Thirsty Thoughts Dairy Juice Blends

1. Thirsty Thoughts Dairy Juice Blends • Annual Market Quantification • April 2011

2. Setting the scene Dairy juice blends are a combination of fruit juice and dairy beverages, either milk or yoghurt based which can be produced in a variety of flavours. The product is not shelf stable and needs the cold chain to be maintained from manufacturer to supermarket shelf followed by constant refrigeration thereafter to maintain freshness. Dairy juice blends packaged into cartons are the exception as these have been UHT treated and can retain freshness in ambient temperatures. Packaging within this category includes cartons and plastic bottles. Clover SA manufactures Tropika, considered to be the leading brand within the category. Dairy juice blends are considered healthy and are marketed as products containing the ‘goodness of dairy with the vitamin benefits of fruit juice’, with the intention to attract consumers who prefer a healthy lifestyle. 2

3. 2010 Category Distribution 3

4. Annual Growth Rates 4

5. Dairy juice blends weather the recession • Dairy juice blends contributed 0.03% to the Gross Domestic Product in 2010, remaining constant from the 2009 contribution. This beverage category is relatively smaller than other healthy, ready-to-drink beverages such as fruit juice. • The market for dairy juice blends performed well during the economic downturn, unlike other dairy beverages such as drinking yoghurt. Dairy juice blends experienced 1.3% volume growth in the base year while the value of the market shrunk by a marginal 0.4%. The negative value growth was primarily because of marginal price increases seen over the past year as well as the result of packaging shifts. 2010 saw volume reductions in the 500ml and 350ml pack volumes which in turn led to value decline as smaller packs are relatively more expensive than larger ones on a per litre basis. Larger pack sizes such as the 950ml/1litre pack experienced good growth, which further contributed to value decline, as these are sold at a lower Rand per litre price. • Heavy investments in promotional activities by Tropika, the flagship brand in this category coupled by the inherent ‘good for you’ properties of dairy have kept the category over the years. 5

6. Dairy juice blends weather the recession (Cont.) • Product line extension in the form of Tropika Cool Colours as well as limited edition products such as Tropika paradise are believed to have generated consumer interest in the category during 2010. • International trends in dairy juice blends include the following: • Convenient packaging for on-the-go consumption • Introduction of functional nutrients to dairy fruit blends that are said to aid in weight loss and enhance mood and beauty • The use of organic milk and fruit in the manufacture of dairy juice blends • The marketing of the category as a guilt free indulgence with low calorie, low fat products • The introduction of exotic flavour combinations 6

7. Thirsty Thoughts Bottled Water For more information, contact: Jan Wegelin Research Manager Tel: (011) 615 7000 Mobile: 082 938 0744 www.bmi.co.za