Making the Most of Foodservice Trends Menu Insights for Beef And

Home , Hard Rock Cafe, Pink slime, Qdoba, Small plates, Yoshinoya

Making the Most of Foodservice Trends Patty Johnson, Global Food Analyst

April 2015

WHAT YOU NEED, WHEN YOU NEED IT

Mintel is a leading global supplier of consumer, product and market intelligence. For over 40 years, Mintel has provided insight into key worldwide trends, offering exclusive data and analysis that directly impacts client success.

• Mintel Reports • Mintel GNPD • Mintel Market Sizes • Mintel Trends • Mintel Menu Insights

Every day we provide our clients with robust information, analysis and critical recommendations so market leaders can make the right decisions, at the right time.

2 Presentation overview

• Foodservice overview • Beef on the menu Snapshot • Pork on the menu Snapshot • Redefining Value for Meat Products – Convenience ǀ Health, Wellness and Indulgence ǀ Human Touch ǀ The Real Thing ǀ Individuality ǀ Participation

3 Setting the foodservice table

National Restaurant Association projects 3.8% growth

• 2.9% gain in tableservice

• 4.3% gain in quickservice/fast casual

• In January 2015 retail sales at restaurants exceeded retail sales at grocery stores for the first time

Two major demographic cohorts to watch: • Millennials (20-37) 24.5% in 2014 • Convenience-driven • Putting off buying homes • More health and ethically driven

• Baby Boomers (50-68) 23.6% • Empty nests (maybe) leave more $ for dining out Source: US Census Bureau, interim population projections released 2012 and annual population • More likely to eat at fullservice, but looking to estimates/Mintel conserve cash 4 Menu Insights Dashboard - Beef

INCIDENCE BY SEGMENT INCIDENCE BY Menu Incidence Change Q4 2011-14 MEAT CUT TOTAL Menu Incidence Change Q4 2011-14 DECLINE -2% +6% +62% STEAK-CUT +31% Fine Casual Family Fast QSR RIBEYE SIRLOIN Dining Dining Midscale Casual +10% -6% -11% +8% 0%

INCIDENCE BY MENU ITEM DISH Menu Incidence Change Q4 2011-14

+25% +71% NEW YORK -4% +5% -11% 0% +14% BRISKET +40% STRIP MEAT BURGER SANDWICH PIZZA SALAD FILET

5 SOURCE: MINTEL MENU INSIGHTS, Q4 2011-14 Beef – What’s Trending

Fine dining and fast casual increased their use of beef as an ingredient on menus while casual dining and family midscale declined. Going Upscale Growth in fine dining is driving growth in steak-cut, sirloin, ribeye, brisket, and filet cuts. Since commodity prices are high, operators must create ways to offer upscale beef dishes while keeping food costs at a reasonable level.

Most menu claims that posted growth fall within the areas of nutrition and marketing. Menu Labeling More details: Preparation claims related to meat cuts and cooking technique have also grown on menus, 2% and 6%, respectively.

Beef is being sprinkled throughout dishes rather than being Smaller Portions the main focus. Physical preparations for beef posting growth include shredded, shaved, filled, and crushed.

6 Menu Insights Dashboard: Pork

INCIDENCE BY SEGMENT INCIDENCE BY Menu Incidence Change Q4 2011-14 MEAT CUT TOTAL Menu Incidence Change Q4 2011-14 GROWTH 5% -6% +3% CHOP -23% Fine Casual Family Fast QSR RIB TENDERLOIN Dining Dining Midscale Casual +13% 6% -3% +8% +7%

INCIDENCE BY MENU ITEM DISH Menu Incidence Change Q4 2011-14

-4% -32% SHOULDER LOIN -3% +2% -17% 0% +7% +25% SANDWICH MEAT PIZZA SALAD BURGER BELLY

7 SOURCE: MINTEL MENU INSIGHTS, Q4 2011-14 Pork: What’s trending

New Places Fine dining contributed to overall growth, taking pork upscale.

Upscale claims like premium, gourmet, and artisan posted growth in Premiumization dishes containing pork, along with authentic, old-fashioned, house/homemade, and secret

Dishes with pork are taking on Mexican, Hawaiian, Southern, and Ethnic Flair California dishes. Emerging cuisines include Thai, Japanese, Korean, Cuban, and Spanish.

Declining meat cuts for pork include chop, tenderloin, boneless, loin, Making the Cut and center-cut. Operators are using other cuts and preparing them by shredding, roasting and braising.

Everything’s Bacon leads pork ingredient my menu incidence better with Bacon

8 The new “value” equation

Quantity

Quality Price

...... 9 mintel.com Convenience is what foodservice is all about ......

94% of US adults snack at least once daily, with 15% snacking four or more times per day, falling into the Super Snackers consumer segment.

Daily snacking frequency, US, January 2015

Easy to go Easy to gather and share—small plates, appetizers as the meal

Base: 2,000 internet user aged 18+ 11 Source: Lightspeed GMI/Mintel Pork: Menu incidence of appetizers has grown

PCYA Q4 Q4 Q4 2011 2014 2014 Appetizers and Entree 3,648 4,027 10% soups Sandwiches 3,008 2,952 -2% containing pork Salad 858 865 1% have grown Appetizer 601 683 14% showing the Sides 423 402 -5% versatility of the Soups 143 150 5% Child/Kids 117 -4% ingredient. 112 Senior 26 23 -12% Beverage 3 12 300% Specialties 1 6 500% Bakery 2 3 50% Pork in Small Plates 0 3 - beverages, Dessert 2 1 -50% has also Low Carb 2 0 -100% Total Dishes 8,834 5% grown, creating 9,239 unique and Entrées, the largest menu section for pork, makes up hearty drinks 44% of pork dishes.

Sandwiches are the second largest menu section for pork, but decreased -2% from Q4 2011-14. PCYA = Percent Change Year Ago

12 SOURCE: MINTEL MENU INSIGHTS, Q4 2011-14 Pork: A focus on appetizers

SPARROW BAR & COOKSHOP MAGGIANO’S LITTLE ITALY FAMOUS DAVE’S Date with a Pig Roasted Pear and Gorgonzola Barbeque Nachos Bruschetta Medjool date, chorizo, bacon, House-smoked cheddar cheese, chermoula (price not listed). Toasted crostinis layered with wilbur beans, Famous Chili, gorgonzola cheese, roasted pear, jalapenos, Rich & Sassy and choice imported prosciutto, topped with a of Texas Beef Brisket, Georgia balsamic honey glaze and arugula Chopped Pork, or Barbeque Pulled (price not listed). Chicken ($6.99 small, $9.49 large).

13 SOURCE: MINTEL MENU INSIGHTS, Q4 2011-14 Beef – A Focus on Appetizers & Small Plates

Friendly’s Munchie Mania Added in Q4 2014 the item allows guests to choose 3 of the following: Cheeseburger sliders, loaded waffle fries, waffle fries, kickin' buffalo chicken tenders, mini mozzarella sticks, chicken quesadilla, onion rings, buffalo wings ($9.99).

Candelas Tapas Mexicanas Added in Q4 2014 the item consists of an assorted plate with salmon ceviche tostada, tuna quesadilla, beef birria taco and guacamole ($12.95).

Blue Ginger Restaurant Fleming’s Steakhouse Charcuterie Plate Added in Q4 2014 the item includes duck prosciutto, Sliced Filet Mignon chicken liver mousse, basturma and country pate ($15).

14 SOURCE: MINTEL MENU INSIGHTS, Q4 2011-14 Beef – A Focus on Portability

Applebee’s Sweet Asian Pineapple Burger Added Q4 2014 the item includes pineapple, spicy sweet Asian Chile sauce , and jack cheese ($9.99).

Pollo Tropical Calypso Beef Wrap Added Q4 2014 the item includes select prime rib, pan seared with melted cheese and cilantro garlic sauce (no price listed).

Steak ‘n Shake Dunkin’ Donuts Queso Steakburger Angus Steak and Egg Added Q4 2014 the item consists of a single Steakburger topped with new signature queso sauce, roasted poblano, Wake Up Wrap bell, and jalapeno peppers, and crispy tortilla strips. Served with fries ($3.99).

15 SOURCE: MINTEL MENU INSIGHTS, Q4 2011-14 What it Means

For the consumer, saving time becomes nearly as important as saving money Speed-facilitating operations

• Require easy and quick-to-execute menu concepts

Speedy delivery options • Investment is happening in technology and systems to get goods ordered on line to consumers sooner.

Movement to 3rd party compilers • How do your recipes and preparation concepts hold up to Takeout Taxi?

...... 16 mintel.com Health and Wellness ......

has thrust health and nutrition to the forefront. The obesity epidemic… 29% of today’s consumers are currently dieting while 55% have dieted in the past year or are watching what they eat.

More than of what is in their food. ever, consumers They are becoming more skeptical of ingredients. are aware… They are looking for ‘clean’ and simple ingredients and preparation.

Consumers ways to be healthier. are However, consumers may be unaware or confused about what continually trying to they need to do in their quest for better health. find… 92% agree that moderation is best for a healthy lifestyle ...... 18 mintel.com Source Link: Mintel Oxygen: Nutritional Food & Drink – US – January 2013 Protein moves into the spotlight

Connecting what I eat to how I feel… • Protein’s satiety, muscle building and weight management attributes are becoming well-recognized by US consumers.

19 Source: Lightspeed GMI/Mintel The Rise of ‘Flexitarians’

Meat Meat avoidance is on the rise in the US avoidance rises 7% of US consumers now self-identify as vegetarian

Meat limiters 39% of US consumers claim to be eating less red meat, grow target underscoring opportunities for menu items that are less meat market size intensive.

Millennials When dining out, four in 10 US consumers define a healthy look for menu item as one that includes more fruit and vegetables than health the average restaurant menu option. markers Millennial-aged consumers are health concerned than older consumers

...... Mintel’s Food and Drink ...... 20 mintel.com Beef – Cooking preparation reflects healthy intentions

PCYA Q4 Q4 Q4 2011 2014 Cooking 2011-14 Grilled (All) 90 80 -11% preparations for Broiled (All) 14 31 121% meats are Roasted (All) 18 28 56% increasing with Braised (All) 22 15 -32% the most growth Seared (All) 6 13 117% in broiled, Hot Preparation 2 10 400% roasted, and Fajita 5 8 60% seared. Raw (All) 10 7 -30% Fried (All) 6 5 -17% Baked (All) 3 5 67% Rubbed (All) 4 4 0% Blackened (All) 6 3 -50% Stew (All) 2 3 50% Dried (All) 1 3 200% Grilled Floured (All) 0 3 - preparations are Slowly-Cooked (All) 10 2 -80% the leading Scrambled 0 2 - preparation Warm Preparation 2 1 -50% descriptor Spiced (All) 0 1 - House-Smoked 0 1 - Top 20 Cooking 201 225 12% Total Cooking 216 229 6%

PCYA = Percent Change Year Ago Cooking preparation descriptors for ingredients in dishes with beef increased 6%

21 SOURCE: MINTEL MENU INSIGHTS, Q4 2011-14 Beef makes its way into salads

PCYA Q4 Q4 Q4 2011 2014 2011-14 Entree 4,722 4,659 -1% Salads Sandwiches 2,942 2,811 -4% experienced the Salad 432 482 12% highest growth Appetizer 462 474 3% Child/Kids 285 245 -14% Soups 194 158 -19% Sides 136 108 -21% Senior 22 22 0% Specialties 2 11 450% Small Plates 0 5 - Appetizers and Bakery 0 1 - small plates Beverage 0 1 - remain important Low Carb 6 0 - menu sections for Total Dishes 9,203 8,977 -2% beef Entrées, the largest menu section for beef, account for 52% of beef dish share and 21% of the decline from Q4 2011-14, less than its share.

Sandwiches make up 31% of beef dish share and 43% of the decline from Q4 2011-14, driving the decline and PCYA = Percent Change Year Ago CTG/D = Contribution to Growth (or Decline) contributing more than its share.

22 SOURCE: MINTEL MENU INSIGHTS, Q4 2011-14 Beef – A Focus on Salads

Schlotzsky’s Deli Chophouse Steak Salad Added in Q4 2014 the item includes tender hand- carved ribeye steak, roasted tomatoes, fried onions, bleu cheese crumbles, and dried cranberries on a bed of field greens with choice of dressing ($8.99).

Subway Roast Beef Salad Added in Q4 2014 the item is piled high with lean roast beef and choice of veggies including green peppers, tomatoes and jalapenos (no price listed).

Lone Star Steakhouse and Saloon Panera Bread Sirloin Steak & Wedge Salad Added in Q4 2014 the item contains its signature lettuce Steak & Blue Cheese Salad wedge with bleu cheese dressing, crumbled bleu cheese, tomato, bacon, red onion and sliced USDA Choice sirloin ($12.49).

23 SOURCE: MINTEL MENU INSIGHTS, Q4 2011-14 Leaving room for indulgence: A focus on bacon

FRONTERA GRILL ROCKIT BAR & GRILL BENNIGAN’S Bacon Guacamole Buffalo Beer Battered Bacon Guinness Glazed Bacon Cheeseburger Bacon, spicy morita, grilled onion, Applewood smoked bacon, goose smoked tomato, anejo cheese island beer batter, buffalo sauce, GUINNESS Stout glaze, applewood- ($9.75). jalapeno ranch, celery, crumbled smoked bacon, Cheddar cheese, bleu cheese ($9.00). crispy fried onions ($12.00).

24 SOURCE: MINTEL MENU INSIGHTS, Q4 2011-14 Pork: A focus on boozy beverages

O’CHARLEY’S HARD ROCK CAFÉ SMOKEY BONES Southern Bacon Bloody Mary Twist & Shout Shake Hail Mary

O’Charley’s very own with candied Bacardi Oakheart Spiced Rum, Absolut vodka + Smokey Bone's bacon (no price listed). Guinness, DeKuyper Dark Creme signature Bloody Mary Mix + olive de Cacao, chocolate syrup, vanilla juice + Tobasco + Bacon and bleu ice cream and Monin Salted cheese stuffed olives + a celery Caramel. Topped with whipped stalk + a Montreal seasoning rim. A cream, caramel, chocolate syrup libation to go long for ($8.50). and bacon pieces (no price listed)..

25 SOURCE: MINTEL MENU INSIGHTS, Q4 2011-14 Beef – A Focus on Indulgence

McCormick & Schmick’s Beef Medallions Bordelaise Roasted mushroom, spinach sautee ($25.99).

Friendly’s Sirloin Steak Tips Served with cheddar biscuit and choice of two sides ($12.99).

Claim Jumper Roasted Tri-Tip Tony Roma’s Certified Angus beef slow-roasted and sliced over herb demi-glace served Medium Rare to Medium and served Filet Medallions with mashed potatoes and roasted vegetables ($12.99).

26 SOURCE: MINTEL MENU INSIGHTS, Q4 2011-14 Catering to Individuality ......

When choosing a casual dining restaurant:

80%

of consumers are influenced by the restaurant’s ability to easily accommodate special orders

...... 28 Source: Mintel Inspire Trend Make it Mine, Mintel Report Casual Dining Restaurants – US – August 2013 mintel.com Pork: Allowing for customization

NOODLES & COMPANY QDOBA MEXICAN GRILL Thai Hot Pot Pork Mexican Gumbo

Signature curry broth, cabbage, sprouts, fresno Shredded pork simmered in a blend of tangy peppers, shiitake mushrooms, rice noodles, pulled tomatillos, jalapenos, garlic and lime juice ($8.40). chicken and pork, lime wedge and cilantro. Served with a side of toasted Asian flatbread ($8.59).

29 SOURCE: MINTEL MENU INSIGHTS, Q4 2011-14 Beef – A Focus on Customization

Yoshinoya Angus Steak Bowl Savory premium Angus steak is grilled to perfection and drizzled with a sweet soy glazed and topped with sesame seeds and green onions. All comes on a bed of fluffy steamed rice ($5.39).

Panera Bread Power Steak Lettuce Wraps Seared steak, leaf lettuce, cucumbers, diced tomatoes, red onions and basil pesto finished with freshly squeezed lemon (no price available).

Don Pablo’s Mexican Kitchen Sizzling Fajita Salad

30 SOURCE: MINTEL MENU INSIGHTS, Q4 2011-14 What it Means

Consumers expect to have it their way

Look for growth of foodservice brands that encourage guests to customize • Consider new products that allow consumers to build in their own style

Consider special needs • Consumers are increasingly motivated by individualized diet needs such as gluten-free, vegetarian, vegan, no added sugar, etc. Cater to these needs with a range of choices

Products that engage consumers in preparation maximize the custom feeling • Engaging consumers emotionally through involvement in the process.

...... 31 mintel.com Human Touch ......

AUTOMATION AND MASS PRODUCTION

WILL CONTINUE TO SIMPLIFY LIFE

BUT WE WILL REACT BY VALUING

AND PROMOTING HUMAN ATTRIBUTES

AND ARTISAN GOODS

33 mintel.com Foodservice embraces artisan qualities

Handmade and artisan attributes provide a counterpoint to factory food

• Mass-produced factory processed food Consumers isn’t about to fade away soon…..but….. connect emotionally by • Handmade products are being elevated and learning about: prized for old world craftsmanship

• hands-on production techniques • Artisan positioning has spread across food and drink categories • farmers' lives • Increasing demand for handcrafted products • crop heritage creates opportunities

• recipe origins

...... 34 mintel.com Pork: A focus on traditional claims

MOOSE JAW WOODY’S BAR-B-Q MILLER’S ALE HOUSE Pop’s Old Fashioned Beer Ribs Woody’s Signature Baby Back Ribs Baby Back Ribs

A loin rack of ribs topped with Sweet A tradition for more than three Our own secret slow-cooked Baby Ray's BBQ Sauce ($17.99 decades. A half rack of our recipe smothered with southern half, $22.99 full). succulent, meat-fallin-off-the- BBQ sauce and served with choice bone baby back ribs, slow cooked of side and cole slaw ($9.99 half, in Woody's secret-recipe marinade, $16.95 full). then grilled to perfection ($8.99).

35 SOURCE: MINTEL MENU INSIGHTS, Q4 2011-14 Pork: A focus on preparations with handmade and homestyle appeal

MAY DRAGON WOLFGANG PUCK Shredded Pork in Garlic Sauce Slow Braised Short Ribs

Shredded pork sautéed in a slightly sweet and sour Slow braised short ribs with a white bean bacon hot garlic sauce ($10.00). puree and baby kale ($21.00).

SOURCE: MINTEL MENU INSIGHTS, Q4 2011-14 36 Beef – A Focus on Specific Beef

Carl’s Jr 1/3 Jalapeno Thickburger Added Q4 2014 the item includes 100% Black angus beef patty, pepper jack cheese, jalapeno coins, and Santa Fe sauce served on fresh baked bun ($5.79).

Upstream American Wagyu Flank Steak Added Q4 2014 with local sweet potato, sea beans, miso red wine reduction ($34).

Bone’s Arby’s Wagyu Carpaccio Crisp Montreal Angus & Portabella Added Q4 2014 the item includes Boursin cheese and truffle oil ($19).

37 SOURCE: MINTEL MENU INSIGHTS, Q4 2011-14 Artisan action plan

Consider product processes or ingredients that could be Upgrade upgraded or highlighted for artisan status me

Appeal to ‘foodie’ emotions with product lore, heritage stories Tell a and provenance story

Emphasize slow, human and artistic attributes of ingredient Slow it all selection and product preparation down

Give me a Explore ingredients and packaging options that enhance artisan makeover appeal—rough cut and random is a good thing

...... 38 mintel.com The real thing 66% 82%

Of US consumers Of US consumers say it's prioritize “authentic” important ingredients are traditional flavors. native to the cuisine.

SOURCE: MINTEL ETHNIC RESTAURANTS UK APRIL 2012; ETHNIC RESTAURANTS US MARCH 2012; THE REAL THING

39 mintel.com Pork: Cuisine type reflects shift into ethnic cuisines

PCYA Q4 Q4 Q4 2011 2014 North American 2014 dishes increased Traditional American 4,730 4,848 2% their usage of Italian 1,799 1,849 3% pork including Mexican 475 608 28% Mexican, BBQ 585 603 3% Hawaiian, Chinese 392 379 -3% Southern, and Southwest/Tex-Mex 283 293 4% California. Hawaiian 127 134 6% Southern 77 91 18% Pan-Asian 86 90 5% California 51 61 20%

Top 10 Cuisine Types 8,605 8,956 4% Emerging Total Cuisine Types 8,834 5% cuisines include 9,239 Thai, Japanese and Korean as

well as Cuban, Fusion cuisines are contributing more than their share Spanish, and in growth from Q4 2011-14 indicating their return to Mediterranean the menu and room for innovation.

PCYA = Percent Change Year Ago )

• 40 SOURCE: MINTEL MENU INSIGHTS, Q4 2911-14 Pork: A focus on ethnic foods

TACO TIME POMODORI’S FRANTOIO’S Sweet Pork Burrito Figs and Prosciutto Bucatini Del Pupone

Sweet and savory pork carnitas, Sliced Turkish figs with imported Artisan bucatini, Berkshire pork black beans, rice, cheddar cheese prosciutto on a garlic and olive oil pancetta, San Marzano tomato, and sour cream rolled in a home- crust ($11.99). Calabrian pepper, pecorino Romano style tortilla ($4.89). ($1095 half, $17.95 whole).

41 SOURCE: MINTEL MENU INSIGHTS, Q4 2011-14 Pork: A focus on Asian cuisine

CALIFORNIA PIZZA KITCHEN NOODLES & COMPANY TGI FRIDAY’S Korean Barbecue Pizza Japanese Pan Noodles Thai Pork Tacos

Roasted pork in a sweet & spicy Caramelized udon noodles in a Three soft corn tortillas with Thai Korean barbecue sauce on our sweet soy sauce, broccoli, carrots, marinated pulled pork, sriracha aioli, original hand-tossed crust. Topped shiitake mushrooms, Asian sprouts, ginger lime slaw and hoisin sauce with Napa cabbage, julienned pears black sesame seeds and cilantro ($6.00). & carrots, slivered scallions and with choice of meat or tofu including fresh cilantro in a Ponzu vinaigrette naturally raised pork ($4.49 small, (no price listed). $5.89 regular).

42 SOURCE: MINTEL MENU INSIGHTS, Q4 2011-14 Beef – Ethnic menu items rise

PCYA Q4 Q4 Q4 2011 2014 2011-14 Rise in tacos, Meat (All) 1,912 1,832 -4% burritos, bowls Burger (All) 1,576 1,648 5% and stir fries Sandwich (All) 1,374 1,219 -11% show a Pizza (All) 674 676 0% preference Entree Combination (All) 510 545 7% Salad (All) 415 474 14% toward ethnic Stir Fry (All) 322 359 11% cuisines. Taco (All) 265 269 2% Burrito (All) 210 232 10% Soup / Stew (All) 256 212 -17% Pasta (All) 323 201 -38% Chips (All) 124 132 6% Egg (All) 146 129 -12% Fajitas (All) 119 0% 119 Vegetable (All) 122 118 -3% Portable options Quesadilla (All) 111 103 -7% like burgers and Calzone (All) 103 101 -2% wraps are Enchilada (All) 111 98 -12% increasing. Wrap (All) 74 81 9% Bowl (All) 32 52 63% Top 20 Dishes 8,779 8,600 -2% Total Dishes 9,203 8,977 -2%

The top 20 beef menu dishes account for 96% of share PCYA = Percent Change Year Ago ) and contributed 86% to the decline in menuing. In fact, only 7 of the top 20 menu item dishes posted growth.

43 SOURCE: MINTEL MENU INSIGHTS, Q4 2011-14 Beef – A Focus on Ethnic Foods

Tropical Smoothie Cafe Korean BBQ Steak Taco Added in Q4 2014 the item includes Steak, Asian BBQ Sauce, Cucumber and Kale Slaw (no price listed).

Samurai Sam’s Teriyaki Grill Dark Chicken and Steak Rice Bowl Added in Q4 2014 the item includes steamed rice, dark meat chicken, steak, wok-stirred veggies and Samurai Sam's Teriyaki Sauce ($7.98 regular, $8.98 large).

Del Taco Cali Steak and Guac Panda Express Added Q4 2014 the item is loaded with grilled carne Beijing Beef asada steak, guacamole, sour cream, freshly chopped pico de gallo salsa and stuffed with Del Tacos famous crinkle-cut fries ($6.99, $6.59 combo).

44 SOURCE: MINTEL MENU INSIGHTS, Q4 2011-14 Pork: Authenticity can be American traditions too--a focus on smoked flavors

RED ROBIN BOSTON MARKET ARMADILLO WILLY’S A.1. Peppercorn Burger ¼ Rack of Ribs Bacon Cheeseburger

Hardwood-smoked bacon, melted These meaty ribs are pit-smoked Our flat-iron cheeseburger with our Pepper-Jack, A.1. Peppercorn with real hickory wood for hours and special double-smoked brown sugar Spread, tomatoes and crispy onion slathered in our sweet, peppery, bacon ($8.45). straws on an onion bun ($10.99). kettle-cooked barbecue sauce ($10.99).

45 SOURCE: MINTEL MENU INSIGHTS, Q4 2011-14 Participation ......

• 36% of UK • 62% of US consumers adults say consider "free when they from Consumers are concerned see products additives" the labeled ‘all most about what’s in their food natural’ they important think they’re food claim healthy

Product recalls. Allergy scares. Villainous additives. We’re more • 1 in 4 new wary of what we consume than • But only 24% products ever before. of US launched consumers globally feel they can carries some trust the term kind of ‘natural’ on a ‘natural’ claim label

...... Source Link: Mintel Inspire– Factory Fear Trend ...... 47 mintel.com DECLINE OF DEFERENCE

WE ARE CHALLENGING,

QUESTIONING AND SUBVERTING

THE SYSTEM LIKE NEVER BEFORE 48 mintel.com 48 mintel.com PROTESTY Other Examples:

• Subway removes ingredients Kraft Foods Group Inc. has from bread announced that it will remove • Pink Slime yellow color dyes its Macaroni • Johnson & Johnson removes and Cheese after Food Babe ingredients from baby starts petition.

The petition received 348,000 Not just consumer activists, but signatures. NGOS too around animal welfare issues

• Gestation crates • Battery cages for hens • Ag gag bill prevention

SOURCE: MINTEL; DECLINE OF DEFERENCE

49 mintel.com Consumers want “moral” and transparent brands

Consumers may voice ethical or green sentiments, but….they are often too busy, too broke or too lazy to act on their beliefs

64% • of US consumers expect companies to be environmentally friendly 55% • of US consumers support boycotting companies that act irresponsibly 46% • of US consumers agree that poultry brands that support animal welfare are worth paying more for

A brand’s ethics can act as a differentiator or a deal breaker

50 mintel.com SOURCE: MINTEL/ EDELMAN; CONE COMMUNICATIONS; ATTITUDES TOWARDS SOCIAL RESPONSIBILITY US SEPTEMBER 2012 Beef – Ingredient Claims cater to increased demand for transparency

PCYA Q4 Q4 Q4 2011 2014 Clean-food labels 2011-14 focusing on the Tender (All) 574 441 -23% nutrition of the Fresh 454 440 -3% cows like grass- USDA Choice 431 396 -8% fed and corn-fed Juicy 405 317 -22% USDA 204 -1% have grown. 201 Prime 197 198 1% Naturalness is a Premium 151 175 16% key attribute Certified Angus Beef 142 169 19% American (All) 148 153 3% Natural 114 145 27% Lean 157 125 -20% 100% Pure 88 103 17% Quality claims Signature 63 88 40% Corn-Fed 63 74 17% have also risen, Grain-Fed 100 68 -32% helping to justify Choice 88 53 -40% the increasing Grass-Fed 26 49 88% prices of beef like Asian (All) 53 48 -9% Signature and Mediterranean (All) 64 46 -28% Premium. Hormone-Free 60 45 -25% Top 20 Claims 3,582 3,334 -7% Total Claims 4,078 3,856 -5%

PCYA = Percent Change Year Ago Operators are focusing on nutritional and marketing claims to communicate quality SOURCE: MINTEL MENU INSIGHTS, Q4 2011-14 51 Pork: Ethical and nutritional menu claims are relatively rare

PCYA Q4 Q4 Q4 2011 2014 2014 Lean 57 49 -14% There was a drop Natural 27 12 -56% in natural and Grain-Fed 1 11 1000% organic claims. Naturally-Raised 9 10 11% Nitrate-Free 10 9 -10% Antibiotic-Free 3 5 67% Organic 5 3 -40% Hormone-Free 15 1 -93% Fat-Free 2 1 -50% Reduced-Fat 2 1 -50% Vegetarian-Fed 1 1 0% Humanely-Raised 1 1 0% There was growth Low-Carb 2 0 -100% in antibiotic-free, Milk-Fed 1 0 -100% naturally raised, Total Ethical/ 136 104 -24% and grain-fed. Nutritional Claims While there have been some standout operators making ethical claims related to pork, this trend is not apparent in menu claims across foodservice PCYA = Percent Change Year Ago

52 SOURCE: MINTEL MENU INSIGHTS. Q4 2011-14 Summing it all up Consumers are evolving…Expectations have been raised Foodservice is back in growth mode • Highest growth coming from faster concepts—quick serve and fast casual • Snacking and grazing habits play a role • Indulgence is here to stay Focus on quality value-adds

• Human touch, artisan qualities, authenticity, minimal processing • Recognizable ingredients, solid health benefits. • Customizable options catering to individual diet needs are now expected.

The decline of deference • Today’s consumers, especially Millennials, expect to participate • You need a two-way dialogue • Brands need to listen and provide transparency ...... 53 mintel.com Thank you, get in contact

Patty Johnson Global Food Analyst email: [email protected] Tel: 312-932-0400 Cell: 208-308-3404