What The Hell Is Going On Here PERSPECTIVESThe Consulting Group Inc 1 Ed Engoron Ph D PerspectivesThe Consulting Group Inc Los Angeles CA 90025 edperspectiveslacom wwwPerspectiveslacom ID: 553080
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Slide1
Friday, September 23, 2016
What The Hell IsGoing On Here?
PERSPECTIVES/The Consulting Group, Inc.
1Slide2
Ed Engoron, Ph. D.
Perspectives/The Consulting Group, Inc.Los Angeles, CA 90025
ed@perspectives-la.com
www.Perspectives-la.com
PERSPECTIVES/The Consulting Group, Inc.
2Slide3
Passion For Food
We Are Bombarded With FoodFood Commercials / BillboardsFood Shows (Food Network)
Radio Food Talk Shows
Food Contests
Food
Hobbyists
Everyone’s A Food Critic
Yelp
Open Table
On-Line Dining Memberships
(Points
)Eating Is Habit-Forming / Addictive
PERSPECTIVES/The Consulting Group, Inc.
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PERSPECTIVES
Where Food and People Come TogetherSlide5
PERSPECTIVES/The Consulting Group, Inc.
5PERSPECTIVES
Concept Creation
Strategic Planning
Brand Development
Menu & Product Development
Market / Location Research
(Target Market Profiles)
Operations Analysis
Facilities & Kitchen Design
Market Planning & Site Analysis
Food Safety & Sanitation Programs Slide6
It’s An Election Year
… And A Pretty Crazy
One At That
Wait & See
PERSPECTIVES/The Consulting Group, Inc.
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This Is The First National Election
In Which More Millennials Could Vote Than Boomers
PERSPECTIVES/The Consulting Group, Inc.
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Social Game Changers
College DebtKids Living w/ParentsThe New Dating SceneMovies / Streaming (Box Office Hits)
Smart Phone Isolation
Credentials / Recommendations Required
Knowledge
(Yelp)
Not
Chain-Oriented
LGBT Community
(Concentration Of Like-Minded People / Upscale income)
PERSPECTIVES/The Consulting Group, Inc.8Slide9
National Minimum Wage
($15 an hour)RegulationsSafety / Security Real Unemployment / Under-EmploymentDiscretionary Income
(iPhone
Phenomena)
Affordable Care
(
ObamaCare
)
Nearly 90% Uncertainty
Consumer Confidence
Shrinking Middle Class / Wage Disparity
46M People on Food SubsistenceHighest National Debt EVER (Student Debt / Pension Debt)
PERSPECTIVES/The Consulting Group, Inc.
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Economic Game ChangersSlide10
Those who DON’T have money aren’t spending
Those who DO have money are keeping it in a safe place PERSPECTIVES/The Consulting Group, Inc.
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Reactions
Money Is Scarce For The “Common Folk”Slide11
Facts & Figures
Occasions Of Away From Home Eating Down Nearly 10% Consumers Are Trading DownConsumers Are Opting OutOccasions Of In-home Eating Have Risen 15%Different Shopping / Eating Patterns
Different Shopping / Eating Places
Different Buying Patterns
PERSPECTIVES/The Consulting Group, Inc.
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McDonald’s sales down 7%
Walmart sales down 4.4%Zappos sales down 15%GameStop sales down 9%Macy’s sales down 3.6%Staples sales down 6.4%
PERSPECTIVES/The Consulting Group, Inc.
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Facts &
Figures
Eating Out Is A Habit
Amazon sales up 7%
eBay sales up 4%
Apple sales up 4.4%
Starbucks sales up 7%
Whole Foods sales up 2.3%
Target sales up 1.6%
*2014
vs.
2015 sales data from annual reportsSlide13
PERSPECTIVES/The Consulting Group, Inc.13
Game Changers
Consumer trends toward customized and multi-channel shopping are forcing retailers to adapt their business models and supply chains.
Transitioning to digital operations, making it central to the business strategy and involving the entire team are good starting points
.Slide14
PERSPECTIVES/The Consulting Group, Inc.14
Game Changers
Absence of Bad, Less is More…
I am Special!Slide15
PERSPECTIVES/The Consulting Group, Inc.15
The Great Generational
“Disrupters”
(Social Media & Technology)
Amazon
(Amazon Fresh)
Google
(Google Delivery)
UBER
Apple
Yelp / Eat 24
GrubHub
GoPro
BuzzFeed
Robots
Wearables
Self-Drive
(Smart Cars)
GoFundMe
SmartPhones
(iPhone)
FaceBook
Twitter
Instagram
Tumbler
OpenTable
Food Trucks
Drones
Tesla
(Elon Musk)
SpaceX
A
irbnb
PokemanGoSlide16
Billion Dollar Companies That Didn't Exist In 2006
UberAirbnbTwitter Snapchat
Instagram
Fitbit
Spotify
PERSPECTIVES/The Consulting Group, Inc.
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Dropbox
WhatsApp
Tumblr
Pinterest
Tesla
(Elon Musk)
SpaceX
(Elon Musk)
SolarCity
(Elon Musk)
Virgin Galactic Slide17
What’s Gone?
KodakChrysler CIT Group
MCI WorldCom
Enron
Lehman Brothers
Montgomery Wards
PERSPECITS/The Consulting
Grop
, Inc.
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M. F. Global
American Airlines
Pacific Gas & Electric
Conseco
Thornburg Mortgage
Bear Stearns
Circuit City
Travel AgenciesSlide18
Why Is There Money In Food?
Huge CategoriesLack Skills / Soft InclinationProfitable / Reasonable MarginsFrequently Purchased4+ Meals A Week Purchased In / From A Restaurant or Market
Incremental Sales
Promotable
Expandable Consumption
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63%
Drive Thru
16%
Food Truck
17%
Farmer’s Mkt
22%
C-Store Meal
57%
Grocery Prepared Foods
95%
Meal @ Home
85%
Restaurant Meal
63%
Carry OutSlide20
PERSPECTIVES/The Consulting Group, Inc.20
Sources: NRA, US Census Bureau
Food At Home (Grocery)
Food Away From Home (Restaurant)
Restaurant Industry Share of the Food Dollar
1955 = 25%
$1.4 Trillion Food Business
7.5% of GDP!Slide21
PERSPECTIVES/The Consulting Group, Inc.
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Sources: NRA & USDA
$1.4 Trillion Food Business
E
-com
(small base) growing at 10x rate of bricks & mortar
Total
Number
of Store -1%Slide22
Restaurant Segments
Quick Service Fast Casual / Fast FreshFamily Dining
Barbecue
Casual Dining
Fine Dining
Coffee
++
Indulgence
Healthy / Wealthy Indulgence
PERSPECTIVES/The Consulting Group, Inc.
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Quick Service Restaurants
PERSPECTIVES/The Consulting Group, Inc.23Slide24
Share of Restaurant Traffic
QSR 79% (+1%)Midscale 10% (-3%)Casual Dining 10%
(-2%)
Fine Dining 1%
(-1
%)
2016 Total Restaurant Lunch Sales -4%
Mall Lunch Sales Down ($8.50)
PERSPECTIVES/The Consulting Group, Inc.
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QSR Trends
Squeezing Fast Casual w/Premium OfferingsMenu… Offering Premium Coffee, Sweets & Specialty Sandwiches, Upscale Salads, Ethnic Flavors Healthy Choices
… Bottled Water, Milk, Upscale Soda, Salads, Fresh Fruit, Confections
Décor
…
Wi-Fi, Wide-Screen TVs, Upholstered Booths, Better Sound & Softer Lighting
(McDonald’s spending $1 Million per store on 1,300 stores)
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Fast Casual / Fast FreshSlide27
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Fast Casual TrendsSqueezed Up & DownQSR Continues To Push Upwards
Casual Dining Pushing Downwards
Meal Deals, Bundles, Curbside Delivery & Immediate Delivery
(On Demand)
Replacing Family Restaurants For ManySlide28
PERSPECTIVES/The Consulting Group, Inc.28
How Does The FC Financial Model Work?Concept-BasedRelevance
GeographySlide29
A Fresh Take On Financing Fast Casual
Newer Fast Casual brands are attracting big investor dollars. Newer Fast Casual restaurants—with their chef-driven menus and next-level ingredients—are piquing the interests of private equity firms propelling the category to the next level of nationwide growth.
More large-scale investments in the Fast Casual space.
Customers are increasingly interested in what a brand and company’s culture represents.
Consumers are seeking new flavors, new foods & new ways of doing the common items we often all eat.
It’s what consumers are demanding, and private equity money is following.
PERSPECTIVES/The Consulting Group, Inc.
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Family DiningSlide31
Family Dining Trends
No Man’s Land ~ It’s A Struggle!Less Convenient Than QSRLess Fun & Flavorful Than Casual DiningBoring!
PERSPECTIVES/The Consulting Group, Inc.
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PERSPECTIVES/The Consulting Group, Inc.32
Barbecue Slide33
Barbecue Trends
Small Base, But Growing, Hot SegmentBig Regional DifferencesLots of IndependentsFinger
Lickin
’ FunPERSPECTIVES/The Consulting Group, Inc.
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PERSPECTIVES/The Consulting Group, Inc.34
Casual DiningSlide35
Casual Dining Trends
The “Yelp” EffectTrouble In River City Since the ’80s—Re-define RelevanceLess Relevant Than Years Past (Boomers vs Millennials)Very Susceptible To High Gas Prices
Must Become More Convenient ~ Delivery Now
Must Become More Inviting / Exciting ~ Singles, Couples & Families
Affordable, Flavorful &
Fun
!
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Dinner House / UpscaleSlide37
Fine Dining Traffic & Trends
Dominated By Independent Operators Star Chefs
Public Companies
PERSPECTIVES/The Consulting Group, Inc.
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Coffee Plus++Slide39
Coffee
Plus++Home Away From Home / Escape / Wi-FiLinger / LoiterUbiquitous Locations
Traffic Draw
Addictive Products (Caffeine)
Lots of Calories
Great Margins
Stealing Share Of Meal and Beverage Occasions From Traditional Segments
The “Democratization” of Luxury / Affordable
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IndulgenceSlide41
Indulgence Trends
Small FootprintLots of LocationsAddictive Products
(Sugar)
Lots of Calories
Good Margins
Stealing Share From Traditional Restaurants & Day-Parts
The “Democratization” of Luxury
Vulnerable
To the Next “Big Thing”
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Healthy / Wealthy IndulgenceSlide43
PERSPECTIVES/The Consulting Group, Inc.43
American Food Halls /
Gastro Market Place
How Do I Describe It?Slide44
PERSPECTIVES/The Consulting Group, Inc.44
American Food Halls / Gastro MarketplaceShop, Eat & Learn At Eataly
(NYC)
57,000 Sq. Ft.
50,000 Visitors A Day -- 25,000 Diners A Week
(11M Focaccia, 5M Pounds of Pasta Per Week, )
Only 30% Non-resident
>$100,000,000 Sales Per Year
$1,800
+ Sales Per Sq. Ft.
vs
.
$1,000
For Top Restaurants
vs
.
$350
To
$500
Per Sq. Ft. For Lucrative Malls
International GrowthSlide45
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Eataly WorldwideSlide46
PERSPECTIVES/The Consulting Group, Inc.46
The Genie Is Out Of The Bottle
~
$50B
By
2026Slide47
PERSPECTIVES/The Consulting Group, Inc.47
Hey Dude, Where’s Your Stash?Slide48
Food In R
etail SegmentsSupermarketsFresh FormatsLimited AssortmentSuper Warehouse
Small Grocery
Wholesale Clubs
Super Centers
Dollars Stores
Drug Stores
Mass Markets
Military
C-Stores
PERSPECTIVES/The Consulting Group, Inc.
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Sheetz… Innovation & Quality!
Wawa… Private Label Efforts7-Eleven… Battled BackPERSPECTIVES/The Consulting Group, Inc.49
C-StoresSlide50
Ubiquitous
Loaded With Immediate ConsumablesToday’s C-Store For FemalesCross CategoriesGreat Margins
Private Label
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Drug Stores
Rite Aid Acquired By
Rite Aid Acquired by WalgreensSlide51
PERSPECTIVES/The Consulting Group, Inc.51
Traditional Supermarkets
Continuous ReinventionSlide52
Specialty
MerchandisePrivate LabelQuality ReputationInnovation
Personality
Experience!
Great Margins
PERSPECTIVES/The Consulting Group, Inc.
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Specialty RetailersSlide53
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Big Box
Too Many? Too Big?
=Slide54
Better For You
Wholesome OrganicNaturalExpensiveGreat Margins
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New Age / Healthful Alternative
=Slide55
Now Trending
Pop-up Stores / Road ShowsNew TenantsNew CustomersGreat Food Theater—Excitement
High Rents / Short Terms
Great Margins
Seasonality
PERSPECTIVES/The Consulting Group, Inc.
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Now Trending
Aging US Population Beyond Boomers(Age 65+ 16.3 percent of the population by 2020. Nearly
1 in 5 Americans will be 65+ by 2030)
Forever Young—Refuse To Get Old
Wellness Obsession
Yoga / Pilates
Doc in the Box
Medical Spas / Physical Therapy / Massage
Day Spas / Nail Spas / Food Spas
Exercise / Athletic Clubs
Holistic Remedies
Live Better / Feel Better / Be Better
Transportation
(Public & Private)
PERSPECTIVES/The Consulting Group, Inc.
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Now Trending
Natural vs. OrganicMainstreamingFarmers’ MarketsPermanent
Weekly
Artisans’ Market
Cheese
Candy / Chocolate
Specialty
Baking
Grocery
Décor & Tools
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Now Trending
Repurposing Big SpacesExciting Foot Fall DrawInteractive
(Stroll & Eat Progressively)
Entertaining
Daily / Weekly
Local Artisans
Cheese Bars
Candy
Specialty Baking
Grocery
Charcuterie Bars
Sushi BarsWine Bars
PERSPECTIVES/The Consulting Group, Inc.
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Now Trending
Coffee, Tea, Chocolate & JuiceCoffeeCoke & Nestle Partnership Pepsi + Starbucks Partnership + BudweiserDunkin Donuts
(Coffee & Donuts+)
Tim
Hortons
(Coffee & Donuts+)
Craft Bars
Tea
(Select Metro Markets)
Tea Bars & Shops
PERSPECTIVES/The Consulting Group, Inc.
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Now Trending
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~ $2.7B By 2017Slide61
Now Trending
Ethnic Grocery OfferingsHispanic, Asian and Halal Specialty Grocery StoresThey offer:Bilingual Workers
Bilingual Signage
Meat, Produce, Bakery and
Deli selections that cater to ethnic tastes
Mainstream Grocers Increasing Hispanic Offerings & New Latino Formats
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Now Trending
Non-Traditional Locations For FoodserviceIntercept LocationsKiosks & CartsQuick Stores
Pop-Up Stores
Food Trucks
Bakeries & Fakeries
(No Ovens Or Hoods)
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Now Trending
Apple Pay (Cashless / Cardless Transactions)RFID Quick-Pass Check-Out
Delivery & Concierge Services
(Plus, Plus $$$ For Landlords & Developers Who Do It Right
)
Drone Delivery
Vending
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Size Matters
Smaller MenusLess Is More Fewer Things Done WellSignture Items
Smaller Footprints
More Affordable
Fewer Employees
Feels Fuller
Less Utilities Required
More Emphasis On Take-Out
Fewer People, Trained Well… Paid Well
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So Why Food?
FOOD Is A Profitable Frequency / Traffic Driver / Builder
FOOD
Must Be An Extension To The Fun;
Not An Interruption To Eat!
PERSPECTIVES/The Consulting Group, Inc.
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iPic
TheaterSlide66
It’s A
D.I.Y. World/ $15 An Hour Minimum Wage
PERSPECTIVES/The Consulting Group, Inc.
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The Customer Becomes The Employee
In The Smartphone Era, Lives Are A Series Of Kiosk Stops—ATMs, Self Checkouts & Check-Ins,
(Airlines, Gas Stations, Grocery And Fast-Food Kiosk)
Time Is Money! An Industry That Dubs Itself “Quick Service” Has Zero Choice But To Pay Serious Attention To Any Device That Espouses Shaving Seconds Off Each Order
(McDonald’s, Yum Brands And Panera Are Spending Millions Of Dollars To Roll Out Touch-Screen Kiosks In Stores)Slide67
Who Ever Would Have Believed It’?
$15 An Hour Minimum Wage PERSPECTIVES/The Consulting Group, Inc.67
Forbidden PlanetStar WarsSlide68
You Better Believed It’?
$15 An Hour Minimum Wage PERSPECTIVES/The Consulting Group, Inc.68Slide69
You Better Believed It’?
The World’s First Anatomically-Correct Sex RobotPERSPECTIVES/The Consulting Group, Inc.69Slide70
Foods On Trend-2016
ArtisanLocally Sourced / Grown
Hyper-Local Sourcing
Locally Grown Produce
Chef-Driven Concepts
Natural / Minimally Processed
Environmentally Conscious
Sustainable
Healthful Kids' Meals
New Cuts Of Meat
Sustainable Seafood
House-Made / Artisan Ice CreamPERSPECTIVES/The Consulting Group, Inc.
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Authentic Ethnic Cuisines
Condiments / Spices
Ethnic-Inspired Breakfasts
Farm / Estate Branded Items
Artisan Butchery
Ancient Grains
Fresh / House-Made Sausage
House-Made / Artisan Pickles
Food Waste Reduction
Street Food / Food Trucks
Slide71
PERSPECTIVES/The Consulting Group, Inc.71
It’s Inevitable
Any Idea Designed Using 20th Century Thinking Is Doomed For Failure In The 21st Century.
If It Doesn't Work With Your
“
SmartConnection
,”
Forget About The Idea… It Will Never Succeed. Slide72
For more information contact :
Ed Engoron, Ph. D.
ed@perspectives-la.com
Joan Vieweger
joan@perspectives-la.com
Perspectives/The Consulting Group, Inc.
Los Angeles, CA 90025
310-477-8877
www.Perspectives-la.com
PERSPECTIVES/The Consulting Group, Inc.
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Interesting Facts About “Wally-world
” AppendexWalmart sales are over $20 billion more than Austria's GDP. If Walmart were a country, it would be the 28th largest economy in the world.
Walmart has more employees than the population of Houston.
Walmart is bigger than Home Depot, Kroger, Target, Sears, Costco, and K-Mart combined.
The average family of four spends over $4,000 a year at Walmart.
Walmart serves more than 200 million customers per
week.
One of every four dollars Americans spend on groceries is spent at Walmart.
China's exports to Walmart accounted for 11 percent of the growth of the total U.S. trade deficit with
China.
If Walmart's more than 900 million square feet of retail space were spread out over one place it would take up roughly 34 miles, which is about 1.5 times the size of Manhattan.
Walmart parking lots alone take up roughly the size of Tampa, Florida.
90 percent of all Americans live within 15 miles of a Walmart.
1 of every 123 people in U.S. work for
Walmart.
PERSPECTIVES/The Consulting Group, Inc.
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Vegan Goes Mainstream
(Appendix)Plant-Based Eating Is Gaining Traction Among The 98 Percent Of Americans Who Don’t Identify As Vegans.
Attracted For Health & Environmental Benefits—“Cool” Factor.
61% Of Consumers Say They Enjoy Menus That Heavily Feature Vegetables
(Which Jumps To 75 Percent Among 25–34-Year-Olds)
,
Led By Kale, Brussels Sprouts & Cabbage.
There Have Been A Number Of Buzzy, Veg-Heavy Restaurant Openings Injecting Edginess & Sophistication Into A Cuisine Historically Compared To Rabbit Food.
Trends Like This In Food, Speak To A Higher Trend Of Consciousness Because What We Eat Has Such A Ripple Effect On Lives.
PERSPECTIVES/The Consulting Group, Inc.
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A Modern Take On Flavor
(Appendix)The Demand For Premium Foods & Flavors In Fast-Casual Is At An All-Time High.More Chefs With Culinary Training & Fine-dining Experience Are Migrating To The QSR Category, Joining Or Founding Multi-Unit Concepts That Put High-Quality Flavors & Conscious Sourcing Practices At The Center.
Freshness And Sustainability Are An Important Part Of The Mix.
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