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© 2017 Technomic Inc. State of Foodservice@Retail 2017
© 2017 Technomic Inc.
State of Foodservice@Retail 2017
© 2017 Technomic Inc.
Today’s agenda
Retail foodservice performance in 2016
Consumer attitudes and behaviors
Retail foodservice menu trends
Emerging channels: opportunity or threat?
What’s next?
2
© 2017 Technomic Inc.
Retail Foodservice
Performance
3
© 2017 Technomic Inc.
Foodservice segment performance
(2016)
8.6%
7.9%
7.8%
7.5%
5.3%
5.2%
4.8%
4.8%
3.9%
3.9%
3.5%
Supermarket foodservice
Senior living
Catering
Fast casual
Lodging
Fine dining
Hospitals
Recreation
C-store foodservice
Fast food
Full service restaurants
© 2017 Technomic Inc.
Supermarket FS performance by tier
Tier Definition CAGR (‘14-16)
1 Foodservice specialists blur the line between supermarkets andrestaurants. Gourmet menu items, limited table service, a warmatmosphere, and restaurant-type amenities likely exist.
11.3%
2 Destination supermarkets have a comprehensive perimeter that offersextensive choice across cuisine types. The perimeter often containsMTO stations, café seating, and well-trained service.
10.5%
3 Prepared Foods Departments have generally shifted focus away frommeats and cheeses and to ready-to-eat or ready-to-heat meals. In mostcases, shoppers have the ability to customize orders and there may besome basic in-store seating.
7.6%
4 Extended Delis, while still emphasizing sliced meats and cheeses,typically offer customers several hot meal alternatives as well as aready-to-eat cooler selection.
6.5%
© 2017 Technomic Inc.
Tier descriptions: c-store FS
6
BASIC • Traditional hot/cold beverages
• Limited roller grill, grab-and-go,
condiments
• Limited merchandising/signage
PREMIUM • Some specialty beverages
• Broader roller grill, grab-and-
go, condiment offerings
• Prominent FS merchandising
SUPER-PREMIUM• Made-to-order, on site
preparation
• Fresh, quality ingredients
• FS a focal point of store design
© 2016 Technomic Inc.
© 2017 Technomic Inc.
Convenience store FS evolution
88% 9% 3%
Basic PremiumSuper-
premium
7© 2016 Technomic Inc.
-2 +2 -Year over Year Change
© 2017 Technomic Inc.
Consumer Attitudes and
Behavior
8
Retail FS attribute importance
92%Store is
clean
91%Taste/flavor
of the food
88%Convenient location/
access
88% Good value through
low prices
90%Food
quality
What else is important to heavy users?
Good value
through prepared
foods’ deals
Handles
payment in
timely fashion
Convenient
store hoursConvenient
parking
Knowledgeable
staff
Supermarket FS – food perceptions
Item Primary
Rotisserie chicken 48%
Fried chicken 28
Sandwich (cold) 20
Potato salad 16
Salad bar 14
Pasta salad 13
Pizza (by the slice) 12
Chicken wings 11
Soup (station) 11
Sushi 10
Baked goods 10
Prepared green salad 9
Pizza (take and bake) 8
Baked pasta 7
Baked chicken 7
Item Primary
Potato sides (mashed, baked) 7%
Sandwich wrap 7
Soup (grab-n-go) 7
Sandwich (hot) 6
Fruit salad 6
Mexican entrees 5
Mediterranean foods 4
Chicken fingers 4
Asian foods 3
Beef/steak 3
Breakfast entrees 3
Fish/shrimp/shellfish 3
Antipasto salad 2
Pork 1
“When you think of supermarket prepared foods, which of the following first
come to mind?”
Supermarket FS – food needs
22%
17%
16%
16%
16%
14%
13%
12%
11%
11%
Mexican foods
Asian dishes
Pasta
Fish/shrimp/shellfish
Pizza by the slice
Breakfast entrees
Mediterranean foods
Chicken wings
Beef/steak
Baked goods
“In which of the following would you like to see more variety in
what prepared foods department offer?”
Top 10
Supermarket FS - purchase behavior
31%
33%
19%
9%
9%
My prepared foods purchase wascompletely unplanned
I planned to buy an item but didn’t know exactly what I was going to get
I planned to buy a specific item andthat is all that I bought
I planned to buy a specific preparedentrée but my purchase of additionalside item(s) was unplanned
I planned to buy a specific preparedfoods meal (I knew the entrée and thesides I wanted)
“How would you BEST describe your MOST RECENT prepared foods
purchase from a supermarket?”
27%
55%
13%
5% Earlier in the week
Early in the day
On my way to the storebut before I arrived
On my way into thestore
“When had you decided that you were going to purchase that
specific item(s) from the prepared foods department?”
Supermarket FS - purchase behavior
1
5
18%
14%
13%
11%
11%
11%
I was in the mood for that type of food
Looked like it would taste really good
It looked freshly made
It is my usual purchase
The price was right
It was grab-n-go; I didn't have to ask for help
“On this most recent prepared foods purchase occasion, what was
the top reason you purchased the main item that you did?”
Supermarket FS - purchase behavior
Fresh perceptions - consumers
1
6
80%
20%
Appearance
Menudescription
“Is your perception of ‘fresh’ based more on the appearance of the
food or any description provided”
C-store FS - purchase behavior
How would the following descriptors influence your decision to purchase a prepared food item at c-stores?
52%
38%
28%
11%
9%
19%
26%
33%
27%
30%
30%
36%
38%
62%
61%
Gluten-free
Non-GMO
Type of frying oil
Made-to-order
Freshnessinformation
Not factor into decision
More likely to purchase, but not pay more for
More likely to purchase and pay more for
© 2017 Technomic Inc.
Retail Foodservice: Menu
Trends
18
Reinventing
chickensparking interest in a legacy category
with health, flavor innovations
Antibiotic-free | free range | all-natural and organic
Fairway Market — now offering antibiotic-free, vegetarian-fed rotisserie chicken
New Seasons Market — now promoting organic whole roasted chicken
2
0
FORECAST:
Spicy chicken sandwiches
Flavor synergyuncommon flavor combinations that
make a surprisingly good mix
QuickChek — sausage, egg and cheese on a honey butter biscuit with grape jelly
QuikTrip — seasonal milkshake flavored with maple and bacon
H-E-B — bacon-wrapped jalapeños filled with barbecue-marinated chicken
bold flavors | ethnic ingredients | mashup appeal
FORECAST:
Multiple flavor callouts
On trend: Wawa’s Wacky Wildwood hoagie with Old Bay seasoning, ranch and chipotle
Outside-the-box
pizzafrom premium to playful, operators
amp up pizza game
Dorothy Lane Market —premium LTO with clams and Calabrese peppers
QuikTrip — breakfast pizza with egg, sausage, bacon, cheese and sausage gravy
Rutter’s Farms Stores — now offering customizable baked-to-order pies
all-day occasions | made-to-order | custom built
FORECAST:
Built for the season
On trend: Kwik Trip’s Oktoberfest-style Bratwurst Pizza with cheese, onions and mustard cream sauce
Meal planningPromoting meal solutions that offer flexibility throughout the week
“I would like more retail stores to offer options that help me plan future meals.”
42% 43% 44%38%
32%
48%56%
51% 47%39%
18–24 25–34 35–44 45–54 55+
2012
2016
47%
39%
FORECAST:
Meal kits
On trend: Whole Foods partnering with plant-based meal solutions company Purple Carrot
© 2017 Technomic Inc.
Emerging Channels:
Opportunity or Threat?
27
• 1800’sFirst known restaurant
1971Starbucks’
first location
1955Ray Kroc
joins McDonald’s
1921First drive-in restaurants
1993Chipotle founded
TodayOn-demand
gains momentum
2010ishRMS makes
impact
Early
2000Fast casual takes off
1917Snacking takes off
1947 First restaurant
drive-thru
2013Foodservice everywhere
Transformative decade+
29
“Life moves pretty fast. If you don’t stop and look around once in a while, you could
miss it.”
© 2017 Technomic Inc.
Image credit to answers.com
Meal kit subscription market
Consumer ExpendituresForecast 2015 – 2020
($ million)
$1B +
$8.8B
2015 2020
51% CAGR
1.5%
13%
2015 2020
Household Exposure(households receiving at least one
order per year)
NOT DELIVERED
BY THE RESTAURANT
NOT JUST PIZZA
ORDERED ONLINE OR VIA MOBILE
APP
DRIVERS DON’T WEAR RESTAURANT
UNIFORM
INDUSTRYDISRUPTOR
What is 3rd party delivery?
Meal kits and third party provide
unique differentiators
Third-party delivery Can try new foods
Fresh ingredients
Can try new foods
To satisfy a craving
Allows me to try a restaurant I would not have before
Meal kits
Non-users gravitate to grocery
delivery, though familiarity is a factor
60%58%
56%54%
47%
Grocery Delivery Delivery-OnlyRestaurants
Third-Party Delivery Prepared MealServices
Meal Kits
Would consider using in the future
Emerging alternatives: consumer
response10%
23%
28%
8%
8%
14%
20%
6%
8%
18%
22%
7%
14%
8%
20%
4%
9%
16%
23%
3%
Good fit for my daily life
Way to help me add variety
Good to use sometimes, but not everyday
Good for my long-term diet
Meal kits
Third-party delivery
A prepared meal service
Grocery delivery
Delivery only restaurantkitchen
© 2017 Technomic Inc.
What’s Next?
35
Supermarkets will ‘double down’ on
foodservice based on performance…
2016
8.6%
…changing shopper behavior…
10+ times
7-9 times
4-6 times
2-3 times
1 time 17% 14%
42%38%
23%
25%
8%12%
9% 11%
2015 2016
+2
+4
+2
-4
-3
Monthly usage
© 2017 Technomic Inc.
…and customer feedback
How important is the prepared foods department in your choice of supermarket to shop at?
36%
41%
15%
6%
2%
Very important
Important
Neither important orunimportantUnimportant
Very unimportant
Supermarket FS will pursue breakfast
Major supermarket banners will
continue to transform
Traditional departments will transform
Fresh meat
Fresh seafood
Produce
Prepared foods
All departments ‘in it together’/lines blurring
