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Dining Out: A 2016 Look Ahead - US - January 2016

OVERVIEW
What you need to know
Definition
EXECUTIVE SUMMARY
The issues
Certain demographics plan on cutting back on restaurant expenditures
Figure 1: Plans to spend: 2015 vs 2016, October 2015
Price concerns prohibit beverage ordering
Figure 2: Beverages at restaurants, “It’s too expensive to order beverages at restaurants,” October 2015
LSR/other growth outpacing FSR growth
Figure 3: Total US revenues and forecast for restaurants and other eating places, market share, 2005-15
The opportunities
The restaurant industry is projected to grow further
Figure 4: Total US sales and fan chart forecast restaurants and other eating places, at current prices, 2010-20
“Natural” is the top buzzword for 2016
Figure 5: Desired food and drink characteristics, will look for more in the coming year, October 2015
Customization is universally appealing
Figure 6: Important factors when choosing a restaurant, any occasion, October 2015
What it means
THE MARKET – WHAT YOU NEED TO KNOW
Outlook is positive for the restaurant industry
Sales of LSRs and other establishments surpass FSRs
Future of commodity prices uncertain
MARKET SIZE AND FORECAST
Historic and projected sales performance
Figure 7: Total US sales and fan chart forecast restaurants and other eating places, at current prices, 2010-20
Figure 8: Total US revenues and forecast for restaurants and other eating places, at current prices, 2010-20
Figure 9: Total US revenues and forecast for restaurants and other eating places, at inflation-adjusted prices, 2010-20
MARKET BREAKDOWN
Both FSRs and LSRs will have strong growth/LSRs gain market share
Figure 10: Total US revenues and forecast for restaurants and other eating places, by segment, at current prices, 2010-20
Figure 11: Total US revenues and forecast for restaurants and other eating places, by segment, at current prices, 2013 and 2015
Full service restaurants
Figure 12: Total US revenues and forecast of full service restaurants, at inflation-adjusted prices, 2010-20
Figure 13: Total US revenues and forecast of full service restaurants, at inflation-adjusted prices, 2010-20
Figure 14: Total US revenues and forecast of full service restaurants, at inflation-adjusted prices, 2010-20
Limited service restaurants/other foodservice
Figure 15: Total US revenues and forecast of limited service restaurants and other eating places*, at current prices, 2010-20
Figure 16: Total US revenues and forecast of limited service restaurants and other eating places*, at current prices, 2010-20
Figure 17: Total US revenues and forecast of limited service restaurants and other eating places*, at inflation-adjusted prices, 2010-20
MARKET FACTORS
General economic prosperity bodes well for restaurants
Figure 18: Unemployment and underemployment rates in the US, January 2007-October 2015
Food health and safety
Figure 19: Land O Lakes: European Style Super Premium Salted Butter
Figure 20: Siggi’s: Icelandic Style Vanilla Flavored Strained Whole-Milk Yogurt
Volatile year for commodities
Figure 21: YOY commodity price changes, September 2014 to September 2015
FOODSERVICE TRENDS FOR 2016
Unpredictable proteins
New bar stars
Segment shifting
Message more than marketing
Figure 22: Distribution of menu ingredient claims and growth, Q3 2012-Q3 2015
Extreme living – Balance or bust
WHAT’S WORKING?
Technology’s role in foodservice
Keep it simple
Handcrafted
WHAT’S STRUGGLING?
Legacy brands struggle for identity
Soda goes flat
WHAT’S NEXT?
Better beverages
Fast casuals go premium
THE CONSUMER – WHAT YOU NEED TO KNOW
Highlight the use of natural ingredients
Changes in future behavior depend on demographics
Beverages face a value problem
A LOOK AHEAD – DINING AND SPENDING
Consumers split on future behaviors
Figure 23: Number of visits: 2015 vs 2016, October 2015
Figure 24: Plans to spend: 2015 vs 2016, October 2015
A LOOK AHEAD – DESIRED DESCRIPTORS
Natural is the top descriptor for 2016
Figure 25: Desired food and drink characteristics, will look for more in the coming year, October 2015
Figure 26: Desired food and drink characteristics, will look for more and menu incidence, October 2015
Descriptors and demographics
Figure 27: Desired food and drink characteristics, will look for more in the coming year, October 2015
Figure 28: Desired food and drink characteristics, will look for more in the coming year, October 2015
Descriptors appealing to the “Spend More” consumer
Figure 29: Desired food and drink characteristics, October 2015
SEGMENT VISITATION
Innovation abounds at every segment, even among less-frequented establishments
Figure 30: Visitation to foodservice establishments in the past month, October 2015
Restaurant visitation by demographics
Figure 31: Visitation to foodservice establishments in the past month, snack shop, October 2015
BEVERAGE FACTORS
Beverages must be positioned as a value
Figure 32: Beverages at restaurants, October 2015
Beverages – Coffee/tea
Beverages – Alcohol
Beverages – CSDs
HISPANICS
Hispanics dining attitudes and behaviors
Figure 33: Restaurant experience agreement, October 2015
Figure 34: Desired food and drink characteristics, will look for more in the coming year, October 2015
Hispanics and beverages
Figure 35: Beverages at restaurants, October 2015
IMPORTANT RESTAURANT CONSIDERATIONS
Customization remains a top priority
Figure 36: Important factors when choosing a restaurant, any occasion, October 2015
Figure 37: Important factors when choosing a restaurant, any occasion, October 2015
CORRESPONDENCE ANALYSIS
Methodology
Correspondence analysis reveals strengths/opportunities
Figure 38: Important factors when choosing a restaurant, any occasion, October 2015
THE RESTAURANT EXPERIENCE
Quality and price are top-of-mind but look to secondary restaurant experiences
Figure 39: Restaurant experience agreement, October 2015
RESTAURANTS AND TECH/SOCIAL MEDIA
The relationship between technology and restaurants will strengthen in 2016
Figure 40: Restaurant experience agreement, October 2015
RESTAURANT PREFERENCES/ATTITUDES BY AREA
Urbanites are trendsetters, rural diners are very price conscious
Figure 41: Restaurant experience agreement, October 2015
Figure 42: Number of visits: 2015 vs 2016, October 2015
Figure 43: Plans to spend: 2015 vs 2016, October 2015
AGE DIFFERENCES
The under 45 crowd
Figure 44: Number of restaurant visits in the past month, October 2015
Figure 45: Important factors when choosing a restaurant, “customizes my order exactly as I like it,” October 2015
Differences between Millennials
Figure 46: Number of visits: 2015 vs 2016, October 2015
Figure 47: Plans to spend: 2015 vs 2016, October 2015
Figure 48: Desired food and drink characteristics, will look for more in the coming year, October 2015
DINING OUT – QUALITATIVE ASSESSMENT
Restaurant choice factors
Price factors
The role of sustainability at restaurants
APPENDIX – DATA SOURCES AND ABBREVIATIONS
Data sources
Fan chart forecast
Consumer survey data
Consumer qualitative research
Abbreviations and terms
Abbreviations
Terms
APPENDIX – MARKET
Figure 49: Total US revenues and forecast for restaurants and other eating places, at current prices, 2010-20
Figure 50: Total US revenues and forecast for restaurants and other eating places, at inflation-adjusted prices, 2010-20
Figure 51: Total US revenues and forecast for restaurants and other eating places, by segment, at current prices, 2010-20
Figure 52: Total US revenues and forecast for restaurants and other eating places, by segment, at current prices, 2013 and 2015
Figure 53: Total US revenues and forecast of full service restaurants, at inflation-adjusted prices, 2010-20
Figure 54: Total US revenues and forecast of full service restaurants, at inflation-adjusted prices, 2010-20
Figure 55: Total US revenues and forecast of limited service restaurants and other eating places*, at current prices, 2010-20
Figure 56: Total US revenues and forecast of limited service restaurants and other eating places*, at inflation-adjusted prices, 2010-20
APPENDIX – THE CONSUMER
Correspondence analysis
Figure 57: Important factors when choosing a restaurant, October 2015
APPENDIX – FOODSERVICE TRENDS 2016

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