TECHNOMIC FOODSERVICE planning program June 2015 Research Strategies to Drive Product Development and Sales

Introduction 2 Review our Research ToolkitOverview of Product Development ProcessProduct Development Case StudyExample Sales Deck

Map Product Development and Sales onto the Operator Menu Development Process 3 Selling Strategy Product Development Supplier Focus Operator Focus 1. Ideation 2. Feasibility 3. Operational Validation 4. Marketplace Validation 5. System Wide Launch 6 Weeks to >12 months

1. Ideation Tools: Syndicated Subscriptions Restaurant Brand Positioning Source: Consumer Brand Metrics Consumer Trends Identification Source: Consumer Access Competitive Landscape Analysis Source: Digital Resource Library Flavor & Menu Trends Source: MenuMonitor 4

2. Product Feasibility Screening: Customized Strategic Research Menu optimization Maximum difference scaling Conjoint analysis Market simulation New item scorecard TURF analysis Customer reach Brand fit Cannibalization Probability of purchase Impact on sales mix Incremental revenue 5

TECHNOMIC FOODSERVICE planning program The Process In Action

7 The Problem What do you do? One of your top fast casual chain accounts has signaled a need to add new menu items. They are looking for items that can replace one or two low profit offerings……

Ideation Road Map 8 Menu Category Chain Economics Menu Gap Analysis Menu Trends Overview Customer Attitudes and Usage Ideation Session

Client Brand Overview: Competitive Landscape 9 Client BrandCompetitive Set $6.99$6.40$7.35$5.25’13 Check Average $7.15$6.25$7.00$5.50Median Spend 11.8%0.7%5.2%10.6%Sales Growth (‘12-’13)

Client Brand Overview: Brand Performance Overview 10

Customers are Ready for Something New Menu Evaluation % Agree or Strongly Agree Need more… 11

Where is Innovation Happening? 12 Fastest Growing Proteins: Emerging LSR Chains Bison +22% Tofu +20% Capicola +14% Tempeh +14% Ribeye +12%

Menu Development Targets 13 Customer feedback points toward healthy and more innovative product offerings Healthy Innovative Gourmet Vegan Burger Gourmet Deli Sandwich Chicken Wrap Turkey Burger Gourmet Burger Gourmet Fried Chicken Sandwich

Overview of Quantitative Menu Ideation Feasibility Test 14 Goal is to identify new menu ideations that will attract new customers and best cater to the existing customer base Key Outcomes Predicted sales share of new menu concepts Impact on existing sales mix Replacement of unprofitable items Limit cannibalization of high value menu items Optimal price to maximize its share of sales New item impact on revenue

New Sandwich Concepts Show Significant Potential on the Menu 15 Summary of Sandwich Menu % Likely to Order% Reach Estimated Share of Category Optimal Price Point Premium Cheeseburger76%26%23%$6.99 Chargrilled Chicken Sandwich64%19%15%$6.99 Gourmet Cheeseburger55%16%12%$7.99 Gourmet Fried Chicken Sandwich53%15%10%$7.99 Pulled Chicken Sandwich48%9%6%$6.99 Roast Beef Baguette44%8%7%$6.99 BLT43%3%7%$6.99 Healthy Chicken Wrap35%2%3%$7.99 Italian Chicken and Herb Wrap25%2%0.5%$6.99 French Dip18%0% $6.99 Gourmet Vegan Burger15%0% $5.99 Turkey Burger14%0% $5.99 Gourmet Deli Sandwich12%0% $5.99

Cannibalization Estimations – Gourmet Burgers Note: The Confidence Interval for this analysis is +/- 1.58% at a 95% Confidence Level. 16 Change in Share Gourmet Burger Impact Simulated Sales Share Estimated % of Sales13% Sales Impact on Low Profit Menu Items % Sales Impact on High Profit Menu Items % Desired Cannibalization Highly Profitable Cannibalization

17 Current Sandwich Revenue $2,775,128 Current Lineup Current vs. Proposed Sandwich Menu Suggested Lineup Projected New Revenue $3,515,573 Premium Cheeseburger$6.99 Premium Cheeseburger$6.99 Chargrilled Chicken Sandwich$6.99 Chargrilled Chicken Sandwich$6.99 Pulled Chicken Sandwich$6.99 Gourmet Cheeseburger$7.99 Roast Beef Baguette$6.99 Gourmet Fried Chicken Sandwich$7.99 BLT$6.99 Pulled Chicken Sandwich$6.99 Italian Chicken and Herbs$6.99 Roast Beef Baguette$6.99 French Dip$6.99 BLT$6.99 Italian Chicken and Herbs$6.99 Healthy Chicken Wrap$7.99

+$740,445 Significant Incremental Revenue Potential Exists in the “Gourmet” Sandwich Concepts 18 Estimated Incremental Revenue – System Wide

TECHNOMIC FOODSERVICE planning program The Selling Story

Sales Agenda 20 Consumer Trends Impacting Client’s Brand 1 Review of Menu Ideations 2 Findings and Recommendations 3

Fast Casuals are Driving Industry Growth Note: The results reported here are preliminary and subject to revision. Source: Technomic Top 500 Report, Total Top 500 Fast Casual Sales 2014 Sales Growth $30 B 12.8% ALL FAST CASUAL in Top % BUILD-YOUR-OWN in Top % NON-BYO in Top % 23.6%

What’s Driving This? 22 AtmosphereServiceFoodTransparency Elevated expectations of...

Your Customers Want More 23 Source: Technomic Custom Study 75% of customers desire more innovation 73% Want healthier options 71% Want more burgers 51% Want more sandwiches

Our Proposed Solutions 24 Turkey Burger Gourmet Deli SandwichGourmet Burger Gourmet Fried Chicken Sandwich Chicken WrapGourmet Vegan Burger

The Feasibility Screener Results 25 Move Forward With… Why? +$740,445 System Wide Gourmet Burgers Gourmet Fried Chicken Sandwich Healthy Chicken Wrap Potential for new premium price menu options These items show significant sales mix potential Significant incremental revenue forecasted From $6.99 to $7.99 for Gourmet and Healthy Items Gourmet Items forecasted at 22% of estimated Sales Mix Healthy option out-performed existing items* *e.g. French Dip

Any Questions? 26 Sara Monnette Senior Director, Consumer Insights & Innovation Rich Shank Senior Manager, Consumer Insights