THE NEW CONVERSATION ABOUT NUTRITIVE SWEETENERS

1. THE NEW CONVERSATION ABOUT NUTRITIVE SWEETENERS CHANGING CONSUMER PERCEPTIONS AND THE IMPACT ON CONSUMER PURCHASE DECISIONS CAPRI SUN® and logo are registered trademarks of Rudolf Wild GmbH & Co. GATORADE® and logo are registered trademarks of Stokley-Van Camp, Inc.. HEINZ® brands are registered trademarks of H.J. Heinz Co. HUNT’S® brands are registered trademarks of ConAgra Brands Inc. MIRACLE WHIP® and logo are registered trademarks Kraft Foods, Inc. NUTRI-GRAIN® and logo are registered trademarks of The Kellogg Company.POWERADE® and logo are registered trademarks of The Coca-Cola Company. SARA LEE® and logo are registered trademarks of Sara Lee™ Holdings used under license. International Baking Industry Exposition October 2013

2. Martin Concannon Founder and Managing Director, Lafayette Associates John S. White, Ph.D. President and Founder, White Technical Research

3. FIRST & FOREMOST: How can we continue to create food and beverage products that consumers will want to buy? 3

4. TOP QUESTIONS FROM F&B INDUSTRY PROS • Why do I read or hear that a large percentage of consumers are concerned about HFCS? • How do I know that research that says different applies to my consumers? • If consumers say they want to avoid “sugar,” don’t they really mean HFCS? • Isn’t it true that consumer attitudes about HFCS drive their purchase decisions? • If nothing else, isn’t “HFCS-Free” a niche market for incremental volume and share?

5. WHY WE ARE HERE: To share 3rd-party research that will answer those questions and help you make informed business decisions about sweeteners. 5

6. Consumer Attitudes Toward Sweeteners & HFCS The Science of Sweeteners Sweeteners & Consumer Purchase Decisions Sweetener Strategies Summary & Looking Ahead 6

7. WHAT DO CONSUMERS THINK?

8. FIRST, WHAT DO YOU THINK CONSUMERS ARE THINKING? Is the media coloring your perception of consumer attitudes? “You Really Can’t Eat Just One, and Here’s the Reason” (3/17/13) Fructose changes brain to cause overeating, scientists say (1/2/13) “Mom: High fructose corn syrup caused diabetes” (6/24/13) “Is Sugar Toxic?” (4/01/12) “High fructose corn syrup linked to global diabetes crisis”(11/27/12) “New Research Suggests High Fructose Corn Syrup Triggers Addictive Consumption Similar to Drugs” (6/6/13)

9. TOP QUESTIONS FROM F&B INDUSTRY PROS • Why do I read or hear that a large percentage of consumers are concerned about HFCS? • How do I know that research that says different applies to my consumers? • If consumers say they want to avoid “sugar,” don’t they really mean HFCS? • Isn’t it true that consumer attitudes about HFCS drive their purchase decisions? • If nothing else, isn’t “HFCS-Free” a niche market for incremental volume and share?

10. THE BIG GAP: WHAT PEOPLE SAY AND WHAT THEY DO Responses to unaided questions reveal top-of-mind concerns, true attitudes and likely behavior. It’s the difference between what people say and what they actually do – as conclusively shown in extensive research by Mintel, NPD Group, and Nielsen. Source: Mintel.

11. American consumers are much more concerned about total sugars in their diet than about any specific sweetener.

12. In fact, consumers avoid added sugars more than any other ingredient.

13. TOP QUESTIONS FROM F&B INDUSTRY PROS • Why do I read or hear that a large percentage of consumers are concerned about HFCS? • How do I know that research that says different applies to my consumers? • If consumers say they want to avoid “sugar,” don’t they really mean HFCS? • Isn’t it true that consumer attitudes about HFCS drive their purchase decisions? • If nothing else, isn’t “HFCS-Free” a niche market for incremental volume and share?

14. HOW DO WE KNOW?WE TALKED TO CONSUMERS. Mintel research focuses on moms, the primary shopper. MINTEL OCTOBER 2012 SURVEY: • 2,400 primary household grocery shoppers • Nationally representative, regionally balanced samples • Methodology: Unaided and aided questions HOUSEHOLDS: + Children under 18yrs + No children INCOME RANGE: < $35,000 through >$85,000 EDUCATION: < High school through doctorate degree Sample weighted by age and education prior to analysis. 75% of primary shoppers being women is within range of other studies. Results accurate +/- 2.0% at a 95% confidence level..

15. TOP QUESTIONS FROM F&B INDUSTRY PROS • Why do I read or hear that a large percentage of consumers are concerned about HFCS? • How do I know that research that says different applies to my consumers? • If consumers say they want to avoid “sugar,” don’t they really mean HFCS? • Isn’t it true that consumer attitudes about HFCS drive their purchase decisions? • How do I know that consumer research is relevant to my brand? • If nothing else, isn’t “HFCS-Free” a niche market for incremental volume and share?

16. SEGMENTATION BASED ON COMBINATION OF AIDED AND UNAIDED • Q3. In the last six months, have there been any  particular foods, beverages, or specific ingredients that you and your family are trying to consume less of or avoid? (Multiple responses accepted) *Includes HFCS & Corn Syrup (Unaided) • Q8. Which of the following statements best describes your beliefs regarding the foods and beverages that you or your family consume?(Aided) • I/we limit or try to avoid high fructose corn syrup specifically • I/we have no real concerns with respect to the sweet content of the foods and/or beverages I/we consume • I/we limit or try to avoid sugar of any kind • It is the overall sugar content that matters more to me/us, not the high fructose corn syrup Source: Mintel, October 2012; N = 2,400

17. CONSUMERS FALL INTO THREE MAIN SEGMENTS. • Sugars Avoiders: Say they avoid or limit sugars on an unaided basis. • This segment includes HFCS Avoiders – those who mention HFCS specifically on an unaidedbasis. • Sugars Concerned:On an aidedbasis, say they limit all sugars, or that total sugars matter more than HFCS. • This segment includes HFCS-Concerned – those who say on an aidedbasis that they limit or avoid HFCS specifically. • Eaters: No concerns about sweeteners in foods and beverages. Source: Mintel, October 2012; N = 2,400

18. “HFCS AVOIDERS” – WHAT PART OF THE POPULATION? HFCS AVOIDERS: 2.9% Only 2.9% of consumers avoid HFCS specifically. EATERS: 20.3% SUGARS CONCERNED: 58.4% SUGARS AVOIDERS 21.3% HFCS CONCERNED: 23.1% unaided aided unaided aided 79.7% of consumers are concernedabout total sugars. Source: Mintel, October 2012; N = 2,400

19. WHAT ARE CONSUMERS DEMANDING? LESS ADDED SUGAR. In the last six months, have there been any particular foods, beverages, or specific ingredients that you and your family are trying to consume less of or avoid? (UNAIDED) Source: Mintel 2012; N = 2,400 Q3. In the last six months, have there been any particular foods, beverages, or specific ingredients that you and your family are trying to consume less of or avoid? (multiple responses accepted) * “HFCS” Includes HFCS and corn syrup

20. PRIMARY SHOPPERS DON’T LOOK FOR HFCS ON LABELS. Frequency of label-reading (UNAIDED) Information sought on labels (UNAIDED) Source: Mintel 2012; N = 2,173 Q2. When you read labels, what information are you looking for? (multiple responses accepted) * “HFCS” Includes HFCS and corn syrup

21. FEWER THAN 3% OF SHOPPERS SPECIFICALLY AVOID HFCS IN 12 HIGH-VOLUME FOOD AND BEVERAGE CATEGORIES. Category Shoppers Specifying HFCS as a Concern When Buying Products (UNAIDED) Q11. You said that you consider sugar or other sweeteners when buying …… Please tell us why. (Open-ended response = “Avoid/dislike HFCS”) Source: Mintel 2012; N = 2,008

22. SHOPPERS ARE FAR MORE CONCERNED ABOUT ADDED SUGARS OVERALL THAN ABOUT HFCS SPECIFICALLY. Category shoppers specifying HFCS as a concern when buying products Category shoppers who consider sugar/sweeteners when buying products Q10. Do you consider ….when buying ...? Q11. You said that you consider sugar or other sweeteners when buying …… Please tell us why. (Open-ended response = “Avoid/dislike HFCS”) Source: Mintel 2012; N = 2,008

23. HFCS IS A CONCERN FOR THREE OUT OF 100 FRESH/PACKAGED BREAD BUYERS. Q10 Do you consider ….when buying ...? Q11 You said that you consider sugar or other sweeteners when buying fresh packaged bread. Please tell us why? (open ended) 2012 Base n =2,008 2012 Base n Buy Fresh/Packaged Bread =1,649

24. TWO IN 100 COOKIE/CAKE/PASTRY BUYERS MENTION HFCS AS A CONCERN. Q10 Do you consider ….when buying ...? Q11 You said that you consider sugar or other sweeteners when buying cookies, cakes and pastries Please tell us why? (open ended) 2012 Base n =2,008 2012 Base n Buy Cookies, Cakes and Pastries= 1,024 Totals equal more than 43% due to multiple responses

25. LOW SEARCH VOLUME FOR “HFCS” INDICATES LOW INTEREST. Search volume for “Sugar” is more than 60x greater than for “HFCS” – a clear sign of what matters more to consumers. July 2009 July 2012 July 2010 July 2013 July 2011 *”High Fructose Corn Syrup” search combines commonly used terms, “High Fructose Corn Syrupand “Corn Syrup” Source: Google Trends, Scale is based on the average traffic in US only from January 4, 2004

26. SOCIAL MEDIA “BUZZ” DOES NOT REFLECT HIGH INTEREST. “…We need to take into account the motivations of some commentators seeking to create false controversies. A high volume of comments on sites such as Facebook and Twitter does not necessarily translate to high consumer interest.” K.D. Paine, CEO, KDPaine & Partners Actual conversation: Mainly on forums and personal blogs by people heavily engaged in activities such as organic farming and body-building. Additional 15%of posts from people paid to post & from automated “bots.” >60%of posts about HFCS are by people who post only once or twice a year – clearly not a high priority issue for them. Source: KDPaine & Partners, 2011 Base: 301,497 comments, posts and published conversations

27. CONSUMER ATTITUDES:Research shows that consumers are focused on added sugars overall, not on the sweetener type. Unaided questions reveal top-of-mind concerns, true attitudes, and likely behavior. 27

28. THE SCIENCE OF SWEETENERS

29. HFCS IS MORE THAN JUST A Sweetener. • Maintains freshness in condiments  • Promotes browning of baked goods • Enhances fruit and spice flavors in marinades  • Aids fermentation in breads and yogurts  • Retains moisture in breakfast bars and cereals • Makes high-fiber baked goods and cereals more palatable • Maintains consistent flavors in beverages • Keeps ingredients evenly mixed in salad dressings

30. CLEAR SCIENTIFIC AGREEMENT HFCS and table sugar are safe … … with no nutritivedifference.

31. IS HFCS NATURAL? YES, UNDER FDA POLICY. HFCS meets the Food and Drug Administration’s test for use of the term “natural.” HFCS is made from corn, a natural grain product, and enzymes used in production of HFCS are found in nature. Source: Letter from Geraldine June, FDA Center for Food Safety and Applied Nutrition, to Audrae Erickson, President of the Corn Refiners Association, July 3, 2008.

32. HFCS use decreased as obesity rates continued to rise. Data for the last 10 years do not support the HFCS hypothesis. HFCS OBESITY Data: USDA Economic Research Service (U.S. per capita loss-adjusted food availability: “Total Calories”); Flegal et al, JAMA, 2010;Flegal et al, JAMA, 2012.

33. HFCS is not a significant part of the calorie increase. OBESITY =EXCESS CALORIES Average Calories Consumed Daily Per Capita (U.S.) Percentage of Caloric Growth • 2010 • 1970 • 2,076 • 2,534 • +458 Calories Source: Economic Research Service, USDA (U.S. per capita loss-adjusted food availability: “Total Calories”)

34. It’s not the type of added sugar that matters to consumers; the issue is total sugar consumption. The sweetener conversation has shifted. USDA 2010 dietary guidelines emphasize total caloric intake; industry labeling initiatives are in sync, highlighting total sugar content.

35. CONFUSION ABOUT HFCS MISCHARACTERIZEDSome nutritionists and researchers have erroneously suggested a direct and unique causation between the consumption of HFCS and obesity. MISUNDERSTOODConsumers have been told that sugar is a more natural substitute for HFCS. MISALLOCATEDSome companies have begun to replace HFCS with other sweeteners in their brands for marketing purposes.

36. There is no meaningful nutritional difference between HFCS and sugar. There is widespread agreement among health and science experts that

37. SWEETENERS & CONSUMER PURCHASE DECISIONS

38. TOP QUESTIONS FROM F&B INDUSTRY PROS • Why do I read or hear that a large percentage of consumers are concerned about HFCS? • How do I know that research that says different applies to my consumers? • If consumers say they want to avoid “sugar,” don’t they really mean HFCS? • Isn’t it true that consumer attitudes about HFCS drive their purchase decisions? • If nothing else, isn’t “HFCS-Free” a niche market for incremental volume and share?

39. Retail scan data shows What Shoppers are Really Doing. Nielsen scanner data tracked sales performance of brands that switched from HFCS to sugar: more than 3,200 SKUs across 25 leading brands in three major product categories. Source: Nielsen

40. NUTRI-GRAIN BREAKFAST BAR SHARE ($) OF TOTAL BREAKFAST BAR MARKET Nutri-Grain brand dollar sales share has not increased with recent reformulation to HFCS-free. Source: Nielsen US Retail Sales All Outlets Combined (including Walmart). March 2013.

41. SARA LEE BREAD SHARE ($) OF TOTAL FRESH BREAD MARKET Product reformulation to HFCS-free in 2010 has not increased brand dollar share. The uptick in sales the last four months is likely due to retail promotions. Source: Nielsen US Retail Sales All Outlets Combined (including Walmart). March 2013.

42. Consumer Purchase DECISIONS: The overwhelming majority of consumers don’t respond to strategies based on promoting single type of sweetener. 42

43. SWEETENER STRATEGIES

44. SWEETENER STRATEGIES VARY WIDELY ACROSS BRANDS. New data emerging on performance of brands with different approaches. Many have already switched back to HFCS – including “Mom & Kid” brands.

45. REPLACE: MIRACLE WHIP 52-week sales trend shows no sales gain from either sweetener change. HFCS Sugar 52 wk trailing Source: Nielsen US Retail Sales All Outlets Combined (including Walmart). March 2013.

46. TOP QUESTIONS FROM F&B INDUSTRY PROS • Why do I read or hear that a large percentage of consumers are concerned about HFCS? • How do I know that research that says different applies to my consumers? • If consumers say they want to avoid “sugar,” don’t they really mean HFCS? • Isn’t it true that consumer attitudes about HFCS drive their purchase decisions? • If nothing else, isn’t “HFCS-Free” a niche market for incremental volume and share?

47. ExtenD: Heinz gives up as much as it gains. Low-salt, HFCS-free SKUs cannibalized about 7% share from their existing base. HFCS Sugar Source: Nielsen US Retail Sales All Outlets Combined (including Walmart). March 2013.

48. PromotE: Hunt’s Brand reformulation didn’t pay off. “Overall, consumer demand for HFCS-free ketchup was not as strong as expected.” - Hunt’s spokesperson, May 31, 20121 HFCS Sugar 1. Source: http://www.foodnavigator-usa.com/Market/ConAgra-switches-back-to-HFCS-in-Hunt-s-ketchup-citing-lackluster-demand Source: Nielsen US Retail Sales All Outlets Combined (including Walmart). March 2013.

49. CAPRI SUN SALES: GAINS FROM PROMOTIONS, NOT FROM SWITCHING SWEETENER. HFCS Sugar 24 wk trailing Source: Nielsen US Retail Sales All Outlets Combined (including Walmart). March 2013.

50. Capri Sun “Roarin’ Waters”: HFCS-SWEETENED, and lower-total-sugars strategy boosts sales. Success of HFCS-sweetened Roarin’ Waters reflects the fact that lower sugars overall, not a specific type of sweetener, is what matters to primary shoppers (moms) – which Capri Sun purposely leveraged. Consolidated sales: $259.9 million HFCS 52wktrailing Source: Nielsen US Retail Sales All Outlets Combined (including Walmart). March 2013.