NRA presentation - bslg-smartketing-wawa

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The Grocerants Are Eating Your Lunch: How Grocery Stores, C-Stores, Drug Stores & Home Delivery Are Taking

Away Market Share

Presented by: Bill Cross, SVP Business Development, Broad Street Licensing GroupWith Jim Matorin, SMARTKETING

Mike Sherlock, Vice President, Fresh Food & Beverage, Wawa, Inc.Ben Hamlin, VP Fresh Direct

5/18/2014

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Restaurant Brands at Retail: An Overview by

Bill Cross, Broad Street Licensing Group

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Restaurant Brands Licensed to Retail• Began in 1996 - Initial line of 5 SKUs from restaurant menu

(potato skins, Buffalo wings, mozzarella sticks) - grown to 18 SKUs•Annual Retail Sales (est.) = $ 350MM•181MM 1 year ago (21% growth )•4% Share of total frozen/refrigerated appetizers & snacks segment

Frozen Appetizers &

Dinner Entrees

Salsas/Dips

ChipsDrinks & Mixers

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Restaurant Brands Licensed to Retail

• CPK began licensing in1997 – 12 SKUs utilizing restaurant’s most popular flavors•Annual retail sales $159 MM;•19.6% annual growth

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•High-end frozen skillet meals launched 2010: “PF Chang’s Home Menu”•Priced in the premium $8.99-$9.99 range

Restaurant Brands Licensed to Retail

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• Starbucks began in1995 w/ice cream - by July 1996 Starbucks Ice Cream was top-selling super premium brand in coffee-flavor segment•“2nd Generation” non-coffee ice creams launched 2010•RTD drinks introduced 1996 - by 2005 achieved 98% share of US RTD coffee market•Coffee beans introduced 1998 – leader in gourmet /premium coffee bean segment•Retail products are highlighted on the company’s web site under “Starbucks at Home”•Coupons given out in Starbucks promoting grocery products•Went into retail business directly after contentious falling-out with Kraft

Ice Cream

Candy & Liqueur Drinks

Coffee Beans

Restaurant Brands Licensed to Retail

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#NRAShow“You know White Castle is always open late so you can always get what you crave, but sometimes you just want to get what you crave at home. Did you know you can get frozen White Castle hamburger patties from your grocer’s freezer?” [White Castle’s corporate web site]

Restaurant Brands Licensed to Retail

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Restaurant Brands Licensed to Retail

Coming Soon

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Restaurant Brands Licensed to Retail

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Don’t Just Compete With Other Restaurants in Their Category (e.g., fast casual)—

Don’t Just Compete With Other Restaurants—

They Compete With Everyone Who Sells Food—

RESTAURANTS:

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And Almost Everyone Sells Food Now:

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80% of Americans Don’t Know by 4PM What’s for Dinner*

* Source: Technomic

Factoid:

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Don’t ask whether non-traditional retailers are threatening your business, but whether you can

threaten theirs*

* Chris Stark

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The Convenience Factor

Jimmy Matorin – Business Catalyst

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The Convenience Factor

• Time Usage- 24/7- Mobile U.S.A.- Internet

• Lifestyles

• Snacking Numerology

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-4%

0%2% 1%

3%

Restaurant Traffic % Change vs. YAG

Morning Meal( )

Lunch( )

Supper( )

PM Snack( )

NPD Traffic YE Dec ‘13

0%

-2%

0%

-1%

1%

-3%-1% -1%

1%

-1%

-3%

0% 0% 1%

-1%

21%

34%

31%

14%

YE Dec'09 YE Dec'10 YE Dec'11 YE Dec'12 YE Dec'13

The NPD Group, Inc. | Proprietary and Confidential Source: CREST

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2007 2008 2009 2010 2011 2012 2013

208207

200

197

194 194192

The NPD Group, Inc. | Proprietary and Confidential

17

Annual Restaurant Meals & Snacks Per Person

Source: CREST Years Ending November

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Nanosecond

The fraction of time that elapses between when a traffic signal changes to green and the car behind

you blasts their horn.

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Nanosecond

A nanosecond is one billionth of a second. Consequently one nanosecond is to one second as

one second is to 31.7 years.

TelecommunicationsPulsed Lasers

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Average Time Usage Study

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Mobile U.S.A.

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Mobile U.S.A. – Smartphone Usage

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Internet Usage – Social Media

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Internet Usage – Social Media

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Lifestyles

• Multiple Screens

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Lifestyles

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Lifestyles

• Multiple Screens

• Demographics – Indie Woman – Millennial Moms

• Online Education

• Night Owls (24/7)

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Snacking Numerology

2.35/92%

50% +22

+18/12 percent

$9.2 Billion

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The Grocerants Are Eating Your Lunch: How Grocery Stores, C-Stores, Drug Stores and Home Delivery Are Taking Away Market Share

Mike Sherlock

5/18/2014

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Who is Wawa?200 Years in American Business

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• Employs over 22,000 people

• Owns and Operates 650 stores– 263 non-gas– 387 gas

Delaware

220240

41

Pennsylvania

Virginia

New Jersey

Maryland

40

45

Florida

Mid Atlantic

68

Who is Wawa Today?

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A trusted brand in our Mid-Atlantic market (PA, NJ, MD, DE, VA):

#1 C-Store Share (47.8%)#1 in Gasoline (21.1% sales); 1.6% of all fuel sales in U.S.#1 in Coffee; #7 nationally#1 in Hoagies and Sandwiches#47 – Forbes Annual Ranking of Largest Private Companies3rd in Food Trade News Market Share for food retailers in

the Delaware Valley

Who is Wawa Today?

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Private Ownership

• Long-term Point of View• Closely Held = Engaged Owners

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Employee Ownership!

40.9%

10.0%11.2%

37.9%

ESOP

OtherShareholders

George WoodTrust

George WoodDescendants

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Our Core Values

Value People Delight Customers Embrace Change

Do The Right Thing Do Things Right Passion For Winning

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Wawa Dairy

1902

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Store #1 Opens in Folsom, PA

1964

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Coffee Program Begins

1975

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Hoagie Program Begins

1975

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1977 ESOP Created

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1996 First Super Gas Store - Millsboro, DE

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2000 Touch Screen Ordering

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2012Florida

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44

Fast Casual To Go

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What Do You Want To Be Known For?

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Keep Your Brand Fresh

After

Before

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Create the Environment To Represent Your Brand

After

Before

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Create the Environment To Represent Your Brand

Before

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Create the Environment To Represent Your Brand

Before

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50

Communicate Freshness

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Communicate Freshness

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Value

Fast, Friendly, Clean and Fresh

Personalization

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Fulfilling lives, everyday.