2016 Challenge: Develop new products that make dairy the go-to food/beverage for people who want physical or mental ENERGY* “Powered by Dairy” August 2015 * The statements made and information provided in the current and subsequent slides are based on consumer insights and cannot be used to make product claims. Claims must be truthful and not misleading, supported by scientific data and aligned with regulations in the current marketing environment. Consumers Define “Energy” In Many Ways … • Helps manage my blood sugar • Helps me get through my day • Provides lasting energy • Boosts of energy naturally • 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 Sustained Mental energy… energy…Physical energy that is long lasting, not overly hyperactive Natural energy… Energy Physical Energy (Exercise) Quick energy… Protein Based Energy Other • 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 • 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 TNS Landis Database • Gives me energy w/o the calories • Boosts my metabolism • Rejuvenates me • Revitalizes me 2 Note: This information provides consumer insights and cannot be used to make product claims. See disclaimer on first slide. Consumers Identify 7 Varying Energy Needs throughout the Day that Manifest Differently Physical energy to complete activities, get through the day Strength Immediate and noticeable increase in physical energy, typically short lasting Physical + Emotional energy required after energy is drained, typically afternoon/evening need Spike/Boost Ready for What’s Next Physical + Mental boost before specific activity Focus or Concentration Mental energy, typically before a certain activity ie short term need Energy Recharge Mental awareness, calm and focused energy, typically long term sustained need Alert Sustained Energy Physical energy that is long lasting, not overly hyperactive Note: This information provides consumer insights and cannot be used to make product claims. See disclaimer on first slide. 3 Consumer data suggests that, with eating habits now including more frequent meals, energy occasions are also on the rise Focus Alert Ready for What’s Next Wake Up Get Ready for the Day Sustained Energy Spike/Boost Concentration Busy Morning 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. Afternoon Slump Get Through to Dinner Focus Recharge Post Dinner Lull Ready for Bed 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. Note: This information provides consumer insights and cannot be used to make product claims. See disclaimer on first slide. 4 Many occasion specific solutions are already available & existing dairy offerings (benefits) are perceived as limited … where are the “open” occasions? 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 rituals Wake Up Get Ready for the Day Busy Morning Afternoon Slump Get Through to Dinner Post Dinner Lull Ready for Bed Physical Movement Coffee Vitamins/ Supplements Smoothie Energy Drink Dairy could offer more solutions to fulfill gaps in evening needs without interrupting sleep Soda Nuts/Seeds Dairy 5 Note: This information provides consumer insights and cannot be used to make product claims. See disclaimer on first slide. Most consumers do not associate dairy as a top-of-mind energy source Consumers perceive Dairy as a “natural food” that is widely associated with: • Protein • Vitamin D • Calcium • Consumers have not been educated to view protein from dairy as being on par with protein 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 6 Note: This information provides consumer insights and cannot be used to make product claims. See disclaimer on first slide. Based on recent consumer insights, current energy solutions (products) have multiple benefits and some drawbacks Habits, lifestyles and overall approach to eating/wellness strongly dictate which solutions align across needs Drawbacks Benefits Coffee Energy Drinks Healthy Diet Nuts/Seeds Smoothies • 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 7 Note: This information provides consumer insights and cannot be used to make product claims. See disclaimer on first slide. Key Findings From Consumer Research 1 Consumers view seven unique ENERGY needs throughout the day that manifest differently 2 ENERGY solutions are part of a multifaceted mind-body approach to wellness 3 ENERGY solutions are driven by specific energy needs with some solutions being tied to multiple needs • Consumers are keenly aware of a connection between mental and physical energy • Consumers want to use more natural energy solutions but struggle with changing familiar habits • There are significant gaps in delivering good solutions in late afternoon and evening 4 5 However, dairy is not typically top-of-mind to many consumers for their ENERGY solutions • Most do not view the protein content in dairy as a factory that satisfies their ENERGY solutions • Consumers would need significant education to view dairy in positive light for their ENERGY solutions Dairy 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 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 and scientifically credible way Note: This information provides consumer insights and cannot be used to make product claims. See disclaimer on first slide. 8 Summary Energy needs are distinct & most are currently being met through specific solutions, but there are clear opportunities for dairy • • SO WHAT? 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 noticed • Consumers seek specific messaging cues to help determine which products are best for specific needs Since most consumers do not readily think of dairy as a go-to for their energy solutions, there is a need to educate them SO WHAT? • To date, consumers have not been educated to view dairy as an energy solution • Generally, dairy is not seen as having enough protein to have a positive impact on consumers’ energy needs • 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? • 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 SO WHAT? Note: This information provides consumer insights and cannot be used to make product claims. See disclaimer on first slide. 9 Considerations for Product Labeling 10 Consumer perception of “energy”, either physical or mental, may differ from the scientific and regulatory views. The regulatory definition of “energy” is calories (food energy). Products in the marketplace convey energy benefits in a variety of ways including by product name, ingredients or images. Therefore Substantiation of product benefits must include supporting all express and implied claims The substantiation must be truthful and not misleading and include a review of the totality of the scientific evidence and reflect the strength of the science at the time the claim is made Substantiation may include proprietary (non-public) research results For further considerations, please see the National Dairy Council Quick Reference Guide 11 Thought Starters for How Dairy Might Play in Energy Space 12 DISCLAIMER FOR THE FOLLOWING SLIDES THE USE OF BRANDS AND IMAGES OF BRANDED PRODUCTS IS INTENDED ONLY TO PROVIDE EXAMPLES OF CONCEPTS BEING DISCUSSED, AND DOES NOT IMPLY ENDORSEMENT OF ANY BRAND OR PRODUCT 13 CONSUMER INSIGHTS EXAMPLE: Get Ready for the Day – Strength and Sustained Energy Main Idea: Utilizes consumer perception towards basic positive nutrition of dairy as a source of calcium and protein that is beneficial to start the day right and is perceived as a positive association with sustained energy throughout the day Potential Plays for Dairy: • • • • Dairy based smoothies for convenient energy Dairy based smoothies with other ingredients mixed in Dairy/yogurt based energy bars – highlighting protein and calcium benefits Greek yogurt with ingredients blended in or as toppers – oats, granola, peanut butter 14 CONSUMER INSIGHTS EXAMPLE: Get Ready for the Day – Strength and Sustained Energy Main Idea: Utilizes consumer perception towards basic positive nutrition of dairy as a source of calcium and protein that is beneficial to start the day right and is perceived as a positive association with sustained energy throughout the day Inspirations from the marketplace Manufacturer’s Product description: Manufacturer’s Product description: “Crunchy toasted flakes with frosting and combined with energy clusters gives every morning a great start.” “Special K® Protein Chocolate Mocha Shakes are a perfectly portable way to curb your hunger on the go, with an added pick-me-up. These delicious chocolatey shakes have 10g of protein, 5g of fiber* and as much caffeine as a cup of coffee** to give your day a little perk. *Contains 5g total fat per serving. **A 5.5 oz. cup of drip-brewed coffee and Special K® Protein Chocolate Mocha Shakes both have 65mg of caffeine……” http://www.specialk.com/en_us/products/protein-shakes/chocolate-mocha.html “KRAFT MILKBITE combines real milk with whole grain granola and other tasty and nutritious ingredients, providing the same calcium as an 8 oz. glass of milk.” “Peaches, yogurt, whole grain and a whole lot of “mmmm”. Introducing the world’s most delicious way to start your day.” 15