Page 1

FooDSERvICE FACTS 2013

MARKet RevieW And FoReCAst

$80 bILLION 2018

$70 bILLION 2014

$60 bILLION 2010

$50 bILLION $40 bILLION 2004 1999

Foodservice sales hit $68 billion in 2013 Sales sparkle in resource-rich provinces Supper makes a comeback

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Contents 4

CRFA’s 2013 Foodservice Forecast

8

Foodservice Segments

11

CRFA’s Restaurant Industry Forecast: 2014 to 2017

12-13 The Provinces 15

Foodservice Market Share

16

Profitability

17

Chains and Independents

18-20 Consumer Trends 22

Top 10 Lists

24

2013 CRFA Chef Survey Results

About Foodservice Facts FOODSERVICE FACTS is an annual market review and forecast from the Canadian Restaurant and Foodservices Association, 316 Bloor Street West, Toronto, Ontario M5S 1W5.

POWERPOINT SLIDES Foodservice Facts is available in PowerPoint format for CRFA members only:

Phone: (416) 923-8416 or 1-800-387-5649 Fax: (416) 923-1450 E-mail: info@crfa.ca Websites: www.crfa.ca www.restaurantcentral.ca

Deluxe Edition – A ready-made presentation with all the charts and graphs in Foodservice Facts, plus text slides with key points in bullet form. $250.00 plus applicable taxes.

Senior Economist: Chris Elliott Editor: Prasanthi Vasanthakumar

Basic Edition – Includes all the charts and graphs in Foodservice Facts. $130.00 plus applicable taxes.

Copyright 2013. All rights reserved including the right of reproduction in whole or in part in any form.

To order the slides, visit CRFA’s online resource centre at www.crfa.ca or call 1-800-387-5649 ext. 4215. CRFA accepts all major credit cards.

Special thanks to:

Want more CRFA stats? Download our Infographics (free) and “I am a restaurant” video (view online or CRFA members can request a free DVD copy). See all our research reports at www.crfa.ca/research.

Follow us on Twitter (@CDNRestaurants) and ‘Like’ us on Facebook (Canadian Restaurant and Foodservices Association) to see the latest CRFA stats.

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Fact

CRFA’s 2013 FoodseRviCe FoReCAst

Fact

Foodservice sales will moderate in 2013 following solid gains in 2012.

With $65 billion in sales and 1.1 million employees, Canada’s restaurant industry is a social and economic driver in communities across the country. In 2012, the restaurant industry turned a corner with healthy gains in commercial foodservice sales. However, operators will be hard-pressed for a repeat performance in 2013. Despite a slower pace of growth, total foodservice sales will reach nearly $68 billion in 2013 – an increase of $2.4 billion over 2012.

THE FOODSERVICE OUTLOOK: A moderation in consumer spending coupled with a sluggish economy will limit total foodservice sales growth to 3.7% in 2013 following a 5.0% increase in 2012. Since 2000, total foodservice sales have averaged 3.7% nominal growth. Adjusted for menu inflation of 2.5%, real sales are forecast to climb by 1.2% in 2013 compared to a 2.5% increase in 2012. Growth in 2013 will be driven by solid gains in caterers, accommodation and institutional foodservice.

THE ECONOMIC OUTLOOK: There are several points of weakness for the Canadian economy in 2013. Sluggish economic expansion in the United States and lethargic growth in Europe will continue to weigh on Canadian exports. Government cutbacks at the provincial and federal levels will restrain overall fiscal spending. As a result, Canada’s economy is forecast to expand by 1.6% in 2013 after growing a modest 1.8% in 2012. This is a notable slowdown as real GDP grew at an average of 2.9% annually between 2000 and 2007. Disposable income increased 3.4% in 2012, but will slow to 2.6% growth in 2013. Weaker disposable income growth will play a major role in restraining foodservice sales. Retail spending is forecast to climb by 2.4% due to strong gains in Saskatchewan and Alberta. However, high consumer debt and modest disposable income growth will keep consumer spending in check. Canada has among the highest household debt-to-income ratios in the world, at 165% of disposable income.

tOtaL FOODSERVIcE SaLES

REaL chaNgE IN tOtaL FOODSERVIcE SaLES

(In BILLIonS oF DoLLARS)

4%

$80 $70 $60 $50

$47.5

$50.0 $51.8

$62.4 $59.3 $58.7 $60.8 $54.8 $56.7

$65.5

$67.9

3.1%

2.7%

3%

2.5%

2.1%

2%

0.8%

1% 0%

$40

-0.3%

-1% $30

-2%

$20

-1.2%

-3%

$10 $0

1.2%

1.1%

0.8%

-4% 2003

2004

2005

2006

2007

2008

2009

2010

2011

2012-p 2013-f

p - preliminary; f - forecast

Source: CRFA and Statistics Canada

-5%

-4.4% 2003

2004

2005

2006

2007

2008

2009

2010

2011

2012-p 2013-f

p - preliminary; f - forecast Source: CRFA and Statistics Canada note: Real refers to inflation-adjusted growth

4 Foodservice Facts 2013 | www.crfa.ca

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Fact

CRFA's 2013 Foodservice Forecast

Fact

For the first time since 2008, all segments of the restaurant industry will see higher sales.

A rebound in traffic, especially at supper, led to solid gains at quick- and full-service restaurants in 2012. As a result, commercial foodservice sales jumped 5.1% – the strongest growth since 2006.

Healthy gains in accommodation and institutional foodservice will boost non-commercial foodservice sales by 4.0% in 2013 following a 4.4% increase in 2012.

CRFA's Foodservice Sales Forecast Canada

2011 Final

% Change '11/'10

(Millions of Dollars)

Quick-service restaurants

$21,962.0

Full-service restaurants Caterers Drinking places

2012 Preliminary

% Change '12/'11

(Millions of Dollars)

3.5%

$23,144.6

$21,486.0

2.6%

$4,213.5

5.4%

2013 Forecast

% Change '13/'12

(Millions of Dollars)

5.4%

$24,024.1

3.8%

$22,693.2

5.6%

$23,487.4

3.5%

$4,395.8

4.3%

$4,602.4

4.7%

$2,362.4

-4.3%

$2,351.3

-0.5%

$2,358.3

0.3%

$50,024.0

2.9%

$52,584.8

5.1%

$54,472.2

3.6%

Accommodation foodservice

$5,235.0

0.6%

$5,544.0

5.9%

$5,794.0

4.5%

Institutional foodservice

$3,561.8

3.6%

$3,698.1

3.8%

$3,863.5

4.5%

Retail foodservice

$1,267.6

-1.4%

$1,314.5

3.7%

$1,367.1

4.0%

Other foodservice

$2,304.4

2.2%

$2,362.0

2.5%

$2,416.3

2.3%

TOTAL NON-COMMERCIAL

$12,368.8

1.9%

$12,918.4

4.4%

$13,440.9

4.0%

TOTAL FOODSERVICE

$62,392.7

2.6%

$65,503.2

5.0%

$67,913.1

3.7%

TOTAL COMMERCIAL

Menu inflation REAL GROWTH

2.9%

2.5%

2.5%

-0.3%

2.5%

1.2%

Source: CRFA's InfoStats, Statistics Canada, fsSTRATEGY Inc. and Pannell Kerr Forster

Foodservice Segments Commercial Foodservice Operations whose primary business is food and beverage service. Quick-service Restaurants Includes counter service, cafeteria, food courts and take-out and delivery establishments. Full-service Restaurants Includes licensed and unlicensed fine-dining, casual and family restaurants as well as restaurant-bars. Caterers Includes contract caterers supplying food services to airlines, railways, institutions and recreational facilities, as well as social caterers providing food services for special events. Drinking Places Includes bars, taverns, pubs, cocktail lounges and nightclubs primarily engaged in serving alcoholic beverages for immediate consumption. These establishments may also provide limited food service.

Non-Commercial Foodservice Self-operated foodservice in establishments whose primary business is something other than food and beverage service. Branded restaurants in any of these settings are counted in commercial restaurant sales if they are owned by the restaurant chain. Accommodation Foodservice Foodservice in hotels, motels and resorts. Institutional Foodservice Foodservice in hospitals, residential care facilities, schools, prisons, factories, remote facilities and offices. Includes patient and inmate meals. Retail Foodservice Foodservice operated by department stores, convenience stores and other retail establishments. Other Foodservice Includes vending, sports and private clubs, movie theatres, stadiums and other seasonal or entertainment operations.

Total Foodservice: Includes commercial and non-commercial foodservice. www.crfa.ca | Foodservice Facts 2013 7

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Fact

FoodseRviCe seGMents

Fact

Quick-service restaurants and caterers have led the commercial foodservice industry in sales growth over the past 10 years.

Restaurants and caterers have enjoyed solid sales growth since 2002, while drinking places have endured a sharp sales drop due to a decline in units and weak consumer demand. Since 2002, quick-service restaurants have led the industry with a 38% jump in per capita sales because consumers are looking for convenience and value. This preference was especially true during the recession as Canadians visited full-service restaurants less. In addition, menu innovation has boosted traffic at quick-service restaurants in the breakfast and snacking dayparts. For 2013, sales at quick-service restaurants are forecast to climb by 3.8%.

cuMuLatIVE chaNgE IN PER caPIta FOODSERVIcE SaLES SINcE 2002 50%

Full-service restaurants Quick-service restaurants Caterers Drinking Places

40%

The recession in 2009 combined with a weak sales recovery in 2010 and 2011 has restrained per capita full-service restaurant sales growth to 21% since 2002 – which is nearly half the pace of growth at quickservice restaurants. A rebound in supper traffic at family, casual and fine dining boosted total full-service restaurant sales by 5.6% in 2012, which is the segment’s strongest growth since 2006. In 2013, slower disposable income growth will restrain sales expansion to 3.5%.

30%

38% 37% 21%

20% 10% 0% -10%

After several years of solid gains, caterer sales slowed to 4.3% growth in 2012. Sales are forecast to climb an additional 4.7% in 2013. Since 2002, per capita caterer sales have risen by 37% for the second-fastest growth in the industry. This success is due to an aging population and increased contracting-out in health care facilities (i.e. hospitals, long-term care and retirement homes), as well as robust growth in managed service providers offering foodservice to remote camps in the natural resources industry.

-20%

-20% -30%

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

Source: CRFA and Statistics Canada note: Data are not adjusted for menu inflation.

In 2012, the number of commercial foodservice units rose by 194 to 81,772 as increases in full- and quick-service restaurants were partially offset by a decline in caterers and drinking places.

Drinking places posted the worst performance since 2002. Per capita sales plummeted by 20% as a result of fewer units and poor consumer demand. In 2012, drinking place sales fell by 0.5%, primarily due to stricter drinking and driving legislation in British Columbia and falling demand in Central Canada. Sales are forecast to climb by just 0.3% in 2013.

Note: Per capita foodservice sales are calculated by dividing total segment sales by Canada’s total population.

PERFORMaNcE by SEgMENt (cOMMERcIaL FOODSERVIcE)

Quick-service restaurants Full-service restaurants Caterers drinking places Canada

Sales Growth Forecast in '13/'12 1

Sales Growth in '12/'11 1

2012 Sales (in millions)

Average Unit volume 2

Units

Chain Share of Units 3

Independent Share of Units 3

Pre-tax Profit (% of operating revenue) 4

3.8% 3.5% 4.7% 0.3% 3.6%

5.4% 5.6% 4.3% -0.5% 5.1%

$23,144.6 $22,693.2 $4,395.8 $2,351.3 $52,584.8

$712,048 $614,750 $630,826 $436,676 $643,070

32,504 36,915 6,968 5,385 81,772

61.7% 15.8% n.a. n.a. 37.0%

38.3% 84.2% n.a. n.a. 63.0%

5.2% 3.1% 4.9% 4.0% 4.2%

Source: Statistics Canada, CRFA's Restaurant Industry Forecast and ReCount/nPD Group

8 Foodservice Facts 2013 | www.crfa.ca

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1 Growth rates are unadjusted for menu inflation. 2 Data are based on sales from the Monthly Survey of Food Services and Drinking Places divided by the number of units from the Business Register, Statistics Canada. 3 2011 data that includes foodservice from restaurants. 4 2011 data.

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CRFA’s Restaurant Industry Forecast: 2014 to 2017

Fact

Commercial foodservice sales will grow by an annual average of 3.7% over the next four years.

Growing disposable income will boost total commercial foodservice sales an average of 3.7% per year between 2014 and 2017, matching the historical long-run average for the restaurant industry. Following a 3.6% increase in 2013, foodservice sales will jump an additional 4.1% in 2014 due to stronger job creation and higher disposable income. Sales will level off at an average of 3.6% between 2015 and 2017.

Fuelled by healthy gains at quick-service restaurants and caterers, total commercial sales will jump nearly $9 billion to $63 billion between 2013 and 2017. Adjusted for menu inflation of 2.5%, real commercial foodservice sales will grow by an average of 1.2% per year. This expansion is on par with overall population growth. Quick-service restaurants will lead the industry with average annual sales growth of 3.9% between 2014 and 2017 as consumers continue to seek out convenience and value.

Caterers will grow by an average of 3.8% per year between 2014 and 2017. An aging population will propel growth in health care while solid demand will spur sales in education and remote camps serving the natural resources industry. Following the recession and recovery, sales at full-service restaurants are forecast to advance by an annual average of 3.8% over the next four years. The Prairie provinces will enjoy the strongest gains. The downward spiral in units combined with weak consumer spending will restrain total sales at drinking places to just 1.3% average annual growth over the next four years.

CRFA's Commercial foodservice sales forecast

CRFA's Average annual sales growth forecast

(Year-over-year change)

(2014-2017)

6%

3.9%

Quick-service restaurants

5.1%

5%

4.1%

4%

3.6% 3.2%

3%

3.6%

3.7%

3.5%

Caterers

3.8%

Full-service restaurants

3.8%

Total sales

3.7%

2.9%

2%

1.3%

Drinking places 1% 0%

0%

2010

2011

2012-p

2013-f

2014-f

2015-f

2016-f

2017-f

p - preliminary; f - forecast

1%

2%

3%

4%

5%

Source: CRFA's Restaurant Industry Forecast Note: Growth rates are in nominal terms.

Source: Statistics Canada and CRFA's Restaurant Industry Forecast Note: Growth rates are in nominal terms.

CRFA employs an econometric model to forecast commercial foodservice sales by using the Conference Board of Canada’s forecasts of disposable income, real GDP, employment and tourism.

www.crfa.ca | Foodservice Facts 2013 11

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Fact

The Provinces

Fact

Resource-rich provinces hold on to the top spot for foodservice sales growth in 2013. Double-digit gains at full-service restaurants and caterers propelled total foodservice sales in Newfoundland and Labrador by a robust 8.8% in 2012 – the second-strongest growth in the country. A moderation in consumer spending will curb total sales growth to 3.8% in 2013. Sluggish job creation and high unemployment will restrain foodservice sales growth on Prince Edward Island to 2.4% in 2013. Following a healthy 4.6% increase in 2012, foodservice sales in Nova Scotia will advance by an additional 2.8% in 2013. Lacklustre consumer spending because of government cutbacks made New Brunswick the weakest-growing province in 2012 with 1.9% bump in foodservice sales. Improved job creation will spur sales growth by 2.5% in 2013. Healthy spending at restaurants lifted foodservice sales in Quebec by 4.8% in 2012, the province’s strongest growth since 2008. Modest economic expansion, however, will restrain restaurant spending to 2.9% in 2013. In Ontario, a moderation in spending at restaurants and sluggish demand at drinking places will hold foodservice sales growth to 3.0% in 2013 following a 4.7% increase in 2012. A healthy economy and strong consumer spending boosted foodservice sales in Manitoba by 6.8% in 2012. Following several years of solid gains, sales are expected to slow to 3.9% growth in 2013. A booming economy and growing population will make Saskatchewan the fastest-growing province in 2013 with a 5.1% jump in foodservice sales. Alberta led the country in 2012 with a robust 8.9% increase in sales. Continued strong economic activity will boost foodservice sales an additional 4.9% in 2013. British Columbia posted the second-weakest growth in 2012 due to the continued impact of the HST and stricter drinking and driving legislation. The HST’s demise and the return to PST-exemption for restaurant meals will help lift foodservice sales in the province by a respectable 5.0% in 2013.

12 Foodservice Facts 2013 | www.crfa.ca

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The Provinces Performance by Province (Commercial Foodservice) Sales Growth Forecast in '13/'12 1

Sales Growth in '12/'11 1

2012 Sales (in millions) 2

Average Unit Volume 3

Units

Chain Share of Units 4

Independent Pre-tax Share of Profit (% of Units 4 operating revenue) 5

Canada

3.6%

5.1%

$52,584.8

$643,070

81,772

37.0%

63.0%

4.2%

Newfoundland and Labrador

3.8%

8.8%

$739.3

$677,635

1,091

41.5%

58.5%

6.0%

Prince Edward Island

2.4%

3.7%

$194.3

$572,867

339

32.4%

67.6%

5.8%

Nova Scotia

2.8%

4.6%

$1,333.4

$685,573

1,945

39.9%

60.1%

5.0%

New Brunswick

2.5%

1.9%

$980.1

$620,927

1,579

45.3%

54.7%

5.6%

Quebec

2.9%

4.8%

$10,385.1

$508,945

20,405

28.3%

71.7%

4.0%

Ontario

3.0%

4.7%

$20,062.4

$660,257

30,386

41.4%

58.6%

3.0%

Manitoba

3.9%

6.8%

$1,538.1

$676,328

2,274

39.1%

60.9%

7.4%

Saskatchewan

5.1%

8.1%

$1,628.8

$753,446

2,162

39.0%

61.0%

7.4%

Alberta

4.9%

8.9%

$7,713.4

$847,534

9,101

43.0%

57.0%

6.6%

British Columbia

5.0%

2.4%

$7,845.2

$636,359

12,328

31.2%

68.8%

3.3%

Source: Statistics Canada, CRFA's Restaurant Industry Forecast and ReCount/NPD Group 1 Growth rates are unadjusted for menu inflation. 2 Includes full-service restaurants, quick-service restaurants, caterers and drinking places.

3D  ata are based on sales from the Monthly Survey of Food Services and Drinking Places divided by the number of units from the Business Register, Statistics Canada. 4 2011 data that includes foodservice from restaurants. 5 2011 data.

Cumulative commercial Foodservice Sales Growth 2002-2012

55.3%

Saskatchewan

41.7%

Newfoundland and Labrador

35.1%

Alberta

28.3%

Quebec

26.2%

Canada

25.6%

Ontario

20.8%

Manitoba

17.2%

Nova Scotia

14.1%

British Columbia

9.2%

New Brunswick Prince Edward Island 0%

3.6% 10%

20%

30%

40%

50%

60%

Source: Statistics Canada Note: Growth rates are in nominal terms.

www.crfa.ca | Foodservice Facts 2013 13

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Fact

FoodseRviCe MARKet shARe

9:27 AM

Fact

The foodservice share of the total food dollar will hold steady at 37% in 2013.

Healthy spending at restaurants grew the foodservice share of the total food dollar from 36.8% in 2011 to 37.2% in 2012 to reach the greatest amount since the recession began in 2008. This share will slip to 37.1% in 2013 as retail food is expected to slightly outpace foodservice.

Despite rising spending in recent years, Canadians still source just one in 10 meals from restaurants, unchanged since 2001. Most meals are prepared and eaten at home, increasing slightly from 67% in 2011 to 68% in 2012.

In 2012, retail food and beverage sales grew by 3.6% to $110.8 billion. Food sales rose a tepid 1.5% at grocery stores and supermarkets, but climbed a robust 12.1% at department and big box stores (e.g. Walmart, Costco) due to greater selection.

Despite the recent proliferation of home meal replacements, ready-to-eat items purchased from grocery stores and eaten at home represent just 1% of all meals.

Food and beverage sales at retail stores are forecast to climb by an additional 3.8% in 2013 compared to a 3.7% increase in foodservice sales. In the wake of the recession, the foodservice share of the total food dollar in the United States slipped to 47% in 2012. Due to a higher disposable income and no federal tax on restaurant meals, that country’s foodservice market share is still 10 percentage points higher than Canada’s.

A growing array of tax-free, ready-to-heat meals, however, are competing with restaurant occasions.

whERE caNaDIaNS SOuRcE thEIR MEaLS At a restaurant

8%

Purchased from restaurant, eaten in home

2%

All other away-from-home

7%

Skipped

FOODSERVIcE ShaRE OF thE tOtaL DOLLaR

7%

(CAnADA vS. UnITED STATES)

Prepared and eaten at home

Ready-to-eat meal purchased from grocery, eaten in home

68%

1%

50%

46.7%

47.5% 47.9%

47.5% 47.9% 46.7%

49.0% 49.0%

8%

48.0% 47.0%

United States Canada

45%

40.1% 40%

35%

48.0%

Carried from home

2002

39.3% 39.4%

2003

2004

39.1% 39.3% 38.8%

2005

2006

2007

38.5%

2008

Source: The nPD Group/national Eating Trends Canada, March 2012

37.2% 37.0% 36.8% 37.1% 36.7%

2009

2010

2011

2012-p 2013-f

p - preliminary; f - forecast Source: CRFA, Statistics Canada and the national Restaurant Association note: Total food dollar includes spending by consumers, tourists, businesses and government at foodservice operations, grocery and convenience stores.

www.crfa.ca | Foodservice Facts 2013 15

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Fact

PRoFitABiLity

Fact

The average foodservice operator’s pre-tax profit margin was just 4.2% in 2011, or $27,008.

PROFIT MARGINS The average pre-tax profit margin slipped from 4.5% in 2010 to 4.2% in 2011. Over the past decade, increasing operating costs have reduced profit margins from 5.8% in 2001.

TOP CHALLENGES According to CRFA’s Restaurant Outlook Survey for the first quarter of 2013, rising food costs remain the number one challenge for 66% of operators.

Food costs account for 36.0% of operating revenue – unchanged from 2010.

A little over half of respondents believe the weak economy is having a negative impact on their business.

Due to rising minimum wages, labour costs now make up 33.6% of operating revenue compared to 30.8% in 2001.

One-quarter of restaurant operators are currently facing a shortage of skilled workers, an issue that will intensify over the coming years. By 2030, the Canadian Tourism Human Resource Council forecasts more than 136,000 unfilled jobs in the restaurant industry due to an aging workforce and a declining youth population.

Manitoba and Saskatchewan boast the highest pre-tax profit margins, at 7.4% of operating revenue. Due to above-average rental and leasing costs, Ontario is the least profitable province with pre-tax profit of just 3.0%.

PRE-taX PROFIt MaRgINS

OPERatINg EXPENSE RatIOS - 2011

AS A ShARE oF oPERATInG REvEnUE

AS A ShARE oF oPERATInG REvEnUE

8%

2001

Other

2011

7.0%

7% 6% 5%

5.8%

5.6%

6.0% 5.2%

4.2%

4.9% 4.3%

4%

4.0%

Pre-tax profit

4.2% Food and beverage costs

36.0%

2.8% Utilities including telephone

2.7%

2%

Rental and leasing

1% 0%

2.9%

7.6%

Advertising and promotion

3.1%

3%

Depreciation

7.7% Industry average

Full-service restaurants

Quick-service restaurants

Caterers

Drinking places

Source: 2013 Foodservice operations Report, Statistics Canada and CRFA

Repair and maintenance

2.5%

Salaries and wages

33.6%

Source: 2013 Foodservice operations Report, Statistics Canada and CRFA

16 Foodservice Facts 2013 | www.crfa.ca

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Fact

Chains and Independents

Fact

The top 50 foodservice companies in Canada generate 51% of total commercial foodservice sales and account for 28% of units.

Although independents accounted for 63% of total units, chain restaurants laid claim to 76% of traffic and 62% of dollars spent.

As a result of the recession and the weak recovery in fullservice restaurant sales, chains have acquired a higher share of overall restaurant traffic and sales over independent restaurants. Traffic to chain restaurants rose by a solid 2.6% in 2012 following a modest 1.3% increase in 2011. Growth was led by gains at quick-service, family and casual dining restaurants and retail foodservice. Despite a 1.6% increase in 2012, traffic to independent restaurants remains 9.4% below 2008 levels. Meanwhile, traffic to chain restaurants has jumped by a robust 8.6%. Independents are primarily table-service restaurants, but even quick-service restaurants in this category have struggled in recent years. The market share of the top 50 foodservice companies has steadily risen over the past decade. The top 50’s share of total commercial sales has increased from 42% in 1999 to 51% today, and the share of units has grown from 21% in 1999 to 28% today.

Traffic at chain and independent restaurants (year-over-year change)

4% 2%

2.3% 1.8% 2.1%

2.6% 1.6%

1.3% 0.4%

0.4% 0%

'08

'10

'09

'11

'12

'08

'09

-4%

-4.2%

-6% -8%

-7.4%

Chains

Independents

Source: The NPD Group Inc.\Foodservice\CREST®\Total Canada\YE November

Restaurant market share - Traffic

Restaurant market share - dollars chains and independents

71.8%

Chains Independents

70%

'12

-2%

chains and independents

80%

'11

'10

70%

75.6%

60%

60%

Chains Independents

59.2%

62.2%

50%

50% 40%

40.8%

37.8%

40% 30%

30%

28.2%

24.4%

20%

10%

10% 0%

20%

2007

Source: The NPD Group Inc.\Foodservice\CREST®\Total Canada\YE November

2012

0%

2007

2012

Source: The NPD Group Inc.\Foodservice\CREST®\Total Canada\YE November

www.crfa.ca | Foodservice Facts 2013 17

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Fact

Consumer Trends

Fact

A rebound in supper traffic helped boost total sales at quick- and full-service restaurants.

Quick-service restaurants account for the bulk of traffic to restaurants, drawing in 65% of visits in 2012. While this market share is unchanged from 2011, it has steadily climbed from 62% in 2008 as consumers shied away from full-service restaurants during the recession and the economic recovery.

Traffic to quick-service restaurants rose by 2.3% in 2012, matching its increase in 2011. The biggest gains were at QSR chicken, coffee/donut and burger.

Fine dining took the hardest hit in the recession, but bounced back as the fastest-growing segment in 2012 with a 9.2% boost in traffic.

Although full-service restaurants take in 24% of traffic, they account for 48% of total spending at restaurants. In 2007 and 2008, full-service restaurants captured 50% of spending at restaurants.

Retail foodservice, which includes prepared food from department, convenience and grocery stores, accounts for 12% of all traffic to restaurants. This share is relatively unchanged since 2007.

Growth in traffic to full-service restaurants outpaced quickservice restaurants for the first time since 2008. A rebound in visits to fine dining combined with higher volumes at family and casual dining restaurants lifted total traffic to full-service restaurants by 2.7%. Despite its improvement in 2012, traffic to full-service restaurants remains 6.0% below 2008 levels as consumers watch their budgets. High household debt levels and modest disposable income growth will restrain discretionary spending in the near term, which could slow the recovery in full-service restaurant sales.

market share by restaurant segment

70%

64.6%

50%

Total Growth 2008 - 2012

2.4%

3.6%

Quick-service

2.3%

7.5%

Family/Midscale

1.8%

-7.0%

Casual Dining

3.4%

-5.0%

Fine Dining

9.2%

-1.3%

Retail

2.3%

4.1%

2012 over 2011

Total Growth 2008 - 2012

4.3%

8.3%

Quick-service

4.3%

12.8%

Family/Midscale

4.2%

5.2%

Casual Dining

4.5%

4.6%

Fine Dining

8.4%

-5.3%

Retail

2.2%

12.3%

45.3%

Total Restaurant Market

40% 30%

20.6%

20%

12.9% 10% 0%

Total Restaurant Market

2012 over 2011

Growth in Dollars Spent at Restaurants

Share of Traffic Share of Dollars

60%

Growth in Traffic to Restaurants

22.8% 11.7%

10.1% 0.8%

Quick-service Restaurants

Family/Midscale

Casual Dining

4.4%

Fine Dining

6.8% Retail

Source: The NPD Group Inc.\Foodservice\CREST速\Total Canada\YE November 2012

Source: The NPD Group Inc.\Foodservice\CREST速\Total Canada\YE November

18 Foodservice Facts 2013 | www.crfa.ca

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Fact

ConsuMeR tRends

Fact

Snacking represents a greater share of visits to restaurants in recent years.

DAYPART TRENDS Lunch is the most popular time to go to a restaurant, drawing in 26% of total restaurant traffic. Following closely behind is supper, which pulls in 25% of traffic to restaurants. Supper accounts for 42% of dollars compared to lunch’s 29%.

ON- AND OFF-PREMISE TRENDS Drive-through and delivery traffic revved up, lifting total offpremise visits by 2.9% in 2012 over 2011. On-premise traffic rose 1.7%. More than 80% of visitors to full-service restaurants eat on premise. In 2012, traffic rose by 2.9% on premise versus 1.8% off premise.

Snacking represents a combined 35% of all traffic in 2012. Snacking visits have steadily climbed in recent years, up from 33% of traffic in 2008.

In contrast, just 33% of visitors to a quick-service restaurant eat on premise. In 2012, off-premise traffic rose by 2.8% due to a rebound in drive-through orders.

Morning snacks and afternoon snacks are the two fastestgrowing dayparts, with traffic jumping by 15% and 11%, respectively, between 2008 and 2012. Despite an increase in 2012, supper traffic remains 3.6% below 2008 levels.

tOtaL gROwth IN tRaFFIc by DayPaRt

ShaRE OF tRaFFIc by DayPaRt

(2008 To 2012)

Evening Snack

Breakfast/Brunch

9.7%

20%

14.3%

15.2% 15%

11.1%

Morning Snack

Supper

11.4%

25.0%

9.5%

10%

5%

3.6% 0.7%

0.4%

0%

-5%

Lunch

Afternoon Snack

25.6%

14.1%

-3.6% Total Market

Breakfast/ Morning Snack Brunch

Lunch

Afternoon Snack Supper

Evening Snack

Source: The nPD Group Inc.\Foodservice\CREST®\Total Canada\YE november

Source: The nPD Group Inc.\Foodservice\CREST®\Total Canada\YE november 2012

REStauRaNt ShaRE OF tRaFFIc by ON aND OFF PREMISE Total Market

Quick-service Restaurants

Full-service Restaurants

total On Premises

42.1%

32.8%

80.6%

total Off Premises

57.9%

67.2%

19.4%

Carry out

36.4%

35.6%

15.2%

drive through

18.8%

29.0%

0.6%

2.6%

2.7%

3.7%

delivery

Source: The nPD Group Inc.\Foodservice\CREST®\Total Canada\YE november 2012 Total Market includes retail foodservice.

12057_FoodFacts_2013.indd 19

www.crfa.ca | Foodservice Facts 2013 19

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ConsuMeR tRends

Fact

British Columbia boasts the highest average check while Atlantic Canada has the lowest.

The average check per person rose 13 cents in 2012 to $7.20. Quick-service restaurants, casual dining and family/midscale all saw increases, while fine dining and retail foodservice experienced slight decreases.

AVERAGE CHECK SIZE The highest average checks are in British Columbia ($8.01) and Quebec ($7.97) due to greater spending in these provinces at full-service restaurants. Atlantic Canada’s bigger share of snacking occasions leaves it with the lowest average check per person ($5.92). All dayparts posted a higher average check in 2012, with supper taking the top spot at $12.24 per person. Lunch has the second-highest average at $8.20. Morning snacks add up to the lowest average check at a mere $2.80, but posted the greatest increase at 4.9% over 2011.

aVERagE chEck PER PERSON Quick-service Full-service

2010

2011

2012

$4.91

$4.96

$5.06

$13.66

$14.21

$14.48

Family/Midscale

$10.80

$11.23

$11.50

Casual dining

$15.47

$16.10

$16.26

Fine dining

$42.04

$41.51

$41.21

$4.11

$4.24

$4.23

$6.95

$7.07

$7.20

Retail average

Source: The nPD Group Inc.\Foodservice\CREST®\Total Canada\YE november Average check includes taxes but excludes tips.

what'S gROwINg

cRESt DEFINItIONS: consumer Reports on Eating Share trends Quick-Service Restaurants (QSR): Counter service, inexpensive and usually specializes in one food. take-out and delivery is generally strong and there may be drive-through service. Family/Midscale: table- or self-service, moderately priced and usually specializes in one type of food. there may be take-out service.

1

hot coffee

6

Alcoholic beverages

2

Frozen/slushed soft drinks

7

iced/frozen/slush coffees

3

Breakfast sandwiches

8

tap water

4

Bottled water

9

non-carbonated soft drinks

5

seafood/fish

10 smoothies

Source: The nPD Group Inc.\Foodservice\CREST®\Total Canada\YE november 2012 note: The “growing” list shows the menu items that made the biggest volume gains in 2012 compared to 2011.

Casual Dining: Full table service, mid-priced range, and often with a themed atmosphere. there is generally little take-out. Fine Dining: extensive table service, formal table settings, premiumpriced. Retail Foodservice: Consists of prepared foods purchased from department stores, gas and convenience as well as grocery.

20 Foodservice Facts 2013 | www.crfa.ca

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12057_FoodFacts_2013.indd 21

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toP 10 Lists TOP 10 FOODS

5.

Note: Menu importance is defined as the percentage of meals and snacks that included a particular food item. Data are for the 12 months ending November each year.

seAFood/Fish

2011 6% 2012 6%

6. PizzA

1.

2011 6% 2012 6% FRenCh FRies

2011 15% 2012 15%

2.

7.

donuts

2011 6% 2012 6%

ChiCKen/PouLtRy entRÉes

2011 14% 2012 13%

3. BuRGeRs

2011 11% 2012 11%

4. sALAds

2011 9% 2012 9%

8.

BReAKFAst sAndWiCh

2011 5% 2012 6%

9. deLi MeAt sAndWiCh

2011 6% 2012 6%

10. hot ChiCKen sAndWiCh

2011 5% 2012 5%

Source: The nPD Group Inc.\Foodservice\CREST®\Total Canada\YE november

22 Foodservice Facts 2013 | www.crfa.ca

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Fact

toP 10 Lists TOP 10

5.

BEVERAGES

1. 2.

hot CoFFee

2011 30% 2012 30%

6. 7.

CARBonAted soFt dRinKs

8. ALCohoLiC BeveRAGes

2011 6% 2012 6%

2011 6% 2012 6%

JuiCe

2011 5% 2012 5%

2011 20% 2012 20%

3.

hot teA

9.

BottLed WAteR

2011 4% 2012 4%

MiLK

2011 3% 2012 3%

iCed teA

2011 3% 2012 3%

4. tAP WAteR

2011 6% 2012 6% Source: The nPD Group Inc.\Foodservice\CREST速\Total Canada\YE november

10. iCed/FRozen/sLush CoFFee

2011 3% 2012 3%

www.crfa.ca | Foodservice Facts 2013 23

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Fact

2013 CRFA CheF suRvey ResuLts

Fact

Local is the hottest menu trend in Canada for the fourth straight year.

More than 350 professional chefs participated in CRFA’s fourth annual Canadian Chef Survey. They rated a variety of menu items and cooking methods as either a ‘hot trend,’ ‘yesterday’s news,’ or ‘perennial favourite.’ Here are the top picks for 2013:

TOP 10 HOT TRENDS ON CANADIAN MENUS

1.

6. LoCALLy PRoduCed And LoCALLy insPiRed dishes

2.

ethniC/ stReet Food insPiRed APPetizeRs (e.G. teMPuRA, tAQuitos)

7. GLuten-FRee/ Food ALLeRGy ConsCious

3.

GReeK yoGuRt

8. sustAinABiLity

4.

siMPLiCity/ BACK-to-BAsiCs

9. FARM-/ estAte-BRAnded inGRedients

5.

Food tRuCKs/ stReet Food

non-WheAt noodLes oR PAstA (e.G. QuinoA, RiCe, BuCKWheAt)

10.

AnCient GRAins (e.G. KAMut, sPeLt, AMARAnth)

Results are based on a survey of professional chefs for the Canadian Restaurant and Foodservices Association by independent market research firm BrandSpark International in January 2013. The Canadian Culinary Federation participated in the survey, along with CRFA members. For more information visit CRFA’s online resource centre at www.restaurantcentral.ca. 24 Foodservice Facts 2013 | www.crfa.ca

12057_FoodFacts_2013.indd 24

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RC_F


Canada’s premier site for Restaurant & Foodservice Operators

From food trends to marketing ideas to new laws that affect your business, you’ll find it all right here.

For more information please contact Chuck Nervick at 416-512-8186 x 227 or ChuckN@mediaedge.ca

Welcome to Restaurant Central.ca, crfa’s new online resource centre! 12057_FoodFacts_2013.indd 25 RC_FP_HouseAds_2013.indd 1

13-05-13 3:15 PM 13-02-20 11:47 AM


2013 CRFA Chef Survey Results The CRFA survey also asked chefs to identify ‘up and comers’ poised to be the next hot trend:

Top 10 Up and Coming Canadian Menu Trends

1.

Red rice

2.

6. 7.

Digital menus

3. 4.

Gluten-free beer

Goat

House-made soft drinks

5.

Kid-friendly versions of adult dining options

8. 9.

Underutilized fish (e.g. mackerel, bluefish, redfish)

Drinkable desserts

10. African cuisine

Black/forbidden rice

Source: CRFA's 2013 Canadian Chef Survey

Results are based on a survey of professional chefs for the Canadian Restaurant and Foodservices Association by independent market research firm BrandSpark International in January 2013. The Canadian Culinary Federation participated in the survey, along with CRFA members.

For more information visit CRFA’s online resource centre at www.restaurantcentral.ca.

26 Foodservice Facts 2013 | www.crfa.ca

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Untitl


Lamb Weston House Cut Fries

Get the authentic look, texture and taste of fresh kitchen-cut fries and chips with the quality, consistency and convenience of frozen. House Cut Fries, sliced from the finest potatoes with the skin on, feature a gourmet kitchen-cut look and irresistible appetite appeal. From our delicious, new House Cut Fries varieties to our incredibly popular Gourmet Chips, your customers will crave every bite. A natural fit for any operation, their great taste, versatility and low food cost make them a highly profitable performer, no matter what your menu.

Profile of House Cut Fries™

House Cut Fries™ Product Name

Fresh-cut colouring characteristics. Less labour and waste = lower costs. Full of rich potato flavour. Cut with the skin on for a madefrom-scratch appearance.

Item #

Regular Cut Fries

25025

Thin Regular Cut Fries

25026

Shoestring Fries

25027

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12057_FoodFacts_2013.indd 27 Untitled-4 1

13-05-13 3:16 PM 13-04-19 10:54 AM


For every burger

craving

Taste the difference quality makes.速

12057_FoodFacts_2013.indd 28 Untitled-1 1

13-05-13 3:16 PM 13-05-08 4:48 PM

FSF 2013  

Foodservice Facts 2013

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