Plant-Based Beverages - WordPress.com...The skeletal muscle anabolic response to plant-versus animal...

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Plant-Based Beverages June 2017 1

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Page 1: Plant-Based Beverages - WordPress.com...The skeletal muscle anabolic response to plant-versus animal based protein consumption. The Journal of nutrition, 145(9), 1981-1991. The Journal

Plant-Based Beverages

June 2017

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Page 2: Plant-Based Beverages - WordPress.com...The skeletal muscle anabolic response to plant-versus animal based protein consumption. The Journal of nutrition, 145(9), 1981-1991. The Journal

Review of Objectives and Definitions

• Provide a clear understanding:

– Key products/nutritional profiles

– Size and momentum of plant-based beverages

– Drivers of decision-making

– Consumer/household profile

Implications for DAIRY

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Key Players

Page 4: Plant-Based Beverages - WordPress.com...The skeletal muscle anabolic response to plant-versus animal based protein consumption. The Journal of nutrition, 145(9), 1981-1991. The Journal

Definitions and Method

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Plant Beverages in this Report Defined as…

Nuts/drupes: Almond, cashew, walnut, pistachio, hazelnut, coconut

Legumes: Soy, peas

Grains: Rice, oat

Seeds: Hemp, flax

Key Players…

Almond: Blue Diamond Almond Breeze, Silk, Private Label, Califia

Soy: Silk, Private Label, 8th Continent

Coconut: Silk, So Delicious, Private Label, Goya, Thai Kitchen

Cashew: Silk, So Delicious, Private Label, Cashew Dream

Rice: Rice Dream, All Juicy Whip

Other: Private Label, Good Karma, Borden, Dean’s Ripple

Page 5: Plant-Based Beverages - WordPress.com...The skeletal muscle anabolic response to plant-versus animal based protein consumption. The Journal of nutrition, 145(9), 1981-1991. The Journal

Milk’s Nutritional Proposition Compared to Alternatives

Nutrition Profile:

• Most alternatives are fortified with nutrients they don’t naturally contain

• Alternatives have no standard nutrient composition - it varies from brand to brand

• While some of the beverages reviewed (almond, cashew and coconut)† contain more calcium per serving, the bioavailability of calcium in the alternatives can be a consideration 1,2

Protein:

• Almond, cashew, coconut and rice beverages reviewed offer little or no protein per serving (0-1g per serving)†

• Some alternatives are expanding their lines with protein fortified products that match or exceed the protein found in milk

• However, typically milk delivers a higher quality of protein (PDCAAS) compared to these alternatives 3

Sugar:

• Lactose in white milk is naturally occurring and is not considered added sugar; whereas alternative beverages reviewed† contain added sugar (from cane sugar/syrup), with the exception of unsweetened varieties

• Total sugar in alternatives reviewed varies from product to product (0-21g per serving)

Composition:

• As compared to a regulated milk category, alternative beverages are not clearly defined nor do they have a standard of identity

• Dairy milk has only 3 simple ingredients: milk vitamin D and vitamin A; whereas, alternatives can range between 8-14 ingredients†, including water, stabilizers, emulsifiers and gelling agents*

*Note: All of these ingredients are safe for consumption†Based on review of the following alternative products from USDA NND SRR28: 14091, 14016, 14054, 16223, 14171, 45179314, 146391. Weaver, Connie M., and Karen L. Plawecki. "Dietary calcium: adequacy of a vegetarian diet." The American journal of clinical nutrition 59.5 (1994): 1238S-1241S2. Weaver, Connie M., and Robert P. Heaney. "Food sources, supplements, and bioavailability. "Calcium in human health. Humana Press, 2006. 129-142.3. van Vliet, S., Burd, N. A., & van Loon, L. J. (2015). The skeletal muscle anabolic response to plant-versus animal based protein consumption. The Journal of nutrition, 145(9), 1981-1991.

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“Soy beverages fortified with calcium, vitamin A, and vitamin D, are included as part of the dairy group because they are similar to milk based on nutrient composition and in their use in meals.”

“Other products sold as “milks” but made from plants (e.g., almond, rice, coconut, and hemp “milks”)…are not included as part of the dairy group because their overall nutritional content is not similar to dairy milk and fortified soy beverages (soymilk)…”

Except for Soy, 2015 Dietary Guidelines do not Include Alt Bev as Part of the Dairy Group

2015 –2020 Dietary Guidelines for Americans. 8th Edition. 2015.

Page 7: Plant-Based Beverages - WordPress.com...The skeletal muscle anabolic response to plant-versus animal based protein consumption. The Journal of nutrition, 145(9), 1981-1991. The Journal

Alternative Beverages are Typically Made with 8+ Ingredients as Compared to Milk’s 3

1% MilkAlmond Beverage,

Original

Soy Beverage,

Original

Coconut Beverage,

OriginalCashew Beverage Rice Beverage

Number of

ingredients3 14 12 12 14 8

Legend:

Water

Added sugar

Salt

Buffering agent

Emulsifier

Gelling agent

Added vitamins &

minerals

Flavoring Agent

Natural Flavor

Preservative/

Antioxidant

Preservative/added

vitamin E

Lowfat Milk

Vitamin A Palmitate

Vitamin D3

Almondmilk (Filtered

Water, Almonds)

Cane Sugar

Sea Salt

Locust Bean Gum

Sunflower Lecithin

Gellan Gum

Calcium Carbonate

Vitamin E Acetate

Zinc Gluconate

Vitamin A Palmitate

Riboflavin (B2)

Vitamin B12

Vitamin D2

Soymilk (Filtered Water,

Soybeans)

Cane Sugar

Tricalcium Phosphate

Calcium Carbonate

Vitamin A Palmitate,

Vitamin D2,

Riboflavin [B2]

Vitamin B12

Sea Salt

Natural Flavor

Gellan Gum

Coconutmilk

(Filtered Water,

Coconut Cream)

Cane Sugar

Calcium Carbonate

Vitamin A Palmitate

Vitamin B12

Vitamin D2

Sea Salt

Natural Flavor

Sunflower Lecithin

Locust Bean Gum

Gellan Gum

Cashewmilk (Filtered

Water, Cashews)

Cane Sugar

Sea Salt

Natural Flavor

Almond Butter

Locust Bean Gum

Sunflower Lecithin

Gellan Gum

Ascorbic Acid

Calcium Carbonate

Vitamin E Acetate

Vitamin A Palmitate

Vitamin D2

Filtered Water

Organic Brown Rice

Organic Expeller

Pressed Canola Oil/

Organic Safflower Oil/

Organic Sunflower Oil

Tricalcium Phosphate

Sea Salt

Vitamin A Palmitate

Vitamin D2

Vitamin B12

Based on review of SILK, DELICIOUS ALMONDMILK, ORIGINAL ALMOND, UPC: 025293001466 (USDA NND SRR28 #45136756), SILK, SOYMILK, ORIGINAL, UPC: 025293600478 (USDA NND SRR28 #45136578), SILK, CREAMY CASHEWMILK, CASHEW, UPC: 025293003064 (USDA NND SRR28 #45179317), SILK, COCONUTMILK, ORIGINAL, UPC: 025293001220 (USDA NND SRR28 #45179293) and RICE DREAM, RICE DRINK, UPC: 084253222402 (USDA NND SRR28 #45135751)Low-fat milk USDA NND SRR28 #01082Note: All of these ingredients are safe for consumption

Page 8: Plant-Based Beverages - WordPress.com...The skeletal muscle anabolic response to plant-versus animal based protein consumption. The Journal of nutrition, 145(9), 1981-1991. The Journal

Per 8oz 1% Milk

1%

Chocolate

Milk

Almond

Beverage,

Unsweetened

Almond

Beverage,

Sweetened,

Vanilla

Almond

Beverage,

Sweetened,

Chocolate

Soy

Beverage,

Sweetened

Coconut

Beverage,

Sweetened

Cashew

Beverage,

Sweetened

Rice

Beverage,

Unsweetened

Calories 100 160 40 90 120 110 70 60 110

Total Fat (g) 2.5 2.5 3 3 3 5 5 3 2

Sat Fat (g) 1.5 1.5 - - - 0.5 4.5 - -

Carbohydrate

(g)12 25 2 16 23 8 7 9 22

Dietary Fiber (g) - - - - 1 1 - - 1

Sugars (g) 13 25 0 15 21 6 6 7 13

Added Sugar*

(g)- 12 0 15 21 5 6 7 -

Protein (g)8

(16% DV)

9

(17% DV)2 1 2

7

(14% DV)<1 1 <1

Nutritional Profile of Milk Compared to Alternatives: Macronutrients

Low-fat milk: USDA NND SRR28 #01082Low-fat chocolate milk: USDA NND SRR28 #01104Based on review of the following alternative products from USDA NND SRR28: 14091, 14016, 14054, 16223, 14171, 45179314, 14639*Added sugar for low-fat chocolate milk (USDA SR#01104) was calculated based on 8 fl oz of low-fat milk (USDA SR#01082) - contains 13 g naturally occurring sugar and 0 grams added sugar*Added sugar for alternatives was calculated based on comparison to 8 fl oz Unsweetened variety of each product

Page 9: Plant-Based Beverages - WordPress.com...The skeletal muscle anabolic response to plant-versus animal based protein consumption. The Journal of nutrition, 145(9), 1981-1991. The Journal

Per 8oz 1% Milk

Almond

Beverage,

Unsweetened

Almond

Beverage,

Sweetened,

Vanilla

Soy Beverage,

Sweetened

Coconut

Beverage,

Sweetened

Cashew

Beverage,

Sweetened

Rice Beverage,

Unsweetened

Good/Excellent Source

of Essential Nutrients

9 EN

(w/protein)*5 EN* 7 EN*

10 EN

(w/protein)*4 EN* 6 EN* 7 EN*

Vitamin D (%DV) 15% 10% 10% 15% 10% 15% 10%

Calcium (%DV) 25% 35% 35% 25% 35% 35% 20%

Iron (%DV) - 5% 4% 7% 4% 2% 3%

Potassium (mg) 366 180 120 340 45 30 65

Vitamin E (%DV) - 35% 45% 25% - - -

Vitamin A (%DV) 15% 10% 15% 15% 15% 15% 15%

Vitamin C (%DV) - - - 20% - - -

Riboflavin (%DV) 35% 9% 30% 35% - 40% 25%

Vitamin B6 (%DV) 5% 2% - 35% - - 6%

Vitamin B12 (%DV) 50% - 130% 110% 130% 130% 65%

Thiamin (%DV) 9% 15% 3% 15% - - 80%

Phosphorus (%DV) 20% 2% 2% - - - 10%

Pantothenic Acid (%DV) 20% - - - - - -

Niacin (%DV) 10% - 1% 50% - - 6%

Folate (%DV) 4% 1% 1% - - - -

Magnesium (%DV) 6% 4% 4% - - 4% 6%

Sodium (mg) 105 190 150 120 45 170 95

Zinc (%DV) 9% 2% 15% 5% - 15% -

Nutritional Profile of Milk Compared to Alternatives: Micronutrients

Low-fat milk: USDA NND SRR28 #01082Based on review of the following alternative products from USDA NND SRR28: 14091, 14016, 16223, 14171, 45179314, 14639*New %DV conversions were done to align with the Final Rule: Revision of the Nutrition and Supplement Facts Labels for nutrients available on product Nutrition Facts panel

Page 10: Plant-Based Beverages - WordPress.com...The skeletal muscle anabolic response to plant-versus animal based protein consumption. The Journal of nutrition, 145(9), 1981-1991. The Journal

Emerging Alternatives Nutrition Highlights

• Lower in calories, carbohydrate, sugar and protein compared to 1% milk

• Tout omega-3 content (1200 mg per 8-oz serving)

Flax

• Higher in calories, fat, and carbohydrate, lower in protein compared to 1% milk

• Tout omega-3 content and overall fatty acid profile

Hemp

• Higher in fat, lower in carbohydrate compared to 1% milk

Pea

• Higher in calories, carbohydrate and sugar, lower in protein compared to 1% milk

• Does not contain an ingredient that indicates added sugar

Oat

Nutrition Facts,

per 1 cup1% Milk

Hemp,

Original

Flax,

Original

Oat,

Original

Pea,

Original

Calories (kcal) 100 140 50 130 100

Total Fat (g) 2.5 5 2.5 2.5 4.5

Sat Fat (g) 1.5 0.5 - - 0.5

Cholesterol (mg) 10 - - - -

Sodium (mg) 105 130 80 115 130

Potassium (mg) 366 170 - 120 450

Carbohydrate (g) 12 20 7 24 6

Dietary fiber (g) - 1 - 2 -

Sugars (g) 13 14 7 19 6

Added sugars (g) - 14 7 - 6

Protein (g) 8 (16% DV) 3 - 4 8 (16% DV)

Based on a sample of available products: Good Karma Flaxmilk Original, Pacific Hemp Original, Ripple, Pacific Oat OriginalLow-fat milk USDA National Nutrient Database for Standard Reference Release 28 Database #01082

Page 11: Plant-Based Beverages - WordPress.com...The skeletal muscle anabolic response to plant-versus animal based protein consumption. The Journal of nutrition, 145(9), 1981-1991. The Journal

• Nutrient rich profile in 3 simple ingredients: – 9 essential nutrients

– High quality protein

– No added sugars

• Milk is the leading food source of 3 of the 4 nutrients of public health concern for children1 and adults2

– Calcium

– Potassium3

– Vitamin D

• Low-fat and fat free milk and milk products are recommended as part of healthy diet patterns4

Milk’s Inherent Nutrition Profile is Tough to Match

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1. Keast DR, Fulgoni 3rd VL, Nicklas TA, O’Neil CE. Food sources of energy and nutrients among children in the United States: National Health and Nutrition Examination Survey 2003–2006. Nutrients. 2013;5:283–301.2. O’Neil CE, Keast DR, Fulgoni VL, Nicklas TA. Food sources of energy and nutrients among adults in the US: NHANES 2003–2006. Nutrients. 2012;4:2097–120.3. Low-fat milk provides 366 mg potassium per cup, 8% DV (USDA National Nutrient Database for Standard Reference Release 28 #01082)4. 2015 –2020 Dietary Guidelines for Americans. 8th Edition. 2015

There is an extensive body of research showing dairy’s health benefits on

critical issues related to public health.

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Plant-Based Beveragesare a Tiny but Growing Beverage Category

Page 13: Plant-Based Beverages - WordPress.com...The skeletal muscle anabolic response to plant-versus animal based protein consumption. The Journal of nutrition, 145(9), 1981-1991. The Journal

At Retail, Plant-based Beverages are $1.7 Billion and are One of the Faster Growing Beverage Categories

$27,676.7

$15,094.5 $14,948.3

$12,138.9$10,157.5

$6,649.3 $6,602.8

$3,594.6$1,912.5 $1,672.5 $1,218.5 $656.7 $239.7 $190.8

Carbonatedsoft drinks

Bottled water Milk Energy drinks Shelf stablejuice

Rfg juice &drinks

Sports drinks Canned &bottled tea

Cappucino &iced coffee

Plant-basedbeverages

Rfg tea Rfg yogurtdrinks

RFG RTDcoffee

Shelf-stablenon-fruit

drink

Retail Dollars – Millions52 Weeks Ending 3/19/2017

-0.2% 7.3% -4.6% 3.1% 1.8% -1.3% 4.4% 3.3% 10.6% 4.7% 7.5% 15.5% 21.7% -1.9%

-1.4% 8.5% -2.0% 3.8% -0.5% -2.7% 3.3% 2.3% 10.5% 4.8% 4.6% 15.3% 13.4% -3.4%

DollarsVolume

Growth last 52 wks

1.6%share

14.5%share

13Source: IRI

Page 14: Plant-Based Beverages - WordPress.com...The skeletal muscle anabolic response to plant-versus animal based protein consumption. The Journal of nutrition, 145(9), 1981-1991. The Journal

Over the Last Five Years, Retail Sales of Plant-based BeveragesHave Grown by Over 60%

Source: IRI MULO+C retail channel includes grocery, c-store, drug, mass/supercenters including Wal Mart, K Mart, Target, Shopko club (Sam’s, BJ’s), dollar (Dollar General, Family Dollar, Fred’s) and military;52 weeks ending 5/14/2017

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VOLUME DOLLARS

$1,679 mil

+63% growth2011-2016

Currently,10% share

of MILK + PLANT

247 mil gal

+62% growthlast 5 years

Currently,6% share

of MILK + PLANT

Page 15: Plant-Based Beverages - WordPress.com...The skeletal muscle anabolic response to plant-versus animal based protein consumption. The Journal of nutrition, 145(9), 1981-1991. The Journal

Plant Beverage Sales However, are Growing at a More Moderate Pace in Recent Years

144,310,096166,435,242

192,362,434219,559,274 232,515,258 245,218,553 246,719,779

98,234,638

2011 2012 2013 2014 2015 2016 52 wks end 5/14/17 2017 YTD (5/14)

Source: IRI Market Advantage, Multi-Outlet + Convenience 15

15.3% 15.6%14.1%

5.9% 5.5%4.1%

1.6%

2012 2013 2014 2015 2016 52 wks end 5/14/17 2017 YTD (5/14)

Plant-based BeveragesRetail Volume Sales (Gallons)

Retail Volume % Change vs Year Ago

Page 16: Plant-Based Beverages - WordPress.com...The skeletal muscle anabolic response to plant-versus animal based protein consumption. The Journal of nutrition, 145(9), 1981-1991. The Journal

Sales Momentum of Plant Beverages has been Fueled by Continuous Innovation

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The Plant Beverage category has introduced new varieties and enhanced health benefits

Good source protein, more calcium, lower sugar

Omega, probiotics

Page 17: Plant-Based Beverages - WordPress.com...The skeletal muscle anabolic response to plant-versus animal based protein consumption. The Journal of nutrition, 145(9), 1981-1991. The Journal

Flavor is More Important to Plant-based Beverage Purchasing Compared to Dairy Milk

Source: IRI Market Advantage, Multi-Outlet + Convenience52 weeks ending 4/16/2017

Volume Share of Dairy Milk

• 5.2% Chocolate• 0.5% Eggnog• 0.3% Strawberry• 0.1% Vanilla• 0.01% Banana• 0.01% Coffee

94.4%Plain/Other

-3% growth

Growth latest 52 wks

Volume Share of Plant-based Beverages

49.2%Plain

+5% growth

50.8%Flavored+4% growth

• 38.6% Vanilla• 8.7% Chocolate• 3.5% Other

Growth latest 52 wks

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Page 18: Plant-Based Beverages - WordPress.com...The skeletal muscle anabolic response to plant-versus animal based protein consumption. The Journal of nutrition, 145(9), 1981-1991. The Journal

Stores Grew the Number of Plant Beverages they Carried as More New Items were Launched. Recently, this Number has Flattened.

19

72

83 82

34

53 52

0

10

20

30

40

50

60

70

80

90

2011 2012 2013 2014 2015 2016 2017 YTD (5/14)

Average Weekly Items Per Store SellingDairy Milk vs. Plant-based Beverages

Dairy Milk

Plant-basedAlternatives

Source: IRI Market Advantage, Multi-Outlet + ConvenienceSource: Innova

Average Weekly Dollars Per Store Selling 2017 YTD• Dairy Milk: $1,175• Plant-based Beverages: $457

Page 19: Plant-Based Beverages - WordPress.com...The skeletal muscle anabolic response to plant-versus animal based protein consumption. The Journal of nutrition, 145(9), 1981-1991. The Journal

Almond is the Clear Leader Holding 71% of Plant Beverage VolumeWhile Soy Sales have Dampened

0

20,000,000

40,000,000

60,000,000

80,000,000

100,000,000

120,000,000

140,000,000

160,000,000

180,000,000

200,000,000

2011 2012 2013 2014 2015 2016 52 wks end 5/14/17

Plant-based Beverage Volume Sales by Type(Gallons)

Almond Soy Coconut Cashew Rice Other

20

Almond

Soy

Coconut

Page 20: Plant-Based Beverages - WordPress.com...The skeletal muscle anabolic response to plant-versus animal based protein consumption. The Journal of nutrition, 145(9), 1981-1991. The Journal

Source: IRI/DMI Custom Unify, L52W Ending 3/19/2017, Total US Multi Outlet + Convenience

* Due to a retailer restriction, these product segments may be under-reported

Non-Mainstream Nut & Plant Beverages have Been Launched, Although they Contribute Very Small Volume

Collectively, these non-mainstream products

account for 2% Plant-based Volume• Flax largest at 0.82 mil gal +68%• Pea: 0.41 mil gal +13%• Hemp: 0.35 mil gal +13%

New intros coming this summer

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Page 21: Plant-Based Beverages - WordPress.com...The skeletal muscle anabolic response to plant-versus animal based protein consumption. The Journal of nutrition, 145(9), 1981-1991. The Journal

Almond and Coconut Continue to be Growth Engines in Plant Beverages

58.6%52.6%

36.3%

7.5% 10.2%6.2%

2012 2013 2014 2015 2016 2017ytd(5/14)

Almond

22

-6.1%

-16.7% -19.5%

-8.8% -11.0% -14.3%

2012 2013 2014 2015 2016 2017ytd(4/16)

Soy

12.4%

-14.7%

2012 2013 2014 2015 2016 2017ytd(5/14)

Cashew

-2.8%-7.1%

-11.9% -10.7%-6.1% -4.9%

2012 2013 2014 2015 2016 2017ytd(5/14)

Rice

-5.6%

1.3%

-3.9%

-20.9%

-3.1%

1.8%

2012 2013 2014 2015 2016 2017ytd(5/14)

Other

Source: IRI Market Advantage, Multi-Outlet + Convenience

Retail Volume % Change vs. Year Ago

+13679%

29.9% 29.0%

16.0%10.4% 10.8%

5.0%

2012 2013 2014 2015 2016 2017ytd(5/14)

Coconut+2999%

71% share 15% share

7% share

0.9% share

2% share

3% share

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Plant-Based Beverageshave Regional Skews

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The Most Developed Regions for Plant Beverages are the Northeastern States, Florida and Colorado

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Strongest Sales Index• 170 Miami• 165 Orlando• 158 New England• 154 Tampa• 142 Denver• 137 Jacksonville

Weakest Sales Index• 55 Mississippi• 59 Green Bay• 72 Oklahoma City• 73 Memphis• 74 Toledo• 75 Peoria/Springfield

Source: IRI Market Advantage, Multi-Outlet + Convenience;52 weeks ending 5/14/2017

Index=Product development Index = Volume development relative to population with 100=average; >120 Index is high; <80 index is low

Volume Index52 Weeks End 5/14/17• 119 Southeast• 115 West• 109 Northeast• 101 California• 100 Total U.S.• 99 Mid-South• 90 Plains• 83 Great Lakes• 80 South Central

= high development; index >120

= average development; index 80 to 120

= low development; index <80

Page 24: Plant-Based Beverages - WordPress.com...The skeletal muscle anabolic response to plant-versus animal based protein consumption. The Journal of nutrition, 145(9), 1981-1991. The Journal

Plant Beverages are Growing Across All Regions, With the Strongest Growth in the Northeast

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Strongest Sales Growth• +11% Boston• +11% Boise• +10% Providence• +10% New England• +9% Phoenix• +9% Salt Lake City

Declining Markets• -4% Pittsburgh• -3% Tulsa• -2% Peoria/Springfield• -1% San Diego• -0.5% Grand Rapid• -0.5% Oklahoma City

Plant-based alternatives hold 12% of the combined Dairy Milk + Plant-Based Market in MiamiAnd a low of 4% share in Toledo

Source: IRI Market Advantage, Multi-Outlet + Convenience;52 weeks ending 5/14/2017

Volume Growth52 Weeks End 5/14/17• 6.2% Northeast• 5.8% West• 5.1% Mid-South• 4.2% Southeast• 4.1% Total U.S.• 3.4% South Central• 2.3% Plains• 2.1% California• 1.9% Great Lakes

= strongest growth +6% or more

= growth of 4-6%

= growth less than 4%

= decline

Note: U.S. and regions include c-stores while states and markets do not

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Plant-Based Beveragesare Increasing Their User Base

Page 26: Plant-Based Beverages - WordPress.com...The skeletal muscle anabolic response to plant-versus animal based protein consumption. The Journal of nutrition, 145(9), 1981-1991. The Journal

Plant Beverages are Growing Primarily by Adding More Buyers

Volume Sales Up +29%

2013 to latest 52 wks*

42.9% Households Purchased

Up +19%

5.3 Gallons Purchased Per Buyer

Up +5%

7.7 Trips Per Buyer

Up +3%

0.7 Gallons Per Trip

Up +2%

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Plant beverages added+9.7 million buyers 2013-2017

Source: IRI National Consumer Panel, All Outlet, 52 weeks ending 5/14/2017

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Dairy Milk is Losing Volume as Households Become Lighter Buyers, Making Fewer Trips for Milk

Volume Sales Down-7.5%

2013 to latest 52 wks*

95.5% Households Purchased

Down -0.8%

32.2 Gallons Purchased

Down -9.4%

30.3 Trips Per Buyer

Down -6.8%

1.1 Gallons Per Trip

Down -2.8%

28Source: IRI National Consumer Panel, All Outlet, 52 weeks ending 5/14/2017

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Plant Products are Building Strength With Younger Generations and Multi-cultural Consumers

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Millennials are More Likely to Purchase Plant Beverages and are Increasing their Purchasing

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Gallons per All Households

2.74 2.45 2.03 1.94 1.71 1.43

122

Volume Index

% Chg Vol per HHvs. Year Ago

6.4

1.3 2.34.7

0.1

-1.5122 10990 86 76 64

Millennials Gen X YoungerBoomers

OlderBoomers

Retirees Seniors

Source: IRI National Consumer Panel, All Outlet, 52 weeks ending 5/14/2017Volume Index compares plant beverage to size of the generation

51.8 46.0 40.2 36.1 32.8 27.9% Households purchasing

Gallons per Buyer

5.3 5.3 5.0 5.4 5.3 5.2

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5.4

2.6

2.75 2.01

49.139.9

% Households purchasing

Gallons per All Households

% Chg Vol per HHvs. Year Ago

Source: IRI National Consumer Panel, All Outlet, 52 weeks ending 5/14/2017Volume index compares volume of plant beverages to the size of the segment

Households with Children

Adult Households

12289

Volume Index

Households With Children are More Likely to Buy Plant Beverages than Adult Only Households; Both are Growing

Plant Beverages Buying Dynamics by Household Type

5.6 5.1

Gallons per Buyer

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4.4 4.22.7

1.83 2.39 2.57

36.9 44.2 48.4

Source: IRI National Consumer Panel, All Outlet, 52 weeks ending 5/14/2017

81106 114

% Households purchasing

Gallons per All Households

% Chg Vol per HHvs. Year Ago

Volume Index

Plant Beverages Buying Dynamics by Household Type

Purchase of Plant-based Milk Alternatives Skews Toward Higher Income Households

Lower Per Capita Income Middle Per Capita Income Higher Per Capita Income

1.83 2.39 2.57

Gallons per Buyer

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TOTAL Dairy Milk

Almond/Cashew

Beverages

Rice Drink

Organic Milk

White Gallon Milk

Flavored HGalDairy Milk

Plant/Soy Beverages

Lactose-free Milk

Coconut Beverages

35

Average Price Per 8 Ounce Serving52 weeks ending 5/14/2017

19¢ 25¢ 34¢ 41¢ 43¢ 45¢ 50¢ 53¢ 63¢

Overall, On a Per Serving Basis, Plant-based Beverages’ Pricing Falls Between Conventional Milk and Value-Added Milk Segments

Source: IRI Market Advantage, Multi-Outlet + Convenience52 weeks ending 5/14/2017

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White Milk

Flavored Dairy Milk

Total PlantBeverages

Coconut Beverages

Lactose-free Milk

36

Average Price Per Half Gallon Size of Product52 weeks ending 5/14/2017

When Focusing on a Similar Size Product Offering (Half Gallon), Price Differences between Milk and Plant Beverages are Less Pronounced

$2.65 $2.67 $2.69 $3.05 $3.10 $3.18 $3.25 $3.57 $3.77 $4.45

TOTAL Dairy Milk

AlmondBeverage

Soy/Cashew Beverages

RiceDrink

Organic Dairy Milk

Plant Beverages: 78% sold as half gallonDairy Milk: 20% sold as half gallon, 73% sold as gallon

Source: IRI Market Advantage, Multi-Outlet + Convenience52 weeks ending 5/14/2017

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Both Plant Beverages and Milk have Strength with Young Families.Plant is More Likely to Pull in Households Getting Started.

37

Getting Started

14%

Young Families24%

Raising Teens16%

Established Workers

22%

Retired24%

Plant Beverage Retail Volume

Index=95

Getting Started

8%

Young Families25%

Raising Teens22%

Established Workers

20%

Retired25%

Dairy Milk Retail Volume

Index=83

LifeStage

LifeStage

Index=105

Index=135

Index=107

Index=78

Index=58

Index=139

Index=153

Index=84

Source: IRI National Consumer Panel, All Outlet, 52 weeks ending 5/14/2017

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The Growing Population Groups of Asians and Hispanics are More Likely to Purchase Plant-based Milk Alternatives

38

Black

White Asian

Other Race

Hispanic

WHITE41% purchase2.2 gallons97 Volume Index+4% growth

BLACK47% purchase2.1 gallons94 Volume Index+4% growth

ASIAN59% purchase3.0 gallons132 Volume Index+5% growth

OTHER50% purchase2.7 gallons122 Volume Indexflat growth

HISPANIC53% purchase2.9 gallons127 Volume Index+1%growth

Source: IRI National Consumer Panel, All Outlet, 52 weeks ending 5/14/2017growth based on % change in volume per household

Plant Beverages Purchase Dynamics

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In Comparison to Dairy Milk, Plant Beverages are More Likely to Pull in the Black Population

39

Product Volume Index

Source: IRI National Consumer Panel, All Outlet, 52 weeks ending 5/14/2017growth based on % change in volume per household

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42

A Number of Food Trends Favor Plant-based Beverages

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Plant Beverages Link to Consumer Engagement With Broad Food Trends

Growing desire to lead a healthy lifestyle which includes a healthy diet

Deeper interest in knowing about food –who made it, what are ingredients, who produced it

Heightened interest in farm animal issues as well as less prioritization of meat in the diet

Increased focus on food absence claims/food sensitivities – gmo-free, antibiotic-free, hormone-free, gluten-free, lactose-free, dairy-free

Broadened focus from healthy “me” to healthy “planet”

43

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Plant Beverage Users Over-Index Relative to the Average Shopper in Buying Home and Health Magazines

85

104

108

111

114

116

127

133

Newspapers

Food

Entertainment

Tabloids

Women

Crosswords

Health/Fitness/ Grooming

Home

Plant-based BeveragesShopper Magazine Genres

Index to Total Shoppers

44

102

82

119

100

93

108

118

95

Dairy Milk

Source: Inmar

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Plant-based Users are More Likely to Purchase Food Magazines Focusing on Lighter/Healthier Recipes

69

87

112

115

163

Cooking with Paula

Taste of Home

Food Network

Better Homes & Gardens

Cooking Light

Plant-based BeveragesShopper Cooking Magazine Titles

Index to Total Shoppers

45

91

136

110

131

202

Dairy Milk

Source: Inmar

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Good for Me All Natural

46

Fulfill Needs High Quality

Give Back to Communities

Help Global Organizations

Environmentally Friendly Products

New Beverages

Prefer Beverages Pay More for Beverages

64% Drinkers 49% Drinkers 56% Drinkers 53% Drinkers

Support Companies that Buy 1st to Try

33% Drinkers 29% Drinkers 40% Drinkers 26% Drinkers

Plant Beverages Leverage Growing Attributes Consumers Seek in Beverages

Source: Kantar Worldpanel 2016

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4720%

34%

25%

30%

23%

45%

37%

41%

37%

49%

52%

55%

47%

65%

36%

42%

42%

43%

47%

53%

54%

56%

57%

63%

65%

67%

69%

79%

Consumers of Plant Beverages Express Stronger than Average Opinions Regarding Beverage Health and Social Attributes

Source: 2016 Kantar Worldpanel; consumers age 1+,

Prefer GOOD FOR ME Beverages

Prefer ALL NATURAL Beverages

Pay More For Beverages That FULFILL NEEDS

Pay More for HIGHER QUALITY Beverages

Drink beverages LOW IN CALORIES

Prefer Beverages with NATURAL SWEETENERS

Buy ENVIRONMENTALLY FRIENDLY PRODUCTS

Regularly drink beverages with HEALTHY ADDITIVES

Regularly drink beverages HIGH IN CALCIUM*

Prefer ORGANIC Beverages

Support companies helping GLOBAL ORGANIZATIONS/CHARITIES

Prefer Beverages with NATURAL ENERGY

Support companies that GIVE BACK TO COMMUNITIES

Drink Beverages HIGH IN FIBER*

Dairy Milk Drinkers

Plant Beverage Drinkers

Beverage Attitudes% AGREE Strongly/Somewhat

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New Product Claims for Plant Beverages are Built on Current Health & Social Responsibility Trends

48

Allergy16%

Gluten-free14%

Time saving13%

Lactose-free11%

No additives10%

Ethical pkg8%

Low cholesterol7%

Low fat6%

Organic4%

High/good source protein

4%

Convenient consumption

4%

Low calorie3%

% SHARE of

TOTAL CLAIMS

2016 PLANT-BASED MILK ALTERNATIVES

NEW PRODUCT CLAIMS

Claims Growing in Importance• Ethical/recyclable packaging• Gluten-free• Protein• Lactose-free• Allergy• No additives• Omega 3• Low sugar

Source: Innova

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19%

25%

29%

Dairy Milk

49

28%

35%

41%

Plant Beverages

My choice of drink brand is important

Search online for info about a brand

Follow favorite brand on social media/websites

% Agree Strongly/Somewhat

Plant Beverage Users are Also More Likely to Seek Deeper Engagement With their Beverage Brands

Source: 2016 Kantar Worldpanel; consumers age 1+,

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50

There is Some Interaction Between Plant Beverages and Dairy Milk

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Over the Course of a Year, Nearly All Households Buy Milk While 4 in 10 Purchase Plant-based Beverages

51

Source: IRI Custom panel; DMI database; 52 weeks ending 5/14/2017

95.5% Households Buy

Dairy Milk(117 mil households)

42.9% Households

BuyPlant-based

(53 mil households)

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56.3% Households Buy

Only Dairy Milk

(67.3 mil)

39.2% Households

are DUAL Buyers, Purchasing Both Dairy Milk and

Plant Beverages

3.6% Households

Buy Only Plant-based

(4.3 mil)

However, A Sizeable Number of HouseholdsBuy Both Dairy Milk and Plant-based Beverages

52

Source: IRI Custom panel; DMI database; 52 weeks ending 5/14/2017

47.0 million households

92% plant-based buyers also purchased milk over

the year

40% milk buyers also purchase plant-based

beverages over the year

0.9% don’t PURCHASE

either product annually

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Dairy Plays an Important Role in Dual Milk + Plant Beverage Buying Households

Dual “Dairy Milk” + “Plant-based Beverages” Profile

53

DUAL Households are good DAIRY BUYERS

• Milk 101 Index

Cheese 113 Index

Yogurt 125 Index (purchase more

yogurt than exclusive dairy milk households)

MILK is dominant n DUAL households

• 31 Milk gallons purchased/yr compared to 5 gallons of Plant Beverages

DUAL households buy Value-added beverages

• Organic Milk 156 Index

Lactose-free Milk 131 Index

Yogurt Drinks 130 Index

Kefir 174 Index

DUAL households buy lion’s share of Plant volume

• Account for 85% plant beverage volume

Source: IRI Custom panel; DMI database; 52 weeks ending 5/14/2017

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45% People Drink Only Dairy Milk

(145 mil people)

2% drinkboth

576 million people

49% don’t DRINK either product weekly

When it Comes to Drinking Beverages, Only 2% PeopleDrink Both Dairy Milk and Plant-based Beverages

1/3 people who drink plant-based beverages also drink milk weekly

Only 4% of milk drinkers also drink plant-based

beverages weekly

4% People

Drink Only Plant-based

(13 mil people)

Source: 2016 Kantar Worldpanel; consumers age 1+,

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While Milk Individuals are Less Likely to Drink Plant Beverages, Ingredient Use is Dialed Up for Plant

As a BEVERAGE36%

As an ADDITIVE43%

As an INGREDIENT

21%

Plant Beverage Usage

58

As a BEVERAGE48%

As an ADDITIVE43%

As an INGREDIENT

9%

Dairy Milk Usage

Source: NPD Group/National Eating Trends In-home consumption; 2 yrs ending Aug 2016

Examples: smoothies, nutrition drinks

Examples: in cereal, in coffee

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59

Users See Plant-based Products as Superior to Milk

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Absence Claims are Important to the Plant Beverage Decision

Top Attributes that Matter to Both Plant

Beverages and Dairy Milk

• Safe

• Nutritious

• General health & well-being

• Strong bones & teeth

• Taste

Attributes that Index High for Plant Beverages

Relative to Dairy Milk

• No artificial hormones

• Improve quality of life

• Antibiotic free

• Manage health issues

• GMO-free

Attributes that Index Low for Plant Beverages

Relative to Dairy Milk

• Calcium

60

Attributes that Matter “A Lot” to Consumption Decision

Source: DMI Dairy Tracker March 2017

DAIRY MILK

PLANT-BASED ALTERNATIVES

DAIRY MILK

PLANT-BASED ALTERNATIVES

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Lactose Intolerance is a Driver of Plant-based Beverages,But a Secondary One

61

12% of Plant Based Beverage Drinkers

drink the category because they are Lactose Intolerant

88% drink the category for other reasons

Source: Kantar 2016

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Easier to digest than milk

Tastes better than milk

Nutritionally superior to milk

No harm to animals

No added hormones

Healthier than milk

49%

29%

32%

28%

24%

23%

Plant-based Alternative Users Cite “Superiority” Over Milk

62

Reasons for Drinking Plant-based Alternatives

(Base: Plant-based Users)

Source: DMI Dairy Tracker 2016

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63

Plant-based Products Get Strength from Morning and Home Occasions

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Plant Beverages Skew Heavily to Breakfast With Over Half of Beverage Use Occurring at that Time

64

Breakfast Lunch DinnerBefore

Breakfast

BetweenBreakfast & Lunch

BetweenLunch

& Dinner

AfterDinner

All Beverages 11% 18% 12% 17% 13% 17% 13%

Plant Beverages 6%Index=59

53%Index=297

4%Index=34

8%Index=49

5%Index=37

14%Index=83

9%Index=72

Dairy Milk 5%Index=43

42%Index=233

3%Index=24

17%Index=97

3%Index=22

22%Index=134

9%Index=70

----------% Beverage Occasions Taking Place at Time of Day----------

Plant beverages, like milk, are under-developed between meals

Source: Kantar Worldpanel, 12 ME September 2016

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Plant Beverages are Primarily Consumed at Homeand are Underdeveloped Away-from-home

65

SchoolHome Restaurant/Other

All Beverages 79.3% 3.0% 9.3% 8.4%

Plant Beverages 91.0%Index=115

2.0%Index=67

2.6%Index=28

4.4%Index=52

Dairy Milk 88.7%Index=112

7.6%Index=253

1.8%Index=19

1.9%Index=23

----------% Beverage Occasions Consumed at Location---------

Source: Kantar Worldpanel, 12 ME September 2016

Office

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67

Plant Beverage Communications and Social Chatter

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Plant Beverages Invest a Disproportionately Higher Amount in Media than Milk, Given the Size of Category

2016 Retail Dollars($billions)

68

Media Spending$millions)

PLANT$1.7 bil (+5%)

10%

DAIRY MILK$15 bil (-5%)

90%

DAIRY MILK$150 mil (+3 mil)

65%

PLANT$72 mil (+$7 mil)

35%

Sources: IRI DMI custom milk database; Kantar

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Silk Cites Calcium, Fat and Calorie Advantages

69

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Social Responsibility is Also a Theme in Silk’s Positioning

70

It’s not always easy being non-GMO, but it’s worth itDid you know a whopping 94% of U.S. soybeans are genetically modified?1 But not the ones you’ll find in Silk. We use only non-GMO soybeans grown close to home in North America. And our commitment isn’t limited to soy. We apply the same high non-GMO standards across all of our product lines. That means taking extra time to research our suppliers, and choosing the ones we believe bring the best for our consumers. Being non-GMO takes extra care, but we think it’s a standard well worth fighting for.

Silk® versus milk: Bring it on!

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Smaller Plant Beverages Also Highlight their Sustainability Platforms

71

Why Plants?FOOD IS MORE THAN NUTRITION. IT IS A CELEBRATION.It’s about how good we feel knowing we’re putting something beneficial into our bodies, becoming stronger, healthier, more able.

GIVING BACK TO THE EARTHCare. It’s at the root of DREAM™, and it’s the #1 ingredient in every product we make. Caring about the well being of our customers is the reason we were founded over 30 years ago. DREAM’s wholesome, better-for-you beverages, yogurts and frozen desserts provide delicious alternatives to dairy all day long. We are committed to sourcing quality ingredients and we work with farmers who share our sense of environmental stewardship.That care and sense of responsibility extends to caring for our planet as well. Our shelf-stable packaging is made with less material than virtually any other comparable container for reduced environmental impact. That’s just one of the earth-friendly manufacturing methods we use to help reduce waste and keep our footprint as small as possible.We feel it’s our responsibility to give back to the Earth that gives us so much

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Recipes and Product Usage Tips are Highlighted on Plant Beverage Websites

72

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Almond Breeze Highlights Taste in Communications Along With Dedicated Farmers and Product Developers

73

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Source:

96,191,655

18,841,893

1,297,571

Dairy Milk Plant-based beverages

Social media discussion, April 2016-March 2017Number of Posts in Social Media

6.9% of milk discussion

1.3% of dairy discussion

Social Media Chatter is Also Fairly Low for Plant-based Beverages Relative to Dairy Milk

76

Over the past year, plant-based beverage conversation represented 1.3 percent of dairy conversation,

peaking at 1.6% in July 2016.

Source: Cision

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Consumers prefer to talk about individual beverages rather than the category, but the most popular term for the category among consumers is “nut milk.”

Volume source: Spredfast and Cision Visible, timeframe: April 1, 2016-March 31, 2017. Other plant-based beverages such as hemp milk, oat milk and hazelnut milk were not analyzed separately.

Almondmilk

Coconutmilk

Soy milk Cashewmilk

Rice milk Pea / Peaprotein

milk

172,256

138,748

51,376

13,942 13,137

638

Plant Beverages by # Mentions on Social Media

# social media posts

35,611

22,625

18,922 18,21216,169

11,668 11,196

7,626

3,802 3,116

Popularity of Plant-based Category Terms by Social Media Post

Almond is the Most Discussed Plant Beverage on Social Media,Mentioned in Just Over Half of Al Posts

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Source: Spredfast and Cision Visible, timeframe: April 1, 2016-March 31, 2017. Themes assessed from an n=100 random sample of messages taken within the timeframe. Themes are not mutually exclusive.

3%

3%

4%

4%

4%

5%

6%

6%

7%

7%

8%

9%

16%

19%

29%

Weight Loss

Dairy Farmer Mention

Ingredients

Environment/ Sustainability

Milk Allergy/ LI

Animal Care

Category Comparison

Dining Out

How It's Made

Dairy Industry Mention

Plant-Based Beverage Industry

Veganism

Health/ Nutrition

Cooking/ Recipes

Taste

Top conversation themes surrounding plant-based beveragesInsights: Bloggers and home cooks are sharing ways to incorporate plant-based beverages into foods from Asian-inspired entrees to desserts. Many recommend them neutrally, but some mention other causes for choosing plant-based beverages, such as not liking the taste of milk.

Just under 10 percent of posts mentioning plant-based beverages also mention or endorse a vegan diet, indicating that veganism is not frequently a motivator to choose plant-based beverages.

More people believe that plant-based beverages are healthyrather than unhealthy, citing calories, sugar and the potential for weight loss. However, they are also cited for being high in fat and containing chemicals rather than nutrients.

Plant-based beverage discussions are much more likely to talk about dairy as an industry rather than talking about dairy farmers.

Top Social Media Conversation Themes for Plant Beverages Center on Taste, Which is Highly Individualized

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Source: Spredfast and Cision Visible, timeframe: April 1, 2016-March 31, 2017. Themes assessed from an n=100 random sample of messages taken within the timeframe. Themes are not mutually exclusive.

4%

3%

4%

4%

6%

9%

7%

29%

5%

7%

8%

19%

5%

16%

1%

3%

3%

3%

3%

5%

7%

8%

9%

10%

11%

11%

12%

19%

Environment/ Sustainability

Dairy Farmer Mention

Ingredients

Milk Allergy/ LI

Category Comparison

Veganism

Dairy Industry Mention

Taste

Animal Care

How It's Made

Plant-Based Beverage Industry

Cooking/ Recipes

Mentions Cows

Health/ Nutrition

Top conversation themes surrounding milk compared to plant-based beverages

Milk

Plant-based Beverages

In Comparison, Health and Nutrition is the Top Conversation Topic Within Dairy Milk On Social Media With Taste Less than Half the Level

of Chatter

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Positive, 38% Negative, 24% Mixed, 14% Neutral, 24%Sentiment

How do consumers feel about the taste of milk?

Source: Spredfast and Cision Visible, timeframe: April 1, 2016-March 31, 2017. Themes assessed from an n=100 random sample of messages taken within the timeframe. Themes are not mutually exclusive.

Positive, 66% Negative, 14%

Mixed, 7%

Neutral, 14%Sentiment

How do consumers feel about the taste of plant-based beverages?

Positive: “It's soy [milk] creamer from Trader Joe's (their brand.) I like the creamy texture better than almond milk or coconut milk.”

Positive: “Almond milk tastes better than cow milk y'all sleeping on it 😴💯”

Negative: “Almond milk is no nasty. I need my cow milk.”

Positive: “I had the chocolate milk for my bedtime snack-tasted great and blood sugar was perfect!”

Mixed: “[My son] always was happy with [brand]… About a month ago we had to stop with [brand] ‘cause it tasted funny to him.”

Negative: “I've stopped drinking dairy milk and switched to nut-based milk and it tastes so much nicer.”

Taste is a Greater Positive Driver for Plant Beverages than for Milk

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Source: Spredfast and Cision Visible, timeframe: April 1, 2016-March 31, 2017. Sentiment assessed from an n=100 random sample of messages taken within the timeframe.

“I got a pumpkin spice latte with almond milk and it's so gross. @AlyssaViernezais the almond milk flavored?” Twitter.com, 9/22/2016

“Cutting dairy out is hard afespecially when you love ice cream & cheese. but baby steps. only soy milk in my coffee.” Twitter.com, 1/26/2017

“@chlomoney there is dairy free milk and ice cream and they taste completely normal!!” Twitter.com, 1/7/2017

“Is it ok to have unsweetened almond milk on a weight loss diet? #Healthy #Nutrition” Twitter.com, 7/4/2016

Most Social Media Posts are Neutral to Positive About Plant Beverages

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Plant-based beverage source: Spredfast and Cision Visible, timeframe: April 1, 2016-March 31, 2017. Sentiment assessed from an n=100 random sample of messages taken within the timeframe.

Social Media Comments Towards Plant Beverages are More Positive than those About Milk

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Source: Spredfast and Cision Visible, timeframe: April 1, 2016-March 31, 2017. Sentiment assessed from an n=100 random sample of messages taken within the timeframe; positive driversare scared based on n=43 messages, while negative drivers are scored based on n=11 messages. Drivers are not mutually exclusive.

Nearly half of posts that are positive about plant-based beverages also criticized dairy, compared to just over one-third of positive dairy messages that criticized plant-based beverages.

9%

18%

18%

27%

36%

Containers

Not "Natural"

Ingredients

Health

Taste

What don't people like about plant-based beverages?

2%

7%

7%

7%

9%

14%

19%

40%

Ingredients

Environment/ Sustainability

Have LI or Allergies

Animal Care

Activist Group Messaging

Health Benefits

Use in Cooking/ Recipes

Taste

What do people like about plant-based beverages?

Taste is the Top Driver of Both Positive and Negative Social Media Conversation Surrounding Plant Beverages

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No Single Form of Plant-based Beverage Dominates Discussion, Though Soy and Almond are Most Frequently Mentioned

Word Cloud: PLANT BEVERAGES

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Summary

• Plant beverages are a growing market with significant spending support– The category may gain strength from new entrants that offer new health halos, from old

brands with new health claims, or from additional dollar investment.

– The category may be vulnerable as focus on “added sugar” intensifies and as protein content is highlighted and better understood by consumers.

• Plant beverages have created a premium image, offering a large variety of choices, appealing packaging, and a narrative that connects to current consumer needs

• Plant beverages pull in younger consumers as well as multicultural consumers – Products are utilized as ingredients in other beverages, as additives in cereal as well as

beverages on their own, with marketing support encouraging these uses

• Plant beverages showcase their commitment to sustainability and social responsibility initiatives, growing attributes in food and beverages.

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Opportunity

• Continue to move dairy milk beyond a commodity image by developing more fully dairy milk’s “premium” segment through continued innovation

• Promote Dairy Milk as an ingredient in other beverages – at retail, foodservice and homemade (e.g., smoothies)

• Support dairy milk at breakfast - “milk as milk”, “milk in other beverages” and as cereal accompaniment– This has been a key strength for milk and is also a volume time for plant beverages.

• Better communicate dairy’s value proposition– Dispel myths regarding the nutritional profile of plant beverages

– Continue to leverage protein and milk as a complete nutrient package

• Showcase dairy’s sustainability platform in communications

• Strengthen dairy’s relationship with growing consumer groups (Asians, Hispanics), and early household lifestages where plant beverages have gained users

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APPENDIX

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Retail Sales of Dairy Milk is Trending Down

Source: IRI MULO+C retail channel includes grocery, c-store, drug, mass/supercenters including Wal Mart, K Mart, Target, Shopko club (Sam’s, BJ’s), dollar (Dollar General, Family Dollar, Fred’s) and military;52 weeks ending 5/14/2017 88

VOLUME DOLLARS

$14,949 mil

-14% declinelast 5 years

90% shareof MILK + PLANT

3,773 mil gal

-13% declinelast 5 years

94% shareof MILK + PLANT

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Dairy Milk Retail Volume on Downward Trend

4,411,947,376 4,259,095,361 4,111,794,272 3,955,931,779 3,884,614,541 3,814,800,361

1,436,344,290

3,772,946,848

2011 2012 2013 2014 2015 2016 2017 YTD (5/14) 52 wksend5/14/17

Source: IRI Market Advantage, Multi-Outlet + Convenience

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+4.6%

-3.5% -3.5%-3.8%

-1.8% -1.8%

-2.8%

-2.1%

2012 2013 2014 2015 2016 2017 YTD (5/14) 52 wks end5/14/17

Dairy MilkRetail Volume Sales (Gallons)

Retail Volume % Change vs Year Ago

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Dairy Milk is Most Developed in the Plains Region

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Strongest Sales Index• 141 Toledo• 140 Salt Lake• 132 Indianapolis• 131 Cincinnati/Dayton• 130 Grand Rapids

Weakest Sales Index• 61 New York• 63 San Francisco• 74 San Diego• 75 Providence

Source: IRI Market Advantage, Multi-Outlet + Convenience;52 weeks ending 4/16/2017

Index=Product development Index = Volume development relative to population with 100=average; >120 Index is high; <80 index is low

Volume Index52 Weeks End 4/16/17• 120 Plains• 112 Great Lakes• 112 West• 108 Mid-South• 103 Southeast• 100 Total U.S.• 92 South Central• 91 Northeast• 75 California

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Regions With Growing Populations are Posting Dairy Milk Sales Growth

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Strongest Sales Growth• +4.2% Boise• +3.7% Tulsa• +3.0% Oklahoma City• +2.5% Toledo• +1.6% Mississippi

Declining Markets• -8.7% San Diego• -6.4% Los Angeles• -6.2% San Francisco• -5.3% Las Vegas• -4.7% Chicago• -4.6% Milwaukee

Source: IRI Market Advantage, Multi-Outlet + Convenience;52 weeks ending 4/16/2017

Index=Product development Index = Volume development relative to population with 100=average; >120 Index is high; <80 index is low

Volume Growth52 Weeks End 4/16/17• -0.9% South Central• -0.9% Southeast• -1.6% Mid-South• -1.8% Northeast• -2.1% Total U.S.• -2.3% Great Lakes• -2.4% Plains• -2.4% West• -5.5% California

= growth less than 5%

= decline -0.1% to -3%

= decline larger than -3%

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Source: Spredfast and Cision Visible, timeframe: April 1, 2016-March 31, 2017, and Wordle.net

No Single Form of Plant-based Beverage Dominates Discussion, Though Soy and Almond are Most Frequently Mentioned

Word Cloud: PLANT BEVERAGES

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Almond Milk Overlaps With Dairy Milk but Also with Animal Rights Language and Smoothie Ingredients and Instructions

Word Cloud: ALMOND MILK

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Word Cloud: MILK

Health Terms and Breastfeeding Terms Predominate in Online Discussion Surrounding Milk

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Beverage Use Controls the Conversation Surrounding Coconut Milk

Word Cloud: COCONUT MILK

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Health Claims Pop in Soy Milk Discussion, as Well as Soy Brands and a Related Product (Tofu)

Word Cloud: SOY MILK

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Breakfast Discussion, Including Cereal, Smoothies and Oatmeal, Drives Cashew Milk Conversation Online”

Word Cloud: CASHEW MILK

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Source: Spredfast and Cision Visible, timeframe: April 1, 2016-March 31, 2017, and Wordle.net

Rice Milk Social Media Conversation is the Most Tilted Towards Animal Rights with Terms Such as “Baby Animals” and “Slaughterhouse”

Word Cloud:RICE MILK