RAB Webinar Spotlight On Restaurants Cooking Up Advertising Sales

1. RAB WebinarSpotlight On RestaurantsCooking Up Advertising Sales TECHNICAL ASSISTANCE: call RAB Member Response at 1-800-232-3131. WEBINAR AUDIO: For audio: click the Voice & Video Tab to control volume through your computer. If you do not have computer speakers call 1-800-244-2500 toll-free anywhere in the USA. PIN code: 993851#. MUTE and UNMUTE by touching *1. (Outside the USA, call 1-212-786-7191 tolls apply.) Audio may be recorded… for “training purposes.”

2. If at any time you have… technical difficulties 800-232-3131 RAB Member Response

3. PDF of slides • Will be available • Watch for an e-mail following today’s webinar a link to download

4. Lynn Anderson SVP/Training Radio Advertising Bureau landerson@rab.com

5. What’s in store… • [guest] • [guest] • [guest]

6. Restaurant Industry 2010:Vision for a New Decade Hudson Riehle Senior Vice President Research and Knowledge Group National Restaurant Association Radio Advertising Bureau Webinar May 20, 2010

7. Agenda • Overview • Economic Backdrop • Industry Segments • Industry Imperatives • Jobs and Careers • Food and Healthy Living • Sustainability and Social Responsibility • Profitability and Entrepreneurship • Regional Outlook • Wrap-Up

8. DEFINITION: “Restaurant Industry” Allmeals/snacks prepared away from home, including all takeout meals and beverages

9. Commercial Restaurant Services Restaurant Industry Military Restaurant Services Non-Commercial Restaurant Services

10. Overview The Industry in 2010

11. $580 billion Annual Sales:

12. 40 Years of Restaurant-Industry Sales 40 Years of Restaurant-Industry Sales Source: National Restaurant Association

13. 13 million Employees:

14. 945,000 Locations:

15. Restaurant Industry’s Share of the Food Dollar 1955: 25% Present: 49% Source: National Restaurant Association

16. Fullservice Caterers Cafeterias and buffets Quickservice Self-operated services Snack and nonalcoholic beverage bars The Industry Mosaic Lodging Places Managed services contractors at Retail hosts: • Book stores • Service stations • Convenience stores • Industrial plants • Hospital nursing home • Schools and universities • Airlines • Recreation and sports centers Military restaurant services

17. Economic Backdrop Economic Backdrop

18. National Economy Expected to Improve in 2010 U.S. Real Gross Domestic Product – Historical and Projected Growth Rates Source: Bureau of Economic Analysis; National Restaurant Association

19. IncomeGrowth Expected to Remain Modest in 2010 Real Disposable Personal Income – Historical and Projected Growth Rates Source: Bureau of Economic Analysis; National Restaurant Association

20. Gas Prices Trending Higher Average price per gallon for regular gasoline Source: U.S. Department of Energy, Energy Information Administration

21. Female Labor Force Participation Rate 1950 to 2009 Source: Bureau of Labor Statistics

22. Industry Segments Industry Segments

23. +2.5% Total Restaurant Industry Sales 2010 Forecast $580 billion $566 billion 2009 2010 Source: National Restaurant Association

24. +1.2% Fullservice Restaurant Sales $184 billion $182 billion 2009 2010 Source: National Restaurant Association

25. +3.0% Limited-Service Restaurant Sales $165 billion $160 billion 2009 2010 Source: National Restaurant Association

26. +4.0% Managed Services Sales $39.3 billion $36.1 billion 2009 2010 Source: National Restaurant Association

27. APRIL 2010 The Economy 33% Sales Volume 27 Government 13 Food Costs 4 Recruiting Employees 4 Access to Capital 4 APRIL 2009 The Economy 43% Sales Volume 29 Recruiting Employees 6 Food Costs 5 Operating Costs 4 Government 2 Economy Remains the Top Challenge Facing Operators Top Challenges Facing Restaurant Operators: April 2008, April 2009, April 2010 APRIL 2008 The Economy 25% Food Costs 22 Sales Volume 16 Recruiting Employees 14 Gas & Energy Prices 6 Government 2 Source: National Restaurant Association, Restaurant Industry Tracking Survey

28. Total Monthly Sales Rising Above 2009 Levels Seasonally-adjusted Monthly Sales at Eating and Drinking Places (in billions) Source: U.S. Census Bureau

29. Restaurant Performance Index Topped 100 for First Time in 29 Months Values Above 100 = Expansion, Values Below 100 = Contraction Source: National Restaurant Association

30. Operators Are More Optimistic About the Economy Restaurant Operators’ Outlook for Business Conditions in Six Months Source: National Restaurant Association

31. Jobs and Careers Jobs and Careers

32. Nearly half of all adults have worked in the restaurant industry

33. More than one in four adults report their first job was in the restaurant industry

34. Restaurants Added 84,000 Jobs Thus Far in 2010 Eating and Drinking Place Employment – Still Down 209,000 Jobs Since Recession Began Source: Bureau of Labor Statistics; figures are seasonally-adjusted

35. Total Restaurant and Foodservice Employment (in millions) 14.0 15.0 12.7 11.2 12.0 9.0 6.0 3.0 0.0 2000 2010* 2020* Source: National Restaurant Association; *projected Total Restaurant-Industry Employment

36. Long Term Labor Challenges Will Eventually Re-emerge Distribution of the U.S. Labor Force by Age Group 80% 72% 69% 68% 64% 61% 60% 40% 24% 24% 18% 19% 20% 16% 14% 14% 13% 12% 12% 0% 1978 1988 1998 2008 2018 16 to 24 Years Old 25 to 54 Years Old 55 Years and Older Source: Bureau of Labor Statistics

37. Labor Force Participation Rates: Teenagers (16-19) versus Older Adults (65+) Source: Bureau of Labor Statistics

38. Operators Plan Higher Staffing Levels in Months Ahead Restaurant Operators’ Outlook for Staffing Levels in Six Months vs. Same Period in Previous Year Source: National Restaurant Association

39. Food and Healthy Living Food and Healthy Living

40. Almost three out of four adults (73 percent) said they are trying to eat healthier now at restaurants than they did two years ago. Source: National Restaurant Association

41. The Power of Fresh Produce Almost three out of four operators (72 percent) agree that emphasizing fresh produce in their marketing efforts drives more customers to their restaurant. Source: Restaurant Produce Survey, 2009

42. Locally grown produce Locally sourced meats & seafood Sustainability Bite size desserts Locally produced wine and beer Hot/Trendy Offerings Fullservice Restaurants Source: National Restaurant Association; American Culinary Federation, 2009

43. Healthy options in kids meals Energy drinks Snack sized items Locally sourced items Spicy items Hot/Trendy Offerings Quickservice Restaurants Source: National Restaurant Association, Quickservice Restaurant Survey 2009

44. Sustainability and Social Responsibility Sustainability and Social Responsibility

45. Going Green Percent of operators, by type of operation, who plan to devote more oftheir resources to green initiatives in 2010 Quickservice Fine dining 31% 43% 47% Source: National Restaurant Association

46. Forty percent of adults said they are likely to make a restaurant choice based on a restaurant’s practices in the areas of energy and water conservation. Source: National Restaurant Association

47. Profitability and Entrepreneurship Profitability and Entrepreneurship

48. Word of Mouth Has Moved On-line

49. More Operators Will Be Using Social Media Source: National Restaurant Association

50. Usage of Radio Advertising by Restaurant Operators Source: National Restaurant Association