BUSINESS INSIGHTS Lifestyle Food and Drinks Future product opportunities from changing consumer attitudes New Food

and Drinks Report - Published May 2008 The complexity and diversity of modern lifestyles Source: Lifestyle Food and Drinks A consumer who buys organic foods may do so for a variety of reasons connected to health, taste, ethics or social status. Food and drink aspirations and preferen ces across consumer groups may converge but as lifestyles become more individual ized, it is appropriate to talk about core lifestyles supplemented by various in ternal and external influences... Identify and target the key growth areas in lifestyle food and drinks by categor y and region with the analysis and forecasts in this new report...

Business Intelligence for the Consumer Goods Industry Business Insights' portfolio of consumer goods management reports are designed t o help you make well informed and timely business decisions. We understand the p roblems facing today's consumer goods executives when trying to drive your busin ess forward, and appreciate the importance of accurate, up-to-date, incisive pro duct, market and company analysis. We help you to crystallize your business deci sions. The strength of our consumer goods research and analysis is derived from access to unparalleled databases and libraries of information and the use of pro prietary analytic techniques. Business Insights reports are authored by independ ent experts and contain findings garnered from dedicated primary research. Our a uthors' leading positions secure them access to interview key executives and to establish which issues will be of greatest strategic significance for the indust ry. Our consumer goods portfolio of reports can be used across a wide range of b usiness functions to assess market conditions and devise future strategies and c over the food, drink, health, cosmetics, toiletries, dairy categories and key co nsumer issues including eRetail and marketing. Key issues examined by this report... Natures Promise Natural and Organic foods and Eat Natural bar Environmental issues. Manufacturers cannot afford to ignore environmental issues such as recycling, biodegradable packaging and carbon footprints, which are inc reasingly important to consumers. Food safety and artificial additives. Food saf ety scares and concern over artificial colors, preservatives and flavorings are prompting consumers to look for products made with natural ingredients. Hectic l ifestyles. Long working hours, rising female employment and long commutes are in creasing stress levels and leaving consumers seeking energy and fun. Mainstream diet products. Manufacturers are attempting to broaden the appeal of low and lig ht food and drinks by avoiding using the word diet. An ageing population. The worl ds ageing population is increasing demand for functional and beauty products, inc luding anti-ageing food and drinks. Source: Lifestyle Food and Drinks in the UK the cereal bar brand Eat Natural uses the tag-line eat Natural. Feel Goo d. The brands positioning is based around using natural wholesome ingredients with out additives. To further the natural impression, large chunks of fruit and nuts a re included in the bars. In the US the food brand Natures Promise uses the organic certification of their products and do not use artificial flavors, preservatives and colors in their products to reassure consumers...

Lifestyle Food and Drinks Future product opportunities from changing consumer attitudes S&B Foods Wasabi in Tube and Kirin Ichiban Japanese Kirin Beer Consumer lifestyles determine the food and drinks they consume, and consumption choices help consumer s to achieve the lifestyle they desire. Fragmenting lifest yles present a complex maze of influences and drivers. Just as lifestyles become more fragmented, so food and drink consumption patterns will follow less clearl y defined routes and will become individualized to match the lifestyle and aspir ations of the individual. Lifestyle Food and Drinks is a new management report p ublished by Business Insights that explores the new product developments of food and drink manufacturers that cater for key lifestyle trends, and highlights fut ure opportunities for manufacturers. It also draws on an exclusive industry surv ey to assess current and future trends in lifestyle food and drinks. Discover th e latest innovations undertaken by manufacturers to appeal to certain lifestyle trends with this new report... Source: Lifestyle Food and Drinks In the UK in March 2008, S&B Foods launched Prepared Wasabi in Tube which is clai med to be ideal for using with sushi and can be served as an accompaniment. In S witzerland in January 2008, Denner launched Primess Wasabi Coated Peanuts. Such products help consumers to experiment with and acclimatize to Japanese cuisine w ithout having to cook from scratch... This new report will enable you to... % share of products launched in each category in the back to basics and nostalgi a trend, 2003-2006 Quantify and target future growth areas with this reports epidemiology data on ma jor depressive/anxiety disorder and obesity in the 7 major markets, to determine the potential for stress reduction and weight management food and drinks. Impro ve targeting and the effectiveness of your NPD strategies with this reports analy sis of Productscan data of over 28,000 food and drink product launches, to deter mine the key trends, fast growth categories and leading regions. Create more eff ective competitive strategies based on detailed analysis of an industry survey c onducted for this report, presenting industry insiders opinions on lifestyle food and drinks and the future of the market. Predict future market growth levels wi th this report s analysis of statistical data such as, international tourist arr ivals and foreign populations to determine opportunity in the culture, travel an d exploration trend. Source: Lifestyle Food and Drinks Confectionery represents a very small proportion of product launches, but is show ing the strongest growth. Recent healthy eating trends have left confectionery b rands behind other competing products. However, they are now developing products with natural ingredients, such as fruit to target health conscious consumers. T hey have also benefited from the current trend toward single-origin chocolate. C onsumers are increasingly demanding to know where the cocoa beans in their choco late have come from as it affects the taste and texture of the product...

Your questions answered... Employment rates by gender, (%), Europe & US, 2002-2006 What lifestyle trends do todays consumers aspire to? How are food and drinks manu facturers emulating trends seen in topical beauty products and beauty supplement s? What ingredients are manufacturers using to create food and drinks products w hich help consumers to relax? How can food and drinks manufacturers create produ cts which evoke a sense of heritage or nostalgia? Source: Lifestyle Food and Drinks What future opportunities are there for ethnic food and drinks? How important is it to be environmentally friendly? How can the appeal of diet products be widen ed? What natural energy-giving ingredients are food and drinks manufacturers usi ng? The proportion of women in employment is rising, particularly in Europe where it has risen by around 3% between 2002 and 2006. This means that more women can aff ord to treat themselves to more expensive products that provide beauty benefits. At the same time, the rising number of single consumers offers an opportunity f or manufacturers as single consumers tend to go out more often... Some key findings from this report... Wrigleys Orbit Complete and Xear Spry Xylitol Mints The combined value of the oral beauty supplements market in Europe and the US is forecast to grow at a CAGR of 9% between 2005 and 2010 to be worth $2.3bn by 20 10. Consumers are willing to spend money on products that provide them with beau ty benefits. 1 in 10 people in the 7 major markets have a major depressive/ anxi ety disorder, and work-related stress is extremely common. This has created oppo rtunities for food and drinks products which claim to help consumers relax and i mprove mental function. Source: Lifestyle Food and Drinks Manufacturers of sugar free products have started to use sweeteners, such as xyli tol, which have added benefits. Xylitol is found in fruit and vegetables and har dwoods such as birch. It has the same natural sweetness as sugar but 40% less ca lories. It also has other benefits such as having a low GI, a prebiotic effect a nd encourages plaque reduction by inhibiting the growth of oral bacteria. Produc ts containing xylitol include Wrigleys Orbit Complete chewing gum launched in the UK in September 2006 and Xears Spry Sugar-Free Mints launched in the US in Janua ry 2008... The combined value of the diet food and drinks market in Europe and the US is fo recast to grow by 15% between 2006 and 2010 to be worth $111bn. Manufacturers ar e dropping the word diet from their products to gain widespread appeal and are exp loring the opportunities of nutraceutical products. The ethical, Fairtrade, orga nic and safety trend will be the most important lifestyle food and drinks trend over the next 5 years.

Pages: 157 Figures: 51 Tables: 22 Sample from Lifestyle Food and Drinks Chapter 3: Stress reduction and time managem ent Innovation and NPD Of all the stress reduction products launched, ready meals took the highest shar e, with 39.6% in 2006. Their strong presence within this trend is due to their i ntrinsic timesaving features, which in turn reduces stress by freeing up time fo r other activities. Soft drinks and bakery and cereals also have a significant s hare of all product launches. The soft drinks category has seen launches of prod ucts containing ingredients to help people relax and energy drinks which improve mental function, whilst the high number of bakery and cereal launches is the re sult of a growing number of microwavable (and thus time-saving) products. Figure 3.9: % share of products launched in each category in the stress reductio n and time management trend, 2003-2006 Source: Lifestyle Food and Drinks Key trends Relaxation When consumers have a hectic, stressful lifestyle or when they are in particularly stressful situations, they look for products which can help them t o relax. Recent food and drinks products which aim to aid relaxation have used t wo key ingredients; theanine and GABA. Theanine Theanine is an amino acid which is found naturally in green tea and has a relaxing effect without causing drowsi ness or reducing alertness. By reducing worry, theanine can have a positive effe ct on concentration and focus. Theanine is thought to work by increasing GABA le vels (see section on GABA below) and mood-enhancing dopamine. To date the use of theanine to create relaxation food and drink products has been mainly limited t o Japan and the US. Examples of products containing theanine include Bourbon Mil k Cocoa Relax, a cocoa drink mix launched in Japan by Bourbon in December 2006 a nd Doctors Chocolate, a dark chocolate truffle product in the US in January 2007 by Perfect Chocolate Inc. The truffle is claimed to reduce stress and improve me ntal clarity if consumed twice a day. In the US RelaxCo launched the Blue Cow Re laxation drink in November 2006 which is designed to reduce stress within 30 min utes of consumption. GABA GABA (gamma-aminobutyric acid) is a neurotransmitter t hat helps to block the transmission of impulses between cells in the nervous sys tem which has the effect of preventing over-excitation. In doing so it induces r elaxation and sleep and regulates anxiety. Adding GABA to food and drink product s has been particularly popular in Japan. For example, in 2005 Glico Dairy Produ cts launched Mental Balance Chocolate which contained 280mg GABA per 100g. In 20 06 the company launched GABA Coffee Milk which is a caffe latte type milk drink which contains 28mg GABA per 200ml pack. GABA has also been added to products in other categories such as yogurt (GABA 100 Yogurt launched in December 2006 by M eiji Dairies) and cheese (Q.Q.B GABA launched in October 2006 by Rokko Butter). - 44 Order this report today to find out more...

Table of Contents CHAPTER 1: INTRODUCTION Defining lifestyle food and drinks Aspirational lifestyl es The complexity and diversity of modern lifestyles Lifestyle benefits CHAPTER 2: HEALTH, BEAUTY AND A POSITIVE IMAGE Introduction The health, beauty and posit ive image trend - Ageing population - Increase in working women and single consu mers Value of the oral beauty supplements market Innovation and NPD Key trends Skin moisturizing and nourishing - Tanning - Anti-ageing - Hair and nail care Inner beauty and feeling good Conclusions CHAPTER 3: STRESS REDUCTION AND TIME MANAGEMENT Introduction The stress reduction and time management trend - Stress - Depression - Time management Innovation and NPD Key trends - Relaxation - Thea nine - GABA - Improving mental function - Saving time Conclusions CHAPTER 4: CUL TURE, TRAVEL AND EXPLORATION Introduction The culture, travel and exploration tr end - Global tourism and travel - Ethnic diversity - Increasing popularity of ea ting out - Interest in food and cooking Value of the ethnic food and drink marke t - Types of cuisine Innovation and NPD Key trends - Expanding tastes - Caribbea n food and drink - Brazilian food and drink - Japanese food and drink - African and Middle Eastern food and drink - Emerging Asian cuisines - Authenticity Concl usions CHAPTER 5: BACK TO BASICS AND NOSTALGIA Introduction The back to basics a nd nostalgia trend - The influx of foreign food - Growth of eating out and fastfood - Decline in family meal occasions - Case study Bistos Aah Night campaign - Pr ovenance/food miles - Backlash against food safety scares and additives and pres ervatives Value of the natural food and drinks market Innovation and NPD Key tre nds - Tradition and heritage - The good ole times - Homemade style products - Hom emade products - Helping consumers to cook - Locally produced products - Natural products Conclusions CHAPTER 6: ETHICAL, FAIRTRADE, ORGANIC AND SAFETY Introduc tion The ethical, Fairtrade, organic and safety trend - Increased concern for th e environment and animal welfare - Recycling - Carbon emissions - Animal welfare - Increased awareness of world poverty and exploitation - Food safety scares

Table of Contents (contd.) CHAPTER 6: ETHICAL, FAIRTRADE, ORGANIC AND SAFETY (CONTD) Value of the ethical f ood and drinks market - Organic products - Fairtrade products Innovation and NPD Key trends - Biodegradeable packaging - Responses to food safety scares - Fairt rade evolution - Carbon neutral Conclusions CHAPTER 7: SATISFACTION WITHOUT PENA LTY Introduction The satisfaction without penalty trend - Obesity levels - Empha sis on appearance - Growing popularity of eating out - Failure of strict diets V alue of the diet food and drinks market Innovation and NPD Key trends - Foods wi th low/no calories, sugar and fat - Reducing sugar and fat - Moving into the mai nstream - Products with nutraceutical benefits - Hoodia - Citrimax - L-carnitine Conclusions CHAPTER 8: MORE FUN, LESS BORING AND ENERGETIC Introduction The mor e fun, less boring and energetic trend - Rising female employment - Long working hours and increasing commuting times Market value of energy food and drinks mar ket Innovation and NPD Key trends - A natural boost - Guarana - White Tea - Long -term vitality - Having fun Conclusions CHAPTER 9: SURVEY RESULTS Introduction D efining lifestyle food and drinks Health trends Ethical, indulgence and convenie nce trends Consumer compromises Charging a premium Product categories Consumer g roups Companies Innovative brands - Innocent - Danone Conclusions CHAPTER 10: CO NCLUSIONS Introduction Key lifestyle food and drink trends - Ethical, Fairtrade, organic and safety - Health, beauty and a positive image Key geographical marke ts Key categories Opportunities for food and drinks manufacturers TABLES Over 50s population in Western EU & US, (m), 2004-09 Employment rates by gender (%), EU & US, 2002-06 Consumer spending on oral beauty supplements, ($m), EU & US, 200010 Prevalence of major depressive disorder/anxiety in the 7 major markets, 2005 International tourist arrivals, (m), 2005-06 Population by Ethnic Group, UK (200 5)/US (2000) Foreign population by nationality, Japan, 2000/2005 The value of ea ting out, ($bn), EU & US, 2004-09 Ethnic food retail market, by country/category / cuisine ($m), EU & US, 2004-09 EU ethnic food retail market, by cuisine & coun try (% value), 2004 Sales of energy food & drinks, ($m), EU & US, 2001-11 Top 10 innovative lifestyle food & drink brands Diet food & drinks market, ($m), EU & US, 2006-10 Prevalence of obesity in the 6 major markets by age (000s), 2005 Hea lth club membership, by country, (% population aged 6+), 2002-08

Table of Contents TABLE (CONTD) Natural (excluding organic) food & drink market, by category, ($m) , EU & US, 2000-10 Value of the organic food & drink market, ($bn), EU & US, 200 5-10 Value of organic food & drink markets, by key product markets, ($bn), EU & US, 2005-10 Adult population on a diet, USvsEU (% adults), 2004 FIGURES The comp lexity & diversity of modern lifestyles Aspirations in food & drink: beyond nutr ition to self-fulfillment % share of products launched in each category in the h ealth, beauty & positive image trend/the back to basics & nostalgia trend/the et hical, Fairtrade, organic & safety trend/the culture, travel & exploration trend /the satisfaction without penalty trend/the more fun, less boring and energetic trend (2003-06) Melodian Natural Beauty Ceramide Drink, Snow Collagen Cheesecake & Danone Essensis Microfluid Biotechnologys Leau Bronzante Lotte Snow Beauty Sens ation Coenzyme Q10 cup ice and Kyodo First Health & Beauty Custom Coenzyme Q10 L otte Nature Bio Yogurt Aji, Inaba Shiwa no Bitan functional beauty drink & Whole bakeFlax 9 Bar Danone Activia, H2Olive Pure Mineral Water & Solution Sciences Al ibi Percentage share of products launched in each category in the stress reducti on & time management trend, 2003-06 Blue Cow Relaxation Drinks, GABA Coffee & Me iji Dairies GABA 100 Yogurt Flora Omega-3 Plus spread & Focus Blend Organic Coff ee Tilda Rizazz & Quick Cuisine self-heating seafood paella Havana Mojito Oven & Grill Sauce & Malibu BBQ Starter Set Isabellas Brazilian Flavors - Banana & Aa, Gu ava & Cashew Fruit jams & Global Brands Ypioca Caipirinha Cocktail S&B Foods Wasab i in Tube & Kirin Ichiban Japanese Kirin Beer Haddouch Gourmet - Mustapha s Moro ccan Harissa Sauce, Kilifi Creek Kenyan Sauces & Something South African Cooking Sauces Pierhead - Max Prime & Albert Heijn Sajoer Boontjes Mrs Beetons Rediscove red Ice Creams & Mars American Heritage Chocolate brand Coca-Cola 11.8oz glass b ottled with twist top & Cadburys Wispa bar Two Chicks Free Range Liquid Egg White s & Greens Apple & Blueberry Muffins Casino LEau Minerale Mont Blanc & Tarascio An tonino & Figli Olio Extra Vergine di Oliva Alnatura Soups & Eat Natural Organic fruit & nut bar The Carbon Trusts Food Label Life Waters Belu Mineral Water, Might y Leaf Tea Company biodegradable pouch & The Village Bakery compostable bag Natu res Promise Natural & Organic foods & Eat Natural bar Ben & Jerrys, Tate & Lyle an d Rainforest Alliance Certified logo Asdas Respectful eggs, Salt Spring Coffees Ca rbon Cool Coffee & Icelandic Glacial H2O Carbon Neutral Water Wrigleys Orbit Comp lete & Xear Spry Xylitol Mints Pepsi Max & Walkers Baked crisps Bija Hoodia Slim ming Tea & Froodia Health Bars Leclerc Slimming Mandarin Tea & Cott Beverages Sli m-Lite Appetite Suppressant Drinks Mawai Food Corporation Power Bowl Noodles & M eiji Dairies Margarine Hobarama Bawls Mints & Unilevers Kibon Guarana Ice Cream In kos White Tea Energy & H3 Enterprises HG7 Kirin Venergy Vegetable Juice Drink, Ra w Vitality Himalania Goji Berry Trail Mix & Mller Vitality yogurts Lambrini & Cin zano Spritzz Up Definitions of lifestyle food & drinks Over the next 5 years - T he importance of key consumer groups for lifestyle food & drink products/key cat egories - Health related lifestyle trends important for food & drinks NPD - Ethi cal, indulgence & convenience lifestyle trends important for food & drinks NPD Companies that have the most influence on innovation in lifestyle food & drinks today - Compromises consumers will make in their purchasing & consumption behav iors