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General market info
This document discusses trends in the beef industry and foodservice sector. It notes that beef exports from major grain-fed countries are projected to be down 10% in 2015. Domestic beef production in Canada is also down 4% year-to-date in 2015. However, domestic retail and international beef demand continues to climb. The document outlines strategies for foodservice operators to respond to competition from retailers, including focusing on craveable items, atmosphere, value, and better-for-you options. It emphasizes differentiating through authenticity and farm-fresh or handcrafted approaches.
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General market info
- 1. Connect, Innovate andInspire. Seeking the shift and owning new consumers All things Culinary
- 2. Agenda • Market update •Foodservice Trends • Who after your Business • What can you do • Key driver of Sales for Foodservice • Conclusion
- 3. Beef Exports fromgrain-fed countries are projected to be down 10% in 2015. -6% -14% -1% 0.0 0.2 0.4 0.6 0.8 1.0 1.2 1.4 1.6 1.8 2.0 US Australia Canada MillionTonnesCWE Beef Exports 2011-2015 2011 2012 2013 2014 2015p Source: USDA, FAS, PSD 45 47 49 51 53 55 57 59 61 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015f MillionTonnes Global Beef Production Source: USDA, FAS
- 4. Domestic production isdown 4% YTD in 2015. 120 140 160 180 200 220 240 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec millionpounds Domestic Beef Production 2014 2015 Projection Source: Canfax, CBGA
- 5. 80 85 90 95 100 105 110 115 120 125 130 90 92 9496 98 00 02 04 06 08 10 12 14 DemandIndex(2000=100) Canadian Retail Beef Demand Index Index 2000=100 Source: Statistics Canada, CanFax, US Beef Demand Study Group 50 60 70 80 90 100 110 120 130 90 92 94 96 98 00 02 04 06 08 10 12 14 InternationalBeef Demand (Index2000=100) Source: Cranfield 2012, CanFaxResearch Domestic retail and international demand continues to climb in 2015
- 6. $180 $200 $220 $240 $260 $280 $300 $320 $340 Jan Feb MarApr May Jun Jul Aug Sep Oct Nov Dec Cdn$percwt Canadian AAA Cutout Values 2014 2015 3 yr avg Source: Canfax Research,AAFC Record high wholesale beef prices are expected to remain strong through 2015.
- 7. Some cuts havedropped their prices in Q3 2015 (e.g. 50% Trim, Bone-in Shortrib). $0 $2 $4 $6 $8 $10 $12 Fresh 50% Lean Trimmings Bone-in Shortrib Fresh 65% Lean Trimmings Briskets 120 Bone-in Chuck Shortrib Top Butt 13dn Inside Skirt Boneless Round Flank Steak Outside Skirt Boxed Beef Prices - Selected Cuts, Q3 2015 Source: Canfax Research,AAFC LargestY/YchgSmallestY/Ychg
- 8. King of grocery,centre of the plate. $12 $13 $14 $15 $16 $17 $18 $19 $20 $21 J F M A M J J A S O N D $/kg Retail Beef Prices 2013 2014 2015 Source: Statistics Canada
- 10. Market mover… • Oldprojection versus reality
- 11. 0 20 40 60 80 100 120 APR '07 APR'08 APR '09 APR '10 APR '11 APR '12 APR '13 APR '14 APR '15 Consumer confidence is higher in 2015 1 © 2015 Technomic Inc. Apr ’15 94.7
- 12. 12 Few consumers plan todine out more in 2015 More than in 2014 14% About the same 68% Less than in 2014 18% In 2015, do you think you will eat at restaurants more, less or the same amount as you did in 2014?
- 13. 13 …but twice asmany plan to spend more In 2015, do you think you will spend more, less or the same amount at restaurants as you did in 2014? Spend more 28% Spend about the same 53% Spend less 19%
- 14. -4% -3% -2% -1% 0% 1% 2% 3% 4% Feb '07 Feb'08 Feb '09 Feb '10 Feb '11 Feb '12 Feb '13 Feb '14 Feb '15 Foodservice sales slowly increasing % Change vs. PriorYear (12-Month Moving Average) 1
- 15. © 2015 TechnomicInc. 15 restaurant retailer ? OR
- 16. 16 Lines continue toblur as options grow Meal kits Home delivery Fast food Fast casual Casual dining Delivery RMS Grab-n-go Food trucks Vending Snack boxes
- 17. Meal kits Homedelivery Fast food Fast casual Casual dining Delivery RMS Grab-n-go Food trucks Vending Snack boxes Retail Growth rate is approaching that of restaurants Retail: 3.3% Restaurants: 4.0%2014 growth: 17 Consumers’ consideration set expands © 2015 Technomic Inc.
- 18. 18 Many retailers haveupgraded and expanded Ready Meals Solution programs $5.9 billion and GROWING © 2015 Technomic Inc.
- 19. Identify and respondto Foodservice vs retail limitations
- 20. 20 Who’s winning? Restaurant Quick serviceSupermarkets Craveable items Atmosphere Overall value Better-for-you options Service speed Convenience Ingredient quality © 2015 Technomic Inc.
- 21. © 2015 TechnomicInc. endless choice and customization 21
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- 24. 24 Restaurant Here’s what YOU cando about it
- 25. Acknowledge the threat forFresh, With a story… Beef is a single ingredient, clean label dense protein option raise with pride in Canada
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- 28. 28 © 2015 TechnomicInc. HANDCRAFTED BURGERS
- 29. 29 © 2015 TechnomicInc. ACCENT ON FRESHNESS
- 30. 30 © 2015 TechnomicInc. FARM-FRESH FOODS
- 31. • Strong growthand an unique upsell strategy • Review new beef cut concept with your Sales Reps… Promote innovative cuts • Review your portion size for menu mix • Maintain premium local angle Burger and Steak offer: Other option for growth: