Dessert Landscape October 2013

Everyday at Mintel…

QSR & Fast Casual Dessert Trends

Purpose & Methodology Purpose: The purpose of this project is to provide an overview of the dessert landscape within foodservice. Specifically focusing on limited service restaurants (QSR & Fast Casual), and Casual Dining. This includes a focus on innovative LTO desserts and shakes. Menu Insights, for the purpose of this report, the following filters were used: Restaurant Segments: QSR (All), Fast Casual (All), Casual Dining (All) All items in custom time period (Q2 2011- Q2 2013) Menu Item Dish: Dessert (All) Ingredient: Nuts (All), Fruit (All Usage of Ingredient: Toppings (All) Plate Options: Food, Center of Plate and Prepared Entrée Dish Menu City: Core Menus Mintel Menu Insights LTO Tracker Mintel Oxygen: Oxygen Casual Dining Restaurants 2013 Oxygen Quick Service Restaurants 2013

Cookies & brownies top as the most popular QSR & Fast Casual dessert Top QSR & Fast Casual Desserts, Q2 2011-Q2 2013 Dessert Dish 2011-Q2 2012-Q2 2013-Q2 % Change Q2 2013 vs. Q2 2011 Cookie 62 67 77 24.2% Brownie - Dessert 36 40 45 25.0% Cookie - Chocolate Chip 27 34 35 29.6% Frozen Custard 26 33 32 23.1% Ice Cream 29 -6.9% Ice Cream Cone 18 19 22 22.2% Pizza - Dessert 14 20 42.9% Cheesecake 13 46.2% Sundae 17 35.7% Cake - Chocolate 0.0% Breadsticks - Dessert 16 15 -18.8% Pie - Apple Gelato Frozen Yogurt 6 116.7% Churros 10 12 40.0% Ice Cream - Blended 11 9 -18.2% Cookie - Oatmeal Raisin 11.1% Cake 8 12.5% Banana Split - Dessert 7 14.3% Cake - Carrot 33.3% Number of Items 619 724 734 18.6% Overall, desserts within the QSR & Fast Casual segment have grown 18.6% since Q2 2011. Of the top 10 most commonly menu’d desserts, ice cream is the only dish to experience decline over the last 3 years (-6.9%). Source: Mintel Menu Insights

Top flavors in QSR & Fast Casual desserts, Q2 2011- Q2 2013 Flavor of Ingredient 2011-Q2 2012-Q2 2013-Q2 % Change Q2 2013 vs. Q2 2011 Vanilla 84 111 121 44.0% Chocolate 77 92 89 15.6% Chocolate Chip 43 53 56 30.2% Sweet 31 40 35 12.9% Oatmeal 30 32 36 20.0% Raisin 27 29 11.1% Cinnamon 24 -20.0% Peanut Butter 23 20 -13.0% Macadamia Nut 19 5.3% Chocolate Chunk 17 11.8% Strawberry 22 16 15 -31.8% White Chocolate Sugar 14 -26.3% Fudge 8 112.5% Caramel 11 27.3% Number of Items 619 724 734 18.6% Classics such as vanilla, chocolate and chocolate chip remain the at the top of the list of most popular dessert flavors. Fudge has experienced significant growth since Q2 2011, with 112.5%. QSR LTO Examples Fazoli’s (Fast Casual), Italian Donuts: Consist of six mini cake donuts coated in sugar and served with Wildberry dipping sauce. Carl’s Jr. (QSR), Strawberry Pop-Tart Ice Cream Sandwich: Hand-scooped vanilla ice cream sandwiched between a strawberry pot-tart. Tim Horton’s (Fast Casual), Gluten-Free Coconut Macaroon: The macaroon is a meringue-style cookie made with real coconut and drizzled in milk chocolate, and is sold in a pre-wrapped two-piece package to avoid cross contamination. Dairy Queen (QSR), Leon Meringue Pie Blizzard Treat: Blended with creamy vanilla soft serve. With lemon meringue pie filling and crunchy pie pieces crowned with whipped topping. Fast Casual LTO Examples Source: Mintel Menu Insights

Fruit or Nut Ingredient Top fruit & nut ingredients in QSR & Fast Casual Desserts, Q2 2011-Q2 2013 Fruit or Nut Ingredient % Change Q2 2013 vs. Q2 2011 Cherry 25.0% Strawberry 9.7% Apple 3.6% Banana 13.3% Pecan 66.7% Fruit 150.0% Almonds 62.5% Raspberry -20.0% Pineapple -36.4% Blueberry 12.5% Peach 80.0% Nuts -33.3% Peanut -12.5% Cashew 20.0% Walnut 75.0% Maraschino Cherry 50.0% Berry Coconut Blackberry 33.3% Fuji Apple Number of Items 22.7% Culver’s (Fast Casual), Caramel Cashew: Culvers Classic! Our legendary vanilla custard swirled with streams of sweet caramel and loaded with lightly salted cashews. Bruegger’s Bagels & Bakery (Fast Casual), Meltaway Bar: Dark Chocolate and Walnuts, butterscotch and coconut layered on a buttery graham cracker crust. Source: Mintel Menu Insights

Top QSR & Fast Casual dessert ingredients overall, Q2 2011-Q2 2013 % Change Q2 2013 vs. Q2 2011 Cookie 105 124 140 33.3% Ice Cream 112 125 123 9.8% Brownie 45 56 59 31.1% Chocolate 39 46 57 46.2% Whipped Cream 41 54 47 14.6% Sugar 42 51 48 14.3% Cake 49 0.0% Cinnamon 36 44 41.7% Cheesecake 33 54.5% Fudge 43 10.3% Icing 31 41.9% Cherry 25.0% Frozen Custard 30 43.3% Caramel 38 40 21.2% Pie Crust 32 21.9% Strawberry 34 9.7% Apple 28 26 29 3.6% Oreo Cookie 19 25 36.8% Butter 24 21 Pizza Crust 23 21.1% Ice Cream Cone 20 5.3% Dough 13 Banana 15 17 13.3% Pie Filling 16 18 20.0% Pecan 12 66.7% Number of Items 619 724 734 18.6% Desserts remain a constant and growing staple within the QSR & Fast Casual restaurant segments. Worth noting are pecans, which have experienced significant growth with 66.7%, since Q2 2011. Source: Mintel Menu Insights

Trending dessert topping ingredients, Q2 2-11-Q2 2013 QSR & Fast Casual Topping 2011-Q2 2012-Q2 2013-Q2 % Change Q2 2013 vs. Q2 2011 Whipped Cream 33 42 36 9.1% Fudge 29 27 -6.9% Cherry 24 28 30 25.0% Cinnamon 22 25 13.6% Sugar 19 15.8% Strawberry 21 -9.5% Caramel 14 18 35.7% Chocolate 12 16 17 41.7% Icing 10 60.0% Fruit 3 8 233.3% Pecan 4 5 100.0% Pineapple 6 -20.0% Ice Cream 20.0% Powdered Sugar 50.0% Maraschino Cherry Oreo Cookie Whipped Topping Nuts 0.0% Sprinkles 33.3% Marshmallow Caramel Sauce Biscuit Crust -100.0% Brownie 2 Almonds 150.0% Peanut Butter -33.3% Number of Items 125 146 143 14.4% The above chart represents any dessert ingredients called out specifically on the menu as a “topping.” Source: Mintel Menu Insights

LTOs, QSR & Fast Casual Taco Bell (QSR), Brownie Sandwich: Two delicious triangle-shaped brownies with creamy fudge frosting filling in between. Panera (Fast Casual), Strawberry Rhubarb Mini Cake: Vanilla cake batter with chunks of fresh strawberries, fresh rhubarb and cinnamon bits and topped finished with a mixture of our cinnamon crunch and crumb topping. Sonic’s Americas Drive In (QSR), Cinnasnacks with Cream Cheese Frosting: Cinnasnacks are warm, buttery pastries filled with gooey cinnamon roll filling and served with real cream cheese frosting. Dunkin’ Donuts (QSR), Spring Showers Donut: Features a yeast shell, filled with apple raspberry jelly, and topped with strawberry and pastel green icing drizzle over white dipping icing. Burger King (QSR), Donut Holes: Enjoy a sweet start to your morning with our bite-sized glazed donut holes- the perfect complement to our celebration to our delicious new coffee blend. Source: Mintel Menu Insights

LTOs continued… Del Taco (QSR), Warm Brownie Crunch Bites Au Bon Pain (Fast Casual): -Chocolate Trio Cake: Rich chocolate cake layered with chocolate chips & walnuts finished with chocolate drizzle. -Lemon Drop Cupcake: Velvety cream cheese icing with lemon drop cream topped with white chocolate curls on a light white cupcake. Corner Bakery (Fast Casual), Fruit-Filled Hand Pies: In two flavors: blueberry-filled topped with lemon glaze and peach-filled sprinkled with cinnamon-sugar. Einstein Bros. Bagel (Fast Casual), Pumpkin White Chocolate Cookies: A fresh-baked cookie flavored with pumpkin spice and sweet white chocolate chunks. La Madeleine (Fast Casual), Strawberry Cream Puff: A cream puff filled with diced strawberries, strawberry pastry cream and strawberry whipped cream, topped with whipped cream, a strawberry and doughnut sugar. Source: Mintel Menu Insights

Casual Dining Dessert Trends

Chocolate cake & brownie sundaes top as the most commonly menu’d Casual Dining dessert Top Casual Dining Desserts, Q2 2011-Q2 2013 Dessert Dish 2011-Q2 2012-Q2 2013-Q2 % Change Q2 2013 vs. Q2 2011 Cake - Chocolate 63 62 59 -6.3% Sundae - Brownie 53 50 55 3.8% Ice Cream 40 41 2.5% Sundae 43 36 34 -20.9% Cheesecake 33 27 -32.5% Fondue - Dessert 23 38 65.2% Tiramisu 29 32 10.3% Cheesecake - New York Style 20 24 31 55.0% Brownie - Dessert 19 22 15.8% Pie - Key Lime 18 11.1% Sorbet 0.0% Bread Pudding - Dessert 17 -26.1% Gelato 35.3% Creme Brulee 16 -22.7% Sundae - Cookie 25.0% Shooter - Dessert 12 33.3% Sampler - Dessert 15 Float - Root Beer 13 -33.3% Cake - Carrot 10 11 30.0% Cookie -9.1% Number of Items 966 991 979 1.3% Dessert fondue has experienced the most growth (65.2%) out of any other dish in the top 20. Overall, desserts in Casual Dining have remained consistent in menu mentions, growing 1.3% over the last complete 3 years. Source: Mintel Menu Insights

Top dessert flavors in Casual Dining, Q2 2011- Q2 2013 Flavor of Ingredient 2011-Q2 2012-Q2 2013-Q2 % Change Q2 2013 vs. Q2 2011 Vanilla 248 247 229 -7.7% Chocolate 174 177 185 6.3% Vanilla Bean 65 72 71 9.2% Sweet 40 45 42 5.0% Chocolate Chip 31 33 36 16.1% Fudge 32 30 -6.3% Strawberry 22 29 31.8% Key Lime 27 22.7% Cinnamon 25 -29.0% White Chocolate 26 -3.8% Lemon 4.0% Caramel -15.4% Pecan 21 18 0.0% Raspberry 10 16 160.0% Peanut Butter Cream Cheese 14 15 28.6% Walnut 17 Dark Chocolate 13 23.1% Almond 11 63.6% Red Velvet -35.3% Number of Items 966 991 979 1.3% Olive Garden, Dolcini: 1 of 5 mini desserts: Piccoli Dolci "little dessert treats", layered with cake, mouse, pastry creams, and berries. Choose from: Chocolate Mousse with Dark Chocolate Cookie Crust Strawberry and White Chocolate Cream Cake Limoncello Mousse with Vanilla Cookie Crust Dark Chocolate Cake with Chocolate Mousse and Caramel Cream Amaretto Tiramisu with Almond Cookie Crumble. Maggiano’s Little Italy, Vera’s Lemon Cookies: Crescent shaped lemon cookies glazed with a lemon frosting. Ram Restaurant & Brewery, Muddy Ice Cream Cupcake: mocha almond fudge and Cookie's and Cream ice cream served in an Oreo cookie crumb shell. Source: Mintel Menu Insights

Top fruit & nut ingredients in Casual Dining Desserts, Q2 2011-Q2 2013 Fruit or Nut Ingredient % Change Q2 2013 vs. Q2 2011 Cherry -4.0% Strawberry -1.6% Apple -24.0% Pecan -14.6% Banana 14.8% Fruit -8.7% Berry -9.1% Almonds -15.0% Walnut -27.8% Nuts 36.4% Coconut -23.1% Peanut 100.0% Pineapple -38.5% Blueberry 85.7% Raspberry 14.3% Hazelnut -37.5% Citron 50.0% Pistachio 66.7% Maraschino Cherry 0.0% Compote 200.0% Number of Items -4.2% El Chico Café (Casual Dining), Mango Nachos: Mango slices with chocolate syrup, berry sauce, whipped cream and vanilla ice cream on sweet cinnamon chips. BJ’S Restaurant and Brewery (Casual Dining), Raspberry White Chocolate Almond Pizookie: Raspberries and almonds mixed with white chocolate and topped with two scoops of vanilla bean ice cream. Source: Mintel Menu Insights

Top Casual Dining dessert ingredients overall, Q2 2011-Q2 2013 % Change Q2 2013 vs. Q2 2011 Ice Cream 341 381 317 -7.0% Whipped Cream 221 211 195 -11.8% Cake 142 152 157 10.6% Cheesecake 148 149 0.0% Fudge 110 117 121 10.0% Brownie 91 92 99 8.8% Chocolate Sauce 84 89 104 23.8% Cherry 75 70 72 -4.0% Caramel Sauce 71 66 -5.7% Chocolate 59 55 -21.4% Strawberry 62 61 -1.6% Caramel 60 63 56 -6.7% Cookie 12.7% Mousse 53 -3.6% Cinnamon 54 44 47 -13.0% Pie Crust 50 42 6.0% Apple 46 38 -24.0% Icing 41 43 -2.3% Custard 35 -18.6% Graham Cracker Crust 40 20.0% Number of Items 966 991 979 1.3% Ice cream tops as the most common dessert ingredient in Casual Dining, but has experienced a -7.3% decline since Q2 2011. Chocolate sauce has jumped from 84 to 104 mentions, from Q2 2011 to Q2 2013. Source: Mintel Menu Insights

Trending dessert topping ingredients, Q2 2011-Q2 2013 Casual Dining Topping 2011-Q2 2012-Q2 2013-Q2 % Change Q2 2013 vs. Q2 2011 Whipped Cream 155 152 141 -9.0% Cherry 65 66 1.5% Ice Cream 63 68 3.2% Chocolate Sauce 58 62 59 1.7% Fudge 61 55 -5.2% Caramel Sauce 45 46 38 -15.6% Strawberry 34 32 35 2.9% Caramel 37 29 -21.6% Brown Sugar 22 16 -27.3% Pecan 20 19 17 -15.0% Chocolate -15.8% Raspberry Sauce 14 15 -25.0% Chocolate Syrup Granulated Sugar 18 -22.2% Almonds 13 -23.5% Fruit 15.4% Strawberry Sauce 12 0.0% Cinnamon 10 -7.1% Oreo Cookie 9 11 22.2% Sugar -35.7% Mousse Biscuit Crust Fudge Sauce 7 6 -40.0% Banana 8 50.0% Walnut Number of Items 443 411 392 -11.5% The above chart represents any dessert ingredients called out specifically on the menu as a “topping.” Source: Mintel Menu Insights

LTOs, Casual Dining & Family/Midscale California Pizza Kitchen (Casual Dining), Summer Berries + Vanilla Sabayon: Fresh strawberries, blueberries, raspberries and housemade candied lemon zest with vanilla bean sabayon. Denny’s (Family/Midscale), Double Chocolate Pancake Puppies with Peanut Butter Sauce: Six bite-sized round pancakes made with chocolate and white chocolate chips tossed in powdered sugar and served with a side of peanut butter sauce for dipping. LongHorn Steakhouse (Casual Dining), Salted Caramel Cake: Creamy salted caramel mousse layered between moist vanilla cake and topped with rich salted caramel and vanilla butter cream. California Pizza Kitchen (Casual Dining), Salted Caramel Pudding: Eat dessert with a grain of salt! Rich caramel pudding, black cocoa cookie crumbs, housemade whipped cream, caramel sauce and natural flaked sea salt. Source: Mintel Menu Insights

LTOs continued McAlister’s Deli (Casual Dining), Dessert Shooters: Featuring fruit filling layered with crumbled cookies and topped with fruit. Available in blueberry-mango and strawberry-banana flavors. Outback (Casual Dining), Cake Pops: Cheesecake Melba, chocolate peanut butter or carrot cake 99 Restaurants (Casual Dining), Caramel Pecan Cream Pie: Delicious layers with caramel and pecans, then sweet cream cheese and a layer of delicious French Silk topped with whipped cream, chocolate sauce, caramel and pecans. Longhorn Steakhouse (Casual Dining), Very Berry Grilled Pound Cake: Grilled lemon pound cake with fresh strawberries, blueberries and whipped cream. Source: Mintel Menu Insights

Shake & smoothies on the menu Shake LTOs: Smoothie LTOs: Arby’s (QSR), Salted Caramel Shake: Taste our decadent, creamy Salted Caramel Shake topped with whipped cream and a sprinkle of Hawaiian Sea Salt. Fuddruckers (Casual Dining), Peanut Butter Shake: Vanilla ice cream blended with Reese's peanut butter topping and chopped peanut butter cups, then garnished with chocolate syrup whipped topping and more Reese's peanut butter cups. Fatburger (QSR), Orange Creamsicle Shake: Mixed with hand-scooped vanilla ice cream, is a beverage that goes well with warm days. Guests can top their shake with whipped cream. Roy Rogers (QSR), Hazelnut Choco Shake: A blend of vanilla ice cream, chocolate and a hint of hazelnut. Steak ‘n Shake (Family/Midscale), Caramel Apple Milkshake: A smooth apple milk shake covered with a thick layer of caramel sauce, whipped cream and a cherry – it’s the perfect combination for a delicious Fall treat! Culver’s (Fast Casual), Lemon Ice Smoothie: Take our beloved Lemon Ice, made with slow-frozen real Lemonade, blend with Culver’s creamy Vanilla Fresh Frozen Custard and you get a Lemon Ice Smoothie. Two parts summer and a whole bunch of delicious. Jamba Juice (QSR), Kona Berry Blast Smoothie: Kona’s coffee fruit hangs ten with strawberries, blueberries, pineapple juice, soymilk and raspberry sherbet with a 3G Charger Boost. It’s one tasty wave with enough natural energy to keep you carving tubes all summer long. THIS PRODUCT CONTAINS CAFFEINE. Juice It Up (QSR), Ever Green Smoothie: Combines vitamin-packed vegetables such as Kale and Spinach, with the flavor of a blended smoothie. Fatburger (QSR), Orange Creamsicle Shake: Mixed with hand-scooped vanilla ice cream, is a beverage that goes well with warm days. Guests can top their shake with whipped cream. Source: Mintel Menu Insights

Desserts & The Consumer

Casual Dining dessert opportunities Full Course Meals Varying Sizes Appeal to Families Those with children are more likely to visit casual dining restaurants, when compared to those without kids. This group is more likely to seek meals that are easier to share with others, healthier meals for children, and a wide variety of desserts and non-alcoholic drinks. Casual dining operators need to do a better job of marketing their variety of menu items; for example, they often promote a full-course meal (appetizer, main dish, and dessert) at good prices. Changing the menu to focus on fresher offerings and healthier preparations will help appeal to consumers. Specifically, touting limited-calorie menus; highlighting entrées, appetizers, beverages, and desserts in varying sizes Source: Mintel Oxygen Casual Dining Restaurants 2013

QSR consumers prefer desserts as a snack Snacking at restaurants is increasing, with 47% of respondents having visited a fast food restaurant for a snack in the past month and 13% typically choosing fast food restaurants for snacks. Due to an increase in snacking, 11% of consumers would like to see an increased section of small items for snacking and dessert at restaurants. Snacking items offer consumers a way to experience a restaurant at a lower price point and gives consumers an opportunity to select smaller-portioned items as meal components. Desired Improvements: Consumers seek items with lower calories and higher amounts of produce. Women want smaller portions at lower prices as well as snacking and dessert options. Restaurants are exploring new types of prizes to accompany kids’ meals, as children are outgrowing the meals at a younger age. Such strategies include toys with added technology, interactive activities, online content and games, and coupons for desserts. Source: Mintel Oxygen Casual Dining Restaurants 2013

DIY Dessert Touches Soft Serve and FroYo have proven to be easy for QSRs to add; while self serve is a hit with kids. Both make way for customizable sundaes and parfaits. Mix & match baked treats and dips also add a level of interactivity to dessert. Burger King’s soft-serve provides seasonal LTO specials, like an OREO® Sundae, layered with chocolate fudge sauce, vanilla soft serve and OREO® cookie pieces for a made-to-order OREO® Sundae. Yogurtland’s Holiday 2012 flavors were called “Yuletide Yumminess” and included Cinnamon Roll, Peanut Butter Cups, Egg Nog, Brownie Batter, Butterscotch, Strawberry Rhubarb Tart, Sticky Toffee Pudding, Amaretto Cookies, Black Forest Cake, Boysenberry Tart, Tiramisu and Gingerbread. Good Times Burgers & Frozen Custard’s Egg Nog Shake was described as “rich and spicy egg nog blended with our premium vanilla frozen custard creates a treat sure to make even a Scrooge happy!” Taco Bell’s recent dessert additions are aimed at the snacking crowd and offers Churros, a ice cream sandwich and a Caramel Apple Empanada, a pastry pocket filled with warm apples in caramel sauce. Source: Mintel Senior Foodservice Analyst, Kathy Hayden

Summary Cookies and brownies top as the most popular dessert in limited service restaurants. Overall, desserts within the QSR & Fast Casual segment have grown 18.6% since Q2 2011. Of the top 10 most commonly menu’d QSR & Fast Casual desserts, ice cream is the only dish to experience decline over the last 3 years (-6.9%). Classics such as vanilla, chocolate and chocolate chip remain the at the top of the list of most popular dessert flavors. Cherry tops as the most common fruit ingredient in limited service desserts, while pecans top as the most popular nut. Desserts remain a constant and growing staple within the QSR & Fast Casual restaurant segments. Worth noting are pecans, which have experienced significant growth with 66.7%, since Q2 2011. Dessert fondue has experienced the most growth (65.2%) out of any other dish in the top 20. Overall, desserts in Casual Dining have remained consistent in menu mentions, growing 1.3% over the last complete 3 years. Vanilla, chocolate and vanilla bean top as the most commonly used flavors in Casual Dining desserts. Cherries and pecans are also the most popular fruit & nut ingredients used in Casual Dining desserts.