CURRENT CONSUMER TRENDS:SWEETENERS

AUGUST 2015

MATT WILSONGLOBAL TRENDSGENERAL MILLS

Wellness trends in food dominating consumer conversation

Awareness and concern of sugar consumption growing with consumers

Interest in natural sweeteners with inherent benefits increasing

However, indulgence not decreasing, but overlapping with wellness cues

Current Consumer Landscape

Wellness trends in food dominating

• The Rise of “Real Food”• Natural Nutrition• “Free Froms”• GMO Awareness, Avoidance

Growing• Market Reaction

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

Real food is key to being naturally functional – not explicit health benefits

• Fresh• Whole (minimally processed)• Recognizable ingredients• Natural nutrition (not fortified)• Transparency

• Artificial anything (colors, flavors, preservatives, sweeteners)

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

The Rise of “Real Food”

Trending:Detractors from

“Real”Trending:

Cues of “Real”

AlmondsHeart healthy &

nutrient rich

CoconutsRich in potassium

& minerals;Natural energy

• Naturally functional is a key ante, especially for new products, but not a platform itself• NOT about clean label, “all natural” or “organic”

claims, or even specific health claims – the inherent benefits speak for themselves

• Taste and convenience remain essential!

Source: New Nutrition Business – 10 Key Trends 2015

• Naturally functional spans food/beverage landscape• Consumers looking to foods with inherent benefits

“Natural Nutrition”

AlmondsHeart healthy &

nutrient rich

CoconutsRich in potassium

& minerals;Natural energy

• Naturally functional is a key ante, especially for new products, but not a platform itself• NOT about clean label, “all natural” or “organic”

claims, or even specific health claims – the inherent benefits speak for themselves

• Taste and convenience remain essential!

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

Source: New Nutrition Business – 10 Key Trends 2015

• Naturally functional spans food/beverage landscape• Consumers looking to foods with inherent benefits

“Natural Nutrition”

Source: Hartman, Crimson Hexagon, Mintel

Cueing fresh: Demands of “free from” artificial colors, flavors, preservatives, and unnecessary ingredients rising

• “From Froms” = The new table stakes• Real food = Nothing artificial

“Free Froms”

Artificial Sweeteners

HFCS

GMO's

Processed Foods

Sugar52

42

51

11

16

21

24

26

Major Effort to AvoidAt Least Conscious Effort to Avoid

Source: Hartman, Crimson Hexagon, Mintel

Cueing fresh: Demands of “free from” artificial colors, flavors, preservatives, and unnecessary ingredients rising

• “From Froms” = The new table stakes• Real food = Nothing artificial

“Free Froms”

Artificial Sweeteners

HFCS

GMO's

Processed Foods

Sugar52

42

51

11

16

21

24

26

Major Effort to AvoidAt Least Conscious Effort to Avoid

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

GMO Awareness, Avoidance Growing

Awareness Growing Faster GMO in Top Ingredients to Avoid

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

Pre-2010 2010 2011 2012 2013 2014 Jan '15 Feb '15 Mar '15 Apr '15May-June '15Future

• Issuing a comprehensive “No No” ingredient list• Introducing store brands with a banned ingredient

promise• Removing artificial colors, flavors, & preservatives• Removing HFCS• Going non-GMO

Examples:

2010 through 2014

Market Reaction

Brands moving closer to “Real Food” accelerating

Pre-2010 2010 2011 2012 2013 2014 Jan '15 Feb '15 Mar '15 Apr '15May-June '15Future

• Issuing a comprehensive “No No” ingredient list• Introducing store brands with a banned ingredient

promise• Removing artificial colors, flavors, & preservatives• Removing HFCS• Going non-GMO

Examples:

2010 through 2014

Market Reaction

Brands moving closer to “Real Food” accelerating

Pre-2010 2010 2011 2012 2013 2014 Jan '15 Feb '15 Mar '15 Apr '15May-June '15Future

• Issuing a comprehensive “No No” ingredient list• Introducing store brands with a banned ingredient

promise• Removing artificial colors, flavors, & preservatives• Removing HFCS• Going non-GMO

Examples:

2010 through 2014

Market Reaction

Brands moving closer to “Real Food” accelerating

Pre-2010 2010 2011 2012 2013 2014 Jan '15 Feb '15 Mar '15 Apr '15May-June '15Future

• Issuing a comprehensive “No No” ingredient list• Introducing store brands with a banned ingredient

promise• Removing artificial colors, flavors, & preservatives• Removing HFCS• Going non-GMO

Examples:

2010 through 2014

Market Reaction

Brands moving closer to “Real Food” accelerating

Awareness and concern sugar

• Headlines Driving Consumer Concern• Avoidance of Artificial Sugars Growing• Consumers Subjectivity With Sugar Varies

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Headlines Driving Consumer Concern

After calories, sugar is the most-checked nutrition fact for all label readers1

GMI gets 10X+ sugar contacts as sodium, preservatives, colors2

Interest in managing sugar spikes in response to WHO announcement and other press3

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

4

Healthy sugar

Daily sugar intake

* A + B, WHO announcement dates

B A

Headlines Driving Consumer Concern

After calories, sugar is the most-checked nutrition fact for all label readers1

GMI gets 10X+ sugar contacts as sodium, preservatives, colors2

Interest in managing sugar spikes in response to WHO announcement and other press3

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

4

Healthy sugar

Daily sugar intake

* A + B, WHO announcement dates

B A

Red 40

HFCS

Artificial Sweeteners

HFCS

GMO's

Processed Foods

Saturated Fat

Artificial Flavors & Colors

Preservatives

Sodium

Sugar 52

55

49

49

56

56

42

58

51

11

13

13

15

16

16

21

24

26

Major Effort to Avoid At Least Conscious Effort to Avoid

While there is an effort to avoid sugar by many households, i t ranks lower on “major effort to avoid,” similar to Sodium

Sugar a matter of moderation rather than a deal breaker

Low sugar options may need to deliver on other priority free-from claims: gluten, soy, sodium, GMOs, and artif icial ingredients.

Avoidance of Artificial Sugars Growing

Source: Nielsen GMI Headwinds Study Survey n=31,982

Source: Mintel Sugar and Sweeteners US September 2014

Consumers Subjectivity With Sugar Varies

Bad for Health(Avoid)

Neutral

Good for Health

(Moderate)

HFCS

SaccharinAspartame

XylitolErythritol

Sucralose

Granulated sugar

Honey

Monk fruit

Coconut sugar

Agave

Stevia

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

HFCS and Aspartame are perceived as artif icial and unhealthy. Honey associated with health benefits

Interest in natural sweeteners with

• Consumer’s View of the Sweetener Landscape

• The Evolving Evaluation of Sweeteners

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Falling from Favor Currently Trending Rising Stars Down the RoadCaloric sweetenersCaloric sweetenersCaloric sweetenersCaloric sweeteners

High Fructose Corn Syrup

Corn SyrupRefined Sugar

Agave

HoneyRaw sugarcane juice

Brown Rice SyrupBarley MaltMaple syrup

Coconut or Palm SugarSorghum Syrup

Yacon SyrupRaw Unpasteurized

HoneySucanat

Date SugarLucuma fruit

Low or Noncaloric sweetenersLow or Noncaloric sweetenersLow or Noncaloric sweetenersLow or Noncaloric sweeteners

SucraloseTruvia blend

SteviaXylitol

Erythritol*

Monk fruitOrganic Stevia Leaf

Protein sweeteners:Brazzein, Monatin

Rare sugars:Allulose

Miracle berry

Sources: Hartman Consumer POV on Sugar 2013, Crimson Hexagon 2015 *Associated with Truvia backlash

Consumer’s View of the Sweetener Landscape

Consumers Evolving Evaluation of Sweeteners

Natural

Trace BenefitsLow Calorie/ Glycemic

Sources: 1 Crimson Hexagon,

Emerging sweeteners are judged on three facets: naturalness, GI or calor ie count, and any posit ive nutr i t ion they may bring1

While natural sweeteners carry a posit ive halo, FDA-proposed “added sugar” labels may lower subject ive di fferences

Posit ioning, processing play a big role in judging ‘naturalness’.

Indulgence not decreasing, but

• Sweets + Real Food• Justified Indulgence

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Sweets + Real Food

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

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

• Organic• Made with organic blueberries,

sugar, honey• 22g sugar• 7g protein

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Sweets + Real Food

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

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

• Organic• Made with organic blueberries,

sugar, honey• 22g sugar• 7g protein

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Justified Indulgence

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

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

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• Made with sugar, high fructose corn syrup, palm oil

• 14g sugar/ serving (3 cookies)

• 1g protein

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Wellness trends in food dominating consumer conversation

Awareness and concern sugar consumption growing with consumers

Interest in natural sweeteners with inherent benefits increasing

However, indulgence not decreasing, but overlapping with wellness cues

Summary

THANK YOU

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