US Eating Consumer Trends in 2016

Copyright ©2016 Information Resources, Inc. (IRI). Confidential and proprietary.
THE
CONSUMER
PLAYBOOK
SALLY%LYONS%WYATT%
Execu&ve(&(Prac&ce(Leader(
Consumer eating trends
driving industry and
bakery growth

THE%GAME%PLAN%
The(Equipment((Methodology)(
Top(Scores((Headlines)(
Past(and(Present(Teams((Ea&ng(Trends)(
Plays(of(the(Day((Millennials,(Hispanics,(
H&W,(&(Retail)(
How(to(Win(Going(Forward((The(Strategy)(

THE%EQUIPMENT%
1 2 3Sales
Performance
Shopping
Behavior
Customer(
AKtudes(
IRI Market Advantage™
52 Weeks ending 1/24/16 – unless
noted otherwise
MULO+C = Food, Drug, MassX,
Club, Dollar, Walmart, Military, and
Convenience
BAKERY = Bagels/Bialys, Bakery
Snacks, English Muffins, Fresh Bread &
Rolls, Pastry Doughnuts, Pies & Cakes
Technomic
IRI Consumer Network™ IRI 2015 Consumer Snacking Study
IRI 2013 Consumer Eating Study

TOP%SCORES%$1.3(Trillion(spent(in(ea&ng(and(drinking(in(
a(diverse(landscape(
The(quest(for(simple(ingredients(and(fresh(products(is(
providing(opportuni&es(for(the(baking(community(to(
communicate(with(and(serve(American(shoppers(
Products(associated(with(nutri&on(fueling(growth(
Consumers(across(genera&ons(have(a(variety(of(ea&ng(
trends(that(will(impact(growth(over(the(next(5(years(

Consumers(are(spending(over((
$1.3%Trillion%(
in(the(ea&ng(landscape(
42%
Retail -
MULO + C
F&B
20%
Limited Service
Restaurants
6%
Travel &
Leisure
3%
Retail
Hosts
1%
Business
& Industry
18%
Full Service
Restaurants
10%
All Other

THE%EATING%LANDSCAPE%IS%DIVERSE%
Websites%

Food%Trucks%

Restaurants%

VENDING%MACHINES%HAVE%EVOLVED%TO%ADDRESS%
CONSUMER%NEEDS%AND%DEMAND%MOMENTS%

PAST%AND%PRESENT%TEAMS:%
Household(dynamics(have(resulted(in(shiSs(in(cooking(and(ea&ng(behavior(
1950s
Singles%Living%Alone:%9.3%(
Married%Couples%w/%Kids:(55.1%(
Married%Couples%w/o%Kids:(23%(
5+%person%HH:(21.4%(
Average%HH%Spend%on%Food%Per%Week:%$23(
TV#dinners,#created#by#C.A.#Swanson#&#Sons,#
were#introduced#in#1953.#
1970s%
(Singles%Living%Alone:%17.1%(
Married%Couples%w/o%Kids:(30.3%(
In#1971,#the#Quarter#Pounder#premiered#
at#McDonald’s#for#53#cents.#
1990s
Singles%Living%Alone:%24.6%(
1993#marks#the#launch#of#SnackWell’s#
reducedJfat#cookies.#
2000s%
(Singles%Living%Alone:%27.5%(
5+%person%HH:(9.6%(
Home#delivery#of#grocery#items#is#launched#
by#a#major#eJcommerce#company#in#2007.#
Source:(www.census.gov;(www.gallup.com(

EVOLUTION%OF%%
COOKING%AND%EATING%
The%“Then”%Team%
Tried and true family recipes
Three meals a day
Cooking as a chore
Source: WBTB Shopping Study, November 2014

The(U.S.(Shopper(is((
Becoming(More(Diverse(
309M
USA Population 2010
3M
White
10%
growth
13M
Hispanic
53%
growth
4M
Black
16%
growth
4M
Asian
15%
growth
1M
Other
5%
growth
Hispanics(will(account(for((
53%%of%populaon%growth%
334M
USA Population 2020

PLAYERS%HAVE%CHANGED%]%%
More(people(working(and(not(re&ring(at(65(

Consumers(want(to(consume(fresher((
foods(as(part(of(their(wellness(goals(
Source:(Na&onal(Consumer(Panel(Survey:(Total(US:(CY(2013(
Health and Wellness Trends
Being physically fit & active
Consuming fresher foods
Consuming more Gluten-free foods
Feeling good about yourself
Portion control
Buying organic / natural products
Not being overweight
Cooking at home / eating with family

EATING%OCCASIONS(
HAVE%CHANGED%
“I%eat%3%square%meals%%
a%day%and%no%snacks”%
“I%eat%3%square%meals%
and%several%snacks”%
“I%eat%4]5%mini%meals”%
“I%eat%on%the%run%and%grab%
food%when%I%have%a%chance”%

LEADING%TO%“TODAY’S”%TEAM%
COOKING%AND%EATING%STYLE%
“Social” recipes
Hybrid homemade &
meal preparation
Cooking is fun
Source: WBTB Shopping Study, November 2014

We are
obsessed
with food

Q:%Family(commitments/(
priori&es%
Q:%What(&me(is(it?%
Q:%Who(is(ea&ng((
with(me?%
Q:%Have(I(seen(any((
coupons(or(deals?%
Q:%What(is(at(home((
in(the(fridge?%
Q:%How(much((
money(do(I(have?%
THE%TRICK%PLAY%FOR%THE%
DECISION%OF%EATING]IN%OR%
DINING]OUT%HAS%BECOME%
COMPLICATED%

FOOD%SERVICE%GAME%PLAN%HAS%BEEN%WINNING%%
FOR%THE%PAST%THREE%YEARS%(OUTPACING%RETAIL)%
Food((
Service%
Retail(f((
MULO+C(
F&B(
2.4%(
4.0%(
3.1%(
3.3%(
3.9%(
5.1%(
3.3%(
1.8%(
2.7%(
2.9%(
2011( 2012( 2013( 2014( 2015(
Dollar(Sales(Growth(
Source: Technomic Industry Forecast & IRI Total Store Advantage

AT%RETAIL,%THE%PERIMETER%
IS%BECOMING:%
The(fulcrum(point(for(maximum(
retail(diﬀeren&a&on(
(
Base(for(deeper(and(more(engaging(
customer(experiences(
(
Focus(for(space(expansion(

WITH%PERIMETER%
GROWTH%IS%+4.5%%
Source: IRI FreshLook POS data, MULO, 52 weeks ending 11/29/2015

BAKERY%GAME%PLAN%HAS%BEEN%WINNING%%
FOR%THE%PAST%TWO%YEARS%(OUTPACING%FOOD%&%BEV)%
Bakery%
MULO+C%
F&B(
MULO+C(
5.3(
3.5(
1.8(
2.8( 2.9(
6.7(
0.7( 0.6(
3.4(
3.1(
2011( 2012( 2013( 2014( 2015(
Dollar(Sales(Growth(

GENERAL%%
(+2.0%%YAGO)%
BEVERAGES%
(+5.4%YAGO)%
FROZEN%
(+1.3%%YAGO)%
REFRIGERATED%
(+2.5%%YAGO)%
BAKERY%IS%COMING%ON%STRONG%
Source:(CAGR(f(IRI(Infoscan(TSV(data:(CY(2010–(2015:(Total(US(–(MULO+C(
BAKERY%
(+3.1%%YAGO)%
4.2%%
3.7%%
2.9%%
2.5%%
1.6%%
CAGR
CAGR
CAGR
CAGR
CAGR

THE%BAKERY%AISLE%IS%GROWING%FASTER%THAN%OTHER%BAKING%CATEGORIES%
Bakery%Aisle%
+2.9%%
5(Yr($(CAGR(
Baking%Mixes%
+3.1%%
YAGO(
Rfg%Baked%Goods% Fz%Baked%Goods%
]0.9%%
5(Yr($(CAGR(
]6.4%%
YAGO(
]0.2%%
5(Yr($(CAGR(
]0.5%%
YAGO(
+0.6%%
5(Yr($(CAGR(
+1.1%%
YAGO(

%%change%v.%YAGO(
SWEET%NOT%SAVORY%IS%DRIVING%BAKERY’S%GROWTH%RATES%
PIES%&%CAKES%+7.7%%
FRESH%BREAD%&%ROLLS%+1.1%% BAGELS%]0.3%%
DONUTS%/%PASTRIES%+6.9%% BAKERY%SNACKS%+6.7%%

Top%Growing%(%%change%v.%YAGO%&%5%Year%Dollar%Sales%CAGR)(
MAJORITY%OF%GROWTH%OF%BAKERY/BAKED%GOODS%CATEGORIES%
FALL%IN%THE%BAKERY%AISLE%
PASTRY/DANISH/%%%%%
COFFEE%CAKE%
+5.0%%
+4.5%%CAGR%
PIECRUST%MIXES%
+16.8%%%
]1.6%%CAGR%
FROZEN%COOKIE%DOUGH%
+77.7%%%
+29.7%%CAGR%
RFG%PIES%
+8.2%%
]2.0%%CAGR%
PIES%
+11.2%%%
+5.6%%CAGR%
CUPCAKES%
+6.9%%
+7.2%%CAGR%
CAKES%
+6.3%%
+6.2%%CAGR%
DONUTS%
+5.4%%
+4.8%%CAGR%
MUFFINS%
+14.3%%
+5.7%%CAGR%
ENGLISH%MUFFINS%
+4.5%%
+2.9%%CAGR%

PLAYS%OF%THE%DAY:%
Millennials(&(Hispanics(

Acculturated
Hispanics 10% +53%
THE%FACT%THAT%HISPANICS%AND%MILLENNIALS%ARE%THE%%
FASTEST%GROWING%POPULATION%INDICATES%THE%NEED%TO%INNOVATE%
Population by Key Generations%
Source: ILD National Consumer Panel, Total US-All Outlets, Latest 52 wks ending Jan 24, 2016
10%%
21%%
18%%
22%%
5%%
25% +58%
21%
17%
3% +15%
Millennials
(18-34)
Young Boomers
(45-54)
Older Boomers
(55-64)
Asians
Bakery
$ Dist.
Pop Growth
2020
-12%

25%%of(Millennials(eat(foods(that(are((
Cerﬁed%Organic%
%vs.((
17%%of(Young(Boomers(%
19%%of(Older(Boomers(

ON]THE]GO%AND%BUSIER%LIFESTYLES%ARE%LEAVING%LESS%TIME%FOR%THE%%
YOUNGER%GENERATION%TO%STICK%TO%OLD%SCHOOL%FORMAL%MEALS%
Millennials(look(for((
GREATER%%
BREAKFAST%OPTIONS%%
such(as(later(hours,(breakfasts(all(
day,(ethnic(ingredients,(gourmet(
op&ons(and(and(healthier(
ingredients(

Millennials(eat(out((
most(at(lunch%
Four%smaller%meals%%
a(day(at(nonf(
tradi&onal(&mes%

Source: ILD National Consumer Panel, Total US-MULO, Rolling 52 wks ending Mar 22, 2015, NBD Aligned
more(dollars(per(trip(vs.((
Younger(&(Older(Boomers((
$10.67%vs.%$9.94%vs.%$8.91%
Millennials%
less(deal(reliant(vs.((
Younger(&(Older(Boomers((
34.0%%vs.%35.9%%vs.%35.3%%
NOT%ONLY%ARE%THEIR%EATING%HABITS%
DIFFERENT,%THE%WAY%THEY%SHOP%AT%THE%
SUPERMARKETS%IS%ALSO%NOTE%WORTHY%

Source: ILD National Consumer Panel, Total US-MULO, Rolling 52 wks ending Mar 22, 2015, NBD Aligned
NOT%ONLY%ARE%THEIR%EATING%
HABITS%DIFFERENT,%THE%WAY%THEY%
SHOP%AT%THE%SUPERMARKETS%IS%
ALSO%NOTE%WORTHY%
larger(basket(size(
$65.27%vs.%$62.26%
more(dollars(per(trip((
$10.03%vs.%$9.54%
less(deal(reliant(
33.7%%vs.%35.5%%
Hispanics%

LIFESTYLES%ARE%%
FAST%CHANGING%%
WITH%EVOLUTION%%
OF%TECHNOLOGY%
of(BifCultural(Hispanic(
Millennials(look(for(recipes(
online(
(
75%

PLAYS%OF%THE%DAY:%
Health(&(Wellness(

Source: IRI Infoscan TSV data: 52 Weeks Ending 1/24/16: Total US – MULO+C
%%OF%TOTAL%BUSINESS%BY%CLAIM%
CERTAIN%H&W%CLAIMS%ARE%MORE%ESTABLISHED%IN%BAKERY%
TOTAL%BAKERY%
TOTAL%FOOD%&%
BEV%
15%( 11%(
14%( 9%(
14%( 9%(
6%( 4%(
4%( 3%(

Trending
QUEST%FOR%WELLNESS%IS%BOOSTING%CLAIMS%THAT%ALIGN%TO%HIS%OR%HER%NEEDS%
Trailing
Dairy(
Omega(
Gluten(
Free((
No(Added(
Preserva&ves((
USDA(
Organic(
All(
Natural(
High Source
Protein
Source/(
Contains(
Carbs(
Nonf
GMO(
Veriﬁed(
100%(
Whole(
Grain(
Net(
Carb(
Fiber(
OMEGA(
DHA/(
EPA(
No/Low/
Less(
Sodium(
Sugar(
Calories/(
Serving(
Grain
Blends
Artificial
Sweetener

Top%H&W%Claims%Ranked%on%Dollar%Sales%%%Chg%vs%YA%
SOME%CLAIMS%ARE%GROWING%MORE%QUICKLY%IN%BAKERY%

HEALTH%&%WELLNESS%TRENDS%CONTINUE%TO%INCREASE%
Fears They
Won’t Like
Natural/Organic
Products
Proud of Buying
Natural/Organic
Products
True Believers
Enlightened
Environmentalists
Strapped Seekers Indifferent
Traditionalists
Healthy Realists
Resistant
Non-Believers
Struggling
Switchers
10% 10% 26% 15%
16%13%10%
Full(Spectrum(of(Natural/Organic(Buyers(
Source: IRI/Spins NaturalLink segmentation; IRI Consumer panel
IRI FreshLook POS data; MULO, 52 weeks ending 11/29/2015, IRI analysis
10% 10%

True%Believers%
$70K(
College(/((
Post(Grad(
West(
42(avg.(age(
75%(Caucasian(
My(Top(3(Priori&es(for…(
Willing(to(Pay(More(For…(
What(Holds(Me(Back(
My(Sources(of(Info.(
Food & Beverage
Organic
Non-GMO
All Natural
Eco-Friendly
Fair Trade
•  Expense(of(natural/organic(
products(
•  Availability(of(natural/organic(
op&ons(at(local(store(
•  No(allfnatural/organic(op&ons(
available(for(products(I(like(
Food & Beverage
Made w/all natural ingredients
Made w/organic ingredients
Best taste

Enlightened%Environmentalists%
$59K(
Post(Grad(
NE/West(
61(avg.(age(
77%(Caucasian(
Skew(African(American(
What(Holds(Me(Back(
Food & Beverage
Made w/all natural ingredients
Best Taste
Made w/organic ingredients
Food & Beverage
Organic
All Natural
Non-GMO
Eco-Friendly
Fair Trade
•  Expense(of(natural/organic(
products(
Celebrity(Chefs(
(
Product(Labels(

Healthy%Realists%
$70K(
Skews($100K+(
College+(
Throughout(
U.S.(
39(avg.(age(
75%(Caucasian(
What(Holds(Me(Back(
Food(&(Beverage(
Best(taste(
Made(w/all(natural(ingredients(
Is(on(sale/coupon(
Food & Beverage
All Natural

PLAYS%OF%THE%DAY:%
Retail(

FOOD%
62%%
SPECIALTY%
2%(
FOOD%AND%MASS%HAVE%THE%LARGEST%SHARE%OF%WALLET%
FOR%BAKERY%
MASS%
25%% CLUB%
8%(
DOLLAR%
2%(
Source: ILD National Consumer Panel, Total US-All Outlets, 52 Weeks ending 1/24/16
ALL%OTHER%
1%(

MASS%TAKES%THE%GOLD%FOR%GROWTH%
%%CHANGE%VS%YAGO%
MASS%
3.4%%
DOLLAR%
2.6%%
GROCERY%
2.3%%
Source: ILD National Consumer Panel, Total US-All Outlets, 52 Weeks ending 1/24/16, NBD Aligned

FOOD%
$/Buyer(
$(Trip(
Trips(
SPECIALTY%
$/Buyer(
$(Trip(
Trips(
MORE%FREQUENT%BAKERY%TRIPS%IS%ONE%OF%THE%DRIVERS%
MASS%
$/Buyer(
$(Trip(
Trips(
CLUB%
$/Buyer(
$(Trip(
Trips(
DOLLAR%
$/Buyer(
$(Trip(
Trips(
MILITARY%
$/Buyer(
$(Trip(
Trips(
Source: ILD National Consumer Panel, Total US-All Outlets, 52 Weeks ending 1/24/16, NBD Aligned
DRUG%
$/Buyer(
$(Trip(
Trips(

RETAILERS%HAVE%EVOLVED%PERIMETER%OFFERINGS%INTO%4%MODELS%
Sit%Down%
Restaurants%
(
Ltd.(table(service(
(
Mul&ple(dayparts(
Sophiscated%
Staons%
(
Reﬁned(op&ons(
(
Café(sea&ng(
(
Easy%Meals%
(
Takeout(or((
home(meal((
replacement(
(
Limited%%
Oﬀerings%
(
Simple(meals(or(daypart(
occasions(

MAKING%SHOPPING%AN%EXPERIENCE%

Individual Desserts
+18%
over previous year
EMERGING%TRENDS%
Personalization
Entertainment
Customization
(breads/cakes, etc)

Projecting retail bakery sales to be
+$28 Billion
in 2020
WITH%ALL%OF%THESE%TRENDS,%THE%FUTURE%
LOOKS%BRIGHT%FOR%BAKING%AT%RETAIL%%

HOW%TO%WIN%GOING%FORWARD%
1%Nutri&on(and(Wellness(
Consumers(want(cleaner(ea&ng(and(smarter(food(&(
beverage(choices(and(are(drawn(to(the(perimeter((
•  Highlight(how(your(products(ﬁt(into(a(healthy(lifestyle((
•  Tie(Bakery(products(to(restfoffstore(to(deliver(
solu&ons(for(shoppers(
(
Use(storeflevel(insight(into(current(and(poten&al(
shoppers(to(iden&fy(customize(by(store(

CAPTURE%YOUR%GROWTH%OPPORTUNITIES%
2% Convenient(and(Simple((
Consumers(are(foodfsavvy(but(&mefstarved(
(
Strive(for(the(‘easy(buqon’(of(meal(solu&ons(–(convenient(
and(simple(
(
Let(shoppers(quickly(assemble(meals(and(clearly(
demonstrate(the(&me(savings(

3%Tailor(Made(Innova&on(&(Messaging(
Leverage(personaliza&on,(entertainment(and(
customiza&on(to(target(different(consumer(segments(
(
Foster(and(broaden(the(rela&onship(with(Millennial(
consumers(and(their(very(diverse(flavor(profiles(
(
Engage(shoppers(by(keeping(things(interes&ng(and(new(

4%Iden&fy(Ways(To(Reach(Each(Genera&on(
Inform(Millennials(about(the(exci&ng(flavors(and(
different(food(combina&on(ideas(with(baking(items(
Significant(crossfselling(benefits(by(u&lizing(infstore(
demonstra&ons(and(cooking(classes(infstore(
Merchandise(to(the(households(of(today,(which(are(
increasingly(smaller(households,(single(parent(
families,(and(mul&fcultural(families.(

THANK%YOU!%
Sally%Lyons%Wyaq%
Sally.lyonswyaq@iriworldwide.com%

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