Non-Dairy Alternatives and the Impact on Dairy Dairy Industry Panel Discussion

Non-Dairy Alternatives and the Impact on Dairy Dairy Industry Panel Discussion

Today s Presenters John Talbot CEO, California Milk Advisory Board Kikke Riedel Vice President, Strategy, Research & Insights MilkPEP Jen Walsh Director, Market Research Wisconsin Milk Marketing Board Chris Ross Vice President, Marketing HP Hood Dan Peterson Director, Corporate Marketing Insights Land O Lakes Sindhura Polasanapalli Director, Marketing Innovation Dean Foods Moderator: John Crawford, Vice President, Client Insights-Dairy IRI

Agenda Introductions Focus on Milk Brief overview of the trends Are these trends consumer or industry driven? Where else are we seeing non-dairy alternatives having an impact? What other Dairy categories are most at risk? How is/should the industry combat the trends? How are/should brands combat the trends? What can other industries learn from Dairy? Q&A 3

Panelists John Talbot Kikke Riedel Jen Walsh Chris Ross Dan Peterson Sindhura Polasanapalli CEO VP Strategy & Insights Dir. Market Research VP Marketing Dir. Corporate Marketing Insights Dir. Marketing Innovation CMAB MilkPEP WMMB HP Hood Land O Lakes Dean Foods 4

Milk Category Trends 5

Millions Millions Dairy Milk Trend by Type Dairy Milk by Type Dollars Dairy Milk by Type Gallons White Milk Flavored Milk A/O Dairy Milk White Milk Flavored Milk A/O Dairy Milk $18,000 $17,000 $16,000 $15,000 5,000 4,500 4,000 3,500 3,000 $14,000 2,500 $13,000 $12,000 $11,000 2,000 1,500 1,000 500 $10,000 CY 2012 CY 2013 CY 2014 CY 2015 CY 2016 - CY 2012 CY 2013 CY 2014 CY 2015 CY 2016 IRI Total U.S. MULO+C 6

Millions Millions Non-Dairy Alt Bev Trend by Type $1,800 $1,600 $1,400 $1,200 $1,000 $800 $600 $400 $200 Non-Dairy Alt Bev by Type Dollars Soy Almond Coconut Rice Cashew All Other $- CY 2012 CY 2013 CY 2014 CY 2015 CY 2016 250 200 150 100 50 Non-Dairy Alt Bev by Type Gallons Soy Almond Coconut Rice Cashew All Other - CY 2012 CY 2013 CY 2014 CY 2015 CY 2016 IRI Total U.S. MULO+C 7

Millions Millions Dairy Milk vs. Non-Dairy Alt Bev Trend Dairy Milk vs Non-Dairy Alt Bev Dollars Dairy Milk vs Non-Dairy Alt Bev Gallons Dairy Milk Non-Dairy Alt Bev Dairy Milk Non-Dairy Alt Bev $20,000 4,800 $19,000 $18,000 $17,000 4,600 4,400 $16,000 $15,000 $14,000 4,200 4,000 $13,000 $12,000 $11,000 $10,000 CY 2012 CY 2013 CY 2014 CY 2015 CY 2016 3,800 3,600 3,400 CY 2012 CY 2013 CY 2014 CY 2015 CY 2016 IRI Total U.S. MULO+C 8

Dairy Category Trends Dairy Category Trends Dollars Milk Natual Cheese Yogurt Fresh Eggs Cream/Creamer Processed Cheese Butter/Blends Cream Cheese Margarine/Spreads $70,000 Dairy Category Trends Units Milk Natual Cheese Yogurt Fresh Eggs Cream/Creamer Processed Cheese Butter/Blends Cream Cheese Margarine/Spreads 25,000 $60,000 $50,000 $40,000 20,000 15,000 $30,000 $20,000 $10,000 $- CY 2012 CY 2013 CY 2014 CY 2015 CY 2016 IRI Total U.S. MULO+C 10,000 5,000 - CY 2012 CY 2013 CY 2014 CY 2015 CY 2016 9

What is Driving the Shift? Consumer Behavior? Industry Driven? Other? 10

Dairy Milk vs. Non-Dairy Alt Bev Trend Dairy Milk vs. Non-Dairy Beverages % HHs Buying Dairy Milk Non-Dairy Alt Bev Total Milk Dairy Milk vs. Non-Dairy Beverages Volume Per Buyer Dairy Milk Non-Dairy Alt Bev Total Milk 100.0 40.0 80.0 30.0 60.0 20.0 40.0 20.0 10.0 - CY 2013 CY 2014 CY 2015 CY 2016 - CY 2013 CY 2014 CY 2015 CY 2016 IRI Total U.S. MULO+C 11

Other Dairy Categories Impacted or at Risk 12

How Do We Combat the Trends? Industry 13

How Do We Combat the Trends? Brands 14

What Can Other Industries Learn from Dairy? Meat / Meat Substitutes Other? 15

Questions?

Thank You! For more information: John Crawford Steve Ramsey John.Crawford@IRIworldwide.com Steve.Ramsey@IRIworldwide.com 763.458.5101 312.474.4234 Dave Hyland Dave.Hyland@IRIworldwide.com 763.458.5101