Products, Proteins, and Consumers: How Whey is Answering the Call Vikki Nicholson Sr. Vice President, Global Marketing U.S. Dairy Export Council • Global consumer trends • Messaging insights • Product innovations 2 The World is Living Longer & Aging …. … And Getting Younger • Half of the global population is under age 30. • Leading regions are Middle East, Latin America, and Asia Pacific with ½ to 2/3 under 30 Source: Euromonitor, 2013 Rising Youth, Senior Populations Youth Explosion • Dairy deficit China and SE Asia hungry for infant/toddler formulas • MENA’s youth market ripe for great tasting products high in protein to address growing obesity issue (e.g. dairy protein beverages) • High content and quality protein F&B solutions needed to address dietary needs of aging populations – – – – Japan highest share China biggest number Korea among fastest growing U.S. significant senior population Rapidly Graying Societies 5 Emerging middle class – Not just in BRICs 24 countries and 2 billion people spending $6.9 trillion annually 6 Source: McKinsey Emerging middle class defined as yearly income of $13,500-$113,000 (PPP basis) Protein Recognized as Important in Daily Diet, Especially in Asia Multi-Market: Consumer Rankings of Importance in the Daily Diet Vitamins China India Japan Korea Brazil U.S. Indonesia Mexico 38% Protein 18% Minerals 15% Dietary fiber 9% Omega 3s 8% Antioxidants 6% Probiotics 2% Folic Acid 2% 0% 10% 20% Consumer Rankings of Protein Importance in Key Markets 30% 40% 28% 26% 25% 23% 21% 21% 19% 16% 0% 10% 20% Source: Ipsos Marketing, 2010; 18,829 consumers across 24 countries 30% U.S. Consumer Perceived Benefits • Consumers associate protein with building and maintaining muscle and providing energy throughout the day, though not to the degree established in the previous research. • Whey protein benefits regarding overall muscle composition remain the most believable. Helps build and maintain muscle Helps prevent muscle loss during aging Helps increase lean muscle mass Helps muscles recover more completely after exercise • There is favorable association with whey protein and Helping to give you energy throughout the day, as well. Source: USDEC Whey Protein Consumer Tracker. 2011 Additional efforts are needed to communicate and reinforce the messages and benefits of whey protein Perceived Benefits – Comparison of Different Terminologies Whey Protein Milk Protein Concentrate Protein Found Naturally In Milk Protein Helps build & maintain muscle 52% 46% 53% 69% Helps increase lean muscle mass 47% 42% 45% 58% Helps give you energy throughout the day 46% 42% 46% 64% Helps prevent muscle loss during aging 45% 38% 45% 54% Helps muscles recover more completely after exercise 43% 37% 40% 57% Helps maintain healthy bones & joints 43% 44% 58% 51% Helps keep you from feeling hungry between meals 40% 32% 40% 49% Helps you stay active as you get older 38% 35% 42% 50% Helps prevent bone loss during aging 35% 39% 52% 36% Helps you burn fat & lose weight 34% 30% 29% 41% Helps to reduce cholesterol 31% 32% 29% 20% Helps improve digestive health 28% 26% 30% 28% Promotes fat loss around your waist 27% 24% 24% 26% Helps improve brain function 27% 27% 31% 43% Helps improve the responsiveness of immune system 25% 25% 28% 35% Helps manage & possibly prevent onset of diabetes 19% 18% 22% 24% Helps to reduce inflammation 17% 18% 19% 19% Perceived Benefits - Total 2011 Source: USDEC Whey Protein Consumer Tracker. 2011 U.S. Consumer Attitudes Toward Whey Protein % Indicated (Top two box on 7-1 Agree Scale) Attitudes Toward Whey Protein (% Agree) I like the fact whey protein comes from milk Whey protein is one of the highest quality proteins Adding whey protein to everyday foods is a great way to boost nutritional value* 49% b 48% 49% 49% 18% 16% 18% a I've seen advertising for whey protein 15% 18% A I look for whey protein in the foods I eat 14% 17% Ab Whey protein is just for bodybuilders (or athletes) 11% 10% Total 2011 (A) 43% n/a 41% Av 20% a The word “whey" sounds like something I'd like to eat/appealing Whey protein is less nutritious than other kinds of protein* 49% 34% A 30% Whey protein can be considered an allergen It is worth paying more for whey protein 50% 51% 15% A 19% 14% 19% 13% n/a 12% A 14% A Total 2011 – 18-54 (V) Total 2008 – 18-54 (B) Table 61; Q36 Below is a list of statements relating to whey proteins. Please rate each statement based on how much you agree or disagree with that statement.; Base = Total (449-684, 319-460, 312-461) Uppercase letters indicate significance at 95% Confidence Level, lowercase at 90% Confidence Level; columns tested ABV Top two box ratings on a 7 point scale, where 7 = “Agree completely” and 1 = “Disagree completely”* New in 2011 U.S. Health Professionals’ Perceptions of Whey Protein From your perspective, how important is it to achieve a certain daily protein intake? 1% 0% extremely important 11% somewhat important slightly important not at all important Which of the following do you consider to be a high-quality protein? 0% Source: DMI HP Whey Protein Awareness & Knowledge Tracker 2012 * Percentages reflect total sample 12% 18% 41% 51% 20% 53% 40% 64% 60% 70% 80% 78% 100% 79% 45% 83% 43% very important Strong Global Growth in Categories Utilizing Dairy • Health and wellness largest category size; emerging market demand driving growth in key categories for dairy WORLDWIDE RETAIL SALES SNAPSHOT BY KEY CATEGORIES 2010 Sales Value (US$ mn) 2015F Sales Value (US$ mn) 2005-2010 Actual CAGR (%) 2010-2015 Projected CAGR (%) Health & Wellness - Sports Nutrition 601,361 4,980 772,023 6,575 6.9% 5.6% 5.1% 5.7% Baked Goods/Biscuits 393,324 454,813 5.1% 2.9% Chocolate Confectionery 94,870 121,822 6.0% 5.1% Ice Cream 73,820 90,768 5.4% 4.2% Yogurt 65,153 83,928 7.9% 5.2% Baby Formula 25,150 39,102 10.6% 9.2% Condensed/Evap. Milk 6,460 7,677 5.8% 3.5% Energy/Nutrition Bars 2,526 3,011 5.0% 3.6% Source: Euromonitor Converting Trends to Opportunities 13 The protein effect = satiety > weight management Kellogg’s Special K - Special K Protein Plus series combines 10 grams of protein and up to 5 grams of fiber. Special K2O Protein Water Mix contains 5g protein and 5g fiber is an example of ‘portable’ protein Quaker Weight Control Instant Oatmeal contains7g WPI per serving. 14 Mainstream Blurs the Line Between Snacking and Sports Energy • Coca-Cola Co signed a deal with Fair Oaks Farms Brands to distribute the Core Power high-protein energy drinks in the United States. • A cold filtration process maintains 20 percent whey and 80 percent casein ratio that is naturally found in milk. • Available in 26g and 20g protein versions and in 11.5 ounce bottles. United States: Core Power 26g Protein Chocolate. Chocolate flavored milk shake with natural high protein content, in a 340ml bottle. Source: Innova Database: 15 Fusion of dairy with other categories United States: Latte is a synonym for indulgence. Bolthouse whipped one up with caramel, pure Arabica coffee and a dash of sea salt. With 7g of protein plus 30% daily value of calcium per serving. Includes Low-fat milk, coffee, and whey protein concentrate. Austria: Lattella pineapple coconut is an exotic blend of fruity pineapple and exotic mild coconut water. Includes fermented sweet whey. Rich in vitamins and minerals with enzymes which stimulate digestion and regulate. Source: Innova Database: Protein Ready to Drink Shakes for All USA: Ensure Muscle Health Drink: Homemade Vanilla. Individual bottles of muscle health drink with homemade vanilla flavor. Ensure Muscle Health has Revigor (source of HMB, an amino acid metabolite) and also is an excellent source of protein to help rebuild muscle and strength naturally lost over time. Targeted nutrition to help rebuild muscle and strength naturally lost over time Finland: QNT Delicious Protein Shake: Raspberry Flavor. Vanilla flavored protein shake in a 330ml tetra prisma. QNT Delicious Whey Protein Shakes have a fine texture with all the nutritional quality of a traditional protein milk-shake. Made with whey protein, they bring huge quantities of high biological value protein ideal for recovery after training. Gluten free. Zero fat. Aspartame free. With 30g protein! Source: Innova Database: 17 Where do we go from here? • Enhanced marketing communications of proven nutritional benefits that resonate with consumer needs – Weight management – Healthy aging – Superior nutrition for infants/ toddlers • Delivering functional performance to support new products to meet these growing consumer needs • Production technology and regulatory support to meet global growing demand for protein Dairy Check-Off Resources Dairy Management Inc.™ (DMI) is the domestic and international planning and management organization that builds demand for dairy products on behalf of America’s 50,000+ dairy producers. Includes oversight of National Dairy Council and the following: The Innovation Center was established in 2008 under the leadership of America’s dairy farmers through DMI. It is the first of its kind to bring together milk producers, processors and manufacturers, to offer consumers the products they want — when and where they want them. The Dairy Research Institute® is a 501(c)(3) non-profit organization created to strengthen the dairy industry’s access to and investment in the technical research required to drive innovation and demand for dairy products and ingredients globally. The Institute works with and through industry, academic, government and commercial partners to drive pre-competitive research in nutrition, products and sustainability. The U.S. Dairy Export Council (USDEC) is a non-profit, independent membership organization that represents the global trade interests of U.S. dairy producers, proprietary processors and cooperatives, ingredient suppliers and export traders. Thank you Vikki Nicholson vnicholson@usdec.org 20