Presentation on theme: "National Confectioners Association State of the Industry Conference Miami, FL February 20, 2010."— Presentation transcript:
National Confectioners Association State of the Industry Conference Miami, FL February 20, 2010
Agenda Company Overview & Footprint Company Overview & Footprint Market Review & Outlook Market Review & Outlook DFI Capabilities DFI Capabilities Consumer Trends Consumer Trends
Company Overview Only sugar supplier with national brands Distribution channels include Ingredients, Food Service and Grocery customers Produces more than 1500 SKUs of both branded and private label products First Sugar Cane Company to produce certified organic sugar Produces a full line of rice products, including half of all the rice consumed in South Florida Consumer Goods Florida Crystals Corporation and the Sugar Cane Growers Cooperative have created the first fully integrated sugar cane company in North America, taking products from field to shelf. The addition of the Domino, C&H, and Redpath brands has created a North American distribution capability. Farms 180,000 acres in South Florida Operates 2000 pieces of farm equipment Crop is harvested between October and April Uses rice for crop rotation Operates three sugar mills and a rice mill Mills process 800,000 tons of raw sugar annually Farming Operates refineries in New York, Baltimore, South Florida, New Orleans, San Francisco, Toronto Operates a 130 Megawatt cogeneration plant Produces more than 3,000,000 tons of refined sugar annually Refining ® ® ® ® ® ® ® ® ®
Our North American Footprint
Market Outlook World market deficit becomes very evident in December 2009.
The 2010 DEFICIT in pictures – Historically…
Market Outlook World market deficit becomes very evident in December Brazil crop ends – fails to meet expectations.
Brazilian Industrial Yields: kg/tonne of cane - bi-weekly Jenkins Sugar Group Source: UNICA
Market Outlook World market deficit becomes very evident in December Brazil crop ends – fails to meet expectations. India becomes consistent importer due to crop shortfalls
INDIA Cane shifts with prices This year’s deficit not fully addressed yet; election delayed decisions Yield could be impacted by fertilizer usage Poor Monsoon – El Nino Crushing capacity is there going forward
Difficult to model… Unclear until it actually happens. Export volume test, or elasticities of demand? Government intervention can accentuate and accelerate it – seizures, hoarding rules, price This time LDC’s are importers. DEMAND DESTRUCTION - HOW LIKELY?
Market Outlook/Summary 2010/2011 shows a more balanced market Projected surplus is small and in places that tend to “stock build” and “not export”. Brazil & India offer huge swing potentials. Funds, who hold a record 18.0 million mt of sugar, could lighten. As always, WEATHER is a huge and unpredictable variable.
Raw Sugar Prices - #16 Market
Domino * C&H * Florida Crystals * Redpath Reliable provider to the Confectioners Industry for over 100 years. Current supply source in all of North America (USA, Canada & Mexico) Supplier to confectionery industry of all grades of sugar (granulated, liquid, Invert, Large Grain, Fondants, Molasses, Colored Crystals & Grain Extracts).
List of Products which have Switched from HFCS to Sugar Thomas’ English Muffins Capri Sun Bull’s Eye BBQ Sauce Ocean Spray Drinks & Craisins Fuze Vitamin Water Throwback (Pepsi) Snapple Red Bull & Monster Prego Tomato Sauce Sips Flowers Brands Hunt’s Ketchup Heinz Ketchup Jones Soda
Select Learnings from Positioning Research Brand, Private Label, Artificial Sweetener Users Consumers think of Domino/C+H as the brand they can trust, and value that Domino has been around for generations/100 years Artificial sweetener users were just as likely as brand and private label users to value the natural purity of sugar, expressing some guilt over consuming artificial ingredients The taste of sugar remains unrivaled by other sweeteners, all consumers prefer to use real sugar for baking Artificial sweetener users are less likely to care about the taste of real sugar when it comes to coffee and other hot beverages Nearly all consumers were pleasantly surprised to learn that sugar is just 15 calories per teaspoon, adding that knowing this would make them more likely to use sugar in their hot beverages at a minimum Many were convinced by the “sugar in moderation” studies read in magazines
Artificial Sweeteners actually cause weight gain Studies in rats show they don’t lose weight when they eat artificially sweetened food. They eat more, and gain more. (Dr. Susan Swithers, Purdue University, article in Behavioral Neuroscience Feb. 2009) assn.org/amednews/2008/04/07/hlsa0407.htmhttp://www.ama- assn.org/amednews/2008/04/07/hlsa0407.htm “A paper in the Feb. 12 Circulation, for instance, associated drinking one can of diet soda per day with a 34% increased risk of developing metabolic syndrome compared with those who did not drink any carbonated beverages. People who drank the sugar- sweetened versions had a 10% increase in risk.” assn.org/amednews/2008/04/07/hlsa0407.htm assn.org/amednews/2008/04/07/hlsa0407.htm "I'm wondering if maybe the artificial sweetener makes you feel hungrier somehow," said Lyn Steffen, MPH, PhD, one of the authors and associate professor at the University of Minnesota in Minneapolis. "You drink this artificially sweetened drink, and you might feel satisfied for a short time. At the end of the day, it actually makes you eat more.“
Select Findings – Artificial Sweetener Users Number of calories are very important to these consumers; however they are the second least likely (behind health conscious consumers) to know that there are only 15 calories –On average people think there are 62 calories per teaspoon Brand sugar48 Artificial Sweetener73 Health Conscious78 Organic55 They feel some guilt about using artificial ingredients and many say they “would never let my kids use artificial sweeteners” They use zero calorie sweeteners predominantly in hot beverages Several were aware that zero calorie sweeteners create cravings so you end up eating more calories