Innovation & Drive for Growth

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2019-State-of-Snack-Industry1.pdf

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April 9, 2019

THE STATE OF THE SNACK INDUSTRY

How America Eats

We are Living in a …

SNACKING

EVOLUTION

Millennials Were Ages19-34 in 2015, Making Them 23-38 Today; Gen Z Age Range Today is 7-22; We Have Been Monitoring Millennials as They Age and

Starting to Get the First Glimpse of Gen Z From a Purchase and Snacking Perspective

Today We Will Share Our Findings and Future Implications

NOTE: Millennials born 1981-1996; Gen Z born 1997-2012

Agenda

Did You Know? Trend Highlights

Trend Drivers Future

Trends

DID YOU KNOW?

Did You Know?

• Snacking outpaced F&B but facing competition from Quick Serve & Limited Serve, slowing unit growth

• We have gone from 2 ways consumers purchase and consume snacks (planned and impulse) to 4

• 47% of consumers eat 3+ snacks per day

• If the trends continue to hold, millennials are taking their snacking habits with them creating a generation tailwind

• Macrosnacking will have, at a minimum, $16B of incremental growth over the next 5 years

TREND HIGHLIGHTS

Snacks Can Be Found Virtually Everywhere…

…the Impact is “On Demand” Food and Beverage

Including Snacks…

…Leading to 4 Main Ways Consumers Purchase and Consume Snacks

Planned Impulse On Demand Experiential

On Average Consumers are Still Snacking 2.7 Snacks Per Day,

and 3+ Snacks Per Day Increased Over the Last 4 Years

Source: IRI 2019 Snacking Survey

Number of Snacks Consumed Daily

2010 2015 2019

Do not snack 1-2 3+

47% 3+ snacks per day

+4 points vs 2015

Snacking Frequency has Continued to Be Prevalent Across the Day,

With Early Morning Increasing 8 points in Four Years

EARLY MORNING

AFTERNOON

EVENING

LATE EVENING

MORNING

7% 2010

18% 2015

26% 2019

22% 2010

31% 2015

36% 2019

51% 2010

69% 2015

66% 2019

44% 2010

55% 2015

57% 2019

24% 2010

39% 2015

40% 2019

Snacking is Outpacing Total F&B, but Opportunities Exist for Retail to Gain More

Snack Occasion Purchases

Source: Custom IRI POS and IRI Shopper Intelligence Platform – 52 weeks ending 12-30-18

Total F&B

+2.6% +0.4% Dollars Units

Total Snacking

+3.4% +0.4% Dollars Units

Total Core Snacking

+3.1% +0.2% Dollars Units

Dollar and Unit Sales Grew Across All Top 10 Categories Except Yogurt, Ice Cream

and Crackers

Chocolate Candy

Rfg. Yogurt Ice Cream

Cookies Chips Crackers Non-Chocolate Candy

Frz NoveltiesSnack NutsTortilla Chips

0.7% | 0.1% 3.0% | 0.8% 2.1% | 1.1% 0.0% | -0.9% 3.0% | 0.3%

-4.6% | -6.3% -0.6% | 0.4% 5.5% | 4.0% 1.8% | 0.2% 4.1% | 2.4%

$ % Chg Unit % Chg Source: IRI TSV_52 Weeks Ending 12_30_18

Last Year, We

Shared Our

Macrosnacking

Segments

Wellness Permissible

Indulgence

True

Indulgence Treats

Wellness Permissible

Indulgence True

Indulgence Treats

Inherently

healthier

&/or

nutrition claims

Products consumers

feel are more

permissible because

they have less of or

added benefits to their

indulgent favorites

“Fully loaded”

traditional categories

Confections

The Category

Breaks are Based

on Product Roles

And Attributes

Wellness Permissible

Indulgence True

Indulgence Treats

Snk and Granola Bars (GMO+ Claims) All Other Snk and Granola

Bars ( w/o GMO+ Claims)

The Category

Breaks are Based

on Product Roles

And Attributes

+1.6% Wellness

+3.9% Permissible

Indulgence

+2.9% True

Indulgence

When Comparing 2018 vs 2017, All Segments Realized Growth; Permissible Indulgence Drove Dollar Sales for Another Year

+1.2% Treats

Source: IRI TSV_52 Weeks Ending 12_30_18

$ Share & $ % Chg

When Looking at Growth Rates Top Categories Varied – Winners From Shelf

Stable, Frozen, Refrigerated, as Well as, Sweet, Savory and In Between

Dollar % change

Frz Novelties (Calories/Serving+Dairy Claims)

Snack/Granola

Bars (Grain Claims + 100% Natural

Claims +High Source)

Rfg

Peppers/Pimentos/

Olives

Fz Cookies Rfg. RTD Coffee

Rfg. Snack Cakes

& Doughnuts

Rfg. Peanut Butter Rfg. RTD Coffee (Other Natural Claims + Calories

Per Serving + Other Calorie Claims)

Fresh Eggs Dry Fruit Snacks

Source: IRI TSV_52 Weeks Ending 12_30_18

Top Raw Dollar Growth Categories Were Mixed With BFY, Permissible Indulgence, True

Indulgence and Treats Does Not Happen Often – Points Towards Consumers Desire for Variety

Top by raw dollar growth

Other Salted

Snacks

RTE CerealFresh Eggs Non-Chocolate

Candy Cookies

Tortilla Chips Nutritional/intrinsic

health value bars (Other Protein

Claims+Gluten Free Claims)

Refrigerated

Meat/Cheese/

Cracker/Dessert

Frz Novelties AO Yogurt (w/o Fat+ Claims)

Source: IRI TSV_52 Weeks Ending 12_30_18

Millennials

23%

GenX

33%

Seniors

11%

Boomers

33%

All Generations Purchase and Consume Snacks Today

Source: IRI Shopper Intelligence Platform

If the Trends Continue to Hold, Millennials are Taking Their Snacking Habits With

Them as They Age Which is GREAT News for the Industry

Source: IRI 2019 Snacking Survey

18-24

+2pts

25-34

+13pts 35-44

+9pts

3+ snacks/

day

(vs. 2015)

It is Too Soon to Tell, but Early

Indications are That Gen Z Will

Snack Frequently as Well!

3+ snacks per day

Source: IRI 2019 Snacking Survey

18-24

53%

Beverage as a Snack has Evolved to Be a Main Consideration

63% I sometimes have a

beverage as a snack

Up 3 pts. vs 2015

71% 64% 63% 60% 60% 57% 60%

18-24 25-34 35-44 45-54 55-64 65-74 75+

Source: IRI 2019 Snacking Survey

% of Consumers

On Demand and Impulse Snacking is Important to Consumers

75%

68%

75%

71%

74%

77%

72%

18-24 25-34 35-44 45-54 55-64 65-74 75+ 73% don’t plan - just grab

snack as I need it Up 6 pts. vs 2015

Source: IRI 2019 Snacking Survey

% of Consumers

However, When Consumers Pick Where to Get Their Snacks On Demand, Quick Serve and Limited Serve are Capturing Their Attention With Convenience Being the #1 Answer as to Why

54% 57% 54%

41% 33%

26%

18-24 25-34 35-44 45-54 55-64 65-74 75+

45% Of consumers go 1 to 2

x’s per week

Up 6 pts. vs 2015

Source: IRI 2019 Snacking Survey

% of Consumers

TREND DRIVERS

Generational Divide Key Differences

Holistic Health Progression

Food InfluencersPackaging, a Little Art and Science

Craver Flavor

HOLISTIC HEALTH PROGRESSION

Consumers Have a Variety of Ways They Practice Holistic Health (Self-care)

Healthcare Personal

Care F&B Exercise Sleep Natural/Home

Remedies

Mental

Wellness Wearables Medical

Devices

90% 86% 82%

55%

47% 44%

30%

23% 21%

Source: IRI 2018 Self-Care Study

Snacking has Seen Solid Increases for

Products With Relevant Claims

DAIRY: ADDED KOSHER GMO OTHER PROTEIN GLUTEN FREE NO PRESERVATIVES

Dollar Growth

139%

71%

44% 23% 16% 15%

OTHER IMMUNE DEFENSE

OIL BLEND CARBOHYDRATE: SOURCE/

CONTAINS

OTHER ANTIBIOTIC

VEGAN/ VEGETARIAN

OTHER CAFFEINE

$ % Chg

Source: IRI MULO+C- 52 Weeks Ending 12-30-18

57% want snacks that contain

vitamins and minerals

+5 pts vs 2015

49% view snacks as an important

part of a healthy eating plan

throughout the day

+8 pts vs 2015 Even more important to:

18-24 – 63%

25-34 – 63%

Not as important to:

65-74 – 32%

75+ – 24%

There are Additional Benefits Consumers Look For in Their Snacks and It

Sometimes Differs by Age

Source: IRI 2019 Snacking Survey

% of Consumers

All Generations Agree on These Snack Benefits

58% seek snacks that offer

benefits beyond basic

nutrition

+8 pts vs 2015 55% want snacks that

provide a serving of

fruit or vegetables

+7 pts vs 2015

60% want fresh/not

processed

+2 pts vs 2015

73% Is guaranteed fresh

+2 pts vs 2015

Source: IRI 2019 Snacking Survey

% of Consumers

Millennial 43%

GenX 30%

Boomers 25%

Seniors

+2%

However, You Need to Recognize the Differences When It Comes to the Specifics and Ensure Targeted Messaging Aligns to Needs…Like Organic

39% 41% 44%

22% 27%

17% 16%

18-24 25-34 35-44 45-54 55-64 65-74 75+

32% consumers eat more

organic snacks

+5 pt vs 2015

Source: IRI 2019 Snacking Survey and IRI Shopper Intelligence Platform

% of Consumers

Contribution to Core

Snacks Growth Share

and

$ % Chg

+10%

+6%

+7%

40%

18%

22%

14%

Millennials

GenX

Boomers

Seniors

Pre/Probiotics without Yogurt Total Pre/Probiotics

All Generations are Embracing Snacks With Probiotics, While Millennials and GenX

Are Driving Yogurt With Probiotics

Source: IRI 2019 Snacking Survey and IRI Shopper Intelligence Platform

Yogurt Drinks are Outside of Yogurt

39% Has 'probiotics' to

help with digestion

Up 2 pts vs 2015

$ % Chg

The Need for Low, Less or No Amount of Certain Ingredients Varies Across Life And

Varies Across Categories

50% consumers wants

snacks lower in sugar

+3 pt vs 2015

55-64 – 54%

75+ - 56%

49% consumers wants

snacks lower in salt

+1 pt vs 2015

65-74 – 55%

75+ - 56%

$ % Chg

Select Snack Categories

Seniors

Boomers

GenX

Millennials

Seniors

Boomers

GenX

Millennials

Source: IRI 2019 Snacking Survey and IRI Shopper Intelligence Platform

Approximately 45M U.S. Consumers Diet Each Year, Both Commercial and Self-Subscribed, as Part of Their Food & Beverage Practice

Top-Ranked Overall Top Commercial Self-Subscribed

Mediterranean

Diet

DASH Diet

Flexitarian

Diet

WW (Weight

Watchers) Diet

Jenny Craig

Diet

Nutritarian

Diet

Source: Boston Medical Center

U.S. News - Jan. 2, 2019

When You Look Across a Select Group of Self Subscribed Diets, There are Some

Snack Categories Allowed but Not All

Eggs Fruit Vegetables

Whole Grains Cheese Nuts

Source: Primary Research – Not Exhaustive List for Diets or Categories

Not Only are There Category Implications to Diets,

but Also Eating Habit Changes

For example, Keto diet consumers say…

“I have changed

my eating habits

in other ways" 57%

“I have started

intermittent fasting”37%

Source: IRI Monthly Omnibus Survey, March 2019

Millennial 45%

GenX 32%

Contribution to Core

Snacks Growth Share

and

$ % Chg

+20%

+11%

Seniors

+5%

Boomers

20%

Vegan Realized 16% Dollar Growth Within the Macrosnacking Universe With All

Generations Opting In – Some for Dietary Reasons but Preference for Others

Source: IRI 2019 Snacking Survey and IRI Shopper Intelligence Platform

Rise of Plant-Based Protein Snacks in

Select Categories Speaks Volumes to the

Changing Preferences for Many Consumers

$188M in sales

Over

+19% dollar sales

+20% unit sales

Source: IRI MULO+C- 52 Weeks Ending 12-30-18

Plant Based Innovations Crossed Into Many Categories in 2018

Manufacturers are Leveraging This Holistic Health Opportunity to Message Benefits

of Current Approved Products and/or Innovation Aligned With Multiple Benefits

to Functional BenefitsFrom Diet-Friendly

In Addition, Retailers are Assisting Consumers With Their Nutritional Goals Through

Specialists as well as Messaging In and Out of the Store

CRAVER FLAVORS

89% State They Want Snacks

With the Flavor They Prefer

92% Has Taste They Enjoy

There Has Been An Explosion of Flavor Combinations Over the Past Few Years and

Many Had Growth

Flavor combinations in Macrosnacking

Had Dollar Growth in 2018 vs 2017

Source: IRI MULO+C- 52 Weeks Ending 12-30-18

Well Known Flavors Continued to Blend Ingredients and Were Snack Fan Favorites

Driving Raw Dollar Growth…Like Cheese

Source: IRI MULO+C- 52 Weeks Ending 12-30-18 – Top Flavors Based on $ Change

Even Peanut Butter Had a Good Year in Snacks

Source: IRI MULO+C- 52 Weeks Ending 12-30-18 – Top Flavors Based on $ Change

Chocolate

+8%

Chocolate Chip

+5%

Oreo-Flavored

+125% Banana

+21%

Mixed Fruit

+14%

Double

Chocolate

+22%

Sweet Flavors Were Also In Demand

Source: IRI MULO+C- 52 Weeks Ending 12-30-18 – Top Flavors Based on $ Change

Sweet Snacks Has the Largest Share of the Universe, While Savory and Other

(Sweet/Savory Combinations, Assorted, etc..) are Driving Growth

OTHER

38%

$ Share $ Contribution to Growth

Sweet

33%

43%

$ Share $ Contribution to Growth

Savory

29%

48%

$ Share $ Contribution to Growth

other

Source: IRI MULO+C- 52 Weeks Ending 12-30-18

Over the Past 18 Months, Innovation Flavors Have Been More Experiential,

“Emotional” and/or “Descriptive” and …

Chillin’

Dynamite

Blaze

Birthday

Cake

Scorpion

Deer Traxx

Speed

Bump

…These Innovations Appeal to Consumers Across the Ages

Chillin’ Dynamite Deer Traxx

Skews Across

GenX & Younger

Boomers

36 - 45| 185

26 - 35| 138

19 - 25| 149

26 - 35| 144

36 - 45| 144

Source: IRI Shopper Intelligence Platform - Average Buyer Index of each flavor group Repeat % of 2+Purchasers

19 - 25| 132

26 - 35| 124

~6%

Bought By All

Generations

Deer Traxx

Birthday

Cake

~25%~19% ~18%

19 - 25| 159

26 - 35| 155

Broad Appeal

Blaze/

Blazin’

~10%

Avg Repeat

Skews Younger

In Total, Birthday Cake Flavored Snacks Lit Up the Snacking Universe With Strong Growth

+64% $ % Chg

Source: IRI MULO+C- 52 Weeks Ending 12-30-18

Flavor Was One of the Biggest Growth Drivers This Year and You Can See Why

With These Flavors

Flavor Innovation Drives Growth If You Get It Right - AI Influence on Flavor

Innovation Will Increase the Number to Ensure the Best Ones are Developed

PACKAGING,

A LITTLE ART AND SCIENCE

One Role of Packaging Is to Elevate Snacks

Packaging Can Be Fun and Engaging

Packaging and Websites are Great for Sharing Sustainability Stories

Packaging Can Also Assist in Showcasing Authenticity

Packaging is a Great Vehicle to Communicate Simplicity, Transparency and Clean Labels

As Younger Generations Age, These Facts Will Become Even More Important With

Snack Selections – Like Sustainability…

49% 44%

37% 31%

25% 29%

16%

18-24 25-34 35-44 45-54 55-64 65-74 75+

36% Snacks with 'green'

manufacturing processes Up 8 pts. vs 2015

49% 45% 39% 36% 33% 34%

24%

18-24 25-34 35-44 45-54 55-64 65-74 75+

39% Reduced packaging to

be more

environmentally friendly Up 3 pts. vs 2015

Source: IRI 2019 Snacking Survey

% of Consumers

…and Biodegradable Packaging

32% of consumers want snacks with biodegradable

packaging

Up 3 pts vs 2015

18-24 – 46%

Source: IRI 2019 Snacking Survey

% of Consumers

Even Portion Sizes are Poised for Additional Growth

59%

62% 61%

53%

57%

52% 52%

18-24 25-34 35-44 45-54 55-64 65-74 75+

57% Want snacks that have

convenient portion

sizes

Up 4 pts. vs 2015

35% snacks packaged in

100 calorie or similar

portions

Up 5 pts. vs 2015

Source: IRI 2019 Snacking Survey

% of Consumers

Portion Control Innovation Crossed Categories and Occasions

Source: IRI 2019 Snacking Survey - % of Consumer Index over 120

Chocolate Candy Non-Chocolate Candy Snack Nuts

Snack & Protein Bars Bakery Snacks Fruit Based Smoothies

Fresh Veggies

Packaging Has Been

A Factor Making

These Categories

Top-of-Mind When

Consumers Are

Commuting

Augmented Reality Will Begin to Play a Bigger Role in Not Only What Consumers

Choose to Snack but From Where

Remember, Your Package is Your Last Billboard, But Online May be Impacting the Importance to Younger

Generations – Find a Way to Gain Better Package Visibility No Matter What Channel

49% 44%

50% 53%

70% 63%

80%

18-24 25-34 35-44 45-54 55-64 65-74 75+

54% gain information about a specificsnack brand/product via package

SNACKS

Source: IRI 2019 Snacking Survey

% of Consumers

SNACKING INFLUENCERS

With the Variety of Ways Consumer Shop and Purchase Snacks,

There is a Variety of Influencers and The List is Evolving

1. Item price – 77%

2. Previous usage and trust of the brands

3. Product label/packaging – 54%

4. Coupons from home

5. Shopper loyalty card discounts – 50%

6. Signs or displays in the store

7. Checkout – 37%

8. In-store flyers

9. Newspaper circulars from home 10.Television or radio advertising 11. In-store kiosks 12. Information from website or email – 29% 13.Smartphone apps – 28% 14.Online ads and banners – 28% 15. Information from blogs or social networking sites – 27%

Source: IRI 2019 Snacking Survey: How do each of the following sources influence your snack purchase decisions: (Top 15 of Top 2 Box)

Out of the 37% of Consumers Who are Influenced at Checkout, They Truly Want

Variety In Snacking and That Includes Variety At Checkout

Source: IRI 2019 Snacking Survey

Total 18-24 55-64 65-74

Indulgent Snacks 53% 49% 52% 58%

Healthy Snacks 48% 34% 60% 61%

Cold Carbonated Beverages 41% 39% 38% 45%

Cold Bottled Water 41% 39% 33% 27%

Healthy Ready-to-Drink

(smoothies, juices, etc.) 33% 32% 26% 21%

You mentioned your snack purchase decisions were influenced by the checkout. What specifically influenced your decisions?

Purchased-Based Behavior Targeting Avoids Key Missteps in Personalization Efforts

Jamie, a Vegan, Gets a Sponsored Ad for Milk and Milk-Based Products …

But her actual cash register

receipts shows she buys

dairy–free and dairy- alternative products

Attract Consumers NOT Purchasing but

Clearly are Your Target

Drive conversations

from coupons to

experiences

Provide quick access to accompanying products

with snacking occasion ideas

Deliver

consistent

messaging

across channels

Does It Work? YES! Recently a Dairy Snack Was Successful With Targeted Campaigns

$9.31 ROAS SALES

Make a strong first impression

Boost blog engagement

Help consumers discover relevant content

Let your content drive shopping

Provide quick access to similar products

Make finding products simple with the

attributes they want

How Can You Capitalize?

CLICK AND FEET FAVORITES

Image Source: Search Engine Land

The Industry Came Full Circle in 2018 With Pure Plays Opening Up B&M Stores and/or

Being in Distribution in B&M as a Differentiator; B&M Even Had More Online Options

The Influencers Have Driven Growth to Across Several Channels

Source: Custom IRI POS and Consumer Network – Macrosnack - 52 weeks ending 12-30-18

Grocery E-CommConv Club Drug Dollar

All

Other

Mass All Other

$ Sales %

Change

vs. 2017 1.6% 4.0% 3.3% 0.5% 6.3% 38.8% -2.5% 6.5%

Unit Sales

% Change

vs. 2017 -1.3% 2.8% 0.7% -0.6% 3.9% - -4.8% 4.5%

Mass, E-Comm, Dollar and All Other Channels are Getting More Than Their Fair Share of Consumer Dollars

Source: Custom IRI POS and Consumer Network - Macrosnack – 52 weeks ending 12-30-18

Grocery E-CommConv Club Drug Dollar

All

Other

Mass All Other

43% 22% 11% 9% 5% 3% 3% 2% $ Share

of All

Channels

Share of

$ Growth 21% 27% 11% 1% 9% 29% -2% 4%

Online Shoppers are Buying Snacks From All Over the Virtual Store – Shelf Stable,

Frozen, Refrigerated

Rfg Meat/Cheese/

Cracker/Dessert

Appetizers/

Snack Rolls Tortilla Chips Frozen Dairy

Dessert

Corn Snacks Cheese

Snacks

Toasted Corn

Nuts

Pretzels Potato Chips Pork Rinds RTE Popcorn/

Caramel Corn

Crackers Other Salted

Snacks

Pastry

Doughnuts

81% 76% 68% 68% 59% 53% 53%

51% 51% 49% 49% 46% 44% 44%

Dollar Sales % Chg.

Source: IRI eMarket Insights - 52 weeks ending 12/30/2018

Online Sales Continue to Gain Share and Capture Share of Growth

Snack & Granola Bars

9.2% 0.9%

Tortilla Chips RTE Popcorn/Caramel Corn

1.9% 0.7% 5.2% 0.5%

E-commerce share of omni-channel sales

Click and collect share

of omni-channel sales

Source: IRI eMarket Insights - 52 weeks ending 12/30/2018 - “Omni-Channel + C” = MULO + C + eCommerce

Channel Connectivity

Strategies Are Important For

Success

Strive to Be Within a Hand’s

Reach of Consumers With

Optimized Assortment and

Occasion and/or Benefit-based

Messaging

INNOVATION: THE REST OF THE STORY

want snacks that provide

sustenance

Up 1 pt vs 2015

73%

18-24 – 80%

Many Consumers Look for Snacks That are Filling

Source: IRI 2019 Snacking Survey

Millennials ((+9%) and

Gen Z (+4%) are driving the majority of snack

“Energy” purchase growth

Provides an energy boost

Up 8 pts vs 2015

64% 18-24 – 68%

25-44 – 69%

Some Look to

Gain Energy

Source: IRI 2019 Snacking Survey and IRI Shopper Intelligence Platform_Core Snack All Outlet Purchases with Energy claims

…Especially When Snacks Fuel Their Day

66% 74% 77%

64% 58%

52% 44%

18-24 25-34 35-44 45-54 55-64 65-74 75+

66% snack to fuel my dayUp 11 pts. vs 2015 Source: IRI 2019 Snacking Survey and IRI Shopper Intelligence Platform

There’s Protein Innovation…

…Which Consumers are Purchasing and Consuming at Any Age, but Millennials

and Gen X Driving the Majority of Dollar Growth…

Millennials 41%

Gen X 44%

Boomers 13%

Seniors 2%

Source: IRI Shopper Intelligence Platform_Core Snack All Outlet Purchases with Other Protein claims

Contribution

to Growth

…and Then There’s Grass-Fed Collagen Innovation Delivering Protein!

It’s Table Stakes to Have a Benefit Within the Bars Category – from Protein to Cheese to Free Range Chicken – This Year's Innovation Delivered

Meat Snacks Variety Continues to Expand – Textures, Ingredients, Forms,

Flavors, Packaging

Nuts and Dried Fruit are Either Enrobing, Adding New Ingredients and/or Enhancing

With Artisanal Flavors and Packaging

Yogurt Also Innovated With Flavors Targeting Adults

and Kids

If Your Freezer Didn’t Grow… You Need to Make Room! Frozen Desserts/Ice

Cream/Novelties and…

…Lactose/Dairy-free Innovations Were Launched Delivering on Flavors and Benefits

Puffed or Popped Snacks Have Proven to Be Fun and Rewarding

Keeping Consumers Engaged in Snacking from Retail is Critical – Therefore

Experiential Innovations are Needed and These are Some

FUTURE TRENDS

…are exciting and include

conversational commerce, smart

kitchens, lab-grown protein and

cannabis in snacks, to name a few

Future trends…

At Our Recent Industry Conference, IRI Growth Summit, We Shared the Top Types of Edible Marijuana Consumed

39%

Baked Goods

46%

20%

Gummy Candy

45%

13%

Chocolate

32%

Hard Candy

64%

Fully Legal States

Consumed Past 6 Months

Preferred Consumption Method

BDS Analytics Consumer Research Q3 2018 Level 1 States: U.S. adults 21+

CBD and Hemp Snacks are Lining Up and There are More to Come

We are Seeing Ghee Being Leveraged for Many Uses Including Spreads and Beer

Grain Being Used as a Prebiotic in Some Snacks

Ghee

Ghee as an option for an

alternative spread

Beer Grain

Leftover grain from beer

making – rich in prebiotic fiber

and protein being used in

crackers and snacks

Food Service and Innovations Can All Be Predictors for Future Snacking Trends

Bitter Flavors

Continuing to expand in Food

Service and Snacking and we will

see more in the coming years

Technology

Heat your snack with your

phone charger?*

Butter

Butter as an ingredient is

trending in food service – will

butter flavor snacks see a

boost too?

*Source: Inductive Intelligence

To Gain a Portion of the $16B Incremental

Growth, Please Consider:

• Be within a hand’s reach of your target being

mindful of the FOUR ways consumers snack

• Channel strategies should be comprehensive and

include their top influencers, as well as,

assortment and innovation variations to avoid

cannibalization

• All generations are important so cater to their

differences and needs

• Leverage loyalty data to gain granular

understanding of your mutual targets

• Purchase-based targeting will improve ROAS

and ensure you get to the right consumers in

the right place at the right time

Confidential and Proprietary. 107

THANK YOU! SALLY LYONS WYATT [email protected]

mailto:[email protected]

Appendix

Apple Chips

Bagels and Bialys (GF+ Claims)

Bfast Cereal and Snk Bars (Other Natural+ Claims)

Breakfast Drink Mixes

Canned/Bottled Fruit (Non GMO+GF+Low Sugar+Organic+ Claims)

Cappucino/Iced Coffee (Fat+ Claims)

Cheese Snacks (Fat+ Claims)

Chutney

Cottage Cheese (Fat+ Claims)

AO Cottage Cheese (w/o Fat+ Claims)

Crackers (Other Grain+ Claims)

Cream Cheese and Spreads (Fat+ Claims)

AO Cream Cheese and Spread (w/o Fat+ Claims)

Dried Fruit

Dried Meat Snacks (Fat+ Claims)

Dry Fruit Snacks (Gluten Free + Organic + Non GMO+ Claims)

English Muffins (GF+Multigrain+Calorie+ Claims)

Fresh Eggs

FZ Fruit

Granola Bars (Natural+Organic+Non GMO+Grain+ Claims)

Jams Jellies and Honey (Organic+Low Sugar+Low Fat+ Claims)

Kernel Popcorn (Organic+Natural+Home Grown+ Claims)

AO Kernel Popcorn (w/o Organic+Natural+Home Grown+ Claims)

Luncheon Meats (Natural+No Preservatives+ Claims)

Microwave Popcorn (Fat+Organic+Natural/Organic+ Claims)

Natural Cheese (Fat+ Claims)

AO Natural Cheese (w/o Fat+ Claims)

Nutri and Intri Hlth Vlu Bars (Other Protein+ Claims)

Nutritional Snacks/Trail Mixes

Olives

Peanut Butter (Non GMO+Low Fat+Organic+Sugar+ Claims)

Picante Sauce

WELLNESS

The category breaks have been based on consumer attributes – part 1

Pickles

Potato Chips (High Fiber + Low Fat+ Claims)

Pretzels (Fat+ Claims)

Refrigerated Meat/Cheese/Cracker/Dessert

Relish

RFG Appetizers/Snack Rolls - Sushi

Rfg English Muffins (Multigrain+Fat+ Claims)

Rfg Flav Spreads (Fat+ Claims)

AO Rfg Flav Spreads (w/o Fat+ Claims)

AO Rfg Juc and Drk Smoothies (w/o Other Protein+

Claims)

RFG Honey

Rfg Juc and Drk Smoothies (Other Protein+ Claims)

RFG Marinated Vegetables/Fruit

Rfg Peanut Butter (100% Natural+ Claims)

RFG Pickles

RFG Relishes/Appetizer Relish

Rice Cakes/Popcorn Cakes

RTE Cereal (Grain+ Claims)

RTE Popcorn Savory (Fat+ Claims)

RTE Popcorn Sweet (Fat+ Claims)

Salsa

Snack Nuts

Snk and Granola Bars (GMO+ Claims)

Soups - BFY

Specialty Nut Butter (Non GMO+Natural/Organic+

Claims)

Sunflower/Pumpkin Seeds

Total Snack Size Produce

Yogurt (Fat+ Claims)

AO Yogurt (w/o Fat+ Claims)

AO Appetizers/Snack Rolls (w/o Sushi)

AO BAGELS/BIALYS (w/o GF+ Claims)

AO Bfast Cereal and Snk Bars (w/o Other Nat+)

AO Canned/Bottled Fruit (w/o Non GMO+GF+Low

Sugar+Organic+ Claims)

AO Cappucino/Iced Coffee (w/o Fat+ Claims)

AO Cheese Snacks (w/o Fat+ Claims)

AO Dried Meat Snacks (w/o Fat+ Claims)

AO Dry Fruit Snacks (w/o Gluten Free + Organic + Non

GMO+ Claims)

AO English Muffins (w/o GF+Multigrain+Calorie+ Claims)

AO Granola Bars (w/o Natural+Organic+Non GMO+Grain+

Claims)

AO Jams Jellies and Preserves (w/o Organic+Low

Sugar+Low Fat+ Claims)

AO Luncheon Meats (w/o Natural+No Preservatives+

Claims)

AO Nutri and Intri Hlth Vlu Bars (w/o Other Protein+ Claims)

AO Peanut Butter (w/o Non GMO+Low Fat+Organic+Sugar+

Claims)

AO Pretzels (w/o Fat+ Claims)

AO Rfg English Muffins (w/o Multigrain+Fat+ Claims)

AO Rfg Peanut Butter (w/o 100% Natural+ Claims)

AO RTE Cereal (w/o Grain+ Claims)

AO Snack and Granola Bars (w/o GMO+ Claims)

AO Specialty Nut Butter (w/o Non GMO+Natural/Organic+

Claims)

Carob/Yogurt Coated Snacks

Chocolate Covered Salted Snacks

Cookies (Energy+ Claims)

Crackers(w/o Other Grain+ Claims)

Cupcakes and Brownies (GF+ Claims)

Fz App and Snk Rolls (Protein+Natural+ Claims)

PERMISSIBLE INDULGENCE

Fz HH Entrees Non Bkfast (GF+ Claims)

Fz Ice Cream and Ice Milk Desserts (100%

Natural+ Claims)

Fz Jams Jellies and Preserves (100% Natural+

Claims)

Fz Novelties (100% Natural+ Claims)

Fz Pizza (100% Natural+ Claims)

FZ Pretzels

FZ Yogurt/Tofu

Ice Cream (Low Fat+High Protein+Organic+

Claims)

Ice Milk and Fz Dairy Desserts (Low

Fat+Gluten Free+Natural+ Claims)

Ice Pop Novelty (Natural+Low Fat+ Claims)

Muffins (Gluten Free+Low Fat+Natural+Grain+

Claims)

Oth Salted Snack xNuts (Gluten Free+Non

GMO+Low Fat+ Claims)

Pork Rinds

Rfg Bagels and Bialys (Low Fat+Grain+

Claims)

Rfg Desserts (Low Sugar+Gluten Free +

Natural+ Claims)

Rfg Dips (Fat

Claims+Natural+Calories/serving+ Claims)

Rfg Pizza (GF Claims+Natural/Organic+

Claims)

RFG Ready-to-Drink Coffee

Sherbet/Sorbet/Ices

SS Bottled Juice and Drink Smoothies

Tortilla and Tostada Chips (100% Natural+

Claims)

Tortilla/Eggroll/Wonton Wrap - RFG

Aerosol/Squeezable Cheese Spreads

AO Cookies (w/o Energy+ claims)

AO Fz App and Snk Rolls (w/o Protein+Natural+ Claims)

AO Fz HH Entrees Non Bkfast (w/o GF+ Claims)

AO Fz Ice Cream and Ice Milk Desserts (w/o 100% Natural+ Claims)

AO Fz Jams Jellies and Preserves (w/o 100% Natural+ Claims)

AO Fz Novelties (w/o 100% Natural+ Claims)

AO Ice Cream (w/o Low Fat+High Protein+Organic+ Claims)

AO Ice Milk and Fz Dairy Desserts (w/o Low Fat+Gluten

Free+Natural+ Claims)

AO Ice Pop Novelty (w/o Natural+Low Fat+ Claims)

AO Muffins (w/o Gluten Free+Low Fat+Natural+Grain+ Claims)

AO Oth Salted Snack xNuts (w/o Gluten Free+Non GMO+Low Fat+

Claims)

AO Potato Chips (w/o High Fiber + Low Fat+ Claims)

AO Rfg Pastry/Danish/Coffee Cakes (w/o GF+ Claims)

AO Rfg Bagels and Bialys (w/o Low Fat+Grain)

AO Rfg Desserts (w/o Low Sugar+Gluten Free + Natural+ Claims)

AO Rfg Dips (w/o Fat Claims+Natural+Calories/serving+ Claims)

AO Rfg Pizza (GF Claims+Natural/Organic+ Claims)

AO Rfg Snack Cakes and Donuts (w/o GF+ Claims)

AO Tortilla and Tostada Chips (w/o 100% Natural+ Claims)

Corn Snacks (No Tortilla Chips)

Cupcakes and Brownies (w/o GF+ Claims)

Dip/Dip Mixes SS

Doughnuts

FZ Cookies

FZ Dips

TRUE INDULGENCE

The category breaks have been based on consumer attributes – part 2

FZ Onion Rings

Fz Pizza (w/o 100% Natural+ Claims)

FZ Pizza Kits/Toppings

FZ Plain Potatoes/Fries/Hashbrowns

Fz Tortillas

Microwave Popcorn (w/o Fat+Organic+Natural/Organic+

Claims)

Pastry/Danish/Coffee Cakes

Rfg Pastry/Danish/Coffee Cakes (GF+ Claims)

RFG Handheld Non-Breakfast Entrees

Rfg Snack Cakes and Donuts (GF+ Claims)

RTE Popcorn Savory (w/o Fat+ Claims)

RTE Popcorn Sweet (w/o Fat+ Claims)

SS Toaster Pastries and Pop Tarts (Organic+GF+ Claims)

AO SS Toaster Pastries and Tarts (w/o Organic+GF+

Claims)

Toasted Corn Nut Snacks

True Indulg - Soups

Chocolate Candy

Non-Chocolate Candy

Regular Breath Fresheners

Regular Gum (No Sugarless)

SF Breath Fresheners

Sugarless Gum

CORE INDULGENT