General market info

Connect, Innovate and Inspire.

Seeking the shift and owning new consumers

All things Culinary

Agenda

• Market update• Foodservice Trends• Who after your Business• What can you do• Key driver of Sales for Foodservice• Conclusion

Beef Exports from grain-fed countries are projected to be down 10% in 2015.

-6%

-14%

-1%

0.00.20.40.60.81.01.21.41.61.82.0

US Australia Canada

Mill

ion

Tonn

es C

WE

Beef Exports 2011-2015

2011 2012 2013 2014 2015p

Source: USDA, FAS, PSD

45

47

49

51

53

55

57

59

6119

9719

9819

9920

0020

0120

0220

0320

0420

0520

0620

0720

0820

0920

1020

1120

1220

1320

1420

15f

Mill

ion

Tonn

esGlobal Beef Production

Source: USDA, FAS

Domestic production is down 4% YTD in 2015.

120

140

160

180

200

220

240

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

mill

ion

poun

dsDomestic Beef Production

2014 2015 Projection

Source: Canfax, CBGA

80859095

100105110115120125130

90 92 94 96 98 00 02 04 06 08 10 12 14

Dem

and

Inde

x (20

00=1

00)

Canadian Retail Beef Demand IndexIndex 2000=100

Source: Statistics Canada, CanFax, US Beef Demand Study Group

50

60

70

80

90

100

110

120

130

90 92 94 96 98 00 02 04 06 08 10 12 14

International Beef Demand (Index 2000=100)

Source: Cranfield 2012, CanFax Research

Domestic retail and international demand continues to climb in 2015

$180$200$220$240$260$280$300$320$340

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Cdn

$ pe

r cw

t

Canadian AAA Cutout Values

2014 2015 3 yr avg

Source: Canfax Research, AAFC

Record high wholesale beef prices are expected to remain strong through 2015.

Some cuts have dropped their prices in Q3 2015 (e.g. 50% Trim, Bone-in Shortrib).

$0 $2 $4 $6 $8 $10 $12

Fresh 50% Lean Trimmings

Bone-in Shortrib

Fresh 65% Lean Trimmings

Briskets 120

Bone-in Chuck Shortrib

Top Butt 13dn

Inside Skirt

Boneless Round

Flank Steak

Outside Skirt

Boxed Beef Prices - Selected Cuts, Q3 2015

Source: Canfax Research, AAFC

Larg

est Y

/Y c

hgSm

alle

st Y

/Y c

hg

King of grocery, centre of the plate.

$12$13$14$15$16$17$18$19$20$21

J F M A M J J A S O N D

$/kg

Retail Beef Prices

2013 2014 2015

Source: Statistics Canada

Market mover…

• Old projection versus reality

0

20

40

60

80

100

120

APR '07 APR '08 APR '09 APR '10 APR '11 APR '12 APR '13 APR '14 APR '15

Consumer confidence is higher in 2015

1

© 2015 Technomic Inc.

Apr ’1594.7

12

Few consumers plan to dine out more in 2015

More than in 201414%

About the same68%

Less than in 201418%

In 2015, do you think you will eat at restaurants more, less or the same amount as you did in 2014?

13

…but twice as many plan to spend moreIn 2015, do you think you will spend more, less or

the same amount at restaurants as you did in 2014?

Spend more28%

Spend about the same

53%

Spend less19%

-4%-3%-2%-1%0%1%2%3%4%

Feb '07 Feb '08 Feb '09 Feb '10 Feb '11 Feb '12 Feb '13 Feb '14 Feb '15

Foodservice sales slowly increasing% Change vs. Prior Year (12-Month Moving Average)

1


15

restaurant

retailer

?OR

16

Lines continue to blur as options grow

Meal kits Home delivery Fast food Fast casual

Casual dining Delivery RMS Grab-n-go

Food trucks Vending Snack boxes

Meal kits Home delivery Fast food Fast casual

Casual dining Delivery RMS Grab-n-go

Food trucks Vending Snack boxes

Retail Growth rate is approaching

that of restaurants

Retail: 3.3%Restaurants: 4.0%2014 growth:

17

Consumers’ consideration set expands


18

Many retailers have upgraded and expanded Ready Meals Solution programs

$5.9 billion and GROWING


Identify and respond to Foodservice vs retail limitations

20

Who’s winning?

RestaurantQuick service Supermarkets

Craveable items

Atmosphere

Overall value

Better-for-you options

Service speed

Convenience

Ingredient quality



endless choice and customization

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24

RestaurantHere’s what YOU can do about it

Acknowledge the threat for Fresh,With a story…

Beef is a single ingredient, clean label dense protein option raise with pride in Canada

Beyond “fresh,” focus on…

Unique

Signature

Craveable

26

27

authenticity

Build your differentiation on

28


HANDCRAFTED BURGERS

29


ACCENT ON FRESHNESS

30


FARM-FRESH FOODS

• Strong growth and an unique upsell strategy

• Review new beef cut concept with your Sales Reps… Promote innovative cuts

• Review your portion size for menu mix• Maintain premium local angle

Burger and Steak offer:

Other option for growth:

General market info

Food

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