Snack and Dessert Trends in the U.S. Foodservice Market

Date: October 22, 2010
Pages: 144
Price:
US$ 3,995.00
Publisher: Packaged Facts
Report type: Strategic Report
Delivery: E-mail Delivery (PDF)
ID: SBADEA53A16EN
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Snack and Dessert Trends in the U.S. Foodservice Market
Snacking trends intersect with some of the foodservice industry’s most important challenges, which is why cracking the snacking code has become a necessity. But while much attention has been made of consumer snacking trends, and while foodservice operators now roll out new snackable items almost daily, Packaged Facts estimates that usage of “snacks” at restaurants had held relatively stable during 2005-09, and we forecast similar results for 2010 and 2011.

But the devil is in the details. With their low price points, high portability, and upselling potential, snacking strategies can boost mid-morning and mid-afternoon sales; drive guest traffic; and leverage on-site upselling to higher-priced items or bundled meals. The bottom line is that snacking strategies can not only help operators address incremental “true snacking” occasions, but they can also use snackable items as carrots to entice customers to purchase more food and beverages—and give consumers highly portable food options in the bargain.

Snack and Dessert Trends in the U.S. Foodservice Market provides needed insight into the consumer snacking decision-making process; snacking menu pricing and product trends; and foodservice snacking sales (by restaurant segment and by demographic), helping industry participants position themselves accordingly.

With proprietary consumer research laying the foundation, the report analyses consumer attitudes and behaviors influencing foodservice snacking behavior. Themes addressed include where and how snacks are eaten, how the snacking purchase decision relates to consumer activity and routine, and consumer hunger and health purchase motivations. The report also assesses “consumer dessert influencers,” factors that play into the decision to order restaurant dessert during the dinner hour. Themes addressed include dessert formats and purchase incentives; and desserts as conditional options which assesses the influence of cost, satiation and calorie considerations on the purchase decision). As part of this analysis, we detail snacking usage according to restaurant type and to prepared foods use at convenience stores and grocery stores.

We also analyze the snacking patterns and restaurant preferences of five Snacking Lifestyle groups: Carefree Snackers; Fast Food Slighting Hurried Healthy Snackers; Hurried Healthy Snackers; Calorie-Conscious Small Mealers; and Healthy Calorie-Conscious Snackers. With this analysis, restaurants can tailor their incentives to fit the purchasing patterns of these important groups.

Snack and Dessert Trends in the U.S. Foodservice Market also analyzes leading snack-centric restaurant brands, including menu strategies and new menu item introductions; core users; snacking tendencies; food, diet and health attitudes; and trended sales metrics.

The report also includes “Share of stomach” snack and nonalcoholic beverage sales analysis, which includes 5-year sales trends for the fast food/quick-service restaurant and full-service restaurant segments, with forecasts for 2010 and 2011; guest traffic frequency analysis of leading snack-centric restaurant brands, giving a directional perspective on current sales trends; and trended snack and nonalcoholic beverage sales analysis by demographic, including 4-year sales historical sales trends and spending according to key demographics, such as age, income, region, and race/ethnicity.
CHAPTER 1: EXECUTIVE SUMMARY

SCOPE AND METHODOLOGY


  Scope
Methodology
  Consumer survey methodology
  Market size and forecast
  Consumer restaurant expenditure trending
  Terminology
Macroeconomic Analysis
  Fast Facts
Restaurant Usage & Outlook Tracker
  Fast Facts
Share of Stomach: Sales Analysis
  Fast facts
Snacking Trends, Innovations & Strategies
Snacking Menu Item Analysis
Snacking Behavioral Analysis
  Fast facts
Snacking Lifestyle Groups
  Fast facts
Restaurant Dessert Influencers
  Fast facts
Snacking on the Menu: Restaurant Brand Analysis
Starbucks
Dunkin’ Donuts
Jamba Juice

CHAPTER 2: MACROECONOMIC ANALYSIS

RESTAURANT SALES RALLY FIZZLES; LONG SLOG AHEAD


Restaurant industry sales dip in June; future weakness likely
Spending upturn hinges on consumers with strong balance sheets
  Upturn to benefit casual restaurants at expense of family and fast food/QSR players
  Non-discretionary spending a recession rule
  But affluent may help drive growth in discretionary spend
Packaged Facts’ Consumer Restaurant Tracker: gloomy near-term outlook
In-home breakfast and dinner trend remains significant
Bagging lunch, breakfast and snacks taking a bite out of restaurant sales?
Graph 2-1: Consumer Restaurant Tracker: Current Behavior: A Top Line View
  Looking ahead: saving & grocery spending trumps limited-service and full-service restaurant spend
Graph 2-2: Consumer Restaurant Tracker: Next 3 Months: A Top Line View
  February to June food services & drinking places monthly sales sequentially improve
  Full-service restaurants get shot in the arm, shift momentum away from grocery
Graph 2-3: Monthly Sales, 12-Month % Change, Grocery Stores & Food Services & Drinking Places, Full-Service Restaurants and Limited-Service Eating Places, 2009-2010
  But month-to-month spending trends suggest restaurant and food retail pullback
Graph 2-4: Monthly Sales, Month-to-Month % Change, Grocery Stores & Food Services & Drinking Places, Full-Service Restaurants and Limited-Service Eating Places, 2009-2010
Restaurant Performance Index contracts for second straight month
Graph 2-5: Restaurant Performance Index, Monthly Metrics, 2006-2010

MACROECONOMIC FACTORS SHAPING RESTAURANT SALES

Consumer confidence? No, not really
  Present Situation Index decreases as perceptions of job prospects continue to darken
  Expectations Index weighed down by dimmer outlook on job prospects
Unemploymentrate stagnates
  Some perspective:
Graph 2-6: UnemploymentRate and Consumer Confidence: 2007-2010
By demographic, unemployment rates settle into troughs
  Disparity in unemployment rates by education level
  Young adults, minorities and men also find harder going
Graph 2-7: Unemployment Rate, Selected Demographics, 2007-2010
Graph 2-8: Unemployment Rate, by Race/Ethnicity, 2007-2010
How can increasing personal savings and reducing the debt burden be bad?
  Households continue to repair their balance sheets
Graph 2-9: Consumer Debt Burden, 2000-2010
Graph 2-10: Savings Rate & Debt Service Ratio & Financial Obligations Ratio, 2007-2010
Unemployment and GPD forecast: expect recovery to take several years
  Slow employment rebound to coincide with a slowrebound in consumer spending
Graph 2-11: Unemployment and GDP Forecast, 2010-12
Stock & housing declines deflate household wealth; rebound to record 2006 levels a long way off
  Q1 2009 to Q1 2010 sees uptick in household wealth, but still $10 trillion off 2006 high
Graph 2-12: Household Net Worth, 2005-10
  Case-Shiller and FOMC housing pessimism
  Q2 2010 summary equities analysis
Graph 2-13: Wealth Effect: Wilshire 5000 and Case Shiller Composite-20 Index: 2007-2010
Food at home maintains pricing edge
Graph 2-14: CPI: Food at Home vs. Food Away from Home, 2005-2010
Graph 2-15: CPI: Food at Home vs. Food Away from Home, 2005-2010
Food inflation forecast remains muted
  CPI forecast for food at home and food away from home
Commodities pricing analysis
  Intermediate foods and feeds index dips during Q1 2010
  Prepared animal feed prices lead decline
  Dairy product index falls after Q4 2009 hike
  Finished consumer foods rise
  Crude foodstuffs and feedstuffs rise tapers from Q4 2009 pop

CHAPTER 3: RESTAURANT USAGE & OUTLOOK TRACKER

Note on reading charts
Packaged Facts’ Consumer Restaurant Tracker: At-home food spend trumps out-of-home spend
  February 2010 trend continues in June 2010
Food retail snacks to benefit?
Graph 3-1: Consumer Restaurant Tracker: Current Behavior: A Top Line View
Looking ahead: Consumers more likely to pack a lunch, breakfast or snack
  Pack a snack?
Graph 3-2: Consumer Restaurant Tracker: Next 3 Months: A Top Line View
Planned spending on snacking stronghold sends mixed signals
Graph 3-3: Consumer Restaurant Tracker: Future Behavior: Fast Food Restaurant Spending
Intention to save money remains high
Graph 3-4: Consumer Restaurant Tracker: Future Behavior: Saving Money

RESTAURANT USAGE AND USAGE FREQUENCY

Overview
  February 2010 to June 2010 mean use comparison
Graph 3-5: Mean Restaurant Usage in Last Month, by Restaurant Type, 2010
Graph 3-6: Restaurant Usage in Last Month, by Restaurant Type, 2010
Males drive mean use
Table 3-1: Mean Restaurant Usage in Last Month, by Restaurant Type, 2010, by Gender
Graph 3-7: Restaurant Usage in Last Month, by Restaurant Type, by Gender, 2010
18-34s continue to drive guest counts
Table 3-2: Mean Restaurant Usage in Last Month, by Restaurant Type, 2010, by Age
  18-34s exhibit higher usage
  Key smoothie shop and street stand users
Graph 3-8: Restaurant Usage in Last Month, by Restaurant Type, 2010, by Age
HH income: fast food enjoys egalitarian status
Table 3-3: Mean Restaurant Usage in Last Month, by Restaurant Type, 2010,
by HH Income
Graph 3-9: Restaurant Usage in Last Month, by Restaurant Type, 2010, by HH Income
Employment status: having a job pays the bills but also fits restaurant lifestyle
Table 3-4: Mean Restaurant Usage in Last Month, by Restaurant Type, 2010,
by Employment Status
  Full-time workers and students also compare favorably regarding overall usage
Graph 3-10: Restaurant Usage in Last Month, by Restaurant Type, 2010,
by Employment Status
  Restaurant snacking use
Technically speaking, restaurant snacking visits are a drop in the bucket
  But a very important driver for incremental sales and upselling
Graph 3-11: Day Part Usage on Last Visit, 2010
Restaurant snacking use in past month
  Note on reading charts in this section
Convenience stores and snacking a natural fit
Graph 3-12: Restaurant Snacking Usage in Last Month, Type of Restaurant, 2010
Gender snacking differences hinge on impulse, efficiency and affordability
Graph 3-13: Restaurant Usage in Last Month for a Snack, 2010, by Gender
  HH income
Graph 3-14: Restaurant Usage in Last Month for a Snack, 2010, by HH Income
  Employment status a key differentiator
Graph 3-15: Restaurant Usage in Last Month for a Snack, 2010, by Employment Status

CHAPTER 4: SHARE OF STOMACH: SNACKING SALES ANALYSIS

Market size and overview

Snacking usage trends stable over time
Table 4-1: Restaurant Snacking Usage,by Restaurant Type, 2005-10
18-24s hop on snacking trend
Table 4-2: Restaurant Snacking Usage,18-24s, by Restaurant Type, 2005-10
  Near-term challenges
  Long-term outlook
Graph 4-1: Snack and non-alcoholic beverage sales:
limited-service and full-service restaurants, 2005-2011
Graph 4-2: Snack and non-alcoholic beverage sales, % change:
limited-service and full-service restaurants, 2006-2011
Snacks still take a small bite out of food sales
Graph 4-3: Food at Home versus Food Away from Home Daypart Spend
Fast food owns the restaurant snacking space
Graph 4-4: Snack & Beverage Expenditures: Fast Food, Full-Service,
Vending Machines & Cafeterias

RESTAURANTS SALES TRENDS BY DAYPART

Consumer food expenditure trends suggest migration to food at home spend
Table 4-3: Consumer Food Expenditures, 2005-08
Snack & beverage share of spend remains steady
Table 4-4: Meals Away From Home Expenditures,by Daypart, 2005-08
Consistent ratio of snack expenditures to food expense and restaurant expense
Table 4-5: Snack & Beverage Expenditures: Selected Metrics &Fast Food, Full-Service, Vending Machines Cafeteria Spend, 2005-08
Vending machines lose snacking traction
Graph 4-5: Snack & Beverage Expenditures: Fast Food, Full-Service,
Vending Machines & Cafeterias, 2005-08
Western region snack spend champs; South lags
Table 4-6: Snack & Beverage Expenditures: Selected Metrics &Fast Food, Full-Service, Vending Machines and Cafeteria Spend, by Region
Youth drives snacking spend
Table 4-7: Snack & Beverage Expenditures: Selected Metrics &Fast Food, Full-Service, Vending Machines and Cafeteria Spend, by Age
Snacks linked to income
But fast food share shifts
Table 4-8: Snack & Beverage Expenditures: Selected Metrics &Fast Food, Full-Service, Vending Machines and Cafeteria Spend, by Income
Race/ethnicity reveals significant differences in snack spend
Table 4-9: Snack & Beverage Expenditures: Selected Metrics &Fast Food, Full-Service, Vending Machines and Cafeteria Spend, by Race/Ethnicity

SNACK & NONALCOHOLIC BEVERAGE GUEST TRAFFIC ANALYSIS

Frequency counts: definition
  Starbucks loses high-frequency guests & guest share; Dunkin’ gains; Jamba mixed
Table 4-10: Guest Traffic: Limited-Service Restaurants, Selected Snacking Players, 2008-10

CHAPTER 5: SNACKING TRENDS, INNOVATIONS & STRATEGIES

LET’S SNACK!


Three or more snacks a day?
Snack timing: morning and afternoon routine
Restaurants respond with snackable options
What restaurants are doing
What retail is doing

MINI SIZE THAT!

Movement driven by multiple factors
What restaurants are doing
What retail is doing

SNACKING & AFFORDABILITY

Retail snacks as meal substitutes

HEALTHY INDULGENCE

Snacks as culprits
Health versus taste
Salty snacks
Gender issues
What restaurants are doing
What retail is doing

ON-THE-GO PORTABILITY AND CONVENIENCE

What restaurants are doing

IMPULSE

What restaurants are doing

CULINARY EXPLORATION

What restaurants are doing
What Retail Is Doing

COMFORT FOODS

What restaurants are doing

PRIVATE LABEL OPPORTUNITIES

SNACKING AND SOCIABILITY


What Retail Is Doing

SUSTAINABILITY

What Retail Is Doing
Appendix: sources

CHAPTER 6: SNACKING MENU ITEM ANALYSIS

Introduction
Get them through the door
Why snacking? Low cost, portability, driving traffic and building guest checks
Operators report growth by snacking daypart
QSR and FSR snackable items are different animals
The rise of the snackwich
Graph 6-1: Snackwich Timeline, 2005-10
Burger, chicken and sub variations
When a snack is not a snack: bundling snacks to rope in additional sales
Happy Hour and late-night
Small plates

CHAPTER 7: SNACKING BEHAVIORAL ANALYSIS

Note on reading charts

SNACKING BEHAVIORAL ANALYSIS

Overview
Graph 7-1: Restaurant Snacking Influencers, 2010
  Gender differences: health, quick consumption and time of day
Table 7-1: Restaurant Snacking Influencers, by Gender, 2010
  Age
Table 7-2: Restaurant Snacking Influencers, by Age, 2010
  HH income
Table 7-3: Restaurant Snacking Influencers, by Age, 2010
  Employment status
Table 7-4: Restaurant Snacking Influencers, by Employment Status, 2010
  Urban, Suburban, or Rural location
Table 7-5: Restaurant Snacking Influencers, Urban, Suburban or Rural, 2010

CHAPTER 8: SNACKING LIFESTYLE GROUPS

TRENDED SNACKING & HEALTH BEHAVIORS AND ATTITUDES: 2007-10


Table 8-1: Trended Snacking & Health Behaviors and Attitudes, 2007-10

MEET THE SNACKING LIFESTYLE GROUPS

Demographic analysis
Table 8-2: Snacking Lifestyle Groups, Selected Demographics, 2010

RESTAURANT PREFERENCES

Carefree Snackers
Calorie-Conscious Small Mealers
Healthy Calorie-Conscious Snackers
Hurried Healthy Snackers
Fast Food Slighting Hurried Healthy Snackers
Table 8-3: Snacking Lifestyle Groups, Restaurant Use, By Type, 2010

CHAPTER 9: RESTAURANT DESSERT INFLUENCERS

Restaurant dessert influencers
Graph 9-1: Restaurant Dessert Influencers, Dinner, 2010
  Gender
Table 9-1: Restaurant Dessert Influencers, by Gender, 2010
  Age
Table 9-2: Restaurant Dessert Influencers, by Age, 2010
  HH income
Table 9-3: Restaurant Dessert Influencers, by HH Income, 2010
  Employment status
9-4: Restaurant Dessert Influencers, by Employment Status, 2010
  Urban, suburban, or rural location
Table 9-5: Restaurant Dessert Influencers,Urban, Suburban or Rural, 2010

CHAPTER 10: SNACKING ON THE MENU: RESTAURANT BRAND ANALYSIS

SNACKING LIFESTYLES: BRAND COMPETITIVE ANALYSIS


Meet the psychographic groups
Snacker brand analysis
Table 10-1: Snacking Lifestyle Groups: Starbucks, Dunkin’ Donuts
and Jamba Juice

STARBUCKS CORPORATION

Revenue mix shows food trending upward
Table 9-2: Starbucks, Revenue Mix by Product Type, 2009
  Recession response
  Menu pricing strategies and customer incentives
  My Starbucks Rewards gains traction
  iPhone apps and free wi-fi; what could be next?
  Customizable Frappuccino to assuage calorie critics?
  Expanding with VIA, Seattle’s Best and new retail formats
Starbucks users, Starbucks snackers?
Table 10-3: Starbucks Users: Restaurant Usage by Daypart and Restaurant Type
Starbucks core users
Table 10-4: Starbucks Users: Selected Demographics
Starbucks guests: food adventurousness and fast food practicality
Table 10-5: Starbucks Users: Food, Health and Diet Attitudes
A same-store sales turnaround worthy of celebration
Table 10-6: Starbucks, Selected Metrics, 2007-09
Q2 2010 brings good news
Table 10-7: Starbucks, Selected Quarterly Metrics, 2009 and 2010

DUNKIN’ DONUTS

2009-10 menu strategy
  Expanding breakfast value menu in selected markets
Table 10-8: Dunkin’ Donuts “Breakfast not BROKEfast” Dollar Breakfast Menu
  Sandwiches and wraps in the testing phase
Table 10-9: Dunkin’ Donuts Test Market New Items
Rolling through summer with new and limited-time offers
  Bagel Twists, Wake-Up Wrap aimed squarely at snackers
Table 10-10: Dunkin’ Donuts Spring & Summer 2010 New and Limited-Time Offers
Dunkin’ Donuts: egalitarian while attracting the affluent
Table 10-11: Dunkin’ DonutsUsers: Selected Demographics
Positive fast food attitudes
Table 10-12: Dunkin’ Donuts Users: Food, Health and Diet Attitudes
Dunkin’ Donuts: snacker central?
Table 10-13: Dunkin’ Donuts Users: Restaurant Usage by Daypart and Restaurant Type
Sales per store dip
Table 10-14: Dunkin’s Donuts, Selected Metrics, 2007-09

JAMBA JUICE COMPANY

Menu overview
  The BLEND Plan
Menu innovation
  Away from smoothies
  And expanding smoothies, too
  Feel Good Special, anyone?
Consumer product expansion
Jamba Juice user restaurant snacking tendencies
Table 10-15: Jamba Juice Users: Restaurant Usage by Daypart
and Restaurant Type
Jamba users: young!
Table 10-16: Jamba Juice Users: Selected Demographics
A health-fueled bunch
Table 10-17: Jamba Juice Users: Food, Health and Diet Attitudes
Down go same-store sales
Table 10-18: Jamba Juice, Selected Metrics, 2007-09
Could a turnaround be in sight?
Table 10-19: Jamba Juice, Selected Quarterly Metrics, 2009 and 2010
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