MenuTrends DIRECT Mushroom Menuing

1. MenuTrends DIRECTMushroom Menuing www.datassential.com | 877.886.3687

2. MenuTrends Definitions • MenuTrends DIRECT (MTD) is a true quantitative system for detecting and tracking food, beverage, flavor, and ingredient trends. It is the only statistically projectable and trackable menu resource. The database is representative of the actual US distribution of restaurants based on segment, cuisine type, and geography. • Data in this deck was pulled from the US Chains and Independents database consisting of 4,800 restaurants split between chains, regionals, and independents. The data was pulled from the most current time period, 2012 (May-April). • A few definitions: • Incidence: the % of dishes that contain a particular food, flavor, or ingredient. (measure of menu popularity and versatility). • Penetration: the % of restaurants that serve a particular food, flavor, or ingredient (measure of menu adoption). • Quick service restaurants are counter service restaurants, lower priced, no waitress service, most often served on disposables, and do not serve alcohol. Examples include McDonald’s, Taco Bell, and Panera Bread. • Midscale restaurants are waitress service, mid priced, considered a good value, alcohol is not served, and have a comfortable, casual atmosphere. Examples include Denny’s, Sizzler, and Steak and Shake. • Casual Dining restaurants are waitress service, higher priced, alcohol is served, the atmosphere is more upscale than midscale. Examples include Applebee’s, Olive Garden, and PF Chang’s. • Fine Dining restaurants are white table cloth restaurants with high end service, premium ingredients, an onsite chef, and an entrée average price of at least $25. Examples include Morton’s Steakhouse, Capital Grille, Nobu, Per Se, and French Laundry

3. Datassential Study on Mushrooms Datassential is a well-known menu researcher which has almost 5,000 up-to-date menus in its database Using that database, Datassential has provided a look at mushrooms on the menu and showcases strong growth in foodservice Comparisons made between 2012 vs. 2011 as well as 2012 vs. 2006

4. Included in the Research • Penetration of mushroom on the menu (% of operators using mushrooms) • Incidence of mushrooms on the menu (% of dishes that feature mushrooms) • The various segments, types of operation, dayparts, menupartsand regions that use mushrooms • The value of mushrooms on the menu (do they command higher prices)

5. Deeper Look Into the Following • Pizzas • Center of Plate Beef • Egg Dishes (Breakfast, Quiche and Other) • Pasta • Center of Plate Chicken • Hot Sandwiches • Burgers • Fried Vegetables • Vegetarian

6. Comments and Caveats • While this study features menu mentions across all varieties of mushrooms, many operators do not mention a specific variety…using only “mushrooms” as descriptors. In those cases, most of those mentions are included under “White Button”. • While some areas may show decreases in penetration, in many cases, this is because there may be more items on menus today vs. 2006. Example: Mushrooms are flat/down in Vegetarian dishes, but there are considerable more Vegetarian dishes on menus today. • None of the following equates directly to volume, but correlations can be made • The category “Wild” may be wild mushrooms but are more likely a mixed medley, depending on how the operation describes mushrooms on their respective menus

7. Executive Summary Executive Summary

8. Penetration By Segment • 81% of all restaurants serve mushrooms, an increase since 2006 • By Segment... • 98% of Fine Dining • 89% of Casual (like Applebee’s and TGI Friday’s) • 85% of Midscale (like Denny’s and IHOP) • 47% of QSR (like McDonald’s and Burger King)…note that survey was fielded before Wendy’s launched its Bacon Portabella Melt • 63% of Fast Casual

9. Incidence and Usage • 6% of all savory items on menus feature mushrooms, an increase since 2006 • Independents are the highest users, but chains are the fastest growing --up 10% since 2006 • Chain growth is driven by QSR (up 21%) and Fast Casual (9%) • The Northeast region has the greatest penetration on menus followed by Midwest, West and South…but all regions are growing

10. Incidence—Type of Restaurant • Virtually 100% of French, Thai, Italian, Other European and Pizza restaurants feature mushrooms • More than 95% of Chinese, Cross-Cultural and Steakhouse restaurants have mushrooms on the menu • In terms of fastest growing…Mexican is up 13%, South American is up 45% and Caribbean is up29% • BBQ, Dessert, Snack and Indian are declining

11. Incidence—Daypart and Menupart • Restaurants with All Day menus are tops in featuring mushrooms on the menu • Dinner menus that feature mushrooms have grown 24% since 2006 while Breakfast menus are up 10% • Mushrooms are featured most on Entrees and then on Appetizers and Sides. Sides have grown 14%, Appetizers 9% and Entrees 3%.

12. Incidence—Variety of Mushrooms • White button mushrooms featured on menus have basically remained flat since 2006. But, there are more menu items today than in 2006, so there has been growth. • Portabellas featured on menus grew 2% since 2011 and 29.5% since 2006 • Criminis increased 31% since 2011 and 89% in the last 6 years • Oysters increased 25% vs. year ago and 150% since 2006

13. Mushrooms Menued with Key Foods • Pizza—#3 trailing only Onion and Tomato as a topper; ahead of Sausage, Pepper and Pepperoni • Beef Entrees—#2 behind Onions • Non-Fried Veggies—#1 • Egg Dishes—#6 trailing Bacon, Onion, Sausage, Tomato and Ham • Pasta--#8, but #1 vegetable ingredient • Chicken--#1 ingredient • Hot Sandwich--#14 ingredient, #3 vegetable • Burgers--# 6 ingredient, trails onion and lettuce in vegetables • Fried Veggies--#3 behind onions and jalapeños • Vegetable Entree--#3 behind eggplant and beans Note these are named ingredients: If a burger comes with lettuce and tomato, but is not listed as such on the menu, it is now reflected here. Same is true with Meat Lovers Pizzas…if Pepperoni is not called out, it is not reflected.

14. Pizza Category • 99.3% of restaurants that menu Pizza feature mushrooms • As a topping, mushrooms are mentioned most often with onions, peppers, sausage and pepperoni • Fastest growing item on Pizza menus is “Roasted Portabellas” (small base), outpacing “Gluten Free”, “Parmigiana”, “Truffle” and “Forest” descriptors (both of the latter are mushroom-related)

15. Center of Plate Beef Category • Mushrooms mentioned with COP Beef declined from 40% to 38% in the last 6 years • Highest users of mushrooms with COP Beef include Chinese, Italian and Steakhouse restaurants • Mushrooms with COP Beef can command higher prices—in every segment with the exception of fine dining

16. Non-Fried Vegetable Appetizer Category • Mushrooms have declined in menu mentions in the NF Vegetable Appetizer category • Restaurants most likely to feature mushrooms on NF Vegetable Appetizers include Seafood, Italian and Steakhouse operations • Mushrooms on NF Vegetable Appetizer menus command higher prices

17. Egg Category • Mushrooms are growing in penetration on Egg dishes (Breakfast and Quiches) across all mushroom varieties • Coffeehouse/Bakery and American restaurants have the highest incidence • Again, mushrooms menued with egg dishes command higher prices than other egg dishes

18. Other Categories • Pasta—Mushrooms mentioned with Pasta have increased on menus. 38% of all Pasta dishes feature mushrooms. • Chicken—Mushrooms mentioned with Chicken are flat since 2006. Italian, Chinese and Thai restaurants have highest feature incidence. • Hot Sandwiches—Mushrooms mentioned are down. Pizza, Sandwich, American, Steak and Italian restaurants feature them the most.

19. Other Categories • Burgers—White Button mushroom mentions with Burgers are flat, while Portabella mentions are up (prior to Wendy’s launch). Mushrooms on Burgers clearly command higher prices vs. other Burgers • Vegetarian—Growth of mushroom mentions is flat. Chinese, Thai and Italian feature the most mushrooms on Vegetarian options. Portabellas command premium menu prices.

20. Overall Mushroom Menuing

21. Mushrooms are common in foodservice, but most common among full-service operations. • Virtually all fine dining operators currently menu at least one item featuring mushrooms, and the vast majority of MSRs and CDRs do the same. • Mushrooms are menued by the majority of limited service restaurants, though they are far less common than among full service operators. • Growth of mushroom penetration has been limited over the past six years and limited primarily to the fine dining segment. Source: Datassential’s US Chains & Independents MenuTrends database featuring approximately 2,500 chain and 2,500 independent menus; data pulled across appetizers, sides and entrées.

22. Penetration of mushrooms has remained stable since 2006. • There has been little change in the penetration of menus in any segment since 2006. • The fast casual segment experienced a brief decline in mushroom menuing in 2010 but mushrooms have since regained their position against 2009 figures. Source: Datassential’s US Chains & Independents MenuTrends database featuring approximately 2,500 chain and 2,500 independent menus; data pulled across appetizers, sides and entrées.

23. Percent of All Items That Include Mushrooms—By Segment. • Incidence is solid for a non-protein item like Mushrooms. Highest among fine dining operators among which approximately 8% of all savory items feature mushrooms. • Incidence growth is driven primarily by the QSR segment, while there have been some declines in incidence among fine dining operators. Source: Datassential’s US Chains & Independents MenuTrends database featuring approximately 2,500 chain and 2,500 independent menus; data pulled across appetizers, sides and entrées.

24. Incidence, like penetration, has remained relatively unchanged since 2006. • While the fine dining has experienced consistent – albeit minor – declines in mushroom incidence, most other segments have remained stable in the share of savory items featuring mushrooms. But note that there are more items on the menu in 2012. Source: Datassential’s US Chains & Independents MenuTrends database featuring approximately 2,500 chain and 2,500 independent menus; data pulled across appetizers, sides and entrées.

25. Independents are, by far, most likely to menu mushrooms but chains are driving growth. • Independents, particularly ethnic operators, are driving mushroom penetration. • While chains are least likely to menu mushrooms, these operators are driving the growth – though limited – of mushroom penetration in the industry. +3% growth +10% growth Source: Datassential’s US Chains & Independents MenuTrends database featuring approximately 2,500 chain and 2,500 independent menus; data pulled across appetizers, sides and entrées.

26. Specifically, limited service chain restaurants are driving mushroom penetration growth. • All of the growth in chain penetration is driven by QSRs and fast casual operators. • In particularly the penetration of mushrooms in the QSR chain segment has grown by +21% since 2006. Among fast casual chains, mushroom penetration has grown by nearly +10% during the same period. +21% growth +9% growth Source: Datassential’s US Chains & Independents MenuTrends database featuring approximately 2,500 chain and 2,500 independent menus; data pulled across appetizers, sides and entrées.

27. Mushroom menuing is similar regionally, though mushrooms are slightly more common in the northeast. Source: Datassential’s US Chains & Independents MenuTrends database featuring approximately 2,500 chain and 2,500 independent menus; data pulled across appetizers, sides and entrées.

28. Ethnic operators use mushrooms extensively. • Some of the highest penetrated segments are ethnic including French, Thai, Italian, other European, and Chinese. Note, however, that these sub-segments tend to have fairly small unit counts. • Pizza is the largest segment to have a high penetration of mushrooms, with virtually all operators offering at least one pizza (or, more often, mushrooms as a topping option) with mushrooms. • Steakhouses, American and Seafood are also large segments with high indexing penetration. • Some of the most significant segments to experience strong penetration growth include coffee/ bakery, Mexican, burgers and mixed ethnicity. Source: Datassential’s US Chains & Independents MenuTrends database featuring approximately 2,500 chain and 2,500 independent menus; data pulled across appetizers, sides and entrées.

29. The strongest penetration growth has occurred on breakfast and dinner menus. • While dinner menus have experienced the strongest penetration growth for mushrooms at +24% since 2006, breakfast menus may offer the best opportunity for growth given not only the double digit penetration growth of mushrooms but the strength of this daypart overall. +24% growth +10% growth Source: Datassential’s US Chains & Independents MenuTrends database featuring approximately 2,500 chain and 2,500 independent menus; data pulled across appetizers, sides and entrées.

30. Mushrooms are most commonly featured in entrées. • The vast majority of operators offering items with mushrooms do so in the entrée menu part, which accounts for 81% of all mushroom dishes (a share that has remained unchanged since 2006). • Appetizers, and sides, are experience solid penetration growth though this has not yet translated into increased shares of menuing. +3% growth +9% growth +14% growth Source: Datassential’s US Chains & Independents MenuTrends database featuring approximately 2,500 chain and 2,500 independent menus; data pulled across appetizers, sides and entrées.

31. Mushroom Variety Menuing

32. Operators infrequently identify mushroom types. • While 82% of operators currently menu items with mushrooms, the vast majority do not identify the variety of mushrooms menued. • The vast majority of mushrooms – most often unidentified – are presumed to be button or white mushrooms. • Portobellos are the most commonly identified variety, though only 10% currently feature this variety. • Truffles, “wild” mushrooms, and black mushrooms round out the top varieties menued. • Strongest penetration growth since 2006 has occurred with crimini and truffles though this growth has been off of very small bases. • New varieties including wood ears, hen of the woods, matsutake, and black trumpets are impacting menus but nearly exclusively in the fine dining segment or ethnic independents. Growth in these new varieties, however, has been extremely strong. Source: Datassential’s US Chains & Independents MenuTrends database featuring approximately 2,500 chain and 2,500 independent menus; data pulled across appetizers, sides and entrées.

33. Operators infrequently identify mushroom types. Source: Datassential’s US Chains & Independents MenuTrends database featuring approximately 2,500 chain and 2,500 independent menus; data pulled across appetizers, sides and entrées.

34. Fine dining operators are most likely to identify mushroom varieties. • Even common varieties such as button are rarely identified by operators, though the vast majority of unidentified mushrooms tend to be button or white mushrooms. • The vast majority of specialty mushrooms are identified most often by fine dining operators. Mushrooms such as black, straw, Chinese and wood ear are commonly called out by midscale ethnic (most often Asian) operators. Source: Datassential’s US Chains & Independents MenuTrends database featuring approximately 2,500 chain and 2,500 independent menus; data pulled across appetizers, sides and entrées.

35. Independents dominate mushroom varietal call-outs. • While independents are far more likely than regional or national chains (with the exception of button and white mushrooms), identifying mushroom varieties is limited among these operators as well. Source: Datassential’s US Chains & Independents MenuTrends database featuring approximately 2,500 chain and 2,500 independent menus; data pulled across appetizers, sides and entrées.

36. Ethnic operators are the key cuisine sub-segments for nearly all mushroom varieties. • With few exceptions, independent ethnic operators are driving mushroom variety identification on menus. • The exceptions, or those mushroom varieties with high-indexing non-ethnic cuisine sub-segments as key users, include “wild,” truffle and button. Source: Datassential’s US Chains & Independents MenuTrends database featuring approximately 2,500 chain and 2,500 independent menus; data pulled across appetizers, sides and entrées.

37. Menu Adoption Cycle (MAC) Stages and Definitions • Of course, not all trends move through the cycle at the same pace or in the same order. Some trends move rapidly from inception to ubiquity. Some trends may enter at adoption, while others may drop out shortly after inception. Inception Adoption Proliferation Ubiquity • Picked up by casual dining independents • Quick to adopt / react • Risk takers that like to borrow from the inception stage • Traction at Casual Dining & QSR chains • Well-accepted trends from the adoption stage • Validation for a mass audience • Firmly established across all segments • Midscale dining typically last • In some cases, trend may be watered down from original • Fine Dining • Ethnic independents • Differentiating applications Source: Datassential

38. Menu Adoption Cycle: Mushrooms Wild Straw Oyster Chinese Black Morel Portobello Button White Black Trumpet Wood Ears Hen of the Woods Matsutake Crimini Porcini Truffle Chanterelle Inception Adoption Proliferation Ubiquity Source: Datassential

39. Mushroom Menuing by Item Type

40. Pizzas dominate entrée applications for mushrooms. • Pizzas are followed distantly by COP beef entrées (i.e. steaks), egg dishes (primarily breakfast), pastas, COP chicken and hot sandwiches. • Burgers are one of the more common entrée applications, but incidence is relatively low and growth is limited. • Breakfast items, including starches (crepes, etc.) and egg dishes, offer opportunities for growth given penetration, room for growth and current growth rates. Source: Datassential’s US Chains & Independents MenuTrends database featuring approximately 2,500 chain and 2,500 independent menus; data pulled across appetizers, sides and entrées.

41. Non-fried and fried veggie apps are the most common appetizer applications. • Other appetizer applications with larger penetration/ incidence shares for mushrooms include salads, samplers and quesadillas. • Growth in the appetizer menu part is driven largely by fries, bread appetizers (i.e. bruschetta), and a wide variety of other appetizer types. • Mushrooms are on the decline, however, across potato skins, wings, fried veggies (largely stuffed/ fried mushrooms), nachos and non-fried veggie appetizers. Source: Datassential’s US Chains & Independents MenuTrends database featuring approximately 2,500 chain and 2,500 independent menus; data pulled across appetizers, sides and entrées. “++” notes triple digit growth off of extremely small sample size.

42. Item Type Analysis: Pizza

43. Top Menued and Top Growing Profiles in Pizza Overall (%’s are penetration) Source: Datassential’s US Chains & Independents MenuTrends database featuring approximately 2,500 chain and 2,500 independent menus; data pulled across pizza only.

44. Pizzas are dominated by button/white/unidentified mushrooms. • Though white buttons are the most commonly menued mushrooms across pizzas, growth is being driven by specialty varieties including wild mushrooms, portobellos and truffles. • Other mushroom varieties have less than 1% penetration across operators offering pizza. Source: Datassential’s US Chains & Independents MenuTrends database featuring approximately 2,500 chain and 2,500 independent menus; data pulled across pizzas only.

45. Fine dining and CDRs are driving use of specialty mushroom varieties on pizzas. • Button/ white/ unidentified mushroom menuing in pizza is driven by QSR/fast casual operators, though these are also the most commonly menued among MSR and CDR operators. • Fine dining and, to a lesser extent, CDR operators are more likely to feature specialty varieties of mushrooms on pizza. Source: Datassential’s US Chains & Independents MenuTrends database featuring approximately 2,500 chain and 2,500 independent menus; data pulled across pizzas only.

46. Several operations use mushrooms extensively on pizza. • Note that while all other Asian and burger places with pizzas incorporate mushrooms on at least one option, these sample sizes are small. • Virtually all pizza operations currently offer mushrooms as a topping. • Mushrooms are also used extensively on pizzas in Italian and dessert/snack operations. • Note, these percentages are among each restaurant category currently menuing at least one pizza. Source: Datassential’s US Chains & Independents MenuTrends database featuring approximately 2,500 chain and 2,500 independent menus; data pulled across pizza only.

47. Pizzas featuring specialty mushroom varieties typically command a higher price. • Pizzas featuring mushroom, regardless of type, are generally priced higher than average pizza prices. In fact, based on the variety of mushroom featured that price can be nearly $3 more. • NOTE: Prices are across pizza sizes and may be as dependent on other ingredients as on the mushroom featured. Source: Datassential’s US Chains & Independents MenuTrends database featuring approximately 2,500 chain and 2,500 independent menus; data pulled across pizzas only.

48. Growing ingredients/flavor profiles in pizzas featuring mushrooms tend toward the premium or higher end including angus beef, shallots, cream sauces, and buffalo mozzarella. Source: Datassential’s US Chains & Independents MenuTrends database featuring approximately 2,500 chain and 2,500 independent menus; data pulled across pizzas only.

49. Item Type Analysis: COP Beef Entrées

50. Top Menued and Top Growing Profiles in COP Beef Entrées Overall (%’s are penetration) Source: Datassential’s US Chains & Independents MenuTrends database featuring approximately 2,500 chain and 2,500 independent menus; data pulled across COP beef entrées only.