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LIBRARY 2015/2016 foodservice insights
produced for IFMA by
[contact] IFMA: 312-540-4400 | Datassential: 888-556-3687
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Limited Service Restaurants
page 11
Full Service Restaurants
page 19
Supermarkets
page 28
Convenience Stores
page 38
Other Retailers
page 47
K-12 Schools
page 51
Colleges & Universities
page 56
Business & Industry
page 63
Recreation
page 67
Lodging
page 72
Transportation
page 77
Hospitals
page 80
Long Term Care
page 86
Senior Living
page 92
Vending
page 98
Catering
page 100
Military
page 102
Corrections
page 106
RESTAURANTS
RETAIL FOOD
ON-SITE FOODSERVICE
Foodservice Contractors
page 110
Distributors
page 117
Buying Groups
page 125
GPO’s
page 128
DISTRIBUTION & CONTRACT MANAGEMENT
Definitions
page 134
Economic Overview
page 140
APPENDIX
Introduction
page 3
Methodology & Data
page 4
Industry Snapshot
page 5
Occasions & Eater Types
page 7
INTRODUCTION
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Greetings and welcome to the third edition of IFMA’s Insights Library produced by Datassential!
As the industry evolves, IFMA feels it is important to provide its membership with the best and most relevant tools to
help navigate the competitive foodservice environment. The Foodservice Landscape wall chart and Insights Library will
be provided to participants in the Consumer Planning Program, attendees at the Marketing and Sales Leadership Forum,
and for purchase throughout the year.
The goal of the Insights Library is to play a more active role in your planning and strategy development. It is designed as
more of a “playbook” than a reference book, and incorporates consistent and reliable data from a closely curated set of
original research and secondary data.
The Library is designed as a 360° tool for your planning by providing consumer, operator, distributor and general
economic information all in one place. Some of the information featured includes:
• Eater Types and Occasions data from IFMA’s landmark Consumer Planning Program detailing consumer decision-
making and behavior
• Consumer eating patterns as described in The NPD Group’s CREST service
• Operator profile information provided by Datassential’s PULSE service
• Share of units by menu type provided by Datassential’s Firefly service
• A compilation of segment data gathered from government sources, trade associations/groups, industry publications,
and Datassential Keynote reports, all augmented with noteworthy news highlighting important factors and stories
shaping foodservice
• Macro-economic data that provides an indication of general industry health, plus Federal Reserve Beige Book
integration brings you insights into performance, outlook, and concerns from key business and industry contacts
The layout allows you dive into the details of a segment with regard to the size and scope or understand the consumer
occasions most important to a segment.
We trust you will soon make the Landscape wall chart and Insights Library regular parts of your internal planning process.
Larry Oberkfell Jack Li
President/CEO, IFMA Managing Director, Datassential
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PULSE Consumer eating patterns and spend estimates for restaurants and c-stores provided by NPD CREST™.
For information, please contact: 847-692-1787 or [email protected]
Segment counts and profiles provided by Datassential Firefly, the universal operator database.
For information, please contact: 310-922-6299 or [email protected]
Further segment dynamics and decision maker profiles provided by Datassential PULSE.
For information, please contact: 312-655-0594 or [email protected]
universal operator database
Government Data Industry Associations Foodservice Publications Datassential
Keynote Reports
PLUS
In order to accurately gauge the size of the foodservice industry, Datassential developed a “bottom-up”
methodology where proprietary models were built for each segment based on extensive primary and
secondary research. This included leveraging Firefly, Datassential's universal operator database; PULSE,
which provided operator decision maker profiles and further segment dynamics; the IFMA Consumer
Planning Program, an in-depth annual consumer survey; and surveys conducted with Datassential
OPERA™, the industry's largest operator panel. Restaurant and c-store models incorporated consumer
eating pattern data and spend estimates from The NPD Group’s CREST™ service. Supermarket numbers
were provided by Nielsen Perishables Group FreshFacts Data.
A wide range of additional sources, including the US Census and other government data, industry
association statistics, foodservice publications and annual surveys, and segment market research reports,
were also consulted to ensure inclusion of all relevant and accurate information in developing the numbers
and estimates published in the IFMA 2015 Foodservice Insights Library and 2015/2016 IFMA Foodservice
Landscape wall chart.
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INDUSTRY SNAPSHOT
2015/2016 IFMA FOODSERVICE LANDSCAPE 312-540-4400
[email protected] 888-556-3687
Powered by Datassential Food & Non-Alcoholic Beverages | Key Sources: Datassential, The NPD Group/CREST®, Nielsen Perishables Group FreshFacts Data, US Government
*NOTE: totals may not add due to rounding
LANDSCAPE ECONOMICS OUTLOOK USAGE BEHAVIOR
Locations Chaina /
Managedb Operator $
(billions) Share
Consumer $ (billions)
$ Per Location
Projected Growth
(real)
vs. Industry
Scratch Cash & Carry GPO
RESTAURANTS 633,033 43%a $120.7 58% $398.9 $630,141 0.7% average moderate moderate very low
Total Limited Service 308,682 71%a 66.9 32% 230.8 $747,695 1.2 average low moderate very low
Total Full Service 324,351 16%a 53.8 26% 168.1 $518,266 0.0 weak high high very low
RETAIL FOOD 260,102 n/a $23.5 11% $56.6 n/a 2.8% strong low n/a n/a
Supermarkets 98,994 82%a 12.4 6% 24.8 n/a 4.2 strong moderate n/a n/a
Convenience Stores 151,053 37%a 10.4 5% 29.8 n/a 1.7 strong low n/a n/a
Other Retailers 10,055 n/a 0.7 0% 2.0 n/a 1.0 average low n/a n/a
ON-SITE FOODSERVICE 334,535 n/a $65.7 31% $168.7 $504,134 1.8% strong moderate n/a n/a
Education 114,335 7%b $15.9 8% $32.3 $282,739 0.4% weak low low moderate
K-12 109,629 6%b 9.0 4% 15.0 $136,433 0.2 weak low very low moderate
Colleges and Universities 4,706 29%b 6.9 3% 17.4 $3,691,033 0.5 weak moderate low moderate
Business and Industry 11,106 70%b $4.8 2% $11.9 $1,070,592 1.5% average moderate moderate low
Travel and Leisure 133,357 n/a $20.8 10% $67.6 $506,948 2.8% strong moderate n/a n/a
Recreation 62,201 n/a 6.1 3% 20.5 $329,448 2.6 strong low n/a n/a
Lodging 68,663 58%a 13.4 6% 44.7 $651,233 3.0 strong high n/a moderate
Transportation 2,493 n/a 1.2 1% 2.4 n/a 1.7 strong low n/a n/a
Healthcare 55,703 60%b $11.5 5% $24.3 $436,045 1.8% strong moderate low high
Hospitals 5,686 17%b 6.2 3% 15.6 $2,739,536 2.0 strong low low high
Long Term Care 15,632 53%b 1.8 1% 3.1 $195,177 1.7 strong moderate low moderate
Senior Living 34,385 68%b 3.4 2% 5.7 $164,636 1.5 average moderate moderate moderate
Other 20,034 n/a $12.7 6% $32.5 n/a 1.0% average moderate n/a n/a
Vending 4,011 n/a 8.1 4% 20.3 n/a 1.0 average low moderate n/a
Catering 10,625 n/a 2.3 1% 7.8 n/a 2.0 strong high high n/a
Military 523 n/a 1.1 1% 2.2 $4,141,721 (1.5) weak moderate n/a n/a
Corrections 4,875 n/a 1.2 1% 2.3 $477,840 (0.5) weak moderate n/a n/a
TOTAL FOODSERVICE 1,227,670 - $209.9 100%* $624.2 $508,426 1.2% moderate total growth projected for 2016
OCCASIONS & EATER TYPES UNDERLYING DRIVERS OF CHOICE
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Frequency Average Spend Annual $ (billions) Share of Spend
Quick bite 16% $6.71 $36.2 6.1%
Family meal 15% $10.88 $55.8 9.5%
Casual lunch 13% $9.85 $44.0 7.5%
Casual dinner 13% $12.52 $56.7 9.6%
Running errands 13% $6.96 $30.5 5.2%
Cheap bite 13% $6.83 $30.1 5.1%
Hold over 9% $6.83 $19.6 3.3%
Last minute dinner 8% $9.76 $27.8 4.7%
Dinner on the way home 8% $10.27 $29.3 5.0%
Food as fuel 8% $8.36 $23.1 3.9%
Relaxing at home 8% $9.88 $27.6 4.7%
Hanging with friends 7% $11.41 $26.0 4.4%
Work break 5% $10.43 $17.9 3.0%
Morning commute 4% $8.47 $11.6 2.0%
Social gathering 4% $13.44 $16.9 2.9%
Road trip 4% $9.33 $12.2 2.1%
Work lunch 3% $13.35 $12.0 2.0%
Brunch 3% $13.54 $13.4 2.3%
Special occasion 3% $16.75 $15.0 2.5%
Weekend breakfast 3% $10.87 $11.4 1.9%
Romantic meal 2% $17.83 $11.4 1.9%
Before event 2% $13.56 $11.2 1.9%
Festive 2% $15.97 $8.3 1.4%
Formal dinner 2% $20.32 $11.5 2.0%
Guys night out 2% $19.39 $10.0 1.7%
Impressing someone 1% $19.89 $6.5 1.1%
Co-workers after work 1% $16.09 $7.2 1.2%
Girls night out 1% $15.90 $6.8 1.1%
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These attitudinal segments define the spectrum of AFH consumers.
Basic Eaters Quality
Essentialists Progressives Experientialists
dispassionate about food, focusing more on value and
convenience
quality matters to a certain point; it’s got to be good, but
doesn’t have to be great
passionate about food and health, and more willing to
try new things
go beyond the food to also focus on the experiential
aspects of eating & drinking
Food Forward
Health First Environment Driven
Family Driven
NEW CHANGE FOR 2015/16: PROGRESSIVES and EXPERIENTIALISTS
now report out by these four sub-segments
progressive attitudes with an emphasis on trying new
things and adventurous eating
18% of population
$7.20 average spend
26% of population
$8.28 average spend
30% of population
$10.00 average spend
26% of population
$9.47 average spend
progressive attitudes with
an emphasis on nutrition
and doing / feeling good
12% of population
$10.98 average spend
18% of population
$9.33 average spend
12% of population
$8.97 average spend
14% of population
$9.91 average spend
experience-driven with a focus
on the environmental aspects
of eating out
experience-driven with a focus
on good solutions for the
family / household
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RESTAURANTS LIMITED SERVICE: QSR | Fast-Casual
FULL SERVICE: Midscale | Casual Dining | Fine Dining
Limited Service RESTAURANTS
23%
breakfast
36%
lunch
29%
dinner
4% use GPOs
PREDICTIONS
12%
snack
Broadline distributors 89%
Club stores 55%
Cash & carry stores 41%
Direct from manufacturers 41%
Supermarket / grocery 41%
Specialty distributors 35%
Local farms 17%
Third party websites 8%
Food brokers 6%
REFLECTIONS
PURCHASE SOURCES (% who buy from)
39%
PER PERSON
AVERAGE DAILY MEALS
CHECK AVERAGE $
71% CHAIN
29%
$5.88
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308,682 locations $66.9 billion operator F&B spend 32% share of overall
operator spend
INDEPENDENT
DAYPART SHARE
SOURCES/ ESTIMATES BASED ON: Datassential PULSE; Firefly; NPD/CREST
68 AVERAGE SEATING
CAPACITY
279 MEALS PER DAY
Economic conditions in 2015 had varying effects on the limited service
segment. While rising disposable income and a declining unemployment
rate were positive factors, rising food-away-from-home inflation and
increased commodity and operating costs dampened growth rates. Some
chains are passing on the increased operational costs to customers by
increasing menu prices.
Overall, quick-service chains are trying to innovate to keep up with
fast casuals, the main driver for growth within the LSR segment. Chains
are increasingly adding more customizable options, all-day breakfasts,
healthy/functional foods and clean ingredients, and revamping their
restaurants.
The outlook for the limited service sector is good, and growth will continue at a
modest and steady pace. The fast casual segment remains the biggest driver of
growth within LSR, and continues to take traffic and sales from the full service side.
Social media presence and new marketing techniques will continue to be important for
growth within LSR, including word-of-mouth targeting through review sites and
engaging Millennial diners through enhanced information and visual appeal. The
adoption of increasingly innovative products and on-trend ingredients will
continue to be a way for chains to be able to set themselves apart.
As minimum wage and healthcare legislation begins to take effect, many restaurants
have started implementing a higher wage/no-tipping policy and providing
benefits for their staff. In return, many are experiencing higher retention rates, which
could help address the anticipated increased competition for recruiting and retaining
employees as the job market and economy continue to improve. These changes do
come at a cost for many operators though, and more chains may look to increase
menu prices.
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4%
2%
2%
3%
15%
27%
42%
Other
Foodservice Director
Purchasing Manager
F&B Manager
Executive Chef
General Manager
Owner
AGE
3%
23%
25% 26%
20%
3%
Under 25 25 to 34 35 to 44 45 to 54 55 to 64 Over 65
F&B DECISION MAKERS
CULINARY TRAINING
PREDICTIONS
39%
24%
68% 32%
PERSONAL PROFILE
GENDER
LIM
ITE
D S
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VIC
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SOURCE: Datassential PULSE
LIM
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D S
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VIC
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16.6
JOB RESPONSIBILITY / EXPERIENCE
AVERAGE YEARS OF
INDUSTRY EXPERIENCE
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SHARE OF TRAFFIC BY REGION
AGE SHARE
Under 18 20%
18-24 10%
25-34 14%
35-49 20%
50-64 21%
65 and Over 14%
AGE OF EATER
SOURCE: NPD/CREST
48% 52%
GENDER OF EATER
CONSUMER EATING PATTERNS
RACE OF EATER
SHARE BY HOUSEHOLD SIZE
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65%
12%
17%
6% Caucasian, non-Hispanic
African American,non-Hispanic
Hispanic
Other, non-Hispanic
10%
30%
43%
18%
1
2
3 to 4
5 or more
17%
20%
39%
24%
Northeast
Central
South
West
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TOTAL ON/OFF PREMISES SHARE BY HOUSEHOLD INCOME
TOTAL WEEKPARTS
63% MONDAY
BREAKFAST –
FRIDAY LUNCH
37% FRIDAY SUPPER –
SUNDAY PM
SNACK
REASON FOR VISIT 67% ADULTS ONLY
PARTIES
TOTAL PARTIES
33% PARTIES WITH
CHILDREN
CONSUMER EATING PATTERNS L
IMIT
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Traffic Share (%) YE April ‘15
Convenient Location 18%
I Like It There 11%
Had a Special Taste/Craving 9%
Other's Choice/I Didn't Decide 9%
Always/Regularly Go There 7%
SOURCE: NPD/CREST
16%
19%
24%
14%
27%
Under $25
$25-44,999
$45-74,999
$75-99,999
$100,000and more
ON/OFF PREMISES SHARE
Total On Premises 31%
Total Off Premises 69%
Carry Out 36%
Drive Thru 30%
Delivery 4%
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Chain
US Sales
2014 US Units (in millions) % Change
2014 2013
McDonald's $35,447 $35,856 -1.14% 14,350
Starbucks Coffee $13,019 $11,864 9.74% 11,939
Subway $12,265 $12,221 0.36% 26,530
Burger King $8,632 $8,501 1.54% 7,129
Wendy's $8,568 $8,354 2.56% 5,750
Taco Bell $8,200 $7,800 5.13% 5,921
Dunkin' Donuts $7,176 $6,742 6.44% 8,082
Chick-fil-A $5,711 $4,989 14.47% 1,871
Pizza Hut $5,500 $5,700 -3.51% 7,863
Panera Bread $4,260 $4,034 5.60% 1,759
KFC $4,200 $4,200 0.00% 4,370
Domino's Pizza $4,116 $3,770 9.18% 5,067
Chipotle Mexican Grill $4,061 $3,189 27.34% 1,755
Sonic Drive-In $4,033 $3,882 3.89% 3,518
Little Caesar's Pizza $3,405 $3,100 9.84% 4,087
Dairy Queen $3,192 $2,960 7.84% 4,446
Jack in the Box $3,180 $3,181 -0.03% 2,249
Arby's $3,177 $2,992 6.18% 3,226
Papa John's Pizza $2,685 $2,497 7.53% 3,250
Popeye's Louisiana Kitchen $2,419 $2,085 16.02% 1,870
Total $143,246 $137,917 3.86% -
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LEADING LIMITED SERVICE CHAINS
SOURCE: NRN 2015: Top 100 U.S. Chain Systemwide Sales 16
Primary
Cuisine % of QSR Units % Total Units
AFRICAN 0.0% 0.0%
AMERICAN 5.4% 2.6%
BBQ 1.5% 0.7%
BURGERS 16.1% 7.9%
CARIBBEAN 0.3% 0.1%
CHINESE 3.2% 1.6%
COFFEE/BAKERY 9.9% 4.9%
DESSERT/SNACK 11.1% 5.4%
FRENCH 0.2% 0.1%
INDIAN 0.2% 0.1%
ITALIAN 1.0% 0.4%
JAPANESE 0.9% 0.4%
KOREAN 0.1% 0.1%
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Primary
Cuisine % of QSR Units % Total Units
MEDITERRANEAN 0.9% 0.5%
MEXICAN 7.5% 3.7%
MIXED ETHNICITY 0.3% 0.2%
OTHER ASIAN 0.8% 0.4%
OTHER EUROPEAN 0.2% 0.1%
PIZZA 15.8% 7.7%
SANDWICH/DELI 18.6% 9.1%
SEAFOOD 1.2% 0.6%
SOUTH AMERICAN 0.3% 0.1%
SOUTHERN 4.3% 2.1%
STEAKHOUSE 0.1% 0.1%
THAI 0.2% 0.1%
LIMITED SERVICE RESTAURANTS BY CUISINE TYPE
SOURCE: Firefly 17
NOTEWORTHY NEWS
Fine Dining Growth Outpaces other Sectors
“How The Minimum-Wage Debate Moved From
Capitol Hill To City Halls”- May 10th, 2015; NPR
Los Angeles City Council voted to raise the city's minimum wage to $15 per hour. The second-largest city in America could soon join Seattle and San Francisco in the club of cities that have agreed to gradually raise their wages above $15 per hour. And these cities are part of a larger, recent wave of cities and counties setting their own minimum wages.
“Burger King to acquire Tim Hortons for $11.4B”- August 26th,
2014; Nation’s Restaurant News
Burger King Worldwide Inc. confirmed its deal to acquire Tim Hortons for $11.4 billion. The combined entity will create the world’s third-largest quick-service company, with roughly $23 billion in sales and 18,000 restaurants across 100 countries.
“Restaurants poised to accept Apple Pay”– October 17th, 2014; NRN.com
As Apple Inc.’s proprietary mobile payment system Apple Pay launches, a number of restaurant brands are poised to be initial adopters. Most McDonald’s, Subway and Panera Bread units will be among the 220,000 retail locations accepting the new smartphone payment, which is preloaded on Apple’s latest iPhone 6 and iPhone 6 Plus devices. Several dozen independent restaurants will also accept Apple Pay through the OpenTable reservations service.
“The Chipotle effect: Why America is Obsessed with Fast Casual Food” – February 2nd , 2015; Washington Post
The market for fast casual food, which is almost but not quite fast food, has grown by 550 percent since 1999, more than ten times the growth seen in the fast food industry over the same period, according to data from market research firm Euromonitor. Chipotle, likely the best known purveyor of the category, has seen its sales more than quadruple during that time; Panera, another oft-used example, has watched its sales more than triple; and Shake Shack, the hamburger joint du jour, has done so well that it just went public despite operating only 36 outlets.
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“McDonald’s sales bleed continues despite
turnaround efforts”- April 22nd, 2015; Fortune.com
Sales continued to struggle in the first three months of 2015, despite the first efforts of its planned turnaround. McDonald’s reported a more severe sales decline than expected in the first three months of the year Wednesday, with business dropping off from the United States, to Europe and Asia, as fewer customers came in to eat its fast-food offerings.
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Full Service RESTAURANTS
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324,351 locations $53.8 billion operator F&B spend
15%
breakfast
34%
lunch
49%
dinner
7% use GPOs
PREDICTIONS
3%
snack
Broadline distributors 91%
Specialty distributors 63%
Cash & carry stores 42%
Club stores 41%
Supermarket / grocery 33%
Direct from manufacturers 29%
Local farms 28%
Third party websites 8%
Food brokers 6%
REFLECTIONS
PURCHASE SOURCES (% who buy from)
39%
PER PERSON
AVERAGE DAILY MEALS
CHECK AVERAGE $
157 AVERAGE SEATING
CAPACITY
$13.38
260 MEALS PER DAY
16% CHAIN
84% INDEPENDENT
DAYPART SHARE
SOURCES/ ESTIMATES BASED ON: Datassential PULSE; Firefly; NPD/CREST
26% share of overall
operator spend
The full service segment experienced many of the same factors as the
limited service segment in the past year. Falling unemployment and
rising disposable income had positive impacts overall, but growth was
minimized due to increasing operation and commodity costs and
cautious consumer spending habits.
Full service chains continue to experience slower growth than the
LSR segment and look to regain dollars and traffic lost to fast casual.
FSRs continue to look to menu changes, remodeling, and updating
service modes to stay competitive.
Growth will remain minimal as consumer spending habits continue to
be curtailed despite the post-recession economy. FSRs will slowly regain
pre-recession traffic and sales as other segments, specifically fast casual,
remain strong. Consumers are opting for quality over quantity when
visiting restaurants, and with that in mind chains will continue to focus on
updating menus, remodeling, and shrinking their footprint. Independents
and smaller chains remain focused on emphasizing food quality and
service.
As with LSRs, a shift in restaurant policies reflecting recent minimum
wage increases, eliminating reliance on tipping, and healthcare legislation
could be a way of increasing employee retention. As the economy
continues to improve and more jobs become available, recruiting and
retaining employees is becoming increasingly more competitive.
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F&B DECISION MAKERS
CULINARY TRAINING
PREDICTIONS
39%
29%
24%
%
JOB RESPONSIBILITY / EXPERIENCE PERSONAL PROFILE
GENDER
AGE
FU
LL S
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VIC
E
74% 26%
FU
LL S
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VIC
E
SOURCE: Datassential PULSE
23.5 AVERAGE YEARS OF
INDUSTRY EXPERIENCE 0%
12%
24%
30% 29%
5%
Under 25 25 to 34 35 to 44 45 to 54 55 to 64 Over 65
4%
2%
2%
3%
15%
27%
42%
Other
Foodservice Director
Purchasing Manager
F&B Manager
Executive Chef
General Manager
Owner
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VIC
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SHARE OF TRAFFIC BY REGION AGE OF EATER
GENDER OF EATER
RACE OF EATER
SHARE BY HOUSEHOLD SIZE
AGE SHARE
Under 18 15%
18-24 6%
25-34 9%
35-49 17%
50-64 26%
65 and Over 27%
49% 51%
FU
LL S
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VIC
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CONSUMER EATING PATTERNS
SOURCE: NPD/CREST
17%
22%
38%
24%
Northeast
Central
South
West
10%
43%
35%
12%
1
2
3 to 4
5 or more74%
7%
13%
6%
Caucasian, non-Hispanic
African American,non-Hispanic
Hispanic
Other, non-Hispanic
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FU
LL S
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VIC
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ON/OFF PREMISES SHARE
Total On Premises 85%
Total Off Premises 15%
Carry Out 13%
Drive Thru 1%
Delivery 1%
TOTAL ON/OFF PREMISES SHARE BY HOUSEHOLD INCOME
TOTAL PARTIES
TOTAL WEEKPARTS
Traffic Share (%) YE April ‘15
Other's Choice/I Didn't Decide 17%
Convenient Location 13%
I Like It There 13%
Always/Regularly Go There 7%
Had a Special Taste/Craving 7%
REASON FOR VISIT 72% ADULTS ONLY
PARTIES
28% PARTIES WITH
CHILDREN
54% MONDAY
BREAKFAST –
FRIDAY LUNCH
46% FRIDAY SUPPER –
SUNDAY PM
SNACK
FU
LL S
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VIC
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CONSUMER EATING PATTERNS
SOURCE: NPD/CREST
9%
14%
22%
17%
38% Under $25
$25-44,999
$45-74,999
$75-99,999
$100,000 andmore
23
Chain
US Sales
2014 US Units (in millions) % Change
2014 2013
Applebee's Neighborhood Grill & Bar $4,577 $4,517 1.33% 1870
Olive Garden $3,763 $3,669 2.56% 840
Chili's Grill & Bar $3,634 $3,547 2.45% 1263
Buffalo Wild Wings Grill & Bar $3,238 $2,784 16.31% 1052
IHOP $2,933 $2,767 6.00% 1579
Denny's $2,539 $2,408 5.44% 1596
Outback Steakhouse $2,487 $2,455 1.30% 752
Red Lobster $2,373 $2,398 -1.04% 678
Cracker Barrel Old Country Store $2,137 $2,105 1.52% 633
Texas Roadhouse $1,876 $1,721 9.01% 438
The Cheesecake Factory $1,782 $1,685 5.76% 176
T.G.I. Friday's $1,775 $1,772 0.17% 507
Longhorn Steakhouse $1,548 $1,382 12.01% 479
Red Robin Gourmet Burgers & Spirits $1,438 $1,332 7.96% 496
Ruby Tuesday $1,182 $1,209 -2.23% 694
Waffle House $1,119 $1,044 7.18% 1840
Bob Evans Restaurants $960 $953 0.73% 566
P.F. Chang's China Bistro $881 $900 -2.11% 213
BJ's Restaurants $846 $775 9.16% 156
Hooters $837 $816 2.57% 340
Total $41,925 $40,239 4.19% -
SOURCE: NRN 2015: Top 100 U.S. Chain Systemwide Sales
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LEADING FULL SERVICE CHAINS
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Primary
Cuisine % of FSR Units % Total Units
AFRICAN 0.2% 0.1%
AMERICAN 45.1% 23.1%
BBQ 1.9% 1.0%
BURGERS 1.5% 0.8%
CARIBBEAN 0.5% 0.3%
CHINESE 6.3% 3.2%
COFFEE/BAKERY 0.6% 0.3%
DESSERT/SNACK 0.1% 0.1%
FRENCH 0.9% 0.5%
INDIAN 0.9% 0.5%
ITALIAN 5.1% 2.6%
JAPANESE 3.7% 1.9%
KOREAN 0.5% 0.2%
Primary
Cuisine % of FSR Units % Total Units
MEDITERRANEAN 1.5% 0.8%
MEXICAN 7.9% 4.1%
MIXED ETHNICITY 1.0% 0.5%
OTHER ASIAN 2.6% 1.4%
OTHER EUROPEAN 1.4% 0.7%
PIZZA 6.8% 3.5%
SANDWICH/DELI 1.5% 0.7%
SEAFOOD 3.2% 1.6%
SOUTH AMERICAN 1.1% 0.6%
SOUTHERN 1.1% 0.6%
STEAKHOUSE 2.6% 1.3%
THAI 1.8% 0.9%
FULL SERVICE RESTAURANTS BY CUISINE TYPE
SOURCE: Firefly 25
NOTEWORTHY NEWS
Fine Dining Growth Outpaces other Sectors
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“How overtime pay proposal could impact restaurants”- June 30th, 2015; NRN.com
Tens of thousands of additional restaurant workers and managers could become eligible for overtime pay under a new rule President Barack Obama proposed Monday that would double the threshold for overtime eligibility. The rules could significantly impact the restaurant industry and operators’ labor costs. Restaurant operators rely heavily on full-time assistant managers and managers who are salaried and often work more than 40 hours a week without overtime pay. The proposal could make many managers eligible for overtime and force some restaurant owners to alter how they operate.
“Meet your new target customers: Generation Z”– March 24th, 2015; Restaurant Hospitality.com
With Millennials cutting back on restaurant visits, it’s time to reach out to an even-younger crowd.
“FDA: Calories on menus, menu boards delayed until 2016” - July 9th, 2015; AP.com
Diners will have to wait until the end of 2016 to find calorie labels on all chain restaurant menus. The Food and Drug Administration said Thursday that restaurants and other establishments will now have until December 1, 2016, to comply with federal menu labeling rules — one year beyond the original deadline.
“Customers Can Keep The Tip — Which Might Please Restaurant Workers”– October 9th, 2014; NPR
Menu prices might read a bit higher, but diners will know what they'll end up paying at meal's end — probably no more than they would have at an equivalent place where they'd tip. Tipping creates winners and losers. The people who bring you your steaks at high-end restaurants are probably doing quite well off tips, but many restaurant workers can't count on bringing home big bucks, especially after slow shifts on off days. A recent study from the labor-backed Economic Policy Institute found that 17 percent of restaurant workers live in poverty.
“Budgets, food costs taking toll on
independents”– September 3rd, 2014;
RestaurantHospitality.com A long-term decline in traffic at independent restaurants is attributed to smaller marketing budgets and rising food costs. The business outlook for independent restaurants remains murky as operators struggle to compete against those with larger budgets.
26
RETAIL FOOD SUPERMARKETS
CONVENIENCE STORES
OTHER RETAILERS
Supermarkets RETAIL FOOD
98,994 locations $12.4 billion operator F&B spend
PREDICTIONS
13%
breakfast
37%
lunch
22%
dinner
28%
snack
Broadline distributors 69%
Direct from manufacturers 68%
Club stores 40%
Specialty distributors 38%
Local farms 31%
Cash & carry stores 29%
Supermarket / grocery 28%
Food brokers 22%
Third party websites 8%
REFLECTIONS
DAYPART SHARE
PURCHASE SOURCES (% who buy from)
39%
AVG. REGISTER RINGS FOR PREPARED FOOD
400 # PREPARED FOOD REGISTER RINGS DAILY
SOURCES/ESTIMATES BASED ON: Datassential PULSE, Supermarket Keynote; Firefly; NPD/CREST; Nielsen Perishables Group FreshFacts Data; Progressive Grocer
DAYPART AVAILABILITY
100% OFFER LUNCH
91% OFFER DINNER
85% OFFER BREAKFAST
82% CHAIN
18% INDEPENDENT
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6% share of overall
operator spend
Supermarkets continue to benefit from an improving economy and have
experienced another strong year. The combination of rising disposable
income and a shift in consumer purchases have increased supermarket
profit margins across the board. Prepared foods, deli, and bakery
departments remain a big draw for customers and stores and chains
continue to invest in these departments.
The growth of the deli and prepared food departments at many units
have allowed them to compete with local QSRs, and in some instances, are
becoming their own dining destinations. This is a trend likely to continue.
Mobile apps and technology continue to influence the segment and are
instrumental in increasing foot traffic. Grocery delivery services like
Instacart and Google Express continue to grow and are likely to shake up
the industry in years to come, especially in urban areas where their
popularity is increasing.
There have been many mergers and acquisitions taking place over the
past year, further changing the landscape of the segment.
The outlook for supermarkets remains strong this year. Prepared foods,
deli, and bakery departments remain a big draw for customers and stores,
and chains continue to invest in these departments.
Investments will continue to be made in improving foodservice offerings to
compete with local restaurants, and prepared food, catering, and bakery
departments will remain opportune areas for supermarket growth (possibly at
the expense of other supermarket departments). Smaller format stores will
continue to become the ‘new normal’, especially in higher density urban
areas to compete with local restaurants and c-store units.
Grocery delivery services will likely begin to impact the supermarket
landscape over the next few years, creating shifts in consumer buying habits
and foot traffic patterns, as well as some grocery stores partnering with
services or testing their own delivery options.
29
F&B DECISION MAKERS
CULINARY TRAINING
PREDICTIONS
39%
29%
24%
%
JOB RESPONSIBILITY / EXPERIENCE PERSONAL PROFILE
GENDER
AGE
SU
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66% 34%
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SOURCE: Datassential PULSE
5%
18%
26%
29%
22%
0%
Under 25 25 to 34 35 to 44 45 to 54 55 to 64 Over 65
17 AVERAGE YEARS OF
INDUSTRY EXPERIENCE
17%
5%
6%
6%
9%
22%
35%
Other
Purchasing Manager
Foodservice Director
Executive Chef
F&B Manager
Owner
General Manager
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Company Store Count (in thousands)
Annual ACV
Full-time Equivalent
Employees
(in thousands)
Average Sales Per
Store
1 Wal-Mart Stores Inc. (Bentonville, AR) 4,024 $288,049,000 1,235,000 $71,583
2 Kroger Co (Cincinnati, OH) 2,625 $108,500,000 400,000 $41,333
3 AB Acquisition LLC (Boise, ID) 2,238 $56,443,140 165,000 $25,220
4 Publix Super Markets Inc. (Lakeland, FL) 1,097 $30,559,505 174,500 $27,857
5 Ahold USA Inc (Quincy, MA) 761 $25,976,700 72,000 $34,135
6 H. E. B. Grocery Co (San Antonio, TX) 363 $22,590,000 85,000 $62,231
7 Delhaize America Inc (Salisbury, NC) 1,296 $16,900,000 100,000 $13,040
8 Meijer Inc. (Grand Rapids, MI) 213 $15,400,000 65,000 $72,300
9 Wakefern Food Corp (Keasbey, NJ) 141 $14,700,000 50,000 $104,255
10 Whole Foods Market (Austin, TX) 414 $14,194,005 88,000 $34,285
11 BI-LO Holding LLC (Jacksonville, FL) 801 $12,559,300 52,200 $15,680
12 Trader Joe's (Monrovia, CA) 433 $12,100,000 9,000 $27,945
13 Target Corp (Minneapolis, MN) 249 $10,100,000 65,700 $40,562
14 Aldi Inc. (Batavia, IL) 1,366 $9,800,000 21,000 $7,174
15 Giant Eagle Inc. (Pittsburgh, PA) 222 $9,600,000 36,000 $43,243
16 Supervalu Inc. (Eden Prairie, MN) 625 $9,492,000 38,500 $15,187
17 Hy Vee Food Stores Inc. (West Des Moines, IA) 235 $8,700,000 69,000 $37,021
18 Wegman's Food Markets Inc. (Rochester, NY) 85 $7,200,000 40,000 $84,706
19 Great Atlantic & Pacific Tea Co. (Montvale, NJ) 301 $6,300,000 22,000 $20,930
20 WinCo Foods Inc. (Boise, ID) 98 $6,100,000 10,000 $62,245
21 Defense Commissary Agency (Arlington, VA) 185 $4,800,000 11,000 $25,946
22 Save Mart Supermarkets Inc. (Modesto, CA) 218 $4,300,000 13,655 $19,725
23 Stater Bros. Markets (San Bernardino, CA) 168 $4,000,000 18,000 $23,810
24 Roundy's Supermarket Inc. (Milwaukee, WI) 149 $3,855,156 22,000 $25,874
25 Ingles Markets Inc. (Black Mountain, NC) 202 $3,836,000 9,100 $18,990
2014 LEADING SUPERMARKETS 1-25
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SOURCE: Progressive Grocer 31
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2014 LEADING SUPERMARKETS 26-50
Company Store Count (in thousands)
Annual ACV
Full-time Equivalent
Employees
(in thousands)
Average Sales Per
Store
26 Price Chopper/Golub Corp (Schenectady, NY) 135 $3,805,100 11,860 $28,186
27 Demoulas/Market Basket (Tewksbury, MA) 76 $3,400,000 8,100 $44,737
28 Raley's Supermarkets (West Sacramento, CA) 126 $3,061,500 8,700 $24,298
29 Weis Markets Inc. (Sunbury, PA) 163 $2,800,000 18,000 $17,178
30 Smart & Final Inc. (Los Angeles, CA) 299 $2,668,900 7,900 $8,926
31 Schnuck Markets Inc. (St Louis, MO) 99 $2,600,000 9,959 $26,263
32 Tops Market LLC (Buffalo, NY) 158 $2,508,315 15,100 $15,875
33 Sprouts Farmers Market (Phoenix, AZ) 201 $2,463,240 9,834 $12,255
34 Spartan Nash Co. (Byron Center, MI) 162 $2,284,200 16,100 $14,100
35 Brookshire Grocery Co (Tyler, TX) 151 $2,220,400 13,700 $14,705
36 Houchens Industries Inc. (Bowling Green, KY) 414 $2,008,500 9,400 $4,851
37 The Fresh Market, Inc. (Greensboro, NC) 169 $1,753,000 12,400 $10,373
38 Bashas' Markets Inc. (Chandler, AZ) 120 $1,670,000 5,500 $13,917
39 Big Y Foods Inc. (Springfield, MA) 62 $1,611,000 4,800 $25,984
40 K-VA-T Food Stores Inc. (Abingdon, VA) 103 $1,535,000 5,500 $14,903
41 Grocery Outlet Inc. (Berkeley, CA) 218 $1,520,000 931 $6,972
42 Foodarama Supermarkets Inc. (Freehold, NJ) 29 $1,400,100 3,800 $48,279
43 Inserra Supermarkets Inc. (Mahwah, NJ) 29 $1,388,400 3,100 $47,876
44 Woodman's Food Markets Inc. (Janesville, WI) 16 $1,284,400 2,700 $80,275
45 Village Super Market Inc. (Springfield, NJ) 28 $1,236,300 3,100 $44,154
46 Fiesta Mart Inc. (Houston, TX) 60 $1,166,100 4,800 $19,435
47 Central Grocers Inc. (Joliet, IL) 38 $1,129,700 3,400 $29,729
48 Lowe's Pay-n-Save Inc. (Littlefield, TX) 144 $1,094,288 3,600 $7,599
49 Alex Lee Inc. (Hickory, NC) 97 $1,080,300 4,850 $11,137
50 Marc Glassman Inc. (Cleveland, OH) 58 $1,000,000 5,700 $17,241
SOURCE: Progressive Grocer 32
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NUMBER OF US SERVICE DELI LOCATIONS
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SOURCE: Datassential PULSE; Datassential Firefly; US Census; Progressive Grocer, 67th Annual Consumer Expenditures Report
CONSUMER RETAIL EXPENDITURES BY CATEGORY
35,260
34,200
32,980
31,559 30,880
30,364 29,915 29,678
30,300
2006 2007 2008 2009 2010 2011 2012 2013 2014
Category 2014 Total Retail Sales
(in millions)
% Change From
Prior Year
2014 % of Sales From
Supermarkets
2014 % of Sales From
Mass Centers
Grocery -- Food $216,451.48 0.4% 54.4% 19.0%
Grocery -- Nonfood $116,661.33 -0.9% 25.0% 18.9%
Alcoholic Beverages $49,417.99 3.9% 41.6% 8.6%
Perishables $417,685.95 -0.4% 60.5% 15.1%
Bakery In-Store (Service) $11,484.41 1.8% 86.3% 13.7%
Baked Goods (Fresh) $23,102.32 -0.3% 61.7% 18.7%
Dairy $64,647.92 1.3% 65.9% 16.7%
Deli, In-Store (Service) $27,964.68 5.8% 61.6% 17.2%
Deli, Refrigerated (Self-Service) $9,896.01 2.5% 63.6% 17.4%
Frozen Foods $48,270.00 -0.7% 62.8% 18.4%
Meat & Seafood (Fresh) $119,680.01 2.6% 54.9% 35.0%
Packaged Meats (Deli) $18,239.34 1.3% 64.1% 18.3%
Produce $87,641.89 4.4% 61.4% 12.6%
General Merchandise (Tracked) $61,143.35 0.6% 9.5% 28.1%
General Merchandise (Non-Tracked) $799,953.92 3.2% 2.5% 10.8%
Grand Total $1,965,995.90 1.8% 24.2% 21.1%
US CENSUS FOOD & BEVERAGE STORE
SALES
Year
(in millions)
Supermarkets &
Other Grocery
Specialty
Food Stores
All Food
Stores
2007 $468,364 $18,349 $486,713
2008 $487,652 $18,825 $506,477
2009 $487,174 $18,701 $505,875
2010 $495,168 $19,236 $514,404
2011 $519,398 $20,300 $539,698
2012 $534,767 $21,222 $565,715
2013 $550,420 $20,475 $576,421
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SUPERMARKET SALES AND UNITS BY SIZE
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SOURCE: Progressive Grocer, 82nd Annual Grocery Industry Report
2014 # of Stores 2013 # of Stores % change Percent of Total
Total Supermarkets ($2mil or more) 37,716 37,459 1% 100.0%
Chain (11 or More Stores) 30,925 30,778 0% 94.4%
$2 mil to $4mil 2,980 3,114 -4% 1.5%
$4mil to $8mil 6,858 6,996 -2% 6.2%
$8mil to $12mil 3,442 3,546 -3% 5.6%
412mil to $20mil 4,833 4,973 -3% 12.4%
$20mil to $30mil 6,118 5,878 4% 23.7%
$30mil to $40mil 3,217 2,902 11% 17.5%
$40mil to $50mil 2,077 1,949 7% 14.4%
More than $50mil 1,400 1,420 -1% 13.1%
Independent (10 or Fewer Stores) 6,791 6,681 2% 5.6%
$2 mil to $4mil 2,222 2,244 -1% 1.1%
$4mil to $8mil 4,015 3,929 2% 3.4%
$8mil to $12mil 366 333 10% 0.6%
412mil to $20mil 148 137 8% 0.4%
$20mil to $30mil 33 29 14% 0.1%
$30mil to $40mil 3 5 -40% 0.0%
$40mil to $50mil 1 1 0% 0.0%
More than $50mil 3 3 0% 0.0%
SUPERMARKET SALES AND UNITS BY STORE TYPE
2014 # of Stores 2013 # of Stores % change Percent of Total
Total Supermarkets ($2mil or more) 37,716 37,459 1% 100.0%
Supermarket- Conventional 26,487 26,603 0% 65.0%
Supercenter (Grocery/ Mass Merch) 4,150 4,014 3% 25.0%
Supermarket- Limited Assortment 3,242 3,219 1% 2.5%
Supermarket- Natural/Gourmet Foods 3,144 2,960 6% 6.0%
Warehouse Grocery 523 490 7% 0.7%
Military Commissary 170 173 -2% 0.8%
Other Retail Formats
Conventional Convenience 152,120 150,595 1% n/a
Gas Station/Kiosk 22,303 22,847 -2% n/a
Superette 13,070 13,136 -1% n/a
Conventional Club 1,320 1,286 3% n/a
Military Convenience Store 674 687 -2% n/a
NOTE: Supercenter numbers include only supermarket-type items and Conventional Convenience excludes gas
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SOURCE: Progressive Grocer, 2015 Deli Operations Review, 2015 Bakery Report and 82st Annual Grocery Industry Report
Category 2014
Sandwiches 62.2%
Rotisserie Programs 52.0%
Staff Training 51.7%
Meal Deals 46.1%
Daily Specials 40.5%
Catering 37.6%
Premium Brands 34.6%
Hot/Cold Bars 33.9%
Dinner 32.9%
Lunch 27.2%
Side Dishes 25.3%
Soup Stations 19.2%
Private Label 19.2%
Category Management 19.0%
Breakfast 17.5%
Sushi 16.9%
Concept food stations (Asian, Carving, etc.) 14.2%
DELI ITEM AREA OF GROWTH
2014 2013
Gross Margin 46.3% 44.7%
Labor as % of sales 27.9% 27.4%
Shrink as % of sales 5.6% 6.3%
Full Time employees/store 7.7 7.4
Deli Dept. Square footage 1,635 1,650
SERVICE DELI PERFORMANCE
Category 2014 Rank 2013 Rank
Cakes 1 1
Breads 2 2
Cookies 3 3
Artisan Breads 4 8
Cupcakes 5 6
IN-STORE BAKERY ITEM CONSUMER POPULARITY
2014 2013 2012
Sales Volume (in millions) $16.92 $16.56 $16.26
Selling Area (in square feet) 33,000 33,250 33,100
Number of Checkouts 10.5 10.2 9.9
Average Weekly Sales
Dollars per Store $325,478 $318,462 $312,758
Dollars per Square Foot $9.77 $9.58 $9.45
Dollars per Checkout $30,988 $31,222 $31,592
AVERAGE SUPERMARKET PERFORMANCE
2014 2013
Industry Sales (in billions) $13.07 $12.78
% Change From Prior Year 2.3% 1.8%
Share of Supermarket Sales 2.1% 2.1%
Number of Service Bakeries 28,160 28,015
Average Weekly Sales per Store $6,663 $6,561
Average Annual Sales per Store $346,500 $341,162
IN-STORE BAKERY SALES & UNITS
Q: What areas of your deli operations will you concentrate on enhancing in 2014?
35
NOTEWORTHY NEWS
Fine Dining Growth Outpaces other Sectors
“Whole Foods Launching Lower-Cost Stores Geared Toward Millennials”– May 7th, 2015;
USAToday.com
The new stores will cater to a younger generation of shoppers who are still interested in organic and natural foods but want a different shopping experience, executives said. The company made the announcement as part of its second-quarter earnings release.
“How Instacart's $220M Funding Is Going to Help Continue to Push Grocers Online”–
January 13th, 2015; TheStreet.com
According to Mashable, the funding values Instacart at around $2 billion, a massive jump from its $400 million valuation in June. Instacart has definitely been seeing growth, with its revenue increasing more than tenfold in 2014 and doubling in the fourth quarter alone. It has also doubled its full-time employee base to more than 100 during those 12 months, as well as secured partnerships with retailers such as Whole Foods Market and Fairway Market.
“Albertsons, Safeway to Divest 168 Stores in Advance of Merger- Haggen gains lion’s share”– December 19th,
2014; ProgeressiveGrocer.com AB Acquisition LLC, parent of Albertsons, and Safeway Inc. have agreed to sell 168 stores to four separate buyers as part of the companies' $9 billion merger agreement, first announced in March and set to close in January 2015.
“How E-Commerce Is Finally Disrupting The $600 Billion-A-Year Grocery Industry”– January 20th, 2015;
BusinessInsider.com
Between 2013 and 2018, online grocery sales will grow at a compound annual growth rate (CAGR) of 21.1%, reaching nearly $18 billion by the end of the forecast period. For comparison, offline grocery sales will rise by 3.1% annually during the same period.
“Aldi and Lidl Are Ready To Invade the U.S. Beware Walmart and Target!”– July 8th, 2015; Forbes.com
Aldi and Lidl, Germany’s toughest discount food retailers, are invading the US. Both operate small, efficient no frill self serve supermarkets with a strong non-food assortment, and very low prices. These smaller sharply priced formats provide important incentives for customers to frequently return to their stores and will increase competition for both traditional supermarkets as well as supercenters.
“Deal Unites Major Supermarket Players”– June 24th,2015; The Wall Street Journal
With more than 6,500 stores, Ahold Delhaize expects to have the scale to innovate.
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Convenience Stores RETAIL FOOD
151,053 locations $10.4 billion operator F&B spend
PREDICTIONS
24%
breakfast
29%
lunch
15%
dinner
32%
snack
Broadline distributors 82%
Direct from manufacturers 63%
Club stores 51%
Supermarket / grocery 29%
Cash & carry stores 21%
Specialty distributors 17%
Local farms 8%
Food brokers 8%
Third party websites 5%
REFLECTIONS
DAYPART SHARE
PURCHASE SOURCES (% who buy from)
39%
CHECK AVERAGE
AVERAGE DAILY MEALS
CHECK AVERAGE $
263 MEALS SOLD PER DAY
$3.59
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ST
OR
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37% CHAIN
63% INDEPENDENT
SOURCES/ ESTIMATES BASED ON: Datassential PULSE; Firefly; NPD/CREST
5% share of overall
operator spend
C-store foodservice continued to experience growth over the past year,
though weaker than in previous years. Rising operational expenses continue
to grow faster than gross profits, however foodservice remains strong. The
strengthening economy, lower gas prices, and an increase in the
consumption of snack foods have all had positive effects on the segment.
Foodservice remains a bright spot within a segment that is otherwise
seeing declines in areas such as fuel and cigarette revenues. Because of
this, foodservice is being emphasized more and operators are increasingly
focusing on prepared food options. Operators are attempting to broaden the
c-store audience by remodeling their stores and offering food options with an
emphasis on freshness and health. An increase in technology and more
efficient equipment are helping to make individual locations more profitable.
Many corporate mergers and acquisitions have also taken place, significantly
shifting the landscape of the sector.
The outlook for C-stores is positive with locations continuing to look toward
prepared foods as an area to grow revenue and draw in new customers. With
more disposable income and lower gas prices, consumers are expected to
spend more on in-store purchases and foodservice. The popularity of
snacking will likely also aid in the growth of foodservice within this segment.
Technology and vending equipment will continue to improve efficiency and
profitability of individual stores, and chains will continue to remodel
locations to draw more foot traffic.
Large online and traditional retailers are looking to expand into the C-store
marketplace, and if successful these companies could have a substantial
effect on this segment.
38
4%
3%
5%
36%
53%
Other
F&B Manager
Purchasing Manager
Owner
General Manager
F&B DECISION MAKERS
PREDICTIONS
39%
%
JOB RESPONSIBILITY / EXPERIENCE PERSONAL PROFILE
GENDER
AGE
CO
NV
EN
IEN
CE
ST
OR
ES
C
ON
VE
NIE
NC
E S
TO
RE
S
SOURCE: Datassential PULSE
54% 46%
0%
22%
30%
28%
18%
1%
Under 25 25 to 34 35 to 44 45 to 54 55 to 64 Over 65
14 AVERAGE YEARS OF
INDUSTRY EXPERIENCE
39
SHARE OF TRAFFIC BY REGION AGE OF EATER
GENDER OF EATER
CONSUMER EATING PATTERNS
RACE OF EATER
SHARE BY HOUSEHOLD SIZE
CO
NV
EN
IEN
CE
ST
OR
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AGE SHARE
Under 18 15%
18-24 14%
25-34 24%
35-49 23%
50-64 19%
65 and Over 6%
53% 47%
CO
NV
EN
IEN
CE
ST
OR
ES
SOURCE: NPD/CREST
21%
20%
39%
20%
Northeast
Central
South
West
11%
25%
41%
23%
1
2
3 to 4
5 or more
63% 14%
18%
5%
Caucasian, non-Hispanic
African American,non-Hispanic
Hispanic
Other, non-Hispanic
40
CONSUMER EATING PATTERNS
TOTAL ON/OFF PREMISES SHARE BY HOUSEHOLD INCOME
TOTAL PARTIES
TOTAL WEEKPARTS Traffic Share (%) YE April ‘15
Convenient Location 37%
Always/Regularly Go There 9%
Did Not Have Time/Hurry 9%
I Like It There 7%
Good Price 6%
REASON FOR VISIT
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EN
IEN
CE
ST
OR
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ON/OFF PREMISES SHARE
Total On Premises 5%
Total Off Premises 95%
78% ADULTS ONLY
PARTIES
22% PARTIES WITH
CHILDREN
68% MONDAY
BREAKFAST –
FRIDAY LUNCH
32% FRIDAY SUPPER –
SUNDAY PM
SNACK
CO
NV
EN
IEN
CE
ST
OR
ES
SOURCE: NPD/CREST
29%
23%
23%
9%
16%
Under $25
$25-44,999
$45-74,999
$75-99,999
$100,000 andmore
41
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EN
IEN
CE
ST
OR
ES
Company Store Count Company Owned Franchise/
Licenses
(in thousands)
Annual ACV ACV Per Store
7-Eleven Inc. (Dallas, TX) 7,749 1,178 6,571 $19,482,216 $ 2,514
Shell Oil Products US/Motiva Enterprises LLC (Houston, TX) 5,009 20 4,989 $11,340,628 $ 2,264
BP North America (La Palma, CA) 4,378 0 4,378 $15,592,304 $ 3,562
Alimentation Couche-Tard Inc. (Québec, Canada) 4,326 3,337 989 $19,421,200 $ 4,489
Chevron Corp (San Ramon, CA) 3,987 423 3,564 $20,756,892 $ 5,206
ExxonMobil Corp (Irving, TX) 3,458 0 3,458 $7,840,255 $ 2,267
Marathon Petroleum Corp. (Findlay, Ohio) 2,823 1,487 1,336 $14,475,000 $ 5,128
Casey’s General Stores Inc. (Ankeny, Iowa) 1,808 1,808 0 $7,250,840 $ 4,010
Energy Transfer Partners LP , (Philadelphia, PA) 1,650 550 1,100 $7,100,000 $ 4,303
CITGO Petroleum Corp. (Houston, TX) 1,639 0 1,639 $3,555,552 $ 2,169
The Pantry Inc. (Cary, N.C.) 1,553 1,541 12 $7,821,955 $ 5,037
Speedway LLC (Enon, OH) 1,463 1,463 0 $5,171,637 $ 3,535
Phillips 66, (Houston, TX) 1,304 0 1,304 $3,481,400 $ 2,670
Hess Corp. (Woodbridge, N.J.) 1,137 1,099 38 $5,002,660 $ 4,400
CST Brands Inc. (San Antonio, TX) 1,041 1,041 0 $7,576,000 $ 7,278
Getty Realty Corp. (Jericho, N.Y.) 1,040 0 1,040 $2,393,721 $ 2,302
CHS Inc. (Minneapolis, MN) 1,023 70 953 $2,197,575 $ 2,148
The Cumberland Gulf Group (Framingham, MA) 949 587 362 $3,509,168 $ 3,698
The Kroger Co. (Cincinnati, OH) 804 804 0 $4,715,620 $ 5,865
RaceTrac Petroleum (Atlanta, GA) 693 373 320 $4,235,140 $ 6,111
QuikTrip Corp. (Tulsa, OK) 690 690 0 $11,210,000 $ 16,246
Military (Arlington, VA) 683 683 0 $4,192,916 $ 6,139
Wawa Inc. (Wawa, PA) 653 653 0 $7,868,380 $ 12,050
Susser Holdings Corp./SSP Partners (Corpus Christi, TX) 634 633 1 $4,175,600 $ 6,586
Pilot Flying J (Knoxville, TN) 561 549 12 $2,326,220 $ 4,147
Holiday Cos. Inc. (Minneapolis, MN) 485 351 134 $2,154,880 $ 4,443
GPM Investments LLC (Richmond, VA) 477 472 5 $1,516,000 $ 3,178
Sheetz (Altoona, PA) 474 473 1 $7,024,940 $ 14,821
2014 TOP 25 CONVENIENCE STORE CHAINS C
ON
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TO
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SOURCE: Convenience Store News Top 100 2014 42
CO
NV
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Company Annual ACV* (in millions $)
% Change # of Units 2014 2013
7-Eleven Inc. (Dallas, TX) 19,482 16,335 19.3% 7749
Shell Oil Products US/Motiva Enterprises LLC (Houston, TX) 11,340 10,839 4.6% 5009
BP North America (La Palma, CA) 15,592 15,695 -0.7% 4378
Alimentation Couche-Tard Inc (Québec, Canada) 19,421 13,903 39.7% 4326
Chevron Corp (San Ramon, CA) 10,790 10,790 0.0% 3987
ExxonMobil Corp (Irving, TX) 7,840 7,378 6.3% 3458
Marathon Petroleum Corp. (Findlay, Ohio) 14,475 n/a* n/a 2823
Casey’s General Stores Inc. (Ankeny, Iowa) 7,251 6,799 6.6% 1808
Energy Transfer Partners LP (Philadelphia, PA) 7,100 6,967 1.9% 1650
CITGO Petroleum Corp. (Houston, TX) 3,556 3,512 1.3% 1639
The Pantry Inc. (Cary, N.C.) 7,822 7,375 6.1% 1553
Speedway LLC (Enon, OH) 5,172 5,172 0.0% 1463
Phillips 66, (Houston, TX) 3,481 3,033 14.8% 1304
Hess Corp. (Woodbridge, N.J.) 5,003 4,871 2.7% 1137
CST Brands Inc. (San Antonio, TX) 7,576 3,990 89.9% 1041
Getty Realty Corp. (Jericho, N.Y.) 2,394 2,393 0.0% 1040
CHS Inc. (Minneapolis, MN) 2,198 2,197 0.0% 1023
The Cumberland Gulf Group (Framingham, MA) 3,509 3,253 7.9% 949
The Kroger Co. (Cincinnati, OH) 4,716 4,258 10.8% 804
RaceTrac Petroleum (Atlanta, GA) 4,235 4,170 1.6% 693
QuikTrip Corp. (Tulsa, OK) 11,210 6,258 79.1% 690
SOURCE: Convenience Store News Top 100 2014
ONE YEAR COMPARISON OF LEADING CHAINS RANKED BY VOLUME C
ON
VE
NIE
NC
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TO
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S
*Marathon’s Speedway Division is in the process of acquiring retail assets of HESS Corp.
43
CO
NV
EN
IEN
CE
ST
OR
ES
C-STORE FOODSERVICE CATEGORY SALES
CO
NV
EN
IEN
CE
ST
OR
ES
Category
Total Sales (in millions) % of C-Store In-Store Sales Average Sales $ per Store
2014 2013 2012 2014 2013 2012 2014 2013 2012
Prepared Food $21,077 $19,363 $17,520 10.3% 9.8% 9% $140,754 $131,360 $119,962
Hot Dispensed Beverages $6,562 $6,497 $6,588 3.2% 3.3% 3% $43,821 $44,076 $45,109
Cold Dispensed Beverages $2,399 $2,378 $2,344 1.1% 1.2% 1% $16,021 $16,133 $16,050
Frozen Dispensed Beverages $1,209 $1,152 $1,140 1% 1% 1% $8,020 $7,815 $7,806
Total Foodservice $31,239 $29,390 $27,592 15.4% 14.9% 14% $208,616 $199,384 $188,927
Merchandise $171,859 $167,446 $165,189 84.6% 85% 86% $1,147,685 $1,135,966 $1,131,074
Total In-Store $2,030,980 $196,836 $192,781 100% 100% 100% $1,356,301 $1,335,350 $1,320,001
Prepared Food
Sandwiches/ wraps 25.7%
Hot dogs 17%
Pizza 16.6%
Chicken 12.3%
Bakery 6.9%
Salads 4%
Hamburgers 3.5%
Soup 2.4%
Frozen Treats 1.8%
Other 9.8%
Cold Dispensed Beverages
Fountain carbonated 86.1%
Fountain non-carbonated 7.5%
Fountain sports drinks 1.7%
Other 4.7%
Hot Dispensed Beverages
Coffee 74.4%
Cappuccino / specialty 17.1%
Hot chocolate 4.3%
Hot tea 2.6%
Other 1.6%
% SHARE OF SALES WITHIN FS CATEGORIES (2014)
SOURCE: Convenience Store News 44
NOTEWORTHY NEWS
Fine Dining Growth Outpaces other Sectors
“7-Eleven, Tedeschi a Natural Fit: End of an era for one convenience-store chain, expansion for another”– May 18th,
2015; CSPnet.com
7-Eleven Inc. entered into a deal to acquire Tedeschi Food Shops, the 92-year-old, family-run traditional convenience-store chain with fuel at only 15 of its 182 locations. The deal more than doubles 7-Eleven’s footprint in Greater Boston and New Hampshire, where it currently operates and franchises 164 c-stores.
“Thornton’s Embarks on Chainwide Store Overhaul”– October 13th, 2014; CSNews.com
Thornton’s plans to spend approximately $700,000 to overhaul each of its 178 stores in Kentucky, Ohio, Indiana, Tennessee, Florida and Illinois over the next five years in order to "transform our business into a food and beverage destination," Thornton’s President Tony Harris said.
“How Are Lower Gas Prices Affecting C-Store Sales?
Beverage sales, foot traffic most affected, though conclusions are split”– February 3rd,
2015; CSP.net
In general, as a result of lower gas prices, “consumers have extra money in their pockets which is leading to more frequent visits as well as increased purchases,” convenience retailers told Wells Fargo. Survey respondents estimate that higher consumer disposable income drove an incremental 3% in foot traffic in stores during the fourth quarter of 2014.
“Mergers and Acquisitions Hit Record High in 2014”– March 5th, 2015; CSP.net
An impressive 4,200 convenience stores—almost 3% of the entire channel—traded hands last year.
“Amazon Primed to Take on Convenience Stores? Adding, expanding one-hour delivery, private-label
food”– May 28th, 2015; CSPnet.com The e-commerce website has announced that its Prime Now service will offer one-hour delivery from local stores in addition to the tens of thousands of items offered by the online marketplace. To further leverage its convenience-store play, Amazon also plans to roll out its own line of food under its existing Elements private label.
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45
Other Retailers RETAIL FOOD
10,055 locations $0.7 billion operator F&B spend
PREDICTIONS REFLECTIONS
Company (in millions)
US Retail Sales (2013)
Wal-Mart $ 334,302
Costco $ 74,740
Target $ 71,279
The Home Depot $ 69,951
Walgreens $ 68,068
CVS Caremark $ 65,618
Lowe's $ 52,210
Amazon.com $ 43,962
Best Buy $ 35,766
Macy's $ 27,868
Apple Stores / iTunes $ 26,648
Sears Holdings $ 26,614
Rite Aid $ 25,526
TJX $ 20,923
Kohl's $ 19,031
Dollar General $ 17,504
TOP US OTHER RETAILERS
SOURCE/ESTIMATES BASED ON: NRN, Stores.org; Chain Store Guide
OT
HE
R R
ETA
ILE
RS
<1% share of overall
operator spend
Supercenters and club stores are the driving source of success within this
segment. Traditional retail and department stores continue to struggle as
shoppers are more price-conscious and inclined to shop both at
supercenters and club warehouse stores and online. Even as disposable
income continues to rise and overall spending is increasing, segment
growth has been muted.
Food courts at supercenters and warehouse stores remain popular among
shoppers, and restaurants that have been added within department stores
in recent years are showing signs of having the intended effect of
increasing foot traffic and raising brand awareness. Over the past few
years there has also been a rise in some drug stores growing their
foodservice selections like Walgreens’ UpMarket. These remodeled
locations offer a wide selection of food and beverages and are direct
competition with larger department stores, c-stores, and supermarkets.
As the economy continues to improve and consumer confidence increases
there will be more opportunities for spending at retail locations. As
spending increases, competition will remain strong between department
store shopping experiences and the convenience and prices offered at
supercenters and warehouse stores, limiting overall growth in the segment.
The addition of restaurants in department stores will continue to bring in
more foot traffic and increase brand visibility, while food courts at
supercenters and warehouse stores will continue to be popular shopping
destinations with consumers which may or may not translate into increased
foodservice sales. The success of high-end drug store concepts like
Walgreens’ UpMarket will likely impact and shift the landscape of this
segment, increasing competition with traditional retailers while also
elevating the quality and quantity of the foodservice aspects of their
businesses.
47
Company
(in millions)
% Change Units 2013
2013 2012
Walgreens $68,068 $65,014 4.7% 7,998
CVS Caremark $65,618 $63,688 3.0% 7,621
Rite Aid $25,526 $25,392 0.5% 4,587
Health Mart Systems $7,430 $7,350 1.1% 3,199
Good Neighbor Pharmacy $7,271 $8,357 -13.0% 3,155
LEADING DRUG STORES RANKED BY SALES
SOURCE: Stores.org; Chain Store Guide
OT
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ETA
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RS
Company
(in millions)
% Change Units 2013
2013 2012
Macy's $27,868 $27,610 0.9% 837
Sears Holdings $26,614 $30,727 -13.4% 1,905
Nordstrom $12,366 $11,762 3.7% 260
J.C. Penney $11,789 $12,908 -8.7% 1,087
Dillard's $6,439 $6,489 -0.8% 296
Neiman Marcus $4,648 $4,345 7.0% 85
Belk $4,038 $6,489 2.1% 299
LEADING DEPARTMENT STORES RANKED BY SALES
48
ON-SITE FOODSERVICE K-12 SCHOOLS | COLLEGES & UNIVERSITIES
BUSINESS & INDUSTRY | RECREATION
LODGING | TRANSPORTATION
HOSPITALS | SENIOR LIVING | Long Term Care
VENDING | CATERING | MILITARY | CORRECTIONS
K-12 Schools ON-SITE FOODSERVICE
109,629 locations $9.0 billion operator F&B spend
40% use GPOs
PREDICTIONS
19%
breakfast
74%
lunch
1%
dinner
6%
snack
Broadline distributors 95%
Direct from manufacturers 32%
Supermarket / grocery 27%
Local farms 25%
Specialty distributors 22%
Club stores 14%
Cash & carry stores 6%
Food brokers 4%
REFLECTIONS
DAYPART SHARE
PURCHASE SOURCES (% who buy from)
39%
Breakfast 28%
Lunch 72%
Snack 18%
AVERAGE PARTICIPATION RATE - SCHOOL TYPE
AVERAGE REGISTER RING PER DAYPART
Breakfast $1.65
Lunch $3.70
81% PUBLIC SCHOOLS
SOURCE/ESTIMATES BASED ON: Datassential PULSE; DATASSENTIAL Firefly, US Department of Education; National Center for Education Statistics; Foodservice Director
6% CONTRACT MANAGED
94% SELF OPERATED
K-1
2 S
HC
OO
LS
4% share of overall
operator spend
K-12 has shown minimal growth over the past year as a decrease in
enrollment and high food and operational costs to meet new federal
guidelines have put a strain on the segment.
As the Healthy, Hunger Free Kids Act has been implemented,
schools are spending more on food and labor to meet the new
requirements. Many facilities need to upgrade kitchen facilities while
also hiring and training staff, yet are facing lower participation rates.
Many school districts, mostly in larger, urban communities, are
making their food programs free for all students. This, combined with
lower participation rates in many districts, is making revenue
generation difficult. A la carte sales drive revenue for schools, and as
more districts opt for free meals they are also limiting opportunities
for cash purchases.
While there is certainly pushback to these new regulations, many
school districts around the country are successfully implementing the
required changes and in doing so are offering creative menu options
and educating both students and families about their meal programs.
As more school districts opt for free meals for all students and meal
participation rates decline, opportunities for profitable cash purchases
and a la carte sales may be limited, and growth for the K-12 segment
remains weak.
Many operators will continue to face challenges in implementing
the changes required by new school meal guidelines. Keeping costs
down and preventing waste will be major concerns, and operators will
likely continue to experiment with food preparation techniques, fresh vs.
preserved foods, as well as more creative serving methods such as
using tray-less service and changes in cafeteria layout design.
51
6%
3%
4%
4%
10%
73%
Other
Director of Dining Services
F&B Manager
Purchasing Manager
General Manager
Foodservice Director
F&B DECISION MAKERS
PREDICTIONS
39%
24%
JOB RESPONSIBILITY / EXPERIENCE PERSONAL PROFILE
GENDER
AGE
21 AVERAGE YEARS OF
INDUSTRY EXPERIENCE
K-1
2
SOURCE: Datassential PULSE
K-1
2 S
HC
OO
LS
18% 82%
0% 0%
6%
52%
40%
1%
Under 25 25 to 34 35 to 44 45 to 54 55 to 64 Over 65
52
ENROLLMENT IN K-12 BY LEVEL AND CONTROL OF INSTITUTION
Year
(Fall Beginning)
(in thousands)
% Change
From Prior
Year
Public Private
Total
K- Grade 8 Grades 9-12 Total K- Grade 8 Grades 9-12 Total
2005 34,204 14,909 49,113 4,724 1,349 6,073 55,187 --
2006 34,235 15,081 49,316 4,631 1,360 5,991 55,307 0.22%
2007 34,205 15,087 49,293 4,546 1,364 5,910 55,203 -0.19%
2008 34,286 14,980 49,266 4,365 1,342 5,707 54,973 -0.42%
2009 34,409 14,952 49,361 4,179 1,309 5,488 54,849 -0.22%
2010 (P) 34,625 14,860 49,484 4,084 1,299 5,382 54,867 0.03%
2011 (P) 34,773 14,749 49,522 3,977 1,291 5,268 54,790 -0.14%
2012 (P) 34,968 14,684 49,652 3,906 1,275 5,181 54,833 0.08%
2013 (P) 35,111 14,639 49,750 3,856 1,235 5,091 54,842 0.02%
2014 (P) 35,062 14,689 49,751 3,776 1,197 4,974 54,725 -0.21%
2015 (P) 35,069 14,770 49,839 3,741 1,150 4,892 54,731 0.01%
2016 (P) 35,142 14,810 49,951 3,725 1,114 4,839 54,790 0.11%
2017 (P) 35,412 14,868 50,280 3,765 1,087 4,852 55,132 0.62%
2018 (P) 35,642 14,901 50,543 3,782 1,054 4,837 55,380 0.45%
2019 (P) 35,878 14,957 50,834 3,809 1,027 4,836 55,671 0.53%
2020 (P) 36,115 15,050 51,165 3,835 1,009 4,844 56,010 0.61%
SOURCE: US Department of Education, National Center for Education Statistics
(P) Projection
K-1
2
K-1
2 S
HC
OO
LS
53
139
NOTEWORTHY NEWS
Fine Dining Growth Outpaces other Sectors
K-1
2 S
HC
OO
LS
“School Meal Rules to Triple Costs Next Fiscal Year”– September 30th, 2014; FoodServiceDirector.com
According to the USDA, new school meal standards will force school districts and states to absorb $1.22 billion in new food, labor and administrative costs in fiscal year 2015. That’s nearly three times the cost in fiscal year 2014.
“Agriculture Department Expands School Food Training, Mentoring Program”– March
9th 2015; EdWeek.com
Training and technical assistance have been one of the agency's weapons in the political battle over the standards. Some lawmakers and school nutrition representatives see the rules as too difficult to implement, while others see them as necessary to slow child obesity rates. The USDA has defended the rules and insisted that technical assistance and training are all that is necessary to overcome concerns about issues like discarded food and adjustment to new calorie and sodium restrictions.
“Schools Becoming the ‘Last Frontier' for Hungry Kids”– April 5th, 2015; USAToday.com
More than half of students in public schools — 51% — were in low-income families in 2013. In March, the Agriculture Dept. announced $27 million in grants to five states that are trying to reduce childhood hunger. A federal program covering dinner at school expanded to all states in 2010. Before that, only 13 states and the District of Columbia could provide dinner. The rest could offer only after-school snacks such as peanuts and popcorn. The U.S. Department of Agriculture, which runs the program, estimates that 108 million after-school meals were served in fiscal year 2014, up from 81 million in fiscal year 2013.
“California School District Raises Meal Prices to Cover Losses”– July 6th, 2015;
FoodServiceDirector.com
Public schools are struggling to bring students back to the lunch table, as more campuses raise prices and tweak menus in response to federal food regulations that require the use of healthier and more costly ingredients.
“School Lunch Participation in Decline”– October 14th, 2014; Foodservice Director
Participation in school lunch has declined markedly in the past 3 years, despite a slight increase in the percentage of students who qualify for free or reduced-price meals. Daily participation declined from 68% in 2011 to 64% in 2014. During that same period, the average % of students eligible for free or reduced-price meals went from 47% to 48%.
54
Colleges & Universities ON-SITE FOODSERVICE
AVERAGE ENROLLMENT
4,706 locations $6.9 billion operator F&B spend
38% use GPOs
PREDICTIONS
17%
breakfast
46%
lunch
23%
dinner
14%
snack
Broadline distributors 100%
Specialty distributors 53%
Direct from manufacturers 45%
Local farms 25%
Club stores 22%
Supermarket / grocery 18%
Cash & carry stores 10%
Third party websites 8%
Food brokers 4%
REFLECTIONS
DAYPART SHARE
PURCHASE SOURCES (% who buy from)
39%
Breakfast 964
Lunch 2,231
Dinner 1,831
AVERAGE DAILY REGISTER RINGS
PARTICIPATION RATE CHECK AVERAGE $
Breakfast $4.88
Lunch $7.02
Dinner $7.75
Breakfast 23%
Lunch 54%
Dinner 31%
12,766
CO
LL
EG
ES
& U
NIV
ER
SIT
IES
SOURCE/ESTIMATES BASED ON: Datassential PULSE; US Department of Education
29% CONTRACT MANAGED
71% SELF OPERATED
3% share of overall
operator spend
The C&U segment is currently experiencing a phase of transition.
There is a rise in enrolled students opting out of meal plan programs
and choosing off-campus accommodations to relieve cost pressures
from high tuition, while at the same time there are a growing number
of food pantries and co-ops within college communities.
Some colleges have very successful food programs and are
using this success as a selling point for their schools and as a way to
increase enrollment. Revamped dining halls and innovative menu
items reflecting current restaurant trends are examples of how some
schools are able to create very successful and enticing meal
programs for current and prospective students.
Although there are some positive stories, growth potential remains weak
for the C&U segment overall. Colleges and universities will continue to
look for ways to increase enrollment and revenue per student while
addressing the rising tuition that continues to outpace government aid. The
strength of C&U foodservice lies in its retail options. Campus c-stores,
micromarkets, and grocery units are and will continue to experience
stronger performance than traditional dining profit-wise and could aid in
offsetting declining participation rates in meal programs.
Many universities will increasingly look to expand the catering and on-
site branches of their foodservice programs as additional income
generators. Hosting on-campus events such as concerts, conferences,
and sporting events throughout the year act as a way for C&U operators to
make up revenue losses to lower student meal plan participation and
enrollment rates.
56
1%
3%
4%
5%
12%
18%
25%
31%
Other
Procurement Manager
Purchasing Manager
F&B Manager
Director of Dining Services
Executive Chef
General Manager
Foodservice Director
F&B DECISION MAKERS
PREDICTIONS
39%
24%
%
JOB RESPONSIBILITY / EXPERIENCE PERSONAL PROFILE
GENDER
AGE
21 AVERAGE YEARS OF
INDUSTRY EXPERIENCE
CO
LLE
GE
S &
UN
IVE
RS
ITIE
S
71% 29%
CO
LL
EG
ES
& U
NIV
ER
SIT
IES
SOURCE: Datassential PULSE
0%
9%
25% 26%
32%
8%
Under 25 25 to 34 35 to 44 45 to 54 55 to 64 Over 65
57
TR
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SP
OR
TA
TIO
N
ENROLLMENT IN C&U BY GENDER, ATTENDANCE, AND CONTROL OF INSTITUTION
SOURCE: National Center for Education Statistics
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AN
SP
OR
TA
TIO
N
58
CO
LLE
GE
S &
UN
IVE
RS
ITIE
S
CO
LL
EG
ES
& U
NIV
ER
SIT
IES
Year
Gender Attendance Status Control Total
% Change From
Prior Year Men Women Full-time Part-time Public Private
2000 6,721,772 8,590,522 9,009,604 6,302,690 11,752,788 3,559,506 15,312,294 3.1%
2001 6,960,816 8,967,168 9,447,502 6,480,482 12,233,154 3,694,830 15,927,984 4.0%
2002 7,202,119 9,409,600 9,946,365 6,665,354 12,751,999 3,859,720 16,611,719 4.3%
2003 7,260,265 9,651,221 10,326,134 6,585,352 12,858,701 4,052,785 16,911,486 1.8%
2004 7,387,263 9,884,787 10,610,184 6,661,866 12,980,115 4,291,935 17,272,050 2.1%
2005 7,455,925 10,031,545 10,797,009 6,690,461 13,021,831 4,465,639 17,487,470 1.2%
2006 7,574,815 10,184,053 10,957,305 6,801,563 13,180,133 4,578,735 17,758,868 1.6%
2007 7,815,916 10,432,217 11,269,893 6,978,240 13,490,784 4,757,349 18,248,133 2.8%
2008 8,188,899 10,913,919 11,747,748 7,355,070 13,972,156 5,130,662 19,102,818 4.7%
2009 8,769,504 11,658,206 12,722,783 7,704,927 14,810,643 5,617,067 20,427,710 6.9%
2010 9,044,808 11,971,315 13,082,265 7,933,858 15,142,808 5,873,315 21,016,123 2.9%
2011 9,026,499 11,967,614 13,001,457 7,992,656 15,110,196 5,883,917 20,994,113 -0.1%
2012 8,919,087 11,723,732 12,737,013 7,905,806 14,880,343 5,762,476 20,642,819 -1.7%
2013 (P) 9,340,782 12,451,210 13,445,120 8,346,876 15,694,470 6,097,841 21,792,000 1.1%
2014 (P) 9,369,749 12,672,550 13,561,800 8,480,498 15,871,260 6,171,361 22,042,300 1.1%
2015 (P) 9,387,984 12,864,340 13,652,040 8,600,289 16,019,830 6,232,818 22,252,320 1.0%
2016 (P) 9,441,936 13,066,890 13,774,610 8,734,209 16,202,570 6,306,586 22,508,820 1.2%
2017 (P) 9,533,202 13,308,940 13,951,910 8,890,229 16,441,300 6,401,180 22,842,140 1.5%
2018 (P) 9,642,888 13,575,950 14,163,340 9,055,492 16,711,670 6,507,517 23,218,840 1.6%
2019 (P) 9,753,219 13,815,580 14,375,750 9,193,052 16,965,350 6,603,798 23,568,800 1.5%
2020 (P) 9,850,504 14,016,280 14,560,020 9,306,767 17,182,510 6,684,619 23,866,780 1.3%
2021 (P) 9,932,518 14,159,330 14,699,480 9,392,359 17,345,490 6,746,698 24,091,840 0.9%
(P) Projection
58
TR
AN
SP
OR
TA
TIO
N
TR
AN
SP
OR
TA
TIO
N
59
CO
LLE
GE
S &
UN
IVE
RS
ITIE
S
CO
LL
EG
ES
& U
NIV
ER
SIT
IES
2012 ENROLLMENT AT LARGEST DEGREE-GRANTING COLLEGES AND UNIVERSITIES TOP 1-25
Institution Location Public/Private 2-Year/4-Year Total Enrollment
1 Ashford University IA Private 4-year 77,734
2 Liberty University VA Private 4-year 74,372
3 Arizona State University AZ Public 4-year 73,378
4 Miami Dade College FL Public 4-year 66,701
5 Lone Star College System TX Public 2-year 60,428
6 University of Central Florida FL Public 4-year 59,601
7 Houston Community College TX Public 2-year 58,476
8 American Public University System WV Private 4-year 58,115
9 Ohio State University, Main Campus OH Public 4-year 56,387
10 University of Texas at Austin TX Public 4-year 52,186
11 Northern Virginia Community College VA Public 2-year 51,864
12 University of Minnesota, Twin Cities MN Public 4-year 51,853
13 Texas A&M University, College Station TX Public 4-year 50,627
14 Tarrant County College District TX Public 2-year 50,439
15 Walden University MN Private 4-year 50,209
16 University of Florida FL Public 4-year 49,913
17 Kaplan University, Davenport Campus IA Private 4-year 48,865
18 Michigan State University MI Public 4-year 48,783
19 Grand Canyon University AZ Private 4-year 48,650
20 Florida International University FL Public 4-year 46,171
21 Pennsylvania State University, Main Campus PA Public 4-year 45,783
22 University of Illinois at Urbana-Champaign IL Public 4-year 44,520
23 New York University NY Private 4-year 44,516
24 University of Washington, Seattle Campus WA Public 4-year 43,485
25 University of Michigan, Ann Arbor MI Public 4-year 43,426
SOURCE: National Center for Education Statistics *excludes online-only programs 59
TR
AN
SP
OR
TA
TIO
N
TR
AN
SP
OR
TA
TIO
N
60
CO
LLE
GE
S &
UN
IVE
RS
ITIE
S
CO
LL
EG
ES
& U
NIV
ER
SIT
IES
2012 ENROLLMENT AT LARGEST DEGREE-GRANTING COLLEGES AND UNIVERSITIES TOP 26-50
Institution Location Public/Private 2-Year/4-Year Total Enrollment
26 Austin Community College District TX Public 2-year 43,315
27 Valencia College FL Public 4-year 42,915
28 Broward College FL Public 4-year 42,309
29 University of Wisconsin, Madison WI Public 4-year 42,269
30 University of Maryland, University College MD Public 4-year 42,268
31 Indiana University, Bloomington IN Public 4-year 42,133
32 Western Governors University UT Private 4-year 41,369
33 University of South Florida, Main Campus FL Public 4-year 41,116
34 University of Houston TX Public 4-year 40,747
35 Florida State University FL Public 4-year 40,695
36 Rutgers University, New Brunswick NJ Public 4-year 40,434
37 Purdue University, Main Campus IN Public 4-year 40,393
38 University of Arizona AZ Public 4-year 40,223
39 University of Southern California CA Private 4-year 39,958
40 University of California, Los Angeles CA Public 4-year 39,945
41 Excelsior College NY Private 4-year 39,728
42 University of North Texas TX Public 4-year 37,950
43 California State University, Fullerton CA Public 4-year 37,677
44 University of Maryland, College Park MD Public 4-year 37,248
45 East Los Angeles College CA Public 2-year 37,055
46 Temple University PA Public 4-year 36,744
47 California State University, Long Beach CA Public 4-year 36,279
48 California State University, Northridge CA Public 4-year 36,164
49 University of California, Berkeley CA Public 4-year 35,893
50 Capella University MN Private 4-year 35,754
*excludes online-only programs SOURCE: National Center for Education Statistics 60
139
NOTEWORTHY NEWS
Fine Dining Growth Outpaces other Sectors
“More than half of college students
experience food insecurities, study says” –
May 5th, 2015; Foodservice Director
According to the American International Journal of Contemporary Research study "Evaluation of Food Insecurity among College Students," the experience of food insecurity comes from not having enough money to purchase meals or not having time for shopping and preparation. The study reported that food-insecure students regularly reduce the size of their meals, skip meals or don't eat at all.
“When Food Is Too Good To Waste, College Kids Pick
Up The Scraps” – February 27th, 2015; NPR
The average college student generates 142 pounds of food waste a year, according to Recycling Works, a program in Massachusetts. And college campuses as a group throw out a total of 22 million pounds of uneaten food each year, the Food Recovery Network has found. It's a small – but significant — piece of the 35 million tons of food discarded by Americans in 2012 alone, according to the latest estimate from the U.S. Environmental Protection Agency. About 40 percent of all food in the U.S. never even makes it to the plate before it's tossed. Yet 1 in 6 Americans goes hungry.
“College enrollment: Trouble
signs” – March 4th, 2015; The
Washington Post
There are many possible reasons for enrollment declines, including economic cycles. In a shrinking economy, more people tend to seek higher education as a way to improve their job prospects. In an improving economy, that surge will typically recede.
“Pulling Rank on College Dining Programs”– August 21st, 2014; Food
Management
That the quality of campus dining is a significant factor for prospective students choosing a college has been common knowledge for quite a while. There’s been Business Insider, College Prowler and PETA, a vegetarian advocacy organization that grades schools on their vegan friendliness. At GrubHub, they surveyed college students on their eating habits and came away with some interesting, if questionable, statistics. For example, they claim that college students are 26% less likely to order spicy dishes than the general population and that college students order 25% less vegetarian/vegan dishes than everyone else (PETA take note…).
“As California University Costs Rise, College Students Tap Food
Pantries”- March 9th, 2015; spcr.org
CO
LL
EG
ES
& U
NIV
ER
SIT
IES
61
Business & Industry ON-SITE FOODSERVICE
11,106 locations $4.8 billion operator F&B spend
12% use GPOs
PREDICTIONS REFLECTIONS
DAYPART SHARE
PURCHASE SOURCES (% who buy from)
39%
Breakfast 356
Lunch 640
Dinner 337
Snack 318
CHECK AVERAGE
60% SUBSIDIZED
AVERAGE DAILY
SUBSIDIZED - EMPLOYEE ACCESS
Breakfast $3.35
Lunch $6.22
Dinner $5.91
Snack $2.19
1,303 AVERAGE NUMBER OF
EMPLOYEES WITH ACCESS
BU
SIN
ES
S &
IN
DU
ST
RY
SOURCE/ESTIMATES BASED ON: Datassential PULSE; US Census Bureau
70% CONTRACT MANAGED
30% SELF-OP OR HYBRID
2% share of overall
operator spend
27%
breakfast
54%
lunch
6%
dinner
13%
snack
Broadline distributors 97%
Direct from manufacturers 44%
Specialty distributors 40%
Club stores 29%
Cash & carry stores 21%
Supermarket / grocery 19%
Local farms 12%
Food brokers 6%
As employment rates rise, many companies have improved their foodservice
offerings as a way to attract new hires and be a competitive force in the job
market.
An emphasis on improved work environments remains a strong force
behind the success of B&I foodservice, as large companies try to reflect a
positive corporate culture through revamped cafeterias and a variety of food
offerings. Relying on foodservice contractors is a popular option within
this segment, and FSM contractors themselves have been reacting to more
competition within their field and offering a wider variety of options to their
clients, further broadening foodservice options.
The success of micro markets within the B&I segment also continues to be
a source of growth, as many employers look to these easy and efficient
vending options as a way to increase options for their employees.
The job market and economy continues to improve and the outlook for
B&I remains positive. Companies will continue to use their
foodservice offerings as a way to attract new hires, and the increased
use of foodservice contractors and efficient vending offerings like micro
markets will aid in continued growth. Emphasizing restaurant trends,
healthier options, and convenience will all be important to the success
of this segment.
REGISTER RINGS
63
5%
4%
6%
9%
17%
22%
36%
Other
Director of Dining Services
Owner
F&B Manager
Foodservice Director
Executive Chef
General Manager
F&B DECISION MAKERS
PREDICTIONS
39%
24%
JOB RESPONSIBILITY / EXPERIENCE PERSONAL PROFILE
GENDER
AGE
22 AVERAGE YEARS OF
INDUSTRY EXPERIENCE
BU
SIN
ES
S &
IN
DU
ST
RY
64% 36%
BU
SIN
ES
S &
IN
DU
ST
RY
SOURCE: Datassential PULSE
1%
9%
19%
35% 35%
0%
Under 25 25 to 34 35 to 44 45 to 54 55 to 64 Over 65
64
NO
TE
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RT
HY
NE
WS
139
NOTEWORTHY NEWS
Fine Dining Growth Outpaces other Sectors
BU
SIN
ES
S &
IN
DU
ST
RY
“micro markets Go Macro” – October 23rd,
2015; FoodManagement.com
Bridging the gap between vending and full-service cafés is the rapidly growing micro market concept. These unmanned retail shops generally cater to a specific, known demographic within the business segment. (Though some are being test-driven in colleges and universities as well as in hospitality.) They have unlimited variety, incredible flexibility and 24/7/365 access.
“A Snacking Nation: 94% Of Americans Snack Daily” – January 20th, 2015; Times Free Press
Snacking may very well be the new American pastime. According to the recent report from Mintel, nearly all Americans (94 percent) snack at least once a day. What is more, half (50 percent) of adults snack two to three times per day with 70 percent agreeing that anything can be considered a snack these days. Americans also claim a preference for healthier snacking with 33 percent saying they are snacking on healthier foods this year compared to last year. However, they most often snack to satisfy a craving (62 percent), highlighting the important role taste and flavor play on snacking behavior.
“U.S. Economy Adds 223,000 Jobs; Unemployment at
5.3%” – July 2nd, 2015; The
New York Times
The economy added a healthy 223,000 jobs last month, the Labor Department reported Thursday, but with other indicators showing wages flat and many Americans remaining on the sidelines, the overall economic picture for workers was not nearly as bright.
“Best Customer Service: Compass Group at Microsoft”– August 20th,
2014; Food Management
Cashier-less payment/ordering system accommodates made-to-order menu selections customers prefer. The 100% cashier-less/cashless ordering and payment system implemented at half a dozen cafés on the Microsoft campus in Redmond, WA, accomplishes a number of customer service goals. It is highly convenient, it reduces crowding and wait times, it seamlessly accommodates the kind of customized and made-to-order menu selections customers prefer, and it offers an appealingly high tech one-stop-shop solution for those ultra-tech-savvy diners.
“Today's company cafeterias offer healthier, brighter fare” – January 20th, 2015; Times Free Press
65
Recreation ON-SITE FOODSERVICE
RE
CR
EA
TIO
N
62,201 locations $6.1 billion operator F&B spend
PREDICTIONS REFLECTIONS
NATIONAL PARK VISITORS (in millions)
KEY NATIONAL PARK STATS
Concessioners' Gross Receipts $1 bil
Concessioners' Gross Receipts Breakdown:
Merchandise & Retail 25%
Lodging 20%
Food & Beverage 20%
Total Food & Beverage Revenue (2012) $210,420,000
Number of Concession Contracts 575
Percent of Receipts Generated by the Top-60 Contracts 85%
Percent of Contracts Under $500,000 75%
Franchise Fee Average on All Contracts 5%
Number of Commercial Use Authorizations 6,000
Number of Concessioner Employees 25,000
SOURCE/ESTIMATES BASED ON: Datassential PULSE; US Census Bureau; National Park Service; National Association of State Park Directors; International Association of Amusement Parks and Attractions; Cruise Lines International Association
3% share of overall
operator spend
276.0 275.0
286.0
281.0 279.0
283.0
274.0
292.8
260.0
270.0
280.0
290.0
300.0
2007 2008 2009 2010 2011 2012 2013 2014
The health of the recreation segment can be tied directly to the
improved post-recession economy. Disposable personal income
continues to rise, as does consumer confidence, and because of this
more people are spending money on vacations, hobbies, and
sports. Revenues are up in many areas of this industry, particularly at
sports stadiums, amusement parks, national and state parks, and ski &
snowboard resorts.
Operators continue to put their efforts into improving foodservice
offerings and streamlining their operations with the use of new
technologies, increasing overall revenue. Efforts made during the
recession to increase visits and check averages continue to take place
and have a positive effect.
The recreation segment will continue to be directly affected by the
health of the economy. As disposable income remains on the upswing,
the sector will continue to fare well.
As we have seen in the past few years, operators remain focused on
competition in foodservice. Many sporting arenas and stadiums will
continue to feature full restaurants and kiosks from favorite local
establishments, movie theaters and bowling alleys will continue to offer
premium beverages and snacks, and amusement parks will remain
focused on featuring innovative, specialized food options to stand out
from the competition while also implementing new uses for technology
and vending options.
67
7%
8.1%
8.3%
16.8% 51.8%
8%
Six Flags Cedar Fair
Sea World Parks & Entertainment Universal Parks & Resorts
The Walt Disney Company Other
CMAA Club Foods & Beverage
Purchases 2013 2011
Provisions $1,804,618 $1,650,909
Supplies $498,977 $460,266
TOTAL $2,303,595 $2,111,175
Number of CMAA Clubs 2,607 2,489
CMAA Member Income $20 bil $18 bil
SOURCE: Cruise Lines International Association; Club Managers Association of America; Journal of Management and Marketing Research, IBISWorld, Bigelow Companies
GOLF COURSE STATS AMONG CMAA MEMBERS
PROFESSIONAL SPORTS FOOD SPEND
RE
CR
EA
TIO
N
RE
CR
EA
TIO
N
DONE
Year Total Ships Total Beds
Global
Passenger
Volume
2013 381 381,333 21,300,000
2014 410 467,629 21,700,000
2015 421 482,000 23,000,000
High Low
% of
Foodservice
Operations
Outsourced
Major League Baseball $20.00 $9.00 97%
Major League Soccer $15.00 $5.00
Minor League Baseball $15.00 $5.00
National Basketball
Association $20.00 $8.50 87%
National Football League $20.00 $11.00 94%
National Hockey League $20.00 $8.50 83%
AVERAGE $18.33 $7.83
CRUISE STATISTICS
AMUSEMENT PARK MARKET SHARE
68
RE
CR
EA
TIO
N
RE
CR
EA
TIO
N
Theater Operator (March 2015) Screens Sites
Regal Entertainment Group 7,324 569
Dalian Wanda / AMC Entertainment, Inc. 4,972 347
Cinemark USA, Inc. 4,498 335
Carmike Cinemas, Inc. 2,894 272
Marcus Theatres Corp. 685 55
National Amusements 435 31
Harkins Theaters 429 30
Malco 350 35
Theater Type Screens Sites
2013 2012 % Change 2013 2012 % Change
Indoor 39,368 39,056 0.80% 5,326 5,317 0.17%
Drive-in 656 606 8.25% 393 366 7.38%
TOTAL 40,024 39,662 0.91% 5,719 5,683 0.63%
SOURCE: National Association of Theatre Owners; 2014 Themed Entertainment Association (TEA) Index
Park 2014 2013 %
Change
Magic Kingdom - Lake Buena Vista, FL 19,332 18,588 4.00%
Disneyland - Anaheim, CA 16,769 16,202 3.50%
Epcot - Lake Buena Vista, FL 11,454 11,229 2.00%
Disney's Animal Kingdom - Lake Buena Vista, FL 10,402 10,198 2.00%
Disney's Hollywood - Lake Buena Vista, FL 10,312 10,110 2.00%
Disney's California Adventure - Anaheim, CA 8,769 8,514 3.00%
Universal Studios at Universal - Orlando, FL 8,263 7,062 17.00%
Islands of Adventure at Universal - Orlando, FL 8,141 8,141 0.00%
Universal Studios Hollywood - Universal City, CA 6,824 6,148 11.00%
Seaworld Florida - Orlando, FL 4,683 5,090 -8.00%
Busch Gardens Tampa Bay - Tampa, FL 4,128 4,087 1.00%
Seaworld California - San Diego, CA 3,794 4,311 -12.00%
Knott's Berry Farm - Buena Park, CA 3,683 3,683 0.00%
Canada's Wonderland - Maple, ON 3,546 3,582 -1.00%
Cedar Point - Sandusky, OH 3,247 3,382 -4.00%
Kings Island - Kings Island, OH 3,238 3,206 1.00%
Hershey Park, Hershey, PA 3,212 3,180 1.00%
Six Flags Magic Mountain, Valencia, CA 2,848 2,906 -2.00%
Six Flags Great Adventure, Jackson, NJ 2,800 2,800 0.00%
Busch Gardens Europe - Williamsburg, VA 2,699 2,726 -1.00%
LEADING THEATER OPERATORS
THEATER SCREENS AND SITES
LEADING AMUSEMENT PARKS BY ATTENDANCE
*in thousands
69
NOTEWORTHY NEWS
Fine Dining Growth Outpaces other Sectors
“Oceans of Opportunity”– August, 2014;
FSRMagazine.com
The cruise line industry is growing, and adding full-service restaurants onboard—from casual franchises like Johnny Rockets to upscale steakhouses and fine-dining enclaves. One reason the industry is growing—and the passenger growth rate is up 7 percent per annum since 1980—is that people who go on a cruise are very likely to go on multiple cruises in their lifetime—10.5 cruises per person to be exact, according to CLIA. And these are the people who say food and fine dining matter.
“National Park Service Sitting On Half-A-Billion Dollars Of Concessions Obligations” – March
15th, 2015; NationalParksTraveler.com
Across the National Park System, there is an estimated half-a-billion-dollars of obligations owed concessionaires who run lodges, restaurants, and even some activities, for the National Park Service. It's a sum that, while Park Service officials say is manageable, has seemingly stifled concessions competition in some parks and led the agency to divert tens of millions of dollars from some parks to others to reduce the debts.
“In Atlantic City, A Silver Lining For Casinos Left Standing”– June 8th, 2015;
NPR
Atlantic City went from having 25,000 slot machines at the start of last year to 17,000 now. It went from 12 underperforming casinos to eight fuller gambling houses. And that has helped the remaining casinos grow their profits by 26 percent.
“Recreation Foodservice Facilities Adopt Apps to Speed Service”
May 29th, 2015; FoodServiceDirector.com
Theme parks are using technology to reduce waits, but not just for rides. They have started to allow customers to skip the cashier and order food ahead of time. Disney World recently started allowing online preordering for its Be Our Guest restaurant, and this month it tested smartphone ordering at the Backlot Express restaurant and during the Fantasmic! nighttime show. Restaurants and theme parks say they are responding to consumers who are increasingly tech-savvy and hungry for convenience.
“Golf Industry Looks to Hit More Green in ‘15”– January 25th,
2015; FoxBusiness.com
RE
CR
EA
TIO
N
RE
CR
EA
TIO
N
70
Lodging ON-SITE FOODSERVICE
68,663 locations $13.4 billion operator F&B spend
56%
breakfast
15%
lunch
21%
dinner
8%
snack
21% use GPOs
PREDICTIONS REFLECTIONS
DAYPART SHARE
PURCHASE SOURCES (% who buy from)
39%
HAVE ON-SITE
RESTAURANTS
AVERAGE NUMBER OF ROOMS
ON-SITE RESTAURANTS
189 AVERAGE # ROOMS
74% CHECK AVERAGE
$15.32 LO
DG
ING
L
OD
GIN
G
SOURCE/ESTIMATES BASED ON: Datassential PULSE; Smith Travel Research; American Gaming Association
58% CHAIN
42% INDEPENDENT
6% share of overall
operator spend
Broadline distributors 94%
Specialty distributors 39%
Club stores 34%
Direct from manufacturers 32%
Cash & carry stores 25%
Supermarket / grocery 21%
Local farms 21%
Third party websites 6%
Food brokers 4%
As the economy improves, lodging has continued to experience positive
growth. Tourism has made strong strides since the recession, and lodging
has benefitted from an increase in both domestic and international tourist
activity as well as an increase in business travel and activity.
Value remains an important focus for consumers, and deal-driven booking
websites and apps remain a popular choice for booking stays and an
important component within the lodging industry.
Room revenues are the driving force in overall growth for the segment, and
foodservice remains an opportunity for innovation and change. Dining
options within existing operations are being redeveloped and new offerings
are being created as operators look for ways to increase bookings and
traffic.
Outlook for the lodging segment continues to be strong. Rising disposable
income, expanding business travel budgets, and an increase in international
tourism will all aid in continued growth.
Online bookings will continue to be the main driver for bookings, whether online
or through apps and mobile devices. Foodservice offerings and improved
dining options are increasingly being used as a way to market to new
audiences and garner more guests and revenue, particularly by higher-end
hotels and chains. This trend is likely to continue and trickle down into other
sub-groups of lodging.
It is yet to be seen whether economic challenges arising in Europe and Asia
will have an effect on tourism both domestically and internationally, and what
effect that could possibly have on the lodging industry
72
F&B DECISION MAKERS
CULINARY TRAINING
PREDICTIONS
39%
29%
24%
%
JOB RESPONSIBILITY / EXPERIENCE PERSONAL PROFILE
GENDER
AGE
17 AVERAGE YEARS OF
INDUSTRY EXPERIENCE
LO
DG
ING
L
OD
GIN
G
SOURCE: Datassential PULSE
71% 29%
1%
17%
29%
31%
21%
1%
Under 25 25 to 34 35 to 44 45 to 54 55 to 64 Over 65
8%
1%
5%
7%
12%
13%
24%
30%
Other
Director of Dining Services
Purchasing Manager
Foodservice Director
Owner
F&B Manager
Executive Chef
General Manager
73
LO
DG
ING
L
OD
GIN
G
SOURCE: STR Host Almanac
LUXURY HOTEL REVENUE DISTRIBUTION
65%
19%
5%
5% 6%
Rooms
Food
Beverage
Other Food&BeverageOther Revenue
92%
4% 1% 1% 2%
Rooms
Food
Beverage
Other Food&Beverage
Other Revenue
UPSCALE HOTEL REVENUE DISTRIBUTION
UPPER UPSCALE HOTEL REVENUE DISTRIBUTION UPPER MIDSCALE HOTEL REVENUE
DISTRIBUTION
60%
20%
7%
5%
9%
Rooms
Food
Beverage
Other Food&BeverageOther Revenue
87% 7%
2%
1% 3%
Rooms
Food
Beverage
Other Food&BeverageOther Revenue
74
Category (in billions)
% of Total Revenue Direct Revenue
Gaming $34.60 70%
Food & Beverage $6.50 13%
Hotel $5.10 10%
Other $3.50 7%
Total $49.70 100%
CASINO REVENUE SOURCES (ALL CASINOS) 2010
SOURCE: American Gaming Association; Hotels Magazine
LO
DG
ING
L
OD
GIN
G
Company Rooms Hotels
2013 2012 % Change 2013 2012 % Change
Hilton Worldwide - McLean, Virginia 678,630 652,957 4% 4,115 3,966 4%
Marriott International - Bethesda, Maryland 675,623 660,394 2% 3,916 3,800 3%
Wyndham Hotel Group - Parsippany, New Jersey 645,423 627,437 3% 7,485 7,342 2%
Choice Hotels International - Silver Spring, Maryland 506,058 538,222 -6% 6,340 6,725 -6%
Starwood Hotels & Resorts Worldwide - Stamford, Connecticut 346,819 335,415 3% 1,175 1,134 4%
Best Western International - Phoenix, Arizona 317,838 312,467 2% 4,097 4,050 1%
Carlson Rezidor Hotel Group - Minnetonka, Minnesota 168,927 166,241 2% 1,079 1,077 0%
Hyatt Hotels Corp. - Chicago, Illinois 147,388 135,144 9% 548 500 10%
Magnuson Hotels - Spokane, Washington 142,500 201,692 -29% 1,865 1,886 -1%
G6 Hospitality - Carrollton, Texas 109,945 107,767 2% 1,150 1,117 3%
Westmont Hospitality Group - Houston, Texas 98,637 116,334 -15% 722 850 -15%
LQ Management - Irving, Texas 83,658 84,659 -1% 834 835 0%
Extended Stay Hotels - Charlotte, North Carolina 76,234 76,234 0% 684 684 0%
Interstate Hotels & Resorts - Arlington, Virginia 72,529 69,850 4% 375 373 1%
Vantage Hospitality Group - Coral Springs, Florida 70,383 69,502 1% 1,103 1,091 1%
MGM Resorts International - Las Vegas, Nevada 46,908 52,033 -10% 20 20 0%
Caesars Entertainment Corp. - Las Vegas, Nevada 42,710 40,960 4% 54 40 35%
Walt Disney Co. - Burbank, California 39,205 35,859 9% 44 33 33%
Red Roof Inns - Columbus, Ohio 36,552 35,733 2% 357 349 2%
White Lodging Services Corp.- Merrillville, Indiana 24,461 24,177 1% 169 160 6%
LEADING US-BASED HOTEL OPERATORS
75
Transportation ON-SITE FOODSERVICE
TR
AN
SP
OR
TA
TIO
N
2,493 locations $1.2 billion operator F&B spend
PREDICTIONS REFLECTIONS
Year
(in thousands)
Total
2007 $2,006,092
2008 $2,037,944
2009 $1,933,907
2010 $2,007,137
2011 $2,111,232
2012 $2,074,893
2013 $2,160,280
2014 $2,208,371
AIRLINE PASSENGER FOOD PURCHASES
SOURCE/ESTIMATES BASED ON: Datassential PULSE; Bureau of Transportation Statistics; US Department of Transportation; Amtrak; US Census Bureau
Year
(in millions)
Ticket State
Contribution
Food &
Beverage Total
2011 $1,851.50 $191.10 $109.40 $2,152.00
2012 $1,968.20 $179.00 $122.00 $2,269.20
2013 $2099.10 $195.40 $123.00 $2,417.50
2014 $2,124.70 $286.60 $128.30 $2,539.60
AMTRAK PASSENGER REVENUES
1% share of overall
operator spend
With the economy continuing to do well, transportation has
benefitted as more individuals and businesses are spending money
on travel. Airlines continue to do well and benefitted the most from
increased travel. There have been many large mergers in the past few
years, but a direct effect on the overall industry has yet to be seen.
Foodservice remains a small portion of revenue, however there
has been growth in food revenue in the past year.
Rail, bus, and ferries remain stable, and there has been some political
momentum for a stronger national rail system, although it is yet to be
seen if this will occur.
The economy is expected to continue to do well, and the outlook for
transportation is positive. More people will continue to travel and take
part in more business and leisure activities, allowing more revenue to
be generated. Within air travel, airlines will continue to strive for higher
profit margins by increasing ticket prices and developing more efficient
aircrafts for high-traffic routes and possibility using foodservice offerings
to differentiate from competitors.
77
LEADING US AIRLINES RANKED BY FOOD EXPENDITURES
Carrier
Systemwide Food Expense (in thousands)
2014 2013 % Change
Delta Air Lines Inc. $694,390 $658,644 5.4%
American Airlines Inc. $565,878 $561,263 0.8%
United Air Lines Inc. $550,378 $573,118 -4.0%
Alaska Airlines Inc. $89,690 $81,749 9.7%
US Airways Inc. US (Merged with America West) $85,512 $73,802 15.9%
Hawaiian Airlines Inc. $57,600 $52,733 9.2%
JetBlue Airways $44,542 $17,892 148.9%
Southwest Airlines Co. $44,369 $45,232 -1.9%
Virgin America $24,271 $26,082 -6.9%
Omni Air Express $12,467 $13,842 -9.9%
Sun Country Airlines $6,441 $5,220 23.4%
Frontier Airlines Inc. $6,156 $8,156 -24.5%
SkyWest Airlines Inc. $5,294 $5,336 -0.8%
Miami Air International $3,968 $4,193 -5.4%
Spirit Air Lines $3,638 $3,543 2.7%
Allegiant Air $3,452 $3,448 0.1%
Shuttle America Corp. $2,302 $7,424 -69.0%
GoJet Airlines/ United Express $909 $931 -2.4%
North American Airlines $672 $5,347 -87.4%
Total $2,201,257 $2,142,608 2.7%
SOURCE: Bureau of Transportation Statistics
TR
AN
SP
OR
TA
TIO
N
78
Hospitals ON-SITE FOODSERVICE
5,686 locations $6.2 billion operator F&B spend
97% use GPOs
PREDICTIONS
Broadline distributors 99%
Specialty distributors 35%
Supermarket / grocery 35%
Direct from
manufacturers 28%
Local farms 14%
Club stores 11%
Cash & carry stores 11%
Third party websites 9%
Food brokers 9%
REFLECTIONS
DAYPART SHARE
PURCHASE SOURCES (% who buy from)
189 DAILY PATIENTS
Breakfast 274
Lunch 409
Dinner 248
$8.61 DAILY COST PER PERSON
239 AVERAGE # BEDS
AVERAGE DAILY MEALS SERVED
TYPICAL LOCATION SIZE HO
SP
ITA
LS
SOURCE/ESTIMATES BASED ON: Datassential PULSE; American Hospital Association; Foodservice Director
17% CONTRACT MANAGED
83% SELF OPERATED
3% share of overall
operator spend
24%
breakfast
47%
lunch
17%
dinner
12%
snack
The effects of the implementation of the Affordable Care Act (ACA) were
beginning to be seen in the past year, impacting many aspects of the
industry. Since reimbursement measures are now based on providers’
performance as opposed to volume, hospitals are focusing on reining in
costs while also facing the need to hire more staff due to a rising demand
in care. Total hospital beds and facilities have declined, while expenses
and healthcare employees have increased considerably.
The industry is continuing to focus on adopting and implementing an all-
electronic health database system as part of compliance with the ACA. This
is a large undertaking requiring a substantial amount of resources and is
expected to continue over the next few years.
Hospital foodservice is experiencing a shift in many ways as well. Across
the country, many hospitals are shifting food preparations toward more
sustainable and healthier comfort food options and an increased flexibility
in patient dining, while others are adding more fast casual-style restaurants
to compete with offsite locations for employees. Non-patient foodservice
revenue was up this year based on our surveys, and this could be an area
within healthcare foodservice where operators could make up for profits lost
in other areas.
Hospitals will continue to face cost pressures in the upcoming years due to shifts
within both foodservice and other areas of hospital operations. The number of
insured patients under the ACA and Medicaid expansion are expected to rise, as are
the number of individuals over age 65, furthering the demand for more resources and
qualified staff. At the same time, the number of hospital beds is diminishing as
hospitals consolidate and renovate.
Foodservice will continue to shift towards healthier options and flexible dining as
demand for those from consumers rises, which will likely cause continued increases
in food and labor costs.
Growth in this segment is a reflection of volume and not necessarily an increase in
profits. As the size of the healthcare industry grows due to more insured patients
and rising staff levels, operators are spending more on purchasing and
operational costs. This trend is expected to continue and, for that reason, the
outlook is strong.
80
9%
1%
1%
4%
10%
10%
14%
52%
Other
Owner
Procurement Manager
F&B Manager
Executive Chef
Director of Dining Services
General Manager
Foodservice Director
F&B DECISION MAKERS
PREDICTIONS
39%
24%
JOB RESPONSIBILITY / EXPERIENCE PERSONAL PROFILE
GENDER
AGE
21 AVERAGE YEARS OF
INDUSTRY EXPERIENCE
HO
SP
ITA
LS
H
OS
PIT
AL
S
SOURCE: Datassential PULSE
51% 49%
0%
6%
31%
36%
26%
1%
Under 25 25 to 34 35 to 44 45 to 54 55 to 64 Over 65
81
4,344,700
4,423,142 4,515,183
4,626,908
4,667,500
4,679,067 4,721,617
4,790,950
4,830,033
2005 2006 2007 2008 2009 2010 2011 2012 2013
SOURCE: Foodservice Director, American Hospital Association, US Census
NUMBER OF US HOSPITALS
US HOSPITAL BEDS TOTAL US HOSPITAL EXPENSES (in thousands)
US HOSPITAL WORKERS
HO
SP
ITA
LS
H
OS
PIT
AL
S
946,997 947,000 945,199
951,000
944,277 941,995
924,333
920,829
914,513
2005 2006 2007 2008 2009 2010 2011 2012 2013
5,756 5,747
5,708
5,815
5,795
5,754
5,724 5,723
5,686
2005 2006 2007 2008 2009 2010 2011 2012 2013
$570,500
$607,300 $638,500
$690,000
$726,671 $750,602
$773,547
$829,665 $859,419
2005 2006 2007 2008 2009 2010 2011 2012 2013
82
SOURCE: Modern Healthcare
HO
SP
ITA
LS
H
OS
PIT
AL
S
LARGEST FOR-PROFIT HOSPITAL CHAINS
LARGEST NOT FOR-PROFIT HOSPITALS
Rank Organization Location Staffed Beds Total
Hospitals
2013 Revenue
(in millions)
1 Kaiser Foundation Hospitals Oakland, CA 7,503 32 $54,088
2 Ascension Health St. Louis, MO 18,681 101 $19,844
3 Providence Health & Services Renton, WA 5,557 26 $11,352
4 Catholic Health Initiatives Englewood, CO 10,473 74 $11,252
5 Dignity Health San Francisco, CA 7,882 37 $10,939
6 Partners Health Care Systems Boston, MA 3,256 12 $10,788
7 UPMC Pittsburgh, PA 4,876 13 $10,407
8 Sutter Health Sacramento, CA 4,890 24 $10,029
9 CHE Trinity Health Livonia, MI 7,580 34 $9,340
10 Mayo Clinic Health System Rochester, MN 3,165 23 $9,074
Rank Company Location # of Hospitals Revenue (in millions)
% change 2013 2012
1 HCA Nashville, TN 159 $34,182 $33,013 4%
2 Community Health Systems Franklin, TN 131 $12,097 $11,818 2%
3 Tenet Healthcare Corp. Dallas, TX 77 $11,102 $9,119 22%
4 Universal Health Services King of Prussia, PA 24 $7,283 $6,961 5%
5 LifePoint Hospitals Brentwood, TN 60 $3,678 $3,391 8%
6 Iasis Healthcare Franklin, TN 16 $2,376 $2,327 2%
7 Capella Healthcare Franklin, TN 11 $722 $718 1%
8 United Surgical Partners International Addison, TX 14 $616 $540 14%
9 Integrated Healthcare Holdings Santa Ana, CA 4 $386 $365 6%
10 SunLink Health Systems Atlanta, GA 4 $108 $113 -4%
83
139
NOTEWORTHY NEWS
Fine Dining Growth Outpaces other Sectors
“Hospital Launches Healthy Beverage Initiative” – June 16th, 2015; Foodservice Director
San Francisco General Hospital and Trauma Center will no longer sell or provide any sugar-sweetened beverages on campus. The hospital's new policy aligns with the city’s new legislation requiring health warnings on soda advertisements, and banning of sugar-sweetened beverage advertisements on publicly owned property.
“Metro Health’s Multilayered Farm-to-Fork Approach” – February 6th, 2015; FoodManagement.com
Efforts at the Michigan hospital include local sourcing, a seasonal farmers market and an onsite garden tended to by a master gardener. According to the Grand Rapids Business Journal, Metro Health landed on the 101 Best & Brightest Sustainable Companies in Michigan list for the third year in a row in 2014.
“Farmers’ Markets Near Medical Centers and
Clinics Promote Healthy Eating”– January 14th, 2015;
Foodservice Director
A Kaiser Permanente physician in Oakland, Calif. started a farmers’ market to make fresh fruits and vegetables more convenient and readily available. More than a decade later there are over 50 Kaiser-associated farmers’ markets in four states.
“Hospital Fine-dining Restaurant Attracts Customers Who are there to Dine Only” – May 22nd, 2015; Foodservice Director
Jell-O, greasy gravy and stale bread is what you might expect to eat at a hospital. But institutional cafeteria food is the last thing you’ll find at Castle Rock Adventist Hospital thanks to executive chef Daniel Skay. Seventy-five percent of the customers come strictly to eat at Manna, not because they’re visiting a patient or seeing a doctor at the hospital. The kitchen is divided in half, one side works for patients who order room service, the other side serves the restaurant crowd.
“Fast-food Restaurants Still Populate Hospital Cafeterias” – April 8th, 2015; Foodservice Director
HO
SP
ITA
LS
84
Long Term Care ON-SITE FOODSERVICE
15,632 locations $1.8 billion operator F&B spend
28%
breakfast
33%
lunch
29%
dinner
34% use GPOs
PREDICTIONS
10%
snack
Broadline distributors 100%
Supermarket / grocery 38%
Specialty distributors 25%
Club stores 20%
Cash & carry stores 16%
Direct from manufacturers 13%
Local farms 13%
Third party websites 5%
Food brokers 5%
REFLECTIONS
DAYPART SHARE
PURCHASE SOURCES (% who buy from)
39%
127 DAILY PATIENTS
Breakfast 120
Lunch 138
Dinner 128
$6.65 DAILY COST PER PERSON
137 AVERAGE # BEDS
AVERAGE DAILY MEALS SERVED
TYPICAL LOCATION SIZE
SOURCE/ESTIMATES BASED ON: Datassential PULSE; American Health Care Association; American Senior Housing Association; Provider
53% CONTRACT MANAGED
1% share of overall
operator spend
SELF OPERATED
47%
A strengthening economy and the implementation of the Affordable
Care Act (ACA) has created stronger demand for long term care
providers while also increasing cost and labor pressures on operators.
With an estimated 11.4 million people newly insured since the rollout
of the ACA, as well as an aging Baby Boomer generation, LTC
facilities are facing a shortage of qualified medical staff to meet the
demands of this larger patient population, similar to hospitals.
Overhauls to databases and changes in reimbursements also continue
to put pressure on the segment.
The growing economy has allowed for patients to be more selective
in their care options, which is being met by LTC operators improving
their offerings for costly and complex medical issues like Alzheimer’s
and dementia, while also enhancing entertainment, recreation, and
foodservice options to attract more residents.
With the ACA providing coverage for at-home care and the expanding
coverage of Medicaid, the segment will continue to see an expansion
in short-term care, at-home care, adult daycare, and other consumer-
driven care options, even as cost and staffing pressures persist.
Growth will be subdued in spite of the increased demand.
Similarly to Hospitals, the strong growth expected to occur within Long
Term Care is the result of a growing industry overall. More patients
and more foodservice options are creating a shift in purchasing.
While revenues may be rising, profits are not necessarily following
suit.
LO
NG
TE
RM
CA
RE
86
10%
5%
7%
8%
13%
57%
Other
F&B Manager
General Manager
Executive Chef
Director of Dining Services
Foodservice Director
F&B DECISION MAKERS
PREDICTIONS
39%
24%
%
JOB RESPONSIBILITY / EXPERIENCE PERSONAL PROFILE
GENDER
AGE
21 AVERAGE YEARS OF
INDUSTRY EXPERIENCE NU
RS
ING
& L
on
g T
erm
Ca
re
39% 61%
SOURCE: Datassential PULSE
0%
10%
21%
36%
33%
0%
Under 25 25 to 34 35 to 44 45 to 54 55 to 64 Over 65
LO
NG
TE
RM
CA
RE
87
SOURCE: American Health Care Association; US Census
NURSING HOME FACILITIES
NURSING HOME RESIDENTS & BEDS
NURSING HOME EMPLOYEES
1,420,217 1,410,902 1,399,900 1,396,473 1,389,241 1,383,806 1,382,201 1,371,818 1,368,351
1,671,238 1,668,895 1,666,797 1,703,398 1,703,486
1,667,884 1,666,805 1,665,969 1,662,757
2007 2008 2009 2010 2011 2012 2013 2014 2015
Residents Beds
15,772
15,711
15,679 15,690
15,702
15,677 15,681
15,659
15,632
2007 2008 2009 2010 2011 2012 2013 2014 2015
NU
RS
ING
& L
on
g T
erm
Ca
re 1,640,524
1,646,321
1,587,187
1,613,630
1,632,889 1,639,995
1,704,128
2006 2007 2008 2009 2010 2011 2012
LO
NG
TE
RM
CA
RE
88
SOURCE: Senior Living Executive
NU
RS
ING
& L
on
g T
erm
Ca
re
LEADING NURSING FACILITY CHAINS RANKED BY CAPACITY
System Capacity Facilities
2014 2013 % Change 2014 2013 % Change
Genesis Healthcare Corp. 44,805 49,000 -8.56% 380 411 -7.54%
HCR Manor Care 38,027 38,328 -0.79% 280 218 28.44%
Golden Living 30,267 30,937 -2.17% 21 302 -93.05%
Life Care Centers of America 29,338 29,338 0.00% 223 223 0.00%
Sava Senior Care 24,154 24,154 0.00% 200 200 0.00%
Consulate Health Care (new in 2012) 22,048 22,048 0.00% 202 202 0.00%
Signature Healthcare 14,157 11,089 27.67% 113 90 25.56%
The Ensign Group 13,205 11,124 18.71% 124 119 4.20%
Extendicare Health Services 12,086 14,778 -18.22% 90 146 -38.36%
Kindred Healthcare 11,779 12,638 -6.80% 90 100 -10.00%
Evangelical Lutheran 11,444 11,444 0.00% 166 166 0.00%
Preferred Care Partners (new in 2012) 10,587 10,587 0.00% 107 107 0.00%
UHS Pruitt Corp. 10,299 9,639 6.85% 97 86 12.79%
National Healthcare Corp. 9,462 8,943 5.80% 74 69 7.25%
American Senior Communities 7,511 6,931 8.37% 63 60 5.00%
Daybreak Venture 7,283 7,283 0.00% 69 69 0.00%
Petersen Health Care 7,250 7,452 -2.71% 102 108 -5.56%
Creative Solutions in Healthcare 6,178 6,060 1.95% 56 63 -11.11%
Covenant Care 5,972 5,972 0.00% 57 57 0.00%
Saber Healthcare Group 5,831 5,393 8.12% 67 62 8.06%
LO
NG
TE
RM
CA
RE
89
LO
NG
TE
RM
CA
RE
NOTEWORTHY NEWS
“Reducing Readmissions with Reliable Meal
Access”- June 17th 2015; FoodManagement.com
A pilot program between Eskenazi Health and Meals on Wheels will study correlation between readmissions of at-risk seniors and access to healthful meals post-discharge. Food plays a powerful role in a patient’s ability to heal both in the hospital and out. But many seniors—especially those with chronic obstructive pulmonary disease (COPD) or congestive heart failure—are discharged once their health stabilizes without consistent and reliable access to healthful meals at home.
“Banner Health Launches Major Healthy Food Initiative”- January 26th, 2015; Food Management.com
Banner Health is undergoing a massive revamping of its retail dining and vending in order to promote health and wellness. A new Healthy Options program is being introduced in Banner facilities in eight states. Initially, the focus is on vending, where 80 percent of choices will now be healthier, but the initiative is then slated to be introduced into cafeterias and catering. Banner Health is a non-profit health system that provides emergency care, hospital care, hospice, long-term/home care, outpatient surgery centers, labs, rehab services, pharmacies, and more recently has begun operating primary care physician clinics.
“More Caregivers Are No Spring Chickens Themselves”- July 3rd, 2015; The New York Times
Every few years, the National Alliance for Caregiving and the AARP Public Policy Institute survey the state of American caregiving; their latest report, published last month, focused in part on caregivers over 75. They constitute 7 percent of those who provide unpaid care to a relative or friend, the survey found — more than three million seniors helping with the so-called activities of daily living. The aging of the population has thrust more seniors into this role, said Gail Hunt, president and chief executive of the National Alliance for Caregiving. “There didn’t use to be so many 95-year-olds,” she said, “and someone’s caring for those 95-year-olds.”
“Drop-In Chefs Help Seniors Stay In Their Own Homes” – April 27th, 2015; NPR
A healthy diet is good for everyone. But as people get older, cooking nutritious food can become difficult and sometimes physically impossible. A pot of soup can be too heavy to lift. And there's all that time standing on your feet. It's one of the reasons that people move into assisted living facilities. According to some estimates, there are hundreds of thousands, maybe even a million seniors living in their own homes who are malnourished. In Long Term Care facilities, up to 50 percent may suffer from malnutrition. This leads to increased risk for illness, frailty and falls.
90
Senior Living ON-SITE FOODSERVICE
SE
NIO
R L
IVIN
G
34,385 locations $3.4 billion operator F&B spend
23%
breakfast
37%
lunch
30%
dinner
21% use GPOs
PREDICTIONS
10%
snack
Broadline distributors 100%
Supermarket / grocery 45%
Specialty distributors 30%
Cash & carry stores 28%
Club stores 26%
Local farms 15%
Direct from manufacturers 13%
Third party websites 8%
Food brokers 8%
REFLECTIONS
DAYPART SHARE
PURCHASE SOURCES (% who buy from)
39%
151 DAILY PATIENTS
Breakfast 93
Lunch 120
Dinner 112
$6.74 DAILY COST PER PERSON
151 AVERAGE # BEDS
AVERAGE DAILY MEALS SERVED
TYPICAL LOCATION SIZE
SOURCE/ESTIMATES BASED ON: Datassential PULSE; American Health Care Association; American Senior Housing Association; Provider
2% share of overall
operator spend
68% CONTRACT MANAGED
32% SELF OPERATED
Provisions in the Affordable Care Act (ACA) increased the number of
people covered by Medicaid and also made at-home care more
accessible to a larger population. At the same time, gains in the
economy and increasing disposable income are allowing more people
to stay at home longer as opposed to moving into a senior living facility.
Even as the population over 65 continues to increase, occupancy
rates have declined. To combat these declining occupancy rates,
many operators have begun experimenting with new food offerings and
preparations, as well as more flexible dining options as a way to attract
more residents. Operators have also experienced large increases in
food costs over the past year, likely due to shifts in purchasing. This is
a trend likely to continue.
Even as the number of individuals over age 65 is expected to grow over
3% annually for the next five years, opportunities for short-term growth
within the segment will remain muted. With the ACA providing
coverage for at-home care and the expanding coverage of Medicaid,
there will be an expansion in short-term care, at-home care, adult
daycare, and other consumer-driven care options at the expense of
senior living facilities. In the more distant future, the rising aging
population may eventually lead to an increase in facilities. As seniors
continue to be more active than past generations, senior living
foodservice operators will attempt to improve their offerings as a
way to attract more residents by providing a wider variety of choices
as well as increased flexibility in dining.
92
6%
6%
11%
19%
25%
34%
Other
F&B Manager
General Manager
Executive Chef
Director of Dining Services
Foodservice Director
F&B DECISION MAKERS
PREDICTIONS
39%
29%
24%
%
JOB RESPONSIBILITY / EXPERIENCE PERSONAL PROFILE
GENDER
AGE
20 AVERAGE YEARS OF
INDUSTRY EXPERIENCE
47% 53%
SOURCE: Datassential PULSE
4%
9%
23%
30%
26%
8%
Under 25 25 to 34 35 to 44 45 to 54 55 to 64 Over 65
SE
NIO
R L
IVIN
G
93
SOURCE: Provider
NU
RS
ING
& L
on
g T
erm
Ca
re
2015 TOP 10 ASSISTED LIVING PROVIDERS
Rank Company Location Resident Capacity
1 Brookdale Brentwood, TN 62,873
2 Sunrise Senior Living McLean, VA 15,106
3 Five Star Quality Care Newton, MA 11,473
4 Atria Senior Living Group Louisville, KY 10,081
5 Meridian Senior Living LLC Hickory, NC 9,000
6 Enlivant (formerly Assisted Living Concepts) Chicago, IL 8,445
7 Senior Lifestyle Corp. Chicago, IL 7,672
8 Capital Senior Living Corp. Dallas, TX 6,300
9 Elmcroft Senior Living Louisville, KY 5,763
10 Merrill Gardens LLC Seattle, WA 4,696
2015 TOP 10 INDEPENDENT LIVING PROVIDERS
Rank Company Location Resident Capacity
1 Holiday Retirement Lake Oswego, OR 39,080
2 Brookdale Brentwood, TN 32,918
3 Erickson Living Management Cantonsville, MD 22,039
4 Life Care Services LLC Des Moines, IA 20,714
5 Five Star Quality Care Newton, MA 10,517
6 USA Properties Fund Inc. Roseville, CA 8,261
7 Atria Senior Living Group Louisville, KY 8,110
8 Capital Senior Living Corp Dallas, TX 7,600
9 Senior Lifestyle Corp. Chicago, IL 7,183
10 Leisure Care LLC/One-Eighty Seattle, WA 6,943
SE
NIO
R L
IVIN
G
94
SOURCE: US Census
NU
RS
ING
& L
on
g T
erm
Ca
re
POPULATION PROJECTIONS FOR OVER 65
Year Total Male Female
2013 44,688,884 19,576,180 25,112,704
2014 46,179,004 20,304,644 25,874,360
2015 47,695,349 21,040,904 26,654,445
2016 49,223,566 21,774,254 27,449,312
2017 50,793,455 22,525,547 28,267,908
2018 52,437,307 23,304,893 29,132,414
2019 54,157,205 24,115,191 30,042,014
2020 55,968,870 24,970,314 30,998,556
2021 57,745,530 25,802,635 31,942,895
2022 59,597,840 26,668,446 32,929,394
2023 61,424,270 27,519,727 33,904,543
2024 63,203,475 28,344,553 34,858,922
2025 65,051,745 29,203,697 35,848,048
0
10,000,000
20,000,000
30,000,000
40,000,000
50,000,000
60,000,000
70,000,000
Total Male Female
SE
NIO
R L
IVIN
G
95
NOTEWORTHY NEWS
“Senior Community Offers Chef-driven Dining Venue
Options ”- May 25th, 2015; Foodservice Director
Over the last decade, senior citizens are being given a choice when it comes to retired living. Baby Boomers expect retired living to have all the amenities without the hassle of cleaning or keeping up household chores such as landscaping. It’s not just about the cliché Friday-night bingo anymore. In a facility such as Splendido, residents also enjoy services from the movie theater, swimming pool and spas to only the best when it comes to dining choices.
“The Green House Effect: Homes for the Elderly to Thrive”- December 15th, 2014; The
New York Times
The Green House project, co-founded in 2003 by Dr. Thomas and Steve McAlilly of Mississippi Methodist Senior Services, has since spread to 27 states, with four more soon to join the movement. Green House residents, whose care is financed by Medicaid, Medicare or private funds, live in cottages with private rooms and private baths. They participate, when able, in food preparation and eat in a communal setting that is more like a home dining room than a cafeteria. Unlike the regimented meals in nursing homes, Green House residents are free to choose when to eat.
“Celebrity Chefs Spice Up Senior Living Communities”- September 15th, 2014; Food
Management.com
Regan Medzhibzher, the director of marketing for Morrison Senior Living, says (the use of celebrity chefs) stems from generational research showing today’s seniors are well traveled and looking for experiences that stimulate their senses. These interactive demonstrations with famous chefs well known for ethnic cuisines are an ideal blend of those two factors.
“5 factors that make a difference in senior dining” –
July 6th, 2015; Food Management.com
Individualized or “person-centered” care is a strong trend in senior living. Nutrition is a cornerstone of that individualized care. In a person-based setup, nurses and dietitians look at such things as a resident’s nutritional needs, oral function, food preferences, ailments and any sensory or physical impairments.
“America’s Seniors Find Middle-Class ‘Sweet Spot’” – June 14th, 2015; The New York Times
Supported by income from Social Security, pensions and investments, as well as an increasing number of paychecks from delaying retirement, older people not only weathered the economic downturn that began in 2007 but made significant gains, a New York Times analysis of government data has found. As a result, America’s middle class is graying.
SE
NIO
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IVIN
G
96
Vending ON-SITE FOODSERVICE
VE
ND
ING
4,011 locations $8.1 billion operator F&B spend
PREDICTIONS REFLECTIONS
SOURCE/ESTIMATES BASED ON: Datassential; Vending Times; Vending Market Watch; US Census
Location 2014 2013 % Change
Manufacturing 22% 22% 0%
Offices 22% 20% 8.9%
Hotels/ Motels 6.6% 6.4% 3.1%
Restaurants/ Bars 2.8% 2.9% -3.4%
Retail 7.8% 8% -2.5%
Healthcare 8.2% 8.1% -1.2%
C&U 6.8% 7.2% -5.6%
K-12 7.4% 7.6% -2.6%
Military 3% 2.9% 3.4%
Correctional 3.3% 3.1% 6.5%
Other 10.1% 11.5% -12.2%
Category 2014 2013 % Change
Cold Beverages 37.7% 34.1% 10.6%
Candy/ Snacks 33.3% 28.4% 17.3%
OCS 13.3% 14.7% -9.5%
Micro Markets 8.9% 5.1% 74.2%
Vended Food 6.5% 7.3% -11.0%
Hot Beverages 5.2% 4.4% 18.2%
Ice Cream 2.9% 2.8% 3.6%
Milk 1.9% 2.5% -24.0%
Other 7.7% 4.6% 67.4%
VENDING SALES BY LOCATION VENDING SHARE OF SALES BY OFFERINGS
4% share of overall
operator spend
The effects of K-12 meal regulations are being felt this year as many
vending operators within K-12 report having a difficult year. Many
vending operators are shifting and consolidating their accounts to
segments that are more stable, such as business & industry. The bright
spot in the segment remains the growth of micro markets, where the
flexibility and variety available allow for higher profit margins.
Innovations in technology have made locations more efficient and
profitable. Consumer demand is still shifting towards a wider variety of
healthier options (which tend to demand a higher price point), and micro
markets remain a driving force for growth. Increased competition
remains as c-stores and restaurants add more snacking options and
customers purchase bulk snacks from dollar and club stores.
A strengthening economy will allow for more disposable income to be
spent on all foodservice, including vending, however the outlook is
moderate as the effects of K-12 meal reform will continue to have a
negative impact on the segment.
The continually-changing foodservice landscape will force the segment to
evolve. Competition will increase from segments such as restaurants and
supermarkets as they grow their snacking options, and rising demand for
healthier and more innovative selections will also add pressure to adapt.
Advancements in technology and the popularity of micro markets will
continue to play a positive role in the segment’s success.
98
99
Catering ON-SITE FOODSERVICE
CA
TE
RIN
G
10,625 locations $2.3 billion operator F&B spend
PREDICTIONS REFLECTIONS
SOURCE/ESTIMATES BASED ON: Datassential; Special Events Magazine
Company 2014 Estimated # of Events 2014 Estimated Revenue (in millions)
Abigail Kirsch- New York, NY 2,500 $30
A Divine Event- Atlanta, GA 900 $12
A Legendary Event - Atlanta, GA 2,500 $15
Blue Plate - Chicago, IL 7,000 $24
Catering By Michael‘s Family Of Companies - Morton Grove, IL 680 full-service; 7,300 drop-off $12
Culinary Capers - Vancouver, BC ~2,000 staffed events; ~1,500 deliveries $12
Design Cuisine - Arlington, VA 2,500 $24 - $27
Epicurean Culinary Group - Centennial, CO over 1,000 $12 - $15
Great Performances - New York, NY 1,500 - 2,500 $40 - 45
Jewell Events Catering - Chicago, IL 10,000 $20
McCalls Catering & Events - San Francisco, CA 700 to 800 $30
Neuman's - New York, NY 500 to 700 $15
Patina Group Catering - Los Angeles, CA 7,500 to 8,000 $35
Ridgewells - Washington, DC 12,500 $41
Stephen Starr Events - Philadelphia, PA 2,085 $49
Windows Catering Co. - Alexandria, VA 15,000 $22
Wolfgang Puck Catering - Los Angeles, CA 100,000 $150 - $170
LEADING CATERING COMPANIES
1% share of overall
operator spend
Catering has had a strong year and will continue to do well as the
post-recession economy continues to strengthen. Individuals and
businesses are willing and able to spend on events and occasions and
are increasingly using catering firms to plan their events.
Consumers are more educated and interested in current food trends,
and are creating more demand for higher-end dishes reflecting that
knowledge.
The outlook is good for the catering segment as the economy
continues to strengthen, disposable incomes increase, and operators
benefit from continued growth in the culinary workforce.
As other foodservice segments move into catering, like fast casuals and
food trucks, pure caterers will face increased competition and be
expected to expand their offerings. Increasing consumer knowledge and
interest in the food industry and trends will dictate the need for more
innovative and inventive offerings.
100
Military ON-SITE FOODSERVICE
MIL
ITA
RY
523 locations $1.1 billion operator F&B spend
PREDICTIONS REFLECTIONS
Year Army Navy Marine Corps Air Force Total % Change From
Prior Year
2008 542,565 331,682 198,902 329,078 1,402,227 2.49%
2009 553,326 329,518 204,153 334,671 1,421,668 1.39%
2010 564,926 327,447 202,433 334,561 1,429,367 0.54%
2011 558,571 322,629 200,225 332,724 1,414,149 -1.06%
2012 539,191 317,054 196,024 332,786 1,385,055 -2.06%
2013 519,786 323,529 192,787 330,092 1,366,194 -3.39%
2014 508,210 326,054 187,891 316,332 1,338,487 -2.03%
2015 491,063 321,315 184,688 307,378 1,304,444 -2.54%
US ACTIVE MILITARY PERSONNEL
SOURCE: US Department of Defense; Datassential
1% share of overall
operator spend
The military continues to face long-term budget cuts and troop
reductions. These changes are impacting foodservice operations as
many facilities are seeing decreases in funding and being forced to
increase meal costs. The segment is contracting in the face of these
budgetary shifts.
Up to $1 trillion in military funding is expected to be cut in the next few
years, and the military is preparing for them by consolidating
infrastructure, cutting training, and reducing inefficiencies. In the
future, a reduction of troop levels and proposed smaller wage
increases will also be enacted to account for the budget cuts.
Foodservice is likely to continue to contract as the reduction of
enlisted personnel and the overall size of the military decreases over
the next few years. Meal costs are expected to continue to increase,
and utilization will also likely decrease, further impacting the segment.
Long-term, the military will continue to address spending cuts across all
four services, leading to a reduction in size in the years ahead. Calls for
a cut to the military commissary budget, specifically subsidies, will likely
be renewed. Department of Defense operations will continue to shift
from the Middle East to Asia-Pacific as part of the military ‘rebalancing’
program.
102
Year US Europe Former Soviet
Union
East Asia/
Pacific
North Africa/
Near East/
South Asia
Sub-Saharan
Africa
Western
Hemisphere
(excl. US)
Undistributed Total
2007 1,079,599 85,862 149 70,633 5,684 2,500 1,993 121,806 1,368,226
2008 1,118,638 81,582 133 66,750 3,451 1,643 2,039 127,991 1,402,227
2009 1,137,568 77,917 141 47,236 3,362 1,355 1,941 152,148 1,421,668
2010 1,137,716 79,940 162 44,537 5,786 1,731 1,958 157,537 1,429,367
2011 1,217,901 80,370 146 51,170 4,604 509 1,970 57,479 1,414,149
2012 1,199,556 72,198 187 54,025 4,805 489 2,105 39,157 1,372,522
2013 1,194,123 67,383 81 51,929 4,759 334 1,692 33,753 1,354,054
2014 1,148,530 65,356 85 79,794 5,074 371 1,586 4,496 1,305,292
US MILITARY WORLDWIDE DEPLOYMENT
SOURCE: US Department of Defense
MIL
ITA
RY
M
ILIT
AR
Y
103
MILITARY STANDARD MEAL RATE PRICES
SOURCE: US Department of Defense
Year Breakfast Lunch Dinner Brunch Supper Holiday Late Snack
2007 $2.00 $3.65 $3.65 $4.20 $5.15 $6.05 $2.35
2008 $2.10 $3.85 $3.85 $4.40 $5.40 $6.35 $2.45
2009 $2.30 $4.25 $4.25 $4.85 $5.95 $7.00 $2.70
2010 $2.30 $4.25 $4.25 $4.85 $5.95 $7.00 $2.70
2011 $2.30 $4.25 $4.25 $4.85 $5.95 $7.00 $2.70
2012 $2.45 $4.55 $4.55 $5.20 $6.40 $7.50 $2.90
2013 $2.50 $4.60 $4.60 $5.25 $6.45 $7.60 $2.95
2014 $2.55 $4.65 $4.65 $5.35 $6.55 $7.70 $3.00
2015 $3.45 $5.55 $4.85 $6.25 $7.50 $9.05 $3.45
MILITARY DISCOUNT MEAL RATE PRICES
Year Breakfast Lunch Dinner Brunch Supper Holiday Late Snack
2007 $1.65 $3.15 $3.15 $3.60 $4.30 $5.15 $2.00
2008 $1.75 $3.30 $3.30 $3.80 $4.50 $5.40 $2.10
2009 $1.95 $3.65 $3.65 $4.20 $4.95 $5.95 $2.30
2010 $1.95 $3.65 $3.65 $4.20 $4.95 $5.95 $2.30
2011 $1.95 $3.65 $3.65 $4.20 $4.95 $5.95 $2.30
2012 $2.10 $3.90 $3.90 $4.50 $5.30 $6.40 $2.45
2013 $2.10 $3.95 $3.95 $4.55 $5.35 $6.45 $2.50
2014 $2.15 $4.00 $4.00 $4.60 $5.45 $6.55 $2.55
2015 $2.60 $4.20 $3.65 $4.70 $5.75 $6.80 $2.80
MIL
ITA
RY
M
ILIT
AR
Y
104
Corrections ON-SITE FOODSERVICE
CO
RR
EC
TIO
NS
4,875 locations $1.2 billion operator F&B spend
Overcrowding, political pressures, and government budgetary issues will
continue to be concerns within the corrections segment. Privatization will
remain an option for short-term growth within the segment, however cost-
effectiveness and issues of prisoner welfare will remain and continue to be
a point of contention.
It is yet to be seen how a slow down in declining prisoner population
will impact the segment, however if the trend persists, foodservice will
likely be effected and experience an increase in costs.
PREDICTIONS REFLECTIONS
US PRISON POPULATION
SOURCE/ESTIMATES BASED ON: US Justice Department; Bureau of Justice Statistics; state and municipal reports; Datassential
Corrections has been experiencing a decline over the past few years, and
it appears that the negative trend may be losing some of its momentum.
Foodservice in this segment experienced a very slight increase, and
that could be a reflection of the overall prison population declining less
than in previous years. Troubles still persist for the segment, such as
budgetary shortfalls and reduced funding, however not as severe as in
years prior. Prisons facing these issues tend to see cutting food costs as
a viable option, adding to the challenge for operators in the segment.
Interest in private corrections firms remains high as they tend to have the
funds to build necessary facilities while being cost-efficient.
1% share of overall
operator spend
*Total Incarcerated does NOT include those on parole or probation
187,618 193,046 199,618 201,280 208,118 209,771 216,362 216,900 215,866
1,338,292 1,375,628 1,397,217 1,407,002 1,407,369 1,404,032 1,382,418 1,267,000 1,358,875
747,529 765,819 780,174 785,533 767,434 748,728 735,601 744,524 731,200
2,273,439 2,334,493 2,377,009 2,393,815 2,382,921 2,362,531 2,334,381 2,228,424 2,305,941
-
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
2005 2006 2007 2008 2009 2010 2011 2012 2013
Federal State Local TOTAL
106
SOURCE: Bureau of Justice Statistics
PRISON EXPENDITURES
CO
RR
EC
TIO
NS
C
OR
RE
CT
ION
S
STATE PRISON EXPENDITURES
Year Federal State Total % Change
2005 $6,624,068 $40,689,366 $47,313,434 3.50%
2006 $6,968,013 $42,720,103 $49,688,116 5.00%
2007 $7,073,146 $46,497,875 $53,571,021 8.80%
2008 $7,501,306 $49,897,531 $57,398,837 7.30%
2009 $8,015,780 $50,382,439 $58,398,219 1.00%
2010 $8,506,439 $48,549,551 $57,055,990 -3.60%
2011 $8,491,819 $49,166,999 $57,658,818 1.3%
2012 $8,978,000 $48,680,649 $26,397,777 -1.0%
Year
Institutional Current Operations Per Capita Expenditures*
Dollars (in billions) % Change From
Prior Year Dollars (mean)
2000 $35.6 2.6% $30,449
2001 $38.3 7.6% $32,459
2002 $38.2 -0.3% $31,588
2003 $37.9 -0.8% $30,949
2004 $36.5 -3.7% $29,376
2005 $35.7 -2.2% $28,263
2006 $36.4 2.0% $28,028
2007 $37.3 2.5% $28,319
2008 $38.0 1.9% $28,722
2009 (preliminary data) $38.6 1.6% $29,270
2010 (projection) $37.3 -3.4% $28,323
* Calculated at national level 107
DISTRIBUTION & CONTRACT MANAGEMENT FOODSERVICE CONTRACTORS | DISTRIBUTORS
BUYING GROUPS | GPOs
Foodservice Contractors DISTRIBUTION & CONTRACT MANAGEMENT
BU
SIN
ES
S &
IN
DU
ST
RY
Rank Company 2014 Revenue 2013 Revenue
% Revenue Change Total Contracts
(2014) (in millions) (in millions)
1 Compass Group North America $13,600 $12,800 6% n/a
2 Aramark Corp. $10,232 $9,666 6% 2,656
3 Sodexo, Inc. $8,800 $8,900 -1% n/a
4 Delaware North Companies $2,800 $2,500 12% n/a
5 Centerplate $850 $850 0% 300
6 AVI Foodsystems, Inc. $615 $600 3% n/a
7 Thompson Hospitality $499 $470 6% 170
8 Trusthouse Services Group $498 $474 5% 617
9 Healthcare Services Group, Inc. $447 $391 14% 900
10 Guest Services, Inc. $388 $378 3% 108
11 Ovations Food Services, LP $341 $286 19% 140
12 Guckenheimer Enterprises, Inc. $298 $239 25% 170
13 Legends Hospitality $275(e) $250(e) 10%(e) 15(e)
14 Unidine Corp. $249 $197 26% 190
15 CulinArt, Inc. $242 $211 15% 202
16 Metz Culinary Management $201 $162 24% 207
17 Gourmet Services, Inc. $200(e) $200(e) 0%(e) 20(e)
18 Southwest Foodservice Excellence $169 $145 17% 92
19 Whitsons Culinary Group $165 $160 3% 214
20 Parkhurst Dining $155 $132 17% 53
21 Nutrition Group $123 $102 21% 450
22 Treat America, Ltd. $111 $121 -8% 2,600
23 Taher, Inc. $110 $110 0% 241
24 Thomas Cuisine Management $104 $90 16% 70
25 Cura Hospitality $101 $95 7% 57
SOURCE: Food Management
LEADING CONTRACT MANAGEMENT COMPANIES 1-25 F
OO
DS
ER
VIC
E C
ON
TR
AC
TO
RS
NOTE: Companies followed by a (e) include estimates from Food Management
110
BU
SIN
ES
S &
IN
DU
ST
RY
SOURCE: Food Management
LEADING CONTRACT MANAGEMENT COMPANIES 26-50 F
OO
DS
ER
VIC
E C
ON
TR
AC
TO
RS
Rank Company 2014 Revenue 2013 Revenue
% Revenue Change Total Contracts
(2014) (in millions) (in millions)
26 Continental Services $84 $74 14% 240
27 Revolution Foods $80(e) $70(e) 14%(e) n/a
28 Southern Foodservice $79 $73 8% 78
29 Creative Dining Services $74 $69 7% 68
30 MMI Dining Systems $72 $69 4% 156
31 LPM Affiliated Companies dba Epicurean Feast $63 $61 3% 101
32 Pomptonian Food Service $62 $67 -8% 80
33 Lessing's Food Service Management $55(e) $55 0%(e) 80(e)
34 ABM Healthcare Support Services $55 $54 2% 26
35 Lancer Hospitality $53 $49 8% n/a
36 Epicurean Group $46 $40 15% 51
37 Food Management Group, Inc. $44 $42 5% 178
38 Cafe Services, Inc. $39 $34 16% 143
39 Sterling Spoon Culinary Management $39 $37 5% 17
40 HHS Culinary & Nutrition Solutions $39 $25 56% 27
41 Lakeview Center, Inc. dba Gulf Coast Enterprises $38 $40 -5% 17
42 Corporate Chefs, Inc. $35 $38 -8% 70
43 Brock & Co., Inc. $34 $33 3% 56
44 Prince Food Systems, Inc. $34 $38 -11% 46
45 Quest Food Management $32 $26 23% 58
46 Food For Thought $30 $28 7% 20+
47 Luby's Culinary Services $28 $28 0% 37
48 Food Services, Inc. $28 $25 12% 25
49 Lintons Managed Services $25 $22 14% 92
50 RMA Hospitality Management $24 $24 0% 33
NOTE: Companies followed by a (e) include estimates from Food Management
111
SOURCE: Food Management
FO
OD
SE
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ICE C
ON
TR
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TO
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CHANNEL BREAKDOWN OF TOP 10 FSM COMPANIES
B&I Education Healthcare Sports
/Leisure Military
Senior
Living Other Notes
Compass Group
North America 29% 24% 29% 15% 3%
Notable Subsidiaries-
Bon Appétit – B&I, education
Canteen- B&I
Eurest- B&I
FLIK- Education
Restaurant Associates - Hospitality, B&I
Levy Restaurants- Sports & Entertainment
Aramark Corp. 22% 37% 20% 22%* * includes Corrections
Sodexo, Inc. 47%* 24% 4% 1%* *47% (C&U 38%, K-12 9%) *Other 1%-
Recreation/ Convention/conference centers
Delaware North
Companies 3% 71%* 26%*
*71% (stadiums/arenas 53%, Parks and Rec
11%, Gaming 5%, Museums/ Performance
arts 3%) *Other 26%-Airports
Centerplate 88%* 12% * 88% (stadiums/arenas 48%,
Convention/conference centers 33%,
Museums/Performance arts 7%)
AVI
Foodsystems,
Inc.
47% 21% 3%* 2% 3%*
*3% S&L (Convention/conference centers 2%,
stadiums/arenas 1%, museums/performance
arts center 1%) *3% Other (Govt. 1%,
Transportation 2%)
Thompson
Hospitality 38% 43%* 9% 10% * 43% (C&U 31%, K-12 12%)
Trusthouse
Services Group 5% 30%* 5% 47% 13% *30% (C&U 18%, K-12 12%)
Healthcare
Services Group,
Inc.
100%
Guest Services,
Inc. 50% 15%* 8% 1% 25%*
* 15 S&L (Parks & Rec 10%,
Museum/Performance arts center 5%) *25%
Other(Government)
112
BU
SIN
ES
S &
IN
DU
ST
RY
COMPASS GROUP NORTH
AMERICA – REVENUE BREAKDOWN
SOURCE: Food Management
ARAMARK CORP – REVENUE BREAKDOWN
SODEXO – REVENUE
BREAKDOWN
DELAWARE NORTH –
REVENUE BREAKDOWN
CENTERPLATE –
REVENUE BREAKDOWN
FO
OD
SE
RV
ICE C
ON
TR
AC
TO
RS
29%
24%
29%
15%
3%
B&I
Education
Healthcare
Sports/leisure
Military
22%
37%
20%
22%
B&I
Education
Healthcare
Sports/leisure
38%
9%
24%
4%
C&U K-12
Healthcare Military
3%
53% 26%
11%
5%
3%
B&I
Stadiums/Arenas
Arirports
Parks & Rec
Gaming
Museums/Performance Art
48%
33%
7%
12%
Stadiums/Arenas
Convention/conference centers
Museums/Performance Art
Other
113
BU
SIN
ES
S &
IN
DU
ST
RY
NOTABLE US CLIENTS (no specific order)
SOURCE: Compass Group, Aramark, Sodexo, Delaware North, Centerplate, AVI Foodsystems, Guest Services
FO
OD
SE
RV
ICE C
ON
TR
AC
TO
RS
Compass Group
North America Aramark Corp. Sodexo, Inc.
Delaware North
Companies Centerplate
AVI
Foodsystems,
Inc.
Guest Services,
Inc.
Microsoft Soldier Field
Chicago
Botanical
Gardens
Grand Canyon
National Park Levi's Stadiums Xerox Boeing (VA)
IBM Fenway Park Seattle Aquarium Lambeau Field Saks 5th Avenue Ford Motor
Company
Northrop
Grumman
(Baltimore)
United
Technology
MGM Grand,
Vegas Nokia
LAX Airport, Los
Angeles
Cobo Center,
Detroit GM
United States
Nuclear
Regulatory
Commission
(Rockville,
Maryland)
US Marine Corps Olympic National
Park, WA
Glaxo Smith
Kline
Food Network
Kitchen, NYC Sun Life Stadium Ohio State
Office of Naval
Intelligence
Louisiana State
University Cleveland Zoo
International
Monetary Fund
(IMF)
Kennedy Space
Center
New Orleans
Convention
Center
Starbucks Pfeiffer Big Sur
Lodge (California)
Texas A&M Experience Music
Project, Seattle US Air Force
Yosemite
National Park Safeco Field Subway
Mount Rainier
National Park
(WA)
DC Public
Schools
Denali National
Park, AK
Exxon Mobil
(offshore drilling
locations)
Niagara Falls
State Park AT&T Park Verizon
The Marbella
(Naples, FL)
114
BU
SIN
ES
S &
IN
DU
ST
RY
NOTEWORTHY NEWS
FO
OD
SE
RV
ICE C
ON
TR
AC
TO
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“Aramark Awarded Yosemite National Park
Concession Contract” – June 17th, 2015;
National Parks Traveller.com
The National Park Service today announced the selection of an Aramark subsidiary, Yosemite Hospitality, LLC, as the primary concessionaire for Yosemite National Park. Yosemite Hospitality will provide retail, overnight accommodations, fuel sales, bike and raft rentals, and food and beverage to park visitors for the next fifteen years. It is the single largest concession contract in the national park system, and will take effect on March 1, 2016.
“Compass, Bon Appetit Announce "Imperfect
Produce" Recovery Program” – March 20th, 2015;
FoodManagement.com
Compass Group USA and its Bon Appetit Management Co. unit have announced the launch of Imperfectly Delicious Produce (IDP), an initiative aimed at using fruits and vegetables that have traditionally been left in fields to rot because they are of less than required size or shape.
“Sodexo Lands U.S. House of Representatives
Contract” – June 9th, 2015;
Food Management.com
Sodexo has been awarded a four-year contract with the U.S. House of Representatives starting August 10, 2015 that includes management of food service operations for all House cafeterias, catering services and vending machines. Sodexo replaces the previous operator, Restaurant Associates, which continues to provide food service to the U.S. Senate and the U.S. Capitol Visitor Center.
“Sodexo’s Food Truck Concept Rolls into Rock Hill Schools” – February 17th, 2015; Food Management
It’s hard to get teens to take school meals seriously even if they are on closed campuses. The coolness factor associated with food trucks seems to be a good way to put a dent in that mindset and Sodexo is giving it the old high school try with a truck concept called Street Eatz. The mobile eatery is being piloted at a number of client locations, including Rock Hill (S.C.) Schools, where the vehicle—actually a trailer towed behind a catering van—is rotating weekly through the district’s three high schools with different daily menus that are distinct from what is being served in the cafeteria.
“Delaware North Reshuffles Top Management”- January 7th, 2015;
FoodManagement.com Delaware North Chairman Jeremy Jacobs, Sr., has announced that his sons, Louis and Jeremy, Jr., will succeed him as co-CEOs of the company while a third son, Charlie, will become CEO for Delaware North’s Boston Holdings unit.
115
Distributors DISTRIBUTION & CONTRACT MANAGEMENT
Broadline System Specialty Redistributor Cash & Carry
Delivery Direct to
Operators
Direct to
Operators
Direct to
Operators
Direct to
Distributors None
Products
Large Variety,
Multiple
Categories
Limited Variety,
Client Specific
Limited Selection,
Category Specific
Limited Variety,
Category Specific Large Variety
Accessibility Most Operators Chains,
Multi-Units Most Operators Most Distributors
Independent
Operators
Service DSR Account Mgr,
Online DSR, CSR DSR, CSR In-Store Only
Pricing /
Margin
Higher,
Street
Low,
Contract
Higher,
Street ------ High
SOURCE: Datassential
DIS
TR
IBU
TO
RS
DISTRIBUTOR SUMMARY
117
Company Markets Served
SYSCO Corporation C-Store, Institutional Accounts, Restaurants
US Foods Inc. Institutional Accounts, Restaurants
Performance Food Group Institutional Accounts, Restaurants
Reinhart FoodService LLC C-Store, Groceries, Institutional Accounts, Restaurants
Food Services of America Institutional Accounts, Restaurants
Maines Paper & Food Service Inc. C-Store, Institutional Accounts, Restaurants
Gordon Food Service Inc. C-Store, Discount Stores, Institutional Accounts, Restaurants
Ben E. Keith Foods Institutional Accounts, Restaurants
Sherwood Food Distributors C-Store, Discount Stores, Grocery, Institutional Accounts Restaurants
Affiliated Foods Inc. C-Store, Discount Stores, Drug Stores, Grocery, Institutional Accounts Restaurants
AMCON Distributing C-Store, Discount Stores, Drug Stores, Grocery, Institutional Accounts, Restaurants
Cheney Brothers, Inc. Institutional Accounts, Restaurants
Labatt Food Service Institutional Accounts, Restaurants
J. Polep Distribution Foodservice C-Store, Discount Stores, Drug Stores, Grocery, Institutional Accounts, Restaurants
Liberty USA Inc. C-Store, Discount Stores, Drug Stores, Grocery, Institutional Accounts, Restaurants
Agar Supply Company C-Store, Grocery, Institutional Accounts, Restaurants
Anderson-DuBose Restaurants
Perkins C-Store, Grocery, Institutional Accounts, Restaurants
Nicholas & Co C-Store, Grocery, Institutional Accounts, Restaurants
Pitco Foods C-Store, Discount Stores, Drug Stores, Grocery, Institutional Accounts, Restaurants
General Trading Co Inc. C-Store, Discount Stores, Drug Stores, Grocery, Institutional Accounts, Restaurants
Doerle Foodservices LLC C-Store, Institutional Accounts, Restaurants
Southco Distributing Co. C-Store, Discount Stores, Drug Stores, Grocery, Institutional Accounts, Restaurants
Lipari Foods Inc. C-Store, Grocery, Institutional Accounts, Restaurants
Pate Dawson Co Institutional Accounts, Restaurants
DIS
TR
IBU
TO
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LEADING BROADLINE DISTRIBUTORS
SOURCE: Chain Store Guide
*Note- sorted by size according to Chain Store Guide size estimates
118
Company Markets Served
Martin Brothers Distribution C-Store, Grocery, Institutional Accounts, Restaurants
BiRite Foodservice Institutional Accounts, Restaurants
Curtze Foodservice Institutional Accounts, Restaurants
C.D. Hartnett Company C-Store, Discount Stores, Grocery, Institutional Accounts, Restaurants
Sofo Foods C-Store, Discount Stores, Institutional Accounts, Restaurants
Feesers C-Store, Grocery, Institutional Accounts, Restaurants
Topicz C-Store, Grocery
Allen Bros. Wholesale Distributors C-Store, Discount Stores, Drug Stores, Grocery, Institutional Accounts, Restaurants
Glazier Foods C-Store, Grocery, Institutional Accounts, Restaurants
Y. Hata & Co. C-Store, Grocery, Discount Stores, Institutional Accounts, Restaurants
Van Eerden Foodservice Co C-Store, Institutional Accounts, Restaurants
Dierks Waukesha C-Store, Grocery, Institutional Accounts, Restaurants
Goldberg and Solovy Foods Institutional Accounts, Restaurants
City Line Distributors Institutional Accounts, Restaurants
Costa Fruit & Produce Co. C-Store, Grocery, Institutional Accounts, Restaurants
DiCarlo Food Service C-Store, Grocery, Institutional Accounts, Restaurants
J. Kings Food Service Professionals Institutional Accounts, Restaurants
Jordano's Institutional Accounts, Restaurants
Pocono Produce Co. Institutional Accounts, Restaurants
Jose Santiago C-Store, Institutional Accounts, Restaurants
HFM FoodService C-Store, Institutional Accounts, Restaurants
Clark National C-Store, Grocery, Institutional Accounts, Restaurants
Jacmar Foodservice Distribution Restaurants
Shamrock Foods Co. Institutional Accounts, Restaurants
DIS
TR
IBU
TO
RS
LEADING BROADLINE DISTRIBUTORS (CONT.)
SOURCE: Chain Store Guide
*Note- sorted by size according to Chain Store Guide size estimates
119
LEADING SYSTEM DISTRIBUTORS
LEADING SPECIALTY DISTRIBUTORS
DIS
TR
IBU
TO
RS
Company Markets Served
MBM Restaurants
McLane C-Store, Discount Stores, Drug Stores, Grocery, Restaurants
Martin Brower Restaurants
Golden State Foods Restaurants
Sygma Network Restaurants
PFG- Customized Support Services Restaurants
System Services of America Restaurants
Company Markets Served
United Natural Foods Inc. C-Store, Discount Stores, Drug Stores, Grocery, Institutional Accounts
VISTAR Specialty C-Store, Grocery, Institutional Accounts, Restaurants
DPI Specialty Foods Inc. Grocery stores
AJC International Grocery, Discount Stores, Institutional Accounts, Restaurants
FreshPoint Institutional Accounts, Restaurants
Don Institutional Accounts, Restaurants
True World Foods C-Store, Grocery, Restaurants
European imports Grocery, Institutional Accounts, Restaurants
SOURCE: Chain Store Guide
*Note- sorted by size according to Chain Store Guide size estimates
120
DIS
TR
IBU
TO
RS
LEADING CLUB STORES and CASH & CARRY
Company Open to the
Public Markets Served
Restaurant Depot/Jetro No Restaurant Depot- Restaurants
Jetro- C-Store, Discount Stores, Drug Stores, Grocery, Institutional Accounts,
Costco Yes C-Store, Discount Stores, Drug Stores, Grocery, Institutional Accounts, Restaurants
Sam's Club Yes C-Store, Discount Stores, Drug Stores, Grocery, Institutional Accounts, Restaurants
BJ's Yes C-Store, Grocery, Institutional Accounts, Restaurants
GFS Marketplace Yes C-Store, Institutional Accounts, Restaurants
Merchant's Mart Yes C-Store, Institutional Accounts, Restaurants
US Foods Chef's Store Yes C-Store, Grocery, Institutional Accounts, Restaurants
Smart & Final Yes C-Store, Grocery, Institutional Accounts, Restaurants
Pitco Foods No C-Store, Discount Stores, Drug Stores, Grocery, Institutional Accounts, Restaurants
LEADING RE-DISTRIBUTORS
Company Markets Served
Bunzl C-Store, Discount Stores, Drug Stores, Grocery, Institutional Accounts
DOT C-Store, Grocery, Institutional Accounts, Restaurants
Burris Logistics Institutional Accounts, Restaurants
Honor Foods Institutional Accounts, Restaurants
R3 C-Store, Discount Stores, Drug Stores, Grocery, Institutional Accounts
TSN C-Store, Discount Stores, Drug Stores, Grocery, Institutional Accounts
SOURCE: Chain Store Guide
*Note- sorted by size according to Chain Store Guide size estimates
121
66%
8%
6%
5%
6%
9%
Broadline Distributors
Specialty Distributors
Cash & Carry
Warehouse/ Clubs
Direct from Manufacturers
Other
91%
42%
40%
32%
31%
30%
24%
11%
8%
Broadline distributors
Specialty distributors
Direct from manufacturers
Cash & carry stores
Supermarket / grocerystores
Warehouse / club stores
Local farms
Direct through food brokers
Third party websites NOTfrom distributors
DIS
TR
IBU
TO
RS
SOURCE: Datassential PULSE
% OF OPERATORS WHO BUY FROM SHARE OF TOTAL PURCHASES
n=1076
QF1: Thinking specifically of the orders you place THROUGH YOUR PRIMARY DISTRIBUTOR, please indicate what percent of your orders are placed using the following methods.
122
68%
40%
36%
29%
18%
15%
15%
14%
12%
6%
Broadline distributors
Direct from manufacturers
Local farms
Specialty distributors
Warehouse / club stores
Cash & carry stores - in person
Cash & carry stores - delivery
Direct through food brokers
Supermarket / grocery stores
Third party websites NOT from distributors
DIS
TR
IBU
TO
RS
PURCHASE SOURCE APPEAL
QF3: In general, how appealing is each of the following sources for food & beverage purchases in your operation? (top-box; 3-point scale)
SOURCE: Datassential PULSE
n=1076
123
Buying Groups DISTRIBUTION & CONTRACT MANAGEMENT
SOURCE: Company websites, Bloomberg Snapshot
BU
YIN
G G
RO
UP
S
Company About Members Regional Brands
Distribution
Market
Advantage
Distribution Market Advantage, Inc. provides
foodservice supply chain solutions for multi unit
restaurant and institutional operators throughout the
United States and Canada. The company engages
as a national foodservice distribution system with
regional foodservice distributors as shareholders.
Distribution Market Advantage, Inc. was formerly
known as Distributor Marketing Alliance, Inc. and
changed its name to Distribution Market Advantage,
Inc. in January, 1999. The company was founded in
1988 and is based in Schaumburg, Illinois.
Ben E. Keith
Gordon Food Service
HPC Food Service
Jacmar
Maines Paper & Food Service
Nicholas & Company
Reinhart Food Service
Shamrock Foods Services
Group of America
None of their own, but they work with many
large nationals including Coca Cola, DOT,
and General Mills
Federated
Foodservice
The Federate Group, Inc. is a buying group
engaging in sourcing, quality assurance, supply
chain, private branding, and marketing operations. It
serves as a buying group for various foodservice
channels providing sales support and access to
brand suppliers. The company also specializes in
brokerage, management, and ownership of private
brands in grocery departments, as well as providing
brand development services such as: in-depth
analytics, pre-qualified supplier base, packaging
design, product lifecycle management process,
logistics consolidation, label procurement, and
inventory management.
The company serves food
retailers, wholesalers, and
distributors.
Seven Farms, Fine Fare, Royal Classics,
Hy-Top,Parade, Red & White, Cuddle Ups,
Better Valu, Valu Check'd, Save-it
Independent
Marketing
Alliance
IMA companies operate 55 distribution centers
serving all of the 48 contiguous U. S. states and
Alaska as well as parts of the Caribbean and
Europe and have combined trade sales of over $15
billion. They provide procurement and marketing
services to foodservice distributors and are
headquartered in Houston, Texas.
Food Services of America (FSA)
Maines Paper & Food Service
Merchants Food Service
Nicholas & Company
Reinhart Food Service
Shamrock Foods Company
Bountiful Harvest, Brickfire Bakery, Chef
Mark, Cobblestreet Market, Culinary
Secrets, EverFry, EverLight, EverRich,
Hidden Bay, !Intros!, Katy’s Kitchen, Lotus
Garden, Pierport Seafood, Prairie Creek
Packing, ProPak, ProPower, ProWare,
Ridgeline Coffee Roasters, Rejuv, San
Pablo, SilverBrook, Smart Source, Southern
Pearl, Trescerro, Trifoglio, Villa Frizzoni,
Windscapes
LEADING BUYING GROUPS
*Note- sorted in alphabetical order
125
BU
YIN
G G
RO
UP
S
Company About Members Regional Brands
Markon
Cooperative
Markon Cooperative, Inc. procures, delivers, and
markets fresh produce primarily for Markon
members and their foodservice customers in North
America. It offers fresh fruits and vegetables. The
company was founded in 1985 and is based in
Salinas, California and consists of seven
independent, broadline foodservice companies in
the U.S. and Canada.
Ben E. Keith Foods
Gordon Food Service Canada
Gordon Food Service USA
Maines Paper & Food Service
Nicholas & Company
Reinhart Foodservice
Shamrock Foods Company
Markon First Crop, Markon Essentials,
Ready-Set-Serve
Pro*Act
PRO*ACT is more than 50 members strong and
their collective power totals 71 distribution centers,
3.5 million square feet of warehouse space, 1,950
distribution trucks, and 2.6 million miles of coast-to-
coast distribution
50 local distributors from across
the country None
UniPro
Foodservice
Multi-Unit Group
(MUG)
UniPro Foodservice, Inc., has over 900 distribution
locations serving over 800,000 customers across
the United States and Internationally. The member
companies represent more than $60 billion in annual
sales revenues. UniPro Foodservice, Inc., is
headquartered in Atlanta, Georgia, with a sales
office in Oshkosh, Wisconsin.
Approximately 800 distributors
are members including large
national and regional companies
All Kitchens, Code, ComSource, Emerald
Club, Nifda, Nugget Brand, Plee-zing,
Pochahontas, World Horizons, BuonAmici,
Companions, Cortona, Gourmates, Gourmet
Table, Harvest Gold, Legacy, Ocean
Horizons, Premium Recipe, Reflections,
LEADING BUYING GROUPS
SOURCE: Company websites, Bloomberg Snapshot
*Note- sorted in alphabetical order
126
GPOs DISTRIBUTION & CONTRACT MANAGEMENT
1%
1%
1%
2%
2%
2%
2%
2%
3%
3%
4%
6%
11%
14%
22%
BuyEfficient
DSSI
MHA
HPSI
Dining Alliance
UFPC
MedAssets
UHF Purchasing
HPSI
Amerinet
Avendra
Novation
Entegra
FoodBuy
Premier
n=410
TOP GPO MEMBERSHIP
SOURCE: Datassential GPO Keynote 2012
OPERATOR REASONS FOR JOINING A GPO
For cost savings 77%
The need we had to streamline costs to keep
business viable 41%
There was little to no cost involved
in joining the GPO 35%
GPO has a good reputation 34%
The larger organization had joined the GPO for
savings in other lines of business
(healthcare/hospitality)
30%
Several peers were joining / highly peer
recommended 20%
Seeing how easy it would be to order from the GPO 18%
The knowledge and professionalism of the GPO
sales rep 17%
Was curious if the GPO could be better for my
business than other ways of ordering 13%
The guarantee made by the GPO rep that if not
satisfied, we could drop the membership 13%
Thought they would give me more personalized
service 7%
QA8A: Which GPO or GPOs do you currently work with?
GP
Os
128
GP
Os
39%
GPO
Membership
All
Segments
RESTAURANT ON-SITE FOODSERVICE
Total QSR Midscale Casual
Dining
Upper
Casual /
Fine Dine
Total C&U Lodging K-12 Hospital LT Care B&I
Yes 17% 9% 11% 8% 7% 10% 40% 39% 21% 39% 74% 54% 7%
No 73% 81% 74% 87% 88% 83% 50% 55% 67% 52% 21% 38% 68%
Not Sure 10% 9% 14% 6% 5% 7% 10% 6% 11% 9% 5% 8% 24%
GPO MEMBERSHIP BY SEGMENT
GPO AWARENESS BY SEGMENT
GPO
Awareness
All
Segments
RESTAURANT ON-SITE FOODSERVICE
Total QSR Midscale Casual
Dining
Upper
Casual /
Fine Dine
Total C&U Lodging K-12 Hospital LT Care B&I
Very familiar 11% 8% 3% 16% 7% 11% 14% 12% 14% 14% 22% 15% 13%
Somewhat
familiar 43% 40% 37% 45% 37% 44% 46% 59% 44% 49% 43% 55% 28%
Not very
familiar 47% 52% 60% 38% 57% 44% 39% 29% 42% 37% 35% 30% 59%
SOURCE: Datassential GPO Keynote 2012 129
GPO SERVICES OFFERED
11%
6%
9%
14%
36%
38%
39%
41%
45%
57%
None of the above
Advertising services
Payroll/Accounting services
Marketing services
Information on trends
Product recommendations
Cost reviews/savings recommendations
Upfront discounts on goods ordered
New products info
Rebates
GPO: $ VOLUME MINIMUM REQUIREMENTS
40%
21%
13%
6%
$250k+/year $500k+/year $1mil+/year $2mil+/year
SOURCE: Datassential GPO Keynote 2012
GP
Os
2%
20%
35%
19%
12%
6%
2%
2%
1%
0%
1%
0%
0.1% to 5%
5% to 10%
10% to 15%
15% to 20%
20% to 25%
25% to 30%
30% to 35%
35% to 40%
40% to 45%
More than 45%
GPO MEMBER OPERATOR SAVINGS
130
SOURCE: Datassential GPO Keynote 2012, Company websites
GP
Os
PREMIER
(CHARLOTTE, NC)
SELECT GPO PROFILES
Premier has close to $41 billion in purchase
volume overall, with $2.5 billion in member
foodservice purchases. They work in the
healthcare segment, serving more than 3,000
U.S. hospitals and 110,000-plus other healthcare
sites. The company has 1,100 suppliers and
nearly 2,000 contracts – including both
foodservice and other products. There are
numerous sub-groups under the Premier
umbrella, including Champs and Innovatix.
FOODBUY
(ATLANTA, GA) FoodBuy is the largest foodservice procurement
organization in North America and purchases
about $10 billion annually. They work with over
520 manufacturers and distributors and have 2.7
million unique items available. FoodBuy began in
1999 as the sourcing partner for Compass, but
today they work with a variety of members in
healthcare, hospitality, leisure, entertainment,
restaurants, and other segments.
ENTEGRA
(GAITHERSBURG, MD) Entegra purchases over $5 billion annually for
over 30,000 members in the acute care, seniors,
leisure, hospitality and restaurant industries.
Founded in 1999 as a procurement management
company for the healthcare industry, today
Entegra is a subsidiary of Sodexo and works
across segments beyond healthcare.
NOVATION
(IRVING, TX) Novation has over $40 billion in annual
purchasing for the healthcare segment and over
100,000 members. They have what they claim is
the “broadest, most comprehensive contract
portfolio in the industry”, including agreements
with 600 suppliers and distributors that cover
90% of the products health care organizations
could purchase. They have made numerous
acquisitions in recent years, including
Provista/HPPI and Summa.
AVENDRA
(ROCKVILLE, MD) Avendra buys over $3.5 billion in food and
beverages annually and says they offer their
members double-digit savings on everything
from “luxury foods to everyday necessities”.
They have nearly 5,000 members in the
hospitality and education segments. They offer
solutions outside of their purchasing partnership
with approximately 800 suppliers, including
menu management, labor cost management,
quality assurance, custom contracting, and
purchasing information analysis.
AMERINET
(ST. LOUIS, MO) AmeriNet had nearly 9 billion in purchases (both
food and other products) in 2012 and they
estimate that they saved their members nearly
$1.2 billion in 2012. They have seen 11% growth
between 2011 and 2012 and currently have
nearly 64,000 members in the healthcare
segment.
AXIS PURCHASING
(PURCELLVILLE, VA) Axis purchases over $12 billion in foodservice
annually for their members in education, lodging,
multi-unit restaurants, and contract catering. The
company works with 350 manufacturers and has
over 100,000 pre-negotiated deals on specific
products.
BUYEFFICIENT
(DALLAS, TX) BuyEfficient is focused on purchasing for the
hospitality segment with 1275 Member hotels
representing over 25 leading hotel brands
including Marriott, Hilton, Choice, and others.
OTHERS:
Note: There are other types of organizations that
serve many of the same functions as a GPO, but
were not profiled here, including:
• Chain-specific purchasing companies
• Many K-12 schools and school districts
• Government agencies
131
APPENDIX
Definitions APPENDIX
CHANNELS
CHANNEL & SEGMENT DEFINITIONS
SEGMENTS
OCASSIONS
SE
GM
EN
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EF
INIT
ION
S
KE
Y D
EF
INIT
ION
S
KEY DEFINITIONS
Channels are groups of foodservice operators who have similar businesses. There are three channels: 1) restaurants, 2) retail food, and 3) on-site foodservice. These three channels make up all of foodservice and each channel has multiple subgroups referred to as segments.
Segments are the smallest groupings of foodservice operators and businesses within each group that are similar The segments discussed in this report include: limited service restaurants, full service restaurants, supermarkets, convenience stores, other retailers, K-12, college & universities, business & industry, recreation, lodging, transportation, hospitals, Long Term Care, senior living, vending, catering, military, and corrections.
The scenarios for which consumers eat and drink away from home. Occasions describe the underlying motivators for away-from-home activity and decisions.
EATER TYPES
Eater types are categories of consumers which are grouped by how and why they eat away-from-home. There are four attitudinal segments that define the spectrum of away-from-home consumers (with two sub-groups for a total of six possible eater types). Looking at eater types can help the foodservice industry to better understand their consumers.
134
SE
GM
EN
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INIT
ION
S
LIMITED
SERVICE
RESTAURANTS
CHANNEL & SEGMENT DEFINITIONS S
EG
ME
NT
DE
FIN
ITIO
NS
FULL SERVICE
RESTAURANTS
RESTAURANTS
Traditional Quick Service Order and pay at counter with a check average of under $8 per person.
McDonald’s Subway Domino’s
Fast Casual Order at counter, staff brings food or calls when food is ready with a check average of approximately $8 or more per person.
Panera Chipotle Five Guys
Midscale Dining
Wait staff takes order and delivers food with an average check of less than $12 per person; typically does not serve/offer alcohol. Buffet service is also included within this segment.
IHOP Denny’s Old Town Buffet
Casual Dining Wait staff takes order and delivers food with an average check of approximately $12 to $20 per person; typically serves/offers alcohol.
Applebee’s Olive Garden TGI Friday’s
Upper Casual Dining Wait staff takes order and delivers food with an average check of $20 to $30.
Cheesecake Factory PF Chang’s Houston’s
Fine Dining Wait staff takes order and delivers food with an average entrée more than $25; includes both traditional (white tablecloth) and modern fine dining.
Ruth’s Chris Morton’s Roy’s
SEGMENT HALLMARKS EXAMPLES
135
SUPERMARKETS
CHANNEL & SEGMENT DEFINITIONS
CONVENIENCE
STORES
OTHER RETAIL
SE
GM
EN
T D
EF
INIT
ION
S
SE
GM
EN
T D
EF
INIT
ION
S
RETAIL FOOD
Includes hot and cold prepared foods and beverages from the deli area and the in-store bakery. Excludes bulk meats and cheeses sold at the deli counter. Estimates based on Nielsen Perishables Group FreshFacts Data and other secondary sources.
Includes hot and cold prepared foods and beverages. Estimates based on NPD Group’s CREST service based on projected customer traffic and check average for both meals and beverage-only occasions within the C-Store segment.
Includes hot and cold prepared foods and beverages sold at Mass Merchandisers (Target, Wal-Mart, etc.), Department Stores, Warehouse/Club Stores, Drug Stores, and other Specialty Retailers. Total based on food and beverage sales estimates compiled from NRN, Stores.org and Datassential.
136
K-12
CHANNEL & SEGMENT DEFINITIONS
COLLEGES &
UNIVERSITIES
BUSINESS &
INDUSTRY
RECREATION
LODGING
SE
GM
EN
T D
EF
INIT
ION
S
SE
GM
EN
T D
EF
INIT
ION
S
ON-SITE FOODSERVICE Includes public and private/parochial schools. Estimates based on data compiled from the US Department of Education/National Center for Education Statistics, Foodservice Director and Datassential.
Includes technical/trade, 2 year and 4 year institutions. Estimates based on data compiled from the US Department of Education, Foodservice Director and Datassential.
Includes blue collar and white collar cafeterias/dining facilities. Estimates based on data compiled from the US Census Bureau, Foodservice Director, Food Management and Datassential.
Includes state and national parks, amusement parks, museums and historical sites, zoos and botanical gardens, golf clubs, country clubs, private clubs, cruise lines, casinos without hotels/accommodations, stadiums/arenas/sports venues, ski and snowboard resorts, movies theaters/complexes and bowling alleys/centers. Estimates compiled from numerous sources, trade associations and trade publications including but not limited to: US Census Bureau, National Park Service, National Association of State Park Directors, International Association of Amusement Parks and Attractions, Cruise Lines International Association and Datassential.
Includes all types of lodging establishments and casinos with hotels/accommodations. Estimates based on data compiled from Smith Travel Research, the American Gaming Association and Datassential.
TRANSPORTATION
Includes airports, train stations, bus stations, all airlines flying in to and out of the United States, Amtrak and passenger ferry services. Estimates based on data compiled from the Bureau of Transportation Statistics, US Department of Transportation, Amtrak, US Census Bureau and Datassential.
137
HOSPITALS
Long Term Care
VENDING
CATERING
MILITARY
CORRECTIONS
SE
GM
EN
T D
EF
INIT
ION
S
SE
GM
EN
T D
EF
INIT
ION
S
ON-SITE FOODSERVICE Includes patient feeding, employee feeding, visitor meals, and catering operations at institutions that provide acute care, patient services- diagnostic and therapeutic, for particular or general medical conditions over the short-term. Estimates based on data compiled from the American Hospital Association, Foodservice Director and Datassential.
Includes assisted care facilities and Long Term Care facilities. Estimates based on data compiled from the American Health Care Association, the American Senior Housing Association and Datassential.
Includes food and beverages sold through automatic vending machines, excludes cigarettes and non-food items. Estimates based on data from Vending Times, Vending Market Watch.com and Datassential.
Includes establishments that primarily provide event-based food services and that may transport meals to events and/or prepare meals off-site. This also includes banquet halls with catering staff. Estimates based on data from the US Census Bureau and Datassential.
Includes U.S. domestic and global installations. Estimates compiled from numerous sources including the US Department of Defense.
Includes youth, municipal/local, county, state and federal facilities. Estimates compiled from numerous sources including the US Justice Department, state and municipal reports and foodservice management company reports.
SENIOR LIVING Includes senior living centers and communities. Estimates based on data compiled from the American Health Care Association, the American Senior Housing Association and Datassential.
138
Economic Overview APPENDIX
NOTEWORTHY NEWS
Fine Dining Growth Outpaces other Sectors
“House Votes to Change Full-time Definition to 40-hour Week”- January 8th, 2015;
Supermarket News.com The House of Representatives passed a bill to change the definition of a full-time employee under the Affordable Care Act to one who works 40 hours per week, rather than 30 hours per week. The bill passed by a vote of 252-172.
“Avian Influenza Epidemic Spurs Nationwide Rise in Egg Prices”- May 30th, 2015; LA Times
The U.S. Department of Agriculture has reported three deadly flu strains in poultry flocks totaling more than 43 million birds in 15 states since mid-December. In Iowa alone, the outbreak at commercial farms has led to the loss of nearly 30 million chickens, or nearly 10% of the nation's egg-laying hens. "This is a devastation unlike any other in the history of our industry," said Chad Gregory, chief executive of United Egg Producers.
“Supreme Court Allows Nationwide Health Care Subsidies”- June 25th, 2015; The New York Times The Supreme Court ruled on Thursday that President Obama’s health care law allows the federal government to provide nationwide tax subsidies to help poor and middle-class people buy health insurance, a sweeping vindication that endorsed the larger purpose of Mr. Obama’s signature legislative achievement. The 6-to-3 ruling means that it is all but certain that the Affordable Care Act will survive after Mr. Obama leaves office in 2017.
“USDA To Certify Non-GMO Foods With New Label” – May 15th, 2015; NPR
Companies that want to use the USDA's Non-GMO Label will pay to participate in the Process Verified Program. As this issue gains traction with consumers, lots of Americans are wary of GMO foods. And more are just flat out confused about what they are, where they are in the food supply and whether they're dangerous. There is no evidence, by the way, that eating genetically-modified foods poses a threat to health. But, out of precaution, it seems, more consumers are avoiding them.
6
CONSUMERS SAY
“Consumer Confidence Index Rises to 101.4 in June, Solid Gain Pointing to Future Growth”
- June 30th, 2015; USNews.com Consumer confidence showed a solid gain in June following a modest increase in May, supporting the view that strong job gains are giving a boost to the overall economy. The index is now 17.4 percent higher than it was a year ago, evidence that the economy is poised to enjoy stronger growth in coming months.
“U.S. food distributor Sysco drops plan to merge with US Foods”- June 29th, 2015; Reuters Sysco Corp, the biggest U.S. food distribution company, dropped plans to merge with US Foods, its biggest rival, Sysco said on Monday. Cancellation of the deal means Sysco will have to pay a $300 million break-up fee to US Foods and another $12.5 million to a second company, which had agreed to buy 11 facilities that Sysco hoped to sell in order to satisfy U.S. antitrust regulators.
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Year CPI-U* CPI-
Food-at-Home
CPI- Food-Away-
from-Home Total F&B Full Service Limited Service
2001 177.10 173.40 173.90 173.60 110.30 109.60
2002 179.90 175.60 178.30 176.80 113.00 112.70
2003 184.00 179.40 182.10 180.50 115.30 114.90
2004 188.90 186.20 187.50 186.60 118.40 118.60
2005 195.30 189.80 193.40 191.20 121.90 122.40
2006 201.60 193.10 199.40 195.70 125.70 126.00
2007 207.34 201.25 206.66 203.30 130.20 130.55
2008 215.30 214.13 215.77 214.23 135.42 136.93
2009 214.54 215.12 223.27 218.25 139.22 142.64
2010 218.06 215.84 226.11 219.98 141.06 143.86
2011 224.94 226.20 231.40 227.87 144.37 147.09
2012 229.59 231.77 237.99 233.67 148.14 151.75
2013 232.96 233.87 243.07 236.97 151.47 154.63
2014 236.74 242.73 248.98 242.45 155.27 158.43
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SOURCE: Bureau of Labor Statistics
*CPI-U: All urban consumers
WHAT IS THE CONSUMER PRICE INDEX?
The Consumer Price Index (CPI) is a measure of the average change over time in the prices paid by urban consumers for a
market basket of consumer goods and services. The annual percentage change in a CPI is used as a measure of inflation,
and along with the population census, is one of the most closely watched national economic statistics.
ANNUAL CONSUMER PRICE INDEX
141
CO
NV
EN
IEN
CE
ST
OR
ES
SOURCE: Bureau of Labor Statistics
CO
NS
UM
ER
PR
ICE
IN
DE
X
126
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CHANGE IN FOOD PRICE INDEXES: 2013-2015
Item
Relative
Importance
(percent of total)
Forecast 2015
Year-over-Year
Jan 2014 to Jan
2015
Annual 2014 Annual 2013
All food 100.0 2.0 to 3.0 3.2 2.4 1.4
Food away from home 41.1 2.0 to 3.0 3.1 2.4 2.1
Food at home 58.9 2.0 to 3.0 3.3 2.4 0.9
Meats, poultry, and fish 12.5 3.0 to 4.0 8.7 7.2 2.1
Meats 7.9 3.5 to 4.5 12.6 9.2 1.2
Beef and Veal 3.6 5.0 to 6.0 19.0 12.1 2.0
Pork 2.5 1.5 to 2.5 7.4 9.1 0.9
Other meats 1.8 2.5 to 3.5 7.3 3.9 -0.1
Poultry 2.6 2.5 to 3.5 2.0 2.0 4.7
Fish and seafood 2.0 2.5 to 3.5 2.2 5.8 2.5
Eggs 0.9 2.5 to 3.5 8.2 8.4 3.3
Dairy products 6.2 2.0 to 3.0 3.8 3.6 0.1
Fats and oils 1.8 0.0 to 1.0 0.8 0.1 -1.4
Fruits and vegetables 9.7 2.5 to 3.5 2.3 1.5 2.5
Fresh fruits & vegetables 7.5 2.5 to 3.5 2.9 1.9 3.3
Fresh fruits 4.0 2.5 to 3.5 1.7 4.8 2.0
Fresh vegetables 3.5 2.0 to 3.0 4.3 -1.3 4.7
Processed fruits & vegetables* 2.2 2.5 to 3.5 0.2 0.1 0.3
Sugar and sweets 2.1 1.5 to 2.5 2.0 -0.8 -1.7
Cereals and bakery products 8.2 0.5 to 1.5 0.9 0.2 1.0
Nonalcoholic beverages 6.9 2.0 to 3.0 0.9 -0.5 -1.0
Other foods 10.7 1.5 to 2.5 1.2 1.0 0.5
142
Year B&I / Schools K-12 Vending/
Mobile
Other Lodging
Away From
Home (excludes
housing
at school)
Airline
Fare
Nursing
Homes
and Adult Day
Services
Hospital and
Related
Services
Recreation
Services (clubs, theaters,
concerts,
sporting events)
2003 112.40 n/a 107.70 252.20 231.30 135.20 394.80 124.50
2004 115.50 n/a 109.80 265.30 227.20 140.40 417.90 127.50
2005 118.60 n/a 112.60 274.20 236.60 145.00 439.90 130.50
2006 122.60 101.60 115.10 285.60 247.30 151.00 468.10 135.10
2007 126.76 105.77 118.33 299.91 251.69 159.59 498.92 139.37
2008 131.84 110.25 124.10 300.97 282.00 165.34 533.95 142.86
2009 137.32 115.38 129.73 279.22 257.97 171.63 567.88 144.65
2010 140.97 118.33 133.06 280.43 278.19 177.00 607.68 145.12
2011 145.74 122.24 135.77 287.44 304.03 182.19 641.49 145.27
2012 150.19 125.71 140.17 292.58 304.95 188.81 672.08 148.38
2013 155.32 130.12 143.31 294.84 312.71 194.47 701.34 150.50
2014 158.16 132.66 143.06 307.78 307.71 200.08 733.84 152.69
SOURCE: Bureau of Labor Statistics
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ANNUAL CONSUMER PRICE INDEX – SELECTED SEGMENTS
143
SOURCE: Bureau of Labor Statistics
Year
All Food Food at Home Food Away From Home
Total % Change From
Prior Year Total
% Change From
Prior Year Total
% Change From
Prior Year
2001 $5,321 3.16% $3,086 2.15% $2,235 4.59%
2002 $5,375 1.01% $3,099 0.42% $2,276 1.83%
2003 $5,340 -0.65% $3,129 0.97% $2,211 -2.86%
2004 $5,781 8.26% $3,347 6.97% $2,434 10.09%
2005 $5,931 2.59% $3,297 -1.49% $2,634 8.22%
2006 $6,111 3.03% $3,417 3.64% $2,694 2.28%
2007 $6,133 0.36% $3,465 1.40% $2,668 -0.97%
2008 $6,443 5.05% $3,744 8.05% $2,698 1.12%
2009 $6,372 -1.10% $3,753 0.24% $2,619 -2.93%
2010 $6,129 -3.81% $3,624 -3.44% $2,505 -4.35%
2011 $6,458 5.37% $3,838 5.91% $2,620 4.59%
2012 $6,599 2.18% $3,921 2.20% $2,678 2.21%
2013 $6,602 -0.70% $3,977 1.40% $2,625 -2.00% EC
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AVERAGE ANNUAL FOOD EXPENDITURES
144
Year Total Under 25 25-34 Years 35-44 Years 45-54 Years 55-64 Years 65+ Years 65-74 Years 75+ Years
2002 $5,375 $3,621 $5,471 $6,314 $6,228 $5,559 $3,910 $4,479 $3,302
2003 $5,340 $3,401 $5,318 $6,272 $6,381 $5,530 $3,896 $4,544 $3,208
2004 $5,781 $3,715 $5,705 $6,752 $7,038 $5,898 $4,206 $4,871 $3,518
2005 $5,931 $3,933 $5,639 $7,359 $6,980 $6,202 $4,163 $4,899 $3,388
2006 $6,111 $3,919 $6,104 $7,331 $7,328 $6,132 $4,319 $5,172 $3,437
2007 $6,133 $4,141 $6,000 $7,393 $7,181 $6,241 $4,515 $5,226 $3,738
2008 $6,443 $4,447 $6,229 $7,849 $7,696 $6,357 $4,692 $5,338 $3,935
2009 $6,372 $4,179 $6,169 $7,760 $7,445 $6,303 $4,901 $5,561 $4,189
2010 $6,129 $4,073 $6,091 $7,483 $7,230 $6,068 $4,558 $5,148 $3,873
2011 $6,458 $4,354 $6,211 $7,765 $7,424 $6,520 $5,158 $5,804 $4,408
2012 $6,599 $4,412 $6,513 $7,701 $7,917 $6,800 $5,059 $5,793 $4,141
2013 $6,602 $4,698 $6,197 $7,920 $7,907 $6,711 $5,191 $6,020 $4,144
Year Total Under 25 25-34 Years 35-44 Years 45-54 Years 55-64 Years 65+ Years 65-74 Years 75+ Years
2002 $3,099 $1,926 $3,093 $3,601 $3,528 $3,114 $2,548 $2,877 $2,195
2003 $3,129 $1,766 $2,976 $3,600 $3,693 $3,315 $2,575 $2,888 $2,241
2004 $3,347 $1,853 $3,155 $3,897 $4,083 $3,374 $2,722 $3,049 $2,380
2005 $3,297 $1,917 $2,945 $4,121 $3,807 $3,487 $2,605 $2,967 $2,222
2006 $3,417 $1,946 $3,186 $4,128 $4,036 $3,518 $2,659 $3,062 $2,244
2007 $3,465 $2,265 $3,210 $4,125 $4,003 $3,457 $2,905 $3,348 $2,419
2008 $3,744 $2,330 $3,393 $4,509 $4,452 $3,710 $3,075 $3,421 $2,667
2009 $3,753 $2,449 $3,478 $4,446 $4,343 $3,678 $3,222 $3,567 $2,851
2010 $3,624 $2,197 $3,338 $4,255 $4,369 $3,681 $2,950 $3,213 $2,643
2011 $3,838 $2,382 $3,447 $4,594 $4,421 $3,908 $3,309 $3,594 $2,980
2012 $3,921 $2,529 $3,680 $4,490 $4,707 $4,012 $3,273 $3,719 $2,716
2013 $3,977 $2,602 $3,559 $4,641 $4,701 $4,232 $3,327 $3,728 $2,825
Year Total Under 25 25-34 Years 35-44 Years 45-54 Years 55-64 Years 65+ Years 65-74 Years 75+ Years
2002 $2,276 $1,696 $2,378 $2,712 $2,700 $2,445 $1,362 $1,602 $1,107
2003 $2,211 $1,636 $2,342 $2,672 $2,688 $2,215 $1,321 $1,656 $968
2004 $2,434 $1,862 $2,550 $2,855 $2,955 $2,524 $1,484 $1,822 $1,138
2005 $2,634 $2,015 $2,694 $3,238 $3,173 $2,715 $1,558 $1,933 $1,166
2006 $2,694 $1,973 $2,918 $3,203 $3,292 $2,613 $1,659 $2,110 $1,193
2007 $2,668 $1,876 $2,790 $3,268 $3,178 $2,784 $1,610 $1,878 $1,319
2008 $2,698 $2,117 $2,836 $3,340 $3,244 $2,646 $1,617 $1,917 $1,268
2009 $2,619 $1,731 $2,691 $3,314 $3,102 $2,626 $1,679 $1,994 $1,338
2010 $2,505 $1,876 $2,753 $3,227 $2,861 $2,387 $1,608 $1,935 $1,230
2011 $2,620 $1,973 $2,764 $3,171 $3,003 $2,611 $1,849 $2,210 $1,429
2012 $2,678 $1,883 $2,833 $3,210 $3,210 $2,788 $1,785 $2,074 $1,426
2013 $2,625 $2,096 $2,639 $3,280 $3,206 $2,479 $1,864 $2,292 $1,319
AVERAGE
ANNUAL FOOD
EXPENDITURES
BY AGE
AVERAGE ANNUAL
AT-HOME FOOD
EXPENDITURES
BY AGE
AVERAGE ANNUAL
AWAY-FROM-HOME
FOOD EXPENDITURES
BY AGE
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SOURCE: Bureau of Labor Statistics 145
Year Total White and All Other
Races* Asian
Black or African
American
Hispanic
or Latino
2002 $5,375 $5,542 N/A $5,542 $5,666
2003 $5,340 $5,488 $6,285 $4,007 $5,717
2004 $5,781 $5,958 $6,742 $4,265 $5,911
2005 $5,931 $6,127 $6,632 $4,319 $5,551
2006 $6,111 $6,289 $7,411 $4,530 $6,170
2007 $6,133 $6,312 $7,139 $4,601 $5,933
2008 $6,443 $6,676 $7,089 $4,594 $6,596
2009 $6,372 $6,585 $7,565 $4,524 $6,094
2010 $6,129 $6,253 $7,656 $4,796 $6,486
2011 $6,458 $6,623 $8,163 $4,743 $6,373
2012 $6,875 $6,822 $7,980 $4,701 $6,674
2013 $6,805 $6,743 $8,073 $5,168 $6,771
Year Total White and All Other
Races* Asian
Black or African
American
Hispanic
or Latino
2002 $3,099 $3,159 N/A $2,669 $3,643
2003 $3,129 $3,186 $3,302 $2,664 $3,597
2004 $3,347 $3,418 $3,689 $2,749 $3,883
2005 $3,297 $3,373 $3,580 $2,663 $3,344
2006 $3,417 $3,486 $3,947 $2,796 $3,719
2007 $3,465 $3,539 $3,890 $2,831 $3,424
2008 $3,744 $3,865 $3,943 $2,825 $4,039
2009 $3,753 $3,870 $3,905 $2,880 $3,784
2010 $3,624 $3,689 $3,953 $3,075 $4,012
2011 $3,838 $3,931 $4,439 $2,989 $3,849
2012 $4,059 $4,044 $4,367 $2,973 $4,413
2013 $4,074 $4,057 $4,413 $3,290 $4,402
Year Total White and All Other
Races* Asian
Black or African
American
Hispanic
or Latino
2002 $2,276 $2,383 N/A $1,517 $2,023
2003 $2,211 $2,302 $2,983 $1,343 $2,120
2004 $2,434 $2,539 $3,053 $1,516 $2,027
2005 $2,634 $2,754 $3,052 $1,657 $2,207
2006 $2,694 $2,802 $3,463 $1,735 $2,451
2007 $2,668 $2,773 $3,249 $1,771 $2,508
2008 $2,698 $2,811 $3,147 $1,768 $2,556
2009 $2,619 $2,715 $3,660 $1,645 $2,310
2010 $2,505 $2,564 $3,703 $1,721 $2,474
2011 $2,620 $2,692 $3,724 $1,754 $2,524
2012 $2,816 $2,777 $3,613 $1,728 $2,530
2013 $2,731 $2,686 $3,660 $1,878 $2,729
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ANNUAL FOOD
EXPENDITURES
BY RACE
AVERAGE ANNUAL
AT-HOME FOOD
EXPENDITURES
BY RACE
AVERAGE ANNUAL
AWAY-FROM-HOME
FOOD EXPENDITURES
BY RACE
SOURCE: Bureau of Labor Statistics
* All other races includes Native Hawaiian or other Pacific Islander, American Indian or Alaska Native, and approximately 1 percent reporting more than one race.
146
Year Overall Northeast Midwest South West
2002 $5,375 $5,813 $5,180 $5,102 $5,630
2003 $5,340 $5,730 $5,088 $4,960 $5,876
2004 $5,781 $6,368 $5,592 $5,318 $6,224
2005 $5,931 $6,495 $5,754 $5,491 $6,339
2006 $6,111 $6,220 $5,763 $5,649 $7,158
2007 $6,133 $6,419 $5,793 $5,780 $6,811
2008 $6,443 $6,959 $5,966 $6,109 $7,037
2009 $6,372 $6,975 $6,031 $5,944 $6,903
2010 $6,129 $6,755 $5,738 $5,645 $6,804
2011 $6,458 $6,799 $6,236 $5,980 $7,188
2012 $6,598 $6,861 $6,367 $6,183 $7,310
2013 $6,602 $7,033 $6,592 $6,056 $7,180
Year Overall Northeast Midwest South West
2002 $3,099 $3,296 $2,932 $2,961 $3,317
2003 $3,129 $3,306 $2,904 $2,996 $3,428
2004 $3,347 $3,634 $3,189 $3,119 $3,634
2005 $3,297 $3,645 $3,232 $3,011 $3,527
2006 $3,417 $3,463 $3,260 $3,134 $4,018
2007 $3,465 $3,595 $3,252 $3,311 $3,822
2008 $3,744 $4,021 $3,528 $3,494 $4,140
2009 $3,753 $4,043 $3,682 $3,481 $4,023
2010 $3,624 $3,910 $3,577 $3,335 $3,914
2011 $3,838 $4,099 $3,841 $3,505 $4,169
2012 $3,899 $4,028 $3,843 $3,654 $4,264
2013 $3,977 $4,222 $4,119 $3,607 $4,267
Year Overall Northeast Midwest South West
2002 $2,276 $2,517 $2,247 $2,141 $2,314
2003 $2,211 $2,424 $2,184 $1,964 $2,449
2004 $2,434 $2,733 $2,403 $2,199 $2,590
2005 $2,634 $2,850 $2,522 $2,480 $2,813
2006 $2,694 $2,757 $2,503 $2,515 $3,140
2007 $2,668 $2,824 $2,541 $2,470 $2,988
2008 $2,698 $2,938 $2,438 $2,615 $2,897
2009 $2,619 $2,932 $2,349 $2,463 $2,880
2010 $2,505 $2,845 $2,161 $2,310 $2,891
2011 $2,620 $2,700 $2,395 $2,474 $3,019
2012 $2,698 $2,834 $2,524 $2,529 $3,047
2013 $2,625 $2,811 $2,473 $2,449 $2,913 EC
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AVERAGE
ANNUAL FOOD
EXPENDITURES
BY REGION
AVERAGE ANNUAL
AT-HOME FOOD
EXPENDITURES
BY REGION
AVERAGE ANNUAL
AWAY-FROM-HOME
FOOD EXPENDITURES
BY REGION
SOURCE: Bureau of Labor Statistics 147
SOURCE: Thomson Reuters University of Michigan Survey of Consumers
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89.2 89.6 87.6 95.2 88.5 87.3 85.6
63.7 66.3 71.8
67.3 76.6 79.2
84.1
0
10
20
30
40
50
60
70
80
90
100
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
CONSUMER CONFIDENCE INDEX
CCI BY HOUSEHOLD INCOME TERCENTILE CCI BY AGE
Year CCI
Bottom Third Middle Third Top Third
2001 81.7 91.2 95.9
2002 81.8 90.9 96.9
2003 78.2 89.5 96.6
2004 83.7 96.4 106.1
2005 78.0 88.8 98.9
2006 75.8 88.2 98.5
2007 73.5 86.9 97.4
2008 59.4 63.4 68.8
2009 63.5 66.6 69.3
2010 66.1 72.0 79.0
2011 60.8 66.6 75.5
2012 71.2 76.0 83.4
2013 71.2 80.6 86.8
2014 72.6 84.0 92.0
Year CCI
18-34 35-54 Over 55
2001 99.1 89.6 81.3
2002 98.7 90.1 82.1
2003 97.9 87.7 80.4
2004 104.3 96.5 88.2
2005 99.7 90.3 79.9
2006 97.4 90.1 79.8
2007 99.2 87.1 78.2
2008 73.1 64.2 59.6
2009 74.7 66.9 63.1
2010 85.2 73.7 66.6
2011 79.0 70.7 62.1
2012 89.5 80.4 71.4
2013 93.2 80.3 73.4
2014 97.4 84.3 75.2
148
GROSS DOMESTIC PRODUCT
Year GDP (in billions of
current dollars)
GDP (in billions of
chained 2009 dollars)
2002 $10,980.20 $12,909.70
2003 $11,512.20 $13,270.00
2004 $12,277.00 $13,774.00
2005 $13,095.40 $14,235.60
2006 $13,857.90 $14,615.20
2007 $14,480.30 $14,876.80
2008 $14,720.30 $14,833.60
2009 $14,417.90 $14,417.90
2010 $14,958.30 $14,779.40
2011 $15,533.80 $15,052.40
2012 $16,244.60 $15,470.70
2013 $16,799.70 $15,761.30
2014 $17,418.30 $16,085.30
US TOTAL POPULATION ESTIMATES
AND PROJECTIONS
Year Total Population % Change From
Prior Year
2000 282,162,411 -
2001 284,968,955 0.98%
2002 287,625,193 0.92%
2003 290,107,933 0.86%
2004 292,805,298 0.92%
2005 295,516,599 0.92%
2006 298,379,912 0.96%
2007 301,231,207 0.95%
2008 304,093,966 0.94%
2009 306,771,529 0.87%
2010 310,339,744 1.15%
2011 312,602,730 0.72%
2012 314,687,369 0.66%
2013 (P) 316,438,601 0.55%
2014 (P) 318,892,103 0.77%
2015 (P) 321,362,789 0.77%
2016 (P) 323,848,670 0.77%
2017 (P) 326,347,810 0.77%
2018 (P) 328,857,432 0.76%
2019 (P) 331,374,624 0.76%
2020 (P) 333,895,553 0.76%
Year Total (in thousands) Labor Force
Participation Rate
2013 157,393 64.2
2014 158,486 64.0
2015 159,530 63.8
2016 160,572 63.6
2017 161,530 63.3
2018 162,471 63.0
2019 163,435 62.8
2020 164,360 62.5
PROJECTED LABOR FORCE PARTICIPATION
SOURCE: Bureau of Labor Statistics; US Census
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149
US POPULATION PROJECTIONS BY AGE
Year Under 15 15-17 18-20 21-44 45-64
65+
Total Male Female
2013 61,573,729 12,461,673 13,088,134 101,574,319 83,051,862 44,688,884 19,576,180 25,112,704
2014 61,801,455 12,449,956 12,894,409 102,202,501 83,364,778 46,179,004 20,304,644 25,874,360
2015 61,981,103 12,536,679 12,730,110 102,580,480 83,839,068 47,695,349 21,040,904 26,654,445
2016 62,242,504 12,569,778 12,638,436 102,966,674 84,207,712 49,223,566 21,774,254 27,449,312
2017 62,620,992 12,503,233 12,634,225 103,532,427 84,263,478 50,793,455 22,525,547 28,267,908
2018 62,996,730 12,385,354 12,728,312 104,275,112 84,034,617 52,437,307 23,304,893 29,132,414
2019 63,354,852 12,360,610 12,768,764 105,095,800 83,637,393 54,157,205 24,115,191 30,042,014
2020 63,730,616 12,428,245 12,709,738 105,819,687 83,238,397 55,968,870 24,970,314 30,998,556
2021 64,099,082 12,492,773 12,599,519 106,755,037 82,723,681 57,745,530 25,802,635 31,942,895
2022 64,435,558 12,563,485 12,582,290 107,534,539 82,216,660 59,597,840 26,668,446 32,929,394
2023 64,791,262 12,625,169 12,657,299 108,194,505 81,743,609 61,424,270 27,519,727 33,904,543
2024 65,273,359 12,547,525 12,729,137 108,809,877 81,366,082 63,203,475 28,344,553 34,858,922
2025 65,752,026 12,437,564 12,807,163 109,206,397 81,152,328 65,051,745 29,203,697 35,848,048
SOURCE: US Census
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150
US POPULATION PROJECTIONS BY RACE
Year Total White and
All Other Races* Black
American Indian
and Alaska
Native
Asian
Native Hawaiian
and Other Pacific
Islander
Two or
More Races
2013 316,438,601 246,088,296 41,632,480 3,927,478 16,285,109 720,224 7,785,014
2014 318,892,103 247,404,624 42,080,448 3,984,390 16,645,187 734,651 8,042,803
2015 321,362,789 248,725,113 42,531,561 4,041,530 17,009,430 749,246 8,305,909
2016 323,848,670 250,048,929 42,984,959 4,098,820 17,377,581 763,990 8,574,391
2017 326,347,810 251,374,938 43,440,052 4,156,239 17,749,382 778,849 8,848,350
2018 328,857,432 252,701,225 43,896,277 4,213,689 18,124,601 793,789 9,127,851
2019 331,374,624 254,025,732 44,353,052 4,271,114 18,503,027 808,759 9,412,940
2020 333,895,553 255,345,601 44,809,572 4,328,476 18,884,450 823,742 9,703,712
2021 336,415,622 256,657,504 45,264,985 4,385,700 19,268,634 838,684 10,000,115
2022 338,930,372 257,958,022 45,718,488 4,442,749 19,655,369 853,589 10,302,155
2023 341,436,114 259,244,044 46,169,630 4,499,612 20,044,510 868,411 10,609,907
2024 343,929,455 260,512,658 46,618,113 4,556,248 20,435,940 883,139 10,923,357
2025 346,407,223 261,760,754 47,063,823 4,612,623 20,829,637 897,758 11,242,628
SOURCE: US Census
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151
Year
Personal Income Disposable Personal Income Personal Consumption Expenditures Personal Savings
(in billions)
%
Change
From Prior
Year
(in billions)
% Change
From Prior
Year
Real
Chained
05 Dollars,
09 Dollars
2012-
(in billions)
% Change
From Prior
Year
(in billions)
% Change
From Prior
Year
Real
Chained
05 Dollars,
09 Dollars
2012-
(in billions)
% Change
From Prior
Year
(in billions) Savings
Rate
2002 $9,060.10 2.0% $8,009.70 4.7% $8,633.20 3.3% $7,439.20 4.1% $8,018.30 2.7% $282.20 3.5%
2003 $9,378.10 3.5% $8,377.80 4.6% $8,850.50 2.5% $7,804.10 4.9% $8,244.50 2.8% $289.60 3.5%
2004 $9,937.20 6.0% $8,889.40 6.1% $9,152.90 3.4% $8,270.60 6.0% $8,515.80 3.3% $318.20 3.6%
2005 $10,485.90 5.5% $9,277.30 4.4% $9,277.30 1.4% $8,803.50 6.4% $8,803.50 3.4% $143.20 1.5%
2006 $11,268.10 7.5% $9,915.70 6.9% $9,652.80 4.0% $9,301.00 5.7% $9,054.50 2.9% $256.60 2.6%
2007 $11,912.30 5.7% $10,423.60 5.1% $9,880.30 2.4% $9,772.30 5.1% $9,262.90 2.3% $248.70 2.4%
2008 $12,460.20 4.6% $11,024.50 5.8% $10,119.50 2.4% $10,035.50 2.7% $9,211.70 -0.6% $592.30 5.4%
2009 $11,867.00 -4.8% $10,722.40 -2.7% $9,836.70 -2.8% $9,845.90 -1.9% $9,032.60 -1.9% $508.20 4.7%
2010 $12,321.90 3.8% $11,127.10 3.8% $10,016.50 1.8% $10,215.70 3.8% $9,196.20 1.8% $566.70 5.1%
2011 $12,947.30 5.1% $11,549.30 3.8% $10,149.70 1.3% $10,729.00 5.0% $9,428.80 2.5% $489.40 4.2%
2012 $13,743.80 4.2% $12,245.80 3.9% $11,551.60 2.0% $11,149.60 4.1% $10,517.60 2.2% $687.40 5.6%
2013 $14,134.70 2.8% $12,476.20 1.9% $11,636.90 0.7% $11,501.50 3.2% $10,727.90 2.0% $561.30 4.5%
2014 $14,728.63 4.2% $12,985.75 4.1% $11,939.45 2.6% $11,930.35 3.7% $11,130.70 3.8% $628.30 4.9%
INCOME INDICATORS
SOURCE: US Bureau of Economic Analysis, Blue Chip Economic Indicators
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EMPLOYMENT STATUS / UNEMPLOYMENT RATE
Year
Employed Unemployed
Total
(in thousands) % Population Agriculture
Non-Agricultural
Industries
Total
(in thousands)
Percent
of Labor Force
2002 136,485 63% 2,311 134,174 8,378 6%
2003 137,736 62% 2,275 135,461 8,774 6%
2004 139,252 62% 2,232 137,020 8,149 6%
2005 141,730 63% 2,197 139,532 7,591 5%
2006 144,427 63% 2,206 142,221 7,001 5%
2007 146,047 63% 2,095 143,952 7,078 5%
2008 145,362 62% 2,168 143,194 8,924 6%
2009 139,877 59% 2,103 137,775 14,265 9%
2010 139,064 59% 2,206 136,858 14,825 10%
2011 139,869 58% 2,254 137,615 13,747 9%
2012 142,469 59% 2,186 140,283 12,506 8%
2013 155,389 63% 2,130 141,799 11,460 7%
2014 147,442 63% 2,158 139,118 8,688 5%
SOURCE: Bureau of Labor Statistics
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NOTE: Civilian, Non-Institutional Population
153
What are the Beige Books?
The Beige Books are officially known as the Summary of Commentary on Current Economic Conditions.
The report is published eight times per year by the Federal Reserve and is a summary of information on
economic conditions in each reserve district. The information is gathered through interviews and reports
from economists, market experts and other key business contacts.
BEIGE BOOK RECAP
BOSTON
NEW YORK
PHILADELPHIA
CLEVELAND
CHICAGO
MINNEAPOLIS
ST. LOUIS
ATLANTA
DALLAS
SAN FRANCISCO
KANSAS CITY
12
11
10
9
8
7
6
5
3 4
2 1
RICHMOND
PHILADELPHIA
SOURCE: Federal Reserve
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From July 2014 to May 2015, the Beige Books have reported the major changes and reflections in districts
across the country. Across the board, the economy is steadily expanding at a modest to moderate pace.
Despite some concerns within specific segments, the outlook remains optimistic for the upcoming year.
BEIGE BOOK RECAP- National Summary
SOURCE: Federal Reserve
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Holiday retail sales beat expectations and are higher than previous years.
Lower gas and oil prices have a positive effect on overall economy. Natural Gas production has increased while coal production continues to decline.
The severe winter experienced by the Northeast took a toll on the their economy, but is expected to be only temporary.
.
Across many districts, commercial real estate and construction are doing better than residential sales and construction. Both are still faring well and doing better than previous years.
Consumer spending and confidence is up across all segments.
Tourism is up across nearly all districts; hotels, restaurants and other tourist attractions experienced strong seasons and higher profits than previous years.
Avian flu creates severe egg shortage and prices go up.
Livestock and dairy producers benefitted from higher output prices and lower feed costs. Soy and corn prices were low due to high yields.
Droughts in the west reduce the crop yields of many fruit, vegetables, tree nuts, and legumes.
Companies in many industries express a desire to increase hiring. Wages and payroll are UP for most districts year-over-year.
155
Business activity expands this month. Many sectors reporting increase in revenues compared to last year.
Negative effects on the real estate markets due to weather are seen only as temporary. Natural gas
prices are up, strong dollar, though overall contacts say non-labor costs and prices are steady.
Economic activity is generally increasing and retailers and manufacturers report year-over-year revenue
increases. Residential real estate is mixed, while commercial is expanding. Net hiring is occurring in
sectors with more robust demand, and pay levels are rising for temps but generally flat in software and IT.
Contacts report mixed conditions this month. Moderate sales and revenue increases are noted.
Residential and commercial real estate report no change since last report. Product prices and input prices
are generally steady. Hiring plans remain subdued, and wages rose selectively if at all.
Contacts are optimistic this month, with the exception of negative impacts from severe weather. Sales are
up year-over-year in retail and manufacturing. Staffing firms are down due to weather, as is residential
real estate. Commercial real estate is still strong. Labor markets are unchanged, and pricing is not seen
as an issue.
Sales are ahead of year-earlier levels in most sectors. Commercial real estate is steady and residential
continues to see price increases but sales declines. Hiring is essentially flat, cost pressures vary, and the
2015 outlook remains positive for all responding firms.
Economic conditions are mixed this month. Manufacturers are reporting weaker results and retailers are
seeing flat to increasing sales. Tourism continues to be strong; restaurant revenues in the Boston area
were up 3.5% and hotels are expecting 7% revenue increase. Commercial real estate is steady, while
residential has declined. Firms are generally not hiring, and price pressures remain minimal.
Slow overall economic growth is reported this month. Retail sectors report flat results. Tourism is strong,
and manufacturers report mixed results and no commodity price pressures. Median home prices are
rising, however single-family home sales fell. Most contacts are cautiously optimistic.
Business activity is improving this month. Software and IT services report an increase in activity.
Commercial and residential real estate are markets are largely unchanged since the last report. Hiring is
essentially flat, and wages are steady. Prices are steady. A larger portion of retail and manufacturing
contacts cite sales and revenue increases year over year.
BEIGE BOOK RECAP 1ST DISTRICT – BOSTON
JANUARY 2015
FEBRUARY 2015
APRIL 2015
OCTOBER 2014
NOVEMBER 2014
JULY 2014
AUGUST 2014
MAY 2015
SOURCE: Federal Reserve
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BEIGE BOOK RECAP 2ND DISTRICT – NEW YORK
SOURCE: Federal Reserve
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Growth slowed to a modest pace this period. Selling prices are stable, input costs rose moderately.
Labor markets improved, scattered reports of increased wage pressures. Winter weather has slumped
tourism, real estate, and retail sales, but expected to be only temporary.
Growth picked up to a moderate pace since last report. Cost pressures abated somewhat, selling prices
up slightly. Service sector business has picked up slightly, labor market conditions strengthened.
Retailers show sales trending upwards, car dealers report softer sales. Tourism continues to show
strength. Housing slowed slightly, commercial development strengthened.
Economy is expanding at modest pace since last report. Labor market were more subdued in the past
few weeks. Consumer spending weakened in April but shows signs of rebounding in May. Selling prices
are stable, wage and input price increase, and stronger loan demands are reported from banks.
Economy is still growing at moderate pace, selling prices remain mostly stable, cost pressures
increasing, and indications of rising wages. Consumer spending is a bit stronger since last report,
despite harsh winter weather. Consumer confidence is again very high. Housing and office real estate
are strong, though construction is hindered by winter weather. Banks report steady loan demand.
Growth continues at moderate pace. Cost pressures continue to abate. Labor market conditions
continue to be strong. Retailers report slightly disappointing holiday sales. Tourism is robust, and
consumer confidence is at a multi-year high. Housing markets are mixed; office markets steady. Banks
report increased loan demand.
Economy has slowed to a more modest pace. Cost pressures remain fairly widespread. Labor market
conditions continue to strengthen. Business is steady or improving. Retailers report sales are mixed but
on balance to last report. Housing is steady. Tourism has grown since last report.
Growth continues at a moderate pace this month. Prices of finished goods and services are stable.
Hiring has stepped up slightly, and both auto dealers and general retailers report robust sales. Tourism
is brisk. Housing is level, commercial real estate strengthened. Banks report increased loan demand
and declines in delinquency.
The economy expanded again at moderate pace this month. Prices of finished goods and services
remain steady and businesses continue to report upward pressure on input prices. Labor market
conditions improve. Tourism is still strong from last report. Home sales are steady, commercial real
estate is mixed. Loan demand is stable, and little change in credit standards.
JANUARY 2015
FEBRUARY 2015
APRIL 2015
OCTOBER 2014
NOVEMBER 2014
JULY 2014
AUGUST 2014
MAY 2015
157
BEIGE BOOK RECAP 3RD DISTRICT – PHILADELPHIA
SOURCE: Federal Reserve
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Modest pace of growth continued as contacts are adjusting to winter weather. Staffing firms, auto
retailers, and manufacturers all report moderate growth, and brokers report the same for existing home
sales. Tourism is mixed due to weather. Lending volumes slowed but credit quality improved. Price
levels up slightly, but some prices fell as the impact of lower energy prices were felt across sectors.
District is still showing moderate growth. Manufacturers, staffing firms, service sector firms, auto dealers,
retailers all showing moderate growth but slightly slower than last period. Tourism activity is modest, as
is commercial and residential real estate. Lending volumes grew, as did price competition for loans.
Slight increase in home prices and wages.
Staffing firms, the service sector and retailers showed moderate growth this period. Manufacturers report
only slight growth. Brokers report modest growth. Tourism growth was positive and encouraging for a
strong summer season. Increase in wages and home prices occurred. Contacts continue to anticipate
moderate growth of economic activity over the next 6 months.
Severe weather dampened year-over-year growth, especially in tourism, construction, and real estate
sales, however contacts remain positive. Lending volumes continued to grow modestly, however there is
concern about weak underwriting. Price levels, home prices and wages increased slightly.
Modest growth reported across all sectors. Tourism appears to have slowed slightly but still strong.
Retailers, staffing firms and auto dealers showing moderate growth. Residential building declining
slightly, and existing home and commercial real estate sales are modest and steady. Lending volumes
grow modestly. Contacts anticipate moderate growth over next 6 months still.
Growth continues at a modest pace, very few shifts in growth rates of specific sectors. Staffing firms
experiences increase in requests. Service sectors and tourism maintain moderate growth. Retailers and
auto dealers show strong growth. Real estate shows slight growth, but sales down somewhat year-to-
year. Contacts continue to anticipate growth over next 6 month. Restaurants picked up in August after
summer lull.
Business activity grows at a modest pace this period and growth is anticipated over the next 6 months.
Auto sales, real estate sales and construction, and retail sales all reported growth. Manufacturing
activity, tourism, lending volumes and home prices are all up. About 1/3 of contacts plan to increase
employment and make capital expenditures over the next 6 months.
District is growing at a modest pace this period. Good summer weather is thought to have had a positive
effect on tourism. Retailers report slight growth; service sectors grew moderately. Manufacturers show
continued increase in activity. Commercial and residential real estate report slight growth. Lending
volumes are up slightly. Slight increases in wages, home prices, and general price levels.
JANUARY 2015
FEBRUARY 2015
APRIL 2015
OCTOBER 2014
NOVEMBER 2014
JULY 2014
AUGUST 2014
MAY 2015
158
BEIGE BOOK RECAP 4TH DISTRICT – CLEVELAND
SOURCE: Federal Reserve
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Economy grew at a slight pace this period. Unit volumes rose in residential real estate, while commercial
real estate construction declined. Sales are higher than last year for retailers and cars. Spending for
shale drilling has been significantly curtailed. Freight volumes much lower due to severe winter weather
and west coast labor disputes.
Modest growth occurred over the past 6 weeks. Consumer spending at retail establishments grew
slowly, and car sales posted gains. Coal production is up slightly, shale gas production is at a record
high. Freight shipments are strong, but capacity limits are hindering growth. Job openings and
placements are down, attributed to the seasonal effects. Metals and agricultural commodity prices up, as
are transportation costs. Restaurants are raising prices for menu items using animal product.
Non-residential contractors reported strong boost in activity, homebuilders saw mild pickup as well.
Retail sales were high compared to last year. Shale drilling leveled off after sharp first quarter declines.
Staffing firms noted increase in job openings. Upward pressures were mild, and input and finished
goods prices were steady. Declines in prices in steel, beef and dairy product were widely reported.
Activity at manufacturing plants was mixed. Residential real estate was up, as was commercial.
Retailers and car dealers reported higher than last year post-holiday sales. Shale gas activity contracted
due to low oil and natural gas prices. Job openings are increasing slightly. Decline in steel and diesel
prices, while an increase in prices for some building materials.
Most contacts in the district have a positive outlook for the year and expect demand for their products
and services to remain at current levels or rise. Retail spending during holiday season was slightly
above last year’s level. Coal production is up slightly, shale still very high. Payroll increased moderately.
Business and consumer credit demand rose, and input and finished goods prices were stable.
Expansion was moderate this period. Manufacturers reported strong business activity. Consumer
spending grew to pre-2013 levels. Freight volume continues to grow. Energy and agricultural
commodities declined, transportation equipment prices rose. Demand for construction strengthened
while the residential market slowed.
Economy expanded at a modest pace this month. Retailers saw higher year-over-year sales, and
demand for construction was up. New orders and production at factories grew slowly. Coal production
and shale activity remains unchanged from last report. Freight volume strengthened. Payrolls increased,
as did upward pressures on wages. Agricultural products and metal prices increased while coal prices
decreased.
Growth was moderate this period. Demand for construction still up, while new and existing home sales
have leveled. Car sales were robust. Retailers and hospitality venues saw higher year-over-year
revenues. Freight volume grew at a moderately strong rate. Demand for business credit moved higher.
Many companies looking to hire, but unable to find qualified workers. Coal prices continue to decline.
JANUARY 2015
FEBRUARY 2015
APRIL 2015
OCTOBER 2014
NOVEMBER 2014
JULY 2014
AUGUST 2014
MAY 2015
159
BEIGE BOOK RECAP 5TH DISTRICT – RICHMOND
SOURCE: Federal Reserve
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Growth was moderate outside manufacturing. Manufacturing was down due to severe winter weather
forcing shutdowns. Retail sales rose at slower pace. Labor markets generally improved. Agribusiness
reported seasonal, expected increases. Stronger tourism activity was noted, as was moderate growths
in service firm revenues.
Manufacturing activity increased at a slightly slower pace as the overall economy grew slightly in the
district. Retail sales grew, service firms grew more rapidly, and tourism advanced as expected. Crop
prices are lower than a year ago, but cattle, poultry and swine prices were higher as input prices rose as
well. Coal was unchanged, natural gas production increased. Average wages roses more quickly on net.
Expectations for the months ahead remain positive across all sectors. Manufacturing activity is up, retail
sales were balanced and tourism picked up. Residential and commercial real estate activity increased
moderately. Agricultural conditions improved and planting began on schedule. Energy production was
soft, with prices flat to lower than last period.
Growth was slower this period compared to last month. Manufacturing activity weakened. Retail sales
growth slowed. Revenues in the service sector grew quicker, and tourism was at expected levels.
Residential and commercial real estate increased modestly. Agribusiness continued to feel seasonal
slowing. Demand for labor rose. Natural gas prices declined in recent weeks.
Tourism was at or above normal seasonal levels. Loan demand rose slightly. Real estate activity
increased slightly. Labor demand rose, and hiring and wage averages increased. Coal production is still
low as natural gas production rose. Agribusiness reported a seasonal slowing, although business
conditions are better than last year. Service sector and retail prices grew slightly.
Moderate gains in the economy in this month. Inventories of finished good and raw materials rose at a
faster pace. Retail and non-retail sales expanded moderately. Tourism was robust and anticipating a
strong holiday season. Harvesting is on schedule, but prices for corn, soy and grain are down. Demand
for labor is up, and service sector employment and wages increased moderately.
Economy grew modestly since last report. Retail sales slowed since last report, but revenues and
customer demand increased at non-retail service firms. Tourism was at normal seasonal levels. Crops
that suffered due to a bad winter have been replanted. Natural gas increased, coal leveled off.
Employment increased modestly, service sector and retail prices both increased.
Manufacturing advanced moderately as shipments and orders increased. Retail sales grew moderately,
although consumers were conservative in their spending. Tourism is strong, with an increase in bookings
noted. Lending volumes increased with stronger demand for mortgages. Commercial and residential real
estate were strong. Crop prices decreased, input prices were stable, and replanting and harvesting were
on schedule. Coal production was unchanged but prices declined.
JANUARY 2015
FEBRUARY 2015
APRIL 2015
OCTOBER 2014
NOVEMBER 2014
JULY 2014
AUGUST 2014
MAY 2015
160
161
BEIGE BOOK RECAP 6TH DISTRICT – ATLANTA
SOURCE: Federal Reserve
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Retailers affected by the severe winter weather noted slower growth than previous periods. Hospitality
reports were mixed, real estate was flat with the exception for commercial construction. Bankers noted
improvements in lending activity. Firms noted muted wage pressures and low material costs.
Most contacts remain positive about the near-term outlook. Retail sales are up, as are auto sales.
Hospitality and tourism sectors remained positive as an increase in international and domestic travelers
occurred. House prices improved and commercial real estate noted increased activity. Loan activity was
flat, and district continues to experience modest growth. Heavy rain delayed peanut harvesting.
Softness in sales growth were reported compared to prior months for retail segment. Auto sales were
up, tourism and hospitality remained strong, and manufacturing saw moderate growth. Home sales were
slightly up. Commercial real estate noted continuing increase in demand. Firms continue to add payrolls
and struggle to fill a range of positions. Wage and non-labor input cost pressures remained muted.
Growth continues at a moderate pace. Lower gas prices noted as spurring on auto sales. The tourism
sector remains strong. Real estate is up, manufacturers reported increases in new orders and
production, and bankers report a strong demand in loans. Nominal wage increases were reported with a
continued growth in the labor force.
Economic activity continues to improve. Holiday sales were solid, and the hospitality industry fared very
well. Residential and commercial real estate is doing well, as are manufacturers. Banking contacts noted
improving loan demand. Job growth continued, and only mild cost pressures were reported.
Retailers note slight increase in sales activity. Hospitality contacts report strong activity, and leisure and
business travel contacts report an increase in demand. Commercial and residential real estate note
improved demand. Manufacturers cited expanded activity. Banking conditions improved. Lower corn
prices continue to benefit poultry and livestock producers.
Economic activity expanded modestly. Outlook remains strong across all sectors for the rest of the year.
Retail sales rose at a steady pace, as did auto sales. The hospitality sector is doing extremely well.
Residential real estate is steady; builder and brokers are optimistic. Manufacturing increased new orders
and production. Payroll employment grew at a modest pace, and wages and input prices were stable.
The economy increased modestly since last report. Most firms continue to be optimistic for the rest of the
year. The travel and tourism sector remained upbeat. Retail and auto sales continued on an upward
trend. Home sales were at higher levels than last year. Aside from automobiles, manufacturers noted a
decline in new orders and production. Stable wage growth occurred, and cost pressures were muted.
JANUARY 2015
FEBRUARY 2015
APRIL 2015
OCTOBER 2014
NOVEMBER 2014
JULY 2014
AUGUST 2014
MAY 2015
161
162
BEIGE BOOK RECAP 7TH DISTRICT – CHICAGO
SOURCE: Federal Reserve
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Consumer and business spending and manufacturing production all grew moderately, although winter
weather slowed growth slightly. Real estate activity increased modestly. Credit conditions improved. Low
gas prices persisted. High corn and soy stocks put downward pressure on most crop prices.
Concerns were noted about weakening foreign growth and a looming severe winter, however optimism
still persisted for the remainder of the year. Higher consumer confidence and lower gas prices also
added to a positive outlook. Cost pressures generally eased over the period. Milk and hog prices
decreased; corn, soybean, wheat and cattle prices rose.
Contacts expect growth that has occurred recently to persist for the next 6-12 months. Strong sales
reported in the tourism, restaurant, entertainment and sports sectors. Soy and corn prices remain low
because of such high yields and anticipation for large fall harvest. Cattle prices remained high. Poultry
stocks are hit extremely hard by avian flu, and egg prices have increased.
Growth in the district remained moderate. Consumer spending and manufacturing production rose
moderately, while business spending and construction and real estate activity increased modestly.
Credit conditions improved on balance. Cost pressures were little changed, and price increases
remained limited. Corn, soybean, and wheat prices were lower.
Good weather, lower gasoline prices, and generous holiday promotions benefitted holiday sales and
revenues and kept consumer confidence high. Construction and real estate increased moderately. Corn
and wheat prices rose because of drought conditions and limits by the Russian government on exports.
Lower gas prices spurred sales of larger vehicles, and consumers continued to take advantage of low
lending rates. Growth was moderate overall. Business spending, construction and manufacturing activity
all increased moderately. Cost pressures changed little. Corn and soybean prices fell due to a large
harvest, and milk, hog, and cattle prices increased. Many contacts reported passing higher health care
costs onto employees.
Economic activity remained moderate this period and contacts are optimistic. Consumer and business
spending increased. Manufacturing production grew, as did construction and real estate activity. Credit
conditions improved. Cost pressures were modest. Corn, soybean, wheat, cattle and milk was down; hog
prices were up.
Moderate growth continued this period. Real estate activity, manufacturing production, and consumer
and business spending all increased. Credit conditions improved, and cost pressures were modest. Milk
prices were higher, while corn, soybean, hog and cattle prices were lower. Corn and soybean production
exceeded last year’s levels.
JANUARY 2015
FEBRUARY 2015
APRIL 2015
OCTOBER 2014
NOVEMBER 2014
JULY 2014
AUGUST 2014
MAY 2015
162
BEIGE BOOK RECAP 8TH DISTRICT – ST. LOUIS
SOURCE: Federal Reserve
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Modest growth continued this period. Planned activity has been mixed. Service sector has been positive,
however manufacturing was negative. Residential and commercial real estate has been positive. Year-
over-year consumer spending is higher. Tourism activity is up. Very wet conditions have hindered crop
yields. Coal production down.
Growth slowed slightly from previous periods. Retail has experienced slow to modestly increasing sales.
Wages have increased modestly while consumer prices and employment levels have grown more
slowly. Crop production is substantially larger than last year. Coal is 2.8% higher than last year.
Growth is modest. Wages grew moderately, as did employment. Consumer spending grew.
Restauranteurs noted higher year-over-year sales. Banks showed moderate improvements in lending
activity. Spring plantings recovered due to drier weather. Bankers expect farm income, capital spending,
farmland values, and cash rents to decline.
Growth occurred at a moderate pace this period. Residential real estate has improved, commercial
continues to do well. Wages have grown moderately while employment and consumer prices have
grown modestly. Wheat crops were in good condition, meat production was stable, and coal production
increased.
Growth this period was slightly faster than previous month. Retail contacts report a stronger holiday
season compared to last year, as did auto dealers. Planned manufacturing activity is positive. Meat
production is lower. Coal production higher.
Retail contacts have been positive, as have manufacturing and service segments. Lending at banks has
increased slightly. Commercial and industrial real estate has been mixed, and residential has been
weak. Harvest depletion rates have lagged behind their 5 year averages. Coal production was 1.5%
higher than last year.
Economic activity increased modestly. Retail, manufacturing, and service segments have all been
positive. Residential and commercial real estate conditions have improved. Wage and employment
levels have grown modestly, while prices increased slightly.
Planned activity in manufacturing and services has been positive, and retail activity has improved
modestly. Real estate markets have remained weak, commercial has been mixed. Lending activities at
banks have been stable to slightly increasing. Wages and employment levels have grown modestly, as
have prices.
JANUARY 2015
FEBRUARY 2015
APRIL 2015
OCTOBER 2014
NOVEMBER 2014
JULY 2014
AUGUST 2014
MAY 2015
163
BEIGE BOOK RECAP 9TH DISTRICT – MINNEAPOLIS
SOURCE: Federal Reserve
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Activity was flat in manufacturing and tourism, while activity decreased in energy and mining. Increased
activity was noted in consumer spending, commercial and residential construction and real estate, and
professional services. Labor markets were mixed, as a number of layoffs were noted. Milk prices have
fallen dramatically in recent months, but dairy producers are still benefitting from lower feed costs.
Economy grew moderately since last report. Tourism was strong, and early snowfall is leading to
increased optimism for the winter. Activity was steady in energy, increased in manufacturing,
professional services and mining, and moderate in wage increases, hiring and price increases. Farm
incomes continue to be affected by lower crop prices. Meat producers continue to benefit from this.
Increased activity was noted in consumer spending, tourism, commercial construction, and professional
services; residential real estate activity grew briskly. Activity was flat in manufacturing, residential
construction, and commercial real estate, while activity decreased in energy and mining. Labor markets
tightened further since the last report.
Increased activity was noted in consumer spending, commercial construction, commercial real estate,
professional services, and manufacturing. Activity was mixed in tourism and residential real estate and
down in residential construction, agriculture, and energy and mining. Oil and gasoline prices decreased.
Agricultural conditions were down, with livestock and dairy producers doing better than crop farmers.
Growth was modest this period. Tourism activity leveled slightly. Construction and commercial real
estate was mixed; residential was down. Labor markets tightened. Consumer spending was up. Farm
incomes are expected to continue to fall.
Moderate growth was reported across the district. Mining was flat, labor markets continued to tighten
slightly. Wage increases were modest, while price increases generally remained subdued. Consumer
spending, tourism, commercial real estate, professional services, manufacturing and energy continue to
show an increase in activity. Agriculture was mixed. Prices for corn, soy and wheat were still low; higher
for hay, cattle, hogs, poultry and milk.
Economy grew moderately this period. Consumer spending, tourism, commercial construction and real
estate, professional services, manufacturing, energy and mining all experienced increased activity.
Residential real estate and agriculture was mixed. Flooding led to some crop losses. USDA forecasts a
good harvest. Wage increases were modest, hiring outpaced layoffs, and overall prices remained level.
Labor markets showed signs of tightening this period. Wage increases were modest, prices were
generally level. Activity was down in mining and residential real estate. Increase in activity occurred in
consumer spending, professional services, manufacturing and energy. Tourism levels are up from a year
ago. Prices for corn and soy and wheat were down, up for hay, cattle, hogs, poultry, eggs and milk.
JANUARY 2015
FEBRUARY 2015
APRIL 2015
OCTOBER 2014
NOVEMBER 2014
JULY 2014
AUGUST 2014
MAY 2015
164
BEIGE BOOK RECAP 10TH DISTRICT – KANSAS CITY
SOURCE: Federal Reserve
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Mixed conditions were seen across segments. Consumer spending declined slightly, though tourism
picked up slightly. Energy firms note a sharp decline, and agricultural conditions softened. Real estate
increased modestly. Bankers noted solid loan demand. Increase in wage pressures as well as labor
shortages for specific positions was noted.
Economy grew slightly this period. Retail contacts report moderate growth. Restaurants and tourism
noted a slight decline. Commercial real estate increased moderately, residential declined slightly.
Banking contacts noted steady loan demand and quality. Energy sector activity remained steady. Slight
rise in wages noted while the labor market tightened. Farm income expectations fell sharply.
Economy grew slightly this period. Real estate continued to increase at a modest pace. Consumer
spending rose moderately. District manufacturing activity declined sharply, and substantial weakness in
the energy sector persisted. Farm income levels declined from the previous survey period, although crop
conditions improved. Prices rose slightly in most industries and wage growth was steady.
Consumer spending was flat, with auto sales and restaurant traffic offsetting a decrease in retail and
tourism activity. District manufacturing and other business activity rose. Real estate increased slightly.
Farm income and crop prices decreased. Energy activity continued to slow and is expected to continue.
Prices grew modestly and wages grew slightly.
Growth was slight but persistent this period. Retail contacts report slight decline but remain optimistic.
Real estate activity continued to edge up. Agricultural growing conditions were favorable. Energy sector
slowed in response to lower prices.
Most contacts are optimistic about future activity. Sluggishness reported at hotels and restaurants, but
consumer spending overall is still up. Manufacturing activity is up, wholesale trade is noting improved
sales. Crop conditions remain solid, but lower crop prices dampened the outlook for farm incomes.
Cattle prices rose since last report. Farmland values holding at high levels.
The economy expanded modestly this period, and most contacts anticipated stronger growth in the
months ahead. Consumer spending rose modestly, restaurants and tourism fared very well.
Manufacturing activity continued to expand. Crop prices dropped for wheat, corn and soybeans, while
cattle and hog prices continued to rise. The number of active oil rigs expanded and natural gas rigs held
steady. Prices for raw materials and finished goods rose slightly.
Economy grew modestly. Consumer spending, restaurants and tourism continue to do well.
Manufacturing slowed somewhat. Construction was strong, Bankers report steady loan demand. Crop
prices were lower and growing conditions improved. Modest rise in oil well drilling noted. Wage
pressures grew modestly, as did prices.
JANUARY 2015
FEBRUARY 2015
APRIL 2015
OCTOBER 2014
NOVEMBER 2014
JULY 2014
AUGUST 2014
MAY 2015
165
BEIGE BOOK RECAP 11TH DISTRICT – DALLAS
SOURCE: Federal Reserve
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Manufacturers mostly reported steady demand. Retail reports were more mixed, but reports of
automobile sales were positive. Demand for nonfinancial services improved, and real estate activity
remained solid. The energy sector continued to decline. Price pressures were muted and employment
held steady. Outlooks remained cautiously optimistic, except for in the energy sector where outlooks
were negative.
Consumer spending rose moderately, and transportation and wholesale trade firms reported stronger
sales activity. Real estate activity continued to increase. Bankers reported a slight rise in loan demand.
Manufacturing activity declined sharply, and substantial weakness in the energy sector persisted. Farm
income levels declined, although crop conditions improved. Prices rose slightly in most industries and
wage growth was steady.
Manufacturing activity was mostly stable. Retailers and auto dealers reported higher sales. Demand for
business and transportation services was mixed. Home sales continued on an upward trend. Demand
for oilfield services declined sharply, while agricultural conditions and loan demand improved slightly.
Lowering oil prices continue to be a concern for many in the district this period. The economy expanded
slightly this period. Retailers saw steady sales, home sales grew, and agriculture conditions improved
slightly. Employment held steady, and manufacturing activity increased.
The economy grew at a moderate pace this period. Manufacturers reported increases in demand, and
retail and automobile sales expanded. Demand for nonfinancial services generally improved and real
estate activity remained solid. The energy sector continued to grow, and agricultural conditions
improved. Upward price pressures eased slightly and employment held steady or increased.
Growth occurred at a moderate pace this period. Manufacturing was up, as were retail and auto sales.
Residential real estate was down slightly, though commercial was up. Demand for oilfield services was
up. Agricultural conditions improved. Prices were unchanged or increased modestly and employment
held steady or rose slightly. Domestic demand for beef remained very strong despite record prices.
Manufacturing activity was largely positive. Retail and automobile sales strengthened, and demand for
nonfinancial services was stable. Both home sales and commercial real estate leasing activity remained
solid. Demand for oilfield services remained robust, and agricultural conditions improved. Prices
increased modestly or held steady, as did employment levels. The drought being experienced by the
district has eased slightly.
JANUARY 2015
FEBRUARY 2015
APRIL 2015
OCTOBER 2014
NOVEMBER 2014
JULY 2014
AUGUST 2014
MAY 2015
Manufacturing activity continued to increase. Retail and automobile sales reports were mixed, and
nonfinancial services firms saw steady demand. Demand for oilfield services stayed robust; agricultural
conditions improved. Selling prices were stable or rose slightly, and employment held steady. Outlooks
remained optimistic, but some contacts noted concerns about the potential effect of declining oil prices.
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BEIGE BOOK RECAP 12TH DISTRICT – SAN FRANCISCO
SOURCE: Federal Reserve
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The pace of output in the district’s agricultural sector was unchanged. Real estate activity advanced,
especially in the commercial real estate sector. Lending activity increased moderately. Price inflation
was slight, while wage inflation was moderate. Retail sales and demand for business and consumer
services increased moderately.
Price inflation firmed, while wage gains picked up a bit but remained moderate on balance. Retail sales
and demand for consumer services grew moderately. Manufacturing activity was flat. Real estate activity
strengthened. Lending activity expanded. Contacts reported excess supply and low prices for some
agricultural products, notably potatoes and dairy, reflecting global competition and an appreciated dollar
that has reduced exports.
Price inflation remained modest, while wage inflation was moderate. Retail sales and demand for
business and consumer services increased moderately. Manufacturing activity picked up, while
agricultural conditions were mixed. Lending activity increased modestly. Contacts reported that most
retailers are optimistic about growth over the coming year, citing decreases in gas prices and
improvements in employment conditions.
Overall price and wage inflation remained modest. Retail sales and demand for business and consumer
services increased moderately, and holiday sales were higher than last year. Manufacturing activity
picked up, while agricultural conditions were mixed. Real estate activity advanced, mainly in the
commercial construction sector. Lending activity was mixed. Gas prices were down.
Growth was moderate again this period. Price and wage inflation remained modest. Retail sales grew
slightly. Manufacturing activity picked up, and real estate continued to do well. Continuing droughts in
California and parts of Washington and Idaho elevated water costs and depressed harvests of cotton
and various grains, vegetables, nuts, and legumes.
Economic growth was moderate. Price inflation was modest, and wage pressures were contained. Retail
sales were unchanged. Demand for business and consumer services ticked up. Manufacturing activity
improved. Drought conditions contributed to reduced production of some fruits, vegetables, and livestock
products. Activity in real estate markets advanced, Loan demand increased.
Price inflation remained modest this period and wage pressures were well contained. Retail sales
increased, as did business and consumer services. Manufacturing was mixed, agricultural conditions
were good, and activity in real estate markets advanced. Loan demand increased moderately.
JANUARY 2015
FEBRUARY 2015
APRIL 2015
OCTOBER 2014
NOVEMBER 2014
JULY 2014
AUGUST 2014
MAY 2015
Retail sales and manufacturing activity was up this period. Real estate continues to do well. Loan
demand increased moderately. Natural Gas prices decline. Restaurant sales climbed, notably in the
quick service segment. Hotel occupancy rates are up. The continuing drought in California depressed
yields for crops such as raisins and almonds.
167
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