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1 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 STRATEGY & MANAGEMENT MERGERS & ACQUISITIONS COMMERCIAL & MARKET OPERATIONS & TECHNICAL WATER & ENVIRONMENT PACKAGING & DISTRIBUTION
2 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 Dairy free innovation Dairy free investment 14 Trends summary
3 1: LACTOSE FREE IN CONTEXT Dairy market dynamics Socio-economic factors Lactose free opportunity Prevalence of lactose intolerance 3 Competition existing lactose free products & dairy alternatives
4 2: INTERNATIONAL DAIRY MARKET Milk/yogurt/cheese consumption in 33 countries tonnes +1.7% % %
5 3: LACTOSE INTOLERANCE WORLDWIDE 5
6 4: LACTOSE FREE BRAND LEADERS Brand: MinusL Country: Germany, other European markets Brand owner: Omira Oberland-Milchverwertung Brand: Lactaid Country: USA Brand owner: McNeil Nutritionals Brand: Eila Zero Lactose Country: Finland, other European markets Brand owner: Valio 6
7 5: LACTOSE FREE BRAND LEADERS Brand: Zymil Country: Italy, plus others Brand owner: Parmalat Brand: Lactofree Country: UK, Ireland Brand owner: Arla Foods 7
8 6: LACTOSE FREE INNOVATION 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 8
9 7: LACTOSE FREE MISCONCEPTIONS 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 9
10 8: MISCONCEPTION REMEDY Education To dispel myths To ensure consumers understand lactose free dairy benefits Lactose free does not mean avoid dairy 10
11 9: DAIRY FREE ALTERNATIVES Soy Cereal rice, oats, barley Nuts almonds, cashew, coconut, hazelnut, walnut Plant sunflower 11
12 10: DAIRY FREE BRAND LEADERS Alpro Almond Breeze 12
13 11: DAIRY FREE BRAND LEADERS Dream Silk 13
14 12: DAIRY FREE INNOVATION 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 14
15 13: DAIRY FREE INNOVATION Dream Gelato 2013 Silk Fruity & Creamy
16 14: DAIRY FREE INVESTMENT September 2014 WhiteWave Foods to buy so Delicious Dairy Free for $195 million 16
17 15: LACTOSE FREE TRENDS 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 17
18 16: DAIRY FREE TRENDS 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 18
19 For more information on this presentation or on any of Zenith s services, please contact: Esther Renfrew er@.com Richard Hall rhall@.com Or telephone Zenith s head office on +44 (0) STRATEGY & MANAGEMENT MERGERS & ACQUISITIONS COMMERCIAL & MARKET OPERATIONS & TECHNICAL WATER & ENVIRONMENT PACKAGING & DISTRIBUTION
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