5/19/2017

Long Life Yoghurt for AfricaOpportunities, Challenges and Solutions

Brett WordonApplication SpecialistDuPont Nutrition and Health

Milk Yogurt Time

Yoghurts Achilles Heel Shelf life

Yoghurt is a living biome, resulting in shelf lifes of several days / weeks

CONFIDENTIAL2

Starter culture

The Ideal Yoghurt Long life yoghurt

Properties of long life yoghurt:

does not need to be chilled, and is either eaten with a spoon, as stirred yogurt, often with added fruit), or else drunk directly from the package as drinking yogurt.

maintains 9-12 months stable shelf life

must match the expected structure and sensory quality requirement compared with fresh fermented stirred and drinking yogurt

Technically not yoghurt by legislative definition.

Fresh Fermented Milk from Around the World

Stirredyogurt Set yogurt

Sweet lassi

Dahi

Greekyogurt

Stirredyogurt

Skyr

Greek style yogurt

Ayran

Doogh

Buttermilk/fil

Viili

Ryzenka

Long-life yogurt

Long-life yogurt

Maas

Leben Set yogurt

Stirredyogurt

Stirredyogurt

Stirredyogurt

Strawyogurt

5/19/2017 5

Emerging Markets driving the growth of long life yoghurts

- Increased consumer demand for diary products- Infrastructure not in place for retail

Sub-Saharan Africa: Opportunity to penetrate additional

consumer segments Access to nutritious, affordable and

safe dairy products Also healthy positioning (low fat,

fruited) Existing products indicate no need

for refrigeration on the package

Middle East & North Africa: Opportunity to enlarge consumption

occasions Position as convenient healthy,

refreshing dairy Do not indicate long shelf life on

the package, as it creates scepticism

Asia Pacific: Opportunity to continue to grow

with the market Positioned as premium, safe,

convenient, healthy natural/pure

Note! South America is also a market for ambient yogurt, but is not included in the scope of this presentation.

Long Life Yoghurt in China since 2010

6

The market for this exciting product innovation has grown at a rate, accounting for 30% of the countrys total yoghurt category in 2016 and is expected to achieve sales of almost $5 billion by the end of 2017.

China: Bright Dairy relaunched its Mosilianbrand drinking yogurt in 2013

Source: TetraPak, 2015

Bright Dairy, a leading dairy player located in Shanghai, launched an ambient drinking yogurt in 2010, which in 2014 represented about 60% of the ambient yogurt market in China.

0

500

1,000

1,500

2,000

2009 2010 2011 2012 2013 2014 2015

Ambient yogurt estimated market size* China - $MM

*Yogurt market size is an estimation based on sales from Yili, Bright Dairy, Mengniu and Others

Estimated market 2015: $2 BN

Ambient products from Europe already presented in the Chinese market, but are not performing well

Germany EhrmannOnline: 49RMB/8cups

Germany SUKIOnline: 89 RMB/4 cups

Reasons behind lack of success:

Lack of brand awareness

Packaging is similar to chilled spoonable yogurt (not the diamond packaging)

Price of imported yogurt is higher than locally produced yogurt

Taste & texture is different than local ambient yogurt too thick

Ambient yogurt from Chinese dairies is mostly drinking yogurt and plain

8

Sub-Sahara Africas growing dairy industry

PZ Cussons became the sole owner of NigerianNutricima, by acquiring the 50% stake of its partner Glanbia for 30 MM USD in April 2015

In May 2015, Arla Foods & Egypt-bases dairy company Juhayna agreed to undergo a JV selling Arlas products across Egypt.

In Febuary 2016 Danone aquierd Egyptian Dairy ( Cheese producer) Halayeb

In Morocco, French Fromageries Bel bought 69.82% of Safilait, the third Largest national dairy group, in May 2015

RFC buys a factory in ivory CoastIn September 2014 the dairy factory owned by Olam in Abidjan was sold to RFC for 19 MM $

Abraaj & Danone Buy Fan Milk. In October 2013 Abraajsold 49% of Fan milk to Danone

In July 2014 Danone acquired 40% of Brookside Dairy

Clover buys Dairybelle for 18 MM $ in May 2014 & in April 2015

RFC increased its stakes into Nigerian Wamaco form 54.6 to 67.6 % for 200 MM $

Coca-Cola Acquires 40% stake Stake in Nigeria Dairy, Juice Company Chi, deepening its presence in Africa

Source: World Dairy Bulletin, internet

Priplait

General challenges in Sub-Saharan Africa

A modernized distribution network and a formal production sector is still largely under-developed in most of Africa.

Population growth: By 2030 (ref. UN), the African population will grow by 62%.

Malnutrition: Western and Eastern Africa see 1/4-1/3 of children possibly permanently damaged by malnutrition and a significant number in a life-threatening condition (wasting).

Weather conditions: Africa is sensitive to extreme weather because of the reliance of much of the central belt on seasonal rains. This can have immediate and severe impacts on the potential production of all kinds of food.

Source: Innova, Briefing Series: Report on Africa

Long Life Yoghurt already making inroads in some countries

Dairy fermented products in selected African countries are mainly tracked in the fridge. Ambient fermented dairy has been mainly observed in Ghana, Nigeria, Cameroon Morocco and

Egypt.

11

3%

21%

6%

33%

10%

97%

100%

79%

100% 94

%

100%

100%

67%

90%

100%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Egypt Kenya Nigeria SouthAfrica

Morocco Tunisia Algeria Ghana Cameroon Tanzania

Shar

e (%

) of p

rodu

ct la

unch

es

Percentage of dairy fermented launches tracked per format(2011-2015)

Chilled

Ambient

Pascual corners ambient fermented dairy in Ghana

Pascual is the main responsible for all ambient dairy fermented introductions in Ghana. Pascual is one of Spains leading producers of milk and dairy products, exporting to more than 60 countries including UHT yogurts.

12

Pascual Thick & Creamy Pineapple And Melon Low Fat Yogurt (Ghana, May 2011)Description: Four cups of pasteurized thick and creamy yogurt with pieces of pineapples and melon.

Claims: No colorings or preservatives. Low fat. No refrigeration required unless opened. Best served chilled.

Pascual Thick & Creamy Yogurt: Strawberries (Ghana, May 2011)Description: 4 x 125g plastic cups of pasteurized creamy yogurt with strawberries, held in a cardboard sleeve.

Claims: No colorings or preservatives. No refrigeration required unless opened. Best served chilled.

http://www.innovadatabase.com/image/zoomImage?from=export&proid=1087445&guid=99e74c07-e97b-49e8-8c9e-95184025c558http://www.innovadatabase.com/image/zoomImage?from=export&proid=1087444&guid=67545991-906c-4fa0-9e69-d298518a8adf

Positioning for successful ambient yogurt products in Sub-Saharan Africa

Affordability & Safety Products that provide Nutrition

for Money to be able to capture full market potential

Safe products backed by strong brands

Availability The possibility to transport such goods

outside the home knowing they wont get spoilt with the heat

Supply /availability facilitated Access to such products all year round

Reinforce Health Cues Consumers are keen to know how the

product will deliver on nutrition & digestion

They want detailed information around fat content

Fruit linked to healthy

On-the-Go & Snacking On the go solution to provide

healthier snacking solution Key target kids as dairy considers

a major aspect of a healthy upbringing

Note! Clearly indicate no need for refrigeration or needs no refrigeration as this is a key attribute and benefit for this region.

World population is

7.4 BILLION

i.e. 7 400 000 000 people

1 cup of yogurt contains

16x this number!

i.e. 120 000 000 000 bacteria

CONFIDENTIAL14

Technical challenges: Why does yoghurt have a short shelf life?

Typical yoghurt processingYoghurt contains large amounts of viable microorganisms Most are from starter, some may be contaminant (esp yeast and moulds)Results in sensory / product deterioration over shelf life

15

Technical challenges: How is long life yoghurt made?

Fermentation FillingThermal treatment

Contains micro-organisms

Long life yoghurt processingA thermization process after fermentation inactivates viable microorganismsThe disinfected final product is rendered microbially stableAdvantages: No refrigeration needed long shelf life is attained

16

Technical challenges: How is long life yoghurt made?

Fermentation Aseptic FillingThermal

treatment2nd Thermal treatment

microorganism No micro-organisms

Technical challenges: Thermal processing

Aseptic Fillers:Yoghurt passes through heat exchanger for rapid thermisation. Least harsh thermal treatmentRequires specialized equipment

75 85 C / 15-25s

5/19/2017 17

Retorting:Product filled into packaging, followed by thermal processMinimal chance of post thermal contamination.Good aseptic resultLonger heat exposure, making it more challenging

85C / 5 min

Hot Fill:fill product at thermisationtemperature, so packaging is disinfected Requires least capex investmentHandling difficulties with hot filling yoghurtLong thermal exposure due to slow coolingModerate aseptic result

Hot fill @ 85C

Page 18

Technical challenges: Thermal Shock Destabilization

What happens when yoghurt is heated at low pH?

Low quality

Clear separation

Sandy mouthfeel

Uncontrolled viscosity

High quality

No risk

Nice appearance

Smooth mouthfeel

Consistent viscosity

thinness

flouriness

desiccationstructure

clean-eating

0.00% AMD 783 0.30% AMD 783

Chart3

6.65.7

7.43.4

5.95.3

3.23

5.55.6

0.00% AMD 783

0.30% AMD 783

Sheet1

No.SampleD[4,3]D[3,2]D(v, 0.1)D(v, 0.5)D(v, 0.9)SpanpHSedimentTiterBrook.Visc.End visc.K, PasnnZeta pot.ThinnessFlourinessDesiccationStructureClean-

mmmmm%mlcPPasPasnmVeating

10,10% AMD 7835.12.00.84.49.21.94.010.8missing10.80.01130.01360.95-2.26.13.35.12.76.4

20,20% AMD 7831.70.80.41.43.52.34.04.0missing9.20.00740.00990.94-6.56.63.24.92.56.0

ref 10.30% AMD 7831.60.80.41.23.02.24.02.3missing14.20.01060.01910.88-12.95.73.45.33.05.6

30,40% AMD 7831.70.80.41.33.12.24.01.6missing22.80.01560.02900.88-13.94.43.04.33.95.6

40,20% 13204.01.10.41.710.96.14.02.3missing40.20.01800.05140.80-16.44.73.65.13.75.4

50,40% SSPS4.21.10.41.811.25.94.07.9missing6.00.00470.00600.92-3.7

60,40% AMD 7808.91.10.42.315.46.54.05.2missing14.40.01230.01740.93-10.5

70,40% AMD 7828.51.10.42.014.06.73.92.6missing32.00.02310.03920.90-13.94.73.25.64.44.4

80,40% YM-150 A5.41.00.41.59.05.84.01.6missing63.40.03170.08110.82-15.33.43.15.06.04.0

90,40% TSP 60704.81.00.41.710.86.14.01.9missing29.20.01990.03800.88-15.45.13.14.93.75.5

100,40% TSP 60722.10.90.41.74.22.33.98.7missing92.00.02470.08620.78-13.23.93.95.24.64.9

ref 20.30% AMD 7833.50.90.41.410.47.04.03.7missing14.60.01180.01690.91-13.7

110,35% AMD 7801.70.70.31.13.12.74.02.8113.210.40.00900.01260.93-4.96.33.74.93.06.0

120,35% AMD 7811.70.80.41.13.02.54.01.9118.016.40.01350.02000.92-12.25.53.94.83.35.8

130,35% AMD 7821.40.70.31.02.42.14.01.6missing21.40.01640.02570.91-12.55.14.24.84.75.5

140,35% AMD 7601.90.90.41.44.02.64.04.4118.011.20.00960.01580.89-4.86.03.95.22.95.3

150,35% AMD 7831.50.70.31.02.62.24.01.8119.218.40.01340.02490.87-9.35.03.95.03.75.4

ref 30.30% AMD 7831.30.70.41.02.32.04.01.9119.213.80.01120.02030.88-9.6

160.40% TS-P 60722.10.90.31.54.12.44.09.8116.0111.20.02550.13510.69-8.3

170,40% GRINDSTED 1971.80.80.31.23.52.83.92.3122.813.80.01330.01870.93-18.46.13.75.03.94.8

180,25% pectin 13201.60.70.31.03.22.94.01.6117.272.40.02110.10900.68-20.03.93.74.74.94.1

190,40% SSPS2.00.70.31.14.94.23.96.9124.84.60.00440.00560.91-4.17.24.95.92.16.0

200,40% AMD 7801.90.70.41.13.73.23.92.2124.410.60.01010.01370.94-21.35.73.54.83.05.3

ref 40.30% AMD 7832.20.80.41.13.93.13.91.9128.812.00.01050.01640.91-16.4

210,40% TSP 60722.31.00.41.84.32.23.97.1131.266.00.02040.07590.76-12.84.44.35.35.23.7

22No stabiliser11.65.44.710.720.01.43.919.2123.611.00.00880.01790.843.36.67.45.93.25.5

230,35% YM-1001.90.80.41.14.03.33.92.4116.011.20.01070.01430.94-21.25.24.35.63.85.4

240,35% YM-115 H1.90.80.41.13.52.83.91.2122.827.80.02010.04170.86-22.84.64.45.34.45.0

250,35% YM-150 B1.60.70.41.03.02.53.91.2122.031.20.02250.04290.88-24.14.64.85.14.44.8

260,35% JMJ2.20.80.41.13.42.93.91.9122.012.20.01090.01650.92-20.15.54.15.23.55.8

270,35% JM-150 J1.90.80.41.13.93.23.92.5122.49.60.01030.01590.91-9.25.84.75.62.96.1

280,50% LMW 2230-12.10.80.41.14.63.73.93.8125.211.00.01300.01560.96-18.55.94.85.53.26.3

ref 50.30% AMD 7834.80.90.41.27.45.84.02.2122.412.60.01190.01960.90-6.1

290,35% AYD 293.00.80.41.13.12.44.02.1106.812.00.01200.01640.94-20.65.84.15.13.35.7

300,35% AYD 301.60.80.41.12.92.34.01.8110.814.00.01290.02000.91-22.05.43.95.43.35.7

310,35% AYD 3503.31.00.41.68.04.84.05.2110.811.00.00940.01570.89-12.35.95.05.42.85.9

320,35% AYD 3582.10.80.41.25.13.93.93.3117.612.60.01150.01690.92-16.85.54.15.33.75.3

330,35% RS 4502.50.90.41.35.64.14.01.7114.430.20.02200.03730.90-20.34.34.54.64.74.4

340,50% Wave 2122.00.80.41.24.93.94.03.5108.811.00.01130.01570.93-23.05.24.45.43.55.7

ref 60.30% AMD 7832.70.90.41.37.55.64.03.3114.812.80.01180.01560.95-15.0

Sheet2

thinnessflourinessdesiccationstructureclean-eating

6.13.35.12.76.40.00% AMD 7836.67.45.93.25.5

6.63.24.92.56.00.10% AMD 7836.13.35.12.76.4

5.73.45.33.05.60.20% AMD 7836.63.24.92.56.0

4.43.04.33.95.60.30% AMD 7835.73.45.33.05.6

0.35% AMD 7835.03.95.03.75.4

0.40% AMD 7834.43.04.33.95.6

5.03.95.03.75.4

Sheet2

0.00% AMD 783

0.30% AMD 783

Sheet3

ThinnessFlourinessDesiccationStructureClean-eatingThinnessFlourinessDesiccationStructureClean-eating

0,10% AMD 7836.13.35.12.76.40,35% AMD 7806.33.74.93.06.0

0,20% AMD 7836.63.24.92.56.00,35% AMD 7815.53.94.83.35.8

0.30% AMD 7835.73.45.33.05.60,35% AMD 7825.14.24.84.75.5

0,40% AMD 7834.43.04.33.95.60,35% AMD 7606.03.95.22.95.3

0,20% 13204.73.65.13.75.40,35% AMD 7835.03.95.03.75.4

ThinnessFlourinessDesiccationStructureClean-eating

0,40% SSPSmin5.03.74.82.95.3

0,40% AMD 780max6.34.25.24.76.0

0,40% AMD 7824.73.25.64.44.40,35% YM-1005.24.35.63.85.4

0,40% YM-150 A3.43.15.06.04.00,35% YM-115 H4.64.45.34.45.0

0,40% TSP 60705.13.14.93.75.50,35% YM-150 B4.64.85.14.44.8

0,40% TSP 60723.93.95.24.64.90,35% JMJ5.54.15.23.55.8

0.30% AMD 7830,35% JM-150 J5.84.75.62.96.1

0,35% AMD 7806.33.74.93.06.00,35% AYD 295.84.15.13.35.7

0,35% AMD 7815.53.94.83.35.80,35% AYD 305.43.95.43.35.7

0,35% AMD 7825.14.24.84.75.50,35% AYD 3505.95.05.42.85.9

0,35% AMD 7606.03.95.22.95.30,35% AYD 3585.54.15.33.75.3

0,35% AMD 7835.03.95.03.75.4

0.30% AMD 783

0.40% TS-P 6072

0,40% GRINDSTED 1976.13.75.03.94.8

0,25% pectin 13203.93.74.74.94.1

0,40% SSPS7.24.95.92.16.0

0,40% AMD 7805.73.54.83.05.3

0.30% AMD 783

0,40% TSP 60724.44.35.35.23.7

No stabiliser6.67.45.93.25.5

0,35% YM-1005.24.35.63.85.4

0,35% YM-115 H4.64.45.34.45.0

0,35% YM-150 B4.64.85.14.44.8

0,35% JMJ5.54.15.23.55.8

0,35% JM-150 J5.84.75.62.96.1

0,50% LMW 2230-15.94.85.53.26.3

0.30% AMD 783

0,35% AYD 295.84.15.13.35.7

0,35% AYD 305.43.95.43.35.7

0,35% AYD 3505.95.05.42.85.9

0,35% AYD 3585.54.15.33.75.3

0,35% RS 4504.34.54.64.74.4

0,50% Wave 2125.24.45.43.55.7

0.30% AMD 783

Sheet3

0,35% YM-100

0,35% YM-115 H

0,35% YM-150 B

0,35% JMJ

0,35% JM-150 J

0,35% AYD 29

0,35% AYD 30

0,35% AYD 350

0,35% AYD 358

(Karam et al. , 2013) - Aarhus University Marianne Hammershoj 19

Technical challenges: What happens to yoghurt when its heated?

(Karam et al. , 2013) - Aarhus University Marianne Hammershoj 20

Technical challenges: What happens to yoghurt when its heated?

Heat

Charge of casein: Negative Charge of casein: Negative Charge of casein: PositiveCharge of pectin: NegativeCharge of casein-pectin: Negative

pH 6.7 pH 5.5 pH 4.0

Casein

Kappa casein

Specialty pectin

Casein micelle

Casein micelle

Casein micelle

Steric repulsive interactions between casein micelles stable protein system

Collapse of kappa casein unstable protein system

Steric repulsive interaction restored by pectin stable protein system

21

Technical challenges: How to stabilized casein micelles

A shelf stable drinking yoghurt:4C to 25C room temperature can store for up to 180 days

Premium package, Premium price Average Price=2.5RMB/100g, (50%-100% higher than normal yogurt)

High sales, high growth: Launch in 2010, 2014 revenue is about 5.96billion RMB, 85% growth vs 2013

Company: Bright Dairy & Food, China

Momchilovtsi ambient drinkable yogurt a successful story in China

23

increase viscosity/mouthfeel resistance against syneresis reduce precipitation but do not improve

protein stabilisation reduced flavour release

HydrocolloidsSpecialised pectin protein stabilisation increase viscosity/mouthfeel good flavour release

Other hydrocolloids

Emulsifiers improved creaminess smoother texture reduce acid aftertaste whiter appearance

Acheiving spoonable long life yoghurt

Conclusion Long life yoghurt

Will Sub Sahara Africa follow the trends seen in other developing markets?How will manufactures and consumers alike embrace this trend?

5/19/2017 24

Thank you!Brett Wordon Sandra ZuvelaApplication Specialist Sales Lead 021 526 5628 082 775 6096

Long Life Yoghurt for AfricaOpportunities, Challenges and SolutionsYoghurts Achilles Heel Shelf lifeThe Ideal Yoghurt Long life yoghurtSlide Number 4Slide Number 5Long Life Yoghurt in China since 2010Ambient products from Europe already presented in the Chinese market, but are not performing wellSlide Number 8Sub-Sahara Africas growing dairy industryGeneral challenges in Sub-Saharan AfricaLong Life Yoghurt already making inroads in some countriesPascual corners ambient fermented dairy in GhanaPositioning for successful ambient yogurt products in Sub-Saharan AfricaTechnical challenges: Why does yoghurt have a short shelf life?Technical challenges: How is long life yoghurt made? Technical challenges: How is long life yoghurt made? Technical challenges: Thermal processingTechnical challenges: Thermal Shock Destabilization Technical challenges: What happens to yoghurt when its heated?Technical challenges: What happens to yoghurt when its heated?Technical challenges: How to stabilized casein micellesMomchilovtsi ambient drinkable yogurt a successful story in ChinaAcheiving spoonable long life yoghurtConclusion Long life yoghurtSlide Number 25