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zenithinternationalspecialist consultants to the food and drink industries worldwide

STRATEGY & MANAGEMENT MERGERS & ACQUISITIONS COMMERCIAL & MARKET OPERATIONS & TECHNICAL WATER & ENVIRONMENT PACKAGING & DISTRIBUTION

Food Matters Live

LACTOSE FREE AND DAIRY FREE

PRODUCT OPPORTUNITY

Presentation on behalf of Esther Renfrew,

Market Intelligence Director, Zenith International Ltd

18th November 2014, London

zenithinternationalspecialist consultants to the food and drink industries worldwide© Zenith International Ltd 20142

CONTENTS

Lactose free in context 1-3

Lactose free brand leaders 4-6

Lactose free misconceptions 7-8

Dairy free alternatives 9

Dairy free brand leaders 10-11

Dairy free innovation 12-13

Dairy free investment 14

Trends summary 15-16

zenithinternationalspecialist consultants to the food and drink industries worldwide© Zenith International Ltd 2014

1: LACTOSE FREE IN CONTEXT

3

Lactose free opportunity

Dairy market dynamics

Prevalence of lactose

intolerance

Competition –existing lactose free products &

dairy alternatives

Socio-economic factors

zenithinternationalspecialist consultants to the food and drink industries worldwide© Zenith International Ltd 2014

2: INTERNATIONAL DAIRY MARKETMilk/yogurt/cheese consumption in 33 countries

4

191

193

197

200

186

188

190

192

194

196

198

200

202

2008 2009 2010 2011

000 tonnes

+1.2%

+1.6%

+1.7%

zenithinternationalspecialist consultants to the food and drink industries worldwide© Zenith International Ltd 2014

3: LACTOSE INTOLERANCE WORLDWIDE

5

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4: LACTOSE FREE BRAND LEADERS

6

Brand: Lactaid

Country: USA

Brand owner:

McNeil Nutritionals

Brand: MinusL

Country: Germany,

other European markets

Brand owner: Omira

Oberland-Milchverwertung

Brand: Eila Zero Lactose

Country: Finland, other

European markets

Brand owner: Valio

zenithinternationalspecialist consultants to the food and drink industries worldwide© Zenith International Ltd 2014

5: LACTOSE FREE BRAND LEADERS

7

Brand: Zymil

Country: Italy, plus others

Brand owner: Parmalat

Brand: Lactofree

Country: UK, Ireland

Brand owner: Arla Foods

zenithinternationalspecialist consultants to the food and drink industries worldwide© Zenith International Ltd 2014

6: LACTOSE FREE INNOVATION

8

Mainstream brands

• US Yoplait yogurt – 4 lactose free variants

• Europe Activia yogurt – lactose free in Germany, Scandinavia

• New Zealand Anchor milk – 2 variants

Technology improvement

• Better taste

• Less sweet

Awareness and availability

• Health, allergy concerns

• Health stores, categories

zenithinternationalspecialist consultants to the food and drink industries worldwide© Zenith International Ltd 2014

7: LACTOSE FREE MISCONCEPTIONS

9

• Gastrointestinal problems mistakenly self-diagnosed as

lactose intolerance

• Lactose intolerance is same as milk allergy

• Lactose intolerant should stop dairy consumption

• Lactose free not real dairy

So some lactose intolerant may miss out on dairy nutrients

such as calcium, phosphorus, vitamin D, proteins

zenithinternationalspecialist consultants to the food and drink industries worldwide© Zenith International Ltd 2014

8: MISCONCEPTION REMEDY

10

Education

• To dispel myths

• To ensure consumers understand lactose free dairy benefits

Lactose free does not mean avoid dairy

zenithinternationalspecialist consultants to the food and drink industries worldwide© Zenith International Ltd 2014

9: DAIRY FREE ALTERNATIVES

11

• Soy

• Cereal – rice, oats, barley

• Nuts – almonds, cashew, coconut, hazelnut, walnut

• Plant – sunflower

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10: DAIRY FREE BRAND LEADERS

12

Alpro Almond

Breeze

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11: DAIRY FREE BRAND LEADERS

13

Dream Silk

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12: DAIRY FREE INNOVATION

14

• Fortification with vitamins

A, B2, B12, D2, E

• Fortification with minerals

Mainly calcium

• Clean label

Lactose free, dairy free, cholesterol free, GMO free,

additive free, preservative free

• Organic ingredients

zenithinternationalspecialist consultants to the food and drink industries worldwide© Zenith International Ltd 2014

13: DAIRY FREE INNOVATION

15

Dream

Gelato

2013

Silk

Fruity &

Creamy

2013

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14: DAIRY FREE INVESTMENT

16

September 2014

WhiteWave Foods to buy so Delicious Dairy Free for $195 million

zenithinternationalspecialist consultants to the food and drink industries worldwide© Zenith International Ltd 2014

15: LACTOSE FREE TRENDS

17

• Widening product portfolio

• Co-existence with dairy

• Rising consumer awareness

• Self diagnosis boosting demand

• Better tasting products

• Fortification

• New category development – curd cheese

• Lower fat and sugar – stevia

• Packaging range extension - family

zenithinternationalspecialist consultants to the food and drink industries worldwide© Zenith International Ltd 2014

16: DAIRY FREE TRENDS

18

• Ever broader choice beyond soy

• Soy losing halo – health, genetic modification

• Almond rising – high calcium, high antioxidants, low calorie, no

saturated fat, vitamin E, vegan

• Cereals and nuts appearing

• Blends beginning

• Range extensions from milk to yogurt, desserts, ice cream

• Fortification

• Clean label emphasis

For more information on this presentation or on any of Zenith’s services, please contact:

Or telephone Zenith’s head office on +44 (0)1225 327900.

STRATEGY & MANAGEMENT MERGERS & ACQUISITIONS COMMERCIAL & MARKET OPERATIONS & TECHNICAL WATER & ENVIRONMENT PACKAGING & DISTRIBUTION

zenithinternationalspecialist consultants to the food and drink industries worldwide

Esther Renfrew Richard Hall

er@zenithinternational.com rhall@zenithinternational.com

www.zenithinternational.com

www.globaldrinks.com

www.bevblog.net