National Confectioners Association State of the Industry Conference Miami, FL February 20, 2010.
-
Upload
quinten-eggleton -
Category
Documents
-
view
221 -
download
0
Transcript of National Confectioners Association State of the Industry Conference Miami, FL February 20, 2010.
National Confectioners National Confectioners AssociationAssociation
State of the Industry State of the Industry ConferenceConference
Miami, FLMiami, FL
February 20, 2010February 20, 2010
AgendaAgenda
Company Overview & FootprintCompany Overview & Footprint Market Review & OutlookMarket Review & Outlook DFI CapabilitiesDFI Capabilities Consumer TrendsConsumer Trends
Company Overview
Only sugar supplier with national brands
Distribution channels include Ingredients, Food Service and Grocery customers
Produces more than 1500 SKUs of both branded and private label products
First Sugar Cane Company to produce certified organic sugar
Produces a full line of rice products, including half of all the rice consumed in South Florida
Consumer Goods
Florida Crystals Corporation and the Sugar Cane Growers Cooperative have created the first fully integrated sugar cane company in North America, taking products from field to shelf. The addition of the Domino , C&H , and Redpath brands has created a North American distribution capability.
Farms 180,000 acres in South Florida
Operates 2000 pieces of farm equipment
Crop is harvested between October and April
Uses rice for crop rotation
Operates three sugar mills and a rice mill
Mills process 800,000 tons of raw sugar annually
Farming
Operates refineries in New York, Baltimore, South Florida, New Orleans, San Francisco, Toronto
Operates a 130 Megawatt cogeneration plant
Produces more than 3,000,000 tons of refined sugar annually
Refining
® ®
®
® ®
®
®
®
®
The 2010 DEFICIT in pictures – Historically…
-40
-30
-20
-10
0
10
20
30
40
50
60
-20
-15
-10
-5
-
5
10
15
20
66 69 72 75 78 81 84 87 90 93 96 99 02 05 08
US c/lb'000 mt
Global Sugar Balance v NY11
Surplus/Deficit
NY11 monthly av (RHS)
Market Outlook
• World market deficit becomes very evident in December 2009.
• Brazil crop ends – fails to meet expectations.
Market Outlook
• World market deficit becomes very evident in December 2009.
• Brazil crop ends – fails to meet expectations.
• India becomes consistent importer due to crop shortfalls
Exports and Imports
-3.0
-2.5
-2.0
-1.5
-1.0
-0.5
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
5.0
5.5
04/0505/06
06/0707/08
08/09E
09/10E
Exp
ort
s an
d I
mp
ort
s in
Mil
lio
n M
TR
V
Exports Imports
INDIA
• Cane shifts with prices• This year’s deficit not fully addressed yet; election delayed decisions•Yield could be impacted by fertilizer usage•Poor Monsoon – El Nino•Crushing capacity is there going forward
Difficult to model…Unclear until it actually happens. Export volume test, or elasticities of demand?Government intervention can accentuate and accelerate it – seizures, hoarding
rules, priceThis time LDC’s are importers.
DEMAND DESTRUCTION - HOW LIKELY?
Market Outlook/Summary
• 2010/2011 shows a more balanced market• Projected surplus is small and in places that
tend to “stock build” and “not export”.• Brazil & India offer huge swing potentials.• Funds, who hold a record 18.0 million mt of
sugar, could lighten.• As always, WEATHER is a huge and
unpredictable variable.
Domino * C&H * Florida Crystals * Redpath
• Reliable provider to the Confectioners Industry for over 100 years.
• Current supply source in all of North America (USA, Canada & Mexico)
• Supplier to confectionery industry of all grades of sugar (granulated, liquid, Invert, Large Grain, Fondants, Molasses, Colored Crystals & Grain Extracts).
Specialty IngredientsSpecialty Ingredients
Molasses Grain Extracts – Malt & Rice Invert Syrups Fondant Sugars Confectioners Colored Sugar
Crystals
SPECIALTY INGREDIENTS WITHAPPLICATION TO CONFECTIONERY INDUSTRY
INNOVATIVE FUNCTIONAL INGREDIENTS
© 2007 Domino Specialty Ingredients. All Rights Reserved.
© 2007 Domino Specialty Ingredients. All Rights Reserved.
Liquid MolassesLiquid Molasses
MOLASSES FLAVOR: Flavor Profile: caramelized sugar, mild to robust, licorice, bitter to sweet
Sweetness
Mask Unpleasant Flavors: e.g. bitter taste of bran
Enhances Flavors of: Praline Rums Licorice Maple Caramel Coffee Butterscotch Chocolate Roasted Peanuts
INNOVATIVE FUNCTIONAL INGREDIENTS
© 2007 Domino Specialty Ingredients. All Rights Reserved.
Malt ExtractMalt Extract
MALT PRODUCT RANGE
100 % Malt Extract – Conventional and Organic Dry Malt Extract Co-Extracts Malt/Corn Blends Traditional Applications Specialty Breads – French & Italian, Rolls, Bagels Crackers Cookies – Peanut Butter, Malt Confections – Malted Milk Balls Snack Items – Pretzels, Bread Sticks, Pizza Dough RTE Cereals Malt Vinegar
INNOVATIVE FUNCTIONAL INGREDIENTS
© 2007 Domino Specialty Ingredients. All Rights Reserved.
Invert SyrupInvert Syrup
INVERT SYRUPS Product Types
Full Invert – Liquid – FreshVert®/Nulomoline®
Paste – FreshVert Creamy/Nulomoline Congealed Partial Invert - #11 Nulomoline® & Crystal 50 Invert/Honey – Mate ‘N Match™ Honey
Traditional Applications
Bakery Cakes & Cookies Icings/Confectionery Snacks
INNOVATIVE FUNCTIONAL INGREDIENTS
© 2007 Domino Specialty Ingredients. All Rights Reserved.
Fondant SugarsFondant Sugars
Product Types Nulofond® – Sucrose Agglomerate Bakers Drivert®/Drifond® – 7 to 9% Invert EasyFond® – 3 to 4% Invert Amerfond® – 5% Invert
Functional Properties Rapid Rate Particle Dispersion Eliminates Cooking Process Free-Flowing
Traditional Applications Confections – Cream Centers, Fudge, Cherry Cordials, Mints
FONDANT SUGARS
INNOVATIVE FUNCTIONAL INGREDIENTS
© 2007 Domino Specialty Ingredients. All Rights Reserved.
Confectioners Colored Crystals Sugar
ADDITIONAL PRODUCTS
Confectioners Colored Sugar Crystals -
Coarse grain sugar available in 8 individual colors or a “rainbow” of all colors combined: red, orange, yellow, green, blue, violet, pink, white
INNOVATIVE FUNCTIONAL INGREDIENTS
Major Consumer Trends Impacting Sugar Consumption
• Conversions from HFCS to Sucrose
• Concerns about “Effectiveness” of Artificial Sweeteners
• Concerns about “Healthfulness” of Artificial Sweeteners
HFCS–55 Total Deliveries
4,500
4,800
5,100
5,400
5,700
Tho
usan
d S
hort
Ton
s, R
efin
ed V
alue
1998 1999 2000 2001 2002 2003 2004
5,561
5,637
5,565 5,593 5,599
5,4435,374
+ 300
300
+ 270
+ 76
- 72
+ 28 + 6
- 156
- 69
HFCS–55 Deliveries for Human Consumption, Calendar Years 1998 – 2009
Change From Previous Calendar Year
2005 2006
5,314
- 60- 22
5,292
2007
Source: USDA. Economic Research Service, Briefing Room. Sugar and Sweetener Yearbook Tables: Excel (.xls) Spreadsheets, Tables 28 and 30. http://www.ers.usda.gov/briefing/sugar/Data/data.htm. Accessed November 23, 2009.
© The Sugar Association, Inc.November 24, 2009
2008
4,968
- 159
Projection based on comparable CY 2005 – CY 2008 9–month deliveries
2009
4,736
- 232
5,150
- 142
-863,000 strv = - 15.4%Avg. -123,285/ yr.
List of Products which have Switched from HFCS to Sugar
• Thomas’ English Muffins• Capri Sun• Bull’s Eye BBQ Sauce• Ocean Spray Drinks &
Craisins• Fuze• Vitamin Water• Throwback (Pepsi)
• Snapple• Red Bull & Monster• Prego Tomato Sauce• Sips• Flowers Brands• Hunt’s Ketchup• Heinz Ketchup• Jones Soda
Select Learnings from Positioning Research
Brand, Private Label, Artificial Sweetener Users• Consumers think of Domino/C+H as the brand they can trust, and
value that Domino has been around for generations/100 years• Artificial sweetener users were just as likely as brand and private
label users to value the natural purity of sugar, expressing some guilt over consuming artificial ingredients
• The taste of sugar remains unrivaled by other sweeteners, all consumers prefer to use real sugar for baking
• Artificial sweetener users are less likely to care about the taste of real sugar when it comes to coffee and other hot beverages
• Nearly all consumers were pleasantly surprised to learn that sugar is just 15 calories per teaspoon, adding that knowing this would make them more likely to use sugar in their hot beverages at a minimum
• Many were convinced by the “sugar in moderation” studies read in magazines
Artificial Sweeteners actually cause weight gain
• Studies in rats show they don’t lose weight when they eat artificially sweetened food. They eat more, and gain more. (Dr. Susan Swithers, Purdue University, article in Behavioral Neuroscience Feb. 2009) http://www.ama-assn.org/amednews/2008/04/07/hlsa0407.htm
• “A paper in the Feb. 12 Circulation, for instance, associated drinking one can of diet soda per day with a 34% increased risk of developing metabolic syndrome compared with those who did not drink any carbonated beverages. People who drank the sugar-sweetened versions had a 10% increase in risk.” http://www.ama-assn.org/amednews/2008/04/07/hlsa0407.htm
• "I'm wondering if maybe the artificial sweetener makes you feel hungrier somehow," said Lyn Steffen, MPH, PhD, one of the authors and associate professor at the University of Minnesota in Minneapolis. "You drink this artificially sweetened drink, and you might feel satisfied for a short time. At the end of the day, it actually makes you eat more.“ http://www.ama-assn.org/amednews/2008/04/07/hlsa0407.htm
Select Findings – Artificial Sweetener Users
• Number of calories are very important to these consumers; however they are the second least likely (behind health conscious consumers) to know that there are only 15 calories– On average people think there are 62 calories per teaspoon
• Brand sugar 48• Artificial Sweetener 73• Health Conscious 78• Organic 55
• They feel some guilt about using artificial ingredients and many say they “would never let my kids use artificial sweeteners”
• They use zero calorie sweeteners predominantly in hot beverages• Several were aware that zero calorie sweeteners create cravings so
you end up eating more calories