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Friday, September 23, 2016 - PowerPoint Presentation

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Friday, September 23, 2016 - PPT Presentation

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

consulting perspectives amp group perspectives consulting group amp food sales casual walmart fast dining trending trends restaurant

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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.

3Slide4

PERSPECTIVES/The Consulting Group, Inc.

4

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.

6Slide7

This Is The First National Election

In Which More Millennials Could Vote Than Boomers

PERSPECTIVES/The Consulting Group, Inc.

7Slide8

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.

9

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.

10

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.

11Slide12

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.

12

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.

16

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.

17

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

PERSPECTIVES/The Consulting Group, Inc.

18Slide19

PERSPECTIVES/The Consulting Group, Inc.19

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.

21

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.

22Slide23

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.

24Slide25

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)

PERSPECTIVES/The Consulting Group, Inc.

25Slide26

PERSPECTIVES/The Consulting Group, Inc.26

Fast Casual / Fast FreshSlide27

PERSPECTIVES/The Consulting Group, Inc.27

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.

29Slide30

PERSPECTIVES/The Consulting Group, Inc.30

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.

31Slide32

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.

33Slide34

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

!

PERSPECTIVES/The Consulting Group, Inc.

35Slide36

PERSPECTIVES/The Consulting Group, Inc.36

Dinner House / UpscaleSlide37

Fine Dining Traffic & Trends

Dominated By Independent Operators Star Chefs

Public Companies

PERSPECTIVES/The Consulting Group, Inc.

37Slide38

PERSPECTIVES/The Consulting Group, Inc.38

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

PERSPECTIVES/The Consulting Group, Inc.

39Slide40

PERSPECTIVES/The Consulting Group, Inc.40

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”

PERSPECTIVES/The Consulting Group, Inc.

41Slide42

PERSPECTIVES/The Consulting Group, Inc.42

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

PERSPECTIVES/The Consulting Group, Inc.45

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.

48Slide49

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

PERSPECTIVES/The Consulting Group, Inc.

50

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.

52

Specialty RetailersSlide53

PERSPECTIVES/The Consulting Group, Inc.53

Big Box

Too Many? Too Big?

=Slide54

Better For You

Wholesome OrganicNaturalExpensiveGreat Margins

PERSPECTIVES/The Consulting Group, Inc.

54

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.

55Slide56

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.

56Slide57

Now Trending

Natural vs. OrganicMainstreamingFarmers’ MarketsPermanent

Weekly

Artisans’ Market

Cheese

Candy / Chocolate

Specialty

Baking

Grocery

Décor & Tools

PERSPECTIVES/The Consulting Group, Inc.

57Slide58

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.

58Slide59

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.

59Slide60

Now Trending

PERSPECTIVES/The Consulting Group, Inc.60

~ $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

PERSPECTIVES/The Consulting Group, Inc.

61Slide62

Now Trending

Non-Traditional Locations For FoodserviceIntercept LocationsKiosks & CartsQuick Stores

Pop-Up Stores

Food Trucks

Bakeries & Fakeries

(No Ovens Or Hoods)

PERSPECTIVES/The Consulting Group, Inc.

62Slide63

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

PERSPECTIVES/The Consulting Group, Inc.

63Slide64

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

PERSPECTIVES/The Consulting Group, Inc.

64Slide65

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.

65

iPic

TheaterSlide66

It’s A

D.I.Y. World/ $15 An Hour Minimum Wage

PERSPECTIVES/The Consulting Group, Inc.

66

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.

70

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.

72Slide73

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.

73Slide74

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.

74Slide75

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.

PERSPECTIVES/The Consulting Group, Inc.

75