1. F&B Company Strategies * Consumer Analyst Group New York CAGNY* 2014 Summary Schieber Research | February, 2014

2. This presentation demonstrates the strategic trends regarding innovation and marketing, as shown on top food & beverage companies on the recent Consumer Analyst Group New York conference (Feb., 2014). We have researched selected companies in order to gather major marketer trends expected to impact the industry going forward. Schieber Research is a premium market research boutique, providing tailor-made reports and competitive intelligence reports. We assist Israeli and Global firms, as well as strategic consultants, to make decisions which take into consideration the relevant market, consumer and shopper trends; and to know and consider the most important aspects of their decisions. Contact Us | hamutal@researchci.com | 054-7650789

3. Offering Solutions Fitting new lifestyles and markets Internal & external joint ventures, open innovations and M&As Leveraging key brand through new product platforms Shopper Marketing Shopper Engagement along the Path to Purchase Leveraging Retailer / Marketer insights Retailer / Marketer Co-Operation Leveraging Consumer Insights Digital Lifestyle Health & Wellness Combined with Indulgence and Convenience Identifying Niches and Demographics As demonstrated by the CAGNY presentations:

4. F&B manufacturers are researching the shopping and consumption motivations of various consumer / shopper groups and are responding accordingly Main consumer trends mentioned on CAGNY: Communications shift towards digital and mobile Health & Wellness search for better for you food and beverage, meaning fresh and real, without sacrificing indulgence and flavor New consumption opportunities snacking and smaller meals; the rise of breakfast Macro changes demographic changes, urbanization affecting shopping habits Sustainability is a must Kraft Foods Coca-Cola Hershey

5. Coca-Cola Pepsico

6. Main demographic and target changes discussed: A rising 55+ consumer group Millennials / Generation Y The Modern Family new family structures The companies concluded that focusing on these new markets requires customized product, marketing, selling and communication solutions: say good-bye to One Size Fits All! Pepsico Campbell Soup

7. Boomers / 55+ Consumers Have specific health needs empty nesters require smaller packaging, smaller portions; one / two serving ready meals Shopper needs larger, clearer labels and nutritional info Conagra Millennials: Gen Y Digital natives, use mobile for everything Friends are top influencers. Love to share Believe in values such as: sustainability, community, giving back. Value Good brands Campbell Soup targeting Gen. Y Pepsico Gen. Y Communication * Are marketers missing opportunities regarding Energy solutions to the 55+ consumers?

8. Marketers are adapting to the changes in media consumption, and are allocating more resources to digital and social media, with multi-channel and omni-channel marketing. KRAFT FOODS: utilizing the companys digital assets in order to connect to consumers and shoppers through content and value offering

9. General Mills Hershey Budget re-allocation

10. F&B Manufacturers continue to develop products which cater to the new health and wellness needs: real ingredients, fresh food, more protein and fiber, and claims such as energy and anti-oxidants (more on the health and functional trends on the Schieber Research Health Trends presentation). The companies also invest in market education regarding health and physical activity, for reasons of responsibility/ sustainability and regulation, as well as brand positioning. Coca-Cola Campbell Soup

11. Companies are aware that consumers will not give up indulgence and taste for the sake of healthier food; as a result, successful innovations combine health and indulgence. Kelloggs Kraft Foods General Mills

12. Mondelez: Consumption motivations General Mills: addressing new consumption opportunities while offering flavor and wellness Kelloggs: Responding to the changes in breakfast needs In addition, the companies address the changes in eating lifestyles: snacking and consuming smaller meals around the clock; more consumption away from home / on the go; and the rise in breakfast opportunities.

13. Shopper Marketing has become highly meaningful for companies. It is based on leveraging manufacturer data regarding the shopper as well as sharing of data between retailers and manufacturers, aimed at increasing synergies and total buying. Trade management in co-operation with retailers was one of the main issues discussed on CAGNY this year, mainly the shifts in buying channels, and the rise of online commerce and neighborhood stores. Campbell Soup Coca-Cola General Mills

14. Conagra: Offering different price points to answer different motivations of different shoppers (or same shopper in different opportunities) Mondelez: designing the POS according to shopping insights (e.g., crackers with cheese, oreo next to milk) Hershey: positioning the new chocolate spreads next to bread as well as next to bananas to suggest new usage opportunities

15. Conagra: Joint PL + Brand offering Hershey: solving the under-the-counter untapped space problem

16. Conagra: Product packaging used to communicate brand messages premium / healthy / natural Pepsico: Point of purchase communicated the brand messages tailored to a specific crowd Hershey: brand messages match year- round shopping events

17. A strategic shift from brand focus, to solution focus, in order to answer a specific markets needs, often combining brands and categories Solutions include using open innovation and JVs with competitors who provide completing capabilities, to shorten TTM Other solutions require bolt-on / transformative acquisitions. Green Mountain Coffee Roasters / Keurig : catering to various user needs in the coffee category, providing a platform for external popular brands, JVs with Starbucks and Coca-Cola Coca-Cola

18. Kraft Foods + Mondelez: leveraging brands across categories for product and point of sale implementation of consumer insights Pepsico: enhancing ore brands through JVs, including with Foodservice companies

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