and foodservice/menu background, menu representative food culture; in- and ethnic flavors. examine the availability, media examples, and establishments, depth operator Each issue covers hottest LTOs from coverage, and extensive complete with and manufacturer six chains in a major chains both consumer consumer data, extensive profiles; menu single market, across the AND operator including market overviews and examples; and complete with country. data. demand. menu examples. consumer data . menu examples.