Organic Growth: Being Green to Build Customer

Loyalty

18 May 2008National Restaurant Association

More Frequent, More Personal, More Food

People connect to sustainability personally and initially through their food choices.

Food is the new “newspapers and aerosol deodorant.”

The responsibility to make the right choice increasingly falls to Food Service Professionals

Special Focus on Food Choices

Media attention Activism from PTA to Celebrity

Chef’s Connection between “Health,

Fresh, Natural, Local and Sustainable.”

Food Safety incidents now at historic levels…and certain to climb.

Connecting the dots of food inflation, biofuels and climate change.

A “dash” of anti-China sentiment.

Consumer Insights

Environmental Concerns drive consumers to buy “Green Products.”

...Except for Food Health Concerns drive

consumers to buy Natural and Organic Foods.

Mintel Green Living March 2008

So What is “Green”?

Truly Fusion Cuisine!

And who will come up with the next Thai Pizzaritto?

Healthy

LocalAnimal Welfare

Fair Trade

Good for the Planet

Organic

Fresh

Natural

Biodegradable

The Premium Conundrum

About half of consumers are willing to pay a 10% premium for “green products” (Mintel)

And maybe less than 25% (Brandweek)

The rest will buy them when they are available at mainstream places at prices

Only the most committed consumers seek out “green products” at specialty retailers.

Premium shoppers are most skeptical of “green” claims.

For the 50-75%, it’s a difference maker.

The Big Opportunity in the Middle

The Retail Response

Boom to X

Younger consumers are less likely to buy “green” premium products than Baby Boomers and Seniors.

They are more likely to expect their food to reflect their values.

Good cooking and good practices are a “ticket to play.”

How to Reach the Consumer?

Certification

Or

Marketing?

What’s in a Certification

Third party verification of means of production

Sets standard for all businesses Which one to choose? How many are there?

What’s in a Certification?

Does it reflect the values you are trying to communicate?

Is there sufficient supply and selection? Who else is associated with the

certification? Is the certification recognized by your

customers? Or does the certifying agency have a

compelling plan to do so?

Can Marketing Work?

Can you tell a more compelling and verifiable story yourself?

Is the message a part of your existing brand identity? Or closely associated with it?

There are good cars and bad cars for the environment…

But is there really good food and bad food?

How much energy is used?

What percentage of overall US energy needs go to producing food?

1-3%

3-5%

5-7%

10% or more

How much energy is used?

The food sector now consumes 10.4% of all energy used in the United States.*

Globally, the food sector consumes between 10 and 15% of all energy used in industrialized countries.**

In the United States, 2-5% of US energy consumption, is used on the farm alone.***

Energy needs for food

The cheeseburger

…from farm to plate

Carlsson-Kanyama, Annika and Mireille, Faist, Energy Use in the Food Sector: A data survey

Close up: the hamburger

Hamburger Ingredients* Bread .16 lb Hamburger .19 lb Dressing .04 lb Lettuce .06 lb Onions .0037 lb (freeze dried)

Cucumber .016 lb (pickled)

Cheese .032 lb

Cultivated Wheat Milled Grain Flour

Baked Bread

To Storage To Restaurant Burger

Bread supply chain

Bread supply chain: energy needs

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Crop Productionand Drying

Milling Baking Storage Delivery toRestaurant

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Bread supply chain: energy needs

The energy inputs accumulate from field to table.

The calories of food energy decline.

Energy needed for food production often exceeds the energy contained in the food product.

Cumulative Energy Inputs

Meat patty supply chain

Crop Production

Drying

Fodder Production

Feed Consumed

Slaughter House Cutting To Storage To Restaurant BurgerTo Grill

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Storage Frying Transportation

High Energy Consumption Estimate

Low Energy Consumption Estimate

Cumulative Energy Inputs

Meat patty supply chain: energy needs

Hamburger energy profile

The total energy inputs to produce a hamburger are between 1,743 and 4,454 calories of energy inputs required to produce a hamburger.*

Each hamburger contains 310 calories of food energy.**

In addition to the kitchen, our supply chain also is a major contributor.

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Total Energy Inputs for a Hamburger

Bun

Burger

Cheese

Pickle & Onion

Lettuce

Intrinsic or Extrinsic

Cultivated Wheat Milled Grain Flour

Baked Bread

To Storage To Restaurant

Extrinsic or Intrinsic

Local and Global!

Food has been traded for 2K, 5K or 10K, as you choose to believe

Can we still both eat locally and act globally?

The Way Forward

Get this right and you have customers for life!

Service Customers great food that reflects a customer’s values and contributes to a healthy life and they’ll keep coming back.

Exceeding Expectations At Every Level

Our company’s reputation Total transparency about what we do Community connections A great dining environment Great food Great service

Literacy on Sustainability

Inside Park at Café St. Barts

Venerable New York institution on Park Avenue.

A completely new restaurant designed by New York-based Conant Architects with a new state-of-the-art kitchen designed by Pascoe-Jacobs Associates.

• ‘Wood’ used is sustainable bamboo

• Non formaldehyde wood products

• Low VOC (Volatile Organic Compound) paints and products

• Non toxic floor finishes Executive Chef Matthew

Weingarten is creating menus focusing on local, seasonal and responsibly sourced ingredients.

National Geographic

Employee focused

Visually stunning

Globally Sustainable

Matching culinary approach

Reflect Sodexo and Nat’l Geo Values

The University of VermontDudley H. Davis Student Center

“The sustainability concept for building is really a part of the University’s vision” Annie Stevens, Assistant VP for Student and campus life.

The center was constructed with great attention to Green Building Design and sustainability concepts.

The Sustainability Concept for the Student Center

Natural light. Green roof and terrace

collects rain and storm water.

A tunnel built from trees harvested on UVM land is attached to the building.

Water, heat and electricity use tracked on computer monitors in a public Sustainability Gallery.

Serves organic and sustainable food including soups and salads – developed by UVM’s Sodexo team.

Northwestern University

Northwestern University named the nation’s most vegetarian-friendly university by Peta2

One of 30 colleges nominated by our students nominees

20% of the 6,600 recipes Sodexo serves in the dining halls are vegetarian friendly

Sodexo and Illinois Farmers

Sodexo purchased over $4.75 million in fresh produce from Illinois farmers.

In season, this is about half of all produce purchases.

Food = Sustainability

1.3 billion people work in the food sector, the world’s largest employment group.

One quarter of all arable land is dedicated to food production.

One crop – coffee – is the second most valuable commodity in world trade after oil.

Food production accounts for 34% of water use in the U.S. and about 40% globally.

Food production accounts for more than 10% of energy use in the U.S. and 10-15% globally.

Sustainability = Food

Efforts to promote sustainability are linked to our ability to feed ourselves.

Climate Change is forecast to be the leading cause of hunger in the coming decades

Uncertainty in agricultural production means uncertainty in food price, supply and safety.

Sodexo’s Corporate Citizenship Priorities

Sustainability

Health and Wellness

Business Ethics

Fighting Malnutrition Worldwide

Diversity & Respect for Our People

Our Work Ahead: Our Common roles in the Global context