SEPARATING BUZZ FROM BEHAVIOR IS KEY TO NAVIGATING THE CHANGING SWEETENER LANDSCAPE

SWEETENER STRATEGIES

THE SWEETENER LANDSCAPE IS CHANGING …

IGNORES SCIENTIFIC FINDINGS TO DRIVE READERSHIP, CREATING FALSE CONTROVERSY AT THE EXPENSE OF TELLING CONSUMERS THE FULL STORY.

CONSUMER NEWS

ALTHOUGH SCIENCE RELEASED FROM 2004 TO 2013 WAS FAIRLY BALANCED, 90% OF CONSUMER NEWS COVERAGE WENT TO RESEARCH CRITICIZING HIGH FRUCTOSE CORN SYRUP (HFCS) FOR NEGATIVE HEALTH EFFECTS.

LEARN MORE ABOUT THE BUZZ

FROM SOCIAL MEDIA AND CONSUMER NEWS MAY MOTIVATE CONSUMERS TO SAY THEY AVOID SPECIFIC FOOD INGREDIENTS.

WIDESPREAD MISINFORMATION

MORE THAN 50% OF CONSUMERS SAY THEY ARE ACTIVELY PURSUING A HEALTHY LIFESTYLE AND AVOIDING SUGARS. BUT DOES THAT TRANSLATE INTO PURCHASE BEHAVIOR?

REPORTED INGREDIENT AVOIDANCE INFLUENCES FOOD AND BEVERAGE MANUFACTURERS TO MAKE UNNECESSARY CHANGES TO FORMULATIONS AND MARKETING STRATEGIES.

THESE SWEETENER STRATEGIES VARY WIDELY ACROSS BRANDS. BRAND

MIRACLE WHIP® and logo are registered trademarks Kraft Foods, Inc. HEINZ® brands are registered trademarks of H.J. Heinz Co. YOPLAIT® and logo are registered trademarks of General Mills. CAPRI SUN® and logo are registered trademarks of Rudolf Wild GmbH & Co. POWERADE® and logo are registered trademarks of The Coca-Cola Company.

APPROACH

Replace

Extend

Promote

Maintain

Reduce

Switch back

DESCRIPTION

Reformulate without promotion

Offer HFCS-free line extension

Reformulate brand with heavy promotion

Maintain HFCS formulation

Offer lower-sugars line extension

Reformulate from HFCS to sugar, and back to HFCS

LET’S TAKE A CLOSER LOOK …

MIRACLE WHIP REPLACED A SUGAR/HFCS BLEND WITH 100% SUGAR IN 2009, RESULTING IN A PRICE INCREASE.

REPLACEMIRACLE WHIP REPLACED A SUGAR/HFCS BLEND WITH 100% SUGAR IN 2009, RESULTING IN A PRICE INCREASE.

Miracle Whip saw no significant sales gains (apart from typical peaks during summer months), indicating that sweetener type doesn’t affect purchase behavior.

MIRACLE WHIP® and logo are registered trademarks Kraft Foods, Inc.

HFCS SUGAR 52 WK TRAILING

1.1.

2009

4.1.

2009

7.1.

2009

10.1

.200

9

1.1.

2010

4.1.

2010

7.1.

2010

10. 2

010

1.1.

201

1

4.1.

201

1

7.1.

201

1

10.1

. 201

1

1.1.

2012

4.1.

201

2

7.1.

201

2

10.1

. 201

2

1.1.

201

3

4.1.

201

3

7.1.

2013

10.1

. 201

3

1.1.

201

4

4.1.

201

4

$35

$30

$25

$20

$15

$10

$5

$0

HEINZ INTRODUCED SIMPLY HEINZ IN 2010, A LOW-SALT, HFCS-FREE LINE EXTENSION.

EXTEND

Heinz gave up as much as it gained. The new SKUs cannibalized about 7% market share from existing Heinz products. HEINZ® brands are registered trademarks of H.J. Heinz Co.

HFCS SUGAR LOW/NO SUGAR

1.1.

2009

4.1.

2009

7.1.

2009

7.1.

2009

10.1

.200

9

1.1.

2010

4.1.

2010

7.1.

201

0

10.1

. 201

0

1.1.

201

1

4.1.

201

1

7.1.

201

1

10.1

.201

1

1.1.

201

2

4.1.

201

2

7.1.

201

2

10.1

. 201

2

11.1

. 201

1

1.1.

2013

4.1.

201

3

7.1.

201

3

10.1

. 201

3

1.1.

201

4

4.1.

201

4

7.1.

2014

70%

60%

50%

40%

30%

20%

10%

0%

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YOPLAIT REPLACED HFCS WITH SUGAR IN 2010 AND USED HEAVY PROMOTION IN AN ATTEMPT TO APPEAL TO HEALTH-CONSCIOUS CONSUMERS.

PROMOTE1.

1.20

09

3.1.

2009

5.1.

2009

7.1.

2009

9.1.

2009

11.1

.200

9

1.1.

2010

3.1.

2010

5.1.

2010

7.1.

201

0

9.1.

201

0

11.1

. 201

0

1.1.

201

1

3.1.

201

1

5.1.

201

1

7.1.

201

1

9.1.

201

1

11.1

.201

1

1.1.

201

2

3.1.

201

2

5.1.

201

2

7.1.

201

2

9.1.

201

2

11.1

. 201

2

1.1.

2013

3.1.

201

3

7.1.

201

3

9.1.

201

3

11.1

. 201

3

1.1.

201

4

3.1.

201

4

5.1.

2014

7.1.

2014

9.1.

2014

50%

40%

30%

20%

10%

0%

HFCS SUGAR LOW/NO SUGAR

Yoplait gained no sales volume or category share after reformulating. Marketers misallocated valuable marketing “real estate” by communicating a message that resonated with few consumers. YOPLAIT® and logo are registered trademarks of General Mills. LEARN MORE WITH THIS CASE STUDY

THE CAPRI SUN ROARIN’ WATERS SUB-BRAND WAS FORMULATED WITH HFCS WHEN IT LAUNCHED IN 2008, BUT AT A LOWER LEVEL OF TOTAL SUGARS THAN ITS PARENT BRAND.

REDUCE

Roarin’ Waters sales soared over two years, indicating that amount of total added sugars is more important to consumers than specific sweetener types.CAPRI SUN® and logo are registered trademarks of Rudolf Wild GmbH & Co.

1.1.

2009

4.1.

2009

7.1.

2009

10.1

.200

9

1.1.

2010

4.1.

2010

7.1.

2010

10. 2

010

1.1.

201

1

4.1.

201

1

7.1.

201

1

10.1

. 201

1

1.1.

2012

4.1.

201

2

7.1.

201

2

10.1

. 201

2

1.1.

201

3

4.1.

201

3

7.1.

2013

10.1

. 201

3

1.1.

201

4

4.1.

201

4

$7

$6

$5

$4

$3

$2

$1

$0

HFCS

SUGAR

52 WK TRAILING

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GATORADE SWITCHED FROM HFCS TO SUGAR IN 2010, WHILE COMPETITOR POWERADE MAINTAINED ITS HFCS FORMULATION.

MAINTAIN

The HFCS-sweetened product gained market share, additional evidence that consumers are indifferent to sweetener type.

GATORADE® and logo are registered trademarks of Stokley-Van Camp, Inc..POWERADE® and logo are registered trademarks of The Coca-Cola Company.

9.1.

2009

11.1

.200

9

1.1.

2010

3.1.

2010

5.1.

2010

9.1.

2010

11.1

.201

0

1.1.

201

1

3.1.

201

1

5.1.

201

1

7.1.

201

1

9.1.

201

1

11.1

.201

1

1.1.

201

2

3.1.

201

2

5.1.

201

2

7.1.

201

2

9.1.

201

2

11.1

.201

2

1.1.

201

3

3.1.

201

3

5.1.

201

3

7.1.

201

3

9.1.

201

3

11.1

.201

3

1.1.

201

4

3.1.

201

4

5.1.

201

4

7.1.

201

4

9.1.

201

4

45%40%35%30%25%20%15%10%

5%0%

HFCS SUGAR HFCS (NO CHANGE)

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CAPRI SUN REPLACED HFCS WITH SUGAR IN 2008, EVEN THOUGH SUGAR WAS MORE EXPENSIVE AT THAT TIME.

The switch failed to deliver. Capri Sun consumers weren’t willing to pay more for a sugar-sweetened product, so the brand switched back to HFCS.

SWITCH BACK1.

1.20

09

4.1.

2009

7.1.

2010

10.1

.201

0

1.1.

2010

4.1.

2010

7.1.

2010

10. 2

011

1.1.

201

1

4.1.

201

1

7.1.

201

1

10.1

. 201

1

1.1.

2011

4.1.

201

2

7.1.

201

2

10.1

. 201

2

1.1.

201

2

4.1.

201

2

7.1.

2012

10.1

. 201

3

1.1.

201

3

14%

12%

10%

8%

6%

4%

2%

0%

HFCS SUGAR 24 WEEK TRAILING

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MIRACLE WHIP AND HUNT’S USED A SWITCH BACK STRATEGY TOO.

HFCS SUGAR

May 2008

May 2009

May 2010

May 2011

September 2011

May 2012

CAPRI SUN® and logo are registered trademarks of Rudolf Wild GmbH & Co. MIRACLE WHIP® and logo are registered trademarks Kraft Foods, Inc. HUNT’S® brands are registered trademarks of ConAgra Brands Inc.

• Sales results show that replacing HFCS with sugar doesn’t result in sales gains.

• Line extensions using claims perceived as “better for you” may cannibalize sales of existing products.

• Brands that promote “HFCS free” are misallocating valuable marketing “real estate” by communicating a message that resonates with few consumer.

• Reduction of total sugars opens doors for sales growth, through alignment with true consumer attitudes and behavior.

• Sales results for brands maintaining sweetener formulations indicate consumer indifference to sweetener type.

• Consumers aren’t willing to pay more for sugar-sweetened products, motivating brands to switch back to original HFCS formulations.

RECAP

THESE EXAMPLES SHOW THAT EVEN WHEN CONSUMERS SAY THEY ARE ACTIVELY AVOIDING SOMETHING, THEY DON’T ALWAYS DO WHAT THEY SAY.

OVERALL,

SO HOW DO FOOD AND BEVERAGE MANUFACTURERS DEVELOP INFORMED SWEETENER STRATEGIES AND DELIVER AGAINST TRUE CONSUMER DEMAND?

FOCUS ON ACTUAL PURCHASE DATA FOR EACH OF THEIR CONSUMER SEGMENTS.

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