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Evolving Food

& Beverages

Trends in

Foodservice

November 22, 2018

Prepared for

North American Food

& Beverage Trends

Gen Z: Driving Next Level Trends Forward

1. Snacking

2. Flavour

3. Health

4. Local/Sustainable

5. “Glocal” Dining

6. Fun

What’s Coming in 2019

3 trends to watch

© 2018 Technomic Inc.

Change is HERE!

✓ Disruptors in the next 5 years:

✓ Tech-fueled competition

✓ Increasing rate of change for preferences and tastes✓ Snacking✓ Flavour✓ Health✓ Ethnic ✓ Indulgence

✓ Government✓ US, Federal, Provincial,

Municipal


The Next Consumer Wave:

Gen Z

4

Diverse

Entrepreneurial

Individualistic

Connected since Birth

Born Age

1993-2003 15-25


What, Where and

When They Want It

5

Convenience

Customization

On-Demand Experiences


Impact of

‘Anytime, Anywhere’

6

●Third-party delivery rapidly changing customer expectations

Key Players 2017

Canada

Sales

Y/Y %

Change

Largest

Tim Hortons $5.5B* 3.8%

McDonald’s $3.7B* 4.4%

Starbucks $1.8B* 6.4%

Subway $1.4B* -2.1%

A&W $1.2B* 4.5%

Fastest-growing

Freshii $107MM* 60.0%

Chipotle Mexican

Grill$43MM* 48.1%

The Chopped Leaf $49MM* 46.0%

The Burger’s Priest $19MM* 45.0%

Quesada Burritos &

Tacos$40MM* 37.6%


No signs of slowing down

*UberFRESH rebranded to UberEats in 20157

Leading players have continued to expand services across Canada

2009

Just Eat

enters

Canada

Just Eat acquires

YummyWeb & Grub

Canada

2013

Skip the

Dishes

launches

Just Eat acquires

Orderit.ca

DoorDash enters Toronto

& Vancouver

UberEats enters Toronto

2016

Just Eat acquires

Skip the Dishes

DoorDash expands

to Calgary

UberEats expands

to Vancouver

2018

Uber Eats enters

Ontario

2011 2015 2017

© 2018 Technomic Inc. © 2018 Technomic Inc.

Snacking

8

© 2018 Technomic Inc. 9

Percent of consumers

who snack at least daily

80%globally 75%Gen Z 89%

+6ppts since 2016


Next-Level Fries

10

+27%

Herb/Seasoned fries at Top 200 chains since 2016

47%Of consumers

purchase fries as snacks at least occasionally

53% of Gen Zers


Amped Up Veggie Snacks

11

27%

Of consumers say they’d purchase healthful snacks more often if there were more unique flavours32% of Gen Zers

Cauliflower apps and sides have grown 21% since 2017

Montana’s BBQ & Bar


Functional Snacks

12

Consumers would purchase snacks that are…

High in Protein (38%)

Energizing (35%)

High in Fibre (35%)


Health

13© 2018 Technomic Inc.


Of your last 10 restaurant orders, how many do you consider healthy?

5globally 5.1

Of consumers are ordering healthier items more now than two years ago

29%Gen Z 41%


To Eat Healthier Away From Home I Skip…

62%

53% 51%

42%39%

54%

38%42%

Dessert Adult Beverages Appetizers NonalcoholBeverages

Canada Global


The New

Health

16

●Desire to “feel good” about choices

●Deliver flavour and health: Clean, natural, fresh, local

Of your last 10 restaurant orders, how many do you consider healthy?

5all global consumers 5.1


Consumers’ definition of health is changing…

What’s healthy

now?78%

67%

61%

57%

42%

High in antioxidants

Containing probiotics

Having other functionalbenefits

Aiding digestion

Stress relieving

Perceived Healthfulness of Functional Claims

(Top two box = slightly & much more healthy)


Superfoods

18

Mentions of “superfood” on menus are up 11% year over year

+37.1%

+17.6%

+13.3%

+9.4%

+7.7%

+7.6%

+6.4%

+4.5%

+1.7%

Turmeric

Hemp

Ancient Grains

Coconut Water

Chia

Matcha

Quinoa

Charcoal

Kale

Blenz Tumeric Latte


Diversifying

beverages,

often with a

better-for-you

positioning

19

Kombucha

on tap

Additive-

free juice

Slurpee with real

cane sugar


Importance of Local

20

“Restaurants should always source local ingredients”

67%

Canada

54%

Global

Promoting they serve 100% Canadian cheese


Fast Fresh

Foods

21

Limited-Service Restaurant

● Fresh, Real Ingredients

● Healthy Fast Food

● Eco-Friendly Commitment

● Source Supplies Locally8

Units

Toronto

Locations


B.Good

22


● Sustainable

● No Artificial Preservatives, Antibiotics Or Hormones

● Company-Bought Farm

● Better-For-You Food 5

Units

Toronto &

Oakville

Locations


sGlobal Tastes

23


Percent of consumers purchasing ethnic

foods at least once a month

62%(Gen Z 77%)

Of consumers are eating more unique types of ethnic foods/ beverages now than two years ago

59%Gen Z 69%


Global Flavours

Through Condiments

Moxie’s Grill & Bar

These new cauliflower bites are sauced in gochujang and served with jalapeno lime dip

Korean Fried Cauliflower

Mango Chutney (+50%)

Harissa (+33%)

Sambal (+13%)

Peri Peri (+9%)

Kimchee (+3%)


Asian & Latin Street Foods

65%Of consumers would order ethnic items described as “street food”

70% of Gen ZersStreet Corn PizzaBlaze Pizza


Pho Hoa

27


● Globally Recognized

● Health-Conscious

● Vietnamese Comfort Food

5

Units

British

Columbia

Locations


Fun

28


Of consumers find desserts with an interactive element very appealing

24%Gen Z 29%

“Visiting restaurants is a form of

entertainmentfor me.”

69%globally 65%


23%

21%

12%

23%

27%

20%

I'd like these restaurants to offermore menu items withnew/unique flavours

If a restaurant I typically don'tvisit offers a unique LTO, I'd be

likely to visit to try it

I like trying mashup dishes atLSRs

Fast food Fast casual

30

New/Unique

Options

20% of Gen Z

26% of Gen Z

2017 Canadian Flavour Consumer Trend Report


47%

call for more mashupsMashups

Eye-Catching Limited

Time Offers (LTO’s)

38%

say LTOs can drive traffic

Globally,

31


CroaburgerCroasonho (Brazil)

new offering features a beef patty, bacon, cheddar cheese and onion rings on a rounded version of the

chain’s signature croissant

Vulcano Pizza

TelePizza (Colombia)

this returning special features dippable tortilla chips and nacho

sauce on a pizza topped with a choice of two additional ingredients

Waffle Double Down

KFC (Canada)

An out-there sandwich with Two Big Crunch fillets, real Belgian waffle and

maple aioli sauce

Mashups in Action


Rolltation

33


● A Hybrid Food Destination

● Customizable Sushi Burritos

● Poke Bowls & Salads

4

Units

Toronto

Locations


What to

Watch

in 2019

34


1.

After Effects of

Marijuana

Legalization

Wide-ranging yet unknown impact of legal cannabis on foodservice

Development of creative hemp-infused offerings

Potential for increased demand for midnight munchies and home delivery services

Food industry employee legislation and rights


2.

Demand for

Alternative

Proteins

Non-animal proteins are gaining popularity as concerns around health, animal welfare and the environment rise along with continued global culinary tourism and influence


Base: Varies by consumers who eat these proteins (consumption vs. 2 years ago), 98 (vegetarian) & 43 (vegan) who are eating these options more often

Q: Compared to two years ago, would you say that more, fewer or the same amount of the meals you eat include the following?

Q: Why are you eating more meals with vegetarian and/or vegan substitutes? Select all.

Source: Technomic’s 2017 Canadian Centre of the Plate Consumer Trend Report

Top reasons for eating more:

61%

Trying to eat healthier & getting proteins from

other sources like nuts, whole grains, etc.

60%

Vegetarian options are healthier

45%

Greater variety available

42%

41%

33%

29%

24%

16%

15%

44%

42%

58%

58%

60%

60%

55%

14%

17%

8%

13%

16%

24%

29%

Vegetariansubstitutes/options

Vegansubstitutes/options

Chicken

Seafood

Turkey

Pork

Beef

More Same amount Fewer

Consumption vs. 2 Years Ago


Looking Ahead

38

Edible bugs

Cookie Martinez in Toronto: Pataconestopped with grasshoppers and hormigas culonas(leafcutter ants)

Non-beef imitation

meats

Westcoast Poke in Vancouver: First restaurant in Canada to carry Ahimi, raw ahi without the tuna (vegan tuna)


3.

Sustainability

2.0 in Foodservice

Environmentally friendly and multifunctional packaging

Transparency

Food Waste

Local Sourcing

Living Wages

Community Engagement


Sustainability on

the Rise, But…

40

Yes60%

No27%

Minimal12%

Changes Total

To the menu/selection of items 70%

In how we communicate with our

customer53%

In what we demand of suppliers 50%

In what we demand of distributors 49%

In our sourcing practices 46%

To pricing 24%

In employee benefits 23%

In employee recruiting 18%

Have you made

changes to your

business model or

practice in the past

two years based on

sustainability

initiatives?

Technomic 2018 Canadian Operator Research


…Proving to be

a Challenge

What are your biggest obstacles to achieving your sustainability goals?

Obstacle Total

Higher costs 63%

Lack of financial resources 32%

Lack of time/personal resources 29%

Product availability 24%

Limits supplier selection 18%

Inability to measure impact of efforts 15%

Lack of customer interest 14%

41


Final Thoughts

42

More intense competition

coming faster

Consumer expectations

grow & shift

Ethnic, Fun

Health, Global,

& Transparent

the greatest drivers

Will need to exhibit greater

creativity,

innovate

Look and

Listen, and

Adapt to ever

changing consumer needs


Thank You!

43

Margot Swindall

[email protected]

mailto:[email protected]

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