1. 1 ©2007 Mintel Group. All rights reserved. David Jago Director, GNPD Custom Solutions, Mintel 7 th March 2007 Winning Products Seminar, 2007

2. 2 ©2007 Mintel Group. All rights reserved. Don’t make it just because you can…? Tibi chocolate with cottage cheese and lemon cream filling, Turkey

3. 3 ©2007 Mintel Group. All rights reserved. Don’t make it just because you can…? Ketcho ketchup flavoured cheese, Spain

4. 4 ©2007 Mintel Group. All rights reserved. Don’t make it just because you can…? Jones Soda Holiday Pack, USA, in flavours including Green Pea and Turkey & Gravy

5. 5 ©2007 Mintel Group. All rights reserved. Don’t make it just because you can…? Green Card energy drink marketed to illegal immigrants in the US or heading towards the US

6. 6 ©2007 Mintel Group. All rights reserved. Today’s presentation Brief look at the numbers – where is all the effort on NPD being directed? What happened over the last 12 months? –A review of 2006 – some global highlights in food & drink NPD –What will last, and what will fade What do we think will happen next? –Looking forward, what might make the winning products of the future?

7. 7 ©2007 Mintel Group. All rights reserved. NPD activity, global – how are we doing in the UK? Overall growth in 2006 14% growth in new product launches in Europe BUT drop in UK of around 25%... –Branded (non private label) launches fell 35% in 2006 –Private label introductions also fell, but not by such a large margin –Most categories fell back to 2004 levels –Food scares (meat, poultry), poor weather (ice cream), and price competition (dairy) account for much of the drop in 2006

8. 8 ©2007 Mintel Group. All rights reserved. NPD activity, global – which categories are “hot”? Beverages always leads – diverse and fragmented category touched by every trend Impulse- and indulgence-driven categories are strong: bakery, confectionery, snacks

9. 9 ©2007 Mintel Group. All rights reserved. What happened over the last 12 months? Key highlights in food & drink NPD in 2006, globally: –Omega-3 –Free from –No trans fats –Natural and naturally rich in What will last, and what will fade?

10. 10 ©2007 Mintel Group. All rights reserved. Key highlights in 2006: omega-3 2006, the year of omega-3 – for mental function as well as heart health Introductions from major companies and smaller players Activity in every segment Unilever’s Blue Band Idee! margarine, with the fatty acids DHA, ALA and B vitamins that aid mental development, Netherlands; Dynamic Chocolates’ Botticelli Choco-Mind chocolates, with omega-3 and choline for mental function, Canada; Sparky Brand Ornage, orange juice enriched with omega 3, UK

11. 11 ©2007 Mintel Group. All rights reserved. Key highlights in 2006: free from DS Foods’ range of gluten-free convenience foods, now in wide distribution in Europe; Ingman’s lactose-free ice cream, Finland Globally, launches of food & drink labelled as “gluten-free” nearly doubled in 2006 Growth is strongest in Europe and North America, and moving increasingly mainstream Gluten-free and lactose-free products target growing numbers of consumers who suffer from food allergy/intolerance, or who simply prefer to avoid certain foodstuffs for lifestyle reasons

12. 12 ©2007 Mintel Group. All rights reserved. Key highlights in 2006: no trans fats Introductions of products labelled as having no or reduced trans fats grew by 120% in 2006 North America accounts for 80% of those introductions Increasing numbers of convenience food products in the UK communicate a message of “no hydrogenated fats”

13. 13 ©2007 Mintel Group. All rights reserved. Key highlights in 2006: natural Cadbury Schweppes’ 7UP carbonated soft drink, “now 100% natural”, free from additives and artificial flavours, USA Introductions of products labelled as “all natural” grew by 50% in 2006 – and are no longer restricted to specialist retail Introductions of products labelled as “no additives/preservatives” nearly doubled… The focus continues to shift away from fortification, in favour of products “naturally rich in…” Trader Joe’s Green Plant juice, USA; Innocent Superfoods Smoothie, UK

14. 14 ©2007 Mintel Group. All rights reserved. What next? Looking forward, what might make the winning products of the future? 10 predictions: –Areas that will grow in importance in the future –Product attributes that food developers and marketers will seek

15. 15 ©2007 Mintel Group. All rights reserved. 10 predictions for 2007 and beyond 1.Amazonia – products sourced from Brazil and the rainforest 2.Ethical positioning – Fairtrade and sustainability 3.Refills – in food & drink as well as non-food 4.Keeping it simple – via package and function 5.Technology – advances that improve product functionality 6.Internet marketing – new ways to reach and capture consumers 7.Healthy ageing – product & package functionality 8.Teens – the ignored demographic 9.Antioxidants are reborn 10. The end of fad diets

16. 16 ©2007 Mintel Group. All rights reserved. 1. Amazonia: Brazilian ingredients in food products Scozil’s Happy Monkey juice drink, UK, with açaí, “Brazilian Rainforest Superberry”, rich in natural antioxidants; Caffe Classico’s Belizza sorbet with açaí & banana, “the healthiest pleasure in the universe”, USA; Liberty Imports’ Açaí Extreme Superfood with Granola, USA, a frozen fruit snack made with antioxidant- rich açaí berries from Brazil The fusion of natural functionality and exotic provenance Allied to premium positioning Açai as a key ingredient for 2007 and beyond

17. 17 ©2007 Mintel Group. All rights reserved. 2. Ethical: Fairtrade New product introductions with ethical positioning grew 92% in 2006 Fairtrade is appearing in more categories, in more countries Growth in the use of Fairtrade ingredients in mainstream brands Asda Fairtrade tea, UK; Kraft’s Kenco Sustainable Development Coffee, UK; Ethiquable juice with Fairtrade and local fruit, France

18. 18 ©2007 Mintel Group. All rights reserved. 2. Ethical: environmental wellness Biota Water’s spring water, USA, in a bottle made from PLA; Belu Mineral Water, said to be packaged in the UK’s first compostable bottle; profits from the sale of the water go to clean water projects Wellness doesn’t stop at personal health… Growing consumer concern over sustainability and environmental issues Alternative, sustainable packaging materials go mainstream

19. 19 ©2007 Mintel Group. All rights reserved. 3. Refills Unilever’s Dove Silk body wash, Austria, in a refill pack; Kobayashi Pharmaceutical’s Breath Care Mints, Japan, in a container that is designed to be refilled Refills are established in some categories and some regions of the world Premium-positioned non- food brands begin to appear in refill packs Food and beverage will follow Cost savings for the supply chain and the consumer Potential environmental benefit through reduced material

20. 20 ©2007 Mintel Group. All rights reserved. 4. Simplicity in food products Unilever’s WishBone Salad Spritzers salad dressings, USA, with claim of each pump providing one calorie Simplicity works, in product, package and communication Focus on simple home values, formulations and recipes that are familiar Convenience, but not “over- engineered”, packaging that is simple and intuitive

21. 21 ©2007 Mintel Group. All rights reserved. 5. Technology: in food packaging Diamond Fruit’s Anjou Pears, USA, in a Ripe Sense package that indicates the fruit’s level of ripeness; Marks & Spencer’s Asparagus Lasagne with a SmartCode indicator to communicate with the oven to cook to perfection Technology with a tangible consumer benefit Devices and packs that can help deliver the perfect product or the perfect result

22. 22 ©2007 Mintel Group. All rights reserved. 6. Internet marketing Masterfoods’ CocoaVia chocolate bars with a heart health claim, USA, originally only sold over the internet, website now used only to educate consumers about antioxidants in cocoa Using the internet to educate, build awareness and a consumer base for new ideas Marketing-savvy companies take internet communities to new levels PepsiCo's Doritos Paprika Corn Chips, Netherlands, with a tie-in to a website that has games and a contest (nominate someone to win a one-way ticket to the Bermuda Triangle)

23. 23 ©2007 Mintel Group. All rights reserved. 7. Healthy Ageing: product & package functionality Procter & Gamble’s Folgers Simply Smooth Coffee, USA, in an easy-grip plastic canister with a foil seal. Product is endorsed by the American Arthritis Foundation Calpis Fine Support Smooth Walking, a hypotonic energy drink with glucosamine, designed to aid mobility and boost energy in older consumers, Japan Few mainstream products target older consumers in the West Success will come from communicating “vitality” and “activity”, with the promise of helping consumers to live as full a life as possible Senior-friendly packaging begins to make an appearance…

24. 24 ©2007 Mintel Group. All rights reserved. 8. Teens: products just for them Masterfoods’ My Dolmio Sauce and Pasta line, targeted to children and teens, UK; General Mills’ Hamburger Helper Singles Between Meal Pouch, add water and microwave, USA Like older consumer, teens are neglected in many mainstream food markets Yet they have purchase power, freedom to use microwaves and other devices, and frequently eat alone or with friends

25. 25 ©2007 Mintel Group. All rights reserved. 9. Antioxidants are reborn Consumers are increasingly aware of what antioxidants are, and their potential benefits Antioxidants have diverse potential sources, both science-based and natural Growth via diverse benefits: cardiovascular health, immune support, skin health, beauty Minute Maid Antiox, 56% juice content with natural antioxidants from fruit, Spain; Jeunesse range from Parmalat (yogurt, milk, desserts, fruit juice) with anti- oxidant vitamins and coenzyme-Q10, Italy; Sara Lee’s Hornimans Infu Joven, an instant tea powder enriched with grape anti-oxidant polyphenols said to delay ageing, Spain

26. 26 ©2007 Mintel Group. All rights reserved. 10. The end of fad diets Low carb came and went South Beach and Zone diets are barely more than fads in most countries Low GI has made some impact but it hasn’t set the world alight The future will be even more about balance and “naturalness”, including foods that are naturally rich in beneficial ingredients So is the fad diet dead? And if so…? Coca-Cola/Nestlé’s Enviga, a green tea based sparkling drink claimed to burn calories, USA; Kellogg’s K2O Protein Water with whey protein, designed to help consumers lose weight while keeping fit, USA

27. 27 ©2007 Mintel Group. All rights reserved. David Jago Director, GNPD Custom Solutions djago@mintel.com 0207-606-45-33 www.gnpd.com For further information contact: