THE PERFECT STORM THE GLOBAL FREE FROM MARKET 2014 - 2015

1. THE PERFECT STORMTHE GLOBAL FREE FROM MARKET 2014 - 2015 Hamish Renton | Managing Director 3rd June 2014 | Free From Expo, Brussels

2. MY PERSPECTIVE • Over a decade of experience in Free From. • As a leading Retail Exec, launched iconic Free From range in Tesco in 2004. • 8 years on the board of FTSE 250 listed PLCs as MD/Marketing Director. • Set up and run specialist Free From agency working for UK, EU & Global clients. • Small team of Free From specialists, working with like minded clients. • Worked on numerous Free From projects and helped to launch various successful Free From brands.

3. PAST EXPERIENCE Market Entry Consultancy Category Management Marketing & Branding Sales & Distribution Market Research Product Packaging

4. FREE FROM META TRENDS PREMIUM More products aimed at higher end of market Despite lingering uncertainty, more products being aimed at the higher end of the market. Opportunities in confectionary, desserts, frozen food, ambient grocery and bakery. HEALTH Shoppers more health conscious Increasing numbers of people without coeliac disease choosing gluten free lifestyle, with weight loss a key motivator. Increasing time pressure and longer working hoursled to an increased demand for more convenient solutions. Growth in snacks, ready meals, pre-sliced and part cooked. CONVENIENCE Shoppers more time pressed

5. THE PERFECT GROWTH STORM Free From sectors are being restructured with an increase in mergers, acquisitions and disposals. Scale is causing national champions to have regional aspirations. 4. RETAILERS CONTINUE TO GROW 3. INCREASING DEMANDS & NEW CONSUMER TRENDS 2. NEW RULES FOR SUPPLY 1. INCREASINGLY TOUGH COMPETITION Due to growth in mature Western markets, global demand will increase with the emergence of new Free From markets in Eastern Europe, China, India etc. Globalisation has raised awareness and understanding of Free From. Ingredients are subject to global commodity price variations meaning price volatility. Retailers are continuing to consolidate and internationalize with private label increasing its market share. FREE FROM GROWTH STORM

6. WHY EXPORT? Free From companies that export: • Achieve levels of growth not possible domestically. • Increase resilience of revenues and profits. • Achieve economies of scale not possible domestically. • Increase the commercial lifespan of Free From products and NPD returns. • Improve financial performance.

7. EXPORTING ADVICE • If focusing on the right markets, exporting can be very valuable. • It is important to get advice on the right people to deal with and consider which products are best to trade. • Must take advantage of trade grants and maximize trade fairs. • Enlist a trade adviser or business partner. • Persevere in setting up meetings with buyers.

8. SUCCESS FACTORS • Growth is essential to value creation and long term survival. • ‘Where you play’ (momentum) is even more important than ‘how you play’ (execution). • Even mature categories in mature markets usually have ‘pockets of growth’ – where are they for you? • Most management teams spend too little time measuring and managing momentum – do you do this?

9. EUROPEAN TRENDS UNITED KINGDOM • UK gluten free market has grown by 10% in 2013, expected to grow by more than 50% by 2016 (Mintel). • British market for gluten free is worth £238m according to the FSA for 2013. • 80% of all gluten free products are now sold in supermarkets, instead of just health food stores. • Continued belief that the growth in gluten free is due to those wishing to avoid gluten for health reasons, rather than those with actual intolerances and allergies. • FRANCE • After a slow start, and years of resistance to fad diets, France has finally caught up with the gluten free trend. • Looking to neighboring markets has demonstrated Free From’s growth potential. • Sales of gluten free products in large scale retailers have grown tenfold since 2008. • Nutrition & Santé, which acquired gluten-free specialist Valpiform in 2012, has an entire factory dedicated to research and development in gluten-free products. ITALY • 27% of the daily intake of gluten free products is bread. • This high carb diet has called for increase in gluten free bread, pastas and pizzas. • 1 in 250 people have coeliac disease. • Italian schools now test children for gluten intolerances before kindergarten. • Travel company ‘GF journeys’ have designed a week long Italian travel tour through Tuscany, Parma and Rome, making the most of gluten free pasta, bread, pastries and more. THE NETHERLANDS • 50,000 people living gluten free. • Over 500 different gluten free products on offer. • Albert Heijn’s website provides a list of gluten free products. • McDonalds now offers gluten free burgers. • Sonneveld has developed a gluten free breadmix under the Sonfit product range, which has been well received in the market. • SPAIN • 1 out of every 289 adults and 1 of every 118 children suffers from coeliac disease. • Various apps are available to help consumers monitor their gluten intake. • Federation of Associations for Coeliacs in Spain (FACE) has given stamps of recognition to gluten free restaurants and hotels. • Fast food restaurants offering gluten free burgers and buns. • Mercadona, retail market leader, has a range of over 200 gluten free products in own label. GERMANY • Germany is Western Europe’s largest market for gluten free and many of these products are also lactose free. • Sales have risen by a fifth since 2010. • DrSchar, market leader, has planned to expand product ranges, focusing on its DS Gluten Free brand, which is known as the ‘everyday and speciality bread category’. • DeutscheBack has developed a TopBake Rice Bread series available as a 100% ready mixed flour and 50% premix. • People fear that Free From products are still too high in sugars and saturates.

10. NORTH AMERICAN TRENDS CANADA • Gluten free, allergy-conscious food trend is Canada’s top food trend for 2014, knocking the old trend ‘local food movement’ from the top spot, which it held for 4 years previously. • More than 330,000 Canadians are believed to be affected by coeliac disease but only 110,000 have been diagnosed according to the Canadian Digestive Health Foundation. UNITED STATES • Products that have always been gluten free (popcorn, rice crackers, nuts) realising the importance of a ‘gluten free’ on pack label. • Sales of gluten free products were expected to total $10.5 billion in 2013 according to Mintel, with sales predicted to elevate to over $15 billion in 2016. • Wegmans is the country’s largest seller of gluten-free products, with some stores stocking gluten free products in up to 100 feet of linear space. • Boulder Brands’ gluten free bakery companies, Glutino and Udi’s have seen a sales increase of 50% last year with Udi’s providing hot dog buns in most major baseball parks as well as gluten free bagels and muffins for major chains such as Dunkin’ Donuts. • The US was the first country to introduce gluten free online dating websites.

11. THE FUTURE OF FREE FROM • Likely to be increased product ranges, not just packaged and baked goods, but more popularity for pasta and noodles made from buckwheat and other grains. • Gluten free expected to remain the top food and nutrition trend for 2014. • More and more convenience stores will be stocking gluten free products. • Gluten free products likely to get healthier in the future as those who opt in for health options, will steer clear of products high in salt, sugar and fat.

12. GET IN TOUCHHAMISH RENTON ASSOCIATES Rockwood House, Park Hill Road, Torquay, TQ1 2DU 01803 203387 info@hamishrenton.com