Future of Dairy: “ - PowerPoint Presentation

Future of Dairy:“Powered by Dairy” - Opportunities for Growth September 2014 Please note: the products shown in the presentation deck are included solely for the purposes of illustration.

Trends and Needs Converge  Overarching Themes Set the Stage for Identification of 20 Potential Growth AreasThe US market will be marked by increasing rates of change driven by key macro forces in the market In this environment, the US dairy industry has significant opportunities to innovate overall and within individual categories Dairy’s future will require more multi-faceted segmentation and personalization to keep pace with these significant changes In the future, dairy needs to move beyond core messaging and core benefits towards fusion of benefits that address emerging consumer needs more effectively 2

Five areas chosen for pre-competitive exploration Future of Dairy – Key Opportunity Area Identification Future of Dairy initial project: 20 opportunity areas 3 Powered by Dairy Dairy Beverage Reinvented Continuously Delight Kids Fit for Life with Dairy Grazing on Dairy

“Powered By Dairy” Identified as Potential Area for Growth in Comprehensive Future of Dairy Research Study 4 Energy drink market in US was $4.8BN in 2008Functional drinks estimated to grow to $19BN by 2013 (160% growth from 2008)63% of Americans are concerned about lack of energy 69 % say ‘provides energy’ is important in determining products to buy Chocolate milk proven to be a good recovery drink 21% are regular energy drink users, including 43% of those ages 18–24 Only 29% of consumers strongly agree protein is naturally found in milk; only 25% familiar to whey protein Basis of Interest DAIRY INGREDIENT Making dairy the go-to food/beverage for people who want more physical or mental energy Innovation Center research compiled by GfK identified 3 dairy categories that have possible opportunities within the energy space: MILK YOGURT

Question #1: Can products within the dairy category play in the consumer-defined “energy space?”5 YES NO

Using The TNS Landis Database, Consumers Define “Energy” In Many Ways …6 Note: Energy is defined as a need within food and beverage Provides quick energy Picks me up/gets me going Is a supercharged energy source Is a good source of protein Is a good source of soy/ soy protein Enhances mental performance Helps me stay sharp and alert Is a good way to start the day Helps me stay on track Helps me concentrate Helps wake me up Helps manage my blood sugar Helps me get through my dayProvides lasting energy Won't impair performance Helps me lead active lifestyle Is good after physical exercise Enhances physical performance Energy w/o making me crash later Will not slow me down/feel sluggish Protein Based Energy Physical Energy (Exercise) Sustained energy… Boosts of energy naturally Mental energy … Energy Quick energy… Natural energy… Gives me energy w/o the calories Boosts my metabolism Rejuvenates me Revitalizes me Other

Executive SummaryRegular yogurt, greek yogurt, smoothies, drinkable yogurt & low fat/skim milk show most potential to compete within energy space Energy-related Snack Occasions Energy-related Beverage Occasions 7 Snacking is a $90+ billion industry 21% of snacking occasions are energy-related, which creates a: $18.9 Billion 15.9 Billion Gallon Beverage a 53 billion gallon industry 30% of beverage occasions are energy-related, which creates a : 1: Innovation Center of U.S. Dairy, Snacking white paper (2009) 2: Innovation Center of U.S. Dairy, Dairy Beverage Reinvented (2012) Opportunity Opportunity 1 2

Here is a Roadmap of Where Dairy Can Play within the Energy Space 8 Snack Opportunities Beverage Opportunities Additionally, these dairy categories below have similar traits to innovate against: 1 2 3 4 5 Lower Priority Dairy Categories (Don’t meet energy needs or other categories meet the needs) Snack opportunities Beverage opportunities String Cheese Individually Wrapped Cheese Slices Premium Ice Cream Non Premium Ice Cream Soft/ Spreadable Cheeses Cottage Cheese Chocolate Milk RTD Refrigerated Milkshakes Whole Milk Note: Reduced fat/calorie milkshake category are products that require “adding milk and stirring”

9 Where Does Regular Yogurt Currently Play? Defining … Enhance My Health Health functions Fresh/natural ingredients Sound nutrition Better performance Natural lift Categories Competing Within Enhance My Health Need State Fresh fruit-whole or precut 100% RTD fruit smoothies Greek yogurt Dairy-based vegetable dips Cottage cheese Fruit cups Fruit Crisp Bars Cereal naturally sweetened Peanut butter in on-the-go cups Need State: Enhance My Health (Accounts for 14% of Energy–related Snack Occasions ) Regular Yogurt: Opportunity At A Glance Who Is My Target Consumer …? Older consumers Proactive and disciplined Love food and are adventurous eaters Managing their food and nutrition choices Freshness and sources of the foods important Disciplined Eaters: Eat To Live

10 Regular Yogurt: Preliminary Guidance For Innovation How To Innovate …? Enhances daily health Helps ensure long-term health Has redeeming nutritional value Helps me feel good about self 1 2 Helps digestive system work at its best Helps maintain teeth/bone strength Needs Not Met By Energy Categories: Communicate Regular Yogurt Benefits*: Yogurt Outperforms Energy Categories: Note: *Must meet both criteria (1 and 2) before innovation Closer-In Innovation Further-Out Innovation Innovate Against Energy Competitive Set : Develop regular yogurt positioning that optimizes above communication/benefits Important e nergy attributes needed to innovate : * Must communicate all the regular yogurt benefits (above) to innovate far-out: Build new dairy/energy product: Is naturally sweetened Use high quality ingredients Naturally rich in vitamins Expand regular yogurt into energy space by leveraging above benefits along with energy attributes to create breakthrough innovation fusion categories/products

11 Where Does Greek Yogurt Currently Play? Defining … Energize Me Gets me going, keeps me going Has sound nutrition Is a natural lift Has fresh/ natural ingredients Supports body functions Categories Competing Within The “Energize Me” Need State Peanut butter Packaged frozen yogurt Regular Yogurt Fresh fruit – precut or whole Fruit cups Cereal – 100% nutritionally complete, 100% wholegrain Fresh, cooked or raw vegetables Heart-healthy spreads Need State: Energize Me (Accounts for 6% of Energy-related Snack Occasions ) Greek Yogurt: Opportunity At A Glance Who Is My Target Consumer …? Image is important for these consumers “Live to eat” as mindful of health & nutrition Yet struggle with weight/guilt of eating Take time to exercise and look attractive Yet not truly satisfied w/how they look Life-Balancing Weight Manager

12 Greek Yogurt: Preliminary Guidance For Innovation How To Innovate …? Good source of calcium 1 2 Helps build muscle Boost immune system Helps digestive system work at its best Needs Not Met By Energy Categories: Communicate Greek Yogurt Benefits*: Greek Yogurt Outperforms Energy Categories: Note: *Must meet both criteria (1 and 2) before innovation Closer-In Innovation Further-Out Innovation Innovate Against Energy Competitive Set: Develop G reek yogurt positioning that optimizes above communication/benefits Important e nergy attributes needed to innovate: * Must communicate all the Greek yogurt benefits (above) to innovate far-out: Build new dairy/energy product: Enhance physical/ mental performance Good source of antioxidants Fortified w/ vitamins and/or minerals Is made with fresh/real fruit Promotes healthy skin Expand Greek yogurt into energy space by leveraging above benefits along with energy attributes to create breakthrough innovation fusion categories/products Build new dairy/energy product:

13 Where Does Fruit/ Yogurt Smoothies Currently Play? Defining … Fruity Goodness Good for body Fruit-flavored Natural energy boost Kid-friendly Partner with exercising Complex taste Good for lunch/ as a snack Categories Competing Within Fruity Goodness Need State Bottle tea blend w/fruit juice Fruit juice drinks/blends Sparking fruit juices Soft drinks fortified with vitamins and/or minerals Fortified fruit juice Regular RTD sports drinks Pre-game fuel drinks Post-game drinks Herbally enhanced drinks Need State: Fruity Goodness (Accounts for 9% of Energy-related Beverage Occasions ) Fruit/Yogurt Smoothies: Opportunity At A Glance Who Is My Target Consumer …? Eating is important to younger single men Rely on other to prepare food (at home & away) On-the-go consumers w/active, busy lifestyle Don’t worry about weight or health issues Social Indulger: Live to Eat

14 Fruit/Yogurt Smoothies: Preliminary Guidance For Innovation How To Innovate …? Fruit flavored, sweet Kids can prepared/serve themselves Kids like/parents approve of… 1 2 Good mixture of tastes Variety of tastes in every bite Good as a snack Needs Not Met By Energy Categories: Communicate Fruit/Yogurt Smoothie Benefits*: Smoothies Outperforms Energy Categories: Note: *Must meet both criteria (1 and 2) before innovation Closer-In Innovation Further-Out Innovation Innovate Against Energy Competitive Set: Develop fruit/yogurt smoothie positioning that optimizes above communication Important e nergy attributes needed to innovate: * Must communicate all the smoothie benefits (above) to innovate far-out: Build new dairy/energy product : Expand smoothies into energy space by leveraging above benefits along with energy attributes to create breakthrough innovation fusion categories/products Good for fast paced lifestyle Easy to prepare Doesn’t drip when I drink it Provides quick energy Good for when I am surfing the web, blogging or texting

15 Where Does Drinkable Yogurt Currently Play? Defining Proper Health Management Feel and look my best Promotes healthier lifestyle Promotes brain function Better bodily function Categories Competing Within Proper Health Management Need State Soy milk Bottle water fortified w/vitamins Vegetable juices Weight-loss beverages Low-fat/skim milk Protein-enhanced water Unflavored fitness water Nutritionally complete drinks Calorie-burning beverages Need State: Proper Health Management (Accounts for 11% of Energy-related Beverage Occasions ) Drinkable Yogurt: Opportunity At A Glance Who Is My Target Consumer …? Older consumers Proactive and disciplined Love food and are adventurous eaters Managing their food and nutrition choices Freshness and sources of the foods important Disciplined Eaters: Eat To Live

16 Drinkable Yogurt: Preliminary Guidance For Innovation How To Innovate …? Helps me feel good Helps maintain family health Give my body what it needs to feel good 1 2 Helps me look my best Needs Not Met By Energy Categories: Communicate Drinkable Yogurt Benefits*: Drinkable Yogurt Outperforms Energy Cat.: Note: *Must meet both criteria (1 and 2) before innovation Closer-In Innovation Further-Out Innovation Innovate Against Energy Competitive Set : Develop drinkable yogurt positioning that optimizes above communication/benefits Important e nergy attributes needed to innovate : * Must communicate all drinkable yogurt benefits (above) to innovate far-out: Build new dairy/energy product : Helps me feel fit/ healthier Helps make up for less sensible choices Expand drinkable yogurt into energy space by leveraging above benefits along with energy attributes to create breakthrough innovation fusion categories/products

17 Where Does Low Fat/Skim Milk Currently Play? Defining Healthy Weight Management Weight control/Better for me No-regret consumption Healthy ingredients Low/no sugar and Light/not too filling Better health management Categories Competing In Healthy Weight Management Need State Unflavored fitness water Bottled spring water Bottled purified water – plain Low-cal. fruit-flavored drink mix Sparkling water – unflavored Unflavored bottled teas Soy milk Low-cal. RTD sports drinks Need State: Healthy Weight Management (Accounts for 9% of Energy-related Beverage Occasions ) Low Fat/Skim Milk: Opportunity At A Glance Who Is My Target Consumer …? Older consumers Proactive and disciplined Love food and are adventurous eaters Managing their food and nutrition choices Freshness and sources of the foods important Disciplined Eaters: Eat To Live

18 Low Fat/Skim Milk: Preliminary Guidance For Innovation How To Innovate …? Low fat/low calories Can have every day Does not contribute to childhood obesity 1 2 No added sugar Helps lower cholesterol Needs Not Met By Energy Categories: Communicate Low Fat/Skim Milk Benefits*: Low Fat/Skim Milk Outperforms Energy Cat.: Note: *Must meet both criteria (1 and 2) before innovation Closer-In Innovation Further-Out Innovation Innovate Against Energy Competitive Set: Develop low fat/skim milk positioning that optimizes above communication Important e nergy attributes needed to innovate: * Must communicate all low fat/skim milk benefits (above) to innovate far-out: Build new dairy/energy product: Low to high innovation/risk factor: Is low in salt/ sodium Is sugar free Expand low fat/skim milk into energy space by leveraging above benefits along with energy attributes to create breakthrough innovation fusion categories/products

Smart Discovery Consumer online immersive blog In-home ethnographies In-depth web-mining to explore “chatter” around energy as it relates to food and beverage products (including dairy) Get Smart Synthesize existing background information & consumer knowledge Question #2: How might Dairy Play within the Energy Space? Future Path Global scan of new product introductions/market activity in ~12 core and ancillary categories Interviews with professional and industry experts in nutrition and medical-related fields 19 Research Methodology

Executive Summary Not all needs are being met … energy solutions for late afternoon and evening needs are lacking And, since many consumers are habitual with their energy solutions, not often looking for new solutions—it’s tough for new solutions to get noticedConsumers seek specific messaging cues to help determine which products are best for specific needs Energy needs are distinct & most are currently being met through specific solutions, but there are clear opportunities for dairy 20 Since most consumers do not readily think of dairy as a source of energy there is a need to educate them To date, consumers have not been educated to view dairy as an energy source Generally, dairy is not seen as having enough protein to have a positive impact on energy Some consumers are looking to reduce dairy usage because of a perception that it, in fact, negatively impacts their energy levels Consumers are looking for more natural, complete solutions for their energy needs; how can dairy leverage its inherent goodness? SO WHAT? SO WHAT? SO WHAT? Consumers will look for future solutions that are natural, less artificial Actively considering ways to increase energy through modifying their overall health habits/practices rather than just depending on traditional energy solutions, e.g., soda, energy drinks

Key Overall FindingsHowever, dairy is not typically top-of-mind to many consumers as an energy sourceMost do not view the protein content in dairy as a significant source of energy Consumers would need significant education to view dairy as a positive energy source 1 2 D airy is increasingly considered by some as a food to avoid or limit Consumers who have cut back are not missing dairy due to good alternative solutions Alternative “milk” products are gaining popularity, sometimes seen as more beneficial than cow’s milk Consumers view seven unique energy needs throughout the day that manifest differentlyConsumers are keenly aware of a connection between mental and physical energy 3 4 Energy solutions are part of a multifaceted mind-body approach to wellness Consumers want to use more natural energy solutions but struggle with changing familiar habits 5 Energy solutions are driven by specific energy needs with some solutions being tied to multiple needs There are significant gaps in delivering good solutions in late afternoon and evening 6 Consumers are looking for energy products that will bring them greater convenience or a boost to wellbeing 7 Messaging to consumers (e.g., packaging, advertising) needs to communicate energy in a believable way 21

Consumers Identify 7 Varying Energy Needs throughout the Day that Manifest Differently Immediate and noticeable increase in physical energy, typically short lasting Physical + Emotional energy required after energy is drained, typically afternoon/evening need Mental awareness, calm and focused energy, typically long term sustained need Physical energy that is long lasting, not overly hyperactive Mental energy, typically before a certain activity ie short term need Physical + Mental boost before specific activity Physical energy to complete activities, get through the day 22

Current solutions have widely increased beyond “traditional” energy sources to include a more holistic approach to overall diet and lifestyle habitsConsumer energy solutions are evolving to deliver on a growing desire for a multifaceted “mind-body” approach to overall wellbeing 23 Consistent Diet Physical Activity Sleep Store Bought Solutions Feel steadily energized Avoid extreme highs and lows Helps promote mental-physical energy connection Feel in control of overall health and energy levels Non food/bev related energy source Keeps physical energy up and body feeling fluid Helps restore mental energy and rejuvenation Imperative to health of body and mind Consistent patterns help prevent extreme lows Can reduce the use of store bought solutions Used for specific occasions Used in moderation, as part of an overall lifestyle Intended for more immediate results 23

“Going natural” often requires spending more $ or forcing family members to change dietsEliminating artificial energy sources (soda, energy drinks, shots) can be an easy first stepConsumers express a desire to make more natural choices in their diet and energy solutions but struggle with changing familiar habits Cage Free Chickens Concern for Animal Welfare Organic Food Grass Fed Beef/Whey Protein My mother only eats organic eggs. She is really dedicated and I admire that in her but I am not there yet” – Tamara C I feel so much better seeing this signage and knowing that I am picking protein that is treated in a humane way. – Nick P 24

Habits, lifestyles and overall approach to eating/wellness strongly dictate which solutions align across needsEnergy solutions are driven by specific energy needs but are often linked to multiple needs Most consumers are satisfied with their current solutions -- no major gaps identified Still room for improvement to better deliver solutions in single-serve, convenient and shelf-stable formats Looking for more satiating, flavorful and exciting solutions After lunch I like to have a candy bar as a pick me up and in the morning I will have water with protein powder to get me focused on the day. – Gregory N. Strong coffee acts as a fuel in the morning but if I’m feeling sleepy during the day I will have nuts at my desk to keep me going at work. – Tina S. 25

Late afternoon is critical for providing focus & recharge without creating negative sleep cycles, yet energy solutions are lackingWith eating habits now including more frequent smaller meals, energy occasions are also on the rise Get Ready for the Day Get Through to DinnerBusy Morning Afternoon SlumpWake Up Sustained Energy Spike/Boost Concentration Focus Recharge Ready for Bed Post Dinner Lull Focus Alert Ready for What’s Next 26

Most consumers do not associate dairy as a top-of-mind energy source despite its protein content Dairy is a seen as a natural food that is widely known to contain: Protein Vitamin D Calcium Probiotics Perceived as lower quality protein source High sugar content leads to crash, weighted down feeling Consumers have not been educated to view protein from dairy as being on par with protein-based energy from other sources I think the protein content [in dairy] is the most important for energy, but the sugar content is so high it makes me crash after a short period of time! – Mark E Dairy products generally decrease my energy. They make me feel full, slow and sleepy. – Natallie S 27

Current energy solutions (products) have multiple benefits and few drawbacks Coffee Energy Drinks Healthy Diet Nuts/SeedsSmoothies Convenient Can be made at home Variety of options Consistent energy from caffeine Fun flavors Specific energy benefits Strong energy impact Convenient Sustained energy Strong tie between mental and physical energy Variety of solutions throughout the day Satiating solution Variety available throughout the day Convenient on-the-go Part of a healthy diet Highly customizable Total control of ingredients On-the-go solution Sustained energy Negative physical effects (heart racing) Cannot consume late in the day Artificial ingredients Tied to energy “crash” Not a source for immediate needs Total consistent lifestyle needed Fattening solution Must be refrigerated Requires frequent shopping trips, tools Requires creativity 28 Benefits Drawbacks

Consumers choose from an arsenal of solutions for specific occasions, but late afternoon or evening occasion energy solutions are lacking; new solutions could even springboard from evening need fulfillment into better (fewer) morning ‘wake-up’ energy ritualsMany occasion specific solutions are already available & existing dairy offerings (benefits) are perceived as limited … where are the “open” occasions? Wake Up Get Ready for the Day Busy MorningAfternoon Slump Get Through to Dinner Post Dinner Lull Ready for Bed Physical Movement Coffee Vitamins/ Supplements Smoothie Energy Drink Soda Nuts/Seeds Dairy Beyond frozen yogurt treats, Dairy could offer more solutions to fulfill gaps in evening to morning energy needs without interrupting sleep 29

Wake UpGet Ready for the Day Busy Morning Afternoon SlumpGet Through to Dinner Post Dinner Lull Ready for Bed Spike/Boost Strength Ready for What’s Next Focus or Concentration Sustained Energy Alert Recharge DAIRY DAIRY DAIRY DAIRY Consumers also admit there’s room for more readily available convenient solutions to address specific needs; this is where Dairy could step in 30

Thought Starters for How Dairy Might Play in Energy Space 31

Get Ready for the Day – Strength Main Idea: Utilizes the basic positive nutrition of dairy as a source of calcium and protein that is beneficial to start the day off feeling physically powerful Potential Plays for Dairy: Chocolate milk with electrolytes or CoQ10 Milk with magnesium for post-exercise Combining dairy with other “strength” ingredients – B Vitamins, protein sources such as peanut butter Greek yogurt with added calcium, protein or other vitamins for enhanced performance Global Inspiration Restocking Minerals: magnesium Extra calcium from Sheep’s milk Fluid Replacement/Aiding Nutrient Absorption Milk with B Vitamins for strength and energy 32

Post Dinner Lull – Focus/Concentration Main Idea: Using dairy as an effective energy source to provide enough of a boost to get through and enjoy the evening without creating an excess of energy and negatively impacting the late evening Potential Plays for Dairy: Post-dinner dairy drink with soothing flavors and ingredients (tea inspired) Dairy drinks meant to be consumed hot for added calming benefits Tea-infused cheese snacks to create a relaxing snacking experience Avocado-infused ice cream to provide a dose of soothing healthy fats into a night time snacking ritual, reduce sugar intake and still maintain full flavor Global Inspiration Anxiety Reducing Gum (w/ Green Tea) Serotonin Boosting Tea Chamomile and melatonin Uplifting and Refreshing Ginger Tea 33

Ready for Bed – Focus/Concentration & For Next Day Main Idea: Using dairy products as a way to refocus and calm down before bed as part of a ritual to ensure restful sleep and better energy tomorrow Making sleep time efficient, successfulMaking sleep time “work” as sustained energy into next morning Potential Plays for Dairy: Milk or yogurt with tea flavors or ingredients (chamomile, lavender) Melatonin infused dairy to begin the sleep process Aromatherapy inspired flavors Promoting dairy as part of a consistent regimen for beneficial sleep cycles – explaining how dairy helps aid digestion and encourage restfulness Global Inspiration Chocolates with pyridoxine for psychological balance Concentration Tea with Taurine Grass fed whey mixed with alternative “dairy” 34

Get Ready for the Day – Sustained Energy Main Idea: Leveraging dairy’s pre-existing connection to mornings and natural source of protein to position it as a positive source of natural sustained energy Potential Plays for Dairy: Dairy based smoothies for convenient sustained energy Dairy based smoothies with energy sustaining ingredients mixed in Dairy/yogurt based energy bars – highlighting protein and calcium benefits Greek yogurt with energy sustaining ingredients blended in or as toppers – oats, granola, peanut butter to enhance long term effects Global Inspiration Whey Protein Bar Yogurt with love GI Matcha + Whey Drink Smoothies w/ Oats 35

AppendixPowered by Dairy:

Dairy Category Need State/Consumer Segment Target Need State Need State Definition % of Snack Universe String Cheese Speedy, Sweet & Portioned Individually Wrapped Cheese Slices Speedy, Sweet & Portioned Regular Yogurt Enhance My Health Premium Ice Cream Sharpen My Mind & Body Non-Premium Ice Cream Sharpen My Mind & Body Soft/Spreadable Cheeses Healthy Meal Replacement Greek Yogurt Energize Me Cottage Cheese Energize Me Dairy Opportunity Across Snack/Energy Need States (Relative Size of Prize)         14% 7% 13 % Portable, single-serve, sweet, flavorful treats for any time of the day, that provide quick energy to keep going, whether working at a desk or driving in the car Portable, single-serve, sweet, flavorful treats for any time of the day, that provide quick energy to keep going, whether working at a desk or driving in the car Nutritionally complete options for every day, made with the goodness of real fruit, that rehydrate and rejuvenate the body, enhancing health over the longer term Vitamin-fortified, energy- and metabolism-boosting snacks that help you stay focused, physically active, and looking your best Vitamin-fortified, energy- and metabolism-boosting snacks that help you stay focused, physically active, and looking your best A heart-healthy meal replacement with nutritional value that boosts bodily function and gives the body what it needs to feel good A natural energy source that revitalizes and sustains throughout the day, with built-in benefits (like antioxidants or calcium) to help improve the body’s function and endurance A natural energy source that revitalizes and sustains throughout the day, with built-in benefits (like antioxidants or calcium) to help improve the body’s function and endurance 13% 7% Dairy's share of the energy related snack occasions is… 54% However, regular and greek yogurt occasions have opportunity to move into the energy space which encompasses… 21%

Dairy Category Need State/Consumer Segment (Beverage Universe) Target Need State Need State Definition % of Beverage Universe Fruit or Yogurt Smoothies From a Restaurant/ Smoothie Shop Fruity Goodness Chocolate Milk in Bottles/Cartons Easy, Quick, Convenient RTD Refrigerated Milkshakes Satisfying Energy Enhancement Drinkable Yogurt Proper Health Management Whole Milk Proper Health Management Low-Fat/Skim Milk Healthy Weight Management Dairy Opportunity Across Beverage/Energy Need States (Relative Size of Prize )       9% An on-the-go beverage that gives you quick energy so that you can keep going while you’re doing other things 5% 9% Filling, energizing beverages that tide you over until your next meal and make you feel adventurous Beverages that make you feel fit/healthier, enhance your mental focus, aid your digestive system, and make you feel that your are taking care of yourself 10% Daily guilt-free beverages, lower in sugar and calories, that are not too filling and help you manage your weight Fruit-flavored, vitamin and mineral-fortified beverages with a mix of tastes that boost your energy naturally Beverages that make you feel fit/healthier, enhance your mental focus, aid your digestive system, and make you feel that your are taking care of yourself 11% Dairy’s share of the energy related beverage occasions is… 44% However, smoothies, drinkable yogurt and low fat/ skim milk occasions have opportunity to move into the energy space which encompasses… 30%

Global Inspiration 39

Inspiration is an ‘outside-in’ phenomenon To determine how to meet these evolving needs, other “areas of influence” are tracked to uncover innovation that is being seeded with consumers 40

Nine opportunities were identified where solutions will deliver against evolving needs 1-5 years out How to read … Telegraphic name of the FUTURE benefit space Brief description of the main idea for the opportunity Relevant news from various marketplace influencers, including examples Opportunities are frequently used for brainstorming, strategic planning, platform development purposes. 41

Alternative Energy Redefining traditional energy drinks with natural ingredients and advanced energy benefits Products Alternative to Energy Drinks Cu'i Watermelon Drink is a new, healthy alternative to "energy drinks" and "sugar-loaded” drinks. Cu'i (pronounced "swee") is a 100% all-natural Watermelon drink Mumijo Carbonate from Russia contains mumijo, a natural ingredient that energizes, restores strength, and aids the immune system Energize Your Life Drink MatchaMagic is an energy drink based on matcha tea, and also contains whey. Matcha is easier to digest and the body feels its energy effects longer than other natural products such as coffee Cricket Flour Bar This energy bar derives its protein content from cricket flour, an environmentally-friendly product Baobab Energy Juice Plant-based drink made from the baobab tree 42

Sharper Mind Foods that promote positive brain function to enhance mental energy Products L-theanine for Alertness The subtle caffeine hit of this ready-to-drink tea combines with L-theanine for a prolonged, relaxed alertness Children’s Brain Boost This flavored milk contains iron, iodine, and vitamin B to support learning ability and alertness Mental Candy This medicated candy contains a mixture of ginseng and B vitamins to enhance mental function and physical energy Memory Shot This liquid supplement shot contains DHA Omega 3’s and Gingko Biloba to improve cognitive, behavioral, and brain functions Concentration Tea This iced tea mix is formulated with taurine and increases concentration Memory/Cognitive Enhancing Housed fresh and potent in the cap, the proprietary nootropics blend of cognitive enhancers assist in improving memory, cognition, and alertness without adverse side effects 43

Positive Caffeine Movement away from the adverse effects of caffeine with new twists on energy Products No Adverse Effects This gum contains 65 mg of caffeine per piece, but is claimed not to cause associated shakes, nervousness, or crash Caffeine Capsules V12 Energy Balls drink features floating 'capsules'('energy balls'); both the drink and the 'balls' contain caffeine and taurine, and the drink also contains vitamins Benefits of Antioxidants KonaRed™ contains coffee fruit which is high in antioxidants and highly bioavailable Assisting Concentration Clicks Energy Syrup provides a physical and mental boost with B vitamins for healthy nerve function and caffeine for increased concentration Revive & Replenish Effervescent antacids with Caffeine to relieve headache, upset stomach, and fatigue, said to “help revive and replenish your body” 44

Replenish Me Holistically energizing by renewing essential depleted nutrients Products Replenishing Youth Farm milk combined with lycopene to stimulate youth and vitality Ion Supply Drink Health beverage that replenishes water and electrolytes lost through perspiration Restocking Minerals Sports drink resupplies lost calcium, magnesium, sodium, and potassium Post-Sport Recovery The packaging of this electrolyte replenisher claims “what sport and blistering heat takes out, we put right back in – and then some more” Fluid Replacement Rescue Water is claimed to help increase the rate of fluid replacement, and help balance nutrient absorption Spark Plugs Ensures efficient, consistent energy by replenishing CoQ10 and idebenone, important substrates (“spark plugs”) that are depleted by exercise Magnificent Magnesium After exercise, one should replenish magnesium, a critical micronutrient that allows for the absorption of potassium 45

Legum-aliciousBoost of protein goodness from grains provides physical energy Mung Bean Snacks Mung Beans, originating from India and cultivated throughout Asia, are low-glycemic and high in soluble dietary fibers that can aid in supporting essential bodily functions Dairy-Free Yogurt made from “tiger nuts” Lentil Energy Bar Genki Bars are made with organic lentils which are h igh in protein and fiber, rich in folate, B vitamins, iron, zinc and selenium Protein Chips Chips made with soy protein and whey protein are an easy way to increase protein intake, regardless of fitness goals Whey Protein Bar Oatmega Bars contain all-natural whey protein from grass-fed cattle Benefits of Grass-Fed Whey Many professional athletes consume grass-fed whey as it is a good source of beneficial omega-3 fatty acids 46

Zen- e rgy Calming ingredients to help reduce stress and foster centered energy Products Anxiety-Reducing Gum Green tea and apple extract in this chewing gum help to reduce anxiety and activate metabolism Stress Less The wellness variety of this ready-to-drink tea contains elderberry and lemon to help alleviate the effects of stress and tension Calming Coffee Naturally-calming herbs in this iced coffee soothe feelings of nervousness caused by everyday stresses Serotonin-Boosting Iced Tea Contains several B vitamins that participate in the synthesis of serotonin, a “happiness hormone” Chamomile and melatonin Chamomile and melatonin help aid in the ‘relaxing’ effect of this beverage 47

SENSE-ational Energy Energize by activating your senses and taking you “out of the moment” Products Refreshing Spray This South African energy spray claims to freshen breath, provide an energy boost, and enhance focus and alertness with 7 sprays equalling a typical energy drink Ginger Aroma The ginger aroma of this tea is uplifting and refreshing Energizing Fruit Scents The hints of orange and fragrant rose in this tea will “energize your senses any time of day and help to fortify greater vitality” Shocking Menthol This "eye-opening" gum is formulated with menthol to "shock chewers' senses and awaken their minds" Liquid Stimulation The full-bodied taste of this coca leaf drink stimulates the senses and gives more stamina 48

Perfect Timing Time-released energy for when you need it most, whether immediately or later on Products Source. Datamonitor.com Quick Energy This supplement provides energy in a fast, assimilated way from Glucose + Easily-Digested Fibers Energy candy made with natural fibers that are easily digested and can provide up to 10 hours of energy Sustained Energy Yogurt with a low Glycemic Index to provide a sustained energy release Long-Lasting This citrus soda mint flavoring provides an immediate yet long-lasting refreshing feeling Slow Released Guarana In this granola, Guarana provides slow-release energy throughout the day 49

Equivalent Energy Using cups of coffee as a frame of reference for amount of energy in other sources Products 2 Pieces = 1 Cup of Coffee Two pieces of chocolate with energy supplement candies is claimed to be equal to 1 cup of coffee 1 Piece = ½ Cup of Coffee One piece of Alert Energy gum contains about as much caffeine (40mg) as 1/2 cup of coffee 4 Squares = 1 Espresso Four squares of this energizing chocolate are claimed to contain the equivalent amount of caffeine to a strong espresso 1 Bar = 1 Cup of Coffee One these caffeinated chocolate bars is claimed to be equal to "1 cup of joe” 1 Can = 1 Cup of Coffee Natural energy drink has the equivalent energy of 1 cup of coffee with Cognizin citicoline to boost brainpower 50