Frozen Potato Products Brakes CATEGORYOUTLOOK Frozen Potato Products Brakes 28th May 2014

Content UK market overview: Out of Home & Potato Category Trends About Aviko Anticipating on market trends Brakes: thoughts on potato category in Brakes

UK Market Overview

OOH Market: Traffic & Spend Consumers bought fewer items when eating out and are out slightly less often than last year -Average individual spend: + 0.9% -Traffic: -0.7% Source: Potato Council. Foodservice report YE Sept 13

OOH Market: Traffic distribution Consumers bought fewer items when eating out and are out slightly less often than last year - Traffic at weekend: growing - Breakfast continue to grow Source: Potato Council. Foodservice report YE Sept 13

OOH Market: Traffic per key segment QSR - Uplift in total spend, driven by higher prices per item - Breakfast and lunch occasions have performed well (But; compared to other channels, they account for a smaller no. of visits) - Weekend visits increased, consumers are eating out more for social reasons Pubs - Average spend increased by 0.5% - Number of visits: +0.9% - Reversing trend in Q3: sales: +4.3% / visits: +3.3% - Food is growing FSR - Average spend: -1.0% - Number of visits: -0.6% - Decline at key occasions (Lunch and Dinner) remain major ongoing concern for the segment Workplace/ education - Average spend: -3.7% - Number of visits: 2.9% - Trend apparent across all day parts, no meal time in growth Source: Potato Council. Foodservice report YE Sept 13

OOH Market: Occasions Weekday visits make up most traffic in the out of home market However; total traffic growth has come mainly at the weekends over the last three years Matching a shift in motivations; social drivers are becoming more important Breakfast continues to grow: accounting for 10.4% of all out-of-home traffic Source: Potato Council. Foodservice report YE Sept 13

OOH Market: Potato consumption Total potato servings Out of Home: 1.72bn Potato consumption – incidence - Potatoes currently feature in 15.0% of OOH food and drink orders - 11.4% of orders include chips Source: Potato Council. Foodservice report YE Sept 13

OOH Market: Focus on overall food What menu items are growing? - Chicken burgers - Chicken wraps - Fried & Non-fried fish - Traditional roast .... And which are doing less well? - Bacon - Salad - Chinese dishes Source: Potato Council. Foodservice report YE Sept 13

Trends– Alegra Ageing population, leading to: Decline in 15-24yrs group, but they eat out more frequently Increase in 65+ yrs, growth in number of meals eaten out Long term outlook Healthy eating & Obesity Value consciousness Growing Foodie Culture Price consciousness Ageing population Social media & internet 2020 Top Cuisines predictions: Healthier South East Asian Cuisine British Premium Chicken Premium Burger Global Fusion Mediterranean

Trends in profit sector

Blurring Boundaries in the profit sector COMMON DENOMINATORS Value-for-money is becoming more and more important Speed of service is key Broad spectrum required on the menu: ranging from ‘health’ to indulgence’ Highly competitive offering meal deals and promotions

Focus on casual dining (Horizons) Segmentation – average spend: QSR <£5 Fast Casual Dining £5 - £10 Casual Dining £10 - £20 Restaurant £20+ The Top 10 Casual Dining restaurant chains operate a total of 2,204 outlets An estimated 1.5 million people work in the UK’s foodservice industry including casual dining 2003 market value: £4.72bn >> 48% increase over the past decade to Total market value (2013) of £6.9bn

Definition of Fast Casual Dining – Ed’s Easy Diner = Multi unit & Strongly Branded = Between QSR and Full Casual = Element of service (but not full service) = Your first order = whole order = 30 minutes or less = Short menu = Clean pricing & value for money = Alcohol unimportant = Entertaining & distracting, a brief escape Occasions Breakfast = coffee > ‘I’m in control’ Lunch = speed > ‘I’m in control’ Dinner = family & friends > ‘I can relax’

Facts– Ed’s Easy Diner 23 Outlets MEGATREND = High Cash, High Touch ‘The more technology intrudes our lives, the more we counterbalance it with human contact’ Ed’s Easy Diner £10.50 Average spend 35 min Average time spent <12 minutes Fresh Food Preparation 95% Order everything in one go 50% Order milkshake (=‘dessert’) ‘Entertainment’ Served Fast, Out Fast 23 Outlets Strong database marketing: 315k members Using loyalty marketing, no vouchers