Category Report

COFFEE TEA® STRATEGIC MARKETING & DESIGN STUDIO

Category Report

ii S&D Coffee & Tea COFFEE TEA® STRATEGIC MARKETING & DESIGN STUDIO 1 Year TREND

2% LSRLIMITED SERVICE RESTAURANT 0% FSRFULL SERVICE RESTAURANT SERVINGS SERVINGS Source: The NPD Group/CREST® 2015 Who Age: Gender: 41%

26% 57% 19% 43%

8% 4% 1%

0-24 25-34 35-44 45-54 55-64 65+

Source: Datassential BUZZ, 1Q 2015 Source: NCA National Coffee Drinking Trends 2015

Ethnicity: Household Income:

White 61% Under $50K 40% Asian 14% $50K to $100K 41% Hispanic 12% Over $100K 19% Afr. Amer. 11% Other 2% Source: Datassential BUZZ, 1Q 2015 Source: Datassential BUZZ, 1Q 2015

Q: What denotes an iced coffee as high quality?

Taste / Flavor 33%

Right Strength 11%

Not Watery / Not Too Much Ice 11%

Right Amount of Sweetness 9%

Right Temperature 7%

Quality Ingredients 5%

Source: Datassential S&D (YCD), May 2014

Q: What are the characteristics of a “hand-crafted” iced coffee?

SH GRO RE U F N PARE D E D ID R B V U B DI A P Y

N L E

I L B Y A

B 29% N

R S

E S

W 31% A

40% E D

Source: Datassential S&D (YCD), May 2014

2 S&D Coffee & Tea COFFEE TEA® STRATEGIC MARKETING & DESIGN STUDIO

Q: What are the top iced coffee flavors?

MO VAN CAR C IL A H L M A A E

CH HA OC ZE O L N L

A U

T T E

Source: Datassential S&D (Iced and Frozen Coffee Overview) Why

Reasons for Drinking Iced Coffee (Top 5):

1. For Taste 2. An Energy Boost 3. A Treat 4. Start Your Day 5. Stay Focused/Creative

Source: NCA National Coffee Drinking Trends 2015

Daypart Consumption:

Early Morning 16%

With / At Breakfast 22%

Mid-Morning 36%

With / At Lunch 33%

Mid-Afternoon 38%

With / At Dinner 10%

Late Night 7%

Source: Datassential S&D (YCD), May 2014 Where Region:

N. East: 23% West: 26% Midwest: 18%

South: 33%

Source: Datassential BUZZ, 1Q 2015

4 S&D Coffee & Tea COFFEE TEA® STRATEGIC MARKETING & DESIGN STUDIO

ITED S IM ER L V I C Coffee Shop 33% E

R Donut Shop 21%

S QSR 14%

86% A

U C-Store 5%

N T S Bakery-Café 4% Dessert Shop 3% Food Truck / Stand / Kiosk 3% Supermarket Deli 2% L SERV UL IC Fast Casual 2% F E

R E

S Midscale Restaurant 2%

U Casual Dining Restaurant 2%

5% R

A Buffet Restaurant 1% N

T S Upper Casual Restaurant 1% Fine Dining Restaurant 0%

Source: Datassential BUZZ, 1Q 2015

Venue Selection:

40% 39%

33%

24% 22% 21%

14% 12%

Customizable Environment/ Loyalty Gift Card / Convenience Best Quality Best Price Best Variety Beverage Ambiance Program Pre-Paid Card

Source: Datassential BUZZ, 1Q 2015

Condiment Usage:

35% 36% 34%

CLU IN DE 20% C O N

60% T S

Creamer Milk Sweetener Flavored Syrup

Source: Datassential BUZZ, 1Q 2015

Further Customization:

HIPPE DR CES/S W D IZ PI EA C Z S S L O R E

E N

38% 26% 14% G S

ANDY ARSHM NUT TO C T M P O A P P L I L N P

S G

13% 9% S 5%

Source: Datassential S&D (YCD)

6 S&D Coffee & Tea COFFEE TEA® STRATEGIC MARKETING & DESIGN STUDIO

Serving Style Appeal:

57%

21%

13% 9%

Cream & Sweet Cream Only Black Sweet

Source: Datassential BUZZ, 1Q 2015

Q: What sizes of iced coffee do consumers typically purchase?

Small 12%

Medium 45%

Large 33%

Extra Large 5%

Can / Bottle 5%

Source: NPD Group Coffee and Tea Overview YE Feb ‘15

Food Accompaniment:

WITH A

WITH A M S E N A

B A L Y I

TS C E K 16% L F 20% 61% Source: Datassential S&D (YCD)

Q: Who are we with when we drink iced coffee?

Alone 53%

With spouse or significant other 17%

With family 14%

With friends 14%

Source: Datassential S&D (YCD)

8 S&D Coffee & Tea

About S&D Coffee & Tea S&D Coffee & Tea is the nation’s largest custom coffee roaster and supplier of iced tea to the foodservice industry. S&D is also a leading producer of liquid extracts. In continuous operation since 1927, the company serves over 100,000 customers through national distribution and direct store delivery.