Understanding How Consumer Trends Shape Your Market

Culinary Tides, Inc.Suzy Badaracco,

PresidentToxicologist, Chef,

Dietitian

Who We Are…What We Do• Who we are:

– Private Trends Forecasting Think Tank – Staff = 7– 2 Satellite offices – Washington DC, Tokyo– Forecast work is created through military intelligence techniques,

Chaos Theory– Background: BS Criminalistics, Assoc. Culinary Arts, MS Nutrition

• Toxicologist, Chef, Registered Dietitian

• What we do:– Partner long term w/ food industry clients – side along Think Tank– Look for patterns in Chaos to aid future strategy – Produce custom monthly & quarterly reports for clients

• Government, Technology, Adversaries / Allies, Competitors, Research, Flavor & Cuisine - tracked and forecasted specific to client

• Quarterly reports include updated 12-18 month forecast for each area

Chaos, Blips, Shadows, Trends• Chaos

– Birth

• Blips

• Shadows

• Trends– Tracking

• Consumers– Sentiment vs. Behavior, Drivers, Recovery Behavior

• Health Horizons– Generational Concerns– Health Drivers

• Flavor Horizons– Meal Patterns, Settings, Preparations, Flavor Landscape– Couriers, Ricochets, Rock Stars & Rising Stars, Orphan

• How to Play on a New Playground– Headwinds & Tailwinds, Forecast, Suggestions

Today’s Area of Focus

Consumers

The Generations: AgeThe Depression Era• Born: 1912-1921• Coming of Age: 1930-1939• Age in 2013: 92 to 101• Current Population: 11-12 million (and declining rapidly)

World War II • Born: 1922 to 1927• Coming of Age: 1940-1945• Age in 2013: 86-91• Current Population: 11 million (in quickening decline)

Post-War Cohort•Born: 1928-1945•Coming of Age: 1946-1963•Age in 2013: 68 to 85•Current Population: 41 million (declining)

Boomers I or The Baby Boomers• Born: 1946-1954• Coming of Age: 1963-1972• Age in 2013: 59-67• Current Population: 33 million

Boomers II or Generation Jones• Born: 1955-1965• Coming of Age: 1973-1983• Age in 2013: 48 to 58• Current Population: 49 million

Generation X• Born: 1966-1976• Coming of Age: 1988-1994• Age in 2013: 37 to 47• Current Population: 41 million

The Generations: AgeGeneration Y, Echo Boomers or Millennials• Born: 1977-1994• Coming of Age: 1998-2006• Age in 2013: 19 to 36• Current Population: 71 million

Generation Z• Born: 1995-2012• Coming of Age: 2013-2020• Age in 2013: 1-18• Current Population: 23 million and

growing rapidly

The Generations: Personality

Post War

discomfort

uncertainty

Cold War

securitycomfort

familiarity

known activities, environments

Boomers I

largely optimistic

good economic opportunities

Boomers II

economic struggles “I’m out for me”

narcissism

focus on self-help

skepticism -media /institutions

The Generations: Personality

Gen X“lost” generation

skepticism

“what’s in it for me”

“latchkey” kids

lowest voting participation

children of divorce

best educated

caution

pragmatism

concern over family

Gen Ytechnology wise

immune to traditional marketing

more ethnically diverse

flexible

style conscious

involved in family purchases

not brand loyal

not sustainability driven

price driven

eat according to social cues

Gen Z(++)

very brand loyal

sustainability driven

eat according to hunger

Influenced by peers, marketing, not parents

Consumer Sentiment vs. Behavior

3/13 4/13

Con

sum

er +

Con

sum

er -

*Shows recession vs. recovery behavior

Conference Board – consumer confidence h

Commerce Dept - consumer confidence h

Black Box- restaurant $ h

NRF- retail $ i

NRN-Millerpulse- same store $ h

NRA- restaurant performance index h

Consumer Reports- retail $ i

Reuters – Consumer confidence i

Black Box –same store $ h

Black Box –willingness to spend h

Black Box – restaurant traffic i

NRN-Millerpulse- same store $ h

Census Bureau- restaurant sales h

NRA- restaurant performance index h

Consumer Sentiment vs. Behavior*Shows recession vs. recovery behavior

Con

sum

er +

Con

sum

er -

5/13

Conference Board - consumer confidence h

Conference Board – sentiment index h

Conference Board – expectations index h

Conference Board – present situation index h

Black Box –same store $ h

NRN-Millerpulse- same store $ hCommerce Dept -

consumer spending h

Disconnect• Ignorance• Fear• Mis-informed• Sub-consciously

influenced• Denial• Cherry picked data

Conscious Lie• Mis-represent what they

paid for item• Buy something against

partner’s / parents wishes• To hide embarrassment• Anticipate correct answer

(surveys), leading q’s

Saying One Thing…Doing Another

*American Express research:Generation Y is more secretive and belligerent about money than baby boomers

• Texas A&M• Edelman Berland,

8095 Live

• Mintel

• Analytic Partners

• SocialVibe

• Industry Intelligence

• Cone Communications

• FGI Research

• Children between the ages of 3 and 8 - advertisements were more influential than parents

• 80% of Millennials want brands to entertain them, with 40% wanting brands to let them influence products via co-creation

• 90% of adults ages 25 to 34 prepared ethnic foods at home in the last month, 91% of adults with children under 18 made ethnic food

• About half of 18 and 44 year olds base brand loyalty on brand experience - video/online gaming, social media and third-party expert information through blogs and articles

• 70% of consumers actively engaged in social media have made a purchase as a result of being connected to a brand online

• 86% of US shoppers consider sustainability when buying groceries

• 91% of consumers say they would switch brands to one that supports a cause, and 90% say they would boycott if they learned of irresponsible behavior

• 36% of consumers say Meatless Monday campaign influenced their decision to cut back on meat and 47% ate more whole grains

Consumer Influencers

• InSites Consulting

• RAND Corporation

• NPD

• Accenture

• NPD

• NPD

• Just 4% of all Americans aged 15 to 25 thinks that a brand page on Facebook is a credible source of information about the product

• Teen snack purchases were influenced by taxes, subsidies and the presence of peers when buying snacks

• Consumers are looking for products made with less fats/oils, sodium and sweeteners, however, this has little influence on a diner’s choice of restaurant and menu item

• 20% of consumers switched the companies they typically buy from, an increase of 5% over 2011. However, 85% said companies could have done something to prevent them from switching

• 80% of US adults describe themselves as “extremely healthy” or “very healthy”, but only 20% have what is considered to be a “most healthy" diet

• 52% of Americans said figuring out their taxes is easier than knowing how to eat healthy, 23% of obese and 44% of overweight consumers say they are not trying to lose weight

Consumer Apathy / Disconnect

Health Horizons

Generational Health ConcernsH

ealth

Issu

eA

ssoc

iate

d E

lem

ents

GenerationBoomers +Gen XGen Y

(Millennials, Echo Boomers, Boomerangers)Gen Z

Cognitive Function(Focus, Memory, Mood)

DigestionObesity

Cognitive Function(Focus, Mood, Stress)

DigestionObesity

Cognitive Function(Development)

Vision

Digestion

Obesity

Diabetes

Immunity

Heart Health

Digestion

ObesityCancer

Vision

Muscle / Joint

Immunity

Diabetes

Cognitive Function(Focus, Memory, Mood)

Omega 3’s

Pre, Probiotics

Fiber

Sat, Trans Fat

SugarCaffeine

Fiber

Pre, Probiotics

Sat, Trans Fat

Sat, Trans FatFiber

Pre, ProbioticsCaffeine

Vit D, Calcium, Mg

SaltSat, Trans Fat

FiberPre, Probiotics

Caffeine

Omega 3’s

Breakfast BreakfastBreakfast Breakfast

Health Trends: Drivers

Health

Prevention

Digestion

CVD

h Flexitarian

Vision

Obesity

SeniorsJoint / Bone

Fiber / Grains Muscle

Mood

Control

DigestionDiabetes

Kids

Menu Labeling

Acrylamide

Satiety

Calories

Salt, Sugar, Fat

Apps

Seasonal / Local

Cholesterol

Simplify

ConvenienceNaturally Healthy

Benefit?

UnprocessedTrustOrganic / Natural

Free From

Health ClaimsFood Safety

Sustainability

Cognitive FunctionEnergy

Development / DeclineDepression

Memory

Focus Sleep

Stress

Relaxation

Obesity

Portion Control

Satiety

Dining OutKids

Snacking

Flavor Horizons

Health Couriers*Couriers shuttle trends in from neighboring industries / focuses

Health Couriers

i Salt, Fat, Sugar

Botanicals

Double sided menus

Flavorful Health

Gluten free backlash

Mindful Snacks

Healthy Indulgences

Pure, Simple

Kids Focus

Meal Patterns

Meal Types

Vibrant

Seasonal

All Day Breakfast

Daypart Disintegration

Family Friendly Fine Dining

Farm Branded Ingredients

Perpetual Snacking

American Regionalism

Fast Casual Copycats

Kids Meal Evolution

Meal Settings & PreparationIn

spira

tion

Settings PreparationFactor

Tran

slat

ion *Rock Star Butchers, Millers, Bar Chefs

*Communal Tables, Shared Spaces

*Street Food, Underground Restaurants

*Pop-ups, Speakeasies

*Fast Casual, Approachable Fine Dining

*Vibrant, Inspired, Risk Taking

*Authentic, Rustic

*Approachable, Family Friendly

*Open Flame, Foraged

*House Smoked, Herb Infused

*Pickled, Fermented, Peppered

*Meatless*Minimally Processed

*Seasonal, Regional, Authentic

*Portion Size i, Portion Options h

*Scratch Prep, Wildcrafting*Adventure, Discovery

Wine & Travel Trends

Wine

Travel

South America

Central AmericaBelize

Panama

PeruBrazil

Guatemala

Argentina

Africa

Middle East

Jordan

LebanonIsrael

CongoSudan

Ethiopia

Oman

Regions

AfricaNZSpain

Argentina

Italy Chile

France

AsiaNepal

Philippines

Burma

CambodiaStyles

Petit Verdot Vouvray

Sweet Red

Muscato

Sparkling

Cocktails

House blends

Experiential

Themed

Leap/Bucket List

Earthing

Great Barrier Reef

Northern Lts Sports

Multi-Destination

SpaSpaceSettings

Happy Hours hSpeak-Easies

Rotating/GuestBartender

Flights

PacificTasmania

GalapagosCaribbean

Arctic

Iceland

Norway

Scandinavia

Antarctica

Sweden

Cuba

*Couriers - shuttle trends in from neighboring industries / focuses

Food & Flavor Landscape 2013Fa

mili

ar /

His

toric

al

Personality

Exp

erim

enta

l

Seasoning Fruit/Veg DairyMacro BeverageGrainProtein

Interpreters Type ASensualsCage-Dancers Bi-PolarsTree Huggers

*Barrel Aged Cocktail

*Kombucha

*Vietnamese Coffee

*Dessert Cocktail*Sipping Vinegar

*Kefir*Agua Fresca

*Bubbles

*Culinary Cocktails

*Micro-Distilleries

*Lemonade*Ancient Tea

*Coconut

*Moonshine*Hand Crafted

Soda

*Grapefruit

*Roots

*Coconut

*Berries

*Chilies*Kale

*Citrus

*Pumpkin

*Muntries*White

Strawberries

*Finger Limes*Hibiscus

*Sunchokes

*Mizuna*Seaweed

*Kimchee

*Wild Greens

*Offal

*Almond Butter

*Eggs

*Wild Game

*Beans

*Oysters*Sardines

*Smoke

*Pickling*World Salt

*Chilies

*Citrus

*Horseradish

*Chutney

*Zip code honey

*Curry

*Nordic*Flowers*Ashes

*Huacatay

*Flavored Heat

*Sour/Fermented*Miso

*Hyssop

*Geranium leaf

*Sprouted

*Grits*Arepas

*Freekah

*Chia

*Global Noodles

*Farro

*Black rice

*French Pastry*Quinoa

*Oats

*Lentils*Multi-grain

Tortillas*Waffles

*Popcorn*Greek Yogurt

*FarmsteadCheese

*Ricotta*Goat

Cheese

*Artisan soft serve

*Insects

*Goat, LambBellies

*Skin

*Lethal*Invasivors

*Blood*Bone Marrow

*Fin to Tail

*Salumi

*LebaneseYogurt

*Paneer

*Plant BasedDairy

*Burrata*Savory ice

cream

Flavor & Cuisines – Rock / Rising Stars

• Rock Stars• Soul Food• Asia – Korea, Vietnam• Central America –Regional

Mexico• South America – Peru• Middle East

• Rising Stars• Africa – Egypt, Morocco, S. Africa,

Kenya• Caribbean, Pacific- Cuba, Fiji, Tasmania• Asia – Nepal, Cambodia, Philippines• Central America –Nicaragua,

Guatemala, Belize• South America- Ecuador• Arctic – Denmark, Scandinavia, Norway

Pathways:

USA – Regional, Regional SpecialtyForeign Familiar (think Mexican) – Regional, Regional ComfortNuevo Foreign (think Middle East) – National, National Comfort

Other Flavor Factions & Their Parentage• Central America

– Fusion birth, Parents = Travel & So. American flavor trends– Costa Rica, Panama, Guatemala, Nicaragua, El Salvador, Belize, Honduras

• Asian Shift– Courier birth, Parent = Travel – Shift away from Thai, Japanese, Korean & towards Malaysia, Laos, Cambodia,

Nepal– Shift due to rise in consumer confidence, risk taking, adventure seeking

• Caribbean & Pacific– Courier birth, Parent = Economic recovery translated to travel shifts– Cuba, Bora Bora, New Zealand, Tasmania, Fiji, French Polynesia– Travel here signals luxury, time h, $$, playfulness

• Arctic– Fusion birth, Parents = Travel, Economic Recovery– Cross ties Arctic & EU – Antarctica, Nepal, Lapland, Iceland, Norway,

Scandinavia, Finland, Netherlands, Ukraine– Travel here signals solitude, bravery, $$, fearlessness, curiosity, exploration

Nordic: 1/11-3/13

Wine Ind.Bakery Food Mnft./RCA/IFT/ASTA

Hi-End Restaurant/ Celebrity Chef

Governments

Hollywood

Book Publishers

ADAAMAConsumer

Consumer Mags

Travel Ind.

Grocery

TV/News Mags

Industry Mags

Diet Ind.

Universities

Family / Quick Serve Restaurants

AACC

Packaging

Pharmaceutical

Cosmetics / Beauty

Biotech

Bars/Cocktails

*Birth

Overseas – Not USA

US

A

How to Play on a Changing Playground

Consumer Drivers - Recovery

Drivers

Economy

Men EvolveDeal Chic

Cost / Value Co-existRecession Rejection

Brands=ValueResilience

Optimism

Control, SafetyReassurance

Stability

Accountability

GMO

Legacy

Never Eat Alone

Health

Portion Options

Pure

FOP

Wellness=Quality

Kids

Snacking

Sustainability

Seasonal

Green Verification

Animal Rights

Re-commerce

Indigenous

Affordable Green

Risk Taking

Motivation

Family Meals

Mobile Relationships

Value

Simplicity

Authenticity

Escapism

Playfulness

BrandsInvigorating

Red Herrings

Red Herring• Gluten free • Private Label• Functional Food• Rock star chefs• Comfort Food • “Foodies” • Budget • Trade down • Frugality• Local

Re-FocusDiabetes (low GI)Brands make comeback, Brands = ValueWhole food, Nutrient density, PureRock star butchers, Bar chefs, FarmersGlobal Comfort, Playfulness, Adventure, RiskButcher, Baker, Agri, Renegade, YouTube ChefConvenienceTrade offRecession Rejection, Resilience, Value (not $)Global, Seasonal

Consumer Behavior: Recovery ForecastIn

spira

tion

Cause

Priorities Spending Food & FlavorFactor

Tran

slat

ion

Income hTime i Fear i

•Efficiency•Ease

• Convenience trumps budget

•Brands rebound

•Return to restaurants

•Travel abroad h

•Value•Worth

•Value trumps budget

•Organic rebounds

•Green spending h

•Trade off trumps trade down

•Coupon use i

•Explore

•Educate

• Exotic, experimental trumps comfort

•Luxury, Indulgence rebound

•Desserts in spotlight

•Playfulness, risk returns• Wine varietals,

regions h

Forecast: 12-18 months Convenience Store new competition for Grocery, QSR, Fast Casual

Restaurant performance, consumer confidence continue upward swing

Breakfast is mealtime to watch for signals of economic recovery– Breakfast traffic h = sign that economy h

Vegetarian / Flexitarian #s will be linked directly to sustainability, obesity– Sustainability & Obesity h = expect Veg / Flex h

Flavors / cuisines- more extreme, adventurous items as recovery unfolds

Wines will cross borders to unfamiliar regions, varietals

Beverages regionalize

Vegetable/seasonings demonstrate consumer experimentation vs. caution

Beverage, meat, dessert categories act as barometers for consumer mood– Cocktails, craft beer, wine $ h, desserts h, insect eating = recovery behavior– Cheap domestic beer, wine $ i, cocktails i, desserts i, meatloaf = recession behavior

Suggestions Know the birth and lifecycle of a trend prior to deciding to

enter so you can foretell how to navigate it

Neither love nor hate a trend – emotions will fog the trend’s true pattern and you may be blindsided when it shifts

Spend more time researching a trend’s personality and trajectory than worrying about what your competitors are doing – after all, they may be idiots

Thank You!

Culinary Tides, Inc.

Suzy BadaraccoPresident

www.culinarytides.comsbadaracco@culinarytides.comhttps://twitter.com/sbadaracco

(503) 880-4682