Plant-Based FoodsTrends & Insights

HAIN-CELESTIAL CANADA

June 2019

Credentials

• Pioneer in Plant-Based foods – Yves Veggie Cuisine founded in 1985, Acquired by Hain in 2001

• #1 Brand in the Canadian Meat Alternative market• Highest Brand awareness in the Canadian Meat Alternative market • Highest household penetration for a Meat Free brand in Canada• Voted by consumers as the Most Trusted Vegan Brand in Canada past 2 years• Linda McCartney #2 Meat Free Brand in UK• Dream Brand globally in Non Dairy Beverage

Source: Nielsen MarketTrack National GB+DR+MM, L52W Dec 08th, 2018

Definition Of Plant-Based Foods

• Plant-Based Foods are defined as plant based alternatives to animal products – meat and seafood alternatives, ingredient alternatives, egg substitutes and dairy alternatives

• It does not include products that are inherently plant based such as single ingredient vegetables, nuts etc.

Plant-Based Alternatives Are Expanding Rapidly

Grew +20% in 2018 overall in the US Grew +11 in 2018 overall in Canada

Category Dollars GrowthMeat Alternative $92M +27%Tofu $42M +14%Non-Dairy Cheese $12M +14%Non-Dairy Beverages $266M +5%

GRAND TOTAL $412M +11%

Canada Index to US using 10:1 rule• Total Plant-Based Category 124 index• Plant-Based Milk 162 index• Plant-Based Meat 137 index• Plant-Based Cheese 100 index

Source Nielsen 52 weeks end 12/08/18

Source: Nielsen 52 Weeks End 06/2018, PBFA Commissioned dataSPINS 52 Weeks End 07/15/2018; Projected using Plant Based Growth 2014-2017

➢ In Canada, Refrigerated Meat Alternatives are more highly developed.

$59.6

$31.6

Canada Meat Alternatives, $M

Refrigerated Frozen

£382.0

£244.0

UK, Meat Alternatives, £M

Refrigerated Frozen

$200.0

$600.0

US Meat Alternatives, $M

Refrigerated Frozen

Source: Nielsen MarketTrack, N`ational GB+DR+MM, 52 weeks ending Dec 08th, 2018Kantar WPO, 30.12.18

Meat Alternatives Formats

Meat Alternative category has acceleratedgrowth and consumer interest

$51.9 $52.5$57.6

$66.2

$76.0

$96.7

$0

$20

$40

$60

$80

$100

$120

2014 2015 2016 2017 2018 2019 L52W

Consumption $M

+27%

+15%+15%

+10%

Source: Nielsen - Canada

The Movement Has Staying Power

Over Half Of Canadians Are Willing To Reduce Meat Consumption

12%

12%

24%

39%

12%

Not at allwilling

Somewhatunwilling

Neitherwilling norunwilling

Somewhatwilling

Extremelywilling

6%

2%

10%

Have a Vegetarian lifestyle

Have a Vegan lifestyle

Have a Flexitarian lifestyle

How willing would you be to consider reducing your meat consumption sometime in the future?

The Rise Of The Flexitarian

Canada’s 2019 Food Guide overhaul will continue to create interest in plant-based foods

51%

Source: Dalhousie University Protein Wars 2018 study

Household penetration has grown but stillBehind UK, the leading market

Total Panel

03/05/17 -03/03/18

03/04/18 -03/02/19

TL MEAT ALTERNATIVES

% Eq Volume

Penetration 12.0 14.1Trips per Buyer 5.3 5.4Average Elapsed Days

29 28

Source: The Nielsen Company, Homescan , National,52 Weeks ending March 2, 2019 vs YA

Total MA

Fresh MA

Frozen MA

14.1 10.4 7.8

73.1 60.7 46.2

5.3 12.6

The Meat Alternative Consumer

Meat Alternative users span a range of consumers

Vegans:a diet abstaining from the use of any animal

products

Vegetarian:a diet abstaining from

the consumption of meat and fish

Pescatarian:a diet abstaining from

the consumption of meat

Flexitarian:a diet that is largely

plant-based with the occasional inclusion of

meat (or fish)

Meat Reducer:

a diet which is actively seeking to reduce meat

consumption

Meat Eater:a diet which includes

meat and fish

These groups are not linear but fluid: consumers will move between them.

Groups contain consumers from all demographics and drivers: health, ethics – environment, ethics – animals, taste / love of vegetarian food.

The Primary ConsumersAre Younger, Multicultural & Urban

Source: Nielsen Panelviews survey, March 2017 - Canada

Overindexed to Asians, Under 35 & UrbanWho is consuming Meat Alternatives?

50%

Under 35

50%

Chinese

71%

South Asian

50%

Toronto

48%

B.C.

Place Logo Here

➢ Key factors for following a plant based diet are driven by health, nutrition, economics & environmental concerns

Source: Nielsen Panelviews Survey, March 2017 (Canada)

Health, Nutrition & EnvironmentalConcerns Are Key Motivators

A closer look at Health drivers

Associated Benefits:

• Weight loss

• Lower risk of type 2 diabetes

• Lower blood pressure

• Lower risk of heart disease

• Lower cholesterol

• Improved vision

• Healthier skin

• Longer life

Source: US News – 7 Reasons to Choose a Plant Based Diet; JAMA Eating More Plant Protein Associated with Lower Risk of Death 2016

A closer look at Sustainability drivers

Associated Benefits:

• Fewer greenhouse gas emissions

• Less freshwater consumption

• Fraction of the land required for animal production

Source: World Resources Institute April 2016

Plant-BasedProduct Comparisons

There are a variety of reasons to chooseMeat Alternatives. Protein is key motivator.

Not All Protein Is Created Equal

Your body needs 9 essential amino acids

“COMPLETE” PROTEIN SOURCES

Protein Quality Score

Eggs 1.0

Milk 1.0

Soy 0.99

Beef 0.92

“INCOMPLETE” PROTEIN SOURCES

Protein Quality Score

Chickpea 0.71

Pea 0.68

Wheat 0.40

Almonds 0.39

INCLUDESall essential amino acids

MISSING essential amino

acids

Q

U

A

L

I

T

Y

Comparison of Meat to Meat Alternatives in Retail

Nutrition(scaled to 100 g)

Beef Burger*Beyond

MeatYves Good

Burger

Calories 259 240 132

Fat 22 17.7 2.9

Saturated Fat 9 4.4 0.3

Cholesterol 62 0 0

Carb 0 4.4 9.6

Fiber 0 2.6 3.4

Sodium 332 336 425

Protein 15 17.7 17

*PC Thick and Juicy Beef Burger

Comparison of Meat Alternatives in Food Service

Nutrition(both 230 g items)

A&W Teen

Burger

A&W Beyond Burger

Calories 500 500

Fat 26 29

Saturated Fat 11 5

Sodium 910 1110

Protein 25 22

Nutrition Impossible Burger Yves Kale & Root Vegetable Patties

Ingredients

Water, Soy Protein Concentrate, Coconut Oil, Sunflower Oil, Natural Flavors, 2% or less of: Potato Protein, Methylcellulose, Yeast Extract, Cultured Dextrose, Food Starch Modified, Soy Leghemoglobin, Salt, Soy Protein Isolate, Mixed Tocopherols (Vitamin E), Zinc Gluconate, Thiamine Hydrochloride (Vitamin B1), Sodium Ascorbate (Vitamin C), Niacin, Pyridoxine Hydrochloride (Vitamin B6), Riboflavin (Vitamin B2), Vitamin B12.

Kale, onions, brown rice, canola oil, carrots, potatoes, chickpea flour, flaxseed, salt, sprouted grain blend (buckwheat, millet, quinoa and chia), spices, natural flavour, yeast extract.

Consumers are looking for simpler ingredient lists

Beyond Meat Beefy Crumbles

Lean Ground Beef

Yves Original Ground Round

Cost (CDN) $7.37-$8.71 $7.00 $3.99

Weight 284 g 500 g340 g = 1 lb (454 g) raw

beef equiv.

Cost/100 g $2.60-$3.06 $1.40 $0.88

Consumers will do cost comparisons

Beyond Meat Burgers

Beef Burger*Yves Good

Burger

Cost (CDN) $7.49-$7.99 $12.99 $5.29

Weight 226 g (2 patties) 720 g (6 patties) 300 g (4 patties)

Cost/100 g $3.31-$3.54 $1.80 $1.76

Schneider's Country Naturals Beef Burger @ LCLPricing based on retail audit at Sobey’s May 1, 2019

Plant-Based ProteinMerchandising

The value of the Meat Alternative buyer

Source: SPINS 52 WE 12-31-17 Total US – All Outlets – Plant Based Total Basket Size – In Basket Dollars per Trip;SPINS Plant Based Growth Story July 2018

The Meat Alternatives buyer is an important consumer as they bring in more dollars than the Average Shopper

Top items most frequently found in baskets

containing Yves Meat Alternatives:

1. Fresh Produce

2. Legumes

3. Other Meat & Dairy Alternatives

4. Vegetable Broth

5. Vegan Margarine

Where should the refrigerated Meat Alternativecategory be located?

Vegans and Vegetarians are the Heavy Users and drivers for category volume

LIGHT USERSMEDIUM

USERSHEAVY USERS

03/04/18 -03/02/19

03/04/18 -03/02/19

03/04/18 -03/02/19

TL MEAT ALTERNATIVES

% Eq Volume 4.9 21.3 73.7Trips per Buyer 1.2 3.3 18.0Average Elapsed Days

84 56 19

Source: The Nielsen Company, Homescan , National,52 Weeks ending March 2, 2019 vs YA

COREFlexitarian OPPORTUNITY

Place Logo Here Help Flexitarians find the Meat Alternatives

UK Meat Free Merchandising and Signage

Opportunity to test Dual Placement at shelf or in Flyers

Sobey’s

Plant-Based Destinations Maximize Engagement

✓ In the US & UK, sets contain plant-based Meat & Dairy Alternatives, Tofu and Spreads✓ Dedicated sections create a sizeable footprint easier to locate in store✓ Navigation call-outs & signage generate awareness & excitement

➢ US Kroger Live Naturally Signage ➢ UK Sainsbury “Veganuary” End Cap

Global Merchandising Strategies

MISSION: To support the regulatory and market interests of food companies in Canada that make plant-based foods.

To provide education for key government, industry partners and consumers on this growing sector.

To work in collaboration with government and industry on a modernized regulatory environment that promotes innovation and growth within plant-based foods.

To manage the narrative about plant-based foods.

GOALS:

PBFC 2019

PBFC Members

The diversity of our membership is crucial for the modernization of the industry’sregulatory environment. Plant-Based Foods of Canada (PBFC) is made up of companiesengaged in creating the brightest future for plant-based foods.