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What Now: Insights from The Firefly 500+, and Chains' Path Forward

Regular price: $6,500 per year

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04.29.20A Webinar by Datassential and the International Foodservice Manufacturers Association (IFMA).

The Past, Present, and Future of America’s Top 500+ Restaurant Chains

2020 EDITION

An Important Preface:

Because the Firefly 500+ Report was designed as a snapshot of the chain landscape in 2019, all unit counts, sales figures, and secondary insights

were collected prior to the outbreak of COVID-19 in the U.S. This analysis will inform the first half of this webinar, and the report it references.

All consumer and operator insights related to COVID-19 have been fielded weekly by Datassential since March 2020.

How This Webinar Works:

2019 Insights

How did the Firefly 500+ perform in 2019?

01

When Everything Changed

COVID-19 and its impact on the chain restaurant landscape.

02

Q&A

03

04.29.20A Webinar by Datassential and the

International Foodservice Manufacturers Association (IFMA).

SECTION 1:The 2019 Chain Restaurant Landscape

By The Numbers

2019

76 Pizza 54 American 49 Sandwich 45 Desserts & Snacks 37 Mexican 34Burger 28 Coffee 26 Salad & Health

Food 24 Chicken 23 Asian 22Bakery/Cafe 14 BBQ 13 Sports Bars 11 Steakhouses 10 Italian 08 Buffet

08 Mediterranean 06 Seafood 12Other

LSRAsianBakery-CaféBurgerChickenCoffeeDessert-SnackMexicanPizzaSalad-HealthfulSandwichOther

FSRAmericanBuffet-CafeteriaFamily DiningItalianPizzaSeafood-SteakSports BarRegional-Ethnic

207,030

164,503

42,527

26,617

10,28415,811

522

+0.8%

+0.3%

+2.8%

-1.0%

+0.2%

-1.9%

+3.2%

-4.0%

-2.0%

0.0%

2.0%

4.0%

0

50,000

100,000

150,000

200,000

250,000

LSR Quick-Service Fast Casual FSR Midscale Casual Dining Fine Dining

2019 Units 1-Year Change

Firefly 500+ UnitsUnits for the Firefly 500+ grew by 0.5% compared to 2018. At 233,655 total units,

the Firefly 500+ chains account for 34.6% of industry units.

+12.0%

+4.2%

+2.0%

+1.7%

+1.4%

+1.2%

+0.9%

+0.7%

-0.1%

-1.0%

-1.9%

LSR Salad-Healthful

LSR Chicken

LSR Coffee

LSR Mexican

LRS Asian

LSR Bakery-Café

LSR Dessert-Snack

LSR Burger

LSR Pizza

LSR Other

LSR Sandwich

+1.4%

+0.6%

+0.2%

+0.2%

-0.4%

-1.4%

-3.2%

-4.5%

FSR Sports Bar

FSR Family Dining

FSR Seafood-Steak

FSR Pizza

FSR Italian

FSR Regional-Ethnic

FSR Buffet-Cafeteria

FSR American

SEGMENT UNIT GROWTH

FULL-SERVICELIMITED SERVICE

$249,219,096

$192,171,888

$57,047,208$70,621,190

$17,674,238

$50,293,860

$2,653,092

+4.1%+3.6%

+5.8%

+0.3%

+1.5%

-0.3%

+2.7%

-4.0%

-2.0%

0.0%

2.0%

4.0%

6.0%

8.0%

$0

$50,000,000

$100,000,000

$150,000,000

$200,000,000

$250,000,000

$300,000,000

LSR Quick-Service Fast Casual FSR Midscale Casual Dining Fine Dining

Firefly 500+ Sales

2019 Sales (000) 1-Year Change

Sales for the Firefly 500+ grew by 3.2% compared to 2018. At $319.89 billion, the Firefly 500+ chains account for 67.3% of total industry sales.

.

+3.2%

+2.0%

+1.8%

+0.4%

-0.1%

-0.2%

-1.3%

-2.9%

FSR Sports Bar

FSR Family Dining

FSR Seafood-Steak

FSR Italian

FSR Pizza

FSR Regional-Ethnic

FSR Buffet-Cafeteria

FSR American

+11.3%

+9.5%

+7.1%

+4.9%

+3.9%

+3.6%

+2.4%

+1.8%

+1.6%

+0.4%

-0.1%

LSR Salad-Healthful

LSR Chicken

LSR Mexican

LSR Coffee

LSR Burger

LSR Bakery-Café

LRS Asian

LSR Dessert-Snack

LSR Pizza

LSR Other

LSR Sandwich

SEGMENT SALES GROWTH

FULL-SERVICELIMITED SERVICE

76

%

61

%

60

%

59

%

58

%

54

%

52

%

50

%

50

%

49

%

47

%

45

%

45

%

38

%

30

%

27

%

25

%

22

%

20

%24

%

39

%

40

%

41

%

42

% 46

% 48

%

50

%

50

%

51

%

53

%

55

%

55

%

62

%

70

% 73

%

75

% 78

% 80

%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

LSR

Bu

rger

LSR

Co

ffee

LSR

Des

sert

-Sn

ack

FSR

Fam

ily-D

inin

g

LSR

Ch

icke

n

LSR

Piz

za

FSR

Am

eric

an

FSR

Sea

foo

d-S

teak

LSR

Mex

ican

LSR

San

dw

ich

LSR

Asi

an

LSR

Bak

ery

LSR

Oth

er

FSR

Sp

ort

s B

ar

FSR

Reg

ion

al-E

thn

ic

LSR

Sal

ad-H

ealt

hfu

l

FSR

Bu

ffet

-Caf

eter

ia

FSR

Ital

ian

FSR

Piz

za

Proportion Of Segment Belonging In…The Top 250 The Lower 250

Beyond the Halfway Point

2019 HIGHLIGHTS:

Frozen Dessert, Suddenly Cool Again.

Segment Size Unit Growth Sales Growth

2018 43 -0.04% -0.04%

2019 46 +0.8% +1.9%

The previously flat-lining segment saw positive figures:

Promising new entrants may signal a wave of redefinition:

01

2019 HIGHLIGHTS:

Salad-Healthful Abounds with Opportunity

LSR Salad-Healthful remains the growth champion for 2 consecutive years:

Although the segment is rapidly expanding, all menu categories can still lead to growth:

02

10.6%12.0%11.3% 11.3%

2018 2019

Unit Growth Sales Growth

Avg. Unit Growth Avg. Sales Growth

Bowl-Focused +36.8% +34.5%

Varied-Healthful +20.3% +15.9%

Smoothie & Juice +11.6% +10.3%

2019 HIGHLIGHTS:03

The 2019 Plant-Based Momentum

Some quick statistics:

The list of major chains that have tested or menued plant-based alternatives include:

Dunkin'Glory Days GrillSmoothie KingCarl's Jr.Denny'sBurgerville USAUno PizzeriaQdoba

Cheesecake FactoryShari'sCoco's BakeryKFCTaco CabanaDel TacoHard Rock CafeBurger King

Red RobinBlaze PizzaLe Pain QuotidienStarbucksChipotlePizza Hut

“PLANT-BASED”

+495.7%“PLANT-BASED BURGER”

+112.8%

“PLANT-BASED”

34 LTOs

2019 HIGHLIGHTS:05

Winner, Winner, Chicken (Sandwich) Dinner

The strength of an excellent LTO:

Popeye’s Q4 Revenue

$1.3 billion

>

2019 Total Sales

2019 Total Sales 2019 Total Sales+

OR

SECTION 2:COVID-19 and Its Impact

04.29.20A Webinar by Datassential and the

International Foodservice Manufacturers Association (IFMA).

COVID-19 INSIGHTS

12%NEITHER

14%FINANCES

74%SAFETY

What would keep people from dining out May 1?

40%ECONOMIC

CRISIS

60%HEALTH

CRISIS

What are people more concerned about?

Don’t assume 2020 will be 2009.

0%

5%

10%

15%

20%

25%

30%

35%

40%

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

COMBO & VALUE MEALSas a % of all new chain menu introductions

(2.8%) (5.9%) (8.6%) (15.0%) (11.1%) (9.0%) (8.0%) (7.4%) (6.6%) (5.7%) (6.5%) (6.4%) (6.0%) (4.1%)

36.9%

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

QSR

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

MIDSCALE

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

FAST CASUAL

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

CASUAL DINING

25.2% of new items+12.8% vs. historic average

8.4% of new items+5.0% vs. historic average

10.6% of new items+4.9% vs. historic average11.5% of new items

+4.6% vs. historic average

COMBO & VALUE MEALSas a % of all new chain menu introductions

0%

2%

4%

6%

8%

10%

12%

14%

16%

Des

sert

San

dw

ich

Ap

pet

izer

& S

ide

No

n-A

lc B

ever

age

Co

mb

o &

Val

ue

Mea

l

Mea

t En

trée

Ad

ult

Bev

erag

e

Bre

akfa

st D

ish

Seaf

oo

d E

ntr

ee

Sala

d

Bu

rger

Mex

ican

Dis

h

Pas

ta D

ish

Spec

ialt

y En

tree

Bre

akfa

st P

astr

y

Piz

za

Bre

akfa

st S

and

wic

h

Sou

p

Kid

En

tree

Co

nd

imen

t

historic average 2009

SHARE OF CHAIN MENU INTROS

Progress from 2019 is broadly wiped out.

COVID-19 INSIGHTS

CORONAVIRUS FOODSERVICE IMPACT MODEL

$484.4

$377.2

$464.6

$475.4

$345.1

$300.0

$350.0

$400.0

$450.0

$500.0

$550.0

2018 2019 2020 (Forecast)

No COVID-19 COVID-19 COVID-19 with second wave

Datassential and IFMA forecast a -22% impact of COVID-19 on 2020 foodservice sales

If there’s a second wave of COVID-19 cases this fall, the negative effect could be -29%

1.6%

1.6%

1.9%

2.0%

2.4%

3.2%

3.4%

3.8%

4.9%

7.1%

9.5%

11.3%

LSR Dessert

LSR Pizza

FSR Seafood-Steak

FSR Family Dining

LSR Asian

FSR Sports Bar

LSR Bakery Café

LSR Burger

LSR Coffee

LSR Mexican

LSR Chicken

LSR Salad-Healthful

COVID-19 INSIGHTS

Who still has momentum?

2019 Growing Segments

01With lunch under pressure, how do health-focused limited-service chains pivot?

02Can focused menus, fast-casual leaders, and off-premise capabilities help LSR chicken, Mexican, and coffee brands stay competitive?

03Is the winning streak over for sports bars if there are no live sports for months?

04Before COVID-19, plenty of upscale casual-dining chains weren’t wrong to be delivery skeptics. The rules have changed.

05After a solid 2019, can dessert, snack, and treat chains make their signature products fit for delivery and takeout?

COVID-19 INSIGHTS

Dinner leapfrogs lunch as the top restaurant daypart.

0%

5%

10%

15%

20%

25% Dinner

Lunch

Breakfast

Snack

SHARE OF RESTAURANT TRAFFIC BY DAYPART, March 25 – April 14

COVID-19 INSIGHTS

-19%

29%

Pent-up demand will be a mixed bag for FSR chains.

Consumers likely to CUT BACK on FSRrestaurant meals IF BUDGETS WORSEN

Consumers likely to SPEND MORE on FSR restaurant meal IF BUDGETS IMPROVE

COVID-19 INSIGHTS

0%

5%

10%

15%

20%

25%

30%

Healthy foods Full-servicerestaurants

Groceryprepared foods

Eating placeswith tipping

Grocery snacks Limited-servicerestaurants

Heat & eatgrocery

products

Beverage withmeal

Premiumgrocery brands

Snacks AFH Coffee AFH Apps & desserts Alcohol withmeal

Going out fordrinks

will SPEND MORE if finances improve will SPEND LESS if finances worsen

benefits the most from an improved economy

suffers the most if economy worsens

Safe experimentation will be key for off-premise success.

63%

51%

50%

44%

41%

40%

37%

34%

32%

29%

Pizza

Burgers & Sandwiches

Meat entrees

Pasta & noodle dishes

Sides

Mexican dishes

Soups & chili

Asian dishes

Salads

Desserts & sweets

73%

68%

64%

63%

63%

62%

61%

60%

51%

48%

Take-and-Bake Comfort Foods

Build-Your-Own-Pizza Kit

Build-Your-Own Tacos or Burritos Kit

Ready-to-Grill Restaurant Steaks

Take-and-Bake Desserts

Signature Seasonings, Sauces, and Dressings

Build-Your-Own-Burger Kit

DIY BBQ Kit

Decorate-Your-Own Dessert Kits

Cocktail Kits

FOODS CONSUMERS GRAVITATE TO DURING COVID-19:

CONSUMER INTEREST IN DIY DELIVERY OPTIONS:

COVID-19 INSIGHTS

COVID-19 INSIGHTS‘Essential worker’ label reframes labor questions.

72%

45%

45%

17%

5%

Fine Dining

Casual Dining

Midscale

Fast Casual

QSR

% Operators Who Have Cut ≥75% Of Their Staff

16%17%

33%

20%

15%

7%

12%

23%

19%

16%

19%

21%

17%

11%

22%

14%13%

Men

Wo

men

Gen

Z

Mill

enn

ial

Gen

X

Bo

om

er+

Mar

rie

d

Sin

gle

Kid

s

No

Kid

s

<$2

5K

$2

5-$

50

k

$5

0-$

10

0k

$1

00

k+

Urb

an

Sub

urb

an

Ru

ral

CONSUMERS LAID OFF OR FURLOUGHED

How do you want to see restaurants supporting their staff members affected by COVID-19?

Total % Gen Z Millennial Gen X Boomer

Rehiring laid-off and furloughed workers 46% 20% 39% 46% 62%

Paid sick leave 33% 28% 25% 36% 39%

Providing health insurance 29% 30% 23% 29% 34%

Bonuses for front-line staff 24% 21% 27% 22% 24%

Raises for front-line staff 23% 20% 26% 22% 21%

Scheduling enough hours 20% 18% 19% 24% 19%

Letting front-line staff earn paid time off 20% 17% 23% 21% 17%

Consistent scheduling 19% 16% 19% 19% 20%

Subsidizing childcare / leave for parents 14% 26% 16% 13% 9%

Automatic tips or fees to benefit staff 13% 18% 18% 14% 6%

Pooling tips for all staff to share 12% 12% 11% 12% 14%

Supporting workers’ right to unionize 11% 19% 14% 11% 6%

Recruit staff from marginalized groups 10% 11% 17% 8% 2%

Delivery and digital go from niceties to necessities.

COVID-19 INSIGHTS

Since the COVID-19 outbreak, which have you experienced?

14%ENOUGH INCREASE IN TAKE-

OUT TO MOSTLY OFFSET DINE-IN LOSSES

86%SOME INCREASE IN TAKE-OUT, BUT NOT ENOUGH TO OFFSET

DINE-IN LOSSES

Takeout alone doesn’t cut it.

Which of these statements will be true when social distancing eases after COVID-19?

69%I’LL AVOID CROWDED PLACES; EVEN IF THE GOVERNMENT SAYS IT’S SAFE, I WON’T

BELIEVE IT

40%I’LL MAINTAIN MY

CURRENT USAGE OF TAKEOUT AND

DELIVERY FROM RESTAURANTS

01:Maintain the Sparks of Innovation.

KEY TAKEAWAYS:

04.29.20A Webinar by Datassential and the

International Foodservice Manufacturers Association (IFMA).

04.29.20A Webinar by Datassential and the

International Foodservice Manufacturers Association (IFMA).

02:There’s No Such Thing As Being Too Careful.

KEY TAKEAWAYS:

03:Off-premise Will Be The New Normal, At Least For A While.

KEY TAKEAWAYS:

04.29.20A Webinar by Datassential and the

International Foodservice Manufacturers Association (IFMA).

312-655-0622

Purchase The Report Here

Datassential’s Firefly 500+ Report Comes Out On Thursday, April 30.The Firefly 500+ Report reframes the industry’s big picture. Get more than the typical performance metrics. Understand the potential of the largest restaurant chains by integrating their numbers with insights from Datassential’s dynamic platforms.

In the coming weeks, Datassential will also be releasing the Chain Impact Model, a scoring system to rate which Firefly 500+ chains are best- and worst-positioned to immediately succeed in a post-COVID environment. The ranking system will be based on over 40 factors including consumer cleanliness perceptions, recent sales and unit growth, delivery availability, daypart sales, and service format.