kerry_ helping healthier snacks taste better 03 11 16 -2

1 | Taste & Nutrition

Have Your Snack and Eat It Too:

Helping Healthier Snacks Taste Better

Naturally

Geri Berdak

VP, Strategic Marketing

March 11, 2016,


Objectives of session

• Familiarize you with Kerry – The Taste and Nutrition Company

• Share top line perspective on snacking• Provide recommendations for manufactures

looking to enter or grow within this space

Who is Kerry?


KerryDelighting and nourishing consumers across the globe with products people enjoy and feel better about.

To be the leader in taste and nutrition for the global food, beverage and pharmaceutical industries, creating sustainable value for our customers, employees, environment, community and shareholders.

Our Vision

To help delight and nourish consumers across the globe.

Our Mission

Our Values

Commitment TeamworkExcellence

EntrepreneurshipValue Creation


Unmatched Taste & Nutrition Solutions

Applications & Culinary Excellence

Insights & Innovation

Food & Beverage Heritage

Science & Technology

Kerry - The Taste & Nutrition Co.

Our heritage, knowledge and expertise enable us to deliver better taste, health and wellbeing globally.



40+ Years of Strategic Evolution


Taste

We create great tasting products made from trusted, authentic and wholesome foods and flavours.

• Underpinned By: Understanding the

fundamental science of Taste

Flavour Texture Mouthfeel Appearance Aroma Sensory

• Unrivalled breadth of applications and

culinary expertise

• Leading sensorial science capability

• Delivered By: A Leading Taste Portfolio

To Technology & Products Page


Nutrition

We develop more nutritious products that are inspired by and good for people.

• Underpinned By: Understanding the

fundamental science of Nutrition

Fortification Dietary Nutrition Life Stages Need States Taste

• Unparalleled functional technology

portfolio complemented by leading

authentic taste delivery

• Key partnerships with research and

educational institutions

• Delivered By: A leading Nutrition Portfolio

To Technology & Products Page


What Consumers Want…

Fresh, Authentic

Convenient

Better-for-You Great Taste

SustainableTransparent Clean Labels


Simply Nature

Great Taste. Pure and Simple.Simply Nature develops partnerships with farmers and growers the world over to learn the secrets of growing the most perfect vanilla, cocoa, coffee, fruit, vegetables, herbs and spices. We combine this with our technological awareness to extract the purest ingredients available.

• In-depth expertise in all-natural extraction processes to maintain real taste

• Fully traceable products, with declarable origins and all-natural labelling

• Expertise in tailoring extractsto suit local tastes

Snacking


US Snacking Segments: Value & Growth

Total Volume Description

Latest 52 Wks - W/E 12/26/15 2yr $ CAGR

Meat Snacks $ 2,676,173,271 9.5%

Bagged/Salty/Savory $ 31,346,605,166 3.5%

Confectionary $ 24,428,225,537 2.1%

Bars $ 5,078,841,087 4.3%

Bakery $ 19,480,062,711 2.4%

Dairy $ 11,573,876,300 4.4%

Snacking Grand Total$ 94,583,784,072 3.2%

Source: Nielsen AOD $ volume – xAOC plus Convenience, 52 weeks ending 12/26/15


What’s changed in snacking category the past 10 years?


Frequency of snacking has increased in the US

Over the last decade there has been a 44% increase in people having at least 3 snacks per day.

16

Source: US Department of Agriculture

17 | Taste & Nutrition17 | Snack Market Insights

Nearly all US adults are snacking… but Millennials are driving the category

• Millennials accounted for 32% of the total population in 2014 - one of the most populous generations in history.

• They are also the most avid snacks consumers, with 53% of the Millennial generation eating more than three snacks per week, compared to 42% for Generation X and 30% for Baby Boomers.

0%

20%

40%

60%

80%

100%

Millennials Generation X Baby boomers Swinggeneration

% o

f re

spo

nd

ents

World: Snack Consumption Outside the Home 2013

1-2 per week 3-4 per week

Source: Euromonitor International online consumer survey –Global Consumer Trends 2013

5-6 per week 7+ per week

Lives characterized by less structured routines and eating habits means higher incidence of ad hoc snacking

Consistent daily habits and established eating patterns with lower incidence of snacking among older cohorts


The meaning of snacking and meals is changing

18

Satiety Better for You Indulgent


Any and every category is a potential source of snacks

“Our competition is not only other jerky manufacturers.

Any snack item is competing for ‘share of stomach’.”

19

- Jon Sebastiani, founder of Krave


0 10 20 30 40 50

Is organic

Has limited or no added salt

Does not contain trans fats orhydrogenated oils

Reduced or low calorie

Does not contain corn syrup

Has limited or no artificialingredients

Has limited or no added fat

Has limited or no added sugar

Contains added vitamins orfiber

Supported by a healthorganisation

Is all natural

% of respondents

Purchasing Decision: Which of the following factors or ingredients do you look for on food

labels?

Interest in health is impacting snacking expectations….moving toward wellness

• Low/Reduced snacks are no longer resonating well with consumers, who prefer taste and indulgence over artificials

• However, stealth reduction, or the reformulation of products by incorporating healthier ingredients which naturally have lower salt or fat content, appears to be faring well.

• 44%* of consumers agreed that they look for natural ingredients on food labels, as opposed to 20% for limited or no salt.

• Alternative production techniques, such as popping, baking and kettle cooking, are increasingly being explored by snack manufacturers to tap into growing consumer demand for such products.

*Source: Euromonitor International online consumer survey – Global Consumer Trends 2013

What's next in snacking?


2014 and 2015 have seen a surge in savorysnacks, particularly crisps, emphasising the

heritage and provenance of their ingredients.

Provenance to gain ground as Consumers go in search of novelty

Drivers of the Growth in Craft Snacks

Ethical considerations

and locally sourced Flame Grilled --------- Caramelized Onion ------ Chardonnay

Lobster Wine Vinegar

Lack of Customized

Snacks

Rise in Gourmet Cuisine

Against Big Company Mentality


Stealth reduction will continue to rank high on the agenda

• We are seeing increasing demand for naturally healthy snacks with

• Alternative ingredients (vegetables, pulses, super grains, multi grains)

• Alternative processing techniques (popped, kettle cooked and baked)

• Boasting protein (nuts, pulses, meat)

• Focusing on heritage (ancient grains, traditional flavours) is on the rise.

• To take advantage of the stealth reduction trend the taste and texture, in particular crunchiness, properties of their products must be preserved.

Stealth Reduction

Ingredient reformulation

Alternative processing

Protein

Wellness

Reduced salt and sugar

Reduced fat

Reduced carbs

ConceptExamples


Buttered PopcornReal dairy ingredients create a snack without compromise.

MegaTrends:

Features: Great butter flavor without the added fat

Benefits: Naturally good for you in the minds of consumers, popcorn is elevated with ‘from the source’ butter taste.

©2016 KERRY - CONFIDENTIAL AND PROPRIETARY

Pure & SimpleTASTE

Good For YouNUTRITION

Health & NutritionPremiumization

On-the-Go/ Convenience


Black Bean Sticks

A better-for-you indulgent alternative to traditional snacks like chips, and contain protein and a good source of fiber with an on-trend ‘food truck’ taste.

MegaTrends:

Features: Good source of fiber

Benefits: Beans and vegetables for snacks is a hot trend that resonates with consumers as naturally ‘better-for-you’. Chimichurri is a global flavor that is hot in the food truck scene.

©2016 KERRY - CONFIDENTIAL AND PROPRIETARY

Pleasure & Indulgence

TASTE

Better For YouNUTRITION

Health & NutritionPremiumization

On-the-Go/ Convenience

Exploration/ Multi-sensorial


Target the right consumers

Begin by targeting young adults - the heaviestconsumers of snacks

Be open to the many new product opportunities

Consumers are very willing to buy new and innovative

healthy snacks

Reinvent “old” snacks

Shake up old categories and markets - renovating them

tasty and healthy

Give consumers permission to indulge

One of the most effective strategies for snacking

Make your snack premium

Convenient, naturally healthy snacks can

command a degree of premium

Summary: Five insights will help you to succeed in snacking


Recommendations

1. Being nimble and/or leveraging access to start-ups to maintain innovation will be key

2. Tailor snack products for specific purposes, new channels, different day parts

3. Focus on stealth reduction, proactive wellness, clean labels, authentic taste, and transparency of supply chain

4. Authentic taste will be a key driver -Leverage clear packaging to deliver a clean message

‘Together, we can

create world-class solutions that delight and nourishconsumers.’


We invite you to the Kerry’s booth to sample:

Chipotle Mango Black Bean Sticks

Tropical Refresher with Wellmune®

BOOTH #455


Q&A Time

Thank you for attending!

kerry_ helping healthier snacks taste better 03 11 16 -2

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