FUTURE OF FOOD REPORT‘how we all help shift consumers towards sustainable eating’

Call for Unlockers

June 2020

Future of Food Institute

2

Why do we need this shift?

▪ 9,7 billion people need to be fed in 2050 (which represents a market opportunity of 5% annual growth). But we don’t have enough agricultural land and fresh water available to increase the amount of food and calorie intake.

▪ 35% of food produced is lost or wasted (which represents an agricultural areal of more or less the size of the USA).

▪ 25%-30% of the global green house gas emissions is caused by the Agri-Food system and is therefor a key driver in mitigating and reducing climate change. And we run out of time to reach the Paris climate goals and UN sustainable development goals.

▪ Growing inequality in the food security leads to immigration, poverty, hunger and political instability.

▪ 50% of people in Europe is either overweight or obese, leading to health problems such as cardiovascular diseases, high blood pressure and lifestyle related diabetes and 30% of all cancer cases is food related.

Sources: SDG’s, UN, Oxfam Novib, Eurostat, McKinsey

WE NEED A SHIFT IN THE CURRENT FOOD SYSTEM

3

Food players have a large shared interest in changing consumer behaviour towards sustainable diets in order to fulfil the rising demand. While reducing the natural and social cost of their products. All players in the system can together:

The way we produce influences both the consumers and the livelihood of our planet. Food access, affordability, choice and taste drive demand.

They have a big interest in shifting consumer behaviour BUT they often lack the know-how on how to motivate and support consumers towards a sustainable diet.

▪ Ensure food security and growth in a healthy and regenerative way.

▪ Shift behaviour towards plant-based food.

▪ Deliver CO2 targets and mitigate carbon tax cost.

▪ Create innovations that are both sustainable, healthy and circular.

▪ Establish responsible and resilient supply chains.

▪ Replenish soil and stimulate biodiversity

▪ Produce sustainable products for a healthy, delicious and affordable diet

A SUSTAINABLE FOOD SYSTEM CAN ADDRESS THIS SHIFT

4

A food manufacturing company these days goes far beyond its own operations when looked at through a food system perspective. Think of the impact on air, land, water, biodiversity and geological resources.

Typically all other activities, including consumer behaviour, account for more than 80% of greenhouse-gas (GHG) emissions and more than 90% of impact in other areas.

To cut their emissions in line with the Paris Climate target (while increasing sales at the projected rate of 5.3% a year), CPG food companies would have to lower their carbon intensity -the amount of GHG emitted per $1000 revenue - by more than 90% between 2015 and 2050.

From Unilever’s value chain analyses we know that around 2/3 of GHG-emission is due to consumer behaviour.

So if we want a healthy, sustainable and prosperous food system we need to first of all motivate, seduce and support consumers to change their behaviour for the better. Without this shift a sustainable food system is not feasible.

MORE THAN 65% OF THIS FOOD SYSTEM SHIFT IS DRIVEN BY CONSUMER BEHAVIOUR

Unilever's (overall) greenhouse gas footprint shows that the biggest share of the emissions in the supply chain is accounted for by the consumer.(Source: Unilever USLP 2013)

*Source: McKinsey: 'Sustainability in supply chains’ and Unilever USLP

In order to deliver the Paris Climate goals. companies must lower absolute amount of carbon emissions, related to revenue by 92%. (Source: McKinsey)

MOTIVATING, SEDUCING &

SUPPORTING CONSUMERS

IS THE ‘UNLOCK’

TO A MORE SUSTAINABLE

FOOD SYSTEM

6

From different angles many initiatives are already sprouting that will help us to achieve sustainability goals. Governments, scientists, NGO’s and several links in the food chain are developing as hard they can.

But one button still needs to be pushed.

And that button is called ‘Consumer Preference’. Knowing how to motivate, seduce and support consumers to make more sustainable food choices is more crucial than ever. Because sustainable food initiatives will only have impact if they reach the plate and stomach of the consumer.

In order to be able to influence consumer decisions and behaviour, we need to incorporate consumer choices as serious part of the equation.

The consumer should be considered the most important stakeholder for changing the food system.

CLEAR CONSUMER INSIGHTS AND DRIVERS PAVE THE WAY TO A MORE SUSTAINABLE FOOD CHAIN

7

From the 2019 Future of Food Institute study in the Netherlands – a Sustainable Food Diet in order of priority:

WE ALREADY KNOW HOW TO MAKE THIS HAPPEN.

No waste

Seasonal

Local

Packaging

Plant-basedThe impact of plant-based products is many times lower than that of animal products such as meat and dairy. Within animal products, a portion of meat, then cheese and egg have the greatest effects on the planet. Of the meat products, the total impact of chicken or insects is the lowest. The impact of pork is bigger and that of beef is considerably bigger.

Use food more economically. In a sustainable menu we eat 80% of the amount we ate per person in the Netherlands in 2010. Now, as an end user, we are responsible for 15% of food waste. The waste is usually unnecessary, and we can easily reduce it if we handle the portion size and the pantry differently.

Seasonal products require less energy to grow because fewer greenhouses are required. Seasonal products from the field are the least harmful environmentally.

The less transport, the better. Transport can negate a significant part of the impact saved elsewhere. Think of products that are in season on other continents and transported here.

Although overestimated by the consumer, packaging usually has the smallest share of a product's impact.

8

1. Consumers don’t know what a sustainable diet is and need guidance on this

2. Consumers want to help with reducing waste but don’t know exactly how to do this and miss tools to help them.

3. Different consumer groups need different approaches:

▪ Idealists 33%,

▪ Trend followers 19%,

▪ Blocked 20%,

▪ Conservatives 22%.

4. Consumers need practical arguments and benefits to switch behaviour.

5. Novel agri-food technology needed in the shift is not well accepted yet.

WHAT ARE THE BARRIERS TO MAKE THEM SHIFT? (FROM FUTURE OF FOOD INSTITUTE 2019 STUDY*)

* Survey among 1.500 Dutch consumers

Do not see as many barriers to sustainable behaviour but are also not motivated by the climate to behave more sustainably. Are sensitive to other arguments.

Want to behave more sustainably, but experience barriers.

Are concerned about the climate and act accordingly.

Would like everything to remain the same. Are not convinced of the need for change and do not want change.

UNLOCKING CONSUMER INSIGHTS

10

We want all European food manufacturers, brands, retailers and foodservice players (MNC’s, SME’s, scale-ups and start-ups), to be able to use the know-how, barriers, triggers and insights from our annual European study and data.

We target as key users marketing - , innovation -, R&D - and insights managers. For free, but not without a simple commitment:

Any company that is willing to contribute to a more sustainable food system and promises to do so, can use the insights our annual study provides. The report is offered completely free of charge if a company is willing to:

▪ Formulate a yearly goal and actions to increase sustainable consumer behaviour in there markets and influence factors.

▪ Complete a self-assessment once a year to learn how they are doing.

▪ Become a member of our learning community with best practices and peers.

▪ Sign to the manifesto and become a supporter of this shift. The list of companies that have signed the statement will be made public and shared on our website.

WE WANT TO OFFER FREE ACCESS TO ALL PLAYERS

11

The insights in the report help food companies to maximize impact by developing the right products and services, for the right consumers, with the right messages.

The report is based on a consumer survey amongst N=1.000 respondents per country. We will conduct this yearly study in 7 key markets in the EU, representing an economical, cultural and geographical spread of the EU market.

What’s in the report?

▪ Values, perceptions, behaviour, trends, etc. per markets and consumer segments.

▪ Insights from experts in the field (science, industry, NGO’s, government, etc.)

▪ Comparisons across countries and market segments.

▪ Purchase drivers & barriers. What’s driving consumers and what’s keeping them from eating (more) sustainably?

▪ Best practises: which sustainable products and brands are successful and why?

▪ Overview of the changing playing field and starting points for innovation, co-creation and communication.

HEARTS & MINDS OF QUICKLY CHANGING CONSUMERS EXPOSED IN THE ANNUAL FUTURE OF FOOD REPORT

12

ABOUT THE RESEARCH

Quantitative online consumer research• n=1.000 per market• Representative on age, gender and education• Online panel

Desk research• Literature and media• Online platforms• Expert opinions• Product launches

FieldworkSept. 2020

Analysis and reporting7 EU markets: NL, UK, FR, GE, SE, IT, PlSept/Oct 2020

1 2

Qualitative ResearchExpert interviews food sustainability• Best practices• N=5 - 8 per market

Consumers• Studies in our ‘Conscious Consumer

Community’

3

13

Our belief: if food innovation is based on solid consumer insights; the more successful sustainable innovation will be and… the more our planet will benefit.

In 2019 the first study was conducted in The Netherlands. After evaluation by Senior Food Marketeers we are strongly convinced of its value and wanted to broaden the scope to Europe.

In 2020 we will expand the study to at least 7 other European markets.The following scope is under consideration: NL, Germany, UK, France, Spain, Sweden and Poland.

Including more markets (and even other continents) would paint an even more complete picture. If funding permits us, we will include more countries. In the near future our ambition is to make this project a global yearly recurring study and source of change for consumer eating patterns towards sustainable, healthy, delicious and affordable food.

A YEARLY EUROPEAN STUDY, AS SPRINGBOARD TO REACH THE WORLD, WITH ACCESS FOR ALL

14

The total budget required for the study and providing access to the data and report is indicated at minimum €175,000.-. A detailed budget is provided in appendix 1.

Why Unlockers?Our mission is to help accelerate the transition to a sustainable food system. And we are looking for organisations that support us in making this dream possible for all.

Food organisations who recognize the value of consumer insights and understand this is a central key to UNLOCK a sustainable diet and therefore a positive impact to our planet.

Organisations that want to make consumer insights available (pre-competitive) for every company that wants to contribute to a food better world, and who believe that making these insights available will speed up and scale up the food transition.

We want to build a coalition representing different links in the food system.

• Funding partners providing financial capital.

• Connecting partners that will get the report to as many food companies as possible.

• Knowledge partners enriching the know-how for innovation.

• Education partners supporting marketeers, insight managers, innovation & R&D in new capabilities.

Sponsor fees will be paid to the Flow Impact Fund. This fund will monitor the quality and impact of the research and function as an independent mediator between sponsors and research institute.

Benefits for our Unlockers:

• Be the company that makes this happen

• In all our external communication we will mention the Unlockers.

• Unlimited access to the data and the reports for your company

• Become member of the Mission Board

WE ARE LOOKING FOR UNLOCKERS TO CHANGE THE FOOD SYSTEM AND DRIVE THE GROWTH OPPORTUNITY

15

Future of Food Institute aims to accelerate the transition towards a more sustainable food system, at scale and at speed, with the consumer as a driving force.

The Future of Food institute is a research and consultancy agency that specializes in consumer insight in sustainable food. We are an agency with a mission.

Our goal is to maximize our impact by supporting the development towards a more sustainable food chain with solid consumer knowledge and insights.

ABOUT US

Durk BosmaResearch Director

- Future of Food Institute -

Etienne ZervaasCommercial Director

- Future of Food Institute -

Muriel ArtsDriving shared purpose,impact and engagementfor business & society

- Flow Impact Fund -

15

Thank you fo r your a t ten t ion

The Future of Food Institute

Laan van Meerdervoort 36

2517 AL The Hague, The Netherlands

www.futureoffood.nl

General Per market Total (7 markets)

Project management €10,000 €10,000

Funding costs €20,000 €20,000

Questionnaire design, validation and programming €3,000 €3,000

Qualitative research €5,000 €5,000

Promotion and PR €5,000 €5,000

Access platform €8,000 €8,000

Sample and translations €6,000 €42,000

Fieldwork coordination €1,000 €7,000

Expert interviews €5,000 €35,000

Analysis and market report €3,000 €21,000

Overall data analysis €8,000 €8,000

Overall Reporting €10,000 €10,000

Total €69,000 €15,000 €174,000

A more detailed budget with specified hours and rates is available on request.

Appendix 1: Budget

Append ix 2 : Samp le s l i des ‘ Futu re o f Food ’ repor t 2019

Edition 1, Juli 2019

On April 29, 1899, the Belgian Camille Jenatzy drives a whopping 105.88 km/h with his 'Jamais Contente' ('never satisfied'). It is the first time that a vehicle has exceeded the

limit of 100 kilometres per hour. Surprisingly enough (with today's knowledge) it is an electrical vehicle. At that time there is a battle going on between the internal

combustion engine and the electric one. And electricity seems to be winning this battle just before the turn of the century. For example, ‘De Kampioen’ writes in the summer

of 1898: "It is foreseeable that the means of transport of the future will mainly be moved by electrical power." Electric cars are mechanically more reliable and much more

comfortable than cars with internal combustion engines. The car shakes less, makes much less noise and the passengers are not faced with by exhaust fumes.

At this time, another battle is going on. Between food that is good for the world and food that is less good for the

world. The option that best meets consumers' requirements will win. And if we want the option to win that is better

for the world, we will need to understand what is moving or holding back consumers when making food choices.

Preface

Reality turned out differently, in favour of the internal combustion engine. With, we now know, quite negative consequences for our world and favourable consequences for

the oil industry. Why did electric lose? The range of the electric car was too small and the speed, due to the heavy batteries, too low. Technological developments of the

electric option went too slowly to meet two simple consumer needs: speed and range.

That is why we founded the Future of Food Institute. Brands that understand the consumer, understand their

motives and barriers are the winners in sustainability. Insight is needed to make an impact. Inspiration, ruler, stick

to hit, crystal ball. We hope that this report will contribute in many ways to accelerating the food transition towards

a sustainable world.

Durk Bosma & Etienne Zervaas. Future of Food Institute

About the research

Quantitative online research

• n=1.534• representative NL on age, gender and education• Online panel from Panelinzicht

Qualitative research using remote self-interviewing

• n=15• Interview-tool from Fibeo

Expert interviews

• n=18• Various actors from the food chain

Desk research

• Literature and media• All sources used can be requested from the researchers.

They can also be found on our website futureoffood.nl

Prevention of waste is high onthe agenda of consumers andexperts. There is currently alot of momentum to make astep forward in this area bymoving along with thismomentum. Consumers areopen to it.

There are four consumergroups, each with its own viewon sustainable behaviour. Wehave called them Idealists(33%), Trend Followers (19%),Blocked (26%) andConservatives (22%). Reachingeach group effectively, withthe right message and theright product, requires asmart, segmented approach.

Consumers are not (yet)thinking about improvingefficiency in the context ofsustainability. New agriculturaltechnology is greeted with adose of scepticism. Only athird of consumers think it's agood idea. Technology wouldmake agriculture less natural,take the farmer's sandwich,produce lower qualityproducts and be less efficient.Proponents see it as a goodway to meet the growing needfor food.

Arguments that deliver avisible, concrete and personalbenefit work better thangeneral messages. Argumentsfor sustainable behaviouraimed at abstract benefitsthat are far away from theconsumer work less well.There is also little support formeasures that compelconsumers to eat moresustainably. This is especiallythe case when it comes tocutting down on meat.

Consumers do not yet have anunambiguous, clear andcorrect picture of what exactlyis a sustainable diet. Theimpact of packaging isoverestimated, while theimpact of less animal productsis greatly underestimatedcompared to the impactdetermined by experts. Thewrong perception about whatis sustainable, among otherthings, leads people to thinkthat sustainable is alwaysexpensive.

WE ARE IN THE MOMENTUM FOR PREVENTING FOOD WASTE

THERE ARE 4 DIFFERENT GROUPS OF CONSUMERS WHO WILL SEE SUSTAINABLE FOOD IN A DIFFERENT WAY

IT IS NOT CLEAR FOR THE CONSUMER WHAT SUSTAINABLE FOOD IS EXACTLY

CONCRETE ARGUMENTS FOCUSED ON DIRECT ADVANTAGE FOR CONSUMERS WORK BEST

THERE IS LITTLE SUPPORT FOR TECHNOLOGICAL AGRICULTURAL INNOVATION1 2 4 5

The 5 most impor tant lessons f rom th is research

3

What is a sustainable diet?

No waste

Seasonal

Local

Packaging

Plant-based

A sustainable menu consists of food that has the smallest possible impact on theenvironment while at the same time providing people with sufficient nutrients.Different products have a different impact on the planet in terms of water use,energy use in processing and transport, CO2 emissions, soil and water pollutionand use of scarce resources.

The impact of plant-based products is many times lower than that of animal products such as meat and dairy. Within animalproducts, a portion of meat, then cheese and egg has the greatest effects on the planet. Of the meat products, the total impact ofchicken or insects is the lowest. The impact of pork is greater and that of beef is considerably greater.

Use food more economically. In a sustainable menu, we eat 80% of the amount we ate in the Netherlands in 2010 perperson. Now, as an end user, we are responsible for 15% of food waste. The waste is usually unnecessary, and we can easilyreduce it if we handle the portion size and the pantry differently.

Seasonal products require less energy to grow because fewer greenhouses are required. Seasonal products fromthe field are the least environmentally harmful.

The less transport, the better. Transport can negate a significant part of the impact saved elsewhere. Thinkof products that are in season on other continents and transported here.

Although overestimated by the consumer, packaging usually has the smallestshare of a product's impact

A sustainable menu means that we eat more plant-based products, only consumewhat we really need, waste little, eat more seasonal fruit and vegetables and morelocal products from the Netherlands or Europe. The impact ladder below shows theimpact in order, from large to small.

0

50

100

150

200

250

300

350

400

gram

/dag

2010 2030

Healthy and within the

capacity of the earth

A sustainable menu is created through cooperation between all links inthe food chain. Only if the farmer can sell his products during the season,the factory learns to respond to changes in supply, the sales channels canhandle flexibility in their range and a reasonable price is paid throughoutthe chain, will a sustainable i.e. maintain system work.

A sustainable menu looks on the consumer's plate as the ‘Menu ofTomorrow’ indicates (‘Nature & Environment’ in collaboration withJumbo supermarkets and Blonck consultants).

• The total weight of food drops from an average of 3291 grams per dayto 2890 grams per day.

• The ratio of animal and vegetable proteins will shift in a sustainablemenu from 70:30 in 2010 to 50:50 in 2030 and 40:60 in 2050.

• This menu concerns vegetable products enriched with, a.o., vitaminB12, calcium and iron, substances that we now mainly obtain fromanimal products.

• This will enable 21% of the climate targets to be achieved (GreenProtein Alliance).

Idealists33%

Blocked26%

Trend Followers

19%Conservatives

22%

“I don't know enough about what exactly sustainable food is to really eat sustainably.”

“I would like to make an active contribution to making the world more sustainable.”

“I think that the amount of attention given to the climate problem is excessive.”

“I am often ahead of new trends, such as sustainable food.”

Distr ibution of the four segments

Do not see as many barriers to sustainable behaviour but are also not motivated by the climate to behave more sustainably. Are sensitive to other arguments.

Want to behave more sustainably, but experience barriers.

Are concerned about the climate and act accordingly.

Would like everything to remain the same. Are not convinced of the need for change and do not want change.

The different groups hardly differ in age, income and family size.

The four segments are very different looking at the brands they use.

Brands of meat substitutes and vegetable dairy are now mainly usedby the idealists. An exception is Becel, which has a long heritage as ahealth brand. The share of Becel users is about the same among allfour groups. This is partly due to the fact that Becel is a brand that hastraditionally not positioned itself as sustainable.

Hip brands such as Kromkommer, Maza and Kipster are doing wellamong the trend followers.

Brands that profile themselves as better for the world (Tony'sChocolonely, Zonnatura) are doing particularly well among theidealists.

Brand usage per consumer segment

Totaal Geblokkeerden Idealisten Conservatieven Trendvolgers

Becel 38% 39% 38% 35% 38%

Zonnatura 29% 27% 42% 14% 25%

Tony's Chocolonely 28% 28% 40% 17% 20%

Alpro 23% 15% 39% 11% 20%

Valess 18% 13% 27% 9% 16%

Vivera 13% 9% 21% 5% 11%

De vegetarische slager 11% 7% 22% 3% 8%

Garden gourmet 8% 6% 15% 2% 6%

Quorn 8% 5% 15% 1% 7%

Kromkommer 8% 8% 9% 4% 10%

Maza 4% 2% 6% 1% 7%

Oatly 3% 1% 5% 1% 3%

Kipster 2% 2% 3% 1% 3%

Veggiechef 2% 0% 3% 1% 4%

Vegafit 2% 1% 4% 1% 2%

Question: Which of the following brands do you use regularly?

Total Blocked Idealists Conservatives Trend Followers

Arguments about the comparison with "real" meat are not convincing.

Emphasizing the naturalness of the product works.

Imagine you are in the supermarket. Your eye catches a packet of hamburgers. They look delicious. You see several things written on the packaging.Can you indicate which of these phrases would most encourage you to try this product?Please choose the 3 to 6 phrases that would prompt you to try this product.And which least?

Communicating about meat (substi tutes)

-31%

-20%

-19%

-12%

-11%

-5%

1%

5%

15%

16%

23%

26%

37%

40%

Just like real meat

40% meat, 60% plant based

Healthier than meat

Produced less than 50 kilometers from the store

With this product you save the CO2 that 3 trees absorb in a week and 10x a bath full of water

CO2 emissions during production

From animals fed with food that would otherwise be thrown away

Climate neutral produced

Contains all necessairy nutrients

Packed with fiber and protein

Minimal environmental impact

Produced without animal suffering

100% natural

No artificial additives

Convincing power

Eating less meat, drinking less dairy

About 40% of Dutch consumers are to some extent eating less meat. For animal dairy this share is less, about 30%. It is especially the ‘Idealists’ who are reducingtheir intake of animal products. But the ‘Trend Followers’ are also above average in reducing dairy and meat. They do not do this out of idealism, but for reasons likehealth or simply because it is trendy.

Strikingly few ‘Blocked’ people are involved in cutting meat and animal dairy. The greatest sustainability gains can be achieved among this group. Apparently, theyexperience thresholds such as not knowing how to prepare a vegetable meal, or a higher price of the vegetable alternatives.

45%54%

29%

72%

32%

24%

24%

26%

15%

27%

12%

9%

16%

5%

19%

9%7%

13%

4%

11%

9% 6%16%

3%11%

Total Blocked Idealists Conservatives TrendFollowers

Eat or drink little or no animal dairy ..

Strongly

Reasonably

Somewhat

Limited

Not or hardly37% 42%

17%

67%

31%

22%

26%

20%

16%

25%

14%

12%

19%

6%

18%

12%11%

16%

6%

14%

15%9%

28%

6%12%

Total Blocked Idealists Conservatives TrendFollowers

Eat little or no meat..

Strongly

Reasonably

Somewhat

Limited

Not or hardly