Food Service

The Foodservice
Equipment & Supplies Market:

Size, Scope & Outlook
By Robin Ashton, Publisher
Foodservice Equipment Reports
Nov. 13, 2014
Emerson E360 Summit
Columbus, Ohio
1
Foodservice Equipment Reports ©2014
A Market Overview And A Look At
The State Of The Industry
• Today, we’ll try to give you the 45-minute version of
the foodservice and foodservice equipment markets.
• We’ll look at how they are structured, both in the U.S.
and globally, and how equipment gets to market.
• We’ll look at some of the big players, both operators
and equipment manufacturers.
• We’ll also look at the outlook this year and next for
operators and for the equipment industry.
• We’ll give you plenty of time for questions.

U.S. Foodservice & Equipment Markets
• The foodservice market in the United States is huge,

complex, diverse and relatively mature.
• Chicago-based research firm Technomic Inc. estimates
U.S. market at the end-user level at $703 billion in 2014.
• Technomic details 20 foodservice “segments,” purchasing
$251 billion of food, beverages and non-foods in ’13.
• NAFEM/FER estimates equipment and supplies market at
$10.1 billion in 2014 at manufacturer level.
• Equipment accounts for 82% of total U.S./Canada E&S
market; durable supplies and tabletop account for 18%.

U.S. Foodservice Market By Segment
Food & Beverage Purchases, 2014
Total: $251.295 Billion
Source: Technomic
3%
8%
LSR
5% FSR/Bars
31%
7% Lodging/Rec.
Retail
8% Education
Healthcare
9% Business
All Other
29%

U.S. Foodservice Market By Segment
Unit Distribution, 2014
Total: 1,136,220
Source: Technomic Inc.
0%
5%
7% LSR
25% FSR/Bars
12% Lodging/Rec.
Retail
Education
18% Healthcare
25% Business
All Other
8%

Operator Market Structure—U.S.
• There are 1.3 million foodservice kitchens in the U.S., but
“it’s a multiunit world.”
• U.S. foodservice is dominated by chain and other
“multiunit” operators including foodservice management
companies and big institutional operators.
• Top 500 chain concepts control nearly 60% of restaurant
sales and 40% of all units.
• On the institutional side of foodservice, management
companies operate 20% to 80% of key segments.
• U.S. more “chain” dominant than most other developed
and developing foodservice markets.
Operator Market Structure—Global
• Big chain, institutional and other multiunit foodservice

operators also rule global markets.
• They continue to grow and gain market share everywhere,
though chain penetration varies by market.
• In the U.S. market, multiunit operators clearly purchase a
majority of all new equipment and supplies.
• As multiunit operators, they have unique needs and much
more complex specification and purchasing processes.
• Markets outside North America and Europe are growing
faster, but remain significantly smaller.

Top 500 Chains’ Market Share 2013
Share Of Restaurant Sales Share of Restaurant Units
Total: $449 Billion, 2013 Total: 522,060, 2013
Source: Technomic Inc. Source: Technomic Inc.
Top 500 Top 500

41% 41%
Rest of Rest of
59% 59%
Industry Industry

Global Foodservice Market Share:
NPD Group, 2011
France Spain
6% 5%
Italy
Germany 8%
9%
Great Britain Japan

8% 11%
Australia China
4% 1%
Canada
5% Russia
2%
USA
42%

NPD: Traffic Share Of Chain Vs.
Independent Restaurants, 2010
Chains
Share of Visits
Independents
24.6
38.2 36.0
43.7 40.7
55.8 54.9
63.7
74.1 77.1
83.4
75.4
61.8 64.0
56.3 59.3
44.2 45.1
36.3
25.9 22.9
16.6
USA Canada Australia Great Germany France Spain Italy Japan China Russia
Britain

Major Chain Traffic Share, NPD
Total Restaurants
OND'13 Traffic - Traffic Distribution - OND
1%
PCYA CAGR
Major
Chains 61% 62% 63% 64% 64% -1% 1%
Small
Chains
11% 11% 11% 11% 11% -1% -1%
Indepen-
dents 28% 27% 26% 25% 25% -2% -2%
2009 2010 2011 2012 2013

ReCount Unit Counts PCYA
CREST Major Chains 1%
CAGR= Cumulative Annual Growth Rate 2009 to 2013
Sm. Chains & Independents 0%
PCYA = % Change vs. Year Ago
Source: CREST / ReCount 11
Operator Market Structure
• A few thousand organizations—chains, FS mgmt.
companies, big institutions—are keys to U.S. market.
• They not only control a majority of operator sales, but
account for an estimated 70-75% of new E&S purchases.
• They don’t purchase E&S like independent operators.
• They are the most brand sensitive and have complex
specification, evaluation and distribution processes.
• This is particularly true of the big QSR brands, but is also
true of other chains and big institutions.

U.S. Equipment & Supplies
Market Structure
• The U.S. market for E&S is very large, diverse and
fragmented. More than $10 billion in sales annually.
• Manufacturers’ association, NAFEM, has more than 600
members. Most companies remain privately held.
• FER Worldwide Buyers Guide has more than 1,500 U.S.
companies selling E&S; more than 5,000 worldwide.
• While big E&S conglomerates dominate, many U.S.
companies in $10-$20 million range.
• The North American market is only 40% of worldwide market.
• NAFEM breaks market into nine big product categories; we
list 760 product categories in our Worldwide Buyers Guide.

U.S. E&S Market By Product
E&S Market Share By Product Category, 2014
Total: $10.145 Billion
Source: NAFEM & FER Estimates
11% Cooking Equip.

20% Refrig./Ice
7%
Storage & Hand.
6% Serving Equip.
Food Prep Equip.
9% Warewash & San.
23%
Cust.Fab/Furnish.
4%
Smallwares
13% Tabletop
7%

FER E&S Market Forecast—2014
(Base market numbers, NAFEM, 2011)
Nom. Real $$$

Growth Growth Millions
Total Equipment 4.4% 2.5% $8,375
Total Supplies 3.9 1.8 $1,770
Total Industry 3.3 1.5 $10,145

Rounding affects totals

15
FER E&S Forecast—2014
Nom. Real $$$
Primary Cooking 4.6% 2% $2,068
Refrigeration & Ice 4.8 2.4 $2,336
Storage & Handling 3.7 2.2 $ 710
Serving Equipment 4.4 2.3 $1,292

16
Nom. Real $$$
Prep. Equipment 4.3% 2% $ 442
Warewash & Ventil. 4 2.2 $ 885
Furn. & Custom Fab. 3.6 1.9 $ 642
Smallwares 4.5 2.2 $ 655
Tabletop & Serv. 4.5 2.1 $1,114

17
Top 100 E&S Manufacturers: 1-25
Top 100 E&S
Manufacturers
Estimated Estimated Estimated
13 vs. 12 ($MM) ($MM) ($MM)
Company % Change 2013 2012 2011
1 Manitowoc FS 3.8% 1542.2 1486.2 1453.5
2 ITW Foodservice NA 6.0% 1473.5 1389.7 1347.9
3 Middleby 13.9% 895.5 786.4 723.3
4 Ali Group FS NA 61.4% 660 409.0 395.0
5 Hoshizaki /Lancer FS 12.7% 445 395.0 360.0
6 Libbey FS -1.0% 433.9 438.2 417.5
7 Standex Foodservice -1.4% 388.1 393.8 380.4
8 Vollrath 4.1% 356 342.0 232.0
9 IMI Cornelius -3.4% 337 349.0 337.4
10 Captive Aire 6.5% 321.4 301.8 269.5
11 True Foodservice -0.5% 315 316.6 305.0
12 Cambro 13.8% 278.1 244.3 229.0
13 Carrier Foodservice 9.8% 269 245.0 265.0
14 Carlisle FS -1.8% 238.8 243.3 235.8
15 Bunn O Matic 6.1% 221.5 208.8 200.8
16 Dover Unified Brands 7.8% 200 185.6 176.0
17 Franke Contract Group 4.0% 184.5 177.4 162.0
18 Rubbermaid FS 3.4% 177.7 171.8 165.0
19 Henny Penny -2.2% 174 178.0 155.0
20 Pentair / Everpure FS 5.8% 157.7 149.0 105.0
21 Duke Mfg 7.0% 154.1 144.0 129.2
22 H&K International -5.5% 135 142.9 131.8
23 Hatco 9.4% 134.8 123.2 110.0
24 Marmon Retail Group 4.6% 130 124.3 87
25 EveryWare -1.5% 126.5 128.4 100
Top 25 Mfrs. 7.4% $9,749.3 $9,073.7 $8,473.1
U.S. E&S Buyer, Specification &
Distribution Channels
• The paths and influences in operator E&S buying,
specifying and logistics decisions are multi-faceted.
• The “normal” path is OEM manufacturer to independent
multi-line sales rep to dealer to operator.
• Big institutional operators usually also employ an
independent design or concept consultant.
• Many chain and big institutional operators generally
follow these “normal” paths and channels.
• But there are also many side paths, “direct” relationships
and other outside influences.

U.S. E&S Buyer, Specification &
Distribution Channels

Chain Functions That Evaluate
E&S Suppliers
• No matter the size or structure of a chain, multiple
functions have some input into selecting suppliers.
• Almost always, operations management have
significant input as do senior execs and culinary.
• But when it comes to the most say in supplier choice,
senior execs are key, especially in smaller chains.
• About one in five respondents name purchasing or
operation management as the key “chooser.”
• In larger chains, R&D personnel, both equipment
engineers and culinary are named more often, along
with other specialist titles.

21
Chain Functions That Evaluate
E&S Suppliers
Have Some Input Have Most Input
(All That Apply) (Name One Only)
41%
76%
64% 61%
39% 39% 21% 21%

34%
26%
10%
6%
2%
0%

Criteria Influencing Chain Buyers
Choice of E&S Products/Suppliers
• Many different criteria are involved in chain buyers E&S
product and supplier choices.
• Labor savings, ease of use, energy efficiency, both initial and
lifecycle cost, speed and previous experience with the supplier
are all named by more than 50% of buyers.
• But the most critical criteria is clearly the product’s and
supplier’s impact on food and menu product quality.
• Ease of use, initial cost and labor savings are the next most
commonly mentioned criteria.
• Unique technology, water savings and availability are cited by
the fewest respondents as important.

Criteria Influencing Chain Buyers
Choice of E&S Products/Suppliers
Criteria Influencing Product/Supplier Choice
Some Influence (Name All) Most Influence (Name 3 or Fewer)
62%
42% 42%
35%
17% 17%
17% 23%
11% 85% 11%
72% 78% 68% 0% 72%
46% 58% 54% 59%
41% 40%

Other Testing & Evaluation Procedures
Where Do You Test New E&S Products?
52%
31%
4% 5% 4%
3% 3%
On-Site Operating Mfrs. Test Mfrs. Rep. Dealer Test Consult. Food
Test Kitch. Unit Kitch. Test Kitch. Kitch. Test Kitch. Supplier
Kitch.

General Economy Overview
• It was a tough first quarter 2014, thanks to the weather.
• General economy tanked and Technomic estimates winter
cost foodservice 1.5 points in growth this year.
• But that’s was then. All general economy foodservice
drivers have been very positive since.
• GDP surged to 4.2% annualized growth 2Q; advance 3Q
estimate 3.5%.
• Disposable income and consumer spending improving.
• Employment trends, consumer confidence, and gasoline
prices are very positive for foodservice.
• The forecasts are for an even better 15 on all fronts.

26
Operator Sales Recent History
• After falling 7.5% during 2008-10 period, total industry
operator real sales have been positive since 2011.
• After moderate gain in 11, Technomic estimates in 12
industry sales grew 1.9% real, 4% nominal.
• 12 was by far best year since 2006 and best of recovery.
• NRA has it a bit different, with 11 up 1.7% real and 12
industry growth slightly slower at 1.5% real.
• The NPD Group reports overall traffic rose 1% in 12, first
year-over-year increase since Great Recession.
• But with population increase, per capita visits still falling.
• Young people and those less well off eating out less.

27
Operator Forecasts 2013-2015
• Technomic final 13 estimate: 3.1% nominal, 1.1% real.
• NPD reported flat year for traffic in 2013.
• NRA’s estimate for 13 matches Technomic’s: 3.2% nominal
and 1% real growth.
• Technomic revised 14 forecast down twice thanks to winter
impact: now 3.3% nom., 0.1% real. Menu prices rising.
• NRA forecast was 3.6% nominal, 1.2% real, but that was
before impact of winter was known.
• NPD forecast 1% traffic gains for 14, but expects flat visits.
• Technomic’s preliminary 2015 forecast is for 3.1% nominal
and 1.2% real increase.

28
Technomic Operator Sales Changes
Nom. Sales Real Sales
10
8
6
4
2
0
-2
-4
-6
-8

Technomic Operator Sales Changes
Nom. Sales Real Sales
8
6.8
6 5.8 6 5.7
4 4 4
3 3.1 3.3 3.1
2.4 2.8 2.6 2.4
2 2.3 1.9
1.1 1.2
0.6
0.4
0 0.1 0.1
-0.6
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014F2015F
-2
-4 -3.9 -3.7
-6
-6.9
-8

NPD Per Capita Visits: 1984-2013
Promise & Challenge
Annual Commercial Foodservice Meals Per Person In the USA
208 210 208 207 208 208 206

205 204 205 205
202
196 197
195
192 193 193 192
187
183
181 180 179 181 182
177
174
171
167
1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Source: The NPD Group/ 26th Annual Eating Patterns of America

Current Sales & Traffic Trends
• Data from Technomic, NPD and NRA show 2013 was an
up and down year, ending on a down note.
• Technomic chain same-store sales trended lower in the
last quarter 2013 as winter began to take hold.
• They fell again in 1Q/14 as winter hit with full force.
• Full-service chains continue to struggle; same-store sales
have been negative three of last five quarters.
• Limited-service chains were still positive 1Q/14, up 1.7%
less McD’s. Add McD’s, only 0.7% LSR gain.
• Still, 41 chains up 1Q versus 26 down.

Technomic Same-Store Sales Index
Weighted Avg. Change, Excluding McDonald’s
8 LSR w/o McDs

FSR
6
4.74.9
4 3.63 4 3.7 4 4.1
2.9 3.3 3.3
2.8 2.76 2.7 2.82.4 2.4
2 2.3
1.651.781.55 2.05 1.8 1.7 1.9 1.6 1.7
0.84 0.70.690.46 1.21.5
0.90.9 1.3 0.90.9 1.2
0.4 0.4 0.33 0.50.6 0.6 0.7 0.4
0 -0.1 -0.3 -0.61 -0.1-0.4 -0.1 -0.1 -0.3
-0.7-0.8 -0.9 -1 -0.78
-2 -1.93
-2.2 -1.8-1.5
-2.3-2.7
-3.3 -3.1-3.3
-4 -3.89
-4.7
-6

Sales & Traffic Trends
• NPD’s CREST traffic numbers have been flat or negative
since the 3Q/13.
• Overall traffic fell 1% in 1Q/14, thanks to harsh winter,
but moved to flat in 2Q.
• QSR traffic was up 1% in 2Q/14 after two quarters flat.
Segment controls 79% of visits.
• Casual-dining traffic was not negative for first time since
2008 2Q/13, but has been negative since.
• Fine dining continues to do well on strong business travel
but accounts for less than 2% of total visits.

NPD Traffic By Segment

35
NPD Traffic By Segment
Total Restaurants
AMJ'14 Traffic 0% Traffic % Change vs. Year Ago
QSR 1% 1% 1% 1% 1%
0% 0% 0% 0%
( 79%)
Midscale
( 9% )
-3% -2% -2% -2% -2% -3% -3% -4% -4%
0%
Casual Dining
( 10%) -2% -1% -1% -2% -2% -2%
-3% -3%
Fine Dining/
Upscale Hotel 5% 0% 4% 5% 6% 6% 4% 2% 2%
( 2%)
AMJ'12 JAS'12 OND'12 JFM'13 AMJ'13 JAS'13 OND'13 JFM'14 AMJ'14
(Share of Traffic AMJ'14)

The NPD Group, Inc. | Proprietary and Confidential Source: CREST 
Sales & Traffic Trends
• NRA’s overall Restaurant Performance Index has been in
expansion territory for 19 consecutive months.
• Traffic per NRA went negative in December 2013 and
remained negative through February 14, thank to winter.
• Beginning March, the index rebounded sharply.
• But the RPI has waffled since summer, down slightly in
June and July, up in august and down in September.
• Operators are worried about increased food and labor
costs cutting margins.
• Their outlook in September RPI fell sharply.

NRA Restaurant Performance Index
September 2014

NRA Restaurant Performance Index
September 2014

39
“Beyond Restaurants” Operator Trends
• Nearly all “spec” market segments are growing again.

• Technomic forecasts real growth for every “Beyond
Restaurants” segment save transport and corrections.
• Hospitals, long-term care, senior living, colleges, and
military foodservice showing strong growth in “sales,”
with real growth of 1.5% or more, per Technomic.
• Supermarket foodservice continues to surge, forecast to
grow 6% nominal, 2.4% real in 14, 3.9% real in 15.
• Lodging foodservice growing fast with 5.5% forecast
nominal growth both 14 and 15.

“Beyond Restaurants” Operator Trends
• NPD CREST Onsite has noncommercial segments and lodging

seeing increased traffic. Traffic rose 1% in 13.
• Consultants are seeing more activity from all spec segments,
according to the MAFSI Barometer.
• Tax receipt trends are slowing, as impact of 2012-13 fiscal
front-loading effect plays out.
• Wealthy taxpayers moved capital, dividend gains into 2012.
• Both income tax and sales tax growth have slowed, though
property tax receipts nudging toward positive.
• Preliminary 2Q data shows another quarter of lower receipts.

State & Local Tax Trends,
Four-Quarter Moving Average

Operator Unit Trends
• During the three years of the recession, independents lost
units while chains continued to add units.
• For the three-year period 2009-11, chains added 4,511
units while independents lost 7,158, per NPD’s ReCount.
• More than 75% of all lost units were full service.
• Net loss, in a universe of 600,000 units, was only 2,647,
an incredibly small number given big sales drop.
• But there was plenty of churn, as CHD numbers show.
• Technomic, NPD and CHD all report net unit growth
returned in 2011 and 2012.

NPD ReCount Unit Changes, 2009-11

44
CHD Unit Trends 2009-2013

CHD Unit Trends 2009-2014

Operator Unit Trends, NPD ReCount
• NPD’s ReCount Census shows a net gain of 5,000 to

6,000 restaurants a year since 2012.
• Total restaurant units grew 0.9% for year ended
spring 2013 (March 31 ending) versus 2012.
• Market added another 5,002 units in the past year.
Total: 635,494.
• Chains added 3,718 net units 13 to 14, up 1.3%.
• Independents added 1,284 net units, up 0.4%.
• In ReCount, chains control 44.7% of total restaurants.

NPD ReCount Restaurant Units, Revised Totals
616,257 619,481 624,896 630,492 635,494
Spring 2010 Spring 2011 Spring 2012 Spring 2013 Spring 2014

Spring '13 to '14
2010 Spring 2011 Spring 2012 Spring 2013 Spring 2014 Spring 14 PCYA Unit Change
Source: The NPD Group/Spring 2014 ReCount®
Total 616257 619481 624896 630492 635494 0.8% 5002
CHAIN 270245 272363 275608 280417 284135 1.3% 3718
INDEPENDENT 346012 347118 349288 350075 351359 0.4% 1284

Operator Capital Expenditure Outlook
• Operator spending on equipment and supplies is quite

healthy despite tough winter.
• Many older chains continue to spend for renovation
and replacement, younger chains adding units.
• Three years of positive sales have helped smaller and
independent operators spend for E&S, too.
• Spec markets are finally beginning to spend again
after nearly five-year lull.
• Operators surveyed by NRA are quite optimistic
about sales and business conditions six months out.

50
Operator Capital Expenditure Outlook
• Harsh winter appears to have dampened operators’ sales

more than their capital spending.
• Pent-up demand for E&S among operators remains high.
• In May RPI, 62% planned a capital purchase in the next
six months matching levels not seen since 07.
• Credit and cash-flow/capital formation are normal.
• However, margin squeeze from rising food and labor
costs are worrisome.
• Publicly funded segments seeing improvement in
availability of capital for facilities projects.
• Technomic’s forecasts moderately better 2015 growth.

51
NRA Index Of Operators
Making Capital Expenditure Purchase
Past Three Months, 09/2014
Current Situation Index--Cap Ex
103
102
101
100
99
98
97
96
95
94
Oct-07
Aug-08
May-07
May-09
May-10
May-11
May-12
May-13
May-14
Jan-10
Jan-11
Jan-12
Jan-13
Jan-14
Aug. 06
Dec-06
Dec-08
Mar-08
Sep-14
Sep-09
Sep-10
Sep-11
Sep-12
Sep-13
NRA Index Of Operators
Planning Capital Expenditure Purchase
Next Six Months, 09/2014
Expectations Index--Cap Ex
104
103
102
101
100
99
98
97
96
95
94
Aug-06 Aug-07 Aug-08 Aug-09 Aug-10 Aug-11 Aug-12 Aug-13 Aug-14

2015 FER
Equipment & Supplies
Market Forecast

E&S Market & Forecast Overview
• The foodservice equipment and supplies market is in the
fifth year of recovery from the recession.
• The growth of the E&S market has been quite remarkable
given that operator sales growth has been moderate.
• Recovery began 2Q/10 (public companies) to 4Q/10
(MAFSI Business Barometer, reflecting broader market.)
• 2011 was a strong bounce-back year for E&S.
• The market’s rate of growth slowed beginning 2Q/12
through 1Q/2013.
• Then, the remainder of last year, growth accelerated. 2013
turned out to be a surprisingly good year.

55
The E&S Market—2013
• Very slow 1Q/13 fooled us as we forecast last year.
• The payroll tax increase and an unusual winter run-up in
gasoline prices hurt operators first half of year.
• But then the E&S market, in spite of sluggish operator sales
and traffic, really took off.
• MAFSI Barometer 2Q hit post-recession high, up 6.1%.
• MAFSI Barometer average for 2013 was gain of 4.5%.
• Public companies showed similar pattern with bounce back
2Q to 4.1% growth and great 4Q 8.4% gain.
• In March this year, we boosted our 13 estimate to 4.5%
nominal gain, 2.4% real, up more than a point.
56
Top 100 Mfrs., Change vs. Prior Year
10.0% 8.7%
8.0% 6.4% 7.0%
5.7%
6.0%
3.9%
4.0% 3.0%
2.0%
0.0%
-2.0%
-4.0%
-6.0%
-8.0% -9.6%
-10.0%
2007 2008 2009 2010 2011 2012 2013

• E&S sales slowed in the first half in the broad market, but
big public equipment companies are doing well.
• Rest of the year looks very good; MAFSI reps forecast
5.7% 3Q growth; still forecast 4.9% for year, a record.
• All the basic macroeconomic factors are looking as good
as they have since the recession, especially jobs growth.
• The spec markets, a third to 40% of total E&S market, are
recovering with many projects on line.
• MAFSI quotation, consultant activity numbers very good.
• Operator food and labor cost run-ups are a worry.
• Given all this, we took our original 2014 forecast up.

58
MAFSI Barometer History, 2Q/14

59
Public E&S Company Blended Sales,
Quarterly % Changes Vs. Year Prior
25
20
15
10
0 Equipment
Supplies
-5
Total
-10
-15
-20
-25

60
MAFSI Barometer—2Q/14

61
MAFSI Barometer—2Q/14

Revised FER E&S Forecast—2014
Nom. Prices Real
Growth Growth
Total Equipment 4.4% 2.1% 2.3%
Total Supplies 4.5 2.4 2.1
Total Industry 4.4 2.1 2.3


63
Nom. Prices Real
Growth Growth
Primary Cooking 4.6% 2.0% 2.6%
Refrigeration & Ice 4.8 2.4 2.4
Storage & Handling 3.7 1.5 2.2
Serving Equipment 4.4 2.1 2.3

64
Nom. Prices Real
Growth Growth
Prep Equipment 4.3% 2.3% 2.0%
Warewash & Ventil. 4.0 1.8 2.2
Furn. & Custom Fab. 3.6 1.7 1.9
Smallwares 4.5 2.3 2.2
Tabletop & Serv. 4.5 2.4 2.1

65
• The macroeconomic forecasts for 2015 look as good as
they have anytime since the Great Recession.
• Europe is recovering and most Asian growth rates are
stronger. Export ever bigger part of U.S. E&S market.
• Operator forecasts call for improved sales environment
and lower food-price inflation.
• MAFSI numbers on rep quotation and consultant activity
are stronger than they’ve been in years.
• E&S price increases will probably go higher given
materials price run-ups.
• We forecast stronger E&S market growth in 2015.

66
Nom. Prices Real
Growth Growth
Total Equipment 4.9% 2.3% 2.5%
Total Supplies 4.5 2.2 2.3
Total Industry 4.8 2.3 2.5


67
Nom. Prices Real
Growth Growth
Primary Cooking 5.2% 2.4% 2.8%
Refrigeration & Ice 5.0 2.5 2.5
Storage & Handling 4.4 2.0 2.4
Serving Equipment 4.9 2.3 2.6

68
Nom. Prices Real
Growth Growth
Prep Equipment 4.5% 2.3% 2.2%
Warewash & Ventil. 4.6 2.2 2.4
Furn. & Custom Fab. 4.2 2.0 2.2
Smallwares 4.7 2.3 2.4
Tabletop & Serv. 4.4 2.1 2.3

69
The E&S Market—2001-2015
5
Real Change
Nom. Change
-15
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

70
The E&S Market—2011-2015
6
5 4.7 4.8
4.5 4.4
4 3.8
2.9
3 Nom. Change
2.4 2.5
2.3 Real Change
2 1.8
0
2011 2012 2013 2014 2015

71
The FER E&S Forecast—2015
Final Thoughts
• 2015 could well be the peak of the current cycle.
• Stronger operator environment should combine with
rebound of the spec markets to boost growth.
• Mature U.S. market will remain driven by the four “R”s:
renovation, replacement, (menu) roll-outs and repair.
• There are hundreds of thousand of existing units and
facilities that need constant renovation and re-equipping.
• U.S. chain brands (and their suppliers) are dominant in
the global race and they are building units like crazy.
• International growth is in part why U.S. E&S market
growth exceeds core U.S. operator growth.

72
FER E&S Market Forecasts
2013-2018
6
4.8 4.6
5 4.5 4.4 4.3
4
4
3 2.4 2.5
2.3 2.3 2.2 2
2 Real Change
Nom. Change
1
0
2013 2014 2015 2016 2017 2018
Real and nominal percentage changes in E&S market growth 2013-2018.

All numbers are FER forecasts.

73
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The Foodservice

Equipment & Supplies Market:

Foodservice Equipment Reports ©2014

• The foodservice market in the United States is huge,

Foodservice Equipment Reports ©2014

Foodservice Equipment Reports ©2014

Foodservice Equipment Reports ©2014

• Big chain, institutional and other multiunit foodservice

Foodservice Equipment Reports ©2014

Top 500 Top 500

Foodservice Equipment Reports ©2014

Great Britain Japan

Foodservice Equipment Reports ©2014

Foodservice Equipment Reports ©2014

2009 2010 2011 2012 2013

Foodservice Equipment Reports ©2014

Foodservice Equipment Reports ©2014

11% Cooking Equip.

Foodservice Equipment Reports ©2014

Nom. Real $$$

Total Equipment 4.4% 2.5% $8,375

Total Supplies 3.9 1.8 $1,770

Total Industry 3.3 1.5 $10,145

Foodservice Equipment Reports ©2014

Primary Cooking 4.6% 2% $2,068

Refrigeration & Ice 4.8 2.4 $2,336

Storage & Handling 3.7 2.2 $ 710

Serving Equipment 4.4 2.3 $1,292

Foodservice Equipment Reports ©2014

Prep. Equipment 4.3% 2% $ 442

Warewash & Ventil. 4 2.2 $ 885

Furn. & Custom Fab. 3.6 1.9 $ 642

Smallwares 4.5 2.2 $ 655

Tabletop & Serv. 4.5 2.1 $1,114

Foodservice Equipment Reports ©2014

Foodservice Equipment Reports ©2014

Foodservice Equipment Reports ©2014

Foodservice Equipment Reports ©2014

39% 39% 21% 21%

Foodservice Equipment Reports ©2014

Foodservice Equipment Reports ©2014

Foodservice Equipment Reports ©2014

Foodservice Equipment Reports ©2014

Foodservice Equipment Reports ©2014

Foodservice Equipment Reports ©2014

Foodservice Equipment Reports ©2014

Foodservice Equipment Reports ©2014

Foodservice Equipment Reports ©2014

Annual Commercial Foodservice Meals Per Person In the USA

208 210 208 207 208 208 206

Source: The NPD Group/ 26th Annual Eating Patterns of America

Foodservice Equipment Reports ©2014

Foodservice Equipment Reports ©2014

8 LSR w/o McDs

Foodservice Equipment Reports ©2014

Foodservice Equipment Reports ©2014

Foodservice Equipment Reports ©2014

Foodservice Equipment Reports ©2014

Foodservice Equipment Reports ©2014

Foodservice Equipment Reports ©2014

Foodservice Equipment Reports ©2014

• Nearly all “spec” market segments are growing again.

Foodservice Equipment Reports ©2014

• NPD CREST Onsite has noncommercial segments and lodging