Document:

gss_ex10-3.htm

Exhibit 10-3

 

 

AMERICANS ARE EATING MORE BREAKFASTS ON THE GO; Skipped Breakfasts Also on the Rise

 

PORT WASHINGTON, NY, (BUSINESS WIRE FEATURES) - November 16, 2000

 

More Americans are eating breakfast on the go than ever before. In fact, last year more than one out of five Americans ate breakfast away from home or skipped it, according to leading marketing information provider The NPD Group, Inc. On-the-go and skipped meals accounted for 21% of all breakfasts last year, compared to 17% in the early ‘90s.
And an average of 73 breakfast meals per person were either eaten away from home or missed completely in 1999. Findings are reported in the firm’s latest Breakfast Book, which compares 1999 breakfast consumption patterns with the decade earlier. Information was collected from more than 2,000 nationally representative households.

 

One of the key drivers for this trend is the increasing popularity of foods that are easy to eat and transport, such as yogurt, breakfast snack bars and bagels. Fruit is the most popular carried breakfast food. However, breakfast snack bars have seen the largest increases among carried morning foods. They are now part of 6% of all carried
breakfasts, twice as many as in 1990.

 

	
TOP 10 CARRIED BREAKFAST FOODS
	 
	
Percentage of carried breakfast meals including:
	 
	 	 
	
1. Fruit
	 	 	24	 
	
2. Breakfast/Snack Bars
	 	 	6	 
	
3. Cookies/Brownies
	 	 	6	 
	
4. Yogurt
	 	 	5	 
	
5. Bagels
	 	 	4	 
	
6. RTE Cereal
	 	 	4	 
	
7. Sandwiches
	 	 	4	 
	
8. Toaster Pastries
	 	 	1	 
	
9. Donuts
	 	 	1	 
	
10. Muffins
	 	 	1	 

 

Not surprisingly, given the growing popularity of eating on the go, NPD reports that restaurants are preparing more of our breakfast meals for us. While the number of meals eaten at a restaurant remains constant, people are picking up more breakfast meals on the go and eating them elsewhere. The popular breakfast sandwich served at most fast
food restaurants reigns as America’s favorite grab-and-go morning food.

 

TOP 10 RESTAURANT BREAKFAST FOODS EATEN OFF PREMISE

 

	
  
	
1.
	
Sandwiches

	
  
	
2.
	
Donuts

	
  
	
3.
	
Soft Drinks

	
  
	
4.
	
Potatoes

	
  
	
5.
	
Bagels

	
  
	
6.
	
Eggs

	
  
	
7.
	
Pancakes

	
  
	
8.
	
Sausage

	
  
	
9.
	
Biscuits

	
       10.
	
Cereal

 

Finally, while most people still eat breakfast, Americans are skipping breakfast more often. Skipped breakfast meals increased to 49 meals per person, up from 42 meals per person in 1990. The average person skips approximately one breakfast meal a week. NPD found that people of all ages are skipping breakfast more than they did years ago. Children 6-12 and young adults 18-34 lead this trend with the largest increases
in skipped meals within the past few years.

  

  

  

 

BREAKFAST MEALS SKIPPED BY AGE GROUP

 

Annual Skipped Meals Per Capita (Person)

 

	  	
< 6
	
6-12
	
13-17
	
18-34
	
35-49
	
50-64
	
65+

	
1996
	
12
	
17
	
59
	
73
	
57
	
27
	
10

	
1999
	
20
	
30
	
63
	
87
	
63
	
36
	
13

 

 

"Americans are having their breakfast on the go, or just plain skipping it more than we did a decade ago," says Arnie Schwartz, vice president of National Eating Trends at The NPD Group, Inc. "Meal preparation time will always be a key issue at breakfast. Ready-to-eat and ready-to-serve foods and beverages continue to grow in importance.
Food manufacturers and restaurant retailers who take advantage of this need for convenience will benefit."

 

About the Study

 

The NPD Group's National Eating Trends® panel is the primary source of data for this study. The National Eating Trends (NET) service has tracked the eating habits of Americans since March 1981 capturing all foods and beverages regardless of where they’re
eaten. NET's annual sample consists of 2,000 households containing approximately 5,200 individuals. The panel is demographically and geographically balanced to U.S. Census Bureau statistics each year.

 

About The NPD Group, Inc.

 

The NPD Group is an international marketing information company headquartered in Port Washington, NY. Founded in 1953, the firm specializes in providing insight into consumer purchasing and behavior via both Internet-based and traditional research methodologies, including online and offline consumer panels and point-of-sale tracking.

 

NPD offers proprietary databases and research expertise in more than 20 industries, including apparel, automotive products, consumer electronics, cosmetics and fragrances, financial services, food, foodservice, footwear, housewares, information technology, interactive entertainment, new media, Pharmaceuticals, toys, and more. The firm also
offers a full range of analytical tools for ad hoc research. NPD is the developer of the revolutionary Web audience measurement technology now marketed by its successful spin-off Media Metrix, Inc. NPD has offices and affiliations in 36 countries, covering North America, South America, Europe, Asia and Australia.

 

  

  

  

Tracking Snacks with NPD Group

Publication: Confectioner

Date: Saturday, September 1, 2007

Since he began working for NPD nearly three decades ago, Harry Balzer has become a national expert on food and diet trends, speaking at many industry events and television news programs, among others. Recently, Balzer, who is vice president of the NPD Group, chatted with Confectioner about
the snack market.

Q: Are there distinct types of snacking situations?

“Yes, there are. NPD has found that these situations are distinguished by ‘social’ versus ‘individual’ occasions, in-home vs. away-from-home and also the activity. The types of snack foods consumed at these distinct situations vary. For example, hard candy and chocolate candy/bars are highly developed at work
and on-the-go situations, but not so with chewy candy. These situations also have distinct consumer profiles. For example, on-the-go snacking, which takes place in the car or in transit, tends to be males 35-44 and females 18-54. Kids are more likely to eat snack foods at ‘social’ situations.”

Q: Are people snacking more or less than in the past? In what ways?

“No, consumers are not snacking more — but they are not snacking less, either. Snacking dynamics are continually evolving with the many new offerings in the marketplace. For example, we see that bars, sugarless gum, chocolate candy, and multigrain chips have all become more popular as between-meal options. Bars and multi-grain
chips have also grown more popular as meal accompaniments. Growth in chocolate candy has been driven by in-home consumption.”

Q: How much does snacking behavior change as we age?

“Kids have a higher propensity to eat snack-oriented foods between meals than do adults. The 18-to-24 years tends to be a transitional age — individuals of this age group consume snack foods between meals less often than younger kids, but more often than adults. Meanwhile, adults in their 30s, 40s and older all eat these types
of foods between meals at a similar, but lower, frequency.”

Q: Is the 100-calorie snack a trend or a fad? Please explain.

“The 100-calorie packs will continue to enjoy growth in the short-term and expand to new categories, but this will evolve to general ‘portion control’ packs that may or may not be 100-calorie based.”

Q: What snacks look good from a growth perspective?

“Sugar-free gum has seen significant growth over the past three years. Sugar-free mints/strips have also seen consistent growth during this period. Candy has not yet benefited from the sugar-free trend, but could be a potential future growth area.”

  

  

  

Defining Instant Consumables

Chocolate candy/candy bars and gum together represent nearly one fourth of the instant consumables market, which is defined by The NPD Group as:

• Snack-oriented convenience foods purchased ready-to-eat

• Consumed right after purchase (or within an hour of purchase)

• Consumed away from home (but not at a restaurant)

• As a snack or meal replacement.

Over 63 million people eat an instant consumable on a regular basis — at least once a week, according to NPD.

More than one fourth of instant consumable snack foods are obtained from a convenience store - THE NPD GROUP

There is a large gap between c-stores and the next most important channel for this behavior. - Supermarkets/grocery stores, Wal-Mart and other discount stores are under-developed as sources for instant consumables.

Top Channels for Obtaining Instant Consumables

	  	  	
Index to Total

	
Distribution
	
(%) of Eating Occasions
	
Snack Foods Occasions

	
C-Store / Mini Mart
	
27.4
	
435

	
Restaurant
	
12.2
	
305

	
     Bakery / Donut Shop
	
4%
	  
	
     Concession Stand
	
2%
	  
	
     Restaurant / Fast Fd
	
2%
	  
	
     Deli/Ice Crm/Spec
	
2%
	  
	
     Movie Theatre
	
2%
	  
	
Workplace / Schl Cafet
	
10.6
	
500+

	
Supermarket
	
10.5
	
25

	
Vending Machine
	
9.9
	
500

	
Wal-Mart
	
7.4
	
42

	
Gift/Free Sample
	
3.2
	
356

	
Drug Store
	
2.5
	
109

	
Discount Store
	
1.9
	
70

	
Dollar Store
	
1.3
	
100

Source: The NPD Group, Inc. / SnackTrack 2005 Note: Table made from bar graph.

After "like the taste", the top reason for choosing a particular snack food as an instant consumable is "it was simple and easy to eat" - THE NPD GROUP

  

  

  

Top Motivations for Instant Consumable Occasions

Distribution (%) of Eating Occasions by Reasons Why Ate *

	
Like the taste
	
48.6

	
It was simple and easy to eat
	
26.3**

	
Had a craving for it
	
23.8**

	
It was quick to eat/in a hurry
	
22.8**

	
Wanted something sweet
	
21.8

	
It was easy to carry/take with
	
18.9**

	
Needed little or no preparation
	
16.5

	
It was fun to eat
	
15.2**

	
A routine or habit
	
14.4

	
Came in a single serve portion
	
12.8**

	
Wanted something to eat while working
	
12.3

	
Wanted to freshen breath
	
12.0**

	
Wanted a treat or reward
	
11.0

	
It was not messy
	
10.9**

	
Someone else provided it
	
10.9

* Percents add up to more than 100% because respondents select all motivations that apply to their situation

** Many of the most frequently Cited motivations are related to convenience

Note: Table made from bar graph.gss_ex10-4.htm

Exhibit 10-4

 

June 01, 2009

Tracking The Trends

It was wild ride for the nation's convenience stores in 2008, but despite the stagnant economy and unprecedented fuel prices, industry profits held strong.

By CSD Staff

	
DIRECT STORE OPERATING EXPENSES JUMP
	 
	
Per Store/Per Month
	 	
2007
	 	 	
2008
	 	 	
Change
	 
	
Wages & Benefits
	 	$	17,813	 	 	$	18,245	 	 	 	2.4	%
	
Utilities
	 	 	3,667	 	 	 	3,965	 	 	 	8.1	 
	
Repairs & Maintenance
	 	 	2,837	 	 	 	3,016	 	 	 	6.3	 
	
Supplies
	 	 	1,102	 	 	 	1,118	 	 	 	1.5	 
	
TOTAL DSOE
	 	 	34,086	 	 	 	36,060	 	 	 	5.8	 

 

Source: 2009 NACS State of Industry report

 

An otherwise tough year for convenience stores was balanced out by strong retail fuel margins from the unprecedented drop in wholesale fuels prices during the fourth quarter of 2008, according to National Association of Convenience Stores’ (NACS) 2009 State of the Industry report. However, credit card fees continue to take a toll on
industry profitability.

 

Overall convenience store industry profits rose 54% in 2008 to reach $5.2 billion, reversing a two-year decline where profits dropped 42% over that period. Industry sales jumped 8.1% to reach $624.1 billion, with both motor fuels sales (up 10.1% to $450.2 billion) and in-store sales (up 3.2% to $173.9 billion) showing growth.

 

The growth of in-store sales defied the overall trend in U.S. retail sales, which fell 0.6% based on U.S. Department of Commerce data. It also came despite a rare decline in the number of convenience stores, NACS reported. For only the third time in the past 15 years, the industry store count fell 1% to 144,875, as many stores closed because
of the punishing economic conditions and record-low motor fuels margins the industry faced during the first three quarters of 2008.

 

The convenience store industry sells an estimated 80% of the fuels purchased in the U.S., and motor fuels sales continue to dominate industry revenues, accounting for 74.5% of all sales dollars, in examining same-firm sales data. However, overall fuel gallons sold declined 2.4%, according to NACS. Meanwhile because of low gross margins on
fuel (5.7%), only 31.7% of all profit dollars came from fuels sales.

 

Credit card fees continue to be the industry’s top pain point, surging another 10.5% in 2008 to reach a record $8.4 billion—-nearly three times the level just five years ago.

 

In-Store Performance

 

Once again, cigarettes dominated in-store sales, accounting for nearly one in every three dollars spent in stores, but cigarette gross margins continued to plummet, falling to 15.3%. These low cigarette margins dropped the category to third in terms of gross margin contribution. Meanwhile, foodservice, which includes dispensed beverages
and food prepared on site, continues to show strong growth, accounting for nearly one in four in-store profit dollars. 

	  	  	
As of the end of 2008, the number of locations now stands at 144,875 stores, a 1% decline from 2007.

U.s. Convenience stores (as of 12/31/08):

 

2008: 144,875

2007: 146,294

2006: 145,119

2005: 140,655

2004: 138,205

For just the third time in the last 15 years the industry’s store count decreased. The count also declined in 1994 and 2003.
	  
	  	  	
TOP STATES FOR

CONVENIENCE STORES

(as of 12/31/08):

 

Texas: 14,112 stores

California: 10,298

Florida: 9,303

New York: 7,580

Georgia: 6,320

North Carolina: 6,130

Ohio: 5,149

Michigan: 4,824

Illinois: 4,541

Virginia: 4,487

 

The bottom three states are Alaska (198 stores), Delaware (315) and Wyoming (350).

	  	
 

Nearly 75% of in-store sales were from the top five categories:

 

• Cigarettes, 32.7% of in-store sales

• Packaged beverages, 14.1%

• Foodservice, 13.9%

• Beer, 10.2%

• Other tobacco products, 3.9%

	
 

Nearly 70% of gross margin dollars were from the top five categories, NACS REPORTED:

 

• Foodservice, 23.9%

• Packaged bevs, 16.6%

• Cigarettes, 16%

• Beer, 6.9%

• Candy, 4.8%

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00162-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00162-of-00352.parquet"}]]