Tom Vierhile Anne Sinha

VP Strategic Insights, Global Segment Lead -

North America Protein Segments

Innova Market Insights CP Kelco

Growth in dairy alternatives is driven by consumer demand
More consumers are embracing dairy alternatives Dairy alternative launches are booming

“I increased my average annual growth of dairy

consumption of dairy alternative launches* tracked
alternatives.” +22%
(Global, CAGR 2014-2018)

34%
Mexico

23%
U.S.

19%
U.K.
Belgium, May 2018 United States, Feb 2019

Sources: Innova consumer survey, 2018; Innova database (2019)

*Spoonable non-dairy yogurt, dairy alternative drinks, non-dairy cheese, non-dairy ice cream & frozen yogurt
2 INNOVA MARKET INSIGHTS
Consumers pay attention to health, diet variety, novelty, sustainability
Health remains biggest driver for buying alternatives Making the consumer connection

For what reasons do you buy alternatives to meat, bread or dairy? United States, Jul 2019
CLAIMS …Promotes
cardiovascular health and
HEALTH
58% optimal wellness.
of global consumers INGREDIENTS Cacao fruit pulp,
pineapple, cucumber seeds,
acacia fiber, cold pressed virgin

DIET VARIETY
50% chia seed oil, konjac…
of global consumers
United States, Apr 2019
DESCRIPTION …added with live

NOVELTY
31% cultures and sweet, ripe
raspberries to produce the most
of global consumers
scrumptious non-dairy yogurt
available.

SUSTAINABILITY
20% CLAIMS Artisan. Dairy free.
Traditionally cultured... Plant-
of global consumers based food that is good for you
and the environment…

Sources: Innova consumer survey (2018, average of U.S., U.K., China, Mexico, Spain, India and Thailand), Innova database (2019)

3 INNOVA MARKET INSIGHTS

Trends and countertrends drive developments of hybrids

Blue Diamond Almond Breeze Live Real Farms Lactose Free Dairy Farmland Fresh Dairies
Almond Milk: Unsweetened Original and Almond Vanilla Milk Blend Organic 2% Reduced Fat Milk
United States, Jun 2019 United States, Aug 2019 United States, May 2019

Plant-based Plant-based + Dairy Dairy

Source: Innova database (2019)

4 INNOVA MARKET INSIGHTS

Alternative protein sources are gaining shelf space
Soy milk is still leading, other sources are catching up Almond milk is in fashion, gellan gum takes the stage

Product bases as percentage (%) of dairy alternative launches* In 2014, 30% of almond milk launches contained carrageenan. By
tracked (Global) 2018, just 5% of new almond milks used the ingredient. Gellan gum
has gained as half of new almond milks in 2018 used the ingredient.

Soy Milk

Almond Milk

Coconut Milk

Oat Milk

0% 10% 20% 30% 40% 50%

% of product launches

2014 2018
United States, Oct 2018 United States, Jan 2019

Source: Innova database (2019)

*Spoonable non-dairy yogurt, dairy alternative drinks, non-dairy cheese, non-dairy ice cream & frozen yogurt
5 INNOVA MARKET INSIGHTS
Evolution of top stabilizers used in dairy alternatives
Top stabilizers as percentage (%) of dairy alternative launches* tracked with stabilizers (Global)

+37%
CAGR 2014-2018

50%
% of product launches

40%

30%

20%

10%

0%
Guar Gum Locust Bean Gum Gellan Gum Pectin Xanthan Gum Carrageenan

2014 2018

Source: Innova database (2019)

*Spoonable non-dairy yogurt, dairy alternative drinks, non-dairy cheese, non-dairy ice cream & frozen yogurt
6 INNOVA MARKET INSIGHTS
Rise of other dairy alternatives beyond plant-based beverages
• The dairy alternatives market was primarily pioneered by and continues to be led by beverages, with dairy alternative drinks accounting for
63% of global dairy alternative launches* in 2018.
• Over the past five years, non-dairy ice cream & frozen yogurt, spoonable non-dairy yogurt and non-dairy cheese have seen rising levels of
new product development but from a smaller base.
UK, Nov 2018 Sweden, Feb 2019

Subcategories as percentage (%) of dairy alternative launches* tracked (Global)

Dairy Alternative Drinks

Non-Dairy Ice Cream & Frozen Yogurt

Spoonable Non-Dairy Yogurt

Non-Dairy Cheese

0% 20% 40% 60% 80% 100%

% of product launches

2014 2018 Canada,

May 2019

Source: Innova database (2019)

*Spoonable non-dairy yogurt, dairy alternative drinks, non-dairy cheese, non-dairy ice cream & frozen yogurt
7 INNOVA MARKET INSIGHTS
Tom Vierhile Anne Sinha
VP Strategic Insights, Global Segment Lead -
North America Protein Segments

Innova Market Insights CP Kelco

Stabilizing Dairy Alternative Products
with Nature-Powered Solutions
Webinar Presentation
9 October 2019
CP Kelco: Who We Are

Unlocking nature-powered success

Through our Ingredients that are Create value
- Science - Nature-based - “Better for you” products
- Innovation - Plant-and - Global relevance
- Partnering fermentation- - Regulatory compliance
- Quality and consistency derived - Sustainability

• A leading global producer of nature-based ingredient solutions

• A rich heritage of hydrocolloid technology innovation and

customer collaboration over the past 90 years

• Part of the J.M. Huber Corporation, based in Atlanta,

Georgia, USA
2
What Consumers Want

Health & Wellness Got (Plant) Protein The Impact of Texture Clean Label

Consumers are looking Consumers are demanding After flavor, texture is Clean label food and
for foods and beverages more protein from a the most important beverages are becoming
that not only taste good variety of sources. consumer attribute. the new norm.
but are also good
for them.

3
Key Challenges and Solutions for
Creating Stable Protein Beverages
KELCOGEL®
Gellan Gum for
Excellent long-term
Suspension suspension with
light mouthfeel

GENU® Pectin,
CEKOL® Cellulose Stable
Gum and Beverage
GENU® Carrageenan Stable Excellent GENU® Carrageenan
for protein protection Proteins Emulsion and processing
Stability modifications for
enhanced emulsion
stability

Solutions for stabilizing alternative protein beverages are generally the same as stabilizing dairy-based
beverages. However, formulation and process modifications may be needed.

4
Why is Suspension Important in
Dairy Alternative Beverages?

5
Solubility vs. pH Curves
for Different Plant Proteins

Isoelectric Pea protein: Soy protein: Faba protein:

points: ~ pH 4-5 ~ pH 4-5 ~ pH 5-6

100
80

Solubility (%)
60
40
20
0
pH 3 pH 4 pH 5 pH 6 pH 7 pH 8
Pea protein Soy protein Faba protein

𝐏𝐏𝐏𝐏𝐏𝐏𝐏𝐏𝐏𝐏𝐏𝐏𝐏𝐏 𝐜𝐜𝐜𝐜𝐜𝐜𝐜𝐜𝐜𝐜𝐜𝐜𝐜𝐜 𝐢𝐢𝐢𝐢 𝐬𝐬𝐬𝐬𝐬𝐬𝐬𝐬𝐬𝐬𝐬𝐬𝐬𝐬𝐬𝐬𝐬𝐬𝐬𝐬𝐬𝐬

𝐒𝐒𝐒𝐒𝐒𝐒𝐒𝐒𝐒𝐒𝐒𝐒𝐒𝐒𝐒𝐒𝐒𝐒𝐒𝐒 % = × 𝟏𝟏𝟏𝟏𝟏𝟏
𝐓𝐓𝐓𝐓𝐓𝐓𝐓𝐓𝐓𝐓 𝐩𝐩𝐩𝐩𝐩𝐩𝐩𝐩𝐩𝐩𝐩𝐩𝐩𝐩 𝐜𝐜𝐜𝐜𝐜𝐜𝐜𝐜𝐜𝐜𝐜𝐜𝐜𝐜
Note: Protein measured with NanoDrop® 2000 Spectrophotometer (Protein A280)

6
Suspension with Light Mouthfeel
with Gellan Gum Fluid Gels

Gellan gum fluid gel: A weak gel network formed from a diluted gellan
gum solution (~0.015 to 0.04%), which is highly pseudoplastic.

SUSPENSION MOUTHFEEL
100000
C A: Right mouthfeel
10000 but poor suspension
B B: Right mouthfeel
Viscosity (cP)

1000
and good suspension
A
100 C: Good suspension
but too much
10 mouthfeel viscosity
1
0.001 0.01 0.1 1 10 100 1000
Shear rate (1/s)

7
Gellan Gum’s Innovation Journey:
Discovered in Nature, Developed for Functional Use

In the production process, naturally occurring, plant-based

• A water-soluble polysaccharide cultures are fermented with sugar and water.
discovered 40 years ago in a lily pond
in Pennsylvania, USA

• Extensively tested for food; Nature-based

Cultures Sugar, Proteins
introduced to the industry by Kelco and Water
• Approved by the US FDA in 1992
• Approved for food in Europe in 1996

• Formulation in beverages at forefront Fermentation Drying

of CP Kelco’s gellan growth &
innovation over the last 25 years
Made through fermentation –
just like beer, yogurt,
• Production capacity expansions at cheese and kombucha Milled into Powder
China and US facilities recently
announced to address continuing
market growth & demand
8
CP Kelco Product Range and Functionalities
for Alternative Protein Beverages

KELCOGEL® Gellan Gum GENU® Pectin GENU® Carrageenan CEKOL® Cellulose Gum

HA-B YM-series J-DS LVD

HS-B BETA Hi-pHive HVD
Hi-pHive

• Suspension with • Protein protection • Emulsification • Protein protection

light mouthfeel • Protein protection

9
KELCOGEL®Gellan Gum
suspends me.
Questions?
 Thank you!
Let’s stay in touch:

We’re here to help at cpkelco.com/contact-us

Connect with us on LinkedIn

12
APPENDIX
CP Kelco: A Leading Innovator in
Fermentation-Derived Specialty Ingredients

First to introduce commercial High quality ingredients produced

volumes of xanthan, gellan and in multiple world-class plants:
diutan gums in 1964, 1988 and San Diego, CA, USA; Okmulgee,
2000, respectively. OK, USA; Wulian, China.

The largest portfolio of Laboratories in every region of the globe:

specialty biogums solutions for (Copenhagen, Dubai, Limeira, Mumbai, San
the food, beverage, consumer Diego, Shanghai and Singapore) to support
and industrial segments. customer application development and
troubleshooting locally.

Committed to sustainability: Our

goal is to reduce water and energy
intensity by 10% and reduce carbon
emissions by 10% by 2022.

14