A Roundup of Noteworthy Foodservice Findings for the Week of July 26, 2021

Industry Insights A roundup of noteworthy foodservice findings for the week of July 26, 2021 Access industry insights instantly Keeping up with the latest foodservice trends has never been easier with Technomic’s Ignite platform. Uncover industry intel, menu trends and consumer insights.

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2021 YEAR-TO-DATE OWNERSHIP CHANGES AMONG TOP 500 CHAINS Chain Restaurant Chain Name Rank Acquiring Organization Freddy's Frozen Custard & 61 Thompson Street Capital Partners Acquisition Activity Steakburgers Round Table Pizza 83 Fat Brands Inc. Heats Up Taco Cabana 125 Yadav Enterprises After a relatively slow start to the year, BBQ Holdings Inc., owner of Famous Au Bon Pain 152 Ampex Brands acquisition activity among chain Dave’s and Granite City Food & restaurants has seen a notable Brewery, agreed to buy the parent Village Inn 162 BBQ Holdings Inc. increase entering the second half of company of Village Inn and Bakers 2021. Square. The transaction is expected to Lee's Famous Recipe Chicken 173 Artemis Lane Partners be completed by the end of July. Twelve chains in Technomic’s Top 500 ranking have undergone a change in The largest single chain to be acquired J. Alexander's 181 SPB Hospitality ownership thus far in 2021. One of the so far in 2021 is Freddy’s Frozen largest acquisitions involved Fat Custard & Steakburgers, which was Luby's 215 Luby’s Restaurants Corp. Brands, the parent company of Fat purchased by Thompson Street Capital Burger. In late June, Fat Brands Partners, a private equity firm, in March. Fuddruckers 227 Black Titan Franchise Systems acquired Global Franchise Group, the owner of Round Table Pizza, Great American Cookies, Hot Dog on a Stick, Great American Cookies 245 Fat Brands Inc. Marble Slab Creamery and Pretzelmaker. Marble Slab Creamery 357 Fat Brands Inc.

Pretzelmaker 471 Fat Brands Inc.

Source: Technomic Ignite Company

© 2021 Technomic, Inc. 3 IGNITE MENU Floral, Fruity and Fresh Nonalcohol Beverages Entice Consumers Technomic data shows that 80% of designations. For example, 19% of sweeter ingredients such as chocolate operators menu nonalcohol beverages, consumers said they were very likely to in coffee drinks are proving to be making it exceedingly difficult to create purchase Tropical Smoothie Cafe’s popular with consumers. Examples standout items that draw consumers in Dragon Fruit Smoothie, and 31% of include the Frozen Blackberry Sage when, on average, there are about 10 those ages 18 to 24 said it would be Latte from Biggby Coffee, which beverages to choose from on a single very likely to draw them into the combines blackberries, chocolate and menu.* One trend forming among LTOs restaurant. espresso (with above-average is the use of herbs, fruit and flowers to purchase intent, craveability, Women especially crave herbal and catch the attention of consumers. Here uniqueness and draw) and the Iced floral beverages. Matcha, mint, hibiscus are some key takeaways from this Matcha White Chocolate Tea Latte at and sage are some of the ingredients in budding trend. Caribou Coffee (with above-average highly craveable beverages among purchase intent, draw and craveability). Tropical fruit-forward beverages are female consumers. For example, especially appealing among women rated the Watermelon consumers. Fruits such as dragon fruit, Cucumber Mint Quencher at Scooter’s passion fruit and pineapple appear to Coffee as above average for be a common ingredient across craveability (32%) and draw (33%). beverages that rate highly in multiple Combining savory herbs or salt with Hibiscus iced tea Image Source: Shutterstock

Source: Technomic Ignite Menu, Q2 2021

TOP-TWO BOX RATINGS Value Re-Evaluation (AGREE/STRONGLY AGREE) “I pay close 68% 68% attention to menu 67% 67% 67% 67% prices so I can find 66% Continues the best value for 65% my money.” 63% “I always 61% 61% 61% A significant trend in the American diner a relief for operators feeling the double- compare prices 60% 60% 60% 59% value mindset further revealed itself in whammy pinch of inflation and before deciding what to buy.” the second quarter of 2021. skyrocketing labor costs. 57% 56% The ongoing tracking of consumer Consumers remain interested in value, attitudes and behaviors captured within to be sure. However, the emerging Technomic’s Ignite Consumer platform consumer value equation may allow includes three fundamental value-based menus to stray further from traditional “I usually pick 50% 50% 50% attitudinal statements. The percentage dollar-based product positioning. 49% 49% 49% of consumers who agreed or strongly Suppliers and operators should take restaurants with 48% lower prices.” agreed with these statements started to advantage of this latitude and seek to 46% decline in the second quarter 2020, just boost value perceptions via other 45% as the COVID-19 pandemic began avenues, such as through premium forcing changes in daily activities, ingredient quality or menu item behaviors and purchasing decisions. differentiation. Consumers indicate that they are continuing to pull away from traditional Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 dollar-driven thinking, which should be 2019 2019 2019 2020 2020 2020 2020 2021 2021

Base: 27,300 consumers ages 18+ per period Source: Technomic Ignite Consumer brand ratings data

When it comes to product innovation and stamina to aid consumers in being Starbucks’ 47 JIMOTO Frappuccino among chain restaurants there are few the “absolute champions of watching To celebrate its 25th anniversary, the markets that compete with Japan. sports.” local menu innovation heavyweight That goes for the sheer quantity of new KFC’s Black Hot Sandwich introduced 47 new Frappuccinos—one products that flood the market each for each of Japan’s prefectures. Not content with featuring a star month as well as the creativity, thematic ingredient once or twice, this new LTO Wendy’s First Kitchen’s Melotozo conceptualization, innovation and showcases its hero three ways: black occasional outright zaniness. A variation on maritozzo—an Italian pepper buns and a mayonnaise sauce sweet bun currently trending in Japan— To celebrate the start of the 2020 Tokyo spiked with both coarse ground black that swaps in local favourite melon Olympic Games, here are five LTOs pepper and powdered black pepper. bread for traditional Roman dough. that exemplify Japan’s LTO greatness. Domino’s Summer Favorite Quattro Pizza Hut’s Meat Decathlon Pizza Quadrants topped with four new builds: Boasting 10 meats, this sports-themed Crispy Fish & Chips, 5 Seafood Ajillo, pie was developed to embody the Butter Chicken Curry and Crispy attributes of toughness, muscle, power Chicken Bites & Honey Mustard.

Frappuccinos in various flavors Note: Units based on data from end of 2019 Image Source: Source: Technomic Global Foodservice Navigator Program Shutterstock

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