1. Restaurant.org/Research
Annika Stensson
Director
Research Communications
National Restaurant Association
Washington, D.C.
@WeRRestaurants
/RestaurantDotOrg
Restaurant.org/Research
/NationalRestaurantAssociation

2. Agenda Overview Economic Backdrop Consumer Trends Technology Trends
Food Trends
Wrap-Up

3. Industry
Overview

4. DEFINITION: “Restaurant Industry” “Food Away from Home”
All meals/snacks prepared away from home, including all takeout meals and beverages.

5. Restaurant Industry 2015
Source: National Restaurant Association, 2015 Restaurant Industry Forecast

6. 45 Years of Restaurant Industry Sales (1971-2015)
Source: National Restaurant Association, 2015 Restaurant Industry Forecast

7. An Economic Powerhouse
Annual sales are larger than 90% of the world’s economies.
Sales will grow by $26 billion in 2015 – more than double Hollywood’s annual domestic box office sales.

8. Foodservice Sales by Segment
Tableservice
Quickservice & Fast Casual
$220 billion
$201 billion
$213 billion
$193 billion
2.9%
4.3%
2014
2015
2014
2015
Snack & Nonalcoholic Beverage Bars
Retail Hosts
$33 billion
$41 billion
$31 billion
$38 billion
5.2%
5.7%
2014
2015
2014
2015 8
Source: National Restaurant Association, 2015 Restaurant Industry Forecast

9. Restaurant Sales Growth in 2015 (Projected)
Source: National Restaurant Association, 2015 Restaurant Industry Forecast

10. Restaurant Employment Growth 2015 to 2025
(Projected)
Source: National Restaurant Association, 2015 Restaurant Industry Forecast

11. Where Do Consumers Spend?
SPENDING CATEGORY
PERCENT OF TOTAL
Housing
34%
Transportation
18%
Food
13%
Insurance/pensions
11%
Health care 7%
Entertainment 5%
Apparel and services 3%
Other 9%
Total
100%
Source: Bureau of Labor Statistics, 2013 Consumer Expenditure Survey; National Restaurant Association

12. Restaurant Industry’s Share of the Food Dollar
1955
Present
1955: 25%
2015: 47%
Source: National Restaurant Association, 2015 Restaurant Industry Forecast

13. Economic Backdrop

14. Gradual improvement continues
2015 U.S Economic Outlook
Gradual improvement continues
INDICATOR
2014
2015
Real Gross Domestic Product
2.4%
3.4%
Real Disposable Personal Income
3.1%
Consumer Price Index
1.7%
2.0%
Total U.S. Employment
1.9%
2.2%
Source: National Restaurant Association, projections as of December 2014

15. Economy 2M Jobs Above Pre-Recession Peak15
Economy 2M Jobs Above Pre-Recession Peak
31 states have more jobs than before losses started in Feb. 2008
National average: 1.4% more jobs
Source: Bureau of Labor Statistics

16. Restaurants Added More Than 360,000 Jobs During 2014
Eating-and-drinking-place employment – change from previous month
Source: Bureau of Labor Statistic; figures are seasonally-adjusted

17. Consumer Confidence Remains Near Post-Recession Highs
U.S. Consumer Confidence Index
Source: The Conference Board

18. Gas Prices Fell Sharply in the Last Half of 2014
Average price per gallon for regular gasoline
Down $1.49 Since End of June
Jan-15
Source: U.S. Department of Energy, Energy Information Administration

19. Rising Food Costs is Top Challenge
DECEMBER 2014
Food Costs %
Government %
Sales Volume %
Recruiting Employees 13%
The Economy %
DECEMBER 2012
The Economy %
Government %
Food Costs %
Sales Volume %
Recruiting Employees %
DECEMBER 2013
Government %
The Economy %
Recruiting Employees %
Food Costs %
Sales Volume %
Source: National Restaurant Association, Restaurant Tracking Survey 19

20. Wholesale Food Prices Post Strongest Growth in 3 Years
Annual growth in Producer Price Index – All food
Source: Bureau of Labor Statistics

21. Menu Price Growth Remains Moderate
Annual growth in Consumer Price Index – Food Away from Home
Source: Bureau of Labor Statistics

22. Share of total restaurant spending by household income level
Higher-Income Households Prime Restaurant Customers
Share of total restaurant spending by household income level
Source: Bureau of Labor Statistics, 2013

23. International arrivals to the United States (in millions)
International Travel and Tourism Continues to Rise
International arrivals to the United States (in millions)
Source: U.S. Department of Commerce, Office of Travel and Tourism Industries *Projected

24. Consumer Trends

25. Quality Time
Consumers who say dining out is a better use of time than cooking and cleaning up.
Source: National Restaurant Association, 2015 Restaurant Industry Forecast

26. Unique Experiences
Consumers who say restaurants provide tastes and flavors that aren’t easily duplicated at home.
Source: National Restaurant Association, 2015 Restaurant Industry Forecast

27. Top Attributes for Choosing a Restaurant
Good service
Food quality
Good value
Favorite items on the menu
Convenient location to home or work
Healthy menu items
Source: National Restaurant Association, 2015 Restaurant Industry Forecast

28. Noticing Healthful Options
Consumers who say there are more healthful options on restaurant menus now than two years ago.
Source: National Restaurant Association, 2015 Restaurant Industry Forecast

29. Choosing Healthy Options
Consumers who say they are more likely to choose a restaurant that offers healthy menu options.
Source: National Restaurant Association, 2015 Restaurant Industry Forecast

30. Actually Choosing Healthy Options
Consumers who say they are ordering more healthful options in restaurants now than two years ago.
Source: National Restaurant Association, 2015 Restaurant Industry Forecast

31. Opting for Local Sourcing
Consumers who say they are more likely to visit a restaurant that offers locally sourced food items.
Source: National Restaurant Association, 2015 Restaurant Industry Forecast

32. Eco-Friendly Matters
Consumers who say they are more likely to visit a restaurant that offers organic or environmentally friendly food.
Source: National Restaurant Association, 2015 Restaurant Industry Forecast

33. Adventurous Palates
Consumers who say they are more adventurous in their restaurant food choices now than two years ago.
Source: National Restaurant Association, 2015 Restaurant Industry Forecast

34. Different Kind of Takeout
Consumers who say they would buy fresh, uncooked food items from restaurants.
Source: National Restaurant Association, 2015 Restaurant Industry Forecast

35. Consumers who wish restaurants served breakfast items all day
Breakfast for Dinner
Consumers who wish restaurants served breakfast items all day 35
Source: National Restaurant Association, 2015 Restaurant Industry Forecast

36. Technology Trends

37. Consumers who factor in technology when choosing a restaurant.
Tech Influences
Consumers who factor in technology when choosing a restaurant.
Source: National Restaurant Association, 2015 Restaurant Industry Forecast

38. Smartphone/Tablet Ownership or Usage
All adults
70%
18-34
90%
35-44
89%
45-54
62%
55-64
60%
65+
34%
Source: National Restaurant Association, October 2014

39. Consumers More Likely to Use Restaurant Technology Compared to two years ago
Source: National Restaurant Association, 2015 Restaurant Industry Forecast

40. Restaurant Technology Usage
Percent of adults
Look up restaurant locations, directions and hours of operation
88%
Look at menus
70%
Read reviews from apps or sites like Yelp and TripAdvisor
57%
Use rewards or special deals
54%
Order takeout or delivery directly from a restaurant’s website or branded app
Source: National Restaurant Association, 2015 Restaurant Industry Forecast – Base own/use smartphone/tablet

41. Restaurant Technology Usage
Percent of adults
Look up restaurant nutrition information
49%
Make reservations
43%
Pay for meals
26%
Order takeout or delivery via an aggregate service like Seamless or GrubHub
22%
Source: National Restaurant Association, 2015 Restaurant Industry Forecast – Base own/use smartphone/tablet

42. Technology Is Growing
79% of consumers say tech options increase convenience
70% say tech options speed up service
70% say tech options increase order accuracy
37% of consumers report technology makes restaurant visits and
ordering more complicated
Source: National Restaurant Association, 2015 Restaurant Industry Forecast

43. What’s In It for Restaurateurs?
45% of consumers say tech options make dining out more fun
35% say tech options make them choose one restaurant over another
34% say tech options make them dine out or order takeout/delivery more often
Source: National Restaurant Association, 2015 Restaurant Industry Forecast

44. Food Trends

45. What’s Hot in 2015 1) Local meat/seafood 6) New cuts of meat
Tableservice Restaurants
1) Local meat/seafood 6) New cuts of meat
2) Local produce 7) Hyper-local
3) Sustainability 8) Sustainable seafood
4) Healthy kids’ meals 9) Food waste reduction
5) Natural ingredients ) Farm-branding
Source: National Restaurant Association, What’s Hot in 2015 chef survey

46. What’s Hot in 2015 1) Gluten-free items 6) Gourmet grilled cheese
Limited-Service Restaurants
1) Gluten-free items 6) Gourmet grilled cheese
2) Sustainability 7) Build-your-own
3) Local produce 8) Healthy kids’ meals
4) Kids’ veggie sides 9) Local meat/seafood
5) Mini-desserts 10) Milk/juice in kids’ meals
Source: National Restaurant Association, 2015 Restaurant Industry Forecast

47. What’s Hot in 2015 1) Artisan spirits 2) Local beer/wine/spirits
ALCOHOL
1) Artisan spirits
2) Local beer/wine/spirits
3) Onsite barrel-aged drinks
4) Regional signature cocktails
5) Culinary cocktails
Source: National Restaurant Association, What’s Hot in 2015 chef survey

48. Movers & Shakers in 2015 Underutilized fish Ethnic condiments Ramen
Warming trends
Underutilized fish
Ethnic condiments
Ramen
Southeast Asian cuisine
Gourmet grilled cheese (QSR)
Mini-desserts (QSR)
Source: National Restaurant Association

49. What’s Hot in 2015 Local sourcing Environmental sustainability
Umbrella trends
Local sourcing
Environmental sustainability
Nutrition/Kids’ nutrition
Ethnic cuisines and flavors
Source: National Restaurant Association

50. Perennial Favorites in 2015
Tableservice restaurants
1) Barbecue 6) Oatmeal
2) Italian cuisine 7) Comfort foods
3) Fried chicken 8) Fruit desserts
4) French toast 9) Pulled pork
5) Frying ) Chicken wings
Source: National Restaurant Association, What’s Hot in 2015 chef survey

51. Perennial Favorites in 2015
Limited-service restaurants
1) French fries 6) Hamburgers
2) Poultry items 7) Side salads
3) Bacon ) Onion rings
4) Bottled water 9) Soft drinks
5) Beef items ) Pizza
Source: National Restaurant Association, 2015 Restaurant Industry Forecast

52. TOP Developments : Food & Menu
Future Trends
TOP Developments : Food & Menu
There will be significant upgrades in product quality and emphasis on “fresh.”
Local sourcing will become more prevalent.
Healthy eating will continue to grow.
There will be a greater demand for authentic items and flavor profiles.
Fresh produce options will become more plentiful.
Source: National Restaurant Association, Restaurant Industry 2020

53. Wrap-Up

54. Americans Love Restaurants Consumers who say they enjoy going to:
90%
66%
Restaurants
Grocery stores
Source: National Restaurant Association, 2015 Restaurant Industry Forecast

55. Consumers who are NOT dining out as often as they would like
Unfilled Demand
Consumers who are NOT dining out as often as they would like
Source: National Restaurant Association, 2015 Restaurant Industry Forecast

56. Restaurant Operators Are More Optimistic about Sales Growth
Operators’ outlook for sales in six months vs. same period previous year
Source: National Restaurant Association

57. Key Takeaways Real sales growth for sixth consecutive year.
Food cost growth will remain a challenge.
While consumer confidence will improve, they will still be managing their check and need “nudging.”
Positive future despite challenges.
More technology integration to aid productivity and boost loyalty.
Average Americans are turning into “foodies.”
Local sourcing, environmental sustainability, nutrition and ethnic cuisine are key menu trends.

58. Restaurant.org/Research
Annika Stensson
Director
Research Communications
National Restaurant Association
@WeRRestaurants
/RestaurantDotOrg
Restaurant.org/Research
/NationalRestaurantAssociation