2015/2016 foodservice insights LIBRARY - ifmaworld.com IFMA Foodservice Insig… · 2015/2016...

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LIBRARY 2015/2016 foodservice insights produced for IFMA by [contact] IFMA: 312-540-4400 | Datassential: 888-556-3687

Transcript of 2015/2016 foodservice insights LIBRARY - ifmaworld.com IFMA Foodservice Insig… · 2015/2016...

Page 1: 2015/2016 foodservice insights LIBRARY - ifmaworld.com IFMA Foodservice Insig… · 2015/2016 foodservice insights ... The Foodservice Landscape wall chart and ... • Consumer eating

LIBRARY 2015/2016 foodservice insights

produced for IFMA by

[contact] IFMA: 312-540-4400 | Datassential: 888-556-3687

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Limited Service Restaurants

page 11

Full Service Restaurants

page 19

Supermarkets

page 28

Convenience Stores

page 38

Other Retailers

page 47

K-12 Schools

page 51

Colleges & Universities

page 56

Business & Industry

page 63

Recreation

page 67

Lodging

page 72

Transportation

page 77

Hospitals

page 80

Long Term Care

page 86

Senior Living

page 92

Vending

page 98

Catering

page 100

Military

page 102

Corrections

page 106

RESTAURANTS

RETAIL FOOD

ON-SITE FOODSERVICE

Foodservice Contractors

page 110

Distributors

page 117

Buying Groups

page 125

GPO’s

page 128

DISTRIBUTION & CONTRACT MANAGEMENT

Definitions

page 134

Economic Overview

page 140

APPENDIX

Introduction

page 3

Methodology & Data

page 4

Industry Snapshot

page 5

Occasions & Eater Types

page 7

INTRODUCTION

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Greetings and welcome to the third edition of IFMA’s Insights Library produced by Datassential!

As the industry evolves, IFMA feels it is important to provide its membership with the best and most relevant tools to

help navigate the competitive foodservice environment. The Foodservice Landscape wall chart and Insights Library will

be provided to participants in the Consumer Planning Program, attendees at the Marketing and Sales Leadership Forum,

and for purchase throughout the year.

The goal of the Insights Library is to play a more active role in your planning and strategy development. It is designed as

more of a “playbook” than a reference book, and incorporates consistent and reliable data from a closely curated set of

original research and secondary data.

The Library is designed as a 360° tool for your planning by providing consumer, operator, distributor and general

economic information all in one place. Some of the information featured includes:

• Eater Types and Occasions data from IFMA’s landmark Consumer Planning Program detailing consumer decision-

making and behavior

• Consumer eating patterns as described in The NPD Group’s CREST service

• Operator profile information provided by Datassential’s PULSE service

• Share of units by menu type provided by Datassential’s Firefly service

• A compilation of segment data gathered from government sources, trade associations/groups, industry publications,

and Datassential Keynote reports, all augmented with noteworthy news highlighting important factors and stories

shaping foodservice

• Macro-economic data that provides an indication of general industry health, plus Federal Reserve Beige Book

integration brings you insights into performance, outlook, and concerns from key business and industry contacts

The layout allows you dive into the details of a segment with regard to the size and scope or understand the consumer

occasions most important to a segment.

We trust you will soon make the Landscape wall chart and Insights Library regular parts of your internal planning process.

Larry Oberkfell Jack Li

President/CEO, IFMA Managing Director, Datassential

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PULSE Consumer eating patterns and spend estimates for restaurants and c-stores provided by NPD CREST™.

For information, please contact: 847-692-1787 or [email protected]

Segment counts and profiles provided by Datassential Firefly, the universal operator database.

For information, please contact: 310-922-6299 or [email protected]

Further segment dynamics and decision maker profiles provided by Datassential PULSE.

For information, please contact: 312-655-0594 or [email protected]

universal operator database

Government Data Industry Associations Foodservice Publications Datassential

Keynote Reports

PLUS

In order to accurately gauge the size of the foodservice industry, Datassential developed a “bottom-up”

methodology where proprietary models were built for each segment based on extensive primary and

secondary research. This included leveraging Firefly, Datassential's universal operator database; PULSE,

which provided operator decision maker profiles and further segment dynamics; the IFMA Consumer

Planning Program, an in-depth annual consumer survey; and surveys conducted with Datassential

OPERA™, the industry's largest operator panel. Restaurant and c-store models incorporated consumer

eating pattern data and spend estimates from The NPD Group’s CREST™ service. Supermarket numbers

were provided by Nielsen Perishables Group FreshFacts Data.

A wide range of additional sources, including the US Census and other government data, industry

association statistics, foodservice publications and annual surveys, and segment market research reports,

were also consulted to ensure inclusion of all relevant and accurate information in developing the numbers

and estimates published in the IFMA 2015 Foodservice Insights Library and 2015/2016 IFMA Foodservice

Landscape wall chart.

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INDUSTRY SNAPSHOT

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2015/2016 IFMA FOODSERVICE LANDSCAPE 312-540-4400

[email protected] 888-556-3687

[email protected]

Powered by Datassential Food & Non-Alcoholic Beverages | Key Sources: Datassential, The NPD Group/CREST®, Nielsen Perishables Group FreshFacts Data, US Government

*NOTE: totals may not add due to rounding

LANDSCAPE ECONOMICS OUTLOOK USAGE BEHAVIOR

Locations Chaina /

Managedb Operator $

(billions) Share

Consumer $ (billions)

$ Per Location

Projected Growth

(real)

vs. Industry

Scratch Cash & Carry GPO

RESTAURANTS 633,033 43%a $120.7 58% $398.9 $630,141 0.7% average moderate moderate very low

Total Limited Service 308,682 71%a 66.9 32% 230.8 $747,695 1.2 average low moderate very low

Total Full Service 324,351 16%a 53.8 26% 168.1 $518,266 0.0 weak high high very low

RETAIL FOOD 260,102 n/a $23.5 11% $56.6 n/a 2.8% strong low n/a n/a

Supermarkets 98,994 82%a 12.4 6% 24.8 n/a 4.2 strong moderate n/a n/a

Convenience Stores 151,053 37%a 10.4 5% 29.8 n/a 1.7 strong low n/a n/a

Other Retailers 10,055 n/a 0.7 0% 2.0 n/a 1.0 average low n/a n/a

ON-SITE FOODSERVICE 334,535 n/a $65.7 31% $168.7 $504,134 1.8% strong moderate n/a n/a

Education 114,335 7%b $15.9 8% $32.3 $282,739 0.4% weak low low moderate

K-12 109,629 6%b 9.0 4% 15.0 $136,433 0.2 weak low very low moderate

Colleges and Universities 4,706 29%b 6.9 3% 17.4 $3,691,033 0.5 weak moderate low moderate

Business and Industry 11,106 70%b $4.8 2% $11.9 $1,070,592 1.5% average moderate moderate low

Travel and Leisure 133,357 n/a $20.8 10% $67.6 $506,948 2.8% strong moderate n/a n/a

Recreation 62,201 n/a 6.1 3% 20.5 $329,448 2.6 strong low n/a n/a

Lodging 68,663 58%a 13.4 6% 44.7 $651,233 3.0 strong high n/a moderate

Transportation 2,493 n/a 1.2 1% 2.4 n/a 1.7 strong low n/a n/a

Healthcare 55,703 60%b $11.5 5% $24.3 $436,045 1.8% strong moderate low high

Hospitals 5,686 17%b 6.2 3% 15.6 $2,739,536 2.0 strong low low high

Long Term Care 15,632 53%b 1.8 1% 3.1 $195,177 1.7 strong moderate low moderate

Senior Living 34,385 68%b 3.4 2% 5.7 $164,636 1.5 average moderate moderate moderate

Other 20,034 n/a $12.7 6% $32.5 n/a 1.0% average moderate n/a n/a

Vending 4,011 n/a 8.1 4% 20.3 n/a 1.0 average low moderate n/a

Catering 10,625 n/a 2.3 1% 7.8 n/a 2.0 strong high high n/a

Military 523 n/a 1.1 1% 2.2 $4,141,721 (1.5) weak moderate n/a n/a

Corrections 4,875 n/a 1.2 1% 2.3 $477,840 (0.5) weak moderate n/a n/a

TOTAL FOODSERVICE 1,227,670 - $209.9 100%* $624.2 $508,426 1.2% moderate total growth projected for 2016

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OCCASIONS & EATER TYPES UNDERLYING DRIVERS OF CHOICE

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Frequency Average Spend Annual $ (billions) Share of Spend

Quick bite 16% $6.71 $36.2 6.1%

Family meal 15% $10.88 $55.8 9.5%

Casual lunch 13% $9.85 $44.0 7.5%

Casual dinner 13% $12.52 $56.7 9.6%

Running errands 13% $6.96 $30.5 5.2%

Cheap bite 13% $6.83 $30.1 5.1%

Hold over 9% $6.83 $19.6 3.3%

Last minute dinner 8% $9.76 $27.8 4.7%

Dinner on the way home 8% $10.27 $29.3 5.0%

Food as fuel 8% $8.36 $23.1 3.9%

Relaxing at home 8% $9.88 $27.6 4.7%

Hanging with friends 7% $11.41 $26.0 4.4%

Work break 5% $10.43 $17.9 3.0%

Morning commute 4% $8.47 $11.6 2.0%

Social gathering 4% $13.44 $16.9 2.9%

Road trip 4% $9.33 $12.2 2.1%

Work lunch 3% $13.35 $12.0 2.0%

Brunch 3% $13.54 $13.4 2.3%

Special occasion 3% $16.75 $15.0 2.5%

Weekend breakfast 3% $10.87 $11.4 1.9%

Romantic meal 2% $17.83 $11.4 1.9%

Before event 2% $13.56 $11.2 1.9%

Festive 2% $15.97 $8.3 1.4%

Formal dinner 2% $20.32 $11.5 2.0%

Guys night out 2% $19.39 $10.0 1.7%

Impressing someone 1% $19.89 $6.5 1.1%

Co-workers after work 1% $16.09 $7.2 1.2%

Girls night out 1% $15.90 $6.8 1.1%

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These attitudinal segments define the spectrum of AFH consumers.

Basic Eaters Quality

Essentialists Progressives Experientialists

dispassionate about food, focusing more on value and

convenience

quality matters to a certain point; it’s got to be good, but

doesn’t have to be great

passionate about food and health, and more willing to

try new things

go beyond the food to also focus on the experiential

aspects of eating & drinking

Food Forward

Health First Environment Driven

Family Driven

NEW CHANGE FOR 2015/16: PROGRESSIVES and EXPERIENTIALISTS

now report out by these four sub-segments

progressive attitudes with an emphasis on trying new

things and adventurous eating

18% of population

$7.20 average spend

26% of population

$8.28 average spend

30% of population

$10.00 average spend

26% of population

$9.47 average spend

progressive attitudes with

an emphasis on nutrition

and doing / feeling good

12% of population

$10.98 average spend

18% of population

$9.33 average spend

12% of population

$8.97 average spend

14% of population

$9.91 average spend

experience-driven with a focus

on the environmental aspects

of eating out

experience-driven with a focus

on good solutions for the

family / household

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RESTAURANTS LIMITED SERVICE: QSR | Fast-Casual

FULL SERVICE: Midscale | Casual Dining | Fine Dining

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Limited Service RESTAURANTS

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23%

breakfast

36%

lunch

29%

dinner

4% use GPOs

PREDICTIONS

12%

snack

Broadline distributors 89%

Club stores 55%

Cash & carry stores 41%

Direct from manufacturers 41%

Supermarket / grocery 41%

Specialty distributors 35%

Local farms 17%

Third party websites 8%

Food brokers 6%

REFLECTIONS

PURCHASE SOURCES (% who buy from)

39%

PER PERSON

AVERAGE DAILY MEALS

CHECK AVERAGE $

71% CHAIN

29%

$5.88

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308,682 locations $66.9 billion operator F&B spend 32% share of overall

operator spend

INDEPENDENT

DAYPART SHARE

SOURCES/ ESTIMATES BASED ON: Datassential PULSE; Firefly; NPD/CREST

68 AVERAGE SEATING

CAPACITY

279 MEALS PER DAY

Economic conditions in 2015 had varying effects on the limited service

segment. While rising disposable income and a declining unemployment

rate were positive factors, rising food-away-from-home inflation and

increased commodity and operating costs dampened growth rates. Some

chains are passing on the increased operational costs to customers by

increasing menu prices.

Overall, quick-service chains are trying to innovate to keep up with

fast casuals, the main driver for growth within the LSR segment. Chains

are increasingly adding more customizable options, all-day breakfasts,

healthy/functional foods and clean ingredients, and revamping their

restaurants.

The outlook for the limited service sector is good, and growth will continue at a

modest and steady pace. The fast casual segment remains the biggest driver of

growth within LSR, and continues to take traffic and sales from the full service side.

Social media presence and new marketing techniques will continue to be important for

growth within LSR, including word-of-mouth targeting through review sites and

engaging Millennial diners through enhanced information and visual appeal. The

adoption of increasingly innovative products and on-trend ingredients will

continue to be a way for chains to be able to set themselves apart.

As minimum wage and healthcare legislation begins to take effect, many restaurants

have started implementing a higher wage/no-tipping policy and providing

benefits for their staff. In return, many are experiencing higher retention rates, which

could help address the anticipated increased competition for recruiting and retaining

employees as the job market and economy continue to improve. These changes do

come at a cost for many operators though, and more chains may look to increase

menu prices.

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4%

2%

2%

3%

15%

27%

42%

Other

Foodservice Director

Purchasing Manager

F&B Manager

Executive Chef

General Manager

Owner

AGE

3%

23%

25% 26%

20%

3%

Under 25 25 to 34 35 to 44 45 to 54 55 to 64 Over 65

F&B DECISION MAKERS

CULINARY TRAINING

PREDICTIONS

39%

24%

68% 32%

PERSONAL PROFILE

GENDER

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SOURCE: Datassential PULSE

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16.6

JOB RESPONSIBILITY / EXPERIENCE

AVERAGE YEARS OF

INDUSTRY EXPERIENCE

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SHARE OF TRAFFIC BY REGION

AGE SHARE

Under 18 20%

18-24 10%

25-34 14%

35-49 20%

50-64 21%

65 and Over 14%

AGE OF EATER

SOURCE: NPD/CREST

48% 52%

GENDER OF EATER

CONSUMER EATING PATTERNS

RACE OF EATER

SHARE BY HOUSEHOLD SIZE

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65%

12%

17%

6% Caucasian, non-Hispanic

African American,non-Hispanic

Hispanic

Other, non-Hispanic

10%

30%

43%

18%

1

2

3 to 4

5 or more

17%

20%

39%

24%

Northeast

Central

South

West

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TOTAL ON/OFF PREMISES SHARE BY HOUSEHOLD INCOME

TOTAL WEEKPARTS

63% MONDAY

BREAKFAST –

FRIDAY LUNCH

37% FRIDAY SUPPER –

SUNDAY PM

SNACK

REASON FOR VISIT 67% ADULTS ONLY

PARTIES

TOTAL PARTIES

33% PARTIES WITH

CHILDREN

CONSUMER EATING PATTERNS L

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Traffic Share (%) YE April ‘15

Convenient Location 18%

I Like It There 11%

Had a Special Taste/Craving 9%

Other's Choice/I Didn't Decide 9%

Always/Regularly Go There 7%

SOURCE: NPD/CREST

16%

19%

24%

14%

27%

Under $25

$25-44,999

$45-74,999

$75-99,999

$100,000and more

ON/OFF PREMISES SHARE

Total On Premises 31%

Total Off Premises 69%

Carry Out 36%

Drive Thru 30%

Delivery 4%

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Chain

US Sales

2014 US Units (in millions) % Change

2014 2013

McDonald's $35,447 $35,856 -1.14% 14,350

Starbucks Coffee $13,019 $11,864 9.74% 11,939

Subway $12,265 $12,221 0.36% 26,530

Burger King $8,632 $8,501 1.54% 7,129

Wendy's $8,568 $8,354 2.56% 5,750

Taco Bell $8,200 $7,800 5.13% 5,921

Dunkin' Donuts $7,176 $6,742 6.44% 8,082

Chick-fil-A $5,711 $4,989 14.47% 1,871

Pizza Hut $5,500 $5,700 -3.51% 7,863

Panera Bread $4,260 $4,034 5.60% 1,759

KFC $4,200 $4,200 0.00% 4,370

Domino's Pizza $4,116 $3,770 9.18% 5,067

Chipotle Mexican Grill $4,061 $3,189 27.34% 1,755

Sonic Drive-In $4,033 $3,882 3.89% 3,518

Little Caesar's Pizza $3,405 $3,100 9.84% 4,087

Dairy Queen $3,192 $2,960 7.84% 4,446

Jack in the Box $3,180 $3,181 -0.03% 2,249

Arby's $3,177 $2,992 6.18% 3,226

Papa John's Pizza $2,685 $2,497 7.53% 3,250

Popeye's Louisiana Kitchen $2,419 $2,085 16.02% 1,870

Total $143,246 $137,917 3.86% -

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LEADING LIMITED SERVICE CHAINS

SOURCE: NRN 2015: Top 100 U.S. Chain Systemwide Sales 16

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Primary

Cuisine % of QSR Units % Total Units

AFRICAN 0.0% 0.0%

AMERICAN 5.4% 2.6%

BBQ 1.5% 0.7%

BURGERS 16.1% 7.9%

CARIBBEAN 0.3% 0.1%

CHINESE 3.2% 1.6%

COFFEE/BAKERY 9.9% 4.9%

DESSERT/SNACK 11.1% 5.4%

FRENCH 0.2% 0.1%

INDIAN 0.2% 0.1%

ITALIAN 1.0% 0.4%

JAPANESE 0.9% 0.4%

KOREAN 0.1% 0.1%

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Primary

Cuisine % of QSR Units % Total Units

MEDITERRANEAN 0.9% 0.5%

MEXICAN 7.5% 3.7%

MIXED ETHNICITY 0.3% 0.2%

OTHER ASIAN 0.8% 0.4%

OTHER EUROPEAN 0.2% 0.1%

PIZZA 15.8% 7.7%

SANDWICH/DELI 18.6% 9.1%

SEAFOOD 1.2% 0.6%

SOUTH AMERICAN 0.3% 0.1%

SOUTHERN 4.3% 2.1%

STEAKHOUSE 0.1% 0.1%

THAI 0.2% 0.1%

LIMITED SERVICE RESTAURANTS BY CUISINE TYPE

SOURCE: Firefly 17

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NOTEWORTHY NEWS

Fine Dining Growth Outpaces other Sectors

“How The Minimum-Wage Debate Moved From

Capitol Hill To City Halls”- May 10th, 2015; NPR

Los Angeles City Council voted to raise the city's minimum wage to $15 per hour. The second-largest city in America could soon join Seattle and San Francisco in the club of cities that have agreed to gradually raise their wages above $15 per hour. And these cities are part of a larger, recent wave of cities and counties setting their own minimum wages.

“Burger King to acquire Tim Hortons for $11.4B”- August 26th,

2014; Nation’s Restaurant News

Burger King Worldwide Inc. confirmed its deal to acquire Tim Hortons for $11.4 billion. The combined entity will create the world’s third-largest quick-service company, with roughly $23 billion in sales and 18,000 restaurants across 100 countries.

“Restaurants poised to accept Apple Pay”– October 17th, 2014; NRN.com

As Apple Inc.’s proprietary mobile payment system Apple Pay launches, a number of restaurant brands are poised to be initial adopters. Most McDonald’s, Subway and Panera Bread units will be among the 220,000 retail locations accepting the new smartphone payment, which is preloaded on Apple’s latest iPhone 6 and iPhone 6 Plus devices. Several dozen independent restaurants will also accept Apple Pay through the OpenTable reservations service.

“The Chipotle effect: Why America is Obsessed with Fast Casual Food” – February 2nd , 2015; Washington Post

The market for fast casual food, which is almost but not quite fast food, has grown by 550 percent since 1999, more than ten times the growth seen in the fast food industry over the same period, according to data from market research firm Euromonitor. Chipotle, likely the best known purveyor of the category, has seen its sales more than quadruple during that time; Panera, another oft-used example, has watched its sales more than triple; and Shake Shack, the hamburger joint du jour, has done so well that it just went public despite operating only 36 outlets.

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“McDonald’s sales bleed continues despite

turnaround efforts”- April 22nd, 2015; Fortune.com

Sales continued to struggle in the first three months of 2015, despite the first efforts of its planned turnaround. McDonald’s reported a more severe sales decline than expected in the first three months of the year Wednesday, with business dropping off from the United States, to Europe and Asia, as fewer customers came in to eat its fast-food offerings.

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Full Service RESTAURANTS

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FU

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VIC

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324,351 locations $53.8 billion operator F&B spend

15%

breakfast

34%

lunch

49%

dinner

7% use GPOs

PREDICTIONS

3%

snack

Broadline distributors 91%

Specialty distributors 63%

Cash & carry stores 42%

Club stores 41%

Supermarket / grocery 33%

Direct from manufacturers 29%

Local farms 28%

Third party websites 8%

Food brokers 6%

REFLECTIONS

PURCHASE SOURCES (% who buy from)

39%

PER PERSON

AVERAGE DAILY MEALS

CHECK AVERAGE $

157 AVERAGE SEATING

CAPACITY

$13.38

260 MEALS PER DAY

16% CHAIN

84% INDEPENDENT

DAYPART SHARE

SOURCES/ ESTIMATES BASED ON: Datassential PULSE; Firefly; NPD/CREST

26% share of overall

operator spend

The full service segment experienced many of the same factors as the

limited service segment in the past year. Falling unemployment and

rising disposable income had positive impacts overall, but growth was

minimized due to increasing operation and commodity costs and

cautious consumer spending habits.

Full service chains continue to experience slower growth than the

LSR segment and look to regain dollars and traffic lost to fast casual.

FSRs continue to look to menu changes, remodeling, and updating

service modes to stay competitive.

Growth will remain minimal as consumer spending habits continue to

be curtailed despite the post-recession economy. FSRs will slowly regain

pre-recession traffic and sales as other segments, specifically fast casual,

remain strong. Consumers are opting for quality over quantity when

visiting restaurants, and with that in mind chains will continue to focus on

updating menus, remodeling, and shrinking their footprint. Independents

and smaller chains remain focused on emphasizing food quality and

service.

As with LSRs, a shift in restaurant policies reflecting recent minimum

wage increases, eliminating reliance on tipping, and healthcare legislation

could be a way of increasing employee retention. As the economy

continues to improve and more jobs become available, recruiting and

retaining employees is becoming increasingly more competitive.

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F&B DECISION MAKERS

CULINARY TRAINING

PREDICTIONS

39%

29%

24%

%

JOB RESPONSIBILITY / EXPERIENCE PERSONAL PROFILE

GENDER

AGE

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74% 26%

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SOURCE: Datassential PULSE

23.5 AVERAGE YEARS OF

INDUSTRY EXPERIENCE 0%

12%

24%

30% 29%

5%

Under 25 25 to 34 35 to 44 45 to 54 55 to 64 Over 65

4%

2%

2%

3%

15%

27%

42%

Other

Foodservice Director

Purchasing Manager

F&B Manager

Executive Chef

General Manager

Owner

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SHARE OF TRAFFIC BY REGION AGE OF EATER

GENDER OF EATER

RACE OF EATER

SHARE BY HOUSEHOLD SIZE

AGE SHARE

Under 18 15%

18-24 6%

25-34 9%

35-49 17%

50-64 26%

65 and Over 27%

49% 51%

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CONSUMER EATING PATTERNS

SOURCE: NPD/CREST

17%

22%

38%

24%

Northeast

Central

South

West

10%

43%

35%

12%

1

2

3 to 4

5 or more74%

7%

13%

6%

Caucasian, non-Hispanic

African American,non-Hispanic

Hispanic

Other, non-Hispanic

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ON/OFF PREMISES SHARE

Total On Premises 85%

Total Off Premises 15%

Carry Out 13%

Drive Thru 1%

Delivery 1%

TOTAL ON/OFF PREMISES SHARE BY HOUSEHOLD INCOME

TOTAL PARTIES

TOTAL WEEKPARTS

Traffic Share (%) YE April ‘15

Other's Choice/I Didn't Decide 17%

Convenient Location 13%

I Like It There 13%

Always/Regularly Go There 7%

Had a Special Taste/Craving 7%

REASON FOR VISIT 72% ADULTS ONLY

PARTIES

28% PARTIES WITH

CHILDREN

54% MONDAY

BREAKFAST –

FRIDAY LUNCH

46% FRIDAY SUPPER –

SUNDAY PM

SNACK

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CONSUMER EATING PATTERNS

SOURCE: NPD/CREST

9%

14%

22%

17%

38% Under $25

$25-44,999

$45-74,999

$75-99,999

$100,000 andmore

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Chain

US Sales

2014 US Units (in millions) % Change

2014 2013

Applebee's Neighborhood Grill & Bar $4,577 $4,517 1.33% 1870

Olive Garden $3,763 $3,669 2.56% 840

Chili's Grill & Bar $3,634 $3,547 2.45% 1263

Buffalo Wild Wings Grill & Bar $3,238 $2,784 16.31% 1052

IHOP $2,933 $2,767 6.00% 1579

Denny's $2,539 $2,408 5.44% 1596

Outback Steakhouse $2,487 $2,455 1.30% 752

Red Lobster $2,373 $2,398 -1.04% 678

Cracker Barrel Old Country Store $2,137 $2,105 1.52% 633

Texas Roadhouse $1,876 $1,721 9.01% 438

The Cheesecake Factory $1,782 $1,685 5.76% 176

T.G.I. Friday's $1,775 $1,772 0.17% 507

Longhorn Steakhouse $1,548 $1,382 12.01% 479

Red Robin Gourmet Burgers & Spirits $1,438 $1,332 7.96% 496

Ruby Tuesday $1,182 $1,209 -2.23% 694

Waffle House $1,119 $1,044 7.18% 1840

Bob Evans Restaurants $960 $953 0.73% 566

P.F. Chang's China Bistro $881 $900 -2.11% 213

BJ's Restaurants $846 $775 9.16% 156

Hooters $837 $816 2.57% 340

Total $41,925 $40,239 4.19% -

SOURCE: NRN 2015: Top 100 U.S. Chain Systemwide Sales

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LEADING FULL SERVICE CHAINS

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Primary

Cuisine % of FSR Units % Total Units

AFRICAN 0.2% 0.1%

AMERICAN 45.1% 23.1%

BBQ 1.9% 1.0%

BURGERS 1.5% 0.8%

CARIBBEAN 0.5% 0.3%

CHINESE 6.3% 3.2%

COFFEE/BAKERY 0.6% 0.3%

DESSERT/SNACK 0.1% 0.1%

FRENCH 0.9% 0.5%

INDIAN 0.9% 0.5%

ITALIAN 5.1% 2.6%

JAPANESE 3.7% 1.9%

KOREAN 0.5% 0.2%

Primary

Cuisine % of FSR Units % Total Units

MEDITERRANEAN 1.5% 0.8%

MEXICAN 7.9% 4.1%

MIXED ETHNICITY 1.0% 0.5%

OTHER ASIAN 2.6% 1.4%

OTHER EUROPEAN 1.4% 0.7%

PIZZA 6.8% 3.5%

SANDWICH/DELI 1.5% 0.7%

SEAFOOD 3.2% 1.6%

SOUTH AMERICAN 1.1% 0.6%

SOUTHERN 1.1% 0.6%

STEAKHOUSE 2.6% 1.3%

THAI 1.8% 0.9%

FULL SERVICE RESTAURANTS BY CUISINE TYPE

SOURCE: Firefly 25

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NOTEWORTHY NEWS

Fine Dining Growth Outpaces other Sectors

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“How overtime pay proposal could impact restaurants”- June 30th, 2015; NRN.com

Tens of thousands of additional restaurant workers and managers could become eligible for overtime pay under a new rule President Barack Obama proposed Monday that would double the threshold for overtime eligibility. The rules could significantly impact the restaurant industry and operators’ labor costs. Restaurant operators rely heavily on full-time assistant managers and managers who are salaried and often work more than 40 hours a week without overtime pay. The proposal could make many managers eligible for overtime and force some restaurant owners to alter how they operate.

“Meet your new target customers: Generation Z”– March 24th, 2015; Restaurant Hospitality.com

With Millennials cutting back on restaurant visits, it’s time to reach out to an even-younger crowd.

“FDA: Calories on menus, menu boards delayed until 2016” - July 9th, 2015; AP.com

Diners will have to wait until the end of 2016 to find calorie labels on all chain restaurant menus. The Food and Drug Administration said Thursday that restaurants and other establishments will now have until December 1, 2016, to comply with federal menu labeling rules — one year beyond the original deadline.

“Customers Can Keep The Tip — Which Might Please Restaurant Workers”– October 9th, 2014; NPR

Menu prices might read a bit higher, but diners will know what they'll end up paying at meal's end — probably no more than they would have at an equivalent place where they'd tip. Tipping creates winners and losers. The people who bring you your steaks at high-end restaurants are probably doing quite well off tips, but many restaurant workers can't count on bringing home big bucks, especially after slow shifts on off days. A recent study from the labor-backed Economic Policy Institute found that 17 percent of restaurant workers live in poverty.

“Budgets, food costs taking toll on

independents”– September 3rd, 2014;

RestaurantHospitality.com A long-term decline in traffic at independent restaurants is attributed to smaller marketing budgets and rising food costs. The business outlook for independent restaurants remains murky as operators struggle to compete against those with larger budgets.

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RETAIL FOOD SUPERMARKETS

CONVENIENCE STORES

OTHER RETAILERS

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Supermarkets RETAIL FOOD

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98,994 locations $12.4 billion operator F&B spend

PREDICTIONS

13%

breakfast

37%

lunch

22%

dinner

28%

snack

Broadline distributors 69%

Direct from manufacturers 68%

Club stores 40%

Specialty distributors 38%

Local farms 31%

Cash & carry stores 29%

Supermarket / grocery 28%

Food brokers 22%

Third party websites 8%

REFLECTIONS

DAYPART SHARE

PURCHASE SOURCES (% who buy from)

39%

AVG. REGISTER RINGS FOR PREPARED FOOD

400 # PREPARED FOOD REGISTER RINGS DAILY

SOURCES/ESTIMATES BASED ON: Datassential PULSE, Supermarket Keynote; Firefly; NPD/CREST; Nielsen Perishables Group FreshFacts Data; Progressive Grocer

DAYPART AVAILABILITY

100% OFFER LUNCH

91% OFFER DINNER

85% OFFER BREAKFAST

82% CHAIN

18% INDEPENDENT

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6% share of overall

operator spend

Supermarkets continue to benefit from an improving economy and have

experienced another strong year. The combination of rising disposable

income and a shift in consumer purchases have increased supermarket

profit margins across the board. Prepared foods, deli, and bakery

departments remain a big draw for customers and stores and chains

continue to invest in these departments.

The growth of the deli and prepared food departments at many units

have allowed them to compete with local QSRs, and in some instances, are

becoming their own dining destinations. This is a trend likely to continue.

Mobile apps and technology continue to influence the segment and are

instrumental in increasing foot traffic. Grocery delivery services like

Instacart and Google Express continue to grow and are likely to shake up

the industry in years to come, especially in urban areas where their

popularity is increasing.

There have been many mergers and acquisitions taking place over the

past year, further changing the landscape of the segment.

The outlook for supermarkets remains strong this year. Prepared foods,

deli, and bakery departments remain a big draw for customers and stores,

and chains continue to invest in these departments.

Investments will continue to be made in improving foodservice offerings to

compete with local restaurants, and prepared food, catering, and bakery

departments will remain opportune areas for supermarket growth (possibly at

the expense of other supermarket departments). Smaller format stores will

continue to become the ‘new normal’, especially in higher density urban

areas to compete with local restaurants and c-store units.

Grocery delivery services will likely begin to impact the supermarket

landscape over the next few years, creating shifts in consumer buying habits

and foot traffic patterns, as well as some grocery stores partnering with

services or testing their own delivery options.

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F&B DECISION MAKERS

CULINARY TRAINING

PREDICTIONS

39%

29%

24%

%

JOB RESPONSIBILITY / EXPERIENCE PERSONAL PROFILE

GENDER

AGE

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66% 34%

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SOURCE: Datassential PULSE

5%

18%

26%

29%

22%

0%

Under 25 25 to 34 35 to 44 45 to 54 55 to 64 Over 65

17 AVERAGE YEARS OF

INDUSTRY EXPERIENCE

17%

5%

6%

6%

9%

22%

35%

Other

Purchasing Manager

Foodservice Director

Executive Chef

F&B Manager

Owner

General Manager

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Company Store Count (in thousands)

Annual ACV

Full-time Equivalent

Employees

(in thousands)

Average Sales Per

Store

1 Wal-Mart Stores Inc. (Bentonville, AR) 4,024 $288,049,000 1,235,000 $71,583

2 Kroger Co (Cincinnati, OH) 2,625 $108,500,000 400,000 $41,333

3 AB Acquisition LLC (Boise, ID) 2,238 $56,443,140 165,000 $25,220

4 Publix Super Markets Inc. (Lakeland, FL) 1,097 $30,559,505 174,500 $27,857

5 Ahold USA Inc (Quincy, MA) 761 $25,976,700 72,000 $34,135

6 H. E. B. Grocery Co (San Antonio, TX) 363 $22,590,000 85,000 $62,231

7 Delhaize America Inc (Salisbury, NC) 1,296 $16,900,000 100,000 $13,040

8 Meijer Inc. (Grand Rapids, MI) 213 $15,400,000 65,000 $72,300

9 Wakefern Food Corp (Keasbey, NJ) 141 $14,700,000 50,000 $104,255

10 Whole Foods Market (Austin, TX) 414 $14,194,005 88,000 $34,285

11 BI-LO Holding LLC (Jacksonville, FL) 801 $12,559,300 52,200 $15,680

12 Trader Joe's (Monrovia, CA) 433 $12,100,000 9,000 $27,945

13 Target Corp (Minneapolis, MN) 249 $10,100,000 65,700 $40,562

14 Aldi Inc. (Batavia, IL) 1,366 $9,800,000 21,000 $7,174

15 Giant Eagle Inc. (Pittsburgh, PA) 222 $9,600,000 36,000 $43,243

16 Supervalu Inc. (Eden Prairie, MN) 625 $9,492,000 38,500 $15,187

17 Hy Vee Food Stores Inc. (West Des Moines, IA) 235 $8,700,000 69,000 $37,021

18 Wegman's Food Markets Inc. (Rochester, NY) 85 $7,200,000 40,000 $84,706

19 Great Atlantic & Pacific Tea Co. (Montvale, NJ) 301 $6,300,000 22,000 $20,930

20 WinCo Foods Inc. (Boise, ID) 98 $6,100,000 10,000 $62,245

21 Defense Commissary Agency (Arlington, VA) 185 $4,800,000 11,000 $25,946

22 Save Mart Supermarkets Inc. (Modesto, CA) 218 $4,300,000 13,655 $19,725

23 Stater Bros. Markets (San Bernardino, CA) 168 $4,000,000 18,000 $23,810

24 Roundy's Supermarket Inc. (Milwaukee, WI) 149 $3,855,156 22,000 $25,874

25 Ingles Markets Inc. (Black Mountain, NC) 202 $3,836,000 9,100 $18,990

2014 LEADING SUPERMARKETS 1-25

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SOURCE: Progressive Grocer 31

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2014 LEADING SUPERMARKETS 26-50

Company Store Count (in thousands)

Annual ACV

Full-time Equivalent

Employees

(in thousands)

Average Sales Per

Store

26 Price Chopper/Golub Corp (Schenectady, NY) 135 $3,805,100 11,860 $28,186

27 Demoulas/Market Basket (Tewksbury, MA) 76 $3,400,000 8,100 $44,737

28 Raley's Supermarkets (West Sacramento, CA) 126 $3,061,500 8,700 $24,298

29 Weis Markets Inc. (Sunbury, PA) 163 $2,800,000 18,000 $17,178

30 Smart & Final Inc. (Los Angeles, CA) 299 $2,668,900 7,900 $8,926

31 Schnuck Markets Inc. (St Louis, MO) 99 $2,600,000 9,959 $26,263

32 Tops Market LLC (Buffalo, NY) 158 $2,508,315 15,100 $15,875

33 Sprouts Farmers Market (Phoenix, AZ) 201 $2,463,240 9,834 $12,255

34 Spartan Nash Co. (Byron Center, MI) 162 $2,284,200 16,100 $14,100

35 Brookshire Grocery Co (Tyler, TX) 151 $2,220,400 13,700 $14,705

36 Houchens Industries Inc. (Bowling Green, KY) 414 $2,008,500 9,400 $4,851

37 The Fresh Market, Inc. (Greensboro, NC) 169 $1,753,000 12,400 $10,373

38 Bashas' Markets Inc. (Chandler, AZ) 120 $1,670,000 5,500 $13,917

39 Big Y Foods Inc. (Springfield, MA) 62 $1,611,000 4,800 $25,984

40 K-VA-T Food Stores Inc. (Abingdon, VA) 103 $1,535,000 5,500 $14,903

41 Grocery Outlet Inc. (Berkeley, CA) 218 $1,520,000 931 $6,972

42 Foodarama Supermarkets Inc. (Freehold, NJ) 29 $1,400,100 3,800 $48,279

43 Inserra Supermarkets Inc. (Mahwah, NJ) 29 $1,388,400 3,100 $47,876

44 Woodman's Food Markets Inc. (Janesville, WI) 16 $1,284,400 2,700 $80,275

45 Village Super Market Inc. (Springfield, NJ) 28 $1,236,300 3,100 $44,154

46 Fiesta Mart Inc. (Houston, TX) 60 $1,166,100 4,800 $19,435

47 Central Grocers Inc. (Joliet, IL) 38 $1,129,700 3,400 $29,729

48 Lowe's Pay-n-Save Inc. (Littlefield, TX) 144 $1,094,288 3,600 $7,599

49 Alex Lee Inc. (Hickory, NC) 97 $1,080,300 4,850 $11,137

50 Marc Glassman Inc. (Cleveland, OH) 58 $1,000,000 5,700 $17,241

SOURCE: Progressive Grocer 32

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NUMBER OF US SERVICE DELI LOCATIONS

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SOURCE: Datassential PULSE; Datassential Firefly; US Census; Progressive Grocer, 67th Annual Consumer Expenditures Report

CONSUMER RETAIL EXPENDITURES BY CATEGORY

35,260

34,200

32,980

31,559 30,880

30,364 29,915 29,678

30,300

2006 2007 2008 2009 2010 2011 2012 2013 2014

Category 2014 Total Retail Sales

(in millions)

% Change From

Prior Year

2014 % of Sales From

Supermarkets

2014 % of Sales From

Mass Centers

Grocery -- Food $216,451.48 0.4% 54.4% 19.0%

Grocery -- Nonfood $116,661.33 -0.9% 25.0% 18.9%

Alcoholic Beverages $49,417.99 3.9% 41.6% 8.6%

Perishables $417,685.95 -0.4% 60.5% 15.1%

Bakery In-Store (Service) $11,484.41 1.8% 86.3% 13.7%

Baked Goods (Fresh) $23,102.32 -0.3% 61.7% 18.7%

Dairy $64,647.92 1.3% 65.9% 16.7%

Deli, In-Store (Service) $27,964.68 5.8% 61.6% 17.2%

Deli, Refrigerated (Self-Service) $9,896.01 2.5% 63.6% 17.4%

Frozen Foods $48,270.00 -0.7% 62.8% 18.4%

Meat & Seafood (Fresh) $119,680.01 2.6% 54.9% 35.0%

Packaged Meats (Deli) $18,239.34 1.3% 64.1% 18.3%

Produce $87,641.89 4.4% 61.4% 12.6%

General Merchandise (Tracked) $61,143.35 0.6% 9.5% 28.1%

General Merchandise (Non-Tracked) $799,953.92 3.2% 2.5% 10.8%

Grand Total $1,965,995.90 1.8% 24.2% 21.1%

US CENSUS FOOD & BEVERAGE STORE

SALES

Year

(in millions)

Supermarkets &

Other Grocery

Specialty

Food Stores

All Food

Stores

2007 $468,364 $18,349 $486,713

2008 $487,652 $18,825 $506,477

2009 $487,174 $18,701 $505,875

2010 $495,168 $19,236 $514,404

2011 $519,398 $20,300 $539,698

2012 $534,767 $21,222 $565,715

2013 $550,420 $20,475 $576,421

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SUPERMARKET SALES AND UNITS BY SIZE

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SOURCE: Progressive Grocer, 82nd Annual Grocery Industry Report

2014 # of Stores 2013 # of Stores % change Percent of Total

Total Supermarkets ($2mil or more) 37,716 37,459 1% 100.0%

Chain (11 or More Stores) 30,925 30,778 0% 94.4%

$2 mil to $4mil 2,980 3,114 -4% 1.5%

$4mil to $8mil 6,858 6,996 -2% 6.2%

$8mil to $12mil 3,442 3,546 -3% 5.6%

412mil to $20mil 4,833 4,973 -3% 12.4%

$20mil to $30mil 6,118 5,878 4% 23.7%

$30mil to $40mil 3,217 2,902 11% 17.5%

$40mil to $50mil 2,077 1,949 7% 14.4%

More than $50mil 1,400 1,420 -1% 13.1%

Independent (10 or Fewer Stores) 6,791 6,681 2% 5.6%

$2 mil to $4mil 2,222 2,244 -1% 1.1%

$4mil to $8mil 4,015 3,929 2% 3.4%

$8mil to $12mil 366 333 10% 0.6%

412mil to $20mil 148 137 8% 0.4%

$20mil to $30mil 33 29 14% 0.1%

$30mil to $40mil 3 5 -40% 0.0%

$40mil to $50mil 1 1 0% 0.0%

More than $50mil 3 3 0% 0.0%

SUPERMARKET SALES AND UNITS BY STORE TYPE

2014 # of Stores 2013 # of Stores % change Percent of Total

Total Supermarkets ($2mil or more) 37,716 37,459 1% 100.0%

Supermarket- Conventional 26,487 26,603 0% 65.0%

Supercenter (Grocery/ Mass Merch) 4,150 4,014 3% 25.0%

Supermarket- Limited Assortment 3,242 3,219 1% 2.5%

Supermarket- Natural/Gourmet Foods 3,144 2,960 6% 6.0%

Warehouse Grocery 523 490 7% 0.7%

Military Commissary 170 173 -2% 0.8%

Other Retail Formats

Conventional Convenience 152,120 150,595 1% n/a

Gas Station/Kiosk 22,303 22,847 -2% n/a

Superette 13,070 13,136 -1% n/a

Conventional Club 1,320 1,286 3% n/a

Military Convenience Store 674 687 -2% n/a

NOTE: Supercenter numbers include only supermarket-type items and Conventional Convenience excludes gas

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SOURCE: Progressive Grocer, 2015 Deli Operations Review, 2015 Bakery Report and 82st Annual Grocery Industry Report

Category 2014

Sandwiches 62.2%

Rotisserie Programs 52.0%

Staff Training 51.7%

Meal Deals 46.1%

Daily Specials 40.5%

Catering 37.6%

Premium Brands 34.6%

Hot/Cold Bars 33.9%

Dinner 32.9%

Lunch 27.2%

Side Dishes 25.3%

Soup Stations 19.2%

Private Label 19.2%

Category Management 19.0%

Breakfast 17.5%

Sushi 16.9%

Concept food stations (Asian, Carving, etc.) 14.2%

DELI ITEM AREA OF GROWTH

2014 2013

Gross Margin 46.3% 44.7%

Labor as % of sales 27.9% 27.4%

Shrink as % of sales 5.6% 6.3%

Full Time employees/store 7.7 7.4

Deli Dept. Square footage 1,635 1,650

SERVICE DELI PERFORMANCE

Category 2014 Rank 2013 Rank

Cakes 1 1

Breads 2 2

Cookies 3 3

Artisan Breads 4 8

Cupcakes 5 6

IN-STORE BAKERY ITEM CONSUMER POPULARITY

2014 2013 2012

Sales Volume (in millions) $16.92 $16.56 $16.26

Selling Area (in square feet) 33,000 33,250 33,100

Number of Checkouts 10.5 10.2 9.9

Average Weekly Sales

Dollars per Store $325,478 $318,462 $312,758

Dollars per Square Foot $9.77 $9.58 $9.45

Dollars per Checkout $30,988 $31,222 $31,592

AVERAGE SUPERMARKET PERFORMANCE

2014 2013

Industry Sales (in billions) $13.07 $12.78

% Change From Prior Year 2.3% 1.8%

Share of Supermarket Sales 2.1% 2.1%

Number of Service Bakeries 28,160 28,015

Average Weekly Sales per Store $6,663 $6,561

Average Annual Sales per Store $346,500 $341,162

IN-STORE BAKERY SALES & UNITS

Q: What areas of your deli operations will you concentrate on enhancing in 2014?

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NOTEWORTHY NEWS

Fine Dining Growth Outpaces other Sectors

“Whole Foods Launching Lower-Cost Stores Geared Toward Millennials”– May 7th, 2015;

USAToday.com

The new stores will cater to a younger generation of shoppers who are still interested in organic and natural foods but want a different shopping experience, executives said. The company made the announcement as part of its second-quarter earnings release.

“How Instacart's $220M Funding Is Going to Help Continue to Push Grocers Online”–

January 13th, 2015; TheStreet.com

According to Mashable, the funding values Instacart at around $2 billion, a massive jump from its $400 million valuation in June. Instacart has definitely been seeing growth, with its revenue increasing more than tenfold in 2014 and doubling in the fourth quarter alone. It has also doubled its full-time employee base to more than 100 during those 12 months, as well as secured partnerships with retailers such as Whole Foods Market and Fairway Market.

“Albertsons, Safeway to Divest 168 Stores in Advance of Merger- Haggen gains lion’s share”– December 19th,

2014; ProgeressiveGrocer.com AB Acquisition LLC, parent of Albertsons, and Safeway Inc. have agreed to sell 168 stores to four separate buyers as part of the companies' $9 billion merger agreement, first announced in March and set to close in January 2015.

“How E-Commerce Is Finally Disrupting The $600 Billion-A-Year Grocery Industry”– January 20th, 2015;

BusinessInsider.com

Between 2013 and 2018, online grocery sales will grow at a compound annual growth rate (CAGR) of 21.1%, reaching nearly $18 billion by the end of the forecast period. For comparison, offline grocery sales will rise by 3.1% annually during the same period.

“Aldi and Lidl Are Ready To Invade the U.S. Beware Walmart and Target!”– July 8th, 2015; Forbes.com

Aldi and Lidl, Germany’s toughest discount food retailers, are invading the US. Both operate small, efficient no frill self serve supermarkets with a strong non-food assortment, and very low prices. These smaller sharply priced formats provide important incentives for customers to frequently return to their stores and will increase competition for both traditional supermarkets as well as supercenters.

“Deal Unites Major Supermarket Players”– June 24th,2015; The Wall Street Journal

With more than 6,500 stores, Ahold Delhaize expects to have the scale to innovate.

SU

PE

RM

AR

KE

TS

S

UP

ER

MA

RK

ET

S

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Convenience Stores RETAIL FOOD

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151,053 locations $10.4 billion operator F&B spend

PREDICTIONS

24%

breakfast

29%

lunch

15%

dinner

32%

snack

Broadline distributors 82%

Direct from manufacturers 63%

Club stores 51%

Supermarket / grocery 29%

Cash & carry stores 21%

Specialty distributors 17%

Local farms 8%

Food brokers 8%

Third party websites 5%

REFLECTIONS

DAYPART SHARE

PURCHASE SOURCES (% who buy from)

39%

CHECK AVERAGE

AVERAGE DAILY MEALS

CHECK AVERAGE $

263 MEALS SOLD PER DAY

$3.59

CO

NV

EN

IEN

CE

ST

OR

ES

37% CHAIN

63% INDEPENDENT

SOURCES/ ESTIMATES BASED ON: Datassential PULSE; Firefly; NPD/CREST

5% share of overall

operator spend

C-store foodservice continued to experience growth over the past year,

though weaker than in previous years. Rising operational expenses continue

to grow faster than gross profits, however foodservice remains strong. The

strengthening economy, lower gas prices, and an increase in the

consumption of snack foods have all had positive effects on the segment.

Foodservice remains a bright spot within a segment that is otherwise

seeing declines in areas such as fuel and cigarette revenues. Because of

this, foodservice is being emphasized more and operators are increasingly

focusing on prepared food options. Operators are attempting to broaden the

c-store audience by remodeling their stores and offering food options with an

emphasis on freshness and health. An increase in technology and more

efficient equipment are helping to make individual locations more profitable.

Many corporate mergers and acquisitions have also taken place, significantly

shifting the landscape of the sector.

The outlook for C-stores is positive with locations continuing to look toward

prepared foods as an area to grow revenue and draw in new customers. With

more disposable income and lower gas prices, consumers are expected to

spend more on in-store purchases and foodservice. The popularity of

snacking will likely also aid in the growth of foodservice within this segment.

Technology and vending equipment will continue to improve efficiency and

profitability of individual stores, and chains will continue to remodel

locations to draw more foot traffic.

Large online and traditional retailers are looking to expand into the C-store

marketplace, and if successful these companies could have a substantial

effect on this segment.

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4%

3%

5%

36%

53%

Other

F&B Manager

Purchasing Manager

Owner

General Manager

F&B DECISION MAKERS

PREDICTIONS

39%

%

JOB RESPONSIBILITY / EXPERIENCE PERSONAL PROFILE

GENDER

AGE

CO

NV

EN

IEN

CE

ST

OR

ES

C

ON

VE

NIE

NC

E S

TO

RE

S

SOURCE: Datassential PULSE

54% 46%

0%

22%

30%

28%

18%

1%

Under 25 25 to 34 35 to 44 45 to 54 55 to 64 Over 65

14 AVERAGE YEARS OF

INDUSTRY EXPERIENCE

39

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SHARE OF TRAFFIC BY REGION AGE OF EATER

GENDER OF EATER

CONSUMER EATING PATTERNS

RACE OF EATER

SHARE BY HOUSEHOLD SIZE

CO

NV

EN

IEN

CE

ST

OR

ES

AGE SHARE

Under 18 15%

18-24 14%

25-34 24%

35-49 23%

50-64 19%

65 and Over 6%

53% 47%

CO

NV

EN

IEN

CE

ST

OR

ES

SOURCE: NPD/CREST

21%

20%

39%

20%

Northeast

Central

South

West

11%

25%

41%

23%

1

2

3 to 4

5 or more

63% 14%

18%

5%

Caucasian, non-Hispanic

African American,non-Hispanic

Hispanic

Other, non-Hispanic

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CONSUMER EATING PATTERNS

TOTAL ON/OFF PREMISES SHARE BY HOUSEHOLD INCOME

TOTAL PARTIES

TOTAL WEEKPARTS Traffic Share (%) YE April ‘15

Convenient Location 37%

Always/Regularly Go There 9%

Did Not Have Time/Hurry 9%

I Like It There 7%

Good Price 6%

REASON FOR VISIT

CO

NV

EN

IEN

CE

ST

OR

ES

ON/OFF PREMISES SHARE

Total On Premises 5%

Total Off Premises 95%

78% ADULTS ONLY

PARTIES

22% PARTIES WITH

CHILDREN

68% MONDAY

BREAKFAST –

FRIDAY LUNCH

32% FRIDAY SUPPER –

SUNDAY PM

SNACK

CO

NV

EN

IEN

CE

ST

OR

ES

SOURCE: NPD/CREST

29%

23%

23%

9%

16%

Under $25

$25-44,999

$45-74,999

$75-99,999

$100,000 andmore

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CO

NV

EN

IEN

CE

ST

OR

ES

Company Store Count Company Owned Franchise/

Licenses

(in thousands)

Annual ACV ACV Per Store

7-Eleven Inc. (Dallas, TX) 7,749 1,178 6,571 $19,482,216 $ 2,514

Shell Oil Products US/Motiva Enterprises LLC (Houston, TX) 5,009 20 4,989 $11,340,628 $ 2,264

BP North America (La Palma, CA) 4,378 0 4,378 $15,592,304 $ 3,562

Alimentation Couche-Tard Inc. (Québec, Canada) 4,326 3,337 989 $19,421,200 $ 4,489

Chevron Corp (San Ramon, CA) 3,987 423 3,564 $20,756,892 $ 5,206

ExxonMobil Corp (Irving, TX) 3,458 0 3,458 $7,840,255 $ 2,267

Marathon Petroleum Corp. (Findlay, Ohio) 2,823 1,487 1,336 $14,475,000 $ 5,128

Casey’s General Stores Inc. (Ankeny, Iowa) 1,808 1,808 0 $7,250,840 $ 4,010

Energy Transfer Partners LP , (Philadelphia, PA) 1,650 550 1,100 $7,100,000 $ 4,303

CITGO Petroleum Corp. (Houston, TX) 1,639 0 1,639 $3,555,552 $ 2,169

The Pantry Inc. (Cary, N.C.) 1,553 1,541 12 $7,821,955 $ 5,037

Speedway LLC (Enon, OH) 1,463 1,463 0 $5,171,637 $ 3,535

Phillips 66, (Houston, TX) 1,304 0 1,304 $3,481,400 $ 2,670

Hess Corp. (Woodbridge, N.J.) 1,137 1,099 38 $5,002,660 $ 4,400

CST Brands Inc. (San Antonio, TX) 1,041 1,041 0 $7,576,000 $ 7,278

Getty Realty Corp. (Jericho, N.Y.) 1,040 0 1,040 $2,393,721 $ 2,302

CHS Inc. (Minneapolis, MN) 1,023 70 953 $2,197,575 $ 2,148

The Cumberland Gulf Group (Framingham, MA) 949 587 362 $3,509,168 $ 3,698

The Kroger Co. (Cincinnati, OH) 804 804 0 $4,715,620 $ 5,865

RaceTrac Petroleum (Atlanta, GA) 693 373 320 $4,235,140 $ 6,111

QuikTrip Corp. (Tulsa, OK) 690 690 0 $11,210,000 $ 16,246

Military (Arlington, VA) 683 683 0 $4,192,916 $ 6,139

Wawa Inc. (Wawa, PA) 653 653 0 $7,868,380 $ 12,050

Susser Holdings Corp./SSP Partners (Corpus Christi, TX) 634 633 1 $4,175,600 $ 6,586

Pilot Flying J (Knoxville, TN) 561 549 12 $2,326,220 $ 4,147

Holiday Cos. Inc. (Minneapolis, MN) 485 351 134 $2,154,880 $ 4,443

GPM Investments LLC (Richmond, VA) 477 472 5 $1,516,000 $ 3,178

Sheetz (Altoona, PA) 474 473 1 $7,024,940 $ 14,821

2014 TOP 25 CONVENIENCE STORE CHAINS C

ON

VE

NIE

NC

E S

TO

RE

S

SOURCE: Convenience Store News Top 100 2014 42

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CO

NV

EN

IEN

CE

ST

OR

ES

Company Annual ACV* (in millions $)

% Change # of Units 2014 2013

7-Eleven Inc. (Dallas, TX) 19,482 16,335 19.3% 7749

Shell Oil Products US/Motiva Enterprises LLC (Houston, TX) 11,340 10,839 4.6% 5009

BP North America (La Palma, CA) 15,592 15,695 -0.7% 4378

Alimentation Couche-Tard Inc (Québec, Canada) 19,421 13,903 39.7% 4326

Chevron Corp (San Ramon, CA) 10,790 10,790 0.0% 3987

ExxonMobil Corp (Irving, TX) 7,840 7,378 6.3% 3458

Marathon Petroleum Corp. (Findlay, Ohio) 14,475 n/a* n/a 2823

Casey’s General Stores Inc. (Ankeny, Iowa) 7,251 6,799 6.6% 1808

Energy Transfer Partners LP (Philadelphia, PA) 7,100 6,967 1.9% 1650

CITGO Petroleum Corp. (Houston, TX) 3,556 3,512 1.3% 1639

The Pantry Inc. (Cary, N.C.) 7,822 7,375 6.1% 1553

Speedway LLC (Enon, OH) 5,172 5,172 0.0% 1463

Phillips 66, (Houston, TX) 3,481 3,033 14.8% 1304

Hess Corp. (Woodbridge, N.J.) 5,003 4,871 2.7% 1137

CST Brands Inc. (San Antonio, TX) 7,576 3,990 89.9% 1041

Getty Realty Corp. (Jericho, N.Y.) 2,394 2,393 0.0% 1040

CHS Inc. (Minneapolis, MN) 2,198 2,197 0.0% 1023

The Cumberland Gulf Group (Framingham, MA) 3,509 3,253 7.9% 949

The Kroger Co. (Cincinnati, OH) 4,716 4,258 10.8% 804

RaceTrac Petroleum (Atlanta, GA) 4,235 4,170 1.6% 693

QuikTrip Corp. (Tulsa, OK) 11,210 6,258 79.1% 690

SOURCE: Convenience Store News Top 100 2014

ONE YEAR COMPARISON OF LEADING CHAINS RANKED BY VOLUME C

ON

VE

NIE

NC

E S

TO

RE

S

*Marathon’s Speedway Division is in the process of acquiring retail assets of HESS Corp.

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CO

NV

EN

IEN

CE

ST

OR

ES

C-STORE FOODSERVICE CATEGORY SALES

CO

NV

EN

IEN

CE

ST

OR

ES

Category

Total Sales (in millions) % of C-Store In-Store Sales Average Sales $ per Store

2014 2013 2012 2014 2013 2012 2014 2013 2012

Prepared Food $21,077 $19,363 $17,520 10.3% 9.8% 9% $140,754 $131,360 $119,962

Hot Dispensed Beverages $6,562 $6,497 $6,588 3.2% 3.3% 3% $43,821 $44,076 $45,109

Cold Dispensed Beverages $2,399 $2,378 $2,344 1.1% 1.2% 1% $16,021 $16,133 $16,050

Frozen Dispensed Beverages $1,209 $1,152 $1,140 1% 1% 1% $8,020 $7,815 $7,806

Total Foodservice $31,239 $29,390 $27,592 15.4% 14.9% 14% $208,616 $199,384 $188,927

Merchandise $171,859 $167,446 $165,189 84.6% 85% 86% $1,147,685 $1,135,966 $1,131,074

Total In-Store $2,030,980 $196,836 $192,781 100% 100% 100% $1,356,301 $1,335,350 $1,320,001

Prepared Food

Sandwiches/ wraps 25.7%

Hot dogs 17%

Pizza 16.6%

Chicken 12.3%

Bakery 6.9%

Salads 4%

Hamburgers 3.5%

Soup 2.4%

Frozen Treats 1.8%

Other 9.8%

Cold Dispensed Beverages

Fountain carbonated 86.1%

Fountain non-carbonated 7.5%

Fountain sports drinks 1.7%

Other 4.7%

Hot Dispensed Beverages

Coffee 74.4%

Cappuccino / specialty 17.1%

Hot chocolate 4.3%

Hot tea 2.6%

Other 1.6%

% SHARE OF SALES WITHIN FS CATEGORIES (2014)

SOURCE: Convenience Store News 44

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NOTEWORTHY NEWS

Fine Dining Growth Outpaces other Sectors

“7-Eleven, Tedeschi a Natural Fit: End of an era for one convenience-store chain, expansion for another”– May 18th,

2015; CSPnet.com

7-Eleven Inc. entered into a deal to acquire Tedeschi Food Shops, the 92-year-old, family-run traditional convenience-store chain with fuel at only 15 of its 182 locations. The deal more than doubles 7-Eleven’s footprint in Greater Boston and New Hampshire, where it currently operates and franchises 164 c-stores.

“Thornton’s Embarks on Chainwide Store Overhaul”– October 13th, 2014; CSNews.com

Thornton’s plans to spend approximately $700,000 to overhaul each of its 178 stores in Kentucky, Ohio, Indiana, Tennessee, Florida and Illinois over the next five years in order to "transform our business into a food and beverage destination," Thornton’s President Tony Harris said.

“How Are Lower Gas Prices Affecting C-Store Sales?

Beverage sales, foot traffic most affected, though conclusions are split”– February 3rd,

2015; CSP.net

In general, as a result of lower gas prices, “consumers have extra money in their pockets which is leading to more frequent visits as well as increased purchases,” convenience retailers told Wells Fargo. Survey respondents estimate that higher consumer disposable income drove an incremental 3% in foot traffic in stores during the fourth quarter of 2014.

“Mergers and Acquisitions Hit Record High in 2014”– March 5th, 2015; CSP.net

An impressive 4,200 convenience stores—almost 3% of the entire channel—traded hands last year.

“Amazon Primed to Take on Convenience Stores? Adding, expanding one-hour delivery, private-label

food”– May 28th, 2015; CSPnet.com The e-commerce website has announced that its Prime Now service will offer one-hour delivery from local stores in addition to the tens of thousands of items offered by the online marketplace. To further leverage its convenience-store play, Amazon also plans to roll out its own line of food under its existing Elements private label.

CO

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Other Retailers RETAIL FOOD

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10,055 locations $0.7 billion operator F&B spend

PREDICTIONS REFLECTIONS

Company (in millions)

US Retail Sales (2013)

Wal-Mart $ 334,302

Costco $ 74,740

Target $ 71,279

The Home Depot $ 69,951

Walgreens $ 68,068

CVS Caremark $ 65,618

Lowe's $ 52,210

Amazon.com $ 43,962

Best Buy $ 35,766

Macy's $ 27,868

Apple Stores / iTunes $ 26,648

Sears Holdings $ 26,614

Rite Aid $ 25,526

TJX $ 20,923

Kohl's $ 19,031

Dollar General $ 17,504

TOP US OTHER RETAILERS

SOURCE/ESTIMATES BASED ON: NRN, Stores.org; Chain Store Guide

OT

HE

R R

ETA

ILE

RS

<1% share of overall

operator spend

Supercenters and club stores are the driving source of success within this

segment. Traditional retail and department stores continue to struggle as

shoppers are more price-conscious and inclined to shop both at

supercenters and club warehouse stores and online. Even as disposable

income continues to rise and overall spending is increasing, segment

growth has been muted.

Food courts at supercenters and warehouse stores remain popular among

shoppers, and restaurants that have been added within department stores

in recent years are showing signs of having the intended effect of

increasing foot traffic and raising brand awareness. Over the past few

years there has also been a rise in some drug stores growing their

foodservice selections like Walgreens’ UpMarket. These remodeled

locations offer a wide selection of food and beverages and are direct

competition with larger department stores, c-stores, and supermarkets.

As the economy continues to improve and consumer confidence increases

there will be more opportunities for spending at retail locations. As

spending increases, competition will remain strong between department

store shopping experiences and the convenience and prices offered at

supercenters and warehouse stores, limiting overall growth in the segment.

The addition of restaurants in department stores will continue to bring in

more foot traffic and increase brand visibility, while food courts at

supercenters and warehouse stores will continue to be popular shopping

destinations with consumers which may or may not translate into increased

foodservice sales. The success of high-end drug store concepts like

Walgreens’ UpMarket will likely impact and shift the landscape of this

segment, increasing competition with traditional retailers while also

elevating the quality and quantity of the foodservice aspects of their

businesses.

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Company

(in millions)

% Change Units 2013

2013 2012

Walgreens $68,068 $65,014 4.7% 7,998

CVS Caremark $65,618 $63,688 3.0% 7,621

Rite Aid $25,526 $25,392 0.5% 4,587

Health Mart Systems $7,430 $7,350 1.1% 3,199

Good Neighbor Pharmacy $7,271 $8,357 -13.0% 3,155

LEADING DRUG STORES RANKED BY SALES

SOURCE: Stores.org; Chain Store Guide

OT

HE

R R

ETA

ILE

RS

Company

(in millions)

% Change Units 2013

2013 2012

Macy's $27,868 $27,610 0.9% 837

Sears Holdings $26,614 $30,727 -13.4% 1,905

Nordstrom $12,366 $11,762 3.7% 260

J.C. Penney $11,789 $12,908 -8.7% 1,087

Dillard's $6,439 $6,489 -0.8% 296

Neiman Marcus $4,648 $4,345 7.0% 85

Belk $4,038 $6,489 2.1% 299

LEADING DEPARTMENT STORES RANKED BY SALES

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ON-SITE FOODSERVICE K-12 SCHOOLS | COLLEGES & UNIVERSITIES

BUSINESS & INDUSTRY | RECREATION

LODGING | TRANSPORTATION

HOSPITALS | SENIOR LIVING | Long Term Care

VENDING | CATERING | MILITARY | CORRECTIONS

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K-12 Schools ON-SITE FOODSERVICE

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109,629 locations $9.0 billion operator F&B spend

40% use GPOs

PREDICTIONS

19%

breakfast

74%

lunch

1%

dinner

6%

snack

Broadline distributors 95%

Direct from manufacturers 32%

Supermarket / grocery 27%

Local farms 25%

Specialty distributors 22%

Club stores 14%

Cash & carry stores 6%

Food brokers 4%

REFLECTIONS

DAYPART SHARE

PURCHASE SOURCES (% who buy from)

39%

Breakfast 28%

Lunch 72%

Snack 18%

AVERAGE PARTICIPATION RATE - SCHOOL TYPE

AVERAGE REGISTER RING PER DAYPART

Breakfast $1.65

Lunch $3.70

81% PUBLIC SCHOOLS

SOURCE/ESTIMATES BASED ON: Datassential PULSE; DATASSENTIAL Firefly, US Department of Education; National Center for Education Statistics; Foodservice Director

6% CONTRACT MANAGED

94% SELF OPERATED

K-1

2 S

HC

OO

LS

4% share of overall

operator spend

K-12 has shown minimal growth over the past year as a decrease in

enrollment and high food and operational costs to meet new federal

guidelines have put a strain on the segment.

As the Healthy, Hunger Free Kids Act has been implemented,

schools are spending more on food and labor to meet the new

requirements. Many facilities need to upgrade kitchen facilities while

also hiring and training staff, yet are facing lower participation rates.

Many school districts, mostly in larger, urban communities, are

making their food programs free for all students. This, combined with

lower participation rates in many districts, is making revenue

generation difficult. A la carte sales drive revenue for schools, and as

more districts opt for free meals they are also limiting opportunities

for cash purchases.

While there is certainly pushback to these new regulations, many

school districts around the country are successfully implementing the

required changes and in doing so are offering creative menu options

and educating both students and families about their meal programs.

As more school districts opt for free meals for all students and meal

participation rates decline, opportunities for profitable cash purchases

and a la carte sales may be limited, and growth for the K-12 segment

remains weak.

Many operators will continue to face challenges in implementing

the changes required by new school meal guidelines. Keeping costs

down and preventing waste will be major concerns, and operators will

likely continue to experiment with food preparation techniques, fresh vs.

preserved foods, as well as more creative serving methods such as

using tray-less service and changes in cafeteria layout design.

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6%

3%

4%

4%

10%

73%

Other

Director of Dining Services

F&B Manager

Purchasing Manager

General Manager

Foodservice Director

F&B DECISION MAKERS

PREDICTIONS

39%

24%

JOB RESPONSIBILITY / EXPERIENCE PERSONAL PROFILE

GENDER

AGE

21 AVERAGE YEARS OF

INDUSTRY EXPERIENCE

K-1

2

SOURCE: Datassential PULSE

K-1

2 S

HC

OO

LS

18% 82%

0% 0%

6%

52%

40%

1%

Under 25 25 to 34 35 to 44 45 to 54 55 to 64 Over 65

52

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ENROLLMENT IN K-12 BY LEVEL AND CONTROL OF INSTITUTION

Year

(Fall Beginning)

(in thousands)

% Change

From Prior

Year

Public Private

Total

K- Grade 8 Grades 9-12 Total K- Grade 8 Grades 9-12 Total

2005 34,204 14,909 49,113 4,724 1,349 6,073 55,187 --

2006 34,235 15,081 49,316 4,631 1,360 5,991 55,307 0.22%

2007 34,205 15,087 49,293 4,546 1,364 5,910 55,203 -0.19%

2008 34,286 14,980 49,266 4,365 1,342 5,707 54,973 -0.42%

2009 34,409 14,952 49,361 4,179 1,309 5,488 54,849 -0.22%

2010 (P) 34,625 14,860 49,484 4,084 1,299 5,382 54,867 0.03%

2011 (P) 34,773 14,749 49,522 3,977 1,291 5,268 54,790 -0.14%

2012 (P) 34,968 14,684 49,652 3,906 1,275 5,181 54,833 0.08%

2013 (P) 35,111 14,639 49,750 3,856 1,235 5,091 54,842 0.02%

2014 (P) 35,062 14,689 49,751 3,776 1,197 4,974 54,725 -0.21%

2015 (P) 35,069 14,770 49,839 3,741 1,150 4,892 54,731 0.01%

2016 (P) 35,142 14,810 49,951 3,725 1,114 4,839 54,790 0.11%

2017 (P) 35,412 14,868 50,280 3,765 1,087 4,852 55,132 0.62%

2018 (P) 35,642 14,901 50,543 3,782 1,054 4,837 55,380 0.45%

2019 (P) 35,878 14,957 50,834 3,809 1,027 4,836 55,671 0.53%

2020 (P) 36,115 15,050 51,165 3,835 1,009 4,844 56,010 0.61%

SOURCE: US Department of Education, National Center for Education Statistics

(P) Projection

K-1

2

K-1

2 S

HC

OO

LS

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139

NOTEWORTHY NEWS

Fine Dining Growth Outpaces other Sectors

K-1

2 S

HC

OO

LS

“School Meal Rules to Triple Costs Next Fiscal Year”– September 30th, 2014; FoodServiceDirector.com

According to the USDA, new school meal standards will force school districts and states to absorb $1.22 billion in new food, labor and administrative costs in fiscal year 2015. That’s nearly three times the cost in fiscal year 2014.

“Agriculture Department Expands School Food Training, Mentoring Program”– March

9th 2015; EdWeek.com

Training and technical assistance have been one of the agency's weapons in the political battle over the standards. Some lawmakers and school nutrition representatives see the rules as too difficult to implement, while others see them as necessary to slow child obesity rates. The USDA has defended the rules and insisted that technical assistance and training are all that is necessary to overcome concerns about issues like discarded food and adjustment to new calorie and sodium restrictions.

“Schools Becoming the ‘Last Frontier' for Hungry Kids”– April 5th, 2015; USAToday.com

More than half of students in public schools — 51% — were in low-income families in 2013. In March, the Agriculture Dept. announced $27 million in grants to five states that are trying to reduce childhood hunger. A federal program covering dinner at school expanded to all states in 2010. Before that, only 13 states and the District of Columbia could provide dinner. The rest could offer only after-school snacks such as peanuts and popcorn. The U.S. Department of Agriculture, which runs the program, estimates that 108 million after-school meals were served in fiscal year 2014, up from 81 million in fiscal year 2013.

“California School District Raises Meal Prices to Cover Losses”– July 6th, 2015;

FoodServiceDirector.com

Public schools are struggling to bring students back to the lunch table, as more campuses raise prices and tweak menus in response to federal food regulations that require the use of healthier and more costly ingredients.

“School Lunch Participation in Decline”– October 14th, 2014; Foodservice Director

Participation in school lunch has declined markedly in the past 3 years, despite a slight increase in the percentage of students who qualify for free or reduced-price meals. Daily participation declined from 68% in 2011 to 64% in 2014. During that same period, the average % of students eligible for free or reduced-price meals went from 47% to 48%.

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Colleges & Universities ON-SITE FOODSERVICE

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AVERAGE ENROLLMENT

4,706 locations $6.9 billion operator F&B spend

38% use GPOs

PREDICTIONS

17%

breakfast

46%

lunch

23%

dinner

14%

snack

Broadline distributors 100%

Specialty distributors 53%

Direct from manufacturers 45%

Local farms 25%

Club stores 22%

Supermarket / grocery 18%

Cash & carry stores 10%

Third party websites 8%

Food brokers 4%

REFLECTIONS

DAYPART SHARE

PURCHASE SOURCES (% who buy from)

39%

Breakfast 964

Lunch 2,231

Dinner 1,831

AVERAGE DAILY REGISTER RINGS

PARTICIPATION RATE CHECK AVERAGE $

Breakfast $4.88

Lunch $7.02

Dinner $7.75

Breakfast 23%

Lunch 54%

Dinner 31%

12,766

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SOURCE/ESTIMATES BASED ON: Datassential PULSE; US Department of Education

29% CONTRACT MANAGED

71% SELF OPERATED

3% share of overall

operator spend

The C&U segment is currently experiencing a phase of transition.

There is a rise in enrolled students opting out of meal plan programs

and choosing off-campus accommodations to relieve cost pressures

from high tuition, while at the same time there are a growing number

of food pantries and co-ops within college communities.

Some colleges have very successful food programs and are

using this success as a selling point for their schools and as a way to

increase enrollment. Revamped dining halls and innovative menu

items reflecting current restaurant trends are examples of how some

schools are able to create very successful and enticing meal

programs for current and prospective students.

Although there are some positive stories, growth potential remains weak

for the C&U segment overall. Colleges and universities will continue to

look for ways to increase enrollment and revenue per student while

addressing the rising tuition that continues to outpace government aid. The

strength of C&U foodservice lies in its retail options. Campus c-stores,

micromarkets, and grocery units are and will continue to experience

stronger performance than traditional dining profit-wise and could aid in

offsetting declining participation rates in meal programs.

Many universities will increasingly look to expand the catering and on-

site branches of their foodservice programs as additional income

generators. Hosting on-campus events such as concerts, conferences,

and sporting events throughout the year act as a way for C&U operators to

make up revenue losses to lower student meal plan participation and

enrollment rates.

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1%

3%

4%

5%

12%

18%

25%

31%

Other

Procurement Manager

Purchasing Manager

F&B Manager

Director of Dining Services

Executive Chef

General Manager

Foodservice Director

F&B DECISION MAKERS

PREDICTIONS

39%

24%

%

JOB RESPONSIBILITY / EXPERIENCE PERSONAL PROFILE

GENDER

AGE

21 AVERAGE YEARS OF

INDUSTRY EXPERIENCE

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RS

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S

71% 29%

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SOURCE: Datassential PULSE

0%

9%

25% 26%

32%

8%

Under 25 25 to 34 35 to 44 45 to 54 55 to 64 Over 65

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ENROLLMENT IN C&U BY GENDER, ATTENDANCE, AND CONTROL OF INSTITUTION

SOURCE: National Center for Education Statistics

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Year

Gender Attendance Status Control Total

% Change From

Prior Year Men Women Full-time Part-time Public Private

2000 6,721,772 8,590,522 9,009,604 6,302,690 11,752,788 3,559,506 15,312,294 3.1%

2001 6,960,816 8,967,168 9,447,502 6,480,482 12,233,154 3,694,830 15,927,984 4.0%

2002 7,202,119 9,409,600 9,946,365 6,665,354 12,751,999 3,859,720 16,611,719 4.3%

2003 7,260,265 9,651,221 10,326,134 6,585,352 12,858,701 4,052,785 16,911,486 1.8%

2004 7,387,263 9,884,787 10,610,184 6,661,866 12,980,115 4,291,935 17,272,050 2.1%

2005 7,455,925 10,031,545 10,797,009 6,690,461 13,021,831 4,465,639 17,487,470 1.2%

2006 7,574,815 10,184,053 10,957,305 6,801,563 13,180,133 4,578,735 17,758,868 1.6%

2007 7,815,916 10,432,217 11,269,893 6,978,240 13,490,784 4,757,349 18,248,133 2.8%

2008 8,188,899 10,913,919 11,747,748 7,355,070 13,972,156 5,130,662 19,102,818 4.7%

2009 8,769,504 11,658,206 12,722,783 7,704,927 14,810,643 5,617,067 20,427,710 6.9%

2010 9,044,808 11,971,315 13,082,265 7,933,858 15,142,808 5,873,315 21,016,123 2.9%

2011 9,026,499 11,967,614 13,001,457 7,992,656 15,110,196 5,883,917 20,994,113 -0.1%

2012 8,919,087 11,723,732 12,737,013 7,905,806 14,880,343 5,762,476 20,642,819 -1.7%

2013 (P) 9,340,782 12,451,210 13,445,120 8,346,876 15,694,470 6,097,841 21,792,000 1.1%

2014 (P) 9,369,749 12,672,550 13,561,800 8,480,498 15,871,260 6,171,361 22,042,300 1.1%

2015 (P) 9,387,984 12,864,340 13,652,040 8,600,289 16,019,830 6,232,818 22,252,320 1.0%

2016 (P) 9,441,936 13,066,890 13,774,610 8,734,209 16,202,570 6,306,586 22,508,820 1.2%

2017 (P) 9,533,202 13,308,940 13,951,910 8,890,229 16,441,300 6,401,180 22,842,140 1.5%

2018 (P) 9,642,888 13,575,950 14,163,340 9,055,492 16,711,670 6,507,517 23,218,840 1.6%

2019 (P) 9,753,219 13,815,580 14,375,750 9,193,052 16,965,350 6,603,798 23,568,800 1.5%

2020 (P) 9,850,504 14,016,280 14,560,020 9,306,767 17,182,510 6,684,619 23,866,780 1.3%

2021 (P) 9,932,518 14,159,330 14,699,480 9,392,359 17,345,490 6,746,698 24,091,840 0.9%

(P) Projection

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2012 ENROLLMENT AT LARGEST DEGREE-GRANTING COLLEGES AND UNIVERSITIES TOP 1-25

Institution Location Public/Private 2-Year/4-Year Total Enrollment

1 Ashford University IA Private 4-year 77,734

2 Liberty University VA Private 4-year 74,372

3 Arizona State University AZ Public 4-year 73,378

4 Miami Dade College FL Public 4-year 66,701

5 Lone Star College System TX Public 2-year 60,428

6 University of Central Florida FL Public 4-year 59,601

7 Houston Community College TX Public 2-year 58,476

8 American Public University System WV Private 4-year 58,115

9 Ohio State University, Main Campus OH Public 4-year 56,387

10 University of Texas at Austin TX Public 4-year 52,186

11 Northern Virginia Community College VA Public 2-year 51,864

12 University of Minnesota, Twin Cities MN Public 4-year 51,853

13 Texas A&M University, College Station TX Public 4-year 50,627

14 Tarrant County College District TX Public 2-year 50,439

15 Walden University MN Private 4-year 50,209

16 University of Florida FL Public 4-year 49,913

17 Kaplan University, Davenport Campus IA Private 4-year 48,865

18 Michigan State University MI Public 4-year 48,783

19 Grand Canyon University AZ Private 4-year 48,650

20 Florida International University FL Public 4-year 46,171

21 Pennsylvania State University, Main Campus PA Public 4-year 45,783

22 University of Illinois at Urbana-Champaign IL Public 4-year 44,520

23 New York University NY Private 4-year 44,516

24 University of Washington, Seattle Campus WA Public 4-year 43,485

25 University of Michigan, Ann Arbor MI Public 4-year 43,426

SOURCE: National Center for Education Statistics *excludes online-only programs 59

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2012 ENROLLMENT AT LARGEST DEGREE-GRANTING COLLEGES AND UNIVERSITIES TOP 26-50

Institution Location Public/Private 2-Year/4-Year Total Enrollment

26 Austin Community College District TX Public 2-year 43,315

27 Valencia College FL Public 4-year 42,915

28 Broward College FL Public 4-year 42,309

29 University of Wisconsin, Madison WI Public 4-year 42,269

30 University of Maryland, University College MD Public 4-year 42,268

31 Indiana University, Bloomington IN Public 4-year 42,133

32 Western Governors University UT Private 4-year 41,369

33 University of South Florida, Main Campus FL Public 4-year 41,116

34 University of Houston TX Public 4-year 40,747

35 Florida State University FL Public 4-year 40,695

36 Rutgers University, New Brunswick NJ Public 4-year 40,434

37 Purdue University, Main Campus IN Public 4-year 40,393

38 University of Arizona AZ Public 4-year 40,223

39 University of Southern California CA Private 4-year 39,958

40 University of California, Los Angeles CA Public 4-year 39,945

41 Excelsior College NY Private 4-year 39,728

42 University of North Texas TX Public 4-year 37,950

43 California State University, Fullerton CA Public 4-year 37,677

44 University of Maryland, College Park MD Public 4-year 37,248

45 East Los Angeles College CA Public 2-year 37,055

46 Temple University PA Public 4-year 36,744

47 California State University, Long Beach CA Public 4-year 36,279

48 California State University, Northridge CA Public 4-year 36,164

49 University of California, Berkeley CA Public 4-year 35,893

50 Capella University MN Private 4-year 35,754

*excludes online-only programs SOURCE: National Center for Education Statistics 60

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139

NOTEWORTHY NEWS

Fine Dining Growth Outpaces other Sectors

“More than half of college students

experience food insecurities, study says” –

May 5th, 2015; Foodservice Director

According to the American International Journal of Contemporary Research study "Evaluation of Food Insecurity among College Students," the experience of food insecurity comes from not having enough money to purchase meals or not having time for shopping and preparation. The study reported that food-insecure students regularly reduce the size of their meals, skip meals or don't eat at all.

“When Food Is Too Good To Waste, College Kids Pick

Up The Scraps” – February 27th, 2015; NPR

The average college student generates 142 pounds of food waste a year, according to Recycling Works, a program in Massachusetts. And college campuses as a group throw out a total of 22 million pounds of uneaten food each year, the Food Recovery Network has found. It's a small – but significant — piece of the 35 million tons of food discarded by Americans in 2012 alone, according to the latest estimate from the U.S. Environmental Protection Agency. About 40 percent of all food in the U.S. never even makes it to the plate before it's tossed. Yet 1 in 6 Americans goes hungry.

“College enrollment: Trouble

signs” – March 4th, 2015; The

Washington Post

There are many possible reasons for enrollment declines, including economic cycles. In a shrinking economy, more people tend to seek higher education as a way to improve their job prospects. In an improving economy, that surge will typically recede.

“Pulling Rank on College Dining Programs”– August 21st, 2014; Food

Management

That the quality of campus dining is a significant factor for prospective students choosing a college has been common knowledge for quite a while. There’s been Business Insider, College Prowler and PETA, a vegetarian advocacy organization that grades schools on their vegan friendliness. At GrubHub, they surveyed college students on their eating habits and came away with some interesting, if questionable, statistics. For example, they claim that college students are 26% less likely to order spicy dishes than the general population and that college students order 25% less vegetarian/vegan dishes than everyone else (PETA take note…).

“As California University Costs Rise, College Students Tap Food

Pantries”- March 9th, 2015; spcr.org

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Business & Industry ON-SITE FOODSERVICE

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11,106 locations $4.8 billion operator F&B spend

12% use GPOs

PREDICTIONS REFLECTIONS

DAYPART SHARE

PURCHASE SOURCES (% who buy from)

39%

Breakfast 356

Lunch 640

Dinner 337

Snack 318

CHECK AVERAGE

60% SUBSIDIZED

AVERAGE DAILY

SUBSIDIZED - EMPLOYEE ACCESS

Breakfast $3.35

Lunch $6.22

Dinner $5.91

Snack $2.19

1,303 AVERAGE NUMBER OF

EMPLOYEES WITH ACCESS

BU

SIN

ES

S &

IN

DU

ST

RY

SOURCE/ESTIMATES BASED ON: Datassential PULSE; US Census Bureau

70% CONTRACT MANAGED

30% SELF-OP OR HYBRID

2% share of overall

operator spend

27%

breakfast

54%

lunch

6%

dinner

13%

snack

Broadline distributors 97%

Direct from manufacturers 44%

Specialty distributors 40%

Club stores 29%

Cash & carry stores 21%

Supermarket / grocery 19%

Local farms 12%

Food brokers 6%

As employment rates rise, many companies have improved their foodservice

offerings as a way to attract new hires and be a competitive force in the job

market.

An emphasis on improved work environments remains a strong force

behind the success of B&I foodservice, as large companies try to reflect a

positive corporate culture through revamped cafeterias and a variety of food

offerings. Relying on foodservice contractors is a popular option within

this segment, and FSM contractors themselves have been reacting to more

competition within their field and offering a wider variety of options to their

clients, further broadening foodservice options.

The success of micro markets within the B&I segment also continues to be

a source of growth, as many employers look to these easy and efficient

vending options as a way to increase options for their employees.

The job market and economy continues to improve and the outlook for

B&I remains positive. Companies will continue to use their

foodservice offerings as a way to attract new hires, and the increased

use of foodservice contractors and efficient vending offerings like micro

markets will aid in continued growth. Emphasizing restaurant trends,

healthier options, and convenience will all be important to the success

of this segment.

REGISTER RINGS

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5%

4%

6%

9%

17%

22%

36%

Other

Director of Dining Services

Owner

F&B Manager

Foodservice Director

Executive Chef

General Manager

F&B DECISION MAKERS

PREDICTIONS

39%

24%

JOB RESPONSIBILITY / EXPERIENCE PERSONAL PROFILE

GENDER

AGE

22 AVERAGE YEARS OF

INDUSTRY EXPERIENCE

BU

SIN

ES

S &

IN

DU

ST

RY

64% 36%

BU

SIN

ES

S &

IN

DU

ST

RY

SOURCE: Datassential PULSE

1%

9%

19%

35% 35%

0%

Under 25 25 to 34 35 to 44 45 to 54 55 to 64 Over 65

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Fine Dining Growth Outpaces other Sectors

BU

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“micro markets Go Macro” – October 23rd,

2015; FoodManagement.com

Bridging the gap between vending and full-service cafés is the rapidly growing micro market concept. These unmanned retail shops generally cater to a specific, known demographic within the business segment. (Though some are being test-driven in colleges and universities as well as in hospitality.) They have unlimited variety, incredible flexibility and 24/7/365 access.

“A Snacking Nation: 94% Of Americans Snack Daily” – January 20th, 2015; Times Free Press

Snacking may very well be the new American pastime. According to the recent report from Mintel, nearly all Americans (94 percent) snack at least once a day. What is more, half (50 percent) of adults snack two to three times per day with 70 percent agreeing that anything can be considered a snack these days. Americans also claim a preference for healthier snacking with 33 percent saying they are snacking on healthier foods this year compared to last year. However, they most often snack to satisfy a craving (62 percent), highlighting the important role taste and flavor play on snacking behavior.

“U.S. Economy Adds 223,000 Jobs; Unemployment at

5.3%” – July 2nd, 2015; The

New York Times

The economy added a healthy 223,000 jobs last month, the Labor Department reported Thursday, but with other indicators showing wages flat and many Americans remaining on the sidelines, the overall economic picture for workers was not nearly as bright.

“Best Customer Service: Compass Group at Microsoft”– August 20th,

2014; Food Management

Cashier-less payment/ordering system accommodates made-to-order menu selections customers prefer. The 100% cashier-less/cashless ordering and payment system implemented at half a dozen cafés on the Microsoft campus in Redmond, WA, accomplishes a number of customer service goals. It is highly convenient, it reduces crowding and wait times, it seamlessly accommodates the kind of customized and made-to-order menu selections customers prefer, and it offers an appealingly high tech one-stop-shop solution for those ultra-tech-savvy diners.

“Today's company cafeterias offer healthier, brighter fare” – January 20th, 2015; Times Free Press

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Recreation ON-SITE FOODSERVICE

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62,201 locations $6.1 billion operator F&B spend

PREDICTIONS REFLECTIONS

NATIONAL PARK VISITORS (in millions)

KEY NATIONAL PARK STATS

Concessioners' Gross Receipts $1 bil

Concessioners' Gross Receipts Breakdown:

Merchandise & Retail 25%

Lodging 20%

Food & Beverage 20%

Total Food & Beverage Revenue (2012) $210,420,000

Number of Concession Contracts 575

Percent of Receipts Generated by the Top-60 Contracts 85%

Percent of Contracts Under $500,000 75%

Franchise Fee Average on All Contracts 5%

Number of Commercial Use Authorizations 6,000

Number of Concessioner Employees 25,000

SOURCE/ESTIMATES BASED ON: Datassential PULSE; US Census Bureau; National Park Service; National Association of State Park Directors; International Association of Amusement Parks and Attractions; Cruise Lines International Association

3% share of overall

operator spend

276.0 275.0

286.0

281.0 279.0

283.0

274.0

292.8

260.0

270.0

280.0

290.0

300.0

2007 2008 2009 2010 2011 2012 2013 2014

The health of the recreation segment can be tied directly to the

improved post-recession economy. Disposable personal income

continues to rise, as does consumer confidence, and because of this

more people are spending money on vacations, hobbies, and

sports. Revenues are up in many areas of this industry, particularly at

sports stadiums, amusement parks, national and state parks, and ski &

snowboard resorts.

Operators continue to put their efforts into improving foodservice

offerings and streamlining their operations with the use of new

technologies, increasing overall revenue. Efforts made during the

recession to increase visits and check averages continue to take place

and have a positive effect.

The recreation segment will continue to be directly affected by the

health of the economy. As disposable income remains on the upswing,

the sector will continue to fare well.

As we have seen in the past few years, operators remain focused on

competition in foodservice. Many sporting arenas and stadiums will

continue to feature full restaurants and kiosks from favorite local

establishments, movie theaters and bowling alleys will continue to offer

premium beverages and snacks, and amusement parks will remain

focused on featuring innovative, specialized food options to stand out

from the competition while also implementing new uses for technology

and vending options.

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7%

8.1%

8.3%

16.8% 51.8%

8%

Six Flags Cedar Fair

Sea World Parks & Entertainment Universal Parks & Resorts

The Walt Disney Company Other

CMAA Club Foods & Beverage

Purchases 2013 2011

Provisions $1,804,618 $1,650,909

Supplies $498,977 $460,266

TOTAL $2,303,595 $2,111,175

Number of CMAA Clubs 2,607 2,489

CMAA Member Income $20 bil $18 bil

SOURCE: Cruise Lines International Association; Club Managers Association of America; Journal of Management and Marketing Research, IBISWorld, Bigelow Companies

GOLF COURSE STATS AMONG CMAA MEMBERS

PROFESSIONAL SPORTS FOOD SPEND

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DONE

Year Total Ships Total Beds

Global

Passenger

Volume

2013 381 381,333 21,300,000

2014 410 467,629 21,700,000

2015 421 482,000 23,000,000

High Low

% of

Foodservice

Operations

Outsourced

Major League Baseball $20.00 $9.00 97%

Major League Soccer $15.00 $5.00

Minor League Baseball $15.00 $5.00

National Basketball

Association $20.00 $8.50 87%

National Football League $20.00 $11.00 94%

National Hockey League $20.00 $8.50 83%

AVERAGE $18.33 $7.83

CRUISE STATISTICS

AMUSEMENT PARK MARKET SHARE

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Theater Operator (March 2015) Screens Sites

Regal Entertainment Group 7,324 569

Dalian Wanda / AMC Entertainment, Inc. 4,972 347

Cinemark USA, Inc. 4,498 335

Carmike Cinemas, Inc. 2,894 272

Marcus Theatres Corp. 685 55

National Amusements 435 31

Harkins Theaters 429 30

Malco 350 35

Theater Type Screens Sites

2013 2012 % Change 2013 2012 % Change

Indoor 39,368 39,056 0.80% 5,326 5,317 0.17%

Drive-in 656 606 8.25% 393 366 7.38%

TOTAL 40,024 39,662 0.91% 5,719 5,683 0.63%

SOURCE: National Association of Theatre Owners; 2014 Themed Entertainment Association (TEA) Index

Park 2014 2013 %

Change

Magic Kingdom - Lake Buena Vista, FL 19,332 18,588 4.00%

Disneyland - Anaheim, CA 16,769 16,202 3.50%

Epcot - Lake Buena Vista, FL 11,454 11,229 2.00%

Disney's Animal Kingdom - Lake Buena Vista, FL 10,402 10,198 2.00%

Disney's Hollywood - Lake Buena Vista, FL 10,312 10,110 2.00%

Disney's California Adventure - Anaheim, CA 8,769 8,514 3.00%

Universal Studios at Universal - Orlando, FL 8,263 7,062 17.00%

Islands of Adventure at Universal - Orlando, FL 8,141 8,141 0.00%

Universal Studios Hollywood - Universal City, CA 6,824 6,148 11.00%

Seaworld Florida - Orlando, FL 4,683 5,090 -8.00%

Busch Gardens Tampa Bay - Tampa, FL 4,128 4,087 1.00%

Seaworld California - San Diego, CA 3,794 4,311 -12.00%

Knott's Berry Farm - Buena Park, CA 3,683 3,683 0.00%

Canada's Wonderland - Maple, ON 3,546 3,582 -1.00%

Cedar Point - Sandusky, OH 3,247 3,382 -4.00%

Kings Island - Kings Island, OH 3,238 3,206 1.00%

Hershey Park, Hershey, PA 3,212 3,180 1.00%

Six Flags Magic Mountain, Valencia, CA 2,848 2,906 -2.00%

Six Flags Great Adventure, Jackson, NJ 2,800 2,800 0.00%

Busch Gardens Europe - Williamsburg, VA 2,699 2,726 -1.00%

LEADING THEATER OPERATORS

THEATER SCREENS AND SITES

LEADING AMUSEMENT PARKS BY ATTENDANCE

*in thousands

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NOTEWORTHY NEWS

Fine Dining Growth Outpaces other Sectors

“Oceans of Opportunity”– August, 2014;

FSRMagazine.com

The cruise line industry is growing, and adding full-service restaurants onboard—from casual franchises like Johnny Rockets to upscale steakhouses and fine-dining enclaves. One reason the industry is growing—and the passenger growth rate is up 7 percent per annum since 1980—is that people who go on a cruise are very likely to go on multiple cruises in their lifetime—10.5 cruises per person to be exact, according to CLIA. And these are the people who say food and fine dining matter.

“National Park Service Sitting On Half-A-Billion Dollars Of Concessions Obligations” – March

15th, 2015; NationalParksTraveler.com

Across the National Park System, there is an estimated half-a-billion-dollars of obligations owed concessionaires who run lodges, restaurants, and even some activities, for the National Park Service. It's a sum that, while Park Service officials say is manageable, has seemingly stifled concessions competition in some parks and led the agency to divert tens of millions of dollars from some parks to others to reduce the debts.

“In Atlantic City, A Silver Lining For Casinos Left Standing”– June 8th, 2015;

NPR

Atlantic City went from having 25,000 slot machines at the start of last year to 17,000 now. It went from 12 underperforming casinos to eight fuller gambling houses. And that has helped the remaining casinos grow their profits by 26 percent.

“Recreation Foodservice Facilities Adopt Apps to Speed Service”

May 29th, 2015; FoodServiceDirector.com

Theme parks are using technology to reduce waits, but not just for rides. They have started to allow customers to skip the cashier and order food ahead of time. Disney World recently started allowing online preordering for its Be Our Guest restaurant, and this month it tested smartphone ordering at the Backlot Express restaurant and during the Fantasmic! nighttime show. Restaurants and theme parks say they are responding to consumers who are increasingly tech-savvy and hungry for convenience.

“Golf Industry Looks to Hit More Green in ‘15”– January 25th,

2015; FoxBusiness.com

RE

CR

EA

TIO

N

RE

CR

EA

TIO

N

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Lodging ON-SITE FOODSERVICE

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68,663 locations $13.4 billion operator F&B spend

56%

breakfast

15%

lunch

21%

dinner

8%

snack

21% use GPOs

PREDICTIONS REFLECTIONS

DAYPART SHARE

PURCHASE SOURCES (% who buy from)

39%

HAVE ON-SITE

RESTAURANTS

AVERAGE NUMBER OF ROOMS

ON-SITE RESTAURANTS

189 AVERAGE # ROOMS

74% CHECK AVERAGE

$15.32 LO

DG

ING

L

OD

GIN

G

SOURCE/ESTIMATES BASED ON: Datassential PULSE; Smith Travel Research; American Gaming Association

58% CHAIN

42% INDEPENDENT

6% share of overall

operator spend

Broadline distributors 94%

Specialty distributors 39%

Club stores 34%

Direct from manufacturers 32%

Cash & carry stores 25%

Supermarket / grocery 21%

Local farms 21%

Third party websites 6%

Food brokers 4%

As the economy improves, lodging has continued to experience positive

growth. Tourism has made strong strides since the recession, and lodging

has benefitted from an increase in both domestic and international tourist

activity as well as an increase in business travel and activity.

Value remains an important focus for consumers, and deal-driven booking

websites and apps remain a popular choice for booking stays and an

important component within the lodging industry.

Room revenues are the driving force in overall growth for the segment, and

foodservice remains an opportunity for innovation and change. Dining

options within existing operations are being redeveloped and new offerings

are being created as operators look for ways to increase bookings and

traffic.

Outlook for the lodging segment continues to be strong. Rising disposable

income, expanding business travel budgets, and an increase in international

tourism will all aid in continued growth.

Online bookings will continue to be the main driver for bookings, whether online

or through apps and mobile devices. Foodservice offerings and improved

dining options are increasingly being used as a way to market to new

audiences and garner more guests and revenue, particularly by higher-end

hotels and chains. This trend is likely to continue and trickle down into other

sub-groups of lodging.

It is yet to be seen whether economic challenges arising in Europe and Asia

will have an effect on tourism both domestically and internationally, and what

effect that could possibly have on the lodging industry

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F&B DECISION MAKERS

CULINARY TRAINING

PREDICTIONS

39%

29%

24%

%

JOB RESPONSIBILITY / EXPERIENCE PERSONAL PROFILE

GENDER

AGE

17 AVERAGE YEARS OF

INDUSTRY EXPERIENCE

LO

DG

ING

L

OD

GIN

G

SOURCE: Datassential PULSE

71% 29%

1%

17%

29%

31%

21%

1%

Under 25 25 to 34 35 to 44 45 to 54 55 to 64 Over 65

8%

1%

5%

7%

12%

13%

24%

30%

Other

Director of Dining Services

Purchasing Manager

Foodservice Director

Owner

F&B Manager

Executive Chef

General Manager

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LO

DG

ING

L

OD

GIN

G

SOURCE: STR Host Almanac

LUXURY HOTEL REVENUE DISTRIBUTION

65%

19%

5%

5% 6%

Rooms

Food

Beverage

Other Food&BeverageOther Revenue

92%

4% 1% 1% 2%

Rooms

Food

Beverage

Other Food&Beverage

Other Revenue

UPSCALE HOTEL REVENUE DISTRIBUTION

UPPER UPSCALE HOTEL REVENUE DISTRIBUTION UPPER MIDSCALE HOTEL REVENUE

DISTRIBUTION

60%

20%

7%

5%

9%

Rooms

Food

Beverage

Other Food&BeverageOther Revenue

87% 7%

2%

1% 3%

Rooms

Food

Beverage

Other Food&BeverageOther Revenue

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Category (in billions)

% of Total Revenue Direct Revenue

Gaming $34.60 70%

Food & Beverage $6.50 13%

Hotel $5.10 10%

Other $3.50 7%

Total $49.70 100%

CASINO REVENUE SOURCES (ALL CASINOS) 2010

SOURCE: American Gaming Association; Hotels Magazine

LO

DG

ING

L

OD

GIN

G

Company Rooms Hotels

2013 2012 % Change 2013 2012 % Change

Hilton Worldwide - McLean, Virginia 678,630 652,957 4% 4,115 3,966 4%

Marriott International - Bethesda, Maryland 675,623 660,394 2% 3,916 3,800 3%

Wyndham Hotel Group - Parsippany, New Jersey 645,423 627,437 3% 7,485 7,342 2%

Choice Hotels International - Silver Spring, Maryland 506,058 538,222 -6% 6,340 6,725 -6%

Starwood Hotels & Resorts Worldwide - Stamford, Connecticut 346,819 335,415 3% 1,175 1,134 4%

Best Western International - Phoenix, Arizona 317,838 312,467 2% 4,097 4,050 1%

Carlson Rezidor Hotel Group - Minnetonka, Minnesota 168,927 166,241 2% 1,079 1,077 0%

Hyatt Hotels Corp. - Chicago, Illinois 147,388 135,144 9% 548 500 10%

Magnuson Hotels - Spokane, Washington 142,500 201,692 -29% 1,865 1,886 -1%

G6 Hospitality - Carrollton, Texas 109,945 107,767 2% 1,150 1,117 3%

Westmont Hospitality Group - Houston, Texas 98,637 116,334 -15% 722 850 -15%

LQ Management - Irving, Texas 83,658 84,659 -1% 834 835 0%

Extended Stay Hotels - Charlotte, North Carolina 76,234 76,234 0% 684 684 0%

Interstate Hotels & Resorts - Arlington, Virginia 72,529 69,850 4% 375 373 1%

Vantage Hospitality Group - Coral Springs, Florida 70,383 69,502 1% 1,103 1,091 1%

MGM Resorts International - Las Vegas, Nevada 46,908 52,033 -10% 20 20 0%

Caesars Entertainment Corp. - Las Vegas, Nevada 42,710 40,960 4% 54 40 35%

Walt Disney Co. - Burbank, California 39,205 35,859 9% 44 33 33%

Red Roof Inns - Columbus, Ohio 36,552 35,733 2% 357 349 2%

White Lodging Services Corp.- Merrillville, Indiana 24,461 24,177 1% 169 160 6%

LEADING US-BASED HOTEL OPERATORS

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Transportation ON-SITE FOODSERVICE

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TR

AN

SP

OR

TA

TIO

N

2,493 locations $1.2 billion operator F&B spend

PREDICTIONS REFLECTIONS

Year

(in thousands)

Total

2007 $2,006,092

2008 $2,037,944

2009 $1,933,907

2010 $2,007,137

2011 $2,111,232

2012 $2,074,893

2013 $2,160,280

2014 $2,208,371

AIRLINE PASSENGER FOOD PURCHASES

SOURCE/ESTIMATES BASED ON: Datassential PULSE; Bureau of Transportation Statistics; US Department of Transportation; Amtrak; US Census Bureau

Year

(in millions)

Ticket State

Contribution

Food &

Beverage Total

2011 $1,851.50 $191.10 $109.40 $2,152.00

2012 $1,968.20 $179.00 $122.00 $2,269.20

2013 $2099.10 $195.40 $123.00 $2,417.50

2014 $2,124.70 $286.60 $128.30 $2,539.60

AMTRAK PASSENGER REVENUES

1% share of overall

operator spend

With the economy continuing to do well, transportation has

benefitted as more individuals and businesses are spending money

on travel. Airlines continue to do well and benefitted the most from

increased travel. There have been many large mergers in the past few

years, but a direct effect on the overall industry has yet to be seen.

Foodservice remains a small portion of revenue, however there

has been growth in food revenue in the past year.

Rail, bus, and ferries remain stable, and there has been some political

momentum for a stronger national rail system, although it is yet to be

seen if this will occur.

The economy is expected to continue to do well, and the outlook for

transportation is positive. More people will continue to travel and take

part in more business and leisure activities, allowing more revenue to

be generated. Within air travel, airlines will continue to strive for higher

profit margins by increasing ticket prices and developing more efficient

aircrafts for high-traffic routes and possibility using foodservice offerings

to differentiate from competitors.

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LEADING US AIRLINES RANKED BY FOOD EXPENDITURES

Carrier

Systemwide Food Expense (in thousands)

2014 2013 % Change

Delta Air Lines Inc. $694,390 $658,644 5.4%

American Airlines Inc. $565,878 $561,263 0.8%

United Air Lines Inc. $550,378 $573,118 -4.0%

Alaska Airlines Inc. $89,690 $81,749 9.7%

US Airways Inc. US (Merged with America West) $85,512 $73,802 15.9%

Hawaiian Airlines Inc. $57,600 $52,733 9.2%

JetBlue Airways $44,542 $17,892 148.9%

Southwest Airlines Co. $44,369 $45,232 -1.9%

Virgin America $24,271 $26,082 -6.9%

Omni Air Express $12,467 $13,842 -9.9%

Sun Country Airlines $6,441 $5,220 23.4%

Frontier Airlines Inc. $6,156 $8,156 -24.5%

SkyWest Airlines Inc. $5,294 $5,336 -0.8%

Miami Air International $3,968 $4,193 -5.4%

Spirit Air Lines $3,638 $3,543 2.7%

Allegiant Air $3,452 $3,448 0.1%

Shuttle America Corp. $2,302 $7,424 -69.0%

GoJet Airlines/ United Express $909 $931 -2.4%

North American Airlines $672 $5,347 -87.4%

Total $2,201,257 $2,142,608 2.7%

SOURCE: Bureau of Transportation Statistics

TR

AN

SP

OR

TA

TIO

N

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Hospitals ON-SITE FOODSERVICE

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5,686 locations $6.2 billion operator F&B spend

97% use GPOs

PREDICTIONS

Broadline distributors 99%

Specialty distributors 35%

Supermarket / grocery 35%

Direct from

manufacturers 28%

Local farms 14%

Club stores 11%

Cash & carry stores 11%

Third party websites 9%

Food brokers 9%

REFLECTIONS

DAYPART SHARE

PURCHASE SOURCES (% who buy from)

189 DAILY PATIENTS

Breakfast 274

Lunch 409

Dinner 248

$8.61 DAILY COST PER PERSON

239 AVERAGE # BEDS

AVERAGE DAILY MEALS SERVED

TYPICAL LOCATION SIZE HO

SP

ITA

LS

SOURCE/ESTIMATES BASED ON: Datassential PULSE; American Hospital Association; Foodservice Director

17% CONTRACT MANAGED

83% SELF OPERATED

3% share of overall

operator spend

24%

breakfast

47%

lunch

17%

dinner

12%

snack

The effects of the implementation of the Affordable Care Act (ACA) were

beginning to be seen in the past year, impacting many aspects of the

industry. Since reimbursement measures are now based on providers’

performance as opposed to volume, hospitals are focusing on reining in

costs while also facing the need to hire more staff due to a rising demand

in care. Total hospital beds and facilities have declined, while expenses

and healthcare employees have increased considerably.

The industry is continuing to focus on adopting and implementing an all-

electronic health database system as part of compliance with the ACA. This

is a large undertaking requiring a substantial amount of resources and is

expected to continue over the next few years.

Hospital foodservice is experiencing a shift in many ways as well. Across

the country, many hospitals are shifting food preparations toward more

sustainable and healthier comfort food options and an increased flexibility

in patient dining, while others are adding more fast casual-style restaurants

to compete with offsite locations for employees. Non-patient foodservice

revenue was up this year based on our surveys, and this could be an area

within healthcare foodservice where operators could make up for profits lost

in other areas.

Hospitals will continue to face cost pressures in the upcoming years due to shifts

within both foodservice and other areas of hospital operations. The number of

insured patients under the ACA and Medicaid expansion are expected to rise, as are

the number of individuals over age 65, furthering the demand for more resources and

qualified staff. At the same time, the number of hospital beds is diminishing as

hospitals consolidate and renovate.

Foodservice will continue to shift towards healthier options and flexible dining as

demand for those from consumers rises, which will likely cause continued increases

in food and labor costs.

Growth in this segment is a reflection of volume and not necessarily an increase in

profits. As the size of the healthcare industry grows due to more insured patients

and rising staff levels, operators are spending more on purchasing and

operational costs. This trend is expected to continue and, for that reason, the

outlook is strong.

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9%

1%

1%

4%

10%

10%

14%

52%

Other

Owner

Procurement Manager

F&B Manager

Executive Chef

Director of Dining Services

General Manager

Foodservice Director

F&B DECISION MAKERS

PREDICTIONS

39%

24%

JOB RESPONSIBILITY / EXPERIENCE PERSONAL PROFILE

GENDER

AGE

21 AVERAGE YEARS OF

INDUSTRY EXPERIENCE

HO

SP

ITA

LS

H

OS

PIT

AL

S

SOURCE: Datassential PULSE

51% 49%

0%

6%

31%

36%

26%

1%

Under 25 25 to 34 35 to 44 45 to 54 55 to 64 Over 65

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4,344,700

4,423,142 4,515,183

4,626,908

4,667,500

4,679,067 4,721,617

4,790,950

4,830,033

2005 2006 2007 2008 2009 2010 2011 2012 2013

SOURCE: Foodservice Director, American Hospital Association, US Census

NUMBER OF US HOSPITALS

US HOSPITAL BEDS TOTAL US HOSPITAL EXPENSES (in thousands)

US HOSPITAL WORKERS

HO

SP

ITA

LS

H

OS

PIT

AL

S

946,997 947,000 945,199

951,000

944,277 941,995

924,333

920,829

914,513

2005 2006 2007 2008 2009 2010 2011 2012 2013

5,756 5,747

5,708

5,815

5,795

5,754

5,724 5,723

5,686

2005 2006 2007 2008 2009 2010 2011 2012 2013

$570,500

$607,300 $638,500

$690,000

$726,671 $750,602

$773,547

$829,665 $859,419

2005 2006 2007 2008 2009 2010 2011 2012 2013

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SOURCE: Modern Healthcare

HO

SP

ITA

LS

H

OS

PIT

AL

S

LARGEST FOR-PROFIT HOSPITAL CHAINS

LARGEST NOT FOR-PROFIT HOSPITALS

Rank Organization Location Staffed Beds Total

Hospitals

2013 Revenue

(in millions)

1 Kaiser Foundation Hospitals Oakland, CA 7,503 32 $54,088

2 Ascension Health St. Louis, MO 18,681 101 $19,844

3 Providence Health & Services Renton, WA 5,557 26 $11,352

4 Catholic Health Initiatives Englewood, CO 10,473 74 $11,252

5 Dignity Health San Francisco, CA 7,882 37 $10,939

6 Partners Health Care Systems Boston, MA 3,256 12 $10,788

7 UPMC Pittsburgh, PA 4,876 13 $10,407

8 Sutter Health Sacramento, CA 4,890 24 $10,029

9 CHE Trinity Health Livonia, MI 7,580 34 $9,340

10 Mayo Clinic Health System Rochester, MN 3,165 23 $9,074

Rank Company Location # of Hospitals Revenue (in millions)

% change 2013 2012

1 HCA Nashville, TN 159 $34,182 $33,013 4%

2 Community Health Systems Franklin, TN 131 $12,097 $11,818 2%

3 Tenet Healthcare Corp. Dallas, TX 77 $11,102 $9,119 22%

4 Universal Health Services King of Prussia, PA 24 $7,283 $6,961 5%

5 LifePoint Hospitals Brentwood, TN 60 $3,678 $3,391 8%

6 Iasis Healthcare Franklin, TN 16 $2,376 $2,327 2%

7 Capella Healthcare Franklin, TN 11 $722 $718 1%

8 United Surgical Partners International Addison, TX 14 $616 $540 14%

9 Integrated Healthcare Holdings Santa Ana, CA 4 $386 $365 6%

10 SunLink Health Systems Atlanta, GA 4 $108 $113 -4%

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139

NOTEWORTHY NEWS

Fine Dining Growth Outpaces other Sectors

“Hospital Launches Healthy Beverage Initiative” – June 16th, 2015; Foodservice Director

San Francisco General Hospital and Trauma Center will no longer sell or provide any sugar-sweetened beverages on campus. The hospital's new policy aligns with the city’s new legislation requiring health warnings on soda advertisements, and banning of sugar-sweetened beverage advertisements on publicly owned property.

“Metro Health’s Multilayered Farm-to-Fork Approach” – February 6th, 2015; FoodManagement.com

Efforts at the Michigan hospital include local sourcing, a seasonal farmers market and an onsite garden tended to by a master gardener. According to the Grand Rapids Business Journal, Metro Health landed on the 101 Best & Brightest Sustainable Companies in Michigan list for the third year in a row in 2014.

“Farmers’ Markets Near Medical Centers and

Clinics Promote Healthy Eating”– January 14th, 2015;

Foodservice Director

A Kaiser Permanente physician in Oakland, Calif. started a farmers’ market to make fresh fruits and vegetables more convenient and readily available. More than a decade later there are over 50 Kaiser-associated farmers’ markets in four states.

“Hospital Fine-dining Restaurant Attracts Customers Who are there to Dine Only” – May 22nd, 2015; Foodservice Director

Jell-O, greasy gravy and stale bread is what you might expect to eat at a hospital. But institutional cafeteria food is the last thing you’ll find at Castle Rock Adventist Hospital thanks to executive chef Daniel Skay. Seventy-five percent of the customers come strictly to eat at Manna, not because they’re visiting a patient or seeing a doctor at the hospital. The kitchen is divided in half, one side works for patients who order room service, the other side serves the restaurant crowd.

“Fast-food Restaurants Still Populate Hospital Cafeterias” – April 8th, 2015; Foodservice Director

HO

SP

ITA

LS

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Long Term Care ON-SITE FOODSERVICE

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15,632 locations $1.8 billion operator F&B spend

28%

breakfast

33%

lunch

29%

dinner

34% use GPOs

PREDICTIONS

10%

snack

Broadline distributors 100%

Supermarket / grocery 38%

Specialty distributors 25%

Club stores 20%

Cash & carry stores 16%

Direct from manufacturers 13%

Local farms 13%

Third party websites 5%

Food brokers 5%

REFLECTIONS

DAYPART SHARE

PURCHASE SOURCES (% who buy from)

39%

127 DAILY PATIENTS

Breakfast 120

Lunch 138

Dinner 128

$6.65 DAILY COST PER PERSON

137 AVERAGE # BEDS

AVERAGE DAILY MEALS SERVED

TYPICAL LOCATION SIZE

SOURCE/ESTIMATES BASED ON: Datassential PULSE; American Health Care Association; American Senior Housing Association; Provider

53% CONTRACT MANAGED

1% share of overall

operator spend

SELF OPERATED

47%

A strengthening economy and the implementation of the Affordable

Care Act (ACA) has created stronger demand for long term care

providers while also increasing cost and labor pressures on operators.

With an estimated 11.4 million people newly insured since the rollout

of the ACA, as well as an aging Baby Boomer generation, LTC

facilities are facing a shortage of qualified medical staff to meet the

demands of this larger patient population, similar to hospitals.

Overhauls to databases and changes in reimbursements also continue

to put pressure on the segment.

The growing economy has allowed for patients to be more selective

in their care options, which is being met by LTC operators improving

their offerings for costly and complex medical issues like Alzheimer’s

and dementia, while also enhancing entertainment, recreation, and

foodservice options to attract more residents.

With the ACA providing coverage for at-home care and the expanding

coverage of Medicaid, the segment will continue to see an expansion

in short-term care, at-home care, adult daycare, and other consumer-

driven care options, even as cost and staffing pressures persist.

Growth will be subdued in spite of the increased demand.

Similarly to Hospitals, the strong growth expected to occur within Long

Term Care is the result of a growing industry overall. More patients

and more foodservice options are creating a shift in purchasing.

While revenues may be rising, profits are not necessarily following

suit.

LO

NG

TE

RM

CA

RE

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10%

5%

7%

8%

13%

57%

Other

F&B Manager

General Manager

Executive Chef

Director of Dining Services

Foodservice Director

F&B DECISION MAKERS

PREDICTIONS

39%

24%

%

JOB RESPONSIBILITY / EXPERIENCE PERSONAL PROFILE

GENDER

AGE

21 AVERAGE YEARS OF

INDUSTRY EXPERIENCE NU

RS

ING

& L

on

g T

erm

Ca

re

39% 61%

SOURCE: Datassential PULSE

0%

10%

21%

36%

33%

0%

Under 25 25 to 34 35 to 44 45 to 54 55 to 64 Over 65

LO

NG

TE

RM

CA

RE

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SOURCE: American Health Care Association; US Census

NURSING HOME FACILITIES

NURSING HOME RESIDENTS & BEDS

NURSING HOME EMPLOYEES

1,420,217 1,410,902 1,399,900 1,396,473 1,389,241 1,383,806 1,382,201 1,371,818 1,368,351

1,671,238 1,668,895 1,666,797 1,703,398 1,703,486

1,667,884 1,666,805 1,665,969 1,662,757

2007 2008 2009 2010 2011 2012 2013 2014 2015

Residents Beds

15,772

15,711

15,679 15,690

15,702

15,677 15,681

15,659

15,632

2007 2008 2009 2010 2011 2012 2013 2014 2015

NU

RS

ING

& L

on

g T

erm

Ca

re 1,640,524

1,646,321

1,587,187

1,613,630

1,632,889 1,639,995

1,704,128

2006 2007 2008 2009 2010 2011 2012

LO

NG

TE

RM

CA

RE

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SOURCE: Senior Living Executive

NU

RS

ING

& L

on

g T

erm

Ca

re

LEADING NURSING FACILITY CHAINS RANKED BY CAPACITY

System Capacity Facilities

2014 2013 % Change 2014 2013 % Change

Genesis Healthcare Corp. 44,805 49,000 -8.56% 380 411 -7.54%

HCR Manor Care 38,027 38,328 -0.79% 280 218 28.44%

Golden Living 30,267 30,937 -2.17% 21 302 -93.05%

Life Care Centers of America 29,338 29,338 0.00% 223 223 0.00%

Sava Senior Care 24,154 24,154 0.00% 200 200 0.00%

Consulate Health Care (new in 2012) 22,048 22,048 0.00% 202 202 0.00%

Signature Healthcare 14,157 11,089 27.67% 113 90 25.56%

The Ensign Group 13,205 11,124 18.71% 124 119 4.20%

Extendicare Health Services 12,086 14,778 -18.22% 90 146 -38.36%

Kindred Healthcare 11,779 12,638 -6.80% 90 100 -10.00%

Evangelical Lutheran 11,444 11,444 0.00% 166 166 0.00%

Preferred Care Partners (new in 2012) 10,587 10,587 0.00% 107 107 0.00%

UHS Pruitt Corp. 10,299 9,639 6.85% 97 86 12.79%

National Healthcare Corp. 9,462 8,943 5.80% 74 69 7.25%

American Senior Communities 7,511 6,931 8.37% 63 60 5.00%

Daybreak Venture 7,283 7,283 0.00% 69 69 0.00%

Petersen Health Care 7,250 7,452 -2.71% 102 108 -5.56%

Creative Solutions in Healthcare 6,178 6,060 1.95% 56 63 -11.11%

Covenant Care 5,972 5,972 0.00% 57 57 0.00%

Saber Healthcare Group 5,831 5,393 8.12% 67 62 8.06%

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NOTEWORTHY NEWS

“Reducing Readmissions with Reliable Meal

Access”- June 17th 2015; FoodManagement.com

A pilot program between Eskenazi Health and Meals on Wheels will study correlation between readmissions of at-risk seniors and access to healthful meals post-discharge. Food plays a powerful role in a patient’s ability to heal both in the hospital and out. But many seniors—especially those with chronic obstructive pulmonary disease (COPD) or congestive heart failure—are discharged once their health stabilizes without consistent and reliable access to healthful meals at home.

“Banner Health Launches Major Healthy Food Initiative”- January 26th, 2015; Food Management.com

Banner Health is undergoing a massive revamping of its retail dining and vending in order to promote health and wellness. A new Healthy Options program is being introduced in Banner facilities in eight states. Initially, the focus is on vending, where 80 percent of choices will now be healthier, but the initiative is then slated to be introduced into cafeterias and catering. Banner Health is a non-profit health system that provides emergency care, hospital care, hospice, long-term/home care, outpatient surgery centers, labs, rehab services, pharmacies, and more recently has begun operating primary care physician clinics.

“More Caregivers Are No Spring Chickens Themselves”- July 3rd, 2015; The New York Times

Every few years, the National Alliance for Caregiving and the AARP Public Policy Institute survey the state of American caregiving; their latest report, published last month, focused in part on caregivers over 75. They constitute 7 percent of those who provide unpaid care to a relative or friend, the survey found — more than three million seniors helping with the so-called activities of daily living. The aging of the population has thrust more seniors into this role, said Gail Hunt, president and chief executive of the National Alliance for Caregiving. “There didn’t use to be so many 95-year-olds,” she said, “and someone’s caring for those 95-year-olds.”

“Drop-In Chefs Help Seniors Stay In Their Own Homes” – April 27th, 2015; NPR

A healthy diet is good for everyone. But as people get older, cooking nutritious food can become difficult and sometimes physically impossible. A pot of soup can be too heavy to lift. And there's all that time standing on your feet. It's one of the reasons that people move into assisted living facilities. According to some estimates, there are hundreds of thousands, maybe even a million seniors living in their own homes who are malnourished. In Long Term Care facilities, up to 50 percent may suffer from malnutrition. This leads to increased risk for illness, frailty and falls.

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Senior Living ON-SITE FOODSERVICE

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34,385 locations $3.4 billion operator F&B spend

23%

breakfast

37%

lunch

30%

dinner

21% use GPOs

PREDICTIONS

10%

snack

Broadline distributors 100%

Supermarket / grocery 45%

Specialty distributors 30%

Cash & carry stores 28%

Club stores 26%

Local farms 15%

Direct from manufacturers 13%

Third party websites 8%

Food brokers 8%

REFLECTIONS

DAYPART SHARE

PURCHASE SOURCES (% who buy from)

39%

151 DAILY PATIENTS

Breakfast 93

Lunch 120

Dinner 112

$6.74 DAILY COST PER PERSON

151 AVERAGE # BEDS

AVERAGE DAILY MEALS SERVED

TYPICAL LOCATION SIZE

SOURCE/ESTIMATES BASED ON: Datassential PULSE; American Health Care Association; American Senior Housing Association; Provider

2% share of overall

operator spend

68% CONTRACT MANAGED

32% SELF OPERATED

Provisions in the Affordable Care Act (ACA) increased the number of

people covered by Medicaid and also made at-home care more

accessible to a larger population. At the same time, gains in the

economy and increasing disposable income are allowing more people

to stay at home longer as opposed to moving into a senior living facility.

Even as the population over 65 continues to increase, occupancy

rates have declined. To combat these declining occupancy rates,

many operators have begun experimenting with new food offerings and

preparations, as well as more flexible dining options as a way to attract

more residents. Operators have also experienced large increases in

food costs over the past year, likely due to shifts in purchasing. This is

a trend likely to continue.

Even as the number of individuals over age 65 is expected to grow over

3% annually for the next five years, opportunities for short-term growth

within the segment will remain muted. With the ACA providing

coverage for at-home care and the expanding coverage of Medicaid,

there will be an expansion in short-term care, at-home care, adult

daycare, and other consumer-driven care options at the expense of

senior living facilities. In the more distant future, the rising aging

population may eventually lead to an increase in facilities. As seniors

continue to be more active than past generations, senior living

foodservice operators will attempt to improve their offerings as a

way to attract more residents by providing a wider variety of choices

as well as increased flexibility in dining.

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6%

6%

11%

19%

25%

34%

Other

F&B Manager

General Manager

Executive Chef

Director of Dining Services

Foodservice Director

F&B DECISION MAKERS

PREDICTIONS

39%

29%

24%

%

JOB RESPONSIBILITY / EXPERIENCE PERSONAL PROFILE

GENDER

AGE

20 AVERAGE YEARS OF

INDUSTRY EXPERIENCE

47% 53%

SOURCE: Datassential PULSE

4%

9%

23%

30%

26%

8%

Under 25 25 to 34 35 to 44 45 to 54 55 to 64 Over 65

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SOURCE: Provider

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2015 TOP 10 ASSISTED LIVING PROVIDERS

Rank Company Location Resident Capacity

1 Brookdale Brentwood, TN 62,873

2 Sunrise Senior Living McLean, VA 15,106

3 Five Star Quality Care Newton, MA 11,473

4 Atria Senior Living Group Louisville, KY 10,081

5 Meridian Senior Living LLC Hickory, NC 9,000

6 Enlivant (formerly Assisted Living Concepts) Chicago, IL 8,445

7 Senior Lifestyle Corp. Chicago, IL 7,672

8 Capital Senior Living Corp. Dallas, TX 6,300

9 Elmcroft Senior Living Louisville, KY 5,763

10 Merrill Gardens LLC Seattle, WA 4,696

2015 TOP 10 INDEPENDENT LIVING PROVIDERS

Rank Company Location Resident Capacity

1 Holiday Retirement Lake Oswego, OR 39,080

2 Brookdale Brentwood, TN 32,918

3 Erickson Living Management Cantonsville, MD 22,039

4 Life Care Services LLC Des Moines, IA 20,714

5 Five Star Quality Care Newton, MA 10,517

6 USA Properties Fund Inc. Roseville, CA 8,261

7 Atria Senior Living Group Louisville, KY 8,110

8 Capital Senior Living Corp Dallas, TX 7,600

9 Senior Lifestyle Corp. Chicago, IL 7,183

10 Leisure Care LLC/One-Eighty Seattle, WA 6,943

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SOURCE: US Census

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POPULATION PROJECTIONS FOR OVER 65

Year Total Male Female

2013 44,688,884 19,576,180 25,112,704

2014 46,179,004 20,304,644 25,874,360

2015 47,695,349 21,040,904 26,654,445

2016 49,223,566 21,774,254 27,449,312

2017 50,793,455 22,525,547 28,267,908

2018 52,437,307 23,304,893 29,132,414

2019 54,157,205 24,115,191 30,042,014

2020 55,968,870 24,970,314 30,998,556

2021 57,745,530 25,802,635 31,942,895

2022 59,597,840 26,668,446 32,929,394

2023 61,424,270 27,519,727 33,904,543

2024 63,203,475 28,344,553 34,858,922

2025 65,051,745 29,203,697 35,848,048

0

10,000,000

20,000,000

30,000,000

40,000,000

50,000,000

60,000,000

70,000,000

Total Male Female

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NOTEWORTHY NEWS

“Senior Community Offers Chef-driven Dining Venue

Options ”- May 25th, 2015; Foodservice Director

Over the last decade, senior citizens are being given a choice when it comes to retired living. Baby Boomers expect retired living to have all the amenities without the hassle of cleaning or keeping up household chores such as landscaping. It’s not just about the cliché Friday-night bingo anymore. In a facility such as Splendido, residents also enjoy services from the movie theater, swimming pool and spas to only the best when it comes to dining choices.

“The Green House Effect: Homes for the Elderly to Thrive”- December 15th, 2014; The

New York Times

The Green House project, co-founded in 2003 by Dr. Thomas and Steve McAlilly of Mississippi Methodist Senior Services, has since spread to 27 states, with four more soon to join the movement. Green House residents, whose care is financed by Medicaid, Medicare or private funds, live in cottages with private rooms and private baths. They participate, when able, in food preparation and eat in a communal setting that is more like a home dining room than a cafeteria. Unlike the regimented meals in nursing homes, Green House residents are free to choose when to eat.

“Celebrity Chefs Spice Up Senior Living Communities”- September 15th, 2014; Food

Management.com

Regan Medzhibzher, the director of marketing for Morrison Senior Living, says (the use of celebrity chefs) stems from generational research showing today’s seniors are well traveled and looking for experiences that stimulate their senses. These interactive demonstrations with famous chefs well known for ethnic cuisines are an ideal blend of those two factors.

“5 factors that make a difference in senior dining” –

July 6th, 2015; Food Management.com

Individualized or “person-centered” care is a strong trend in senior living. Nutrition is a cornerstone of that individualized care. In a person-based setup, nurses and dietitians look at such things as a resident’s nutritional needs, oral function, food preferences, ailments and any sensory or physical impairments.

“America’s Seniors Find Middle-Class ‘Sweet Spot’” – June 14th, 2015; The New York Times

Supported by income from Social Security, pensions and investments, as well as an increasing number of paychecks from delaying retirement, older people not only weathered the economic downturn that began in 2007 but made significant gains, a New York Times analysis of government data has found. As a result, America’s middle class is graying.

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Vending ON-SITE FOODSERVICE

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4,011 locations $8.1 billion operator F&B spend

PREDICTIONS REFLECTIONS

SOURCE/ESTIMATES BASED ON: Datassential; Vending Times; Vending Market Watch; US Census

Location 2014 2013 % Change

Manufacturing 22% 22% 0%

Offices 22% 20% 8.9%

Hotels/ Motels 6.6% 6.4% 3.1%

Restaurants/ Bars 2.8% 2.9% -3.4%

Retail 7.8% 8% -2.5%

Healthcare 8.2% 8.1% -1.2%

C&U 6.8% 7.2% -5.6%

K-12 7.4% 7.6% -2.6%

Military 3% 2.9% 3.4%

Correctional 3.3% 3.1% 6.5%

Other 10.1% 11.5% -12.2%

Category 2014 2013 % Change

Cold Beverages 37.7% 34.1% 10.6%

Candy/ Snacks 33.3% 28.4% 17.3%

OCS 13.3% 14.7% -9.5%

Micro Markets 8.9% 5.1% 74.2%

Vended Food 6.5% 7.3% -11.0%

Hot Beverages 5.2% 4.4% 18.2%

Ice Cream 2.9% 2.8% 3.6%

Milk 1.9% 2.5% -24.0%

Other 7.7% 4.6% 67.4%

VENDING SALES BY LOCATION VENDING SHARE OF SALES BY OFFERINGS

4% share of overall

operator spend

The effects of K-12 meal regulations are being felt this year as many

vending operators within K-12 report having a difficult year. Many

vending operators are shifting and consolidating their accounts to

segments that are more stable, such as business & industry. The bright

spot in the segment remains the growth of micro markets, where the

flexibility and variety available allow for higher profit margins.

Innovations in technology have made locations more efficient and

profitable. Consumer demand is still shifting towards a wider variety of

healthier options (which tend to demand a higher price point), and micro

markets remain a driving force for growth. Increased competition

remains as c-stores and restaurants add more snacking options and

customers purchase bulk snacks from dollar and club stores.

A strengthening economy will allow for more disposable income to be

spent on all foodservice, including vending, however the outlook is

moderate as the effects of K-12 meal reform will continue to have a

negative impact on the segment.

The continually-changing foodservice landscape will force the segment to

evolve. Competition will increase from segments such as restaurants and

supermarkets as they grow their snacking options, and rising demand for

healthier and more innovative selections will also add pressure to adapt.

Advancements in technology and the popularity of micro markets will

continue to play a positive role in the segment’s success.

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Catering ON-SITE FOODSERVICE

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PREDICTIONS REFLECTIONS

SOURCE/ESTIMATES BASED ON: Datassential; Special Events Magazine

Company 2014 Estimated # of Events 2014 Estimated Revenue (in millions)

Abigail Kirsch- New York, NY 2,500 $30

A Divine Event- Atlanta, GA 900 $12

A Legendary Event - Atlanta, GA 2,500 $15

Blue Plate - Chicago, IL 7,000 $24

Catering By Michael‘s Family Of Companies - Morton Grove, IL 680 full-service; 7,300 drop-off $12

Culinary Capers - Vancouver, BC ~2,000 staffed events; ~1,500 deliveries $12

Design Cuisine - Arlington, VA 2,500 $24 - $27

Epicurean Culinary Group - Centennial, CO over 1,000 $12 - $15

Great Performances - New York, NY 1,500 - 2,500 $40 - 45

Jewell Events Catering - Chicago, IL 10,000 $20

McCalls Catering & Events - San Francisco, CA 700 to 800 $30

Neuman's - New York, NY 500 to 700 $15

Patina Group Catering - Los Angeles, CA 7,500 to 8,000 $35

Ridgewells - Washington, DC 12,500 $41

Stephen Starr Events - Philadelphia, PA 2,085 $49

Windows Catering Co. - Alexandria, VA 15,000 $22

Wolfgang Puck Catering - Los Angeles, CA 100,000 $150 - $170

LEADING CATERING COMPANIES

1% share of overall

operator spend

Catering has had a strong year and will continue to do well as the

post-recession economy continues to strengthen. Individuals and

businesses are willing and able to spend on events and occasions and

are increasingly using catering firms to plan their events.

Consumers are more educated and interested in current food trends,

and are creating more demand for higher-end dishes reflecting that

knowledge.

The outlook is good for the catering segment as the economy

continues to strengthen, disposable incomes increase, and operators

benefit from continued growth in the culinary workforce.

As other foodservice segments move into catering, like fast casuals and

food trucks, pure caterers will face increased competition and be

expected to expand their offerings. Increasing consumer knowledge and

interest in the food industry and trends will dictate the need for more

innovative and inventive offerings.

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Military ON-SITE FOODSERVICE

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523 locations $1.1 billion operator F&B spend

PREDICTIONS REFLECTIONS

Year Army Navy Marine Corps Air Force Total % Change From

Prior Year

2008 542,565 331,682 198,902 329,078 1,402,227 2.49%

2009 553,326 329,518 204,153 334,671 1,421,668 1.39%

2010 564,926 327,447 202,433 334,561 1,429,367 0.54%

2011 558,571 322,629 200,225 332,724 1,414,149 -1.06%

2012 539,191 317,054 196,024 332,786 1,385,055 -2.06%

2013 519,786 323,529 192,787 330,092 1,366,194 -3.39%

2014 508,210 326,054 187,891 316,332 1,338,487 -2.03%

2015 491,063 321,315 184,688 307,378 1,304,444 -2.54%

US ACTIVE MILITARY PERSONNEL

SOURCE: US Department of Defense; Datassential

1% share of overall

operator spend

The military continues to face long-term budget cuts and troop

reductions. These changes are impacting foodservice operations as

many facilities are seeing decreases in funding and being forced to

increase meal costs. The segment is contracting in the face of these

budgetary shifts.

Up to $1 trillion in military funding is expected to be cut in the next few

years, and the military is preparing for them by consolidating

infrastructure, cutting training, and reducing inefficiencies. In the

future, a reduction of troop levels and proposed smaller wage

increases will also be enacted to account for the budget cuts.

Foodservice is likely to continue to contract as the reduction of

enlisted personnel and the overall size of the military decreases over

the next few years. Meal costs are expected to continue to increase,

and utilization will also likely decrease, further impacting the segment.

Long-term, the military will continue to address spending cuts across all

four services, leading to a reduction in size in the years ahead. Calls for

a cut to the military commissary budget, specifically subsidies, will likely

be renewed. Department of Defense operations will continue to shift

from the Middle East to Asia-Pacific as part of the military ‘rebalancing’

program.

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Year US Europe Former Soviet

Union

East Asia/

Pacific

North Africa/

Near East/

South Asia

Sub-Saharan

Africa

Western

Hemisphere

(excl. US)

Undistributed Total

2007 1,079,599 85,862 149 70,633 5,684 2,500 1,993 121,806 1,368,226

2008 1,118,638 81,582 133 66,750 3,451 1,643 2,039 127,991 1,402,227

2009 1,137,568 77,917 141 47,236 3,362 1,355 1,941 152,148 1,421,668

2010 1,137,716 79,940 162 44,537 5,786 1,731 1,958 157,537 1,429,367

2011 1,217,901 80,370 146 51,170 4,604 509 1,970 57,479 1,414,149

2012 1,199,556 72,198 187 54,025 4,805 489 2,105 39,157 1,372,522

2013 1,194,123 67,383 81 51,929 4,759 334 1,692 33,753 1,354,054

2014 1,148,530 65,356 85 79,794 5,074 371 1,586 4,496 1,305,292

US MILITARY WORLDWIDE DEPLOYMENT

SOURCE: US Department of Defense

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MILITARY STANDARD MEAL RATE PRICES

SOURCE: US Department of Defense

Year Breakfast Lunch Dinner Brunch Supper Holiday Late Snack

2007 $2.00 $3.65 $3.65 $4.20 $5.15 $6.05 $2.35

2008 $2.10 $3.85 $3.85 $4.40 $5.40 $6.35 $2.45

2009 $2.30 $4.25 $4.25 $4.85 $5.95 $7.00 $2.70

2010 $2.30 $4.25 $4.25 $4.85 $5.95 $7.00 $2.70

2011 $2.30 $4.25 $4.25 $4.85 $5.95 $7.00 $2.70

2012 $2.45 $4.55 $4.55 $5.20 $6.40 $7.50 $2.90

2013 $2.50 $4.60 $4.60 $5.25 $6.45 $7.60 $2.95

2014 $2.55 $4.65 $4.65 $5.35 $6.55 $7.70 $3.00

2015 $3.45 $5.55 $4.85 $6.25 $7.50 $9.05 $3.45

MILITARY DISCOUNT MEAL RATE PRICES

Year Breakfast Lunch Dinner Brunch Supper Holiday Late Snack

2007 $1.65 $3.15 $3.15 $3.60 $4.30 $5.15 $2.00

2008 $1.75 $3.30 $3.30 $3.80 $4.50 $5.40 $2.10

2009 $1.95 $3.65 $3.65 $4.20 $4.95 $5.95 $2.30

2010 $1.95 $3.65 $3.65 $4.20 $4.95 $5.95 $2.30

2011 $1.95 $3.65 $3.65 $4.20 $4.95 $5.95 $2.30

2012 $2.10 $3.90 $3.90 $4.50 $5.30 $6.40 $2.45

2013 $2.10 $3.95 $3.95 $4.55 $5.35 $6.45 $2.50

2014 $2.15 $4.00 $4.00 $4.60 $5.45 $6.55 $2.55

2015 $2.60 $4.20 $3.65 $4.70 $5.75 $6.80 $2.80

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Corrections ON-SITE FOODSERVICE

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Overcrowding, political pressures, and government budgetary issues will

continue to be concerns within the corrections segment. Privatization will

remain an option for short-term growth within the segment, however cost-

effectiveness and issues of prisoner welfare will remain and continue to be

a point of contention.

It is yet to be seen how a slow down in declining prisoner population

will impact the segment, however if the trend persists, foodservice will

likely be effected and experience an increase in costs.

PREDICTIONS REFLECTIONS

US PRISON POPULATION

SOURCE/ESTIMATES BASED ON: US Justice Department; Bureau of Justice Statistics; state and municipal reports; Datassential

Corrections has been experiencing a decline over the past few years, and

it appears that the negative trend may be losing some of its momentum.

Foodservice in this segment experienced a very slight increase, and

that could be a reflection of the overall prison population declining less

than in previous years. Troubles still persist for the segment, such as

budgetary shortfalls and reduced funding, however not as severe as in

years prior. Prisons facing these issues tend to see cutting food costs as

a viable option, adding to the challenge for operators in the segment.

Interest in private corrections firms remains high as they tend to have the

funds to build necessary facilities while being cost-efficient.

1% share of overall

operator spend

*Total Incarcerated does NOT include those on parole or probation

187,618 193,046 199,618 201,280 208,118 209,771 216,362 216,900 215,866

1,338,292 1,375,628 1,397,217 1,407,002 1,407,369 1,404,032 1,382,418 1,267,000 1,358,875

747,529 765,819 780,174 785,533 767,434 748,728 735,601 744,524 731,200

2,273,439 2,334,493 2,377,009 2,393,815 2,382,921 2,362,531 2,334,381 2,228,424 2,305,941

-

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

2005 2006 2007 2008 2009 2010 2011 2012 2013

Federal State Local TOTAL

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SOURCE: Bureau of Justice Statistics

PRISON EXPENDITURES

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STATE PRISON EXPENDITURES

Year Federal State Total % Change

2005 $6,624,068 $40,689,366 $47,313,434 3.50%

2006 $6,968,013 $42,720,103 $49,688,116 5.00%

2007 $7,073,146 $46,497,875 $53,571,021 8.80%

2008 $7,501,306 $49,897,531 $57,398,837 7.30%

2009 $8,015,780 $50,382,439 $58,398,219 1.00%

2010 $8,506,439 $48,549,551 $57,055,990 -3.60%

2011 $8,491,819 $49,166,999 $57,658,818 1.3%

2012 $8,978,000 $48,680,649 $26,397,777 -1.0%

Year

Institutional Current Operations Per Capita Expenditures*

Dollars (in billions) % Change From

Prior Year Dollars (mean)

2000 $35.6 2.6% $30,449

2001 $38.3 7.6% $32,459

2002 $38.2 -0.3% $31,588

2003 $37.9 -0.8% $30,949

2004 $36.5 -3.7% $29,376

2005 $35.7 -2.2% $28,263

2006 $36.4 2.0% $28,028

2007 $37.3 2.5% $28,319

2008 $38.0 1.9% $28,722

2009 (preliminary data) $38.6 1.6% $29,270

2010 (projection) $37.3 -3.4% $28,323

* Calculated at national level 107

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DISTRIBUTION & CONTRACT MANAGEMENT FOODSERVICE CONTRACTORS | DISTRIBUTORS

BUYING GROUPS | GPOs

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Foodservice Contractors DISTRIBUTION & CONTRACT MANAGEMENT

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Rank Company 2014 Revenue 2013 Revenue

% Revenue Change Total Contracts

(2014) (in millions) (in millions)

1 Compass Group North America $13,600 $12,800 6% n/a

2 Aramark Corp. $10,232 $9,666 6% 2,656

3 Sodexo, Inc. $8,800 $8,900 -1% n/a

4 Delaware North Companies $2,800 $2,500 12% n/a

5 Centerplate $850 $850 0% 300

6 AVI Foodsystems, Inc. $615 $600 3% n/a

7 Thompson Hospitality $499 $470 6% 170

8 Trusthouse Services Group $498 $474 5% 617

9 Healthcare Services Group, Inc. $447 $391 14% 900

10 Guest Services, Inc. $388 $378 3% 108

11 Ovations Food Services, LP $341 $286 19% 140

12 Guckenheimer Enterprises, Inc. $298 $239 25% 170

13 Legends Hospitality $275(e) $250(e) 10%(e) 15(e)

14 Unidine Corp. $249 $197 26% 190

15 CulinArt, Inc. $242 $211 15% 202

16 Metz Culinary Management $201 $162 24% 207

17 Gourmet Services, Inc. $200(e) $200(e) 0%(e) 20(e)

18 Southwest Foodservice Excellence $169 $145 17% 92

19 Whitsons Culinary Group $165 $160 3% 214

20 Parkhurst Dining $155 $132 17% 53

21 Nutrition Group $123 $102 21% 450

22 Treat America, Ltd. $111 $121 -8% 2,600

23 Taher, Inc. $110 $110 0% 241

24 Thomas Cuisine Management $104 $90 16% 70

25 Cura Hospitality $101 $95 7% 57

SOURCE: Food Management

LEADING CONTRACT MANAGEMENT COMPANIES 1-25 F

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SOURCE: Food Management

LEADING CONTRACT MANAGEMENT COMPANIES 26-50 F

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Rank Company 2014 Revenue 2013 Revenue

% Revenue Change Total Contracts

(2014) (in millions) (in millions)

26 Continental Services $84 $74 14% 240

27 Revolution Foods $80(e) $70(e) 14%(e) n/a

28 Southern Foodservice $79 $73 8% 78

29 Creative Dining Services $74 $69 7% 68

30 MMI Dining Systems $72 $69 4% 156

31 LPM Affiliated Companies dba Epicurean Feast $63 $61 3% 101

32 Pomptonian Food Service $62 $67 -8% 80

33 Lessing's Food Service Management $55(e) $55 0%(e) 80(e)

34 ABM Healthcare Support Services $55 $54 2% 26

35 Lancer Hospitality $53 $49 8% n/a

36 Epicurean Group $46 $40 15% 51

37 Food Management Group, Inc. $44 $42 5% 178

38 Cafe Services, Inc. $39 $34 16% 143

39 Sterling Spoon Culinary Management $39 $37 5% 17

40 HHS Culinary & Nutrition Solutions $39 $25 56% 27

41 Lakeview Center, Inc. dba Gulf Coast Enterprises $38 $40 -5% 17

42 Corporate Chefs, Inc. $35 $38 -8% 70

43 Brock & Co., Inc. $34 $33 3% 56

44 Prince Food Systems, Inc. $34 $38 -11% 46

45 Quest Food Management $32 $26 23% 58

46 Food For Thought $30 $28 7% 20+

47 Luby's Culinary Services $28 $28 0% 37

48 Food Services, Inc. $28 $25 12% 25

49 Lintons Managed Services $25 $22 14% 92

50 RMA Hospitality Management $24 $24 0% 33

NOTE: Companies followed by a (e) include estimates from Food Management

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SOURCE: Food Management

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CHANNEL BREAKDOWN OF TOP 10 FSM COMPANIES

B&I Education Healthcare Sports

/Leisure Military

Senior

Living Other Notes

Compass Group

North America 29% 24% 29% 15% 3%

Notable Subsidiaries-

Bon Appétit – B&I, education

Canteen- B&I

Eurest- B&I

FLIK- Education

Restaurant Associates - Hospitality, B&I

Levy Restaurants- Sports & Entertainment

Aramark Corp. 22% 37% 20% 22%* * includes Corrections

Sodexo, Inc. 47%* 24% 4% 1%* *47% (C&U 38%, K-12 9%) *Other 1%-

Recreation/ Convention/conference centers

Delaware North

Companies 3% 71%* 26%*

*71% (stadiums/arenas 53%, Parks and Rec

11%, Gaming 5%, Museums/ Performance

arts 3%) *Other 26%-Airports

Centerplate 88%* 12% * 88% (stadiums/arenas 48%,

Convention/conference centers 33%,

Museums/Performance arts 7%)

AVI

Foodsystems,

Inc.

47% 21% 3%* 2% 3%*

*3% S&L (Convention/conference centers 2%,

stadiums/arenas 1%, museums/performance

arts center 1%) *3% Other (Govt. 1%,

Transportation 2%)

Thompson

Hospitality 38% 43%* 9% 10% * 43% (C&U 31%, K-12 12%)

Trusthouse

Services Group 5% 30%* 5% 47% 13% *30% (C&U 18%, K-12 12%)

Healthcare

Services Group,

Inc.

100%

Guest Services,

Inc. 50% 15%* 8% 1% 25%*

* 15 S&L (Parks & Rec 10%,

Museum/Performance arts center 5%) *25%

Other(Government)

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COMPASS GROUP NORTH

AMERICA – REVENUE BREAKDOWN

SOURCE: Food Management

ARAMARK CORP – REVENUE BREAKDOWN

SODEXO – REVENUE

BREAKDOWN

DELAWARE NORTH –

REVENUE BREAKDOWN

CENTERPLATE –

REVENUE BREAKDOWN

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29%

24%

29%

15%

3%

B&I

Education

Healthcare

Sports/leisure

Military

22%

37%

20%

22%

B&I

Education

Healthcare

Sports/leisure

38%

9%

24%

4%

C&U K-12

Healthcare Military

3%

53% 26%

11%

5%

3%

B&I

Stadiums/Arenas

Arirports

Parks & Rec

Gaming

Museums/Performance Art

48%

33%

7%

12%

Stadiums/Arenas

Convention/conference centers

Museums/Performance Art

Other

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NOTABLE US CLIENTS (no specific order)

SOURCE: Compass Group, Aramark, Sodexo, Delaware North, Centerplate, AVI Foodsystems, Guest Services

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Compass Group

North America Aramark Corp. Sodexo, Inc.

Delaware North

Companies Centerplate

AVI

Foodsystems,

Inc.

Guest Services,

Inc.

Microsoft Soldier Field

Chicago

Botanical

Gardens

Grand Canyon

National Park Levi's Stadiums Xerox Boeing (VA)

IBM Fenway Park Seattle Aquarium Lambeau Field Saks 5th Avenue Ford Motor

Company

Northrop

Grumman

(Baltimore)

United

Technology

MGM Grand,

Vegas Nokia

LAX Airport, Los

Angeles

Cobo Center,

Detroit GM

United States

Nuclear

Regulatory

Commission

(Rockville,

Maryland)

US Marine Corps Olympic National

Park, WA

Glaxo Smith

Kline

Food Network

Kitchen, NYC Sun Life Stadium Ohio State

Office of Naval

Intelligence

Louisiana State

University Cleveland Zoo

International

Monetary Fund

(IMF)

Kennedy Space

Center

New Orleans

Convention

Center

Starbucks Pfeiffer Big Sur

Lodge (California)

Texas A&M Experience Music

Project, Seattle US Air Force

Yosemite

National Park Safeco Field Subway

Mount Rainier

National Park

(WA)

DC Public

Schools

Denali National

Park, AK

Exxon Mobil

(offshore drilling

locations)

Niagara Falls

State Park AT&T Park Verizon

The Marbella

(Naples, FL)

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NOTEWORTHY NEWS

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“Aramark Awarded Yosemite National Park

Concession Contract” – June 17th, 2015;

National Parks Traveller.com

The National Park Service today announced the selection of an Aramark subsidiary, Yosemite Hospitality, LLC, as the primary concessionaire for Yosemite National Park. Yosemite Hospitality will provide retail, overnight accommodations, fuel sales, bike and raft rentals, and food and beverage to park visitors for the next fifteen years. It is the single largest concession contract in the national park system, and will take effect on March 1, 2016.

“Compass, Bon Appetit Announce "Imperfect

Produce" Recovery Program” – March 20th, 2015;

FoodManagement.com

Compass Group USA and its Bon Appetit Management Co. unit have announced the launch of Imperfectly Delicious Produce (IDP), an initiative aimed at using fruits and vegetables that have traditionally been left in fields to rot because they are of less than required size or shape.

“Sodexo Lands U.S. House of Representatives

Contract” – June 9th, 2015;

Food Management.com

Sodexo has been awarded a four-year contract with the U.S. House of Representatives starting August 10, 2015 that includes management of food service operations for all House cafeterias, catering services and vending machines. Sodexo replaces the previous operator, Restaurant Associates, which continues to provide food service to the U.S. Senate and the U.S. Capitol Visitor Center.

“Sodexo’s Food Truck Concept Rolls into Rock Hill Schools” – February 17th, 2015; Food Management

It’s hard to get teens to take school meals seriously even if they are on closed campuses. The coolness factor associated with food trucks seems to be a good way to put a dent in that mindset and Sodexo is giving it the old high school try with a truck concept called Street Eatz. The mobile eatery is being piloted at a number of client locations, including Rock Hill (S.C.) Schools, where the vehicle—actually a trailer towed behind a catering van—is rotating weekly through the district’s three high schools with different daily menus that are distinct from what is being served in the cafeteria.

“Delaware North Reshuffles Top Management”- January 7th, 2015;

FoodManagement.com Delaware North Chairman Jeremy Jacobs, Sr., has announced that his sons, Louis and Jeremy, Jr., will succeed him as co-CEOs of the company while a third son, Charlie, will become CEO for Delaware North’s Boston Holdings unit.

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Distributors DISTRIBUTION & CONTRACT MANAGEMENT

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Broadline System Specialty Redistributor Cash & Carry

Delivery Direct to

Operators

Direct to

Operators

Direct to

Operators

Direct to

Distributors None

Products

Large Variety,

Multiple

Categories

Limited Variety,

Client Specific

Limited Selection,

Category Specific

Limited Variety,

Category Specific Large Variety

Accessibility Most Operators Chains,

Multi-Units Most Operators Most Distributors

Independent

Operators

Service DSR Account Mgr,

Online DSR, CSR DSR, CSR In-Store Only

Pricing /

Margin

Higher,

Street

Low,

Contract

Higher,

Street ------ High

SOURCE: Datassential

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DISTRIBUTOR SUMMARY

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Company Markets Served

SYSCO Corporation C-Store, Institutional Accounts, Restaurants

US Foods Inc. Institutional Accounts, Restaurants

Performance Food Group Institutional Accounts, Restaurants

Reinhart FoodService LLC C-Store, Groceries, Institutional Accounts, Restaurants

Food Services of America Institutional Accounts, Restaurants

Maines Paper & Food Service Inc. C-Store, Institutional Accounts, Restaurants

Gordon Food Service Inc. C-Store, Discount Stores, Institutional Accounts, Restaurants

Ben E. Keith Foods Institutional Accounts, Restaurants

Sherwood Food Distributors C-Store, Discount Stores, Grocery, Institutional Accounts Restaurants

Affiliated Foods Inc. C-Store, Discount Stores, Drug Stores, Grocery, Institutional Accounts Restaurants

AMCON Distributing C-Store, Discount Stores, Drug Stores, Grocery, Institutional Accounts, Restaurants

Cheney Brothers, Inc. Institutional Accounts, Restaurants

Labatt Food Service Institutional Accounts, Restaurants

J. Polep Distribution Foodservice C-Store, Discount Stores, Drug Stores, Grocery, Institutional Accounts, Restaurants

Liberty USA Inc. C-Store, Discount Stores, Drug Stores, Grocery, Institutional Accounts, Restaurants

Agar Supply Company C-Store, Grocery, Institutional Accounts, Restaurants

Anderson-DuBose Restaurants

Perkins C-Store, Grocery, Institutional Accounts, Restaurants

Nicholas & Co C-Store, Grocery, Institutional Accounts, Restaurants

Pitco Foods C-Store, Discount Stores, Drug Stores, Grocery, Institutional Accounts, Restaurants

General Trading Co Inc. C-Store, Discount Stores, Drug Stores, Grocery, Institutional Accounts, Restaurants

Doerle Foodservices LLC C-Store, Institutional Accounts, Restaurants

Southco Distributing Co. C-Store, Discount Stores, Drug Stores, Grocery, Institutional Accounts, Restaurants

Lipari Foods Inc. C-Store, Grocery, Institutional Accounts, Restaurants

Pate Dawson Co Institutional Accounts, Restaurants

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LEADING BROADLINE DISTRIBUTORS

SOURCE: Chain Store Guide

*Note- sorted by size according to Chain Store Guide size estimates

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Company Markets Served

Martin Brothers Distribution C-Store, Grocery, Institutional Accounts, Restaurants

BiRite Foodservice Institutional Accounts, Restaurants

Curtze Foodservice Institutional Accounts, Restaurants

C.D. Hartnett Company C-Store, Discount Stores, Grocery, Institutional Accounts, Restaurants

Sofo Foods C-Store, Discount Stores, Institutional Accounts, Restaurants

Feesers C-Store, Grocery, Institutional Accounts, Restaurants

Topicz C-Store, Grocery

Allen Bros. Wholesale Distributors C-Store, Discount Stores, Drug Stores, Grocery, Institutional Accounts, Restaurants

Glazier Foods C-Store, Grocery, Institutional Accounts, Restaurants

Y. Hata & Co. C-Store, Grocery, Discount Stores, Institutional Accounts, Restaurants

Van Eerden Foodservice Co C-Store, Institutional Accounts, Restaurants

Dierks Waukesha C-Store, Grocery, Institutional Accounts, Restaurants

Goldberg and Solovy Foods Institutional Accounts, Restaurants

City Line Distributors Institutional Accounts, Restaurants

Costa Fruit & Produce Co. C-Store, Grocery, Institutional Accounts, Restaurants

DiCarlo Food Service C-Store, Grocery, Institutional Accounts, Restaurants

J. Kings Food Service Professionals Institutional Accounts, Restaurants

Jordano's Institutional Accounts, Restaurants

Pocono Produce Co. Institutional Accounts, Restaurants

Jose Santiago C-Store, Institutional Accounts, Restaurants

HFM FoodService C-Store, Institutional Accounts, Restaurants

Clark National C-Store, Grocery, Institutional Accounts, Restaurants

Jacmar Foodservice Distribution Restaurants

Shamrock Foods Co. Institutional Accounts, Restaurants

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LEADING BROADLINE DISTRIBUTORS (CONT.)

SOURCE: Chain Store Guide

*Note- sorted by size according to Chain Store Guide size estimates

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LEADING SYSTEM DISTRIBUTORS

LEADING SPECIALTY DISTRIBUTORS

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Company Markets Served

MBM Restaurants

McLane C-Store, Discount Stores, Drug Stores, Grocery, Restaurants

Martin Brower Restaurants

Golden State Foods Restaurants

Sygma Network Restaurants

PFG- Customized Support Services Restaurants

System Services of America Restaurants

Company Markets Served

United Natural Foods Inc. C-Store, Discount Stores, Drug Stores, Grocery, Institutional Accounts

VISTAR Specialty C-Store, Grocery, Institutional Accounts, Restaurants

DPI Specialty Foods Inc. Grocery stores

AJC International Grocery, Discount Stores, Institutional Accounts, Restaurants

FreshPoint Institutional Accounts, Restaurants

Don Institutional Accounts, Restaurants

True World Foods C-Store, Grocery, Restaurants

European imports Grocery, Institutional Accounts, Restaurants

SOURCE: Chain Store Guide

*Note- sorted by size according to Chain Store Guide size estimates

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LEADING CLUB STORES and CASH & CARRY

Company Open to the

Public Markets Served

Restaurant Depot/Jetro No Restaurant Depot- Restaurants

Jetro- C-Store, Discount Stores, Drug Stores, Grocery, Institutional Accounts,

Costco Yes C-Store, Discount Stores, Drug Stores, Grocery, Institutional Accounts, Restaurants

Sam's Club Yes C-Store, Discount Stores, Drug Stores, Grocery, Institutional Accounts, Restaurants

BJ's Yes C-Store, Grocery, Institutional Accounts, Restaurants

GFS Marketplace Yes C-Store, Institutional Accounts, Restaurants

Merchant's Mart Yes C-Store, Institutional Accounts, Restaurants

US Foods Chef's Store Yes C-Store, Grocery, Institutional Accounts, Restaurants

Smart & Final Yes C-Store, Grocery, Institutional Accounts, Restaurants

Pitco Foods No C-Store, Discount Stores, Drug Stores, Grocery, Institutional Accounts, Restaurants

LEADING RE-DISTRIBUTORS

Company Markets Served

Bunzl C-Store, Discount Stores, Drug Stores, Grocery, Institutional Accounts

DOT C-Store, Grocery, Institutional Accounts, Restaurants

Burris Logistics Institutional Accounts, Restaurants

Honor Foods Institutional Accounts, Restaurants

R3 C-Store, Discount Stores, Drug Stores, Grocery, Institutional Accounts

TSN C-Store, Discount Stores, Drug Stores, Grocery, Institutional Accounts

SOURCE: Chain Store Guide

*Note- sorted by size according to Chain Store Guide size estimates

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66%

8%

6%

5%

6%

9%

Broadline Distributors

Specialty Distributors

Cash & Carry

Warehouse/ Clubs

Direct from Manufacturers

Other

91%

42%

40%

32%

31%

30%

24%

11%

8%

Broadline distributors

Specialty distributors

Direct from manufacturers

Cash & carry stores

Supermarket / grocerystores

Warehouse / club stores

Local farms

Direct through food brokers

Third party websites NOTfrom distributors

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SOURCE: Datassential PULSE

% OF OPERATORS WHO BUY FROM SHARE OF TOTAL PURCHASES

n=1076

QF1: Thinking specifically of the orders you place THROUGH YOUR PRIMARY DISTRIBUTOR, please indicate what percent of your orders are placed using the following methods.

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68%

40%

36%

29%

18%

15%

15%

14%

12%

6%

Broadline distributors

Direct from manufacturers

Local farms

Specialty distributors

Warehouse / club stores

Cash & carry stores - in person

Cash & carry stores - delivery

Direct through food brokers

Supermarket / grocery stores

Third party websites NOT from distributors

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QF3: In general, how appealing is each of the following sources for food & beverage purchases in your operation? (top-box; 3-point scale)

SOURCE: Datassential PULSE

n=1076

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Buying Groups DISTRIBUTION & CONTRACT MANAGEMENT

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SOURCE: Company websites, Bloomberg Snapshot

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Company About Members Regional Brands

Distribution

Market

Advantage

Distribution Market Advantage, Inc. provides

foodservice supply chain solutions for multi unit

restaurant and institutional operators throughout the

United States and Canada. The company engages

as a national foodservice distribution system with

regional foodservice distributors as shareholders.

Distribution Market Advantage, Inc. was formerly

known as Distributor Marketing Alliance, Inc. and

changed its name to Distribution Market Advantage,

Inc. in January, 1999. The company was founded in

1988 and is based in Schaumburg, Illinois.

Ben E. Keith

Gordon Food Service

HPC Food Service

Jacmar

Maines Paper & Food Service

Nicholas & Company

Reinhart Food Service

Shamrock Foods Services

Group of America

None of their own, but they work with many

large nationals including Coca Cola, DOT,

and General Mills

Federated

Foodservice

The Federate Group, Inc. is a buying group

engaging in sourcing, quality assurance, supply

chain, private branding, and marketing operations. It

serves as a buying group for various foodservice

channels providing sales support and access to

brand suppliers. The company also specializes in

brokerage, management, and ownership of private

brands in grocery departments, as well as providing

brand development services such as: in-depth

analytics, pre-qualified supplier base, packaging

design, product lifecycle management process,

logistics consolidation, label procurement, and

inventory management.

The company serves food

retailers, wholesalers, and

distributors.

Seven Farms, Fine Fare, Royal Classics,

Hy-Top,Parade, Red & White, Cuddle Ups,

Better Valu, Valu Check'd, Save-it

Independent

Marketing

Alliance

IMA companies operate 55 distribution centers

serving all of the 48 contiguous U. S. states and

Alaska as well as parts of the Caribbean and

Europe and have combined trade sales of over $15

billion. They provide procurement and marketing

services to foodservice distributors and are

headquartered in Houston, Texas.

Food Services of America (FSA)

Maines Paper & Food Service

Merchants Food Service

Nicholas & Company

Reinhart Food Service

Shamrock Foods Company

Bountiful Harvest, Brickfire Bakery, Chef

Mark, Cobblestreet Market, Culinary

Secrets, EverFry, EverLight, EverRich,

Hidden Bay, !Intros!, Katy’s Kitchen, Lotus

Garden, Pierport Seafood, Prairie Creek

Packing, ProPak, ProPower, ProWare,

Ridgeline Coffee Roasters, Rejuv, San

Pablo, SilverBrook, Smart Source, Southern

Pearl, Trescerro, Trifoglio, Villa Frizzoni,

Windscapes

LEADING BUYING GROUPS

*Note- sorted in alphabetical order

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G G

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Company About Members Regional Brands

Markon

Cooperative

Markon Cooperative, Inc. procures, delivers, and

markets fresh produce primarily for Markon

members and their foodservice customers in North

America. It offers fresh fruits and vegetables. The

company was founded in 1985 and is based in

Salinas, California and consists of seven

independent, broadline foodservice companies in

the U.S. and Canada.

Ben E. Keith Foods

Gordon Food Service Canada

Gordon Food Service USA

Maines Paper & Food Service

Nicholas & Company

Reinhart Foodservice

Shamrock Foods Company

Markon First Crop, Markon Essentials,

Ready-Set-Serve

Pro*Act

PRO*ACT is more than 50 members strong and

their collective power totals 71 distribution centers,

3.5 million square feet of warehouse space, 1,950

distribution trucks, and 2.6 million miles of coast-to-

coast distribution

50 local distributors from across

the country None

UniPro

Foodservice

Multi-Unit Group

(MUG)

UniPro Foodservice, Inc., has over 900 distribution

locations serving over 800,000 customers across

the United States and Internationally. The member

companies represent more than $60 billion in annual

sales revenues. UniPro Foodservice, Inc., is

headquartered in Atlanta, Georgia, with a sales

office in Oshkosh, Wisconsin.

Approximately 800 distributors

are members including large

national and regional companies

All Kitchens, Code, ComSource, Emerald

Club, Nifda, Nugget Brand, Plee-zing,

Pochahontas, World Horizons, BuonAmici,

Companions, Cortona, Gourmates, Gourmet

Table, Harvest Gold, Legacy, Ocean

Horizons, Premium Recipe, Reflections,

LEADING BUYING GROUPS

SOURCE: Company websites, Bloomberg Snapshot

*Note- sorted in alphabetical order

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GPOs DISTRIBUTION & CONTRACT MANAGEMENT

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1%

1%

1%

2%

2%

2%

2%

2%

3%

3%

4%

6%

11%

14%

22%

BuyEfficient

DSSI

MHA

HPSI

Dining Alliance

UFPC

MedAssets

UHF Purchasing

HPSI

Amerinet

Avendra

Novation

Entegra

FoodBuy

Premier

n=410

TOP GPO MEMBERSHIP

SOURCE: Datassential GPO Keynote 2012

OPERATOR REASONS FOR JOINING A GPO

For cost savings 77%

The need we had to streamline costs to keep

business viable 41%

There was little to no cost involved

in joining the GPO 35%

GPO has a good reputation 34%

The larger organization had joined the GPO for

savings in other lines of business

(healthcare/hospitality)

30%

Several peers were joining / highly peer

recommended 20%

Seeing how easy it would be to order from the GPO 18%

The knowledge and professionalism of the GPO

sales rep 17%

Was curious if the GPO could be better for my

business than other ways of ordering 13%

The guarantee made by the GPO rep that if not

satisfied, we could drop the membership 13%

Thought they would give me more personalized

service 7%

QA8A: Which GPO or GPOs do you currently work with?

GP

Os

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GP

Os

39%

GPO

Membership

All

Segments

RESTAURANT ON-SITE FOODSERVICE

Total QSR Midscale Casual

Dining

Upper

Casual /

Fine Dine

Total C&U Lodging K-12 Hospital LT Care B&I

Yes 17% 9% 11% 8% 7% 10% 40% 39% 21% 39% 74% 54% 7%

No 73% 81% 74% 87% 88% 83% 50% 55% 67% 52% 21% 38% 68%

Not Sure 10% 9% 14% 6% 5% 7% 10% 6% 11% 9% 5% 8% 24%

GPO MEMBERSHIP BY SEGMENT

GPO AWARENESS BY SEGMENT

GPO

Awareness

All

Segments

RESTAURANT ON-SITE FOODSERVICE

Total QSR Midscale Casual

Dining

Upper

Casual /

Fine Dine

Total C&U Lodging K-12 Hospital LT Care B&I

Very familiar 11% 8% 3% 16% 7% 11% 14% 12% 14% 14% 22% 15% 13%

Somewhat

familiar 43% 40% 37% 45% 37% 44% 46% 59% 44% 49% 43% 55% 28%

Not very

familiar 47% 52% 60% 38% 57% 44% 39% 29% 42% 37% 35% 30% 59%

SOURCE: Datassential GPO Keynote 2012 129

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GPO SERVICES OFFERED

11%

6%

9%

14%

36%

38%

39%

41%

45%

57%

None of the above

Advertising services

Payroll/Accounting services

Marketing services

Information on trends

Product recommendations

Cost reviews/savings recommendations

Upfront discounts on goods ordered

New products info

Rebates

GPO: $ VOLUME MINIMUM REQUIREMENTS

40%

21%

13%

6%

$250k+/year $500k+/year $1mil+/year $2mil+/year

SOURCE: Datassential GPO Keynote 2012

GP

Os

2%

20%

35%

19%

12%

6%

2%

2%

1%

0%

1%

0%

0.1% to 5%

5% to 10%

10% to 15%

15% to 20%

20% to 25%

25% to 30%

30% to 35%

35% to 40%

40% to 45%

More than 45%

GPO MEMBER OPERATOR SAVINGS

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SOURCE: Datassential GPO Keynote 2012, Company websites

GP

Os

PREMIER

(CHARLOTTE, NC)

SELECT GPO PROFILES

Premier has close to $41 billion in purchase

volume overall, with $2.5 billion in member

foodservice purchases. They work in the

healthcare segment, serving more than 3,000

U.S. hospitals and 110,000-plus other healthcare

sites. The company has 1,100 suppliers and

nearly 2,000 contracts – including both

foodservice and other products. There are

numerous sub-groups under the Premier

umbrella, including Champs and Innovatix.

FOODBUY

(ATLANTA, GA) FoodBuy is the largest foodservice procurement

organization in North America and purchases

about $10 billion annually. They work with over

520 manufacturers and distributors and have 2.7

million unique items available. FoodBuy began in

1999 as the sourcing partner for Compass, but

today they work with a variety of members in

healthcare, hospitality, leisure, entertainment,

restaurants, and other segments.

ENTEGRA

(GAITHERSBURG, MD) Entegra purchases over $5 billion annually for

over 30,000 members in the acute care, seniors,

leisure, hospitality and restaurant industries.

Founded in 1999 as a procurement management

company for the healthcare industry, today

Entegra is a subsidiary of Sodexo and works

across segments beyond healthcare.

NOVATION

(IRVING, TX) Novation has over $40 billion in annual

purchasing for the healthcare segment and over

100,000 members. They have what they claim is

the “broadest, most comprehensive contract

portfolio in the industry”, including agreements

with 600 suppliers and distributors that cover

90% of the products health care organizations

could purchase. They have made numerous

acquisitions in recent years, including

Provista/HPPI and Summa.

AVENDRA

(ROCKVILLE, MD) Avendra buys over $3.5 billion in food and

beverages annually and says they offer their

members double-digit savings on everything

from “luxury foods to everyday necessities”.

They have nearly 5,000 members in the

hospitality and education segments. They offer

solutions outside of their purchasing partnership

with approximately 800 suppliers, including

menu management, labor cost management,

quality assurance, custom contracting, and

purchasing information analysis.

AMERINET

(ST. LOUIS, MO) AmeriNet had nearly 9 billion in purchases (both

food and other products) in 2012 and they

estimate that they saved their members nearly

$1.2 billion in 2012. They have seen 11% growth

between 2011 and 2012 and currently have

nearly 64,000 members in the healthcare

segment.

AXIS PURCHASING

(PURCELLVILLE, VA) Axis purchases over $12 billion in foodservice

annually for their members in education, lodging,

multi-unit restaurants, and contract catering. The

company works with 350 manufacturers and has

over 100,000 pre-negotiated deals on specific

products.

BUYEFFICIENT

(DALLAS, TX) BuyEfficient is focused on purchasing for the

hospitality segment with 1275 Member hotels

representing over 25 leading hotel brands

including Marriott, Hilton, Choice, and others.

OTHERS:

Note: There are other types of organizations that

serve many of the same functions as a GPO, but

were not profiled here, including:

• Chain-specific purchasing companies

• Many K-12 schools and school districts

• Government agencies

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APPENDIX

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Definitions APPENDIX

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CHANNELS

CHANNEL & SEGMENT DEFINITIONS

SEGMENTS

OCASSIONS

SE

GM

EN

T D

EF

INIT

ION

S

KE

Y D

EF

INIT

ION

S

KEY DEFINITIONS

Channels are groups of foodservice operators who have similar businesses. There are three channels: 1) restaurants, 2) retail food, and 3) on-site foodservice. These three channels make up all of foodservice and each channel has multiple subgroups referred to as segments.

Segments are the smallest groupings of foodservice operators and businesses within each group that are similar The segments discussed in this report include: limited service restaurants, full service restaurants, supermarkets, convenience stores, other retailers, K-12, college & universities, business & industry, recreation, lodging, transportation, hospitals, Long Term Care, senior living, vending, catering, military, and corrections.

The scenarios for which consumers eat and drink away from home. Occasions describe the underlying motivators for away-from-home activity and decisions.

EATER TYPES

Eater types are categories of consumers which are grouped by how and why they eat away-from-home. There are four attitudinal segments that define the spectrum of away-from-home consumers (with two sub-groups for a total of six possible eater types). Looking at eater types can help the foodservice industry to better understand their consumers.

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GM

EN

T D

EF

INIT

ION

S

LIMITED

SERVICE

RESTAURANTS

CHANNEL & SEGMENT DEFINITIONS S

EG

ME

NT

DE

FIN

ITIO

NS

FULL SERVICE

RESTAURANTS

RESTAURANTS

Traditional Quick Service Order and pay at counter with a check average of under $8 per person.

McDonald’s Subway Domino’s

Fast Casual Order at counter, staff brings food or calls when food is ready with a check average of approximately $8 or more per person.

Panera Chipotle Five Guys

Midscale Dining

Wait staff takes order and delivers food with an average check of less than $12 per person; typically does not serve/offer alcohol. Buffet service is also included within this segment.

IHOP Denny’s Old Town Buffet

Casual Dining Wait staff takes order and delivers food with an average check of approximately $12 to $20 per person; typically serves/offers alcohol.

Applebee’s Olive Garden TGI Friday’s

Upper Casual Dining Wait staff takes order and delivers food with an average check of $20 to $30.

Cheesecake Factory PF Chang’s Houston’s

Fine Dining Wait staff takes order and delivers food with an average entrée more than $25; includes both traditional (white tablecloth) and modern fine dining.

Ruth’s Chris Morton’s Roy’s

SEGMENT HALLMARKS EXAMPLES

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SUPERMARKETS

CHANNEL & SEGMENT DEFINITIONS

CONVENIENCE

STORES

OTHER RETAIL

SE

GM

EN

T D

EF

INIT

ION

S

SE

GM

EN

T D

EF

INIT

ION

S

RETAIL FOOD

Includes hot and cold prepared foods and beverages from the deli area and the in-store bakery. Excludes bulk meats and cheeses sold at the deli counter. Estimates based on Nielsen Perishables Group FreshFacts Data and other secondary sources.

Includes hot and cold prepared foods and beverages. Estimates based on NPD Group’s CREST service based on projected customer traffic and check average for both meals and beverage-only occasions within the C-Store segment.

Includes hot and cold prepared foods and beverages sold at Mass Merchandisers (Target, Wal-Mart, etc.), Department Stores, Warehouse/Club Stores, Drug Stores, and other Specialty Retailers. Total based on food and beverage sales estimates compiled from NRN, Stores.org and Datassential.

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K-12

CHANNEL & SEGMENT DEFINITIONS

COLLEGES &

UNIVERSITIES

BUSINESS &

INDUSTRY

RECREATION

LODGING

SE

GM

EN

T D

EF

INIT

ION

S

SE

GM

EN

T D

EF

INIT

ION

S

ON-SITE FOODSERVICE Includes public and private/parochial schools. Estimates based on data compiled from the US Department of Education/National Center for Education Statistics, Foodservice Director and Datassential.

Includes technical/trade, 2 year and 4 year institutions. Estimates based on data compiled from the US Department of Education, Foodservice Director and Datassential.

Includes blue collar and white collar cafeterias/dining facilities. Estimates based on data compiled from the US Census Bureau, Foodservice Director, Food Management and Datassential.

Includes state and national parks, amusement parks, museums and historical sites, zoos and botanical gardens, golf clubs, country clubs, private clubs, cruise lines, casinos without hotels/accommodations, stadiums/arenas/sports venues, ski and snowboard resorts, movies theaters/complexes and bowling alleys/centers. Estimates compiled from numerous sources, trade associations and trade publications including but not limited to: US Census Bureau, National Park Service, National Association of State Park Directors, International Association of Amusement Parks and Attractions, Cruise Lines International Association and Datassential.

Includes all types of lodging establishments and casinos with hotels/accommodations. Estimates based on data compiled from Smith Travel Research, the American Gaming Association and Datassential.

TRANSPORTATION

Includes airports, train stations, bus stations, all airlines flying in to and out of the United States, Amtrak and passenger ferry services. Estimates based on data compiled from the Bureau of Transportation Statistics, US Department of Transportation, Amtrak, US Census Bureau and Datassential.

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HOSPITALS

Long Term Care

VENDING

CATERING

MILITARY

CORRECTIONS

SE

GM

EN

T D

EF

INIT

ION

S

SE

GM

EN

T D

EF

INIT

ION

S

ON-SITE FOODSERVICE Includes patient feeding, employee feeding, visitor meals, and catering operations at institutions that provide acute care, patient services- diagnostic and therapeutic, for particular or general medical conditions over the short-term. Estimates based on data compiled from the American Hospital Association, Foodservice Director and Datassential.

Includes assisted care facilities and Long Term Care facilities. Estimates based on data compiled from the American Health Care Association, the American Senior Housing Association and Datassential.

Includes food and beverages sold through automatic vending machines, excludes cigarettes and non-food items. Estimates based on data from Vending Times, Vending Market Watch.com and Datassential.

Includes establishments that primarily provide event-based food services and that may transport meals to events and/or prepare meals off-site. This also includes banquet halls with catering staff. Estimates based on data from the US Census Bureau and Datassential.

Includes U.S. domestic and global installations. Estimates compiled from numerous sources including the US Department of Defense.

Includes youth, municipal/local, county, state and federal facilities. Estimates compiled from numerous sources including the US Justice Department, state and municipal reports and foodservice management company reports.

SENIOR LIVING Includes senior living centers and communities. Estimates based on data compiled from the American Health Care Association, the American Senior Housing Association and Datassential.

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Economic Overview APPENDIX

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NOTEWORTHY NEWS

Fine Dining Growth Outpaces other Sectors

“House Votes to Change Full-time Definition to 40-hour Week”- January 8th, 2015;

Supermarket News.com The House of Representatives passed a bill to change the definition of a full-time employee under the Affordable Care Act to one who works 40 hours per week, rather than 30 hours per week. The bill passed by a vote of 252-172.

“Avian Influenza Epidemic Spurs Nationwide Rise in Egg Prices”- May 30th, 2015; LA Times

The U.S. Department of Agriculture has reported three deadly flu strains in poultry flocks totaling more than 43 million birds in 15 states since mid-December. In Iowa alone, the outbreak at commercial farms has led to the loss of nearly 30 million chickens, or nearly 10% of the nation's egg-laying hens. "This is a devastation unlike any other in the history of our industry," said Chad Gregory, chief executive of United Egg Producers.

“Supreme Court Allows Nationwide Health Care Subsidies”- June 25th, 2015; The New York Times The Supreme Court ruled on Thursday that President Obama’s health care law allows the federal government to provide nationwide tax subsidies to help poor and middle-class people buy health insurance, a sweeping vindication that endorsed the larger purpose of Mr. Obama’s signature legislative achievement. The 6-to-3 ruling means that it is all but certain that the Affordable Care Act will survive after Mr. Obama leaves office in 2017.

“USDA To Certify Non-GMO Foods With New Label” – May 15th, 2015; NPR

Companies that want to use the USDA's Non-GMO Label will pay to participate in the Process Verified Program. As this issue gains traction with consumers, lots of Americans are wary of GMO foods. And more are just flat out confused about what they are, where they are in the food supply and whether they're dangerous. There is no evidence, by the way, that eating genetically-modified foods poses a threat to health. But, out of precaution, it seems, more consumers are avoiding them.

6

CONSUMERS SAY

“Consumer Confidence Index Rises to 101.4 in June, Solid Gain Pointing to Future Growth”

- June 30th, 2015; USNews.com Consumer confidence showed a solid gain in June following a modest increase in May, supporting the view that strong job gains are giving a boost to the overall economy. The index is now 17.4 percent higher than it was a year ago, evidence that the economy is poised to enjoy stronger growth in coming months.

“U.S. food distributor Sysco drops plan to merge with US Foods”- June 29th, 2015; Reuters Sysco Corp, the biggest U.S. food distribution company, dropped plans to merge with US Foods, its biggest rival, Sysco said on Monday. Cancellation of the deal means Sysco will have to pay a $300 million break-up fee to US Foods and another $12.5 million to a second company, which had agreed to buy 11 facilities that Sysco hoped to sell in order to satisfy U.S. antitrust regulators.

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Year CPI-U* CPI-

Food-at-Home

CPI- Food-Away-

from-Home Total F&B Full Service Limited Service

2001 177.10 173.40 173.90 173.60 110.30 109.60

2002 179.90 175.60 178.30 176.80 113.00 112.70

2003 184.00 179.40 182.10 180.50 115.30 114.90

2004 188.90 186.20 187.50 186.60 118.40 118.60

2005 195.30 189.80 193.40 191.20 121.90 122.40

2006 201.60 193.10 199.40 195.70 125.70 126.00

2007 207.34 201.25 206.66 203.30 130.20 130.55

2008 215.30 214.13 215.77 214.23 135.42 136.93

2009 214.54 215.12 223.27 218.25 139.22 142.64

2010 218.06 215.84 226.11 219.98 141.06 143.86

2011 224.94 226.20 231.40 227.87 144.37 147.09

2012 229.59 231.77 237.99 233.67 148.14 151.75

2013 232.96 233.87 243.07 236.97 151.47 154.63

2014 236.74 242.73 248.98 242.45 155.27 158.43

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SOURCE: Bureau of Labor Statistics

*CPI-U: All urban consumers

WHAT IS THE CONSUMER PRICE INDEX?

The Consumer Price Index (CPI) is a measure of the average change over time in the prices paid by urban consumers for a

market basket of consumer goods and services. The annual percentage change in a CPI is used as a measure of inflation,

and along with the population census, is one of the most closely watched national economic statistics.

ANNUAL CONSUMER PRICE INDEX

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NV

EN

IEN

CE

ST

OR

ES

SOURCE: Bureau of Labor Statistics

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CHANGE IN FOOD PRICE INDEXES: 2013-2015

Item

Relative

Importance

(percent of total)

Forecast 2015

Year-over-Year

Jan 2014 to Jan

2015

Annual 2014 Annual 2013

All food 100.0 2.0 to 3.0 3.2 2.4 1.4

Food away from home 41.1 2.0 to 3.0 3.1 2.4 2.1

Food at home 58.9 2.0 to 3.0 3.3 2.4 0.9

Meats, poultry, and fish 12.5 3.0 to 4.0 8.7 7.2 2.1

Meats 7.9 3.5 to 4.5 12.6 9.2 1.2

Beef and Veal 3.6 5.0 to 6.0 19.0 12.1 2.0

Pork 2.5 1.5 to 2.5 7.4 9.1 0.9

Other meats 1.8 2.5 to 3.5 7.3 3.9 -0.1

Poultry 2.6 2.5 to 3.5 2.0 2.0 4.7

Fish and seafood 2.0 2.5 to 3.5 2.2 5.8 2.5

Eggs 0.9 2.5 to 3.5 8.2 8.4 3.3

Dairy products 6.2 2.0 to 3.0 3.8 3.6 0.1

Fats and oils 1.8 0.0 to 1.0 0.8 0.1 -1.4

Fruits and vegetables 9.7 2.5 to 3.5 2.3 1.5 2.5

Fresh fruits & vegetables 7.5 2.5 to 3.5 2.9 1.9 3.3

Fresh fruits 4.0 2.5 to 3.5 1.7 4.8 2.0

Fresh vegetables 3.5 2.0 to 3.0 4.3 -1.3 4.7

Processed fruits & vegetables* 2.2 2.5 to 3.5 0.2 0.1 0.3

Sugar and sweets 2.1 1.5 to 2.5 2.0 -0.8 -1.7

Cereals and bakery products 8.2 0.5 to 1.5 0.9 0.2 1.0

Nonalcoholic beverages 6.9 2.0 to 3.0 0.9 -0.5 -1.0

Other foods 10.7 1.5 to 2.5 1.2 1.0 0.5

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Year B&I / Schools K-12 Vending/

Mobile

Other Lodging

Away From

Home (excludes

housing

at school)

Airline

Fare

Nursing

Homes

and Adult Day

Services

Hospital and

Related

Services

Recreation

Services (clubs, theaters,

concerts,

sporting events)

2003 112.40 n/a 107.70 252.20 231.30 135.20 394.80 124.50

2004 115.50 n/a 109.80 265.30 227.20 140.40 417.90 127.50

2005 118.60 n/a 112.60 274.20 236.60 145.00 439.90 130.50

2006 122.60 101.60 115.10 285.60 247.30 151.00 468.10 135.10

2007 126.76 105.77 118.33 299.91 251.69 159.59 498.92 139.37

2008 131.84 110.25 124.10 300.97 282.00 165.34 533.95 142.86

2009 137.32 115.38 129.73 279.22 257.97 171.63 567.88 144.65

2010 140.97 118.33 133.06 280.43 278.19 177.00 607.68 145.12

2011 145.74 122.24 135.77 287.44 304.03 182.19 641.49 145.27

2012 150.19 125.71 140.17 292.58 304.95 188.81 672.08 148.38

2013 155.32 130.12 143.31 294.84 312.71 194.47 701.34 150.50

2014 158.16 132.66 143.06 307.78 307.71 200.08 733.84 152.69

SOURCE: Bureau of Labor Statistics

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ANNUAL CONSUMER PRICE INDEX – SELECTED SEGMENTS

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SOURCE: Bureau of Labor Statistics

Year

All Food Food at Home Food Away From Home

Total % Change From

Prior Year Total

% Change From

Prior Year Total

% Change From

Prior Year

2001 $5,321 3.16% $3,086 2.15% $2,235 4.59%

2002 $5,375 1.01% $3,099 0.42% $2,276 1.83%

2003 $5,340 -0.65% $3,129 0.97% $2,211 -2.86%

2004 $5,781 8.26% $3,347 6.97% $2,434 10.09%

2005 $5,931 2.59% $3,297 -1.49% $2,634 8.22%

2006 $6,111 3.03% $3,417 3.64% $2,694 2.28%

2007 $6,133 0.36% $3,465 1.40% $2,668 -0.97%

2008 $6,443 5.05% $3,744 8.05% $2,698 1.12%

2009 $6,372 -1.10% $3,753 0.24% $2,619 -2.93%

2010 $6,129 -3.81% $3,624 -3.44% $2,505 -4.35%

2011 $6,458 5.37% $3,838 5.91% $2,620 4.59%

2012 $6,599 2.18% $3,921 2.20% $2,678 2.21%

2013 $6,602 -0.70% $3,977 1.40% $2,625 -2.00% EC

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AVERAGE ANNUAL FOOD EXPENDITURES

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Year Total Under 25 25-34 Years 35-44 Years 45-54 Years 55-64 Years 65+ Years 65-74 Years 75+ Years

2002 $5,375 $3,621 $5,471 $6,314 $6,228 $5,559 $3,910 $4,479 $3,302

2003 $5,340 $3,401 $5,318 $6,272 $6,381 $5,530 $3,896 $4,544 $3,208

2004 $5,781 $3,715 $5,705 $6,752 $7,038 $5,898 $4,206 $4,871 $3,518

2005 $5,931 $3,933 $5,639 $7,359 $6,980 $6,202 $4,163 $4,899 $3,388

2006 $6,111 $3,919 $6,104 $7,331 $7,328 $6,132 $4,319 $5,172 $3,437

2007 $6,133 $4,141 $6,000 $7,393 $7,181 $6,241 $4,515 $5,226 $3,738

2008 $6,443 $4,447 $6,229 $7,849 $7,696 $6,357 $4,692 $5,338 $3,935

2009 $6,372 $4,179 $6,169 $7,760 $7,445 $6,303 $4,901 $5,561 $4,189

2010 $6,129 $4,073 $6,091 $7,483 $7,230 $6,068 $4,558 $5,148 $3,873

2011 $6,458 $4,354 $6,211 $7,765 $7,424 $6,520 $5,158 $5,804 $4,408

2012 $6,599 $4,412 $6,513 $7,701 $7,917 $6,800 $5,059 $5,793 $4,141

2013 $6,602 $4,698 $6,197 $7,920 $7,907 $6,711 $5,191 $6,020 $4,144

Year Total Under 25 25-34 Years 35-44 Years 45-54 Years 55-64 Years 65+ Years 65-74 Years 75+ Years

2002 $3,099 $1,926 $3,093 $3,601 $3,528 $3,114 $2,548 $2,877 $2,195

2003 $3,129 $1,766 $2,976 $3,600 $3,693 $3,315 $2,575 $2,888 $2,241

2004 $3,347 $1,853 $3,155 $3,897 $4,083 $3,374 $2,722 $3,049 $2,380

2005 $3,297 $1,917 $2,945 $4,121 $3,807 $3,487 $2,605 $2,967 $2,222

2006 $3,417 $1,946 $3,186 $4,128 $4,036 $3,518 $2,659 $3,062 $2,244

2007 $3,465 $2,265 $3,210 $4,125 $4,003 $3,457 $2,905 $3,348 $2,419

2008 $3,744 $2,330 $3,393 $4,509 $4,452 $3,710 $3,075 $3,421 $2,667

2009 $3,753 $2,449 $3,478 $4,446 $4,343 $3,678 $3,222 $3,567 $2,851

2010 $3,624 $2,197 $3,338 $4,255 $4,369 $3,681 $2,950 $3,213 $2,643

2011 $3,838 $2,382 $3,447 $4,594 $4,421 $3,908 $3,309 $3,594 $2,980

2012 $3,921 $2,529 $3,680 $4,490 $4,707 $4,012 $3,273 $3,719 $2,716

2013 $3,977 $2,602 $3,559 $4,641 $4,701 $4,232 $3,327 $3,728 $2,825

Year Total Under 25 25-34 Years 35-44 Years 45-54 Years 55-64 Years 65+ Years 65-74 Years 75+ Years

2002 $2,276 $1,696 $2,378 $2,712 $2,700 $2,445 $1,362 $1,602 $1,107

2003 $2,211 $1,636 $2,342 $2,672 $2,688 $2,215 $1,321 $1,656 $968

2004 $2,434 $1,862 $2,550 $2,855 $2,955 $2,524 $1,484 $1,822 $1,138

2005 $2,634 $2,015 $2,694 $3,238 $3,173 $2,715 $1,558 $1,933 $1,166

2006 $2,694 $1,973 $2,918 $3,203 $3,292 $2,613 $1,659 $2,110 $1,193

2007 $2,668 $1,876 $2,790 $3,268 $3,178 $2,784 $1,610 $1,878 $1,319

2008 $2,698 $2,117 $2,836 $3,340 $3,244 $2,646 $1,617 $1,917 $1,268

2009 $2,619 $1,731 $2,691 $3,314 $3,102 $2,626 $1,679 $1,994 $1,338

2010 $2,505 $1,876 $2,753 $3,227 $2,861 $2,387 $1,608 $1,935 $1,230

2011 $2,620 $1,973 $2,764 $3,171 $3,003 $2,611 $1,849 $2,210 $1,429

2012 $2,678 $1,883 $2,833 $3,210 $3,210 $2,788 $1,785 $2,074 $1,426

2013 $2,625 $2,096 $2,639 $3,280 $3,206 $2,479 $1,864 $2,292 $1,319

AVERAGE

ANNUAL FOOD

EXPENDITURES

BY AGE

AVERAGE ANNUAL

AT-HOME FOOD

EXPENDITURES

BY AGE

AVERAGE ANNUAL

AWAY-FROM-HOME

FOOD EXPENDITURES

BY AGE

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SOURCE: Bureau of Labor Statistics 145

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Year Total White and All Other

Races* Asian

Black or African

American

Hispanic

or Latino

2002 $5,375 $5,542 N/A $5,542 $5,666

2003 $5,340 $5,488 $6,285 $4,007 $5,717

2004 $5,781 $5,958 $6,742 $4,265 $5,911

2005 $5,931 $6,127 $6,632 $4,319 $5,551

2006 $6,111 $6,289 $7,411 $4,530 $6,170

2007 $6,133 $6,312 $7,139 $4,601 $5,933

2008 $6,443 $6,676 $7,089 $4,594 $6,596

2009 $6,372 $6,585 $7,565 $4,524 $6,094

2010 $6,129 $6,253 $7,656 $4,796 $6,486

2011 $6,458 $6,623 $8,163 $4,743 $6,373

2012 $6,875 $6,822 $7,980 $4,701 $6,674

2013 $6,805 $6,743 $8,073 $5,168 $6,771

Year Total White and All Other

Races* Asian

Black or African

American

Hispanic

or Latino

2002 $3,099 $3,159 N/A $2,669 $3,643

2003 $3,129 $3,186 $3,302 $2,664 $3,597

2004 $3,347 $3,418 $3,689 $2,749 $3,883

2005 $3,297 $3,373 $3,580 $2,663 $3,344

2006 $3,417 $3,486 $3,947 $2,796 $3,719

2007 $3,465 $3,539 $3,890 $2,831 $3,424

2008 $3,744 $3,865 $3,943 $2,825 $4,039

2009 $3,753 $3,870 $3,905 $2,880 $3,784

2010 $3,624 $3,689 $3,953 $3,075 $4,012

2011 $3,838 $3,931 $4,439 $2,989 $3,849

2012 $4,059 $4,044 $4,367 $2,973 $4,413

2013 $4,074 $4,057 $4,413 $3,290 $4,402

Year Total White and All Other

Races* Asian

Black or African

American

Hispanic

or Latino

2002 $2,276 $2,383 N/A $1,517 $2,023

2003 $2,211 $2,302 $2,983 $1,343 $2,120

2004 $2,434 $2,539 $3,053 $1,516 $2,027

2005 $2,634 $2,754 $3,052 $1,657 $2,207

2006 $2,694 $2,802 $3,463 $1,735 $2,451

2007 $2,668 $2,773 $3,249 $1,771 $2,508

2008 $2,698 $2,811 $3,147 $1,768 $2,556

2009 $2,619 $2,715 $3,660 $1,645 $2,310

2010 $2,505 $2,564 $3,703 $1,721 $2,474

2011 $2,620 $2,692 $3,724 $1,754 $2,524

2012 $2,816 $2,777 $3,613 $1,728 $2,530

2013 $2,731 $2,686 $3,660 $1,878 $2,729

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AVERAGE

ANNUAL FOOD

EXPENDITURES

BY RACE

AVERAGE ANNUAL

AT-HOME FOOD

EXPENDITURES

BY RACE

AVERAGE ANNUAL

AWAY-FROM-HOME

FOOD EXPENDITURES

BY RACE

SOURCE: Bureau of Labor Statistics

* All other races includes Native Hawaiian or other Pacific Islander, American Indian or Alaska Native, and approximately 1 percent reporting more than one race.

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Year Overall Northeast Midwest South West

2002 $5,375 $5,813 $5,180 $5,102 $5,630

2003 $5,340 $5,730 $5,088 $4,960 $5,876

2004 $5,781 $6,368 $5,592 $5,318 $6,224

2005 $5,931 $6,495 $5,754 $5,491 $6,339

2006 $6,111 $6,220 $5,763 $5,649 $7,158

2007 $6,133 $6,419 $5,793 $5,780 $6,811

2008 $6,443 $6,959 $5,966 $6,109 $7,037

2009 $6,372 $6,975 $6,031 $5,944 $6,903

2010 $6,129 $6,755 $5,738 $5,645 $6,804

2011 $6,458 $6,799 $6,236 $5,980 $7,188

2012 $6,598 $6,861 $6,367 $6,183 $7,310

2013 $6,602 $7,033 $6,592 $6,056 $7,180

Year Overall Northeast Midwest South West

2002 $3,099 $3,296 $2,932 $2,961 $3,317

2003 $3,129 $3,306 $2,904 $2,996 $3,428

2004 $3,347 $3,634 $3,189 $3,119 $3,634

2005 $3,297 $3,645 $3,232 $3,011 $3,527

2006 $3,417 $3,463 $3,260 $3,134 $4,018

2007 $3,465 $3,595 $3,252 $3,311 $3,822

2008 $3,744 $4,021 $3,528 $3,494 $4,140

2009 $3,753 $4,043 $3,682 $3,481 $4,023

2010 $3,624 $3,910 $3,577 $3,335 $3,914

2011 $3,838 $4,099 $3,841 $3,505 $4,169

2012 $3,899 $4,028 $3,843 $3,654 $4,264

2013 $3,977 $4,222 $4,119 $3,607 $4,267

Year Overall Northeast Midwest South West

2002 $2,276 $2,517 $2,247 $2,141 $2,314

2003 $2,211 $2,424 $2,184 $1,964 $2,449

2004 $2,434 $2,733 $2,403 $2,199 $2,590

2005 $2,634 $2,850 $2,522 $2,480 $2,813

2006 $2,694 $2,757 $2,503 $2,515 $3,140

2007 $2,668 $2,824 $2,541 $2,470 $2,988

2008 $2,698 $2,938 $2,438 $2,615 $2,897

2009 $2,619 $2,932 $2,349 $2,463 $2,880

2010 $2,505 $2,845 $2,161 $2,310 $2,891

2011 $2,620 $2,700 $2,395 $2,474 $3,019

2012 $2,698 $2,834 $2,524 $2,529 $3,047

2013 $2,625 $2,811 $2,473 $2,449 $2,913 EC

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AVERAGE

ANNUAL FOOD

EXPENDITURES

BY REGION

AVERAGE ANNUAL

AT-HOME FOOD

EXPENDITURES

BY REGION

AVERAGE ANNUAL

AWAY-FROM-HOME

FOOD EXPENDITURES

BY REGION

SOURCE: Bureau of Labor Statistics 147

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SOURCE: Thomson Reuters University of Michigan Survey of Consumers

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89.2 89.6 87.6 95.2 88.5 87.3 85.6

63.7 66.3 71.8

67.3 76.6 79.2

84.1

0

10

20

30

40

50

60

70

80

90

100

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

CONSUMER CONFIDENCE INDEX

CCI BY HOUSEHOLD INCOME TERCENTILE CCI BY AGE

Year CCI

Bottom Third Middle Third Top Third

2001 81.7 91.2 95.9

2002 81.8 90.9 96.9

2003 78.2 89.5 96.6

2004 83.7 96.4 106.1

2005 78.0 88.8 98.9

2006 75.8 88.2 98.5

2007 73.5 86.9 97.4

2008 59.4 63.4 68.8

2009 63.5 66.6 69.3

2010 66.1 72.0 79.0

2011 60.8 66.6 75.5

2012 71.2 76.0 83.4

2013 71.2 80.6 86.8

2014 72.6 84.0 92.0

Year CCI

18-34 35-54 Over 55

2001 99.1 89.6 81.3

2002 98.7 90.1 82.1

2003 97.9 87.7 80.4

2004 104.3 96.5 88.2

2005 99.7 90.3 79.9

2006 97.4 90.1 79.8

2007 99.2 87.1 78.2

2008 73.1 64.2 59.6

2009 74.7 66.9 63.1

2010 85.2 73.7 66.6

2011 79.0 70.7 62.1

2012 89.5 80.4 71.4

2013 93.2 80.3 73.4

2014 97.4 84.3 75.2

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GROSS DOMESTIC PRODUCT

Year GDP (in billions of

current dollars)

GDP (in billions of

chained 2009 dollars)

2002 $10,980.20 $12,909.70

2003 $11,512.20 $13,270.00

2004 $12,277.00 $13,774.00

2005 $13,095.40 $14,235.60

2006 $13,857.90 $14,615.20

2007 $14,480.30 $14,876.80

2008 $14,720.30 $14,833.60

2009 $14,417.90 $14,417.90

2010 $14,958.30 $14,779.40

2011 $15,533.80 $15,052.40

2012 $16,244.60 $15,470.70

2013 $16,799.70 $15,761.30

2014 $17,418.30 $16,085.30

US TOTAL POPULATION ESTIMATES

AND PROJECTIONS

Year Total Population % Change From

Prior Year

2000 282,162,411 -

2001 284,968,955 0.98%

2002 287,625,193 0.92%

2003 290,107,933 0.86%

2004 292,805,298 0.92%

2005 295,516,599 0.92%

2006 298,379,912 0.96%

2007 301,231,207 0.95%

2008 304,093,966 0.94%

2009 306,771,529 0.87%

2010 310,339,744 1.15%

2011 312,602,730 0.72%

2012 314,687,369 0.66%

2013 (P) 316,438,601 0.55%

2014 (P) 318,892,103 0.77%

2015 (P) 321,362,789 0.77%

2016 (P) 323,848,670 0.77%

2017 (P) 326,347,810 0.77%

2018 (P) 328,857,432 0.76%

2019 (P) 331,374,624 0.76%

2020 (P) 333,895,553 0.76%

Year Total (in thousands) Labor Force

Participation Rate

2013 157,393 64.2

2014 158,486 64.0

2015 159,530 63.8

2016 160,572 63.6

2017 161,530 63.3

2018 162,471 63.0

2019 163,435 62.8

2020 164,360 62.5

PROJECTED LABOR FORCE PARTICIPATION

SOURCE: Bureau of Labor Statistics; US Census

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US POPULATION PROJECTIONS BY AGE

Year Under 15 15-17 18-20 21-44 45-64

65+

Total Male Female

2013 61,573,729 12,461,673 13,088,134 101,574,319 83,051,862 44,688,884 19,576,180 25,112,704

2014 61,801,455 12,449,956 12,894,409 102,202,501 83,364,778 46,179,004 20,304,644 25,874,360

2015 61,981,103 12,536,679 12,730,110 102,580,480 83,839,068 47,695,349 21,040,904 26,654,445

2016 62,242,504 12,569,778 12,638,436 102,966,674 84,207,712 49,223,566 21,774,254 27,449,312

2017 62,620,992 12,503,233 12,634,225 103,532,427 84,263,478 50,793,455 22,525,547 28,267,908

2018 62,996,730 12,385,354 12,728,312 104,275,112 84,034,617 52,437,307 23,304,893 29,132,414

2019 63,354,852 12,360,610 12,768,764 105,095,800 83,637,393 54,157,205 24,115,191 30,042,014

2020 63,730,616 12,428,245 12,709,738 105,819,687 83,238,397 55,968,870 24,970,314 30,998,556

2021 64,099,082 12,492,773 12,599,519 106,755,037 82,723,681 57,745,530 25,802,635 31,942,895

2022 64,435,558 12,563,485 12,582,290 107,534,539 82,216,660 59,597,840 26,668,446 32,929,394

2023 64,791,262 12,625,169 12,657,299 108,194,505 81,743,609 61,424,270 27,519,727 33,904,543

2024 65,273,359 12,547,525 12,729,137 108,809,877 81,366,082 63,203,475 28,344,553 34,858,922

2025 65,752,026 12,437,564 12,807,163 109,206,397 81,152,328 65,051,745 29,203,697 35,848,048

SOURCE: US Census

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US POPULATION PROJECTIONS BY RACE

Year Total White and

All Other Races* Black

American Indian

and Alaska

Native

Asian

Native Hawaiian

and Other Pacific

Islander

Two or

More Races

2013 316,438,601 246,088,296 41,632,480 3,927,478 16,285,109 720,224 7,785,014

2014 318,892,103 247,404,624 42,080,448 3,984,390 16,645,187 734,651 8,042,803

2015 321,362,789 248,725,113 42,531,561 4,041,530 17,009,430 749,246 8,305,909

2016 323,848,670 250,048,929 42,984,959 4,098,820 17,377,581 763,990 8,574,391

2017 326,347,810 251,374,938 43,440,052 4,156,239 17,749,382 778,849 8,848,350

2018 328,857,432 252,701,225 43,896,277 4,213,689 18,124,601 793,789 9,127,851

2019 331,374,624 254,025,732 44,353,052 4,271,114 18,503,027 808,759 9,412,940

2020 333,895,553 255,345,601 44,809,572 4,328,476 18,884,450 823,742 9,703,712

2021 336,415,622 256,657,504 45,264,985 4,385,700 19,268,634 838,684 10,000,115

2022 338,930,372 257,958,022 45,718,488 4,442,749 19,655,369 853,589 10,302,155

2023 341,436,114 259,244,044 46,169,630 4,499,612 20,044,510 868,411 10,609,907

2024 343,929,455 260,512,658 46,618,113 4,556,248 20,435,940 883,139 10,923,357

2025 346,407,223 261,760,754 47,063,823 4,612,623 20,829,637 897,758 11,242,628

SOURCE: US Census

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* All other races includes Native Hawaiian or other Pacific Islander, American Indian or Alaska Native, and approximately 1 percent reporting more than one race.

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Year

Personal Income Disposable Personal Income Personal Consumption Expenditures Personal Savings

(in billions)

%

Change

From Prior

Year

(in billions)

% Change

From Prior

Year

Real

Chained

05 Dollars,

09 Dollars

2012-

(in billions)

% Change

From Prior

Year

(in billions)

% Change

From Prior

Year

Real

Chained

05 Dollars,

09 Dollars

2012-

(in billions)

% Change

From Prior

Year

(in billions) Savings

Rate

2002 $9,060.10 2.0% $8,009.70 4.7% $8,633.20 3.3% $7,439.20 4.1% $8,018.30 2.7% $282.20 3.5%

2003 $9,378.10 3.5% $8,377.80 4.6% $8,850.50 2.5% $7,804.10 4.9% $8,244.50 2.8% $289.60 3.5%

2004 $9,937.20 6.0% $8,889.40 6.1% $9,152.90 3.4% $8,270.60 6.0% $8,515.80 3.3% $318.20 3.6%

2005 $10,485.90 5.5% $9,277.30 4.4% $9,277.30 1.4% $8,803.50 6.4% $8,803.50 3.4% $143.20 1.5%

2006 $11,268.10 7.5% $9,915.70 6.9% $9,652.80 4.0% $9,301.00 5.7% $9,054.50 2.9% $256.60 2.6%

2007 $11,912.30 5.7% $10,423.60 5.1% $9,880.30 2.4% $9,772.30 5.1% $9,262.90 2.3% $248.70 2.4%

2008 $12,460.20 4.6% $11,024.50 5.8% $10,119.50 2.4% $10,035.50 2.7% $9,211.70 -0.6% $592.30 5.4%

2009 $11,867.00 -4.8% $10,722.40 -2.7% $9,836.70 -2.8% $9,845.90 -1.9% $9,032.60 -1.9% $508.20 4.7%

2010 $12,321.90 3.8% $11,127.10 3.8% $10,016.50 1.8% $10,215.70 3.8% $9,196.20 1.8% $566.70 5.1%

2011 $12,947.30 5.1% $11,549.30 3.8% $10,149.70 1.3% $10,729.00 5.0% $9,428.80 2.5% $489.40 4.2%

2012 $13,743.80 4.2% $12,245.80 3.9% $11,551.60 2.0% $11,149.60 4.1% $10,517.60 2.2% $687.40 5.6%

2013 $14,134.70 2.8% $12,476.20 1.9% $11,636.90 0.7% $11,501.50 3.2% $10,727.90 2.0% $561.30 4.5%

2014 $14,728.63 4.2% $12,985.75 4.1% $11,939.45 2.6% $11,930.35 3.7% $11,130.70 3.8% $628.30 4.9%

INCOME INDICATORS

SOURCE: US Bureau of Economic Analysis, Blue Chip Economic Indicators

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EMPLOYMENT STATUS / UNEMPLOYMENT RATE

Year

Employed Unemployed

Total

(in thousands) % Population Agriculture

Non-Agricultural

Industries

Total

(in thousands)

Percent

of Labor Force

2002 136,485 63% 2,311 134,174 8,378 6%

2003 137,736 62% 2,275 135,461 8,774 6%

2004 139,252 62% 2,232 137,020 8,149 6%

2005 141,730 63% 2,197 139,532 7,591 5%

2006 144,427 63% 2,206 142,221 7,001 5%

2007 146,047 63% 2,095 143,952 7,078 5%

2008 145,362 62% 2,168 143,194 8,924 6%

2009 139,877 59% 2,103 137,775 14,265 9%

2010 139,064 59% 2,206 136,858 14,825 10%

2011 139,869 58% 2,254 137,615 13,747 9%

2012 142,469 59% 2,186 140,283 12,506 8%

2013 155,389 63% 2,130 141,799 11,460 7%

2014 147,442 63% 2,158 139,118 8,688 5%

SOURCE: Bureau of Labor Statistics

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NOTE: Civilian, Non-Institutional Population

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What are the Beige Books?

The Beige Books are officially known as the Summary of Commentary on Current Economic Conditions.

The report is published eight times per year by the Federal Reserve and is a summary of information on

economic conditions in each reserve district. The information is gathered through interviews and reports

from economists, market experts and other key business contacts.

BEIGE BOOK RECAP

BOSTON

NEW YORK

PHILADELPHIA

CLEVELAND

CHICAGO

MINNEAPOLIS

ST. LOUIS

ATLANTA

DALLAS

SAN FRANCISCO

KANSAS CITY

12

11

10

9

8

7

6

5

3 4

2 1

RICHMOND

PHILADELPHIA

SOURCE: Federal Reserve

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From July 2014 to May 2015, the Beige Books have reported the major changes and reflections in districts

across the country. Across the board, the economy is steadily expanding at a modest to moderate pace.

Despite some concerns within specific segments, the outlook remains optimistic for the upcoming year.

BEIGE BOOK RECAP- National Summary

SOURCE: Federal Reserve

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Holiday retail sales beat expectations and are higher than previous years.

Lower gas and oil prices have a positive effect on overall economy. Natural Gas production has increased while coal production continues to decline.

The severe winter experienced by the Northeast took a toll on the their economy, but is expected to be only temporary.

.

Across many districts, commercial real estate and construction are doing better than residential sales and construction. Both are still faring well and doing better than previous years.

Consumer spending and confidence is up across all segments.

Tourism is up across nearly all districts; hotels, restaurants and other tourist attractions experienced strong seasons and higher profits than previous years.

Avian flu creates severe egg shortage and prices go up.

Livestock and dairy producers benefitted from higher output prices and lower feed costs. Soy and corn prices were low due to high yields.

Droughts in the west reduce the crop yields of many fruit, vegetables, tree nuts, and legumes.

Companies in many industries express a desire to increase hiring. Wages and payroll are UP for most districts year-over-year.

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Business activity expands this month. Many sectors reporting increase in revenues compared to last year.

Negative effects on the real estate markets due to weather are seen only as temporary. Natural gas

prices are up, strong dollar, though overall contacts say non-labor costs and prices are steady.

Economic activity is generally increasing and retailers and manufacturers report year-over-year revenue

increases. Residential real estate is mixed, while commercial is expanding. Net hiring is occurring in

sectors with more robust demand, and pay levels are rising for temps but generally flat in software and IT.

Contacts report mixed conditions this month. Moderate sales and revenue increases are noted.

Residential and commercial real estate report no change since last report. Product prices and input prices

are generally steady. Hiring plans remain subdued, and wages rose selectively if at all.

Contacts are optimistic this month, with the exception of negative impacts from severe weather. Sales are

up year-over-year in retail and manufacturing. Staffing firms are down due to weather, as is residential

real estate. Commercial real estate is still strong. Labor markets are unchanged, and pricing is not seen

as an issue.

Sales are ahead of year-earlier levels in most sectors. Commercial real estate is steady and residential

continues to see price increases but sales declines. Hiring is essentially flat, cost pressures vary, and the

2015 outlook remains positive for all responding firms.

Economic conditions are mixed this month. Manufacturers are reporting weaker results and retailers are

seeing flat to increasing sales. Tourism continues to be strong; restaurant revenues in the Boston area

were up 3.5% and hotels are expecting 7% revenue increase. Commercial real estate is steady, while

residential has declined. Firms are generally not hiring, and price pressures remain minimal.

Slow overall economic growth is reported this month. Retail sectors report flat results. Tourism is strong,

and manufacturers report mixed results and no commodity price pressures. Median home prices are

rising, however single-family home sales fell. Most contacts are cautiously optimistic.

Business activity is improving this month. Software and IT services report an increase in activity.

Commercial and residential real estate are markets are largely unchanged since the last report. Hiring is

essentially flat, and wages are steady. Prices are steady. A larger portion of retail and manufacturing

contacts cite sales and revenue increases year over year.

BEIGE BOOK RECAP 1ST DISTRICT – BOSTON

JANUARY 2015

FEBRUARY 2015

APRIL 2015

OCTOBER 2014

NOVEMBER 2014

JULY 2014

AUGUST 2014

MAY 2015

SOURCE: Federal Reserve

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BEIGE BOOK RECAP 2ND DISTRICT – NEW YORK

SOURCE: Federal Reserve

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Growth slowed to a modest pace this period. Selling prices are stable, input costs rose moderately.

Labor markets improved, scattered reports of increased wage pressures. Winter weather has slumped

tourism, real estate, and retail sales, but expected to be only temporary.

Growth picked up to a moderate pace since last report. Cost pressures abated somewhat, selling prices

up slightly. Service sector business has picked up slightly, labor market conditions strengthened.

Retailers show sales trending upwards, car dealers report softer sales. Tourism continues to show

strength. Housing slowed slightly, commercial development strengthened.

Economy is expanding at modest pace since last report. Labor market were more subdued in the past

few weeks. Consumer spending weakened in April but shows signs of rebounding in May. Selling prices

are stable, wage and input price increase, and stronger loan demands are reported from banks.

Economy is still growing at moderate pace, selling prices remain mostly stable, cost pressures

increasing, and indications of rising wages. Consumer spending is a bit stronger since last report,

despite harsh winter weather. Consumer confidence is again very high. Housing and office real estate

are strong, though construction is hindered by winter weather. Banks report steady loan demand.

Growth continues at moderate pace. Cost pressures continue to abate. Labor market conditions

continue to be strong. Retailers report slightly disappointing holiday sales. Tourism is robust, and

consumer confidence is at a multi-year high. Housing markets are mixed; office markets steady. Banks

report increased loan demand.

Economy has slowed to a more modest pace. Cost pressures remain fairly widespread. Labor market

conditions continue to strengthen. Business is steady or improving. Retailers report sales are mixed but

on balance to last report. Housing is steady. Tourism has grown since last report.

Growth continues at a moderate pace this month. Prices of finished goods and services are stable.

Hiring has stepped up slightly, and both auto dealers and general retailers report robust sales. Tourism

is brisk. Housing is level, commercial real estate strengthened. Banks report increased loan demand

and declines in delinquency.

The economy expanded again at moderate pace this month. Prices of finished goods and services

remain steady and businesses continue to report upward pressure on input prices. Labor market

conditions improve. Tourism is still strong from last report. Home sales are steady, commercial real

estate is mixed. Loan demand is stable, and little change in credit standards.

JANUARY 2015

FEBRUARY 2015

APRIL 2015

OCTOBER 2014

NOVEMBER 2014

JULY 2014

AUGUST 2014

MAY 2015

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BEIGE BOOK RECAP 3RD DISTRICT – PHILADELPHIA

SOURCE: Federal Reserve

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Modest pace of growth continued as contacts are adjusting to winter weather. Staffing firms, auto

retailers, and manufacturers all report moderate growth, and brokers report the same for existing home

sales. Tourism is mixed due to weather. Lending volumes slowed but credit quality improved. Price

levels up slightly, but some prices fell as the impact of lower energy prices were felt across sectors.

District is still showing moderate growth. Manufacturers, staffing firms, service sector firms, auto dealers,

retailers all showing moderate growth but slightly slower than last period. Tourism activity is modest, as

is commercial and residential real estate. Lending volumes grew, as did price competition for loans.

Slight increase in home prices and wages.

Staffing firms, the service sector and retailers showed moderate growth this period. Manufacturers report

only slight growth. Brokers report modest growth. Tourism growth was positive and encouraging for a

strong summer season. Increase in wages and home prices occurred. Contacts continue to anticipate

moderate growth of economic activity over the next 6 months.

Severe weather dampened year-over-year growth, especially in tourism, construction, and real estate

sales, however contacts remain positive. Lending volumes continued to grow modestly, however there is

concern about weak underwriting. Price levels, home prices and wages increased slightly.

Modest growth reported across all sectors. Tourism appears to have slowed slightly but still strong.

Retailers, staffing firms and auto dealers showing moderate growth. Residential building declining

slightly, and existing home and commercial real estate sales are modest and steady. Lending volumes

grow modestly. Contacts anticipate moderate growth over next 6 months still.

Growth continues at a modest pace, very few shifts in growth rates of specific sectors. Staffing firms

experiences increase in requests. Service sectors and tourism maintain moderate growth. Retailers and

auto dealers show strong growth. Real estate shows slight growth, but sales down somewhat year-to-

year. Contacts continue to anticipate growth over next 6 month. Restaurants picked up in August after

summer lull.

Business activity grows at a modest pace this period and growth is anticipated over the next 6 months.

Auto sales, real estate sales and construction, and retail sales all reported growth. Manufacturing

activity, tourism, lending volumes and home prices are all up. About 1/3 of contacts plan to increase

employment and make capital expenditures over the next 6 months.

District is growing at a modest pace this period. Good summer weather is thought to have had a positive

effect on tourism. Retailers report slight growth; service sectors grew moderately. Manufacturers show

continued increase in activity. Commercial and residential real estate report slight growth. Lending

volumes are up slightly. Slight increases in wages, home prices, and general price levels.

JANUARY 2015

FEBRUARY 2015

APRIL 2015

OCTOBER 2014

NOVEMBER 2014

JULY 2014

AUGUST 2014

MAY 2015

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BEIGE BOOK RECAP 4TH DISTRICT – CLEVELAND

SOURCE: Federal Reserve

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Economy grew at a slight pace this period. Unit volumes rose in residential real estate, while commercial

real estate construction declined. Sales are higher than last year for retailers and cars. Spending for

shale drilling has been significantly curtailed. Freight volumes much lower due to severe winter weather

and west coast labor disputes.

Modest growth occurred over the past 6 weeks. Consumer spending at retail establishments grew

slowly, and car sales posted gains. Coal production is up slightly, shale gas production is at a record

high. Freight shipments are strong, but capacity limits are hindering growth. Job openings and

placements are down, attributed to the seasonal effects. Metals and agricultural commodity prices up, as

are transportation costs. Restaurants are raising prices for menu items using animal product.

Non-residential contractors reported strong boost in activity, homebuilders saw mild pickup as well.

Retail sales were high compared to last year. Shale drilling leveled off after sharp first quarter declines.

Staffing firms noted increase in job openings. Upward pressures were mild, and input and finished

goods prices were steady. Declines in prices in steel, beef and dairy product were widely reported.

Activity at manufacturing plants was mixed. Residential real estate was up, as was commercial.

Retailers and car dealers reported higher than last year post-holiday sales. Shale gas activity contracted

due to low oil and natural gas prices. Job openings are increasing slightly. Decline in steel and diesel

prices, while an increase in prices for some building materials.

Most contacts in the district have a positive outlook for the year and expect demand for their products

and services to remain at current levels or rise. Retail spending during holiday season was slightly

above last year’s level. Coal production is up slightly, shale still very high. Payroll increased moderately.

Business and consumer credit demand rose, and input and finished goods prices were stable.

Expansion was moderate this period. Manufacturers reported strong business activity. Consumer

spending grew to pre-2013 levels. Freight volume continues to grow. Energy and agricultural

commodities declined, transportation equipment prices rose. Demand for construction strengthened

while the residential market slowed.

Economy expanded at a modest pace this month. Retailers saw higher year-over-year sales, and

demand for construction was up. New orders and production at factories grew slowly. Coal production

and shale activity remains unchanged from last report. Freight volume strengthened. Payrolls increased,

as did upward pressures on wages. Agricultural products and metal prices increased while coal prices

decreased.

Growth was moderate this period. Demand for construction still up, while new and existing home sales

have leveled. Car sales were robust. Retailers and hospitality venues saw higher year-over-year

revenues. Freight volume grew at a moderately strong rate. Demand for business credit moved higher.

Many companies looking to hire, but unable to find qualified workers. Coal prices continue to decline.

JANUARY 2015

FEBRUARY 2015

APRIL 2015

OCTOBER 2014

NOVEMBER 2014

JULY 2014

AUGUST 2014

MAY 2015

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BEIGE BOOK RECAP 5TH DISTRICT – RICHMOND

SOURCE: Federal Reserve

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Growth was moderate outside manufacturing. Manufacturing was down due to severe winter weather

forcing shutdowns. Retail sales rose at slower pace. Labor markets generally improved. Agribusiness

reported seasonal, expected increases. Stronger tourism activity was noted, as was moderate growths

in service firm revenues.

Manufacturing activity increased at a slightly slower pace as the overall economy grew slightly in the

district. Retail sales grew, service firms grew more rapidly, and tourism advanced as expected. Crop

prices are lower than a year ago, but cattle, poultry and swine prices were higher as input prices rose as

well. Coal was unchanged, natural gas production increased. Average wages roses more quickly on net.

Expectations for the months ahead remain positive across all sectors. Manufacturing activity is up, retail

sales were balanced and tourism picked up. Residential and commercial real estate activity increased

moderately. Agricultural conditions improved and planting began on schedule. Energy production was

soft, with prices flat to lower than last period.

Growth was slower this period compared to last month. Manufacturing activity weakened. Retail sales

growth slowed. Revenues in the service sector grew quicker, and tourism was at expected levels.

Residential and commercial real estate increased modestly. Agribusiness continued to feel seasonal

slowing. Demand for labor rose. Natural gas prices declined in recent weeks.

Tourism was at or above normal seasonal levels. Loan demand rose slightly. Real estate activity

increased slightly. Labor demand rose, and hiring and wage averages increased. Coal production is still

low as natural gas production rose. Agribusiness reported a seasonal slowing, although business

conditions are better than last year. Service sector and retail prices grew slightly.

Moderate gains in the economy in this month. Inventories of finished good and raw materials rose at a

faster pace. Retail and non-retail sales expanded moderately. Tourism was robust and anticipating a

strong holiday season. Harvesting is on schedule, but prices for corn, soy and grain are down. Demand

for labor is up, and service sector employment and wages increased moderately.

Economy grew modestly since last report. Retail sales slowed since last report, but revenues and

customer demand increased at non-retail service firms. Tourism was at normal seasonal levels. Crops

that suffered due to a bad winter have been replanted. Natural gas increased, coal leveled off.

Employment increased modestly, service sector and retail prices both increased.

Manufacturing advanced moderately as shipments and orders increased. Retail sales grew moderately,

although consumers were conservative in their spending. Tourism is strong, with an increase in bookings

noted. Lending volumes increased with stronger demand for mortgages. Commercial and residential real

estate were strong. Crop prices decreased, input prices were stable, and replanting and harvesting were

on schedule. Coal production was unchanged but prices declined.

JANUARY 2015

FEBRUARY 2015

APRIL 2015

OCTOBER 2014

NOVEMBER 2014

JULY 2014

AUGUST 2014

MAY 2015

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BEIGE BOOK RECAP 6TH DISTRICT – ATLANTA

SOURCE: Federal Reserve

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Retailers affected by the severe winter weather noted slower growth than previous periods. Hospitality

reports were mixed, real estate was flat with the exception for commercial construction. Bankers noted

improvements in lending activity. Firms noted muted wage pressures and low material costs.

Most contacts remain positive about the near-term outlook. Retail sales are up, as are auto sales.

Hospitality and tourism sectors remained positive as an increase in international and domestic travelers

occurred. House prices improved and commercial real estate noted increased activity. Loan activity was

flat, and district continues to experience modest growth. Heavy rain delayed peanut harvesting.

Softness in sales growth were reported compared to prior months for retail segment. Auto sales were

up, tourism and hospitality remained strong, and manufacturing saw moderate growth. Home sales were

slightly up. Commercial real estate noted continuing increase in demand. Firms continue to add payrolls

and struggle to fill a range of positions. Wage and non-labor input cost pressures remained muted.

Growth continues at a moderate pace. Lower gas prices noted as spurring on auto sales. The tourism

sector remains strong. Real estate is up, manufacturers reported increases in new orders and

production, and bankers report a strong demand in loans. Nominal wage increases were reported with a

continued growth in the labor force.

Economic activity continues to improve. Holiday sales were solid, and the hospitality industry fared very

well. Residential and commercial real estate is doing well, as are manufacturers. Banking contacts noted

improving loan demand. Job growth continued, and only mild cost pressures were reported.

Retailers note slight increase in sales activity. Hospitality contacts report strong activity, and leisure and

business travel contacts report an increase in demand. Commercial and residential real estate note

improved demand. Manufacturers cited expanded activity. Banking conditions improved. Lower corn

prices continue to benefit poultry and livestock producers.

Economic activity expanded modestly. Outlook remains strong across all sectors for the rest of the year.

Retail sales rose at a steady pace, as did auto sales. The hospitality sector is doing extremely well.

Residential real estate is steady; builder and brokers are optimistic. Manufacturing increased new orders

and production. Payroll employment grew at a modest pace, and wages and input prices were stable.

The economy increased modestly since last report. Most firms continue to be optimistic for the rest of the

year. The travel and tourism sector remained upbeat. Retail and auto sales continued on an upward

trend. Home sales were at higher levels than last year. Aside from automobiles, manufacturers noted a

decline in new orders and production. Stable wage growth occurred, and cost pressures were muted.

JANUARY 2015

FEBRUARY 2015

APRIL 2015

OCTOBER 2014

NOVEMBER 2014

JULY 2014

AUGUST 2014

MAY 2015

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BEIGE BOOK RECAP 7TH DISTRICT – CHICAGO

SOURCE: Federal Reserve

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Consumer and business spending and manufacturing production all grew moderately, although winter

weather slowed growth slightly. Real estate activity increased modestly. Credit conditions improved. Low

gas prices persisted. High corn and soy stocks put downward pressure on most crop prices.

Concerns were noted about weakening foreign growth and a looming severe winter, however optimism

still persisted for the remainder of the year. Higher consumer confidence and lower gas prices also

added to a positive outlook. Cost pressures generally eased over the period. Milk and hog prices

decreased; corn, soybean, wheat and cattle prices rose.

Contacts expect growth that has occurred recently to persist for the next 6-12 months. Strong sales

reported in the tourism, restaurant, entertainment and sports sectors. Soy and corn prices remain low

because of such high yields and anticipation for large fall harvest. Cattle prices remained high. Poultry

stocks are hit extremely hard by avian flu, and egg prices have increased.

Growth in the district remained moderate. Consumer spending and manufacturing production rose

moderately, while business spending and construction and real estate activity increased modestly.

Credit conditions improved on balance. Cost pressures were little changed, and price increases

remained limited. Corn, soybean, and wheat prices were lower.

Good weather, lower gasoline prices, and generous holiday promotions benefitted holiday sales and

revenues and kept consumer confidence high. Construction and real estate increased moderately. Corn

and wheat prices rose because of drought conditions and limits by the Russian government on exports.

Lower gas prices spurred sales of larger vehicles, and consumers continued to take advantage of low

lending rates. Growth was moderate overall. Business spending, construction and manufacturing activity

all increased moderately. Cost pressures changed little. Corn and soybean prices fell due to a large

harvest, and milk, hog, and cattle prices increased. Many contacts reported passing higher health care

costs onto employees.

Economic activity remained moderate this period and contacts are optimistic. Consumer and business

spending increased. Manufacturing production grew, as did construction and real estate activity. Credit

conditions improved. Cost pressures were modest. Corn, soybean, wheat, cattle and milk was down; hog

prices were up.

Moderate growth continued this period. Real estate activity, manufacturing production, and consumer

and business spending all increased. Credit conditions improved, and cost pressures were modest. Milk

prices were higher, while corn, soybean, hog and cattle prices were lower. Corn and soybean production

exceeded last year’s levels.

JANUARY 2015

FEBRUARY 2015

APRIL 2015

OCTOBER 2014

NOVEMBER 2014

JULY 2014

AUGUST 2014

MAY 2015

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BEIGE BOOK RECAP 8TH DISTRICT – ST. LOUIS

SOURCE: Federal Reserve

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Modest growth continued this period. Planned activity has been mixed. Service sector has been positive,

however manufacturing was negative. Residential and commercial real estate has been positive. Year-

over-year consumer spending is higher. Tourism activity is up. Very wet conditions have hindered crop

yields. Coal production down.

Growth slowed slightly from previous periods. Retail has experienced slow to modestly increasing sales.

Wages have increased modestly while consumer prices and employment levels have grown more

slowly. Crop production is substantially larger than last year. Coal is 2.8% higher than last year.

Growth is modest. Wages grew moderately, as did employment. Consumer spending grew.

Restauranteurs noted higher year-over-year sales. Banks showed moderate improvements in lending

activity. Spring plantings recovered due to drier weather. Bankers expect farm income, capital spending,

farmland values, and cash rents to decline.

Growth occurred at a moderate pace this period. Residential real estate has improved, commercial

continues to do well. Wages have grown moderately while employment and consumer prices have

grown modestly. Wheat crops were in good condition, meat production was stable, and coal production

increased.

Growth this period was slightly faster than previous month. Retail contacts report a stronger holiday

season compared to last year, as did auto dealers. Planned manufacturing activity is positive. Meat

production is lower. Coal production higher.

Retail contacts have been positive, as have manufacturing and service segments. Lending at banks has

increased slightly. Commercial and industrial real estate has been mixed, and residential has been

weak. Harvest depletion rates have lagged behind their 5 year averages. Coal production was 1.5%

higher than last year.

Economic activity increased modestly. Retail, manufacturing, and service segments have all been

positive. Residential and commercial real estate conditions have improved. Wage and employment

levels have grown modestly, while prices increased slightly.

Planned activity in manufacturing and services has been positive, and retail activity has improved

modestly. Real estate markets have remained weak, commercial has been mixed. Lending activities at

banks have been stable to slightly increasing. Wages and employment levels have grown modestly, as

have prices.

JANUARY 2015

FEBRUARY 2015

APRIL 2015

OCTOBER 2014

NOVEMBER 2014

JULY 2014

AUGUST 2014

MAY 2015

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BEIGE BOOK RECAP 9TH DISTRICT – MINNEAPOLIS

SOURCE: Federal Reserve

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Activity was flat in manufacturing and tourism, while activity decreased in energy and mining. Increased

activity was noted in consumer spending, commercial and residential construction and real estate, and

professional services. Labor markets were mixed, as a number of layoffs were noted. Milk prices have

fallen dramatically in recent months, but dairy producers are still benefitting from lower feed costs.

Economy grew moderately since last report. Tourism was strong, and early snowfall is leading to

increased optimism for the winter. Activity was steady in energy, increased in manufacturing,

professional services and mining, and moderate in wage increases, hiring and price increases. Farm

incomes continue to be affected by lower crop prices. Meat producers continue to benefit from this.

Increased activity was noted in consumer spending, tourism, commercial construction, and professional

services; residential real estate activity grew briskly. Activity was flat in manufacturing, residential

construction, and commercial real estate, while activity decreased in energy and mining. Labor markets

tightened further since the last report.

Increased activity was noted in consumer spending, commercial construction, commercial real estate,

professional services, and manufacturing. Activity was mixed in tourism and residential real estate and

down in residential construction, agriculture, and energy and mining. Oil and gasoline prices decreased.

Agricultural conditions were down, with livestock and dairy producers doing better than crop farmers.

Growth was modest this period. Tourism activity leveled slightly. Construction and commercial real

estate was mixed; residential was down. Labor markets tightened. Consumer spending was up. Farm

incomes are expected to continue to fall.

Moderate growth was reported across the district. Mining was flat, labor markets continued to tighten

slightly. Wage increases were modest, while price increases generally remained subdued. Consumer

spending, tourism, commercial real estate, professional services, manufacturing and energy continue to

show an increase in activity. Agriculture was mixed. Prices for corn, soy and wheat were still low; higher

for hay, cattle, hogs, poultry and milk.

Economy grew moderately this period. Consumer spending, tourism, commercial construction and real

estate, professional services, manufacturing, energy and mining all experienced increased activity.

Residential real estate and agriculture was mixed. Flooding led to some crop losses. USDA forecasts a

good harvest. Wage increases were modest, hiring outpaced layoffs, and overall prices remained level.

Labor markets showed signs of tightening this period. Wage increases were modest, prices were

generally level. Activity was down in mining and residential real estate. Increase in activity occurred in

consumer spending, professional services, manufacturing and energy. Tourism levels are up from a year

ago. Prices for corn and soy and wheat were down, up for hay, cattle, hogs, poultry, eggs and milk.

JANUARY 2015

FEBRUARY 2015

APRIL 2015

OCTOBER 2014

NOVEMBER 2014

JULY 2014

AUGUST 2014

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BEIGE BOOK RECAP 10TH DISTRICT – KANSAS CITY

SOURCE: Federal Reserve

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Mixed conditions were seen across segments. Consumer spending declined slightly, though tourism

picked up slightly. Energy firms note a sharp decline, and agricultural conditions softened. Real estate

increased modestly. Bankers noted solid loan demand. Increase in wage pressures as well as labor

shortages for specific positions was noted.

Economy grew slightly this period. Retail contacts report moderate growth. Restaurants and tourism

noted a slight decline. Commercial real estate increased moderately, residential declined slightly.

Banking contacts noted steady loan demand and quality. Energy sector activity remained steady. Slight

rise in wages noted while the labor market tightened. Farm income expectations fell sharply.

Economy grew slightly this period. Real estate continued to increase at a modest pace. Consumer

spending rose moderately. District manufacturing activity declined sharply, and substantial weakness in

the energy sector persisted. Farm income levels declined from the previous survey period, although crop

conditions improved. Prices rose slightly in most industries and wage growth was steady.

Consumer spending was flat, with auto sales and restaurant traffic offsetting a decrease in retail and

tourism activity. District manufacturing and other business activity rose. Real estate increased slightly.

Farm income and crop prices decreased. Energy activity continued to slow and is expected to continue.

Prices grew modestly and wages grew slightly.

Growth was slight but persistent this period. Retail contacts report slight decline but remain optimistic.

Real estate activity continued to edge up. Agricultural growing conditions were favorable. Energy sector

slowed in response to lower prices.

Most contacts are optimistic about future activity. Sluggishness reported at hotels and restaurants, but

consumer spending overall is still up. Manufacturing activity is up, wholesale trade is noting improved

sales. Crop conditions remain solid, but lower crop prices dampened the outlook for farm incomes.

Cattle prices rose since last report. Farmland values holding at high levels.

The economy expanded modestly this period, and most contacts anticipated stronger growth in the

months ahead. Consumer spending rose modestly, restaurants and tourism fared very well.

Manufacturing activity continued to expand. Crop prices dropped for wheat, corn and soybeans, while

cattle and hog prices continued to rise. The number of active oil rigs expanded and natural gas rigs held

steady. Prices for raw materials and finished goods rose slightly.

Economy grew modestly. Consumer spending, restaurants and tourism continue to do well.

Manufacturing slowed somewhat. Construction was strong, Bankers report steady loan demand. Crop

prices were lower and growing conditions improved. Modest rise in oil well drilling noted. Wage

pressures grew modestly, as did prices.

JANUARY 2015

FEBRUARY 2015

APRIL 2015

OCTOBER 2014

NOVEMBER 2014

JULY 2014

AUGUST 2014

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BEIGE BOOK RECAP 11TH DISTRICT – DALLAS

SOURCE: Federal Reserve

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Manufacturers mostly reported steady demand. Retail reports were more mixed, but reports of

automobile sales were positive. Demand for nonfinancial services improved, and real estate activity

remained solid. The energy sector continued to decline. Price pressures were muted and employment

held steady. Outlooks remained cautiously optimistic, except for in the energy sector where outlooks

were negative.

Consumer spending rose moderately, and transportation and wholesale trade firms reported stronger

sales activity. Real estate activity continued to increase. Bankers reported a slight rise in loan demand.

Manufacturing activity declined sharply, and substantial weakness in the energy sector persisted. Farm

income levels declined, although crop conditions improved. Prices rose slightly in most industries and

wage growth was steady.

Manufacturing activity was mostly stable. Retailers and auto dealers reported higher sales. Demand for

business and transportation services was mixed. Home sales continued on an upward trend. Demand

for oilfield services declined sharply, while agricultural conditions and loan demand improved slightly.

Lowering oil prices continue to be a concern for many in the district this period. The economy expanded

slightly this period. Retailers saw steady sales, home sales grew, and agriculture conditions improved

slightly. Employment held steady, and manufacturing activity increased.

The economy grew at a moderate pace this period. Manufacturers reported increases in demand, and

retail and automobile sales expanded. Demand for nonfinancial services generally improved and real

estate activity remained solid. The energy sector continued to grow, and agricultural conditions

improved. Upward price pressures eased slightly and employment held steady or increased.

Growth occurred at a moderate pace this period. Manufacturing was up, as were retail and auto sales.

Residential real estate was down slightly, though commercial was up. Demand for oilfield services was

up. Agricultural conditions improved. Prices were unchanged or increased modestly and employment

held steady or rose slightly. Domestic demand for beef remained very strong despite record prices.

Manufacturing activity was largely positive. Retail and automobile sales strengthened, and demand for

nonfinancial services was stable. Both home sales and commercial real estate leasing activity remained

solid. Demand for oilfield services remained robust, and agricultural conditions improved. Prices

increased modestly or held steady, as did employment levels. The drought being experienced by the

district has eased slightly.

JANUARY 2015

FEBRUARY 2015

APRIL 2015

OCTOBER 2014

NOVEMBER 2014

JULY 2014

AUGUST 2014

MAY 2015

Manufacturing activity continued to increase. Retail and automobile sales reports were mixed, and

nonfinancial services firms saw steady demand. Demand for oilfield services stayed robust; agricultural

conditions improved. Selling prices were stable or rose slightly, and employment held steady. Outlooks

remained optimistic, but some contacts noted concerns about the potential effect of declining oil prices.

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BEIGE BOOK RECAP 12TH DISTRICT – SAN FRANCISCO

SOURCE: Federal Reserve

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The pace of output in the district’s agricultural sector was unchanged. Real estate activity advanced,

especially in the commercial real estate sector. Lending activity increased moderately. Price inflation

was slight, while wage inflation was moderate. Retail sales and demand for business and consumer

services increased moderately.

Price inflation firmed, while wage gains picked up a bit but remained moderate on balance. Retail sales

and demand for consumer services grew moderately. Manufacturing activity was flat. Real estate activity

strengthened. Lending activity expanded. Contacts reported excess supply and low prices for some

agricultural products, notably potatoes and dairy, reflecting global competition and an appreciated dollar

that has reduced exports.

Price inflation remained modest, while wage inflation was moderate. Retail sales and demand for

business and consumer services increased moderately. Manufacturing activity picked up, while

agricultural conditions were mixed. Lending activity increased modestly. Contacts reported that most

retailers are optimistic about growth over the coming year, citing decreases in gas prices and

improvements in employment conditions.

Overall price and wage inflation remained modest. Retail sales and demand for business and consumer

services increased moderately, and holiday sales were higher than last year. Manufacturing activity

picked up, while agricultural conditions were mixed. Real estate activity advanced, mainly in the

commercial construction sector. Lending activity was mixed. Gas prices were down.

Growth was moderate again this period. Price and wage inflation remained modest. Retail sales grew

slightly. Manufacturing activity picked up, and real estate continued to do well. Continuing droughts in

California and parts of Washington and Idaho elevated water costs and depressed harvests of cotton

and various grains, vegetables, nuts, and legumes.

Economic growth was moderate. Price inflation was modest, and wage pressures were contained. Retail

sales were unchanged. Demand for business and consumer services ticked up. Manufacturing activity

improved. Drought conditions contributed to reduced production of some fruits, vegetables, and livestock

products. Activity in real estate markets advanced, Loan demand increased.

Price inflation remained modest this period and wage pressures were well contained. Retail sales

increased, as did business and consumer services. Manufacturing was mixed, agricultural conditions

were good, and activity in real estate markets advanced. Loan demand increased moderately.

JANUARY 2015

FEBRUARY 2015

APRIL 2015

OCTOBER 2014

NOVEMBER 2014

JULY 2014

AUGUST 2014

MAY 2015

Retail sales and manufacturing activity was up this period. Real estate continues to do well. Loan

demand increased moderately. Natural Gas prices decline. Restaurant sales climbed, notably in the

quick service segment. Hotel occupancy rates are up. The continuing drought in California depressed

yields for crops such as raisins and almonds.

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