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Datassential | Menus of Change – Shifting Protein Focus 1 Contact Maeve at Datassential: 802-430-7085

a Datassential solution

MENUS OF CHANGE General Session 3 │ June 18, 2015

“Changing Consumer Behaviors and Attitudes”

Maeve Webster, Senior Director, Datassential


Contact Datassential (Maeve Webster)

802-430-7085 [email protected]

June 2015

SHIFTING THE PROTEIN FOCUS Menus of Change –The Culinary Institute of America


Objectives & Methodology 3

Methodology

Objectives

Determine operator and consumer opinions on key protein issues

Explore the role foodservice should play in environment related concerns

Discover menuing concerns around issues relating to protein

Identify current and future consumption and menuing patterns of proteins

Assess operator ability to react to shifting consumption patterns

Enable operators to make meaningful changes to protein menuing

ONLINE survey of 634 operators by Datassential

Qualification requirements:

All are decision makers for their operation

From a variety of segments including restaurants and on-site foodservice

ONLINE survey of 1,013 consumers by Datassential

Survey fielded February – March 2015


Several options exist to reduce animal protein consumption and resonate with consumers.

• Options such as mixed grill items and the use of protein as a garnish (pastas, stir fries, etc.).

• These options have been well received among patrons of operators that have already rolled them out.

• Reduced portion sizes are of interest to patrons, but have value implications and greater push-back when tied to reduced animal protein sizes versus overall item sizes.

Key Lessons 4


Gap Consumer Operator

Create/ offer more vegetarian items +9% 24% 33%

Reduce the portion size of animal proteins +5% 27% 32%

World cuisines inspired dishes +5% 19% 23%

Reduce portion sizes overall +4% 24% 28%

Create more “mixed grill” items +2% 27% 29%

Blends of meat and plant-based ingredients +2% 16% 18%

Menu fewer items that feature animal protein -0% 16% 16%

Menu less red meat, more seafood -1% 17% 17%

Plant-based items with meat featured as condiment -3% 29% 26%

Menu less red meat, more poultry -3% 19% 16%

n=1,013 634

Consumers/ Operators: What are the top three MOST IMPORTANT things the foodservice industry could do right now to help address issues concerning animal protein production and consumption?

Options where operators are leading the way

Options where consumers are leading the way

Top Three Things the Industry Could Do About Animal Consumption


Responded Well (Top four on 10-point scale)

Featuring more world cuisines

Featuring more high protein items

Using higher-quality meats

Using high-impact preparations on produce

Increasing use of less expensive meat cuts

Demanding antibiotic free animal products

Blending ground meat/ plant-based ingredients

Telling a story with menu descriptions

Eliminating traditional menu headers

Creating “mixed grills”

Utilizing vegetables in non-traditional preparations

Providing greater sourcing transparency

Creating items with animal proteins as garnish

Reducing animal protein focused entrées

Adding/replacing meat options with non-meat

Reducing overall menu size

Reducing portion size of animal proteins

Perceived Patron Responses to Menu Changes

86%

83%

78%

78%

77%

75%

75%

74%

71%

68%

65%

65%

61%

53%

50%

49%

45%

n=varies Operators: For each of the following, which you indicated earlier you are currently implementing in your operation, how well have your patrons responded to these efforts?


Communication is key in driving patron acceptance of items reducing/ eliminating animal proteins.

• Changes made with the greatest acceptance among patrons are the changes that have been effectively communicated.

• Those changes not communicated to patrons in some way (made but not explained) were met by the most resistance according to operator feedback.

Key Lessons 7


68% 67%

63%

58%

41%

36%

"Mixed grills”

Adding/replacingmeat withnon-meat

Animal meats as garnish Blend of meat/ plant-based ingredients

Reduce animal proteinportion size

Reduce animal proteinfocused entrées

Share of Operators Communicating Changes

Operators: For each of the following, have you communicated these changes to your customers? This communication may be on your menu, on your website, etc.

n=varies


Occasion Fit for Meat Center-of-Plate vs. Meat as Garnish

Consumers: Thinking about entrées that feature a large cut of protein – steak, chicken breast, chops, tenderloin, etc. – when are you most likely to order these types of dishes? Consumers: Thinking about entrées that are primarily produce or plant-based with meat/ animal protein used more as a garnish or in a much smaller quantity, when are you most likely to order these types of dishes?

n=1,013

Center-of-Plate As Garnish Difference

Casual lunch 19% 43% +24% Quick bite 9% 24% +15%

Work lunch 8% 19% +11%

Brunch 9% 16% +7%

Hold over meal 8% 15% +7%

Running errands 8% 14% +6%

Cheap bite 8% 15% +6%

Work break 6% 11% +5%

Last minute dinner 13% 17% +4%

Food for Fuel 12% 16% +4%

Relaxing at home 24% 23% -1%

Dinner on the way home 17% 15% -2%

Weekend breakfast 10% 7% -2%

Hanging out with friends 19% 16% -3%

Road trip 12% 8% -4%

Casual dinner 39% 35% -5%

Social gathering 22% 17% -5%

Festive 13% 7% -6%

Guy’s night out 11% 4% -7%

Romantic meal 24% 14% -11%

Family meal 43% 30% -13%

Special occasion 31% 11% -20%

Formal dinner 39% 12% -27%

I'd never order this entrée 8% 16% +8%

Greatest opportunity for items featuring meat as a garnish


Consumer interest in and demand for alternative protein sources appears to be outpacing operator activity.

• Current demand and future demand among patrons will outpace by a significant degree the menuing behavior of operators.

• In fact, more operators report they are likely to drop items such as nut butters/ flours, Greek yogurt and tofu from their menu than will add/ increase the use of over the next two years.

• The result could be a significant demand/ supply gap, which may be filled by retail – stealing AFH traffic share.

Key Lessons 10


95%

94%

91%

89%

88%

85%

83%

82%

80%

62%

56%

50%

44%

90%

87%

78%

71%

77%

63%

47%

44%

54%

32%

14%

7%

17%

Chicken

Beef

Eggs

Seafood/ fish

Processed Meats

Pork

Whole/intact grains

Nuts

Legumes

Greek yogurt

Nut butters

Nut flours

Tofu, seitan, etc.

Consumer Operator

Consumer AFH Ordering vs Availability

Consumer: When eating away from home – at a restaurant, cafeteria, convenience store, etc. – how often do you look for items that feature each of the following? (five-point scale) Operators: Which of the following do you currently feature or use as an ingredient on your menu? Please select all that apply.

n=1,013 634

Note: Operator percentages are penetration (% offering at

least one item featuring), while consumer percentages are

share ordering at least rarely away from home.


a Datassential solution

THANK YOU!

Maeve Webster: 802-430-7085

[email protected]


n=490 to 522 per concept

non-fried fried

*top three scores for each

metric shown in green

APPENDIX


10%

41%

37%

12%

634 OPERATORS

West

South

East

KITCHEN PREP

small (under $250k)

medium ($250k - $1mm)

large ($1mm+)

ANNUAL F&B PURCHASES

23% are contract managed

QSR 9%

Fast Casual 15%

Midscale Dining 10%

Casual Dining 15%

Upper Casual 7%

K-12 12%

C & U 7%

B & I 4%

Lodging 6%

Long-term care 8%

Hospital 6%

56% restaurants

44% on-site

All scratch

Mostly scratch

Mostly pre-made

Equal scratch & pre-made

Midwest

DECISION MAKERS

Owner / operator 29%

General Manager 22%

F&B Purchaser 15%

Manager 11%

Executive Chef / Chef 11%

Kitchen Manager 4%

Other 7%

24% use a GPO

75% self- owned

10% company- owned chain

15% franchise- owned chain

REGION

PRIMARY DISTRIBUTOR

Sysco 35%

US Foods 20%

GFS 6%

PFG 6%

Cash and Carry 4%

FSA 4%

Reinhart Food Service 4%

Club stores 2%

Shamrock Foods 1%

Ben E. Keith 1%

Maines Paper and Food Service

1%

Cheney Brothers 1%

Other 16%

33% 51% 16%

22%

34% 24%

20%

DAILY PATRONS

Fewer than 75 9%

75-150 25%

151-250 21%

251-500 21%

501-1,000 10%

Over 1,000 15%


49%

Consumer Profile Geography

51%

REGIONS

foodies excited by food

Demography

urban suburban rural

1013 Consumers

QSR 79%

Fast Casual 65%

Family Style 60%

Casual 60%

Fine Dining 33%

C-Store 42%

Cafeteria 28%

HH INCOME

Under $50k

$50 - $100k

Over $100k

65% have no kids in home

17% have kids < 6

18% have kids 6 to 12

West: 22% Midwest: 23%

N. East: 20%

South: 35%

indifferent

ETHNICITY %

White 67%

Black 12%

Hispanic 15%

Asian 5%

Other 1%

FOOD ATTITUDE

91% are primary grocery shopper

AGE

DINE AT LEAST MONTHLY

41% full time

12% part time

47% not employed

38% single

11% have significant other

51% married

MARITAL STATUS EMPLOYMENT

Strict diet 6%

I carefully watch what I eat 34%

Generally healthy, not closely 52%

Not concerned with healthy

foods 15%

FOOD CONCERNS

33% 52% 15%

51%

37%

12%

31% 49% 20%

33%

23%

39%

5%

Millennial Gen-X Boomer SilentGeneration


1. Though operators understand the importance of broader issues, many of which are tied to animal protein production/

consumption, the relevance to day-to-day operational decisions is lost. To effect more significant changes in operator

behavior, it will be important to tie these issues directly to relevant operational issues including cost, availability, and quality.

Operators do not appear to be making these connections themselves.

2. Consumer interest in and demand for alternative protein sources appears to be outpacing operator activity. Though

consumers may be interested in nut products (whole, flours, butters), legumes, and Greek yogurt for reasons other than animal

protein substitution, it appears both current demand and future demand among patrons will outpace by a significant degree the

menuing behavior of operators. In fact, more operators report they are likely to drop these types of items from their menu than will

add/ increase the use of over the next two years. This could result in a significant demand/ supply gap.

3. True patron acceptance of alternative proteins, reduced animal protein dishes is both the greatest unknown and potential

hurdle. Though patrons express interest in reduced portions and animal protein alternatives, past industry experience suggests this

expressed interest likely won’t match actual away from home behavior, and operators are well aware of this dichotomy.

“Aspirational” eating versus actual ordering my not align immediately, and operators are leery of making significant menu changes

as a result.

4. Several options exist for operators that would help to reduce animal protein consumption and resonate with consumers.

Specifically, consumers are interested in options such as mixed grill items and the use of protein as a garnish (pastas, stir fries,

etc.), and these items have been well received by the patrons of operators that have already rolled them out. Reduced portion sizes

are of interest to patrons, but have value implications and are less appealing when specifically related to animal proteins rather than

menu portions on an overall basis.

5. To drive acceptance of items that have reduced or eliminated animal proteins, communication is key. Among the changes

already implemented by operators, those that have been best accepted by patrons are the changes that have been effectively

communicated. Those changes not communicated to patrons in some way (made but not explained) were met by the most

resistance according to operator feedback.

6. Reduced animal protein items have the greatest opportunity at more casual, family-centric meals. As with anything,

occasion-focused marketing and ideation may be the key to successful introduction of items that contain reduced animal protein

portion sizes.

Key Lessons 16


Consumer Foodservice Issue Concerns (Top four box; 10-pt scale)

30%

29%

32%

35%

34%

32%

32%

25%

35%

28%

28%

31%

28%

26%

26%

50%

46%

42%

37%

38%

35%

35%

41%

30%

35%

35%

31%

26%

27%

24%

Food safety

Antibiotics, steroids, etc. in animal proteins/ dairy products

Food-related health issues (high blood pressure, diabetes, etc.)

Local farmers/ food manufacturers surviving

Impact of regional droughts in U.S. on food price/ availability

Obesity in U.S.

Impact of crop diseases on produce prices/ availability

GMOs

Current food production practices meeting demand/ population needs

Climate change

Imported ingredients/ food products

Use of non-recyclable materials

Farming impact on environment

Impact of animal protein production on environment

Current consumption levels of animal proteins in U.S.

Extremely concerned Concerned

n=1,013 Consumer: How concerned are you with the following issues?

No broader issue is more important to consumers than food safety, and those issues related to animal

protein consumption rank far lower than other issues. Consumers appear more engaged in environmental and

health-related issues while operators are more concerned with business-oriented issues such as cost and consistent supply.

Consumer Operator

75% 68%

73% 66%

72% 80%

67% 80%

66% 58%

65% 79%

63% 66%


25%

53%

22% 27%

53%

20%

Consumers/ Operators: Which of the following best represents your belief?

Role of Foodservice Industry in Protein

Production and Consumption The majority of both operators

and consumers believe the

industry plays some role in

impacting protein production/

consumption, but a fifth absolve

the industry of any

responsibility. Both consumers and operators, interestingly,

place a lower emphasis on the industry’s role

in addressing protein production/

consumption than in broader issues such as

public health and the environment.

n=1,013 634

Consumer

Operator

Plays a

Significant

Role

Plays Some

Role

Plays No

Role


46%

40%

37%

36%

34%

31%

28%

27%

26%

26%

Fluctuating protein costs

Creating healthier items patrons will pay the same/ more for

Changing menu to reflect seasonal produce

Incorporating more produce in current items

Increasing healthfulness of items without losing patrons

Changing consumer preferences/ tastes

Incorporating trends without losing identity

Creating menu descriptions that increase appeal

Creating appealing produce-focused items

Finding natural, high-quality value-added produce products

Menu Challenges – Most Significant

Operators struggle with finding

ways to make their menu

healthier while maintaining pricing

and patron appeal.

Fluctuating protein costs could

prove to be a strong motivator

for using less animal protein or

smaller portions.

Operators: What are some of the more significant issues you’re facing with regard to your menu? This can include issues with items currently on your menu as well as items you are developing for your menu. Please select all that apply.

n=634

Given the prominence of produce-related challenges,

operators appear to be working to incorporate more

produce onto the menu. But, several issues

including innovation, sourcing, and potential

patron appeal may be limiting advances.


43%

38%

33%

32%

31%

30%

29%

28%

27%

27%

25%

25%

19%

18%

15%

13%

21%

13%

12%

21%

12%

16%

14%

15%

Antibiotic/hormone free animal products

Sourcing noted

Higher-quality meats offered in smaller portions

Menu items that are high in protein

High-impact preparations on fruits/ vegetables

Ground meat blended with plant-based ingredients

Menu descriptions, information that tell a story

World cuisine dishes

Non-traditional menu headers

Smaller menus

"Mixed grill" items

Smaller meat protein entrées

Consumer

Operator

Food Trends – Consumer Interest vs Operator Action (consumers very interested vs. operators very likely to or already offering)

n=1,013 634


Challenging (Top Four Box)

Very

Challenging (Top Two Box)

Neutral (5 or 6)

Not Challenging (Bottom Four)

Reducing portion sizes of all dishes, including but not limited to animal proteins

21% 26% 23%

Reducing the portion size of animal proteins in items 20% 24% 25%

Creating dishes that are primarily plant-based 19% 30% 21%

Menuing fewer items that feature animal protein and more plant-based choices

20% 30% 21%

Blending plant-based ingredients with ground meats 20% 32% 20%

Using world cuisines to develop new dishes 16% 26% 28%

Menuing fewer red meat items and more seafood items

18% 29% 26%

Menuing fewer red meat items and more poultry items

16% 28% 29%

Creating and offering more vegetarian items 16% 29% 30%

Creating more “mixed grill” items 14% 30% 32%

n=634 Operators: How challenging do you believe each of the following would be to implement in your operation?

Challenges in Changing Animal Protein Usage/ Menuing

Interestingly items that are viewed as least appealing to patrons are also those operators think would be the most

challenging to implement. Operators may not be considering consumer preferences, but in fact their own concerns.

51%

51%

50%

49%

47%

46%

45%

43%

40%

39%


17%

60%

22%

Call it a “new

recipe”

Remove for a

while and

reintroduce

as “new”

State that

meat has

been

reduced

Operators: If you have or were to reduce the amount of meat featured in a menu item, which would you be most likely to do?

Communicating Reduced Meat Portions

Operators are more likely to “spin”

reduced meat portions rather than

stating the change overtly. Communication is a key tool in driving patron acceptance of

menu changes – reduced meat portions or otherwise.

n=634


59%

32%

24%

24%

Use phrases in the menu description such as “topped with” or “served with” for the meat

Don’t list meat as the first ingredient in the menu description

Rely on the servers to explain and romancethese types of dishes

Group all similar items under a menu headerthat suggests meat is not the primarily

ingredient of the dishes

Describing Smaller

Portions of Meat to

Patrons

Most operators use

“topped with” or

“served with” as

descriptors.

The smaller share using menu

headers as the key indicator is

not surprising, given “healthy”

or better-for-you dishes are

increasingly scattered

throughout menus rather than

grouped under menu headers.

Operators: Consider dishes that feature meat more as a condiment, offered in smaller cuts throughout the dish. Which do you think would be effective ways of describing these to customers to make the items appealing but also set expectations? Please select all that apply.

n=634


65% 35%

“If I could just get my patrons to order plant-forward dishes, with meat in

much smaller portions (1-2.5 ounces), I know they would love them but it’s

hard to get them to move away from traditional meat-forward items.”

of operators agree of operators disagree

Operators: “If I could just get my patrons to order plant-forward dishes, with meat in much smaller portions (1-2.5 ounces), I know they would love them but it’s hard to get them to move away from traditional meat-forward items.”

n=634

Most operators

believe patron trial

is a key hurdle to

increasing the

presence of plant-

forward items

where meat is a

garnish rather than

the main ingredient.


29%

42%

29%

For an entrée, allowing patron to select a “reduced” portion size or a “regular”

portion size of meat

Offering patrons a no meat/vegetarian version of an

entrée that includes meat

Both

Patron Options

Most operators are

likely to either allow

for customization of

meat portions or

menu vegetarian/ no

meat options but few

offer both.

n=634 Operators: Which of the following options do you allow your patrons?


8 oz. to 6 oz. beef

8 oz. to 6 oz. chicken

7 oz. to 5 oz. pork

6 oz. to 4 oz. other poultry

6 oz. to 4 oz. seafood

6 oz. to 5 oz. fish

5 oz. to 3 oz. processed meats

Portion Size Shifts (current to reduced size)

Regardless of protein, the

typical decrease in portion size

is 2 ounces.

n=varies Operators: For each protein that you plan to reduce portion sizes, on average what is the CURRENT portion size and what do you plan to REDUCE the size to?


Defining “Value”

Operators believe size and

uniqueness are key value

drivers for patrons, but

quality is under-estimated.

Though consumers are less likely to indicate

the size of an item is a key value drive, they

are looking for large amounts of food for low

prices, which essentially is the same issue.

The amount of animal protein is only one

element of this “size matters” mentality, and

produce could help to “bulk up” servings

without adding costs and increasing the

healthfulness of an item.

Given quality is a key driver for consumers –

and this has born out in the success of fast

casual operators – leveraging quality may

help to counteract “more for less” value.

Gap Consumer Operator

Perceptions

Overall size of item +15% 36% 51%

Uniqueness of dish +15% 27% 42%

Ability to customize +3% 22% 25%

Amount of animal protein +3% 24% 26%

Story behind dish +2% 13% 15%

Calories in dish +0% 13% 14%

Amount of food for lowest possible price -4% 40% 36%

Quality of animal protein -12% 40% 27%

n=1,013 634

Consumers: When considering items on a menu, what do you use to determine what will be a good value for you? Please select all that apply. Operators: Which do you think is true for the majority of your customers? Among my patrons… Please select all that apply to your patrons. Value perceptions are ...


n=634 Operators: How do you think each of the following would impact the perceived value of dishes in your operation?

25%

37%

38%

38%

41%

42%

44%

48%

63%

63%

58%

54%

64%

61%

61%

62%

74%

68%

More fruits, vegetables, grains, legumes, etc. in dish

Swapping seafood/ fish for beef

“Narrative” menu descriptions, telling a story

Smaller portions of higher quality proteins

Mixed grill/ mix of proteins

Descriptors like “healthy,” “better for you,” etc.

Swapping chicken for beef

Variety of portion sizes to select from

Descriptors like “seasonal,” “fresh,” “local,” etc.

Consumers Operators

Menu Options - Impact on Value Perceptions vs Patron Appeal (top four box; ten-point scale)

Operators and patrons agree on the impact of “fresh,” “local,” and other similar

descriptors, but operators under-estimate the appeal of other possible changes.

Consumers: How would each of the following impact how appealing a menu item is to you?

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