Powered by Dairy Opportunities for Growth- Preliminary Findings

1. Powered by Dairy Opportunities for Growth- Preliminary Findings October, 2013 Lynn M. Stachura

2. What we will cover: Why Is Powered By Dairy Important? Foundation for Powered By Dairy Research What Opportunities Can Dairy Leverage Within The Energy Space? Relative Size of Prize/Opportunities Quantified

3. Basis of Interest for “Powered By Dairy” Research Making dairy the go-to food/beverage for people who want more physical or mental energy Basis of Interest Potential Ways to Bring to Life • Idea Thought Starters: • Symbols on products to show ‘good source of protein’ • Dairy energy bars/drinks • Flavors associated with protein: peanut butter • Mental energy drinks • Fusions – milk + high protein products (granola, nuts) • Supply Chain Thought Starters: • Vending machines at health clubs, athletic centers at universities • Machines that check energy levels (similar to blood pressure machines) in food stores and then recommend high protein items to buy • Energy drink market in US was $4.8BN in 2008 • Functional drinks estimated to grow to $19BN by 2013 (160% growth from 2008) • 63% of Americans are concerned about lack of energy • 69% say ‘provides energy’ is important in determining products to buy • Chocolate milk proven to be a good recovery drink • 21% are regular energy drink users, including 43% of those ages 18–24 • Only 29% of consumers strongly agree protein is naturally found in milk; only 25% familiar to whey protein Innovation Center research compiled by GfK identified 3 dairy categories that have possible opportunities within the energy space: YOGURT MILK DAIRY INGREDIENT

4. Team Work Plan to Uncover Opportunities Dairy MightLeverage Within The “Powered” Space What dairy opportunity can be leveraged within the energy space and who is the target consumer? TNS Landis Database Quantitative Work: • Identify potential categories focused in the “energy” arena so dairy can leverage equity and consumer acceptance Understanding the Why behind consumer needs, habits/practices, attitudes, and behavior? Help identify emerging innovative energy territories GfK Qualitative Work: • Identify consumer needs by need state/ occasion/ segments • Conduct global scan for new product innovation across energy market Quantitative & Secondary Research: • Exploration of energy claims within food & beverage within the retail channel • E.g. understandingenergy drink/shot categories Players within the “claimed” energy space?

5. Executive Summary • Dairy has permission to play within energy space • Highest priority areas for innovation are • Regular yogurt, greek yogurt, smoothies, drinkable yogurt & low fat/skim milk • Yogurt categories show most potential to compete w/ energy categories • Uncovered preliminary roadmaps for both “close-in” and “farther-out” innovation • Closer-in growth doesn’t require new product development, rather leverages current dairy benefits • Farther-out growth requires greater innovation which can lead to higher incremental growth

6. Executive Summary Snack universe (defined by TNS): • Regular and greek yogurt occasions have an opportunity to move into the energy space, which accounts for 21% of the snack occasions • Learnings from regular and greek yogurt can be applied to other categories such as dessert yogurt, probiotic yogurt and frozen yogurt • Relative potential for dairy-based energy snacks is $18.9 billion Beverage universe (defined by TNS): • Smoothies, drinkable yogurt and low fat/skim milk occasions have opportunity to move into the energy space, accounts for 30% of the beverage occasions • Learnings from smoothies, drinkable yogurt and low fat/skim milk can be applied to other categories such as reduced fat/calorie milkshakes, lactose free milk and organic milk • Relative potential for dairy-based energy beverages is 15.9 billion gallons

7. Powered By Dairy: Initial Discovery

8. Initial Discovery Uncovers Why “Powered By Dairy” Is Important To The Industry • The functional food/beverage category is a profitable market that grew 25% between 2008 - 2011 despite the recession • Energy is among the fastest growing claims with sales increasing 15% in the past year • Adults are increasingly more interested in obtaining physical and mental energy in these hectic times • Natural energy is becoming the new functional energy trend IRI Sales versus year ago (1 year ending July 15, 2012) New Nutrition Business 2011 New Nutrition Business Key Health and Nutrition Trends 2012

9. Consumers Are Changing Their Diets For A Variety Of Reasons Weight management 67% Overall improved health and wellness 54% Improve overall quality of life 46% Improve body shape/fat composition 46% 34% Increase energy levels Source: The NPD Group/Functional Foods & Beverages Custom Survey; June ‘12 Top Reasons for Changing Diet: % Made Dietary Changes in Past Year Disclosed with permission of The NPD Group solely for the purpose for which it is being provided by DMI. The reproduction, dissemination or use of the information for any other purpose is strictly prohibited without NPD’s prior written consent.

10. Physical And Mental Energy Are Important To Consumers Types of Energy Consumer Are Looking For In Functional Products (Foods & Beverages; % of Adult Sample) Source: The NPD Group/Functional Foods & Beverages Custom Survey; June ‘12 Disclosed with permission of The NPD Group solely for the purpose for which it is being provided by DMI. The reproduction, dissemination or use of the information for any other purpose is strictly prohibited without NPD’s prior written consent.

11. Energy Products Maintain Younger Consumers Interest, While Older Consumers Seek More Natural Sources 36% of adults would rather get their nutrients from foods and beverages as opposed to supplements Natural is a good point of difference Source: Package Facts dietary supplements us 2010 study Source: The NPD Group/Functional Foods & Beverages Custom Survey; June ’12 Disclosed with permission of The NPD Group solely for the purpose for which it is being provided by DMI. The reproduction, dissemination or use of the information for any other purpose is strictly prohibited without NPD’s prior written consent.

12. Does Dairy Have Permission to Expand Into Energy Space? The Move To “Natural” Products Is Evident In The Product Introductions And Expanded Users

13. Powered by Dairy: Dairy Outlook IN Energy Space

14. Using The TNS Landis Database, Consumers Define “Energy” As… • Sustained energy… • Mental • energy… • Enhances mental performance • Helps me stay sharp and alert • Is a good way to start the day • Helps me stay on track • Helps me concentrate • Helps wake me up • Helps manage my blood sugar • Helps me get through my day • Provides lasting energy • Physical Energy (Exercise) • Protein Based Energy • Boosts of energy naturally • Provides quick energy • Picks me up/gets me going • Is a supercharged energy source • Natural energy… • Quick • energy… Energy • Won't impair performance • Helps me lead active lifestyle • Is good after physical exercise • Enhances physical performance • Energy w/o making me crash later • Will not slow me down/feel sluggish • Is a good source of protein • Is a good source of soy/ soy protein • Other • Gives me energy w/o the calories • Boosts my metabolism • Rejuvenates me • Revitalizes me Note: Energy is defined as a need within food and beverage

15. Some Dairy Categories Have Opportunity To Move Into Energy Space 1 • 25 Dairy Categories • 11 dairy categories in the Beverage Universe • 14 dairy categories in the Snack Universe 2 • Energy Attributes • Energy attributes define the energy categories • Examples of energy attributes: • Provides quick energy • Helps me get through my day • Enhances my physical performance • Is a good source of protein • Enhances my mental performance 3 • 52 Energy Categories • The 26 energy attributes aligned with 52 energy categories

16. We Prioritized Five Opportunity Areas Where Dairy Has Greater Permission to Innovate Snack Opportunities Beverage Opportunities 1 2 3 4 5 Additionally, these dairy categories below have similar traits to innovate against: • Lower Priority • Dairy Categories • (Don’t meet energy needs or other categories meet the needs) Note: Reduced fat/ calorie milkshake category are products that require “adding milk and stirring”

17. U.S. Snack Universe Within TNS Landis Database: (Overview of Snack Need States) Enjoyment Multitasking Fresh & Filling 12% NS3 9% NS5 14% NS1 Relieve Boredom Do Other Things Enhance My Health Nutritionally complete options for every day, made with the goodness of real fruit, that rehydrate and rejuvenate the body, enhancing health over the longer term Spontaneous, spur-of-the-moment, easy, hand-to-mouth snacks to just open and eat to relieve boredom Simple, no-prep, hand-to-mouth savory snacks that are not messy and can be enjoyed while doing other things, whether on the go, at the computer, or in front of the TV 10% NS4 6% NS9 13% NS2 Indulge With Family Permit Plenty Sharpen My Mind & Body Sweet, full-flavored, uplifting, and craveable indulgent treats that are fun for the whole family Bite-size, pop-in-your-mouth, low-calorie snacks, good anytime and portable for anywhere, whether on the go or at work or school, permissible for munching all day Vitamin-fortified, energy and metabolism-boosting snacks that help you stay focused, physically active and looking your best 4% NS11 4% NS10 7% NS7 Reward Me Save Time & Savor Healthy Meal Replacement A heart-healthy meal replacement with nutritional value that boosts bodily function and gives the body what it needs to feel good For personal moments of indulgence that are comforting and not rushed, to help you relax and escape during and after a stressful day Savory options with crispy, baked texture, that come complete with all the ingredients and are quick to prepare, but with flavor you don’t want to rush 4% NS12 13 4% 7% NS6 Socialize & Entertain Energize Me Speedy, Sweet & Portioned Portable, single-serve, sweet, flavorful treats for any time of the day, that provide quick energy to keep going, whether working at a desk or driving in the car Simple/basic, shareable, savory snacks with big flavor, enjoyed while spending time with friends and family A natural energy source that revitalizes and sustains throughout the day, with built-in benefits (like antioxidants or calcium) to help improve the body’s function and endurance 6% NS8 Break the Routine A freshly prepared, full-flavored option that is a meal in itself – served warm, tastes authentic, and is a good change of pace from the usual routine

18. Dairy Opportunity Across Snack/Energy Need States (Relative Size of Prize) 13% Portable, single-serve, sweet, flavorful treats for any time of the day, that provide quick energy to keep going, whether working at a desk or driving in the car Dairy's share of the energy related snack occasions is… 54% However, regular and greek yogurt occasions have opportunity to move into the energy space which encompasses… 21%   Portable, single-serve, sweet, flavorful treats for any time of the day, that provide quick energy to keep going, whether working at a desk or driving in the car 14% Nutritionally complete options for every day, made with the goodness of real fruit, that rehydrate and rejuvenate the body, enhancing health over the longer term  13% Vitamin-fortified, energy- and metabolism-boosting snacks that help you stay focused, physically active, and looking your best  Vitamin-fortified, energy- and metabolism-boosting snacks that help you stay focused, physically active, and looking your best  7% A heart-healthy meal replacement with nutritional value that boosts bodily function and gives the body what it needs to feel good  7% A natural energy source that revitalizes and sustains throughout the day, with built-in benefits (like antioxidants or calcium) to help improve the body’s function and endurance  A natural energy source that revitalizes and sustains throughout the day, with built-in benefits (like antioxidants or calcium) to help improve the body’s function and endurance 

19. U.S. Beverage Universe Within TNS Landis Database: (Overview of Beverage Need States) • Emotional • Reward Portable Convenience • Meal • Replacement • Health • Management 17% NS1 Indulgent Moments 9% NS6 Fruity Goodness 6% NS10 Healthy Meal Replacement 11% NS3 The Real Deal Fruit-flavored, vitamin and mineral-fortified beverages with a mix of tastes that boost your energy naturally Craveable, indulgent, and fun beverages that make you happy and put you in a good mood Fresh, natural, and nutritionally complete beverages that strengthen teeth and bones, build muscle, and tide you over until your next meal All-natural, wholesome, and great-tasting beverages that have heart-healthy ingredients and help set a good example 11% NS2 Proper Health Management 7% NS7 Natural Soothing Selections 9% NS5 • Easy, Quick, Convenient 5% NS11 Satisfying Energy Enhancement Beverages that make you feel fit/healthier, enhance your mental focus, aid your digestive system, and make you feel that your are taking care of yourself Fresh beverages that have a homemade taste and help you de-stress and relax An on-the-go beverage that gives you quick energy so that you can keep going while you’re doing other things Filling, energizing beverages that tide you over until your next meal and make you feel adventurous 7% NS8 Sweet Fun with a Twist 6% NS9 Easy Refreshment 10% NS4 Healthy Weight Management Daily guilt-free beverages, lower in sugar and calories, that are not too filling and help you manage your weight Sweet, full-flavored, and fun beverages that have a mix of tastes and are made with fresh fruit that my whole family can enjoy Refreshing, thirst-quenching, and light-tasting beverages that are good to have with a meal 4% NS12 Low This, Low That Lower in sugar and calories beverages that are not too filling, don’t spoil your appetite, and help you feel in control

20. Dairy Opportunity Across Beverage/Energy Need States (Relative Size of Prize) 9% Fruit-flavored, vitamin and mineral-fortified beverages with a mix of tastes that boost your energy naturally Dairy’s share of the energy related beverage occasions is… 44% However, smoothies, drinkable yogurt and low fat/ skim milk occasions have opportunity to move into the energy space which encompasses… 30%  9% An on-the-go beverage that gives you quick energy so that you can keep going while you’re doing other things  5%  Filling, energizing beverages that tide you over until your next meal and make you feel adventurous 11% Beverages that make you feel fit/healthier, enhance your mental focus, aid your digestive system, and make you feel that your are taking care of yourself  Beverages that make you feel fit/healthier, enhance your mental focus, aid your digestive system, and make you feel that your are taking care of yourself  10% Daily guilt-free beverages, lower in sugar and calories, that are not too filling and help you manage your weight 

21. The Study Defined Two Distinctive Types Of Innovation For Dairy • How to innovate: Create a new hybrid product that leverages dairy benefits and meets energy attribute needs • High Innovation needed but yields high growth • Highly incremental opportunity • New hybrid product not created, consumers slower to grasp concept • Requires longer lead time • Need to address consumer needs that are served well by energy categories however, not dairy categories • Extending dairy into strongly connected energy categories • Example: New to the world hybrid category… • Nutritionally Balanced Drinkable Yogurt Shots: • This product would deliver on helping consumer feel and look their best and can be considered an option for the family to stay healthy. Goal is to help consumer meet energy needs of feeling fit/ healthier and makes up for less nutritional choices • How to innovate: Develop communication that builds upon dairy benefits so it can be positioned against energy categories • Innovation that is quick but yields less growth; doesn’t require new product development • Leverage new benefits/positioning that communicate dairy categories strengths against existing competitive energy categories • Helps build upon needs not met by energy categories yet delivered by dairy • Capitalize on needs that dairy outperforms energy categories • Example: Position drinkable yogurt messaging that delivers opportunities such as helping feel good, looking my best or helping family maintain health as a way to compete against other energy categories

22. Regular Yogurt: Opportunity At A Glance WhereDoes Regular Yogurt Currently Play? • Need State: Enhance My Health • (Accounts for 14% of Energy – related Snack Occasions ) Who Is My Target Consumer…? How To Innovate…? Closer-In Innovation OR Further-Out Innovation Disciplined Eaters: Eat To Live • Older consumers • Proactive and disciplined • Love food and are adventurous eaters • Managing their food and nutrition choices • Freshness and sources of the foods important

23. Not applicable • Dairy-based vegetable dips • Cheese/Queso dips Regular Yogurt: Preliminary Guidance For Innovation • LOW INNOVATION NEEDED • HIGH INNOVATION NEEDED • MODERATE INNOVATION NEEDED How To Innovate…? Communicate Regular Yogurt Benefits*: • Fruit cups • Reduced calorie brownies • Peanut butter OTG cups • Reduced-fat/sugar cookies • Low-calorie chocolate candy bars 1 2 • Needs Not Met By Energy Categories: • Yogurt Outperforms Energy Categories: • Helps digestive system work at its best • Helps maintain teeth/ bones strength • Enhances daily health • Helps ensure long-term health • Has redeeming nutritional value • Helps me feel good about self Further-Out Innovation Closer-In Innovation • Regular yogurt competes against these energy based categories (competitive set): * Must communicate all the regular yogurt benefits (above) to innovate far-out: • Cheese/Queso dips • Dairy-based vegetable dips • Peanut butter OTG cups • Low-calorie chocolate candy bars • Reduced calorie brownies • Reduced calorie cookies • Important energy attributes needed to innovate: • Build new dairy/energy product: Low to high innovation/risk factor: • Fuse regular yogurt with energy product to create new hybrid product • Higher innovation… higher growth • New product not yet invented • Ex: Expand regular yogurt into energy space by leveraging above benefits along with energy attributes to create breakthrough innovation fusion categories/products Innovate Against Energy Competitive Set: • Develop regular yogurt positioning that optimizes above communication/benefits • Ex: Regular yogurt needs to communicate some of its inherent benefits, such as bone health, to compete with the above competitive set Note: *Must meet both criteria (1 and 2) before innovation

24. Greek Yogurt: Opportunity At A Glance WhereDoes Greek Yogurt Currently Play? • Need State: Energize Me • (Accounts for 6% of Energy – related Snack Occasions ) Who Is My Target Consumer…? How To Innovate…? Closer-In Innovation OR Further-Out Innovation Life- Balancing Weight Manager • Image is important for these consumers • “Live to eat” as mindful of health & nutrition • Yet struggle with weight/guilt of eating • Take time to exercise and look attractive • Yet not truly satisfied w/ how they look

25. Cereal – 100% nutritionally • Cereal – 100% wholegrain • Heart-healthy spreads • Fruit cups • Not applicable Greek Yogurt: Preliminary Guidance For Innovation LOW INNOVATION NEEDED MODERATE INNOVATION NEEDED HIGH INNOVATION NEEDED How To Innovate…? Communicate Greek Yogurt Benefits*: • Cereal- high fiber • Fresh fruit/precut with a dip • Fresh fruit/whole 1 2 • Needs Not Met By Energy Categories: • Greek Yogurt Outperforms Energy Categories: • Helps build muscle • Boost immune system • Helps digestive system work at its best • Good source of calcium Further-Out Innovation Closer-In Innovation • Greek yogurt competes against these energy based categories (competitive set): * Must communicate all the Greek yogurt benefits (above) to innovate far-out: • Fruit cups • Cereal – high fiber • Cereal – 100% wholegrain • Cereal – 100% nutritionally complete • Heart-healthy spreads • Important energy attributes needed to innovate: • Build new dairy/energy product: Low to high innovation/risk factor: Innovate Against Energy Competitive Set: • Fuse Greek yogurt with energy product to create new hybrid product • Higher innovation… higher growth • New product not yet invented • Ex: Expand Greek yogurt into energy space by leveraging above benefits along with energy attributes to create breakthrough innovation fusion categories/products • Develop Greek yogurt positioning that optimizes above communication/benefits • Ex: Greek yogurt needs to communicate some of its inherent benefits, such as builds muscle, boosts immune system or helps digestive system work its best to compete with the above competitive set Note: *Must meet both criteria (1 and 2) before innovation

26. Fruit/Yogurt Smoothies: Opportunity At A Glance WhereDoes Fruit/ Yogurt Smoothies Currently Play? • Need State: Fruity Goodness • (Accounts for 9% of Energy-related Beverage Occasions ) Who Is My Target Consumer…? How To Innovate…? Closer-In Innovation OR Further-Out Innovation Social Indulger: Live to Eat • Eating is important to younger single men • Rely on other to prepare food (at home & away) • On-the-go consumers w/ active, busy lifestyle • Don’t worry about weight or health issues

27. MODERATE INNOVATION NEEDED HIGH INNOVATION NEEDED • Herbally enhanced drinks • Not applicable LOW INNOVATION NEEDED Fruit/ Yogurt Smoothies: Preliminary Guidance For Innovation How To Innovate…? • Flavored fitness water • RTD sports drinks • Pre-game fuel drinks • Low-calorie RTD sports drinks • Post-game drinks • Nutritionally complete drinks • Calorie-burning drinks Communicate Fruit/Yogurt Smoothie Benefits*: 1 2 • Needs Not Met By Energy Categories: • Smoothies Outperforms Energy Categories: • Good mixture of tastes • Variety of tastes in every bite • Good as a snack • Fruit flavored, sweet • Kids can prepared/serve themselves • Kids like/parents approve of… Further-Out Innovation Closer-In Innovation • Fruit/yogurt smoothies competes against these energy based categories: * Must communicate all the smoothie benefits (above) to innovate far-out: • Flavored fitness water • RTD sports drink (regular/low calorie) • Pre-game fuel drinks • Post-game drinks • Herbally enhanced drinks • Nutritionally complete drinks • Calorie-burning drinks • Important energy attributes needed to innovate: • Build new dairy/energy product: Low to high innovation/risk factor: • Fuse smoothies with energy product to create new hybrid product • Higher innovation… higher growth • New product not yet invented • Ex: Expand smoothies into energy space by leveraging above benefits along with energy attributes to create breakthrough innovation fusion categories/products Innovate Against Energy Competitive Set: • Develop fruit/yogurt smoothie positioning that optimizes above communication • Ex: Smoothies needs to communicate some of its inherent benefits, such as mixture or variety of taste or good snack and kid friendly to compete with the competitive set Note: *Must meet both criteria (1 and 2) before innovation

28. Drinkable Yogurt: Opportunity At A Glance WhereDoes Drinkable Yogurt Currently Play? • Need State: Proper Health Management • (Accounts for 11% of Energy-related Beverage Occasions ) Who Is My Target Consumer…? How To Innovate…? Closer-In Innovation OR Further-Out Innovation Disciplined Eaters: Eat To Live • Older consumers • Proactive and disciplined • Love food and are adventurous eaters • Managing their food and nutrition choices • Freshness and sources of the foods important

29. Not applicable • Nutritionally complete drinks • Weight-loss beverages Drinkable Yogurt: Preliminary Guidance For Innovation LOW INNOVATION NEEDED HIGH INNOVATION NEEDED MODERATE INNOVATION NEEDED How To Innovate…? Communicate Drinkable Yogurt Benefits*: • Not applicable 1 2 • Needs Not Met By Energy Categories: • Drinkable Yogurt Outperforms Energy Cat.: • Helps me look my best • Helps me feel good • Helps maintain family health • Give my body what it needs to feel good Further-Out Innovation Closer-In Innovation • Drinkable yogurt competes against these energy based categories (competitive set): * Must communicate all drinkable yogurt benefits (above) to innovate far-out: • Important energy attributes needed to innovate: • Nutritionally complete drinks • Weight-loss beverages Innovate Against Energy Competitive Set: • Build new dairy/energy product: Low to high innovation/risk factor: • Develop drinkable yogurt positioning that optimizes above communication/benefits • Ex: Drinkable yogurt needs to communicate some of its inherent benefits, such as making me feel good, maintaining family health to compete with the above competitive set • Fuse drinkable yogurt with energy product to create new hybrid product • Higher innovation… higher growth • New product not yet invented • Ex: Expand drinkable yogurt into energy space by leveraging above benefits along with energy attributes to create breakthrough innovation fusion categories/products Note: *Must meet both criteria (1 and 2) before innovation

30. Low Fat/Skim Milk: Opportunity At A Glance WhereDoes Low Fat/Skim Milk Currently Play? Need State: Healthy Weight Management (Accounts for 9% of Energy-related Beverage Occasions ) Who Is My Target Consumer…? How To Innovate…? Closer-In Innovation OR Further-Out Innovation Disciplined Eaters: Eat To Live • Older consumers • Proactive and disciplined • Love food and are adventurous eaters • Managing their food and nutrition choices • Freshness and sources of the foods important

31. Unflavored fitness water • Soy milk • Vegetable juices Low Fat/Skim Milk: Preliminary Guidance For Innovation • LOW INNOVATION NEEDED • HIGH INNOVATION NEEDED • MODERATE INNOVATION NEEDED How To Innovate…? Communicate Low Fat/Skim Milk Benefits*: • Not applicable 1 2 • Needs Not Met By Energy Categories: • Low Fat/Skim Milk Outperforms Energy Cat.: • No added sugar • Helps lower cholesterol • Low fat/low calories • Can have every day • Does not contribute to childhood obesity Further-Out Innovation Closer-In Innovation • Low fat/skim milk competes against these energy based categories (competitive set): * Must communicate all low fat/skim milk benefits (above) to innovate far-out: • Important energy attributes needed to innovate: • Unflavored fitness water • Soy milk • Vegetable juices • Build new dairy/energy product: Low to high innovation/risk factor: Innovate Against Energy Competitive Set: • Fuse low fat/skim milk with energy product to create new hybrid product • Higher innovation… higher growth • New product not yet invented • Ex: Expand low fat/skim milk into energy space by leveraging above benefits along with energy attributes to create breakthrough innovation fusion categories/products • Develop low fat/skim milk positioning that optimizes above communication • Ex: Low fat/skim milk needs to communicate some of its inherent benefits, such as providing no added sugar and lowers cholesterol to compete with the above competitive set Note: *Must meet both criteria (1 and 2) before innovation

32. Relative Size of Prize For Dairy Snacking And Beverage Energy Occasions Energy Related Snack Occasions Energy Related Beverage Occasions 1 2 • Beverage a 53 billion gallon industry • 30% of beverage occasions are energy-related, which creates a: • Snacking is a $90+ billion industry • 21% of snacking occasions are energy-related, which creates a: • $18.9 Billion • 15.9 Billion • Gallon • Opportunity • Opportunity 1: Innovation Center of U.S. Dairy, Snacking white paper (2009) 2: Innovation Center of U.S. Dairy, Dairy Beverage Reinvented (2012)

33. What Else Might We Uncover From This Initial Work?

34. Additional Mining of This Data Could: • Look more deeply into protein energy connection • Create work around energy dimensions • Example: sustained, natural or quick energy etc… • Dig into the consumer target(s) of highest priority opportunities • Explore some “lower priority” dairy categories • Further refine sizing estimates based on new information • Other issues of interest for your organization…?

35. Powered by Dairy: Appendix

36. Matrix™ Consumption UniverseMethodology Overview – Overall Food & Beverage What is the Consumption Universe? A comprehensive insight resource for food and beverage marketers, leveraging the proprietary TNS Matrix™ methodology to model how consumers see the market and make their product choices Massive scope: 24,000 consumer interviews – 360 food, beverage, and snack products/categories evaluated across 360 occasion-based needs and product benefits, plus over 50 statements defining differentiated consumer targets based on shared beliefs, behaviors, and lifestyle factors The Matrix™ Consumption Universe is designed to help you: • Understand all factors impacting consumer choice in your category – or a new category of interest • Quickly uncover bona fide gaps and opportunities grounded in consumer needs • Efficiently expand your perspective beyond traditional category definitions to identify new opportunities

37. Survey Overview Many approaches, such as A&U’s, ask a lot of questions on a survey, the more the better, and then hope something interesting surfaces. Matrix instead leverages a consumer behavioral model to drive survey content and analytics/deliverables, and take the guesswork/risk out of research design and execution.

38. What is a consumer target? Consumers have varied lifestyles, behaviors, tensions, and beliefs which predispose them to act in certain ways. Matrix uncovers the differentiated consumer segments which comprise your market targets – each with different beliefs, behaviors, and/or lifestyle tensions – and sizes them to aid prioritization.

39. U.S. Consumption Universe – Consumer Segments Overview of Beliefs & Lifestyles Food Aficionados Carefree Struggling Disciplined LIVE TO EAT EAT TO LIVE Home Cookin’ Family Pleaser (10%) Upbeat Food Explorer (14%) Social Indulger (11%) Routine Convenience Seeker (10%) StressedStruggler (15%) Conflicted Stressed Manager (15%) Life-Balancing Weight Manager (11%) Wellness Proactive (13%) These women provide basic home-cooked food, and eat with their families. They are not focused on health or nutrition, and do not limit themselves or feel guilty about it. They are not impacted by daily stresses in their lives. These “foodies” are adventurous in life, cooking, and eating. They moderate their eating to maintain a healthy lifestyle and an active social life. They enjoy freshly prepared foods more than fast food or junk food. Eating is important to these younger, single men, but they rely on others to prepare foods for them – whether at home or away. Their active, busy lifestyle means they are often eating on the go, and they don’t worry about weight or health issues. For these single male consumers, food is fuel that supports their on-the-go lifestyle. Takeout and quick-cooking foods are the basis of their meals and snacks, and they rarely prepare their own food. Neither explorers nor adventurers, they regularly eat the same foods. They eat what they want without health concerns. Life is stressful for these consumers, and they lack the energy to tackle life’s challenges. Although they struggle with weight issues, they rely on easy prep or simple meals to make their families happy. They tend to stick with the “tried and true” in their food choices, and often use food for comfort. These consumers struggle to maintain a healthy weight and try to eat better, but don’t always succeed. They are focused on fresh food and nutrition, and do not rely on fast food for their meals. These consumers are mindful of health and nutrition, but struggle with weight issues and guilt about eating. Image is important to these consumers, and they take steps to exercise and look attractive, but they are not truly satisfied with how they look. Although these older consumers are lovers of food and adventurous about eating, they are proactive and disciplined in managing their food and nutrition choices. Freshness and sources of the foods they choose are important to them.

40. Energy-Related Categories (Snack Universe)

41. Energy-Related Categories (Beverage Universe)