Meat + Poultry - December 2004 - 37

examining industry data a logical first step is to assess what's happening from a macro perspective.
Technomic, Inc., the Chicago-based consultancy that has been
tracking the foodservice industry for almost 40 years, recently released an industry overview based on data collected for its Top 100
and Second 100 annual reports. According to its findings, foodservice industry sales in 2003 grew 3.4 percent to $288.4 billion, with
the 100 largest restaurant companies accounting for more than half
that total with $150.3 billion in sales.
The Technomic Top 100 increased at a faster rate than the industry
at-large, rising 5 percent in 2003. In fact, the Top 100 has outpaced
overall industry growth in five of the past six years, making them an
important customer base.
Limited-service restaurants account for approximately 73 percent
of Top 100 sales, which represents the lion's share of total industry
L.S.R. sales. While hamburger is king, it was the donut sector, with a
20.4 percent growth, that contributed the most to the segment's 2.1
percent growth rate.
The full-service restaurant category, while a fraction of the size
of L.S.R.s, is made up of eight sub-segments. Italian had the strongest growth rates (14.3 percent). Also in the F.S.R. segment, Top 100
companies do not dominate. Rather, small chains and independents
sales totaled $103.8 billion vs. the Top 100 at just under $44 billion.

there is a plethora of information - so much so that assessing it
can be confusing. Today's consumers are more sophisticated when it
comes to what they eat. Thus, data collection on such menu-related
topics as the use of big, bold flavors, customization, convenience,
portability, smaller portions and healthier options is ongoing. Changes, however, are often subtle, making them hard to interpret.
Technomic for example, reported that consumption patterns of
adults are shifting. A recent study asked consumers what types of
foods they are eating more and which they are eating less, producing the following results:

But sales are only one aspect of the big picture. Making an assessment of unit counts is just as important. These numbers show
why industry analysts continue to view "mom-and-pop" restaurants
as a key bellwether group. Market information provider The NPD
Group, Port Washington, N.Y., put it this way, "The little guys are a
big force in the restaurant industry." It also indicated that independents and small chains account for "about half of all customer visits..."
and added "... what's new and hot and exciting often starts at independents..." Other facts NPD noted are:
* There are 294,000 independent restaurants equating to
about 70 percent of U.S. establishments.
* Independents account for 60 percent of all meals consumed at restaurants. They also dominate servings of certain foods, including 62 percent of pasta dishes.

Interestingly, quick-casual restaurants show how the industry has put
the information to work. The menus are built around key current consumer needs. Foods are prepared when an order is placed, thereby giving
consumers the perception of freshness, customization and convenience
- all factors that are key consumer drivers, according to research.
Here's how it works: Chipolte, one of the largest quick-casual
chains, specializes in big burritos. Once an order is given, customers actually watch the flour tortilla being heated. Then, they can pick
and choose from a variety of fillings. Similarly, at Panera one can buy
fresh European-style breads by the loaf as well as choose from a variety of made-to-order sandwiches.

Menu trends
Numbers, however, mean little without also knowing what's happening regarding the actual product. When it comes to the menu,
DECEMBER 2004

Eating More
Water - 58 percent
Salads - 54 percent
Baked/grilled chicken - 40 percent
Fruit - 39 percent
Vegetables - 39 percent

Eating Less
French fries - 40 percent
Fried/breaded foods - 38 percent
Donuts - 38 percent
Fried chicken - 33 percent
Salty snacks - 31 percent

But what does the study really mean? Robert Goldin, executive
vice-president of Technomic, says he believes smart operators embrace this type of data. "Operators don't want to get caught off guard,"
he says. "Remember, even small consumption changes, as little as 1
percent, will have a major impact on an industry as large as this one."

Low-carb with caution
Low-carb is another consumer-driven change. "The low-carb phenomenon has made many industries sit up and take notice," says
Harry Balzer, vice president of the NPD Group. "I have never seen
the food industry jump on board to a fad as quickly as this low-carb
craze. Restaurant operators and food manufacturers are doing what

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Meat + Poultry - December 2004

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