CURRENT CONSUMER TRENDS: SWEETENERS AUGUST 2015 MATT WILSON GLOBAL TRENDS GENERAL MILLS

Current Consumer Landscape 

Wellness trends in food dominating consumer conversation



Awareness and concern of sugar consumption growing with consumers



Interest in natural sweeteners with inherent benefits increasing

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However, indulgence not decreasing, but overlapping with wellness cues

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Wellness trends in food dominating • The Rise of “Real Food” • Natural Nutrition • “Free Froms” • GMO Awareness, Avoidance

Growing • Market Reaction

The Rise of “Real Food” Real food is key to being naturally functional – not explicit health benefits Trending: Cues of “Real” • Fresh • Whole (minimally processed) • Recognizable ingredients • Natural nutrition (not fortified) • Transparency

Source: CNN, Twitter, Nielsen Global Health & Wellness Survey

Trending: Detractors from “Real” • Artificial anything (colors, flavors,

preservatives, sweeteners) • Added sugars (especially fructose, HFCS) • Simple (“bad”) carbs • “Low fat” and “Low calorie” claims

“Natural Nutrition” • Naturally functional spans food/beverage landscape • Consumers looking to foods with inherent benefits

Almonds

Coconuts

Heart healthy & nutrient rich

Rich in potassium & minerals; Natural energy

• Naturally functional is a key ante,

especially for new products, but not a platform itself • NOT about clean label, “all natural” or “organic” claims, or even specific health claims – the inherent benefits speak for themselves • Taste and convenience remain essential! Source: New Nutrition Business – 10 Key Trends 2015

“Natural Nutrition” • Naturally functional spans food/beverage landscape • Consumers looking to foods with inherent benefits

“Let food be thy medicine and medicine be thy food.” Hippocrates

Source: New Nutrition Business – 10 Key Trends 2015

Almonds

Coconuts

Heart healthy & nutrient rich

Rich in potassium & minerals; Natural energy

• Naturally functional is a key ante,

especially for new products, but not a platform itself • NOT about clean label, “all natural” or “organic” claims, or even specific health claims – the inherent benefits speak for themselves • Taste and convenience remain essential!

“Free Froms” Cueing fresh: Demands of “free from” artificial colors, flavors, preservatives, and unnecessary ingredients rising Major Effort to Avoid At Least Conscious Effort to Avoid

• “From Froms” = The new table stakes

Artificial Sweeteners

• Real food = Nothing artificial HFCS

GMO's

Processed Foods

Sugar

Source: Hartman, Crimson Hexagon, Mintel

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“Free Froms” Cueing fresh: Demands of “free from” artificial colors, flavors, preservatives, and unnecessary ingredients rising Major Effort to Avoid At Least Conscious Effort to Avoid

• “From Froms” = The new table stakes

Artificial Sweeteners

• Real food = Nothing artificial HFCS

GMO's

Processed Foods

Sugar

Source: Hartman, Crimson Hexagon, Mintel

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GMO Awareness, Avoidance Growing Awareness Growing Faster

GMO in Top Ingredients to Avoid

Consumer concerns over GMOs • Unnatural • Prioritizes profit over consumer health • Unknown impact to environment

Source: Nielsen Headwinds Study, Total Respondents (n=31375), Aug/Sept 2014 . “Please select the statement that best describes how you and others in your household are seeking or avoiding the following things from your/your family’s diet.”. (2) Hartman Organic Study, 2014. (3) The NPD Group Food Safety Monitor, January 21, 2015 version (data collected monthly)

Market Reaction Brands moving closer to “Real Food” accelerating Examples: • Issuing a comprehensive “No No” ingredient list • Introducing store brands with a banned ingredient promise • Removing artificial colors, flavors, & preservatives • Removing HFCS • Going non-GMO

Pre-2010

2010

2011

2012

2010 through 2014

2013

2014

Jan '15 Feb '15 Mar '15 Apr '15May-June '15Future

Market Reaction Brands moving closer to “Real Food” accelerating Examples: • Issuing a comprehensive “No No” ingredient list • Introducing store brands with a banned ingredient promise • Removing artificial colors, flavors, & preservatives • Removing HFCS • Going non-GMO

Pre-2010

2010

2011

2012

2010 through 2014

2013

2014

Jan '15 Feb '15 Mar '15 Apr '15May-June '15Future

Market Reaction Brands moving closer to “Real Food” accelerating Examples: • Issuing a comprehensive “No No” ingredient list • Introducing store brands with a banned ingredient promise • Removing artificial colors, flavors, & preservatives • Removing HFCS • Going non-GMO

Pre-2010

2010

2011

2012

2010 through 2014

2013

2014

Jan '15 Feb '15 Mar '15 Apr '15May-June '15Future

Market Reaction Brands moving closer to “Real Food” accelerating Examples: • Issuing a comprehensive “No No” ingredient list • Introducing store brands with a banned ingredient promise • Removing artificial colors, flavors, & preservatives • Removing HFCS • Going non-GMO

Pre-2010

2010

2011

2012

2010 through 2014

2013

2014

Jan '15 Feb '15 Mar '15 Apr '15May-June '15Future

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Awareness and concern sugar • Headlines Driving Consumer Concern • Avoidance of Artificial Sugars Growing • Consumers Subjectivity With Sugar Varies

Headlines Driving Consumer Concern  After calories, sugar is

the most-checked nutrition fact for all label readers 1  GMI gets 10X+ sugar B

A

Healthy sugar

Daily sugar intake

* A + B, WHO announcement dates

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contacts as sodium, preservatives, colors 2  Interest in managing

sugar spikes in response to WHO announcement and other press 3

Sources: 1 Gallup Clean Label Survey 2013, 32 F15 GMI Consumer Contacts 5/14-3/15 3 Who.int Press Release March 2015

Headlines Driving Consumer Concern  After calories, sugar is

the most-checked nutrition fact for all label readers 1  GMI gets 10X+ sugar B

4

A

contacts as sodium, preservatives, colors 2  Interest in managing

Healthy sugar Red 40 HFCS Daily sugar intake

* A + B, WHO announcement dates

sugar spikes in response to WHO announcement and other press 3

Sources: 1 Gallup Clean Label Survey 2013, 32 F15 GMI Consumer Contacts 5/14-3/15 3 Who.int Press Release March 2015

Avoidance of Artificial Sugars Growing Major Effort to Avoid

At Least Conscious Effort to Avoid

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Artificial Sweeteners

51

24

HFCS

58

21

GMO's Processed Foods Saturated Fat Artificial Flavors & Colors Preservatives Sodium Sugar Source: Nielsen GMI Headwinds Study Survey n=31,982

 While there is an effort

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 56

16 56

to avoid sugar by many households, it ranks lower on “major effort to avoid,” similar to Sodium Sugar a matter of moderation rather than a deal breaker

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 Low sugar options may

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13 49

13 55

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need to deliver on other priority free-from claims: gluten, soy, sodium, GMOs, and artificial ingredients.

Consumers Subjectivity With Sugar Varies Honey Coconut sugar Agave

Good for Health (Moderate)

Monk fruit Stevia

Neutral Granulated sugar

Erythritol

Saccharin Aspartame HFCS

concerned about the overall amount of sugar in their foods, but also differentiate between healthfulness of different types of sweetener.  HFCS and Aspartame are

Sucralose

Xylitol

 Consumers are

Bad for Health (Avoid)

Source: Mintel Sugar and Sweeteners US September 2014

perceived as artificial and unhealthy. Honey associated with health benefits

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Interest in natural sweeteners with • Consumer’s View of the Sweetener

Landscape • The Evolving Evaluation of Sweeteners

Consumer’s View of the Sweetener Landscape

Falling from Favor

Currently Trending

Rising Stars

Caloric sweeteners High Fructose Corn Syrup Corn Syrup Refined Sugar Agave

Honey Raw sugarcane juice Brown Rice Syrup Barley Malt Maple syrup

Coconut or Palm Sugar Sorghum Syrup Yacon Syrup Raw Unpasteurized Honey Sucanat

Down the Road

Date Sugar Lucuma fruit

Low or Noncaloric sweeteners Protein sweeteners: Brazzein, Monatin Sucralose Truvia blend

Stevia Xylitol Erythritol*

Monk fruit Organic Stevia Leaf

Rare sugars: Allulose Miracle berry

Sources: Hartman Consumer POV on Sugar 2013, Crimson Hexagon 2015

*Associated with Truvia backlash

Consumers Evolving Evaluation of Sweeteners

Natural

Low Calorie/ Trace Benefits Glycemic

 Emerging sweeteners are judged on three facets: naturalness, GI or

calorie count, and any positive nutrition they may bring 1  While natural sweeteners carry a positive halo, FDA-proposed “added

sugar” labels may lower subjective differences  Positioning, processing play a big role in judging ‘naturalness’. Sources: 1 Crimson Hexagon,

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Indulgence not decreasing, but • Sweets + Real Food • Justified Indulgence

Sweets + Real Food It’s not about the perfect balance of nutrients in every snack; it’s about real food.

• Organic • Made with organic blueberries, sugar, honey • 22g sugar • 7g protein

Source: Consumers Approach to Energy in Food & Beverage (2015), Hartman; State of the Snack Food Industry (2015), IRi

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Sweets + Real Food It’s not about the perfect balance of nutrients in every snack; it’s about real food.

• Organic • Made with organic blueberries, sugar, honey • 22g sugar • 7g protein

Source: Consumers Approach to Energy in Food & Beverage (2015), Hartman; State of the Snack Food Industry (2015), IRi

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Justified Indulgence

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But, having a few indulgence snacks throughout the week is part of a happy life.

• Made with sugar, high fructose corn syrup, palm oil • 14g sugar/ serving (3 cookies) • 1g protein

Source: Consumers Approach to Energy in Food & Beverage (2015), Hartman; State of the Snack Food Industry (2015), IRi

Summary 

Wellness trends in food dominating consumer conversation



Awareness and concern sugar consumption growing with consumers



Interest in natural sweeteners with inherent benefits increasing



However, indulgence not decreasing, but overlapping with wellness cues

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