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Snacking trends intersect with some of the foodservice industry’s most important challenges, which is why cracking the snacking code has become a necessity. But while much attention has been made of consumer snacking trends, and while foodservice operators now roll out new snackable items almost daily, Packaged Facts estimates that usage of “snacks” at restaurants had held relatively stable during 2005-09, and we forecast similar results for 2010 and 2011.

But the devil is in the details. With their low price points, high portability, and upselling potential, snacking strategies can boost mid-morning and mid-afternoon sales; drive guest traffic; and leverage on-site upselling to higher-priced items or bundled meals. The bottom line is that snacking strategies can not only help operators address incremental “true snacking” occasions, but they can also use snackable items as carrots to entice customers to purchase more food and beverages—and give consumers highly portable food options in the bargain.

Snack and Dessert Trends in the U.S. Foodservice Market provides needed insight into the consumer snacking decision-making process; snacking menu pricing and product trends; and foodservice snacking sales (by restaurant segment and by demographic), helping industry participants position themselves accordingly.

With proprietary consumer research laying the foundation, the report analyses consumer attitudes and behaviors influencing foodservice snacking behavior. Themes addressed include where and how snacks are eaten, how the snacking purchase decision relates to consumer activity and routine, and consumer hunger and health purchase motivations. The report also assesses “consumer dessert influencers,” factors that play into the decision to order restaurant dessert during the dinner hour. Themes addressed include dessert formats and purchase incentives; and desserts as conditional options which assesses the influence of cost, satiation and calorie considerations on the purchase decision). As part of this analysis, we detail snacking usage according to restaurant type and to prepared foods use at convenience stores and grocery stores.

We also analyze the snacking patterns and restaurant preferences of five Snacking Lifestyle groups: Carefree Snackers; Fast Food Slighting Hurried Healthy Snackers; Hurried Healthy Snackers; Calorie-Conscious Small Mealers; and Healthy Calorie-Conscious Snackers. With this analysis, restaurants can tailor their incentives to fit the purchasing patterns of these important groups.

Snack and Dessert Trends in the U.S. Foodservice Market also analyzes leading snack-centric restaurant brands, including menu strategies and new menu item introductions; core users; snacking tendencies; food, diet and health attitudes; and trended sales metrics.

The report also includes “Share of stomach” snack and nonalcoholic beverage sales analysis, which includes 5-year sales trends for the fast food/quick-service restaurant and full-service restaurant segments, with forecasts for 2010 and 2011; guest traffic frequency analysis of leading snack-centric restaurant brands, giving a directional perspective on current sales trends; and trended snack and nonalcoholic beverage sales analysis by demographic, including 4-year sales historical sales trends and spending according to key demographics, such as age, income, region, and race/ethnicity.

Table of Contents
Chapter 1: Executive Summary
Scope and Methodology
Scope
Methodology
Consumer survey methodology
Market size and forecast
Consumer restaurant expenditure trending
Terminology
Macroeconomic Analysis
Fast Facts
Restaurant Usage & Outlook Tracker
Fast Facts
Share of Stomach: Sales Analysis
Fast facts
Snacking Trends, Innovations & Strategies
Snacking Menu Item Analysis
Snacking Behavioral Analysis
Fast facts
Snacking Lifestyle Groups
Fast facts
Restaurant Dessert Influencers
Fast facts
Snacking on the Menu: Restaurant Brand Analysis
Starbucks
Dunkin’ Donuts
Jamba Juice

Chapter 2: Macroeconomic Analysis
Restaurant sales rally fizzles; long slog ahead
Restaurant industry sales dip in June; future weakness likely
Spending upturn hinges on consumers with strong balance sheets
Upturn to benefit casual restaurants at expense of family and fast food/QSR players
Non-discretionary spending a recession rule
But affluent may help drive growth in discretionary spend
Packaged Facts’ Consumer Restaurant Tracker: gloomy near-term outlook
In-home breakfast and dinner trend remains significant
Bagging lunch, breakfast and snacks taking a bite out of restaurant sales?
Graph 2-1: Consumer Restaurant Tracker: Current Behavior: A Top Line View
Looking ahead: saving & grocery spending trumps limited-service and full-service restaurant spend
Graph 2-2: Consumer Restaurant Tracker: Next 3 Months: A Top Line View
February to June food services & drinking places monthly sales sequentially improve
Full-service restaurants get shot in the arm, shift momentum away from grocery
Graph 2-3: Monthly Sales, 12-Month % Change, Grocery Stores & Food Services & Drinking Places, Full-Service Restaurants and Limited-Service Eating Places, 2009-2010
But month-to-month spending trends suggest restaurant and food retail pullback
Graph 2-4: Monthly Sales, Month-to-Month % Change, Grocery Stores & Food Services & Drinking Places, Full-Service Restaurants and Limited-Service Eating Places, 2009-2010
Restaurant Performance Index contracts for second straight month
Graph 2-5: Restaurant Performance Index, Monthly Metrics, 2006-2010
Macroeconomic factors shaping restaurant sales
Consumer confidence? No, not really
Present Situation Index decreases as perceptions of job prospects continue to darken
Expectations Index weighed down by dimmer outlook on job prospects
Unemploymentrate stagnates
Some perspective:
Graph 2-6: UnemploymentRate and Consumer Confidence: 2007-2010
By demographic, unemployment rates settle into troughs
Disparity in unemployment rates by education level
Young adults, minorities and men also find harder going
Graph 2-7: Unemployment Rate, Selected Demographics, 2007-2010
Graph 2-8: Unemployment Rate, by Race/Ethnicity, 2007-2010
How can increasing personal savings and reducing the debt burden be bad?
Households continue to repair their balance sheets
Graph 2-9: Consumer Debt Burden, 2000-2010
Graph 2-10: Savings Rate & Debt Service Ratio & Financial Obligations Ratio, 2007-2010
Unemployment and GPD forecast: expect recovery to take several years
Slow employment rebound to coincide with a slowrebound in consumer spending
Graph 2-11: Unemployment and GDP Forecast, 2010-12
Stock & housing declines deflate household wealth; rebound to record 2006 levels a long way off
Q1 2009 to Q1 2010 sees uptick in household wealth, but still $10 trillion off 2006 high
Graph 2-12: Household Net Worth, 2005-10
Case-Shiller and FOMC housing pessimism
Q2 2010 summary equities analysis
Graph 2-13: Wealth Effect: Wilshire 5000 and Case Shiller Composite-20 Index: 2007-2010
Food at home maintains pricing edge
Graph 2-14: CPI: Food at Home vs. Food Away from Home, 2005-2010
Graph 2-15: CPI: Food at Home vs. Food Away from Home, 2005-2010
Food inflation forecast remains muted
CPI forecast for food at home and food away from home
Commodities pricing analysis
Intermediate foods and feeds index dips during Q1 2010
Prepared animal feed prices lead decline
Dairy product index falls after Q4 2009 hike
Finished consumer foods rise
Crude foodstuffs and feedstuffs rise tapers from Q4 2009 pop

Chapter 3: Restaurant Usage & Outlook Tracker
Note on reading charts
Packaged Facts’ Consumer Restaurant Tracker: At-home food spend trumps out-of-home spend
February 2010 trend continues in June 2010
Food retail snacks to benefit?
Graph 3-1: Consumer Restaurant Tracker: Current Behavior: A Top Line View
Looking ahead: Consumers more likely to pack a lunch, breakfast or snack
Pack a snack?
Graph 3-2: Consumer Restaurant Tracker: Next 3 Months: A Top Line View
Planned spending on snacking stronghold sends mixed signals
Graph 3-3: Consumer Restaurant Tracker: Future Behavior: Fast Food Restaurant Spending
Intention to save money remains high
Graph 3-4: Consumer Restaurant Tracker: Future Behavior: Saving Money
Restaurant usage and usage frequency
Overview
February 2010 to June 2010 mean use comparison
Graph 3-5: Mean Restaurant Usage in Last Month, by Restaurant Type, 2010
Graph 3-6: Restaurant Usage in Last Month, by Restaurant Type, 2010
Males drive mean use
Table 3-1: Mean Restaurant Usage in Last Month, by Restaurant Type, 2010, by Gender
Graph 3-7: Restaurant Usage in Last Month, by Restaurant Type, by Gender, 2010
18-34s continue to drive guest counts
Table 3-2: Mean Restaurant Usage in Last Month, by Restaurant Type, 2010, by Age
18-34s exhibit higher usage
Key smoothie shop and street stand users
Graph 3-8: Restaurant Usage in Last Month, by Restaurant Type, 2010, by Age
HH income: fast food enjoys egalitarian status
Table 3-3: Mean Restaurant Usage in Last Month, by Restaurant Type, 2010,
by HH Income
Graph 3-9: Restaurant Usage in Last Month, by Restaurant Type, 2010, by HH Income
Employment status: having a job pays the bills but also fits restaurant lifestyle
Table 3-4: Mean Restaurant Usage in Last Month, by Restaurant Type, 2010,
by Employment Status
Full-time workers and students also compare favorably regarding overall usage
Graph 3-10: Restaurant Usage in Last Month, by Restaurant Type, 2010,
by Employment Status
Restaurant snacking use
Technically speaking, restaurant snacking visits are a drop in the bucket
But a very important driver for incremental sales and upselling
Graph 3-11: Day Part Usage on Last Visit, 2010
Restaurant snacking use in past month
Note on reading charts in this section
Convenience stores and snacking a natural fit
Graph 3-12: Restaurant Snacking Usage in Last Month, Type of Restaurant, 2010
Gender snacking differences hinge on impulse, efficiency and affordability
Graph 3-13: Restaurant Usage in Last Month for a Snack, 2010, by Gender
HH income
Graph 3-14: Restaurant Usage in Last Month for a Snack, 2010, by HH Income
Employment status a key differentiator
Graph 3-15: Restaurant Usage in Last Month for a Snack, 2010, by Employment Status

Chapter 4: Share of Stomach: Snacking Sales Analysis

Market size and overview
Snacking usage trends stable over time
Table 4-1: Restaurant Snacking Usage,by Restaurant Type, 2005-10
18-24s hop on snacking trend
Table 4-2: Restaurant Snacking Usage,18-24s, by Restaurant Type, 2005-10
Near-term challenges
Long-term outlook
Graph 4-1: Snack and non-alcoholic beverage sales:
limited-service and full-service restaurants, 2005-2011
Graph 4-2: Snack and non-alcoholic beverage sales, % change:
limited-service and full-service restaurants, 2006-2011
Snacks still take a small bite out of food sales
Graph 4-3: Food at Home versus Food Away from Home Daypart Spend
Fast food owns the restaurant snacking space
Graph 4-4: Snack & Beverage Expenditures: Fast Food, Full-Service,
Vending Machines & Cafeterias
Restaurants sales trends by daypart
Consumer food expenditure trends suggest migration to food at home spend
Table 4-3: Consumer Food Expenditures, 2005-08
Snack & beverage share of spend remains steady
Table 4-4: Meals Away From Home Expenditures,by Daypart, 2005-08
Consistent ratio of snack expenditures to food expense and restaurant expense
Table 4-5: Snack & Beverage Expenditures: Selected Metrics &Fast Food, Full-Service, Vending Machines Cafeteria Spend, 2005-08
Vending machines lose snacking traction
Graph 4-5: Snack & Beverage Expenditures: Fast Food, Full-Service,
Vending Machines & Cafeterias, 2005-08
Western region snack spend champs; South lags
Table 4-6: Snack & Beverage Expenditures: Selected Metrics &Fast Food, Full-Service, Vending Machines and Cafeteria Spend, by Region
Youth drives snacking spend
Table 4-7: Snack & Beverage Expenditures: Selected Metrics &Fast Food, Full-Service, Vending Machines and Cafeteria Spend, by Age
Snacks linked to income
But fast food share shifts
Table 4-8: Snack & Beverage Expenditures: Selected Metrics &Fast Food, Full-Service, Vending Machines and Cafeteria Spend, by Income
Race/ethnicity reveals significant differences in snack spend
Table 4-9: Snack & Beverage Expenditures: Selected Metrics &Fast Food, Full-Service, Vending Machines and Cafeteria Spend, by Race/Ethnicity
Snack & Nonalcoholic Beverage Guest Traffic Analysis
Frequency counts: definition
Starbucks loses high-frequency guests & guest share; Dunkin’ gains; Jamba mixed
Table 4-10: Guest Traffic: Limited-Service Restaurants, Selected Snacking Players, 2008-10

Chapter 5: Snacking Trends, Innovations & Strategies

Let’s Snack!
Three or more snacks a day?
Snack timing: morning and afternoon routine
Restaurants respond with snackable options
What restaurants are doing
What retail is doing
Mini size that!
Movement driven by multiple factors
What restaurants are doing
What retail is doing
Snacking & affordability
Retail snacks as meal substitutes
Healthy indulgence
Snacks as culprits
Health versus taste
Salty snacks
Gender issues
What restaurants are doing
What retail is doing
On-the-go portability and convenience
What restaurants are doing
Impulse
What restaurants are doing
Culinary exploration
What restaurants are doing
What Retail Is Doing
Comfort foods
What restaurants are doing
Private label opportunities
Snacking and sociability
What Retail Is Doing
Sustainability
What Retail Is Doing
Appendix: sources

Chapter 6: Snacking Menu Item Analysis

Introduction
Get them through the door
Why snacking? Low cost, portability, driving traffic and building guest checks
Operators report growth by snacking daypart
QSR and FSR snackable items are different animals
The rise of the snackwich
Graph 6-1: Snackwich Timeline, 2005-10
Burger, chicken and sub variations
When a snack is not a snack: bundling snacks to rope in additional sales
Happy Hour and late-night
Small plates

Chapter 7: Snacking Behavioral Analysis

Note on reading charts
Snacking behavioral analysis
Overview
Graph 7-1: Restaurant Snacking Influencers, 2010
Gender differences: health, quick consumption and time of day
Table 7-1: Restaurant Snacking Influencers, by Gender, 2010
Age
Table 7-2: Restaurant Snacking Influencers, by Age, 2010
HH income
Table 7-3: Restaurant Snacking Influencers, by Age, 2010
Employment status
Table 7-4: Restaurant Snacking Influencers, by Employment Status, 2010
Urban, Suburban, or Rural location
Table 7-5: Restaurant Snacking Influencers, Urban, Suburban or Rural, 2010

Chapter 8: Snacking Lifestyle Groups
Trended snacking & health behaviors and attitudes: 2007-10
Table 8-1: Trended Snacking & Health Behaviors and Attitudes, 2007-10
Meet the Snacking Lifestyle Groups
Demographic analysis
Table 8-2: Snacking Lifestyle Groups, Selected Demographics, 2010
Restaurant preferences
Carefree Snackers
Calorie-Conscious Small Mealers
Healthy Calorie-Conscious Snackers
Hurried Healthy Snackers
Fast Food Slighting Hurried Healthy Snackers
Table 8-3: Snacking Lifestyle Groups, Restaurant Use, By Type, 2010

Chapter 9: Restaurant Dessert Influencers

Restaurant dessert influencers
Graph 9-1: Restaurant Dessert Influencers, Dinner, 2010
Gender
Table 9-1: Restaurant Dessert Influencers, by Gender, 2010
Age
Table 9-2: Restaurant Dessert Influencers, by Age, 2010
HH income
Table 9-3: Restaurant Dessert Influencers, by HH Income, 2010
Employment status
9-4: Restaurant Dessert Influencers, by Employment Status, 2010
Urban, suburban, or rural location
Table 9-5: Restaurant Dessert Influencers,Urban, Suburban or Rural, 2010

Chapter 10: Snacking on the Menu: Restaurant Brand Analysis

Snacking Lifestyles: Brand Competitive Analysis
Meet the psychographic groups
Snacker brand analysis
Table 10-1: Snacking Lifestyle Groups: Starbucks, Dunkin’ Donuts
and Jamba Juice
Starbucks Corporation
Revenue mix shows food trending upward
Table 9-2: Starbucks, Revenue Mix by Product Type, 2009
Recession response
Menu pricing strategies and customer incentives
My Starbucks Rewards gains traction
iPhone apps and free wi-fi; what could be next?
Customizable Frappuccino to assuage calorie critics?
Expanding with VIA, Seattle’s Best and new retail formats
Starbucks users, Starbucks snackers?
Table 10-3: Starbucks Users: Restaurant Usage by Daypart and Restaurant Type
Starbucks core users
Table 10-4: Starbucks Users: Selected Demographics
Starbucks guests: food adventurousness and fast food practicality
Table 10-5: Starbucks Users: Food, Health and Diet Attitudes
A same-store sales turnaround worthy of celebration
Table 10-6: Starbucks, Selected Metrics, 2007-09
Q2 2010 brings good news
Table 10-7: Starbucks, Selected Quarterly Metrics, 2009 and 2010
Dunkin’ Donuts
2009-10 menu strategy
Expanding breakfast value menu in selected markets
Table 10-8: Dunkin’ Donuts “Breakfast not BROKEfast” Dollar Breakfast Menu
Sandwiches and wraps in the testing phase
Table 10-9: Dunkin’ Donuts Test Market New Items
Rolling through summer with new and limited-time offers
Bagel Twists, Wake-Up Wrap aimed squarely at snackers
Table 10-10: Dunkin’ Donuts Spring & Summer 2010 New and Limited-Time Offers
Dunkin’ Donuts: egalitarian while attracting the affluent
Table 10-11: Dunkin’ DonutsUsers: Selected Demographics
Positive fast food attitudes
Table 10-12: Dunkin’ Donuts Users: Food, Health and Diet Attitudes
Dunkin’ Donuts: snacker central?
Table 10-13: Dunkin’ Donuts Users: Restaurant Usage by Daypart and Restaurant Type
Sales per store dip
Table 10-14: Dunkin’s Donuts, Selected Metrics, 2007-09
Jamba Juice Company
Menu overview
The BLEND Plan
Menu innovation
Away from smoothies
And expanding smoothies, too
Feel Good Special, anyone?
Consumer product expansion
Jamba Juice user restaurant snacking tendencies
Table 10-15: Jamba Juice Users: Restaurant Usage by Daypart
and Restaurant Type
Jamba users: young!
Table 10-16: Jamba Juice Users: Selected Demographics
A health-fueled bunch
Table 10-17: Jamba Juice Users: Food, Health and Diet Attitudes
Down go same-store sales
Table 10-18: Jamba Juice, Selected Metrics, 2007-09
Could a turnaround be in sight?
Table 10-19: Jamba Juice, Selected Quarterly Metrics, 2009 and 2010

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