Canadian Trends Shaping the Future

Prepared by:

Presented by: Darren Tristano

March 2013

Today’s Objectives

Consumer Mindset

Operator Perspectives

Specialty Beverages

Trends for 2013

Conclusion

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Consumer Mindset

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Improvement is evident across income groups

Notable Improvement for the Canadian Consumer

Classification of Financial Situation

Source: Technomic Canadian Consumer Survey 2012

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Some Improvements in Last Six Months

“In the past 6 months, would you say your financial situation has…”

Strongest signs of improvement for city-dwelling

consumers

Source: Technomic Canadian Consumer Survey 2012

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Consumers Are Hesitant about the Economic Outlook

Expectations for the Canadian Economy in the Coming Year

But 45% say that the government is

taking the right steps

Only 33% agree that the economy

is on the right track

Source: Technomic Canadian Consumer Survey 2012

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Additional Consumer Insights

47% of consumers report using foodservice more often

48% say their foodservice spending has increased

• but 55% are financially stressed (struggling or managing money carefully)

Consumer debt at record levels

Nearly half (48%) are cooking at home more

• 40% would like to eat out more but are budget constrained

Source: Technomic Canadian Consumer Survey 2012

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Operator Perspectives

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If it Ain’t Broke, Don’t Fix it

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How often do you make changes to your core menu items?

Source: Technomic Canadian Operators Survey 2013

Customer Interest and Need to Innovate Are Primary Menu Development Drivers

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What is the most important determinant in making a change to your menu?

Source: Technomic Canadian Operators Survey 2013

Many New Items Don’t Make the Cut

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What percentage of menu items you develop actually make it onto your menu?

Source: Technomic Canadian Operators Survey 2013

Declining Sales Drives Items off the Menu

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What criteria do you use to determine if an item should be removed from your core menu?

Source: Technomic Canadian Operators Survey 2013

Do you prefer suppliers to be proactive (i.e. bringing menu ideas to you) or

reactive (i.e. waiting for you to bring menu ideas to you)?

Operators Want Suppliers to Be Proactive

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Source: Technomic Canadian Operators Survey 2013

Speed Is the Name of the Game

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How long does it take you from the initial development stage to the menuing of a new item?

Source: Technomic Canadian Operators Survey 2013

Amid Heightened Competition, Flavour Innovation Is Critical to Driving Traffic

I am more likely to visit a restaurant that offers new and/or innovative flavours.

By age and year, top two box

Source: Technomic, Inc., The Canadian Flavour Consumer Trend Report (2011) Base: 750 (2009) and 1,000 (2011) consumers aged 18+ Consumers indicated their opinion on a scale of 1–6 where 1 = disagree completely and 6 = agree completely

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Specialty Beverages

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Tea and Coffee Lattes

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Specialty Ethnic and Regional Teas Growing

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Thai Iced Teas

Asian Bubble Teas

Southern Sweet Teas

Natural Refreshments Made From Scratch

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Lavender Lemonade: Fresh lavender, steeped with fresh lemons, sweetened with organic sugar

Watermelon Aqua Fresca: Fresh watermelon and a touch of mint, sweetened with organic agave

Energy Drinks

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Biodynamic Wines—Trending in Montreal Independents

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Craft Beer on the Rise

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Craft beer introductions and pairings create increased margin through high-quality/higher-priced adult beverages. Key Insights

Craft Bloodies

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Trends for 2013

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10 Trends for 2013

1. Ethnic Small Plates Move Beyond Tapas

2. Exploring Bolder Cuisines—American Cajun and Bolder Mexican

3. Southeast Asian Goes Mainstream

4. Fresh Pressed Juices and Smoothies

5. Beef Takes a Back Seat—Chicken, Seafood and Veggies

6. Ingredients Gone “Wild”

7. Indulgent and Healthy Snacking

8. Redefining Healthy—Gluten Free

9. Social Responsibility Takes the Stage—Local Sourcing and Ethical Practices

10. Tweaking the “Value Occasion Equation”

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Ethnic Small Plates Move Beyond Tapas

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Fried Eggplant with Kefalograviera Cheese Saganaki Flambeed Tableside

Ethnic Small Plates Move Beyond Tapas

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Insalata di Barbabietole

Pani Cotta

Ethnic Small Plates Move Beyond Tapas

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Traditional small plates are providing healthier portions, flexible pricing and shareable options. Key Insights

Kimali—sauteed minced lamb Special Meze Plate

Exploring Bolder Cuisines—American Cajun

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Exploring Bolder Cuisines—Bolder Mexican

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Spicy Chicken Taco

Southeast Asian Goes Mainstream

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Features 100% seasoned chicken breast, cucumber slices, red peppers, spicy Thai sauce and dried chili peppers

Incorporating ethnic spices, flavours and ingredients broadens the menu, providing consumers with wider options Key Insights

Southeast Asian Goes Mainstream

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Thai Red Curry Pacific Lingcod, featuring seared Ocean Wise Pacific lingcod, Thai red curry sauce, coconut-almond rice, green beans, crispy won tons and micro cilantro

Double-Braised Pineapple Hoisin Short Rib, with pineapple-ginger glaze, shiitake mushrooms, Korean chili sauce, mashed potatoes and snap peas

Fresh Pressed Juices and Smoothies

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Beef Takes a Back Seat—Seafood

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Beef Takes a Back Seat—Chicken

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Beef Takes a Back Seat—Vegetables

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Vegetarian options are providing consumers with more healthful alternatives to traditional proteins. Key Insights

Ingredients Gone “Wild”—Wild Boar Poutine

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Ingredients Gone “Wild”—Wild Pacific Salmon

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Ingredients Gone “Wild”—Wild Blueberry Cheesecake

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Indulgent and Healthy Snacking

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Providing a balanced menu with a wide range of health and indulgence creates the greatest opportunity to meet needs. Key Insights

Redefining Healthy—Gluten Free

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Local Sourcing and Ethical Practices

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Tweaking the “Value Occasion Equation”

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Promotions that appeal to specific occasions create opportunities for unplanned impulse visits Key Insights

Conclusion

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In Conclusion…

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Consumers are still uneasy—Despite seeing signs of improvement and increased patronage, consumers still need to know they are getting value for their dollar. Menu innovation drives visits—Operators are rolling out new products at a faster pace than ever before, and suppliers who help them will be seen as valued partners. Menu development follows some overall trends —Bolder flavors, including new ethnics —Familiar items with innovative or upgraded twists —Fresh, local, sustainable ingredients —Balance of healthy and indulgent —Value for the money spent

Questions or More Information

Darren Tristano Executive Vice President

312-506-3850 dtristano@technomic.com

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