June 11, 2017 Millennial Munching A big brand playbook as the small rise up & generations transition

Equity Research The Conde Nast-GS Love List: Consumer insights across the food industry

The small rise up and the big fall down The growth vs. scale dilemma and call for Legacy packaged food companies are experiencing broader portfolio approach Jason English sales headwinds on both weaker category growth (212) 902-3293 [email protected] Our combined analysis suggests very few brands Goldman Sachs & Co. LLC and share losses. While private label is in focus of that attempt to achieve scale and growth will late, evidence suggests that small brands are the succeed, which may run counter to the CPG main drivers of share losses as barriers to structure and culture of big brand concentration. We Mitch Collett, CFA distribution and brand building fall at the same time look for companies with established Millennial +44(20)7774-1060 [email protected] big brands curtail investment. Goldman Sachs International preference, a track record of brand investment and a Opportunity on the horizon for those flexible portfolio approach embracing a small brand mindset to separate the likely leaders from laggards. Dylann B. Katz ready to seize it (212) 902-7929 [email protected] Category growth should improve in the years ahead MDLZ & Nestle lead; CPB & KHC lag Goldman Sachs & Co. LLC as Millennials form households and ramp food at Leaders: MDLZ benefits from both broader snack home consumption. To better understand which affinity and strength in Oreo, overlaid with consistent Vivek Srivastava brands and companies are best positioned to investment and a big and small brand (e.g., Vea) (212) 934-8372 [email protected] capture that growth, we executed an attitude and mindset. Nestle stands out with top brands in coffee Goldman Sachs India SPL usage study across 35 attributes for 172 brands in (#1 coffee brand), water (San Pellegrino #1 overall conjunction with Conde Nast. Some of the findings Millennial favorite) and leading brands in frozen. are surprising. Many big brands are far from Laggards: Numerous CPB brands appear relatively irrelevant – Millennials demonstrate above average disadvantaged and continuous advertising cuts affinity for them. Big brand communication and disconcerting. At KHC, low brand support raises company portfolio strategies, however, appear questions and a culture of cost efficiency appears largely unaligned with the attributes that can fuel counter to the portfolio complexity likely needed to growth vs. scale. thrive.

Goldman Sachs does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. For Reg AC certification and other important disclosures, see the Disclosure Appendix, or go to www.gs.com/research/hedge.html. Analysts employed by non-US affiliates are not registered/qualified as research analysts with FINRA in the U.S.

The Goldman Sachs Group, Inc. Global Investment Research June 11, 2017 Americas: Food: Packaged & Manufacturing

The problem: Rise of the small but mighty

Further Reading Organic sales growth for leading packaged food companies has disappointed in recent years with the aggregate of our US packaged food coverage setting a new all-time low organic sales decline in 1Q17 (-1.6%). The source of weakness has been twofold. First, This report is part of our overall category growth has slowed which has been most pronounced for center-store categories as consumer shopping behavior ongoing series on the migrates to the perimeter of the store. Equally problematic has been broad based market share erosion. The old adage of number business implications of one or number two brands are most defensible in categories has broadly broken down as top brands are broadly (though not a maturing Millennial generation. For more, universally) losing share. see: In some instances, the share loss for leading brands has been to private label which has garnered increasing investor focus of late The fashion Love List given announced or suggested initiatives by retailers (e.g., Amazon’s private label assortment expansion, Walmart’s focus on A report on global private label and the US expansion of private label oriented Lidl and Aldi). While we are not dismissive of private label threats, we snacking & the see greater cause for concern in the rise of the small brands. munching mismatch Smaller brands, many of which are being led by entrepreneurs (e.g., Kind, Clif or Quest in bars, Amy’s Kitchen in frozen, Siggi’s in Our Consumer Currents yogurt), continue to make inroads and are outpacing both industry and private label growth across the food industry. The pattern is webpage even more evident when we focus on the top 50 packaged food categories which drive 80% of industry sales. Among the top 50 categories, we see established brands and private label losing share in general to smaller brands on both a three and one year basis; in 2016, small brands gained share in 62% of the top 50 categories vs. only 40% for private label and 32% for the leading brand.

We believe the rise of the small brands and fall of the big brands is driven by multiple factors:

 Barriers to distribution are falling. Traditional retailers continue to broaden their assortment and are increasingly welcoming of small and differentiated brands as they attempt to differentiate their offerings from peers and cater to expanding consumer preferences. In Nielsen measured channels, the average number of SKUs per store has expanded at a 2.5% CAGR since 2013 with major food companies seeing a 0.7% increase, private label rising 2.7% and all-other branded manufacturers leading the growth at 3.8%. On-line, while still in its infancy in Food, will likely perpetuate this given broader assortment in the channel and easier access/lower cost for smaller companies.

 Barriers to building brand awareness and interest have fallen. Enhanced social connectivity through digital platforms has facilitated both rapid spread of word-of-mouth awareness building and peer endorsement for brands. Both small and large brands alike can benefit from this, but the point is that it has leveled the playing field. Compounding this has been the digitization of media; multi-million dollar mass media campaigns are no longer requisite to build awareness – another leveling effect.

 Intense focus on margins has likely increased the vulnerability of big brands. The industry at large has prioritized margin expansion in recent years, often at the expense of brand investment. Traditional advertising spend by large brands has materially declined in recent years. This followed an over decade long process of engineering cost out of the food by major companies. The combination has resulted in food products that are often seen as over-engineered by consumers and now less supported by brand investment.

 An evolving consumer psyche may also play a role. Some see a connection between broader anti-establishment movements among the Millennial generation and a distrust of big brands. While we intuitively understand the argument,

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we note that anti-establishment movements have been commonplace in history and believe the other three explanations are the main drivers for big brand weakness.

Exhibit 1: Sales have eroded for major food companies as both industry Exhibit 2: Share losses have come as proliferation of assortment at food growth has slowed and market share was ceded to private label and smaller retailers persists with smaller branded companies the primary gainers companies YoY Average items per store, 52 wk periods ending March YoY $ sales growth, 52 wk periods ending March

5.0% 6.0% 4.0% 5.0% 3.8% 3.0% 4.0% 2.3% 2.7% 1.9% 3.0% 2.5% 2.0% 1.4% 2.0% 1.0% 1.0% 0.7% 0.0% 0.0% ‐1.0% ‐0.8% ‐1.0% ‐2.0% ‐2.0% ‐3.0% ‐3.0% 2014 2015 2016 2017 13‐17 CAGR 2014 2015 2016 2017 13‐17 CAGR

Food majors Private Label All Other Total Food Food majors Private label All Other Total Food

Source: The Nielsen Company, Goldman Sachs Global Investment Research. Source: The Nielsen Company, Goldman Sachs Global Investment Research. Note: Food majors include CAG, CPB, GIS, HSY, SJM, K, KHC, MDLZ, Mars, Nestle, PF Note: Food majors include CAG, CPB, GIS, HSY, SJM, K, KHC, MDLZ, Mars, Nestle, PF

Exhibit 3: Among the top 50 packaged food categories over the past three Exhibit 4: While not ubiquitous, small brands have gained share in 53% of the years, big brands have lost share at the expense of “all other’ smaller brands, categories analyzed vs. only 40% for the incumbent leader not private label 2013-2016 % gaining market share 2013-2016 market share change

0.8% 60% 53% 0.6% 49% 0.6% 50% 43% 0.4% 40% 40% 0.2% 30% 0.0% ‐0.1% 20% ‐0.2%

10% ‐0.4% ‐0.3%

‐0.6% ‐0.5% 0% #1 brand Top 3 brands Private label All other #1 brand Top 3 brands Private label All other

Source: The Nielsen Company, Goldman Sachs Global Investment Research Source: The Nielsen Company, Goldman Sachs Global Investment Research

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Exhibit 5: This pattern continued in 2016… Exhibit 6: …with small brand share gains now spanning 62% of major food 2015-2016 market share change categories last year 2015-2016 % gaining market share

0.4% 0.4% 70% 62% 0.3% 60% 0.2% 50% 0.1% 40% 40% 34% 34% 0.0% 30% ‐0.1% ‐0.1% ‐0.1% 20% ‐0.2% 10% ‐0.3% ‐0.3% ‐0.4% 0% #1 brand Top 3 brands Private label All other #1 brand Top 3 brands Private label All other

Source: The Nielsen Company, Goldman Sachs Global Investment Research Source: The Nielsen Company, Goldman Sachs Global Investment Research

Exhibit 7: Brands outside of the top three are gaining share in key categories ranging from cereal to infant formula with yogurt seeing the most erosion and more commoditized categories such as frozen seafood, milk, eggs and butter the least All other brands (excluding top three and private label) market share change for 2015-2016 and 2013-2016

5% 3% 1% ‐1% ‐3% ‐5% ‐7% Yogurt Infant Ref. Veg. Shortening Candy Soft SS Spice Coffee Baked SS Wholesome Cream Breakfast Fresh RTE Cheese Water SS Salty Shelf Cookies Frzn. Boxed Fresh Lunchmeat Crackers Isotonic Frzn. Snack Frzn. Milk Nuts Eggs Butter Ice Gum Frnz. Novelty Fresh Ref. Nutritional Frnz. New

juices fruit liquid

cream

cereal

meals juice drinks

&

age

snacks veg. seafood Sandwiches entrees pizza

stable

seasoning

meat sausage desserts

cake formula

bread prep. herbs

bev.

soup &

bev.

drinks meat

drinks &

veg. snacks din.

oil

1 yr 3 yr

Source: The Nielsen Company, Goldman Sachs Global Investment Research

Goldman Sachs Global Investment Research 4 June 11, 2017 Americas: Food: Packaged & Manufacturing

The opportunity: Rise of Millennials’ food at home consumption

While packaged food industry growth has disappointed in the US of late, there is reason for optimism: the rise of the Millennials.

Millennials remain the largest population by size with the peak age cohort of this generation rapidly approaching household formation years. As household formation begins, growth in household size should follow. With larger households come larger food expenditures. The current peak household size is in the 35-44 year band (which the oldest Millennials consumer has recently entered). Nielsen measured food sales increase 70% on a per capita basis as consumers graduate from the 20-34 year old grouping to the 35-44 year old grouping. Assuming this relationship holds, the math suggests that Millennial consumers should drive the entirety of the industry’s growth over the next decade.

This presents both opportunity and risk for the industry at large. Given current trends, it speaks to a rich opportunity for entrepreneurs to continue to rise in the industry while also offering reason to believe that overall category growth can improve. Recent results, however, suggest that not all incumbent industry leaders are either prepared or well positioned to benefit.

Exhibit 8: Millennials (roughly 18-34) remain the largest generation in the US Exhibit 9: As Millennials age, their household size should grow and approach household formation years Household size by age cohort Size of cohorts by generation 2015 population (in millions)

5.5 4.0 Millennials Gen X Baby 5.0 3.4 88.7 mn 66.0 mn Boomers 3.5 72.6 mn 4.5 3.0 4.0 2.8 2.7

3.5 2.5 2.1 3.0 2.0 2.0 1.8 2.5 1.5 2.0

1.5 1.0 <25 25‐34 35‐44 45‐54 55‐64 65+ 1.0 0 3 6 9 12 15 18 21 24 27 30 33 36 39 42 45 48 51 54 57 60 63 66 69 72 75 78

Source: Euromonitor, Goldman Sachs Global Investment Research Source: BLS, Goldman Sachs Global Investment Research

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Exhibit 10: Nielsen data shows age distribution for packaged food and Exhibit 11: …Millennials could constitute nearly all of the industry’s growth demonstrates a 70% increase in food expenditures from the 20-34 cohort to through 2027 the 35-44 grouping. If this holds… Age cohort contribution to growth in food spend between 2016-2027 Per capita food expenditures by age cohort

1,600 270 8.4 1,400 Millennials 260 8.4 1,200 24.1 246.4

2027 250

to 1,000 (9.6) (8.2) 240 800

change Today's Millennial will spend 230 600 223.4 $24.1 bn more on packaged food

spend when they are in the 35‐44 220

400 bn

bracket in 2027 if current age‐ $ related spending behavior holds 200 210

‐ 200 20‐34 35‐44 45‐54 55‐65 Over 65+ 2016 25‐34 35‐44 45‐54 55‐64 <25 & <65 2027

Source: Euromonitor, The Nielsen Company, Goldman Sachs Global Investment Research Source: Euromonitor, The Nielsen Company, Goldman Sachs Global Investment Research

The solution: Investment, portfolio strategy and brand role in focus

Introducing the Conde Nast-Goldman Sachs Love List In conjunction with Conde Nast’s Food Innovation Group, we have conducted an attitude and usage study (A&U) among 7,555 US consumers. The respondents included 1,076 millennial consumers between the ages of 18-34, 564 of which we refer to as “Millennial Foodie Influencers” (a group of Millennial responders who agreed with the statement: “I have a passionate interest in food, cooking, restaurants and/or food experiences.”) and focus on for our Love List. We polled these consumers on usage habits and brand association across 35 attributes for 172 brands. We then integrated Nielsen scanner and panel data to merge self- reported data with measured real behavioral data to glean richer insight. The result is both the output of our Love List – an affinity ranking for brands with both Millennial and broader consumer sets – and attribute correlation with growth, scale and loyalty metrics. Key observations, conclusions and recommendations follow.

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The Love List – Big brands are far from irrelevant Not surprisingly, large established brands such as Coca Cola, Heinz Ketchup and Doritos top the list of most commonly purchased brands – they would not be large established brands were they not commonly purchased. Of more interest is the question of affinity. Some surprising observations are made when consumers are asked to rank their favorite brands and interesting divergences between the national sample set and the Millennial Foodie Influencer cohort are revealed:

 Millennials still like big brands. Despite conjecture of brand indifference, when asked to rank their favorites, Millennials demonstrated both a higher level and broader based affinity for big brands.

 Premiumization appetite creates opportunity for the smaller. Millennials also ranked small and mid-sized brands that compete in the premium tier of their respective categories among their favorites (11 of the top 20 favorite brands for both the national sample and millennial cohorts). Among these premium brands, the majority either laddered to health-oriented benefits (e.g., Angie’s, Noosa, and Justin’s Nut Butters) or indulgent attributes (e.g., Ferrero Roche and Starbucks).

 They like to snack. Eight of the top 20 favorite Millennial Foodie Influencer brands are traditional snack brands including Angie’s and Haribo which ranked 2nd and 3rd, respectively, among Millennial Foodie Influencers.

 Premium over mainstream preference in chocolate. Mainstream-oriented Hershey didn’t make the top 20 list for Millennial Foodie Influencers but premium brands such as Ferrero Rocher and Mars’ Dove made the cut with 60% and 56%, respectively, of Millennial Foodie Influencers rating them favorites.

 Premium coffee over tea but water trumps all. Nespresso and Starbucks had strong followings among both sample sets, but San Pellegrino ranked #1 as a favorite for Millennial Foodie Influencers. Poland Spring was not far behind for the Millennial cohort, tying both Starbucks and Nespresso for the 5th most favorite brand. Traditional mainstream coffee brands fall far behind (out of the 172 brands, neither SJM’s Folgers nor KHC’s Maxwell House placed in the top 50 favorite brands for Millennial Foodie Influencers; interestingly, Folgers held the 8th favorite spot for the national sample set).

 Ice cream melts. The national sample set ranks both Haagen-Dazs and Ben & Jerry’s among their top favorites, but ice cream brands are noticeably absent among favorite Millennial Foodie Influencer brands.

 Can baking still be relevant? Surprisingly (to us at least) PF’s Duncan Hines baking brand was ranked among the top 20 (#4) by Millennial Foodie Influencers; 13 spots above SJM’s Pillsbury brand and 100 spots above GIS’s Betty Crocker.

 Bertolli’s frozen thaw? Despite the brand’s sales challenges in recent years, CAG’s Bertolli is the 5th highest ranking favorite brand among Millennial Foodie Influencers versus a 76th ranking for Healthy Choice and 83rd for Lean Cuisine.

 Yogurt is still a go-to. Noosa, founded in 2010, marks the youngest brand to make the top 20 favorite list with both Millennial Foodie Influencers and the national sample set ranking it in the top 10. Competitor brands Fage and Yoplait also made the top 20 list for both cohorts but Chobani was noticeably missing (ranking 36th for millennials and 29th for the national sample set).

 Cookies and crackers crumble. MDLZ’s largest (and still favored) brand Oreo failed to make the cut on either favorite list but it wasn’t alone. No other cookie brand was ranked in the top 20 for Millennial Foodie Influencers while Cheez-It was the only cracker brand to hold a spot (#19).

 Common attributes—it’s the basics. Delving behind the brand names, there is a consistent pattern of attributes that tie the favorite brands together. Good tasting. Easy to find. Consistent. Convenient. Good value. What constitutes each will

Goldman Sachs Global Investment Research 7 June 11, 2017 Americas: Food: Packaged & Manufacturing

vary among consumers, but these are all arguably attributes that large established food companies should be able to deliver on.

Exhibit 12: Which brands are people purchasing? Exhibit 13: Favorite brands by age bracket % surveyed; “which of the following brands have you purchased in the last 6 % surveyed; “which of the following brands do you consider to be your favorites” months”

All Millennial Foodie Influencers All Millennial Foodie Influencers Heinz Ketchup 46% Starbucks 64% Nespresso 68% San Pellegrino 81% Starbucks 45% Coca‐Cola 52% San Pellegrino 59% Angie's 77% Coca‐Cola 44% Doritos 48% Starbucks 57% Haribo 71% Land O'Lakes 42% Chobani 47% Ben & Jerry's 55% Duncan Hines 70% Campbell's 37% Cheerios 45% Coca‐Cola 55% Bertolli Frozen 67% Chobani 37% Nature Valley 40% Noosa 55% Nespresso 67% Boar's Head 36% Oreo 39% Angie's 54% Poland Spring 67% Cheerios 36% Heinz Ketchup 39% Folgers 53% Starbucks 67% Top 20 Doritos 34% Quaker 37% Top 20 brands Fage 51% Yoplait 67% purchased Hellmann's/Best Foods 34% Land O'Lakes 37% which people Peet's Coffee 51% Noosa 64% brands in the Lay's 34% M&M's 36% consider to be Boar's Head 51% Ferrero Rocher 60% last 6 months Hershey Chocolate 33% Naked 35% their favorites Stouffer's 51% Justin's Nut Butters 59% Bush's Beans 33% Hidden Valley 34% Simply Orange 51% Coca‐Cola 59% M&M's 31% Cheez‐It 33% Ghirardelli 50% International Delight 57% Quaker 29% Lay's 33% Cracker Barrel Cheese 50% Kashi 57% Philadelphia 28% Campbell's 33% Hershey Chocolate 50% Dove Chocolate 56% Ritz 28% Pillsbury 32% Special K 50% Pillsbury 55% Oreo 28% Hershey Chocolate 32% Tates 50% Clif 55% Tostitos 28% Pepperidge Farm 32% Yoplait 49% Cheez‐It 53% Ghirardelli 27% Ben & Jerry's 32% Haagen‐Dazs 48% Fage 52%

Source: Conde Nast-Goldman Sachs Love List Source: Conde Nast-Goldman Sachs Love List

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Exhibit 14: Broadly speaking, Millennials demonstrate greater affinity for nearly all top brands % surveyed; “which brands would you consider to be your favorites?”

90% 80% your 70% be 60% to 50% 40% 30% consider

20% 10% you 0% Haribo Hershey International Fage Ferrero Folgers Ghirardelli Haagen Justin's Kashi Nespresso Noosa Peet's Pillsbury Poland San Simply Special Starbucks Stouffer's Tate's Yoplait Dove Duncan Angie's Ben Bertolli Boar's Cheez Clif Coca Cracker favorites?

Pellegrino & would ‐

Cola Chocolate ‐

Coffee

Jerry's Head It

Orange

Spring ‐ K

Nut Frozen Rocher Barrel

Hines Dazs Chocolate

Butters brands

Delight

Cheese Which

All Millennial Foodie Influencers

Source: Conde Nast-Goldman Sachs Love List

The Growth vs. Scale dichotomy Basic measures such as purchase behavior and affinity demonstrate that large established brands have continued relevance to Millennial consumers. While encouraging in terms of an outlook on brand durability, it does not shed light on growth prospects, or lack thereof. In an effort to assess this, we delved deeper and merged Nielsen data to align brand attributes across realized growth, scale (sales level) and loyalty (repeat) using both retail scanner data and panel data among both Nielsen’s national and Millennial aged sample sets.

For both the overall pool and the Millennial Foodie Influencer cohort, affordability and consistency were correlated with scale, suggesting that those attributes are non-negotiable when it comes to establishing a big, scalable brand. It’s also imperative to check “basic” boxes including “easy to find”, “convenient”, and “good variety”. In order to drive growth, however, a different set of boxes need to be checked. For the national sample set, Nielsen sales growth was strongly correlated with “unique”, “trendy”, “innovative” and “a brand not many people know of”. The perception of the ingredient profile (e.g., “made with clean ingredients” and “less processed”) also correlated strongly with sales growth.

As is evident in Exhibits 15 and 16, almost all of the attributes that correlate with growth are negatively correlated with size. There are, however, a few exceptions and both the broader pattern of conflict and rare exceptions have implications in terms of both optimal brand messaging and portfolio strategy, in our opinion.

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There are no attributes at the intersection of positive growth and scale when looking at the national sample set. Amongst the Millennial Foodie Influencer cohort, there are three attributes that lie at the intersection of both positive growth and scale: “good variety”, “convenient” and “consistent”. These seem like basic and obvious attributes, but they are nonetheless strengths of legacy brands that are largely being neglected in modern consumer communication. The industry instead has focused on messages around transparency, authenticity and natural/clean ingredients. While the evolution of product formulation toward these attributes is likely warranted (effectively unwinding the over-engineering trend from the 1990’s into the early 2000’s), the data suggest that brand messaging and communication may be more effective when focused on inherent taste, variety and convenience attributes – all attributes where incumbent brands arguably have a right to win.

Exhibit 15: National sample set: which attributes correlate with scale and growth National sample set population growth and scale correlation scatter plot

Source: Conde Nast-Goldman Sachs Love List, The Nielsen Company

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Exhibit 16: Millennial Foodie Influencer population: which attributes correlate with scale and growth Millennial Foodie Influencer population growth and scale correlation scatter plot

Source: Conde Nast-Goldman Sachs Love List, The Nielsen Company

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Exhibit 17: Among the national sample set, a lack of overlap between growth and scale attributes suggests brands can’t “have it all” Brand attributes split into 3 GS-defined buckets based on strong positive correlation for national sample set SCALE ‐One of my favorites

‐Affordable ‐Consistent ‐Convenient ‐Easy to find ‐Good value ‐Good variety ‐A brand not many people know of ‐Made by a manufacturer I trust ‐Expensive ‐One that reminds me of my ‐Innovative childhood ‐Less processed ‐Trusted ‐Made with clean ingredients ‐Natural ‐One I recommend to friends/family ‐Organic LOYALTY ‐Transparent about how it is produced ‐Trendy ‐Unique GROWTH

Source: Conde Nast-Goldman Sachs Love List, The Nielsen Company, Goldman Sachs Global Investment Research

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Exhibit 18: When we zoom into the Millennial cohort, overlap between growth and scale attributes emerge in “convenient” and “good variety” Brand attributes split into 3 GS-defined buckets based on strong positive correlation for Millennial Foodie Influencers

SCALE

‐A brand not many people know of ‐Affordable ‐Expensive ‐Convenient ‐For me/my lifestyle ‐Good ‐Consistent ‐Fresh variety ‐Easy to find ‐Good tasting ‐One that reminds me of my ‐Less processed childhood ‐Made by a manufacturer I trust ‐Natural ‐One I recommend to friends/family ‐One of my favorites ‐Good value ‐Organic ‐Safe for me/my family GROWTH ‐Trendy ‐Unique LOYALTY

Source: Conde Nast-Goldman Sachs Love List, The Nielsen Company, Goldman Sachs Global Investment Research

A Portfolio Approach: Challenging the big brand first paradigm The findings of the analysis have aforementioned implications on brand communication – a ‘fix your food/ingredient issues’ but ‘trumpet your inherent virtues (taste, variety, convenience)’ conclusion. They also have potential implications on portfolio management strategy that may run counter to the big-brand silo cultures that are inherent in many established CPG companies.

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The modern day brand management structure of the CPG industry emerged as early as 1931 with implementation at P&G. It took nearly three decades to spread throughout the industry but is now commonplace. Most established CPG companies have now organized their marketing functions around and allocated resources against their stable of priority brands. The best talent and most resources generally gravitate to or are assigned to the priority brands, which most often correlate with the largest brands. The focus of both the people and resources is generally to drive growth. The aforementioned analysis, however, suggests that these brands may inherently lack the attributes requisite to achieve the growth and that these resources may be more effective if directed toward small or newer brands that can carve out a growth “niche”. The implicit portfolio strategy of managing large incumbent brands for stability and cash and nurturing small or new brands for growth may seem obvious, but it is both uncommon and conflicting with common food company culture. The evidence of this can be found at retail. Major food companies arguably have an advantage in developing and commercializing the next rising brand in Food, but too few have found success on this front and instead have turned to M&A to fill their portfolio holes (often with mixed results). It is time for big brands to embrace a small brand mindset, in our view.

The leaders and the laggards: MDLZ & Nestle set examples; KHC & CPB lag

Based on the realities of recent trends and analysis of underlying drivers, we believe that category fragmentation, the shrinking of big brands and the growth of small brands is likely to continue. The evidence, however, suggests that this does not need to be a universal trend or translate into big companies lagging even if their big brands are no longer driving the growth. In short, we see some better positioned than others based on both their existing stable of brands and actions on both brand investment and portfolio management. We screen our coverage universe for the following in effort to gauge the likelihood of future success as the Millennial generation graduates to its core food at home consumption life-stage:

 Brands with an already demonstrable affinity among Millennials.

 A consistent track record and pattern of brand investment.

 A flexible portfolio approach that demonstrates willingness and ability to invest and execute behind large and small brands alike, often with an effort of driving premiumization within their categories.

Based on these attributes, we highlight the following leaders and laggards we believe are better or worse positioned to capture the Millennial growth opportunity.

The leaders who appear better positioned:

MDLZ:  Broadly aligned with snack food preferences. Broadly speaking, snack food category growth has consistently outpaced traditional packaged food growth over the past decade. With eight of the top 20 favorite Millennial Foodie Influencer brands being snack brands, we generally expect this trend to continue.

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 MDLZ’s big brands resonate with Millennials. This is evidenced by the measured consumer affinity for its brands. Oreo, for example, was the top ranking cookie brand among Millennial Foodie Influencer favorites in our survey (ranking 83 spots above K’s Keebler brand and 37 spots above CPB’s Pepperidge Farm).

 MDLZ demonstrates an embracement of a small brand mindset. Two brands in particular showcase this mindset: Belvita and Vea. Belvita, which was launched in North America in 2012 and ranks among some of the youngest US brands in our survey, is considered a favorite among 30% of millennials and ranked higher than traditional breakfast/snack bars such as Nature Valley or Nutri-Grain. It has resonated with millennial consumers in particular for being “convenient”, “consistent”, “good tasting” and “for me/my lifestyle”. MDLZ has supported this brand with various TV and media campaigns. It is now seeking to replicate this success with the launch of another new brand – Vea. Vea is launching in the US this July with a line of premium priced crackers featuring on-trend health attributes (e.g., Non-GMO Project Verified, no artificial ingredients, colors or flavors) with a variety of ethnic rooted flavors (e.g., Thai Coconut, Tuscan Herbs, Greek Hummus). Its efforts demonstrate a balance of both nurturing its core brands while investing in new growth equities.

 A consistent brand investment pattern that stands out among peers. Advertising and promotion curtailment in the Food industry has been commonplace over the past five years – since 2011, the percent of sales reinvested in A&P has fallen from 5.7% to 5% in 2016. This compares to a modest increase from 5.2% of sales at MDLZ to 5.4% in 2016 (we expect that measure to rise to 5.8% by FY18).

Nestle:  Advantaged positions in majority of categories. Starting in coffee, Nespresso ranked as the #1 coffee brand for our survey for both the national sample set and Millennial Foodie Influencers. The brand also ranked as #1 overall (out of 172 brands) for the national sample set (with 68% of those surveyed ranking it as a favorite). Compared to Starbucks, which placed #2 in coffee, Nespresso was ranked higher by the national survey sample for key growth beverage attributes such as “good tasting”, “innovative” and “unique”. Starbucks, however, was rated higher for “easy to find” (38% of the national set and 46% of Millennial Foodie Influencers said Starbucks was “easy to find” vs. 6%/7% for Nespresso) which reflects Nespresso remaining exclusive to DTC online sales and Nespresso stores but suggests the brand could benefit from broader distribution without diluting the premium attributes of the brand. In water, Nestle held the top 3 spots for the national sample set and the #1 and #2 spots for Millennial Foodie Influencers. San Pellegrino impressively ranked #1 in the survey overall for Millennial Foodie Influencers and #2 for the national sample set while Poland Spring tied as the #5 favorite brand for Millennial Foodie Influencers. Nestle also held superior positions in frozen meals, with Stouffer’s ranking as the favorite brand for the national sample set and DiGiorno ranking as the 2nd favorite among Millennial Foodie Influencers. For the national survey pool, Lean Cuisine ranked as the superior “better-for-you” frozen entrée brand (and 30th favorite overall) above KHC’s Weight Watchers (86th) and CAG’s Healthy Choice (118th). This positioning in Frozen is notable given the category returned to growth for Nestle in 2016 having been in decline in 2015.

 Opportunity awaits for these big brands. In beverage enhancers, Nestle’s Coffee-Mate ranked #2, behind WhiteWave’s International Delight. Despite its relative ranking to a direct competitor, the brand ranked 21st overall for Millennial Foodie Influencers’ favorite brands, just shy of our top 20 list (International Delight ranked 14th). In ice cream, Nestle’s brands ranked inferior to Ben & Jerry’s (Ben & Jerry’s was the 27th overall favorite brand for Millennial Foodie Influencers compared to Haagen-Dazs 46th and Dreyer’s/Edy’s 119th). Nestle’s brands, however, outranked Ben & Jerry’s for “one that reminds me of my childhood” which suggests Nestle could have some success by embracing the nostalgic attributes of its

Goldman Sachs Global Investment Research 15 June 11, 2017 Americas: Food: Packaged & Manufacturing

brands. 81% of Millennial Foodie Influencers said Haagen-Dazs was “good tasting” (compared to 64% for Ben & Jerry’s) and 31% would recommend the brand to friends and family (compared to 12% for Ben & Jerry’s).

The laggards who appear less well positioned: KHC:

 Relative disadvantage with value-focused brands. KHC’s portfolio has a relative disadvantage in our survey affinity ranking for both the national sample met and Millennial Foodie Influencers: Starbucks/premium coffee > Maxwell House; Planters lags in snacking; Hillshire Farm & Ball Park > Oscar Mayer; Crystal Light and Country Time lag in beverages; Cracker Barrel Cheese was the only KHC brand to show up in either top 20 favorite lists (out of the 16 KHC brands that were included in the survey). Out of the 5 coffee brands we surveyed, Maxwell House came in last place in coffee for the overall sample with only 38% of the national sample set ranking it as a favorite (vs. Starbucks 57%). KHC’s brands comprised our entire sample set for cheese brands (including Cracker Barrel Cheese, Kraft Singles and Velveeta). Although the relative rankings for Kraft Singles and Velveeta were uninspiring (neither breaking the top 50 favorite brands for either sample set), Cracker Barrel Cheese ranked as the 15th most favorite brand for the national sample set with 50% of those surveyed considering it to be a favorite. In frozen meals, KHC’s Weight Watchers brand ranked below Nestle’s Lean Cuisine and received low overall attribute ratings.

 Cost discipline a likely impediment to brand building. KHC’s focus on price discipline, cost cuts and synergy realization resulted in low brand investment (in fact, the lowest out of food peers). A&P as a % of sales averaged 2.5% from 2014-2016. We believe management’s intense focus on scale and cost efficiency is a likely impediment to the natural inefficiencies that can result from a more fragmented portfolio of smaller brands. In order to add complexity to the portfolio, which usually results in increased costs, KHC may need to reevaluate its low brand investment. CPB:

 Inferior positioning in its categories. CPB’s flagship Campbell’s soup brand ranked below GIS’s Progresso for Millennial Foodie Influencers. Core sauce brand Prego ranked 97th among Millennial Foodie Influencers’ favorite brands while it ranked 145th for the national sample set. Bolthouse Farms, which was once slated to be the growth engine for the Campbell Fresh division, ranked below the struggling V8 brand. V8’s relative ranking (3rd for Millennial Foodie Influencers in the juice category) was surprising to us as 46% of Millennial Foodie Influencers ranked the brand a favorite (compared to 42% for Bolthouse Farms). The attribute data, however, was less encouraging with both brands receiving low overall rankings for key beverage attributes. “Good tasting” was identified as a leading indicator to achieve both growth and scale in the beverage category. CPB’s beverage brands ranked significantly below its key competitors for Millennial Foodie Influencers (25%/33% selected “good tasting” as an attribute for V8/Bolthouse Farms vs. Simply Orange 76%, Bai 70%, Tropicana 52%).

 Cutting ad spend. Advertising and promotion spend as a % of sales for CPB has declined from 6.4% in 2011 to 5% in 2016 while overall marketing and selling expenses as a % of sales went from 13% in 2011 to 10.6% in 2016. While we acknowledge that not all marketing and promotion spend is effective and profitable, we also recognize the need for manufacturers to nurture businesses and recent levels show CPB pulling back.

Goldman Sachs Global Investment Research 16 June 11, 2017 Americas: Food: Packaged & Manufacturing

HSY:

 HSY’s investment behind its brands has been at the top of its peer group (average 7.6% A&P as a % of sales from 2014- 2016). However, both measured results and survey results suggest the company’s portfolio is not resonating with current trends, namely, the shift to premiumization in the chocolate category. Only 48% of millennials ranked Reese’s as one of their favorites compared to Ferrero Rocher and Mars’ Dove which 60%/56% of Millennial Foodie Influencers ranked as their favorites. The lack of premium products in HSY’s portfolio signals potential growth challenges in the future.

 HSY’s acquired brand, Krave, for example, also did not rank well in our survey among Millennial Foodie Influencers (ranking among the bottom 20 for the most purchased brands in the past 6 months and in the bottom 20 for brands which people consider to be their favorites).

Exhibit 19: Ratings, price targets, methodologies, and risks

Ticker Rating Methodology Price: Target Price Upside / Risks 6/9/2017 (12mo) Downside Integration challenges; executional missteps; greater-than-expected sales KHC Buy FNTM 24x P/E & 16x EV/EBITDA* 90.83 94 2.4% shortfalls at legacy Kraft; FX & commodity price volatility. Equal weighted FNTM 22x P/E & 15.5x EV/EBITDA (85%); 17X Worse core category growth, innovation success, cost & FX volatility, strategic MDLZ Buy** 45.62 53 15.3% M&A EV/EBITDA (15%) actions 50% by applying a P/E of 16.7x to our 2020 forecasts and (1) Weaker-than-expected cost savings; (2) higher than-expected cost saving 50% by applying a P/E of 20.7x to our 2020 ‘change’ case (both Buy SFr 80.95 SFr 81 0.1% reinvestment; (3) weaker-than-expected organic sales growth; (4) lower- discounted thanexpected or value-destructive cash use; and (5) adverse FX moves. NESN.S back to December 2018) Better/worse productivity realization, input cost relief, innovation success, Neutral FNTM 18x P/E & 12x EV/EBITDA* 56.54 59 4.0% CPB strategic activity HSY Neutral FNTM 21x P/E & 13x EV/EBITDA* 114.02 109 -4.4% More/less favorable input costs, demand growth, strategic actions Notes: *Denotes 50%/50% weighting to price target **On the Americas Conviction List

Source: FactSet, Goldman Sachs Global Investment Research

Why this trend is here to stay: Venture propels small brands

Venture/private equity in food & non-alcoholic beverage In addition to lower barriers to entry, one could also argue that the recent rise of small brands has been facilitated by improved access to capital. Since 2014, more than $12.7 bn of new funds have been injected into small, up-and-coming food and beverage

Goldman Sachs Global Investment Research 17 June 11, 2017 Americas: Food: Packaged & Manufacturing

brands across the globe (both private equity and venture rounds and including e-commerce). Funding since 2014 makes up 83% of all funding rounds since 2009 (which total close to $15.5 bn). 29% of the funding since 2014 supported companies based in the United States (with the vast majority of those based in California, followed by New York and Texas).

Funding levels during 2014-2016 increased 455% compared to 2011-2013 levels. Given the lack of organic growth in the space and the success of new, smaller brands, we are not surprised to see a recent uptick in funding. The spike in 2014 and 2015, however, came from large private equity inflows for a few deals (ex. Weetabix receiving funding of $764 mn in 2015 and Agropur receiving funding of $470 mn in 2014). In 2016 funding levels fell back closer to pre-2014 levels. On the forward, we expect funding to accelerate, as 2017 funding year-to-date is outpacing prior years (funding YTD of $1.4 bn vs. the same period for 2016 of $1.1 bn). Newer start-ups (those founded in 2010 or later) received 52% of new funds from 2014-2017. E-commerce companies obtained 50% of new funding since 2014 (48% of new funding since 2009) while mobile commerce received 14% of new funding since 2014 (12% of new funding since 2009). A lot of the new funding over the past few years has been flowing into a few key “buckets”, including non-alcoholic beverages, e-commerce, mobile commerce, protein-based food and free-from products. We have highlighted a number of deals in these categories in Exhibit 26.

Exhibit 20: The Global Venture Landscape: Food and Non-alcoholic Beverage, including e-commerce $ mn (lt. axis), # of deals (rt. axis)

6000 140

5000 120 100 4000 80 3000 60 2000 40

1000 20

0 0 2009 2010 2011 2012 2013 2014 2015 2016 YTD 2017

Funding amount $ (LHS) Number of deals (RHS)

Source: CB Insights, Goldman Sachs Global Investment Research

Goldman Sachs Global Investment Research 18 June 11, 2017 Americas: Food: Packaged & Manufacturing

Exhibit 21: More than 57% of venture funding is coming from early stage Exhibit 22: Average deal size has been on the rise in recent years (Angel, Seed, Series A, Series B and Series C funding) Average and median deal size in $ mn for food and beverage companies Food & bev (including e-comm) venture funding amount in $ mn by stage

4,000 50 18 3,500 45 16 40 3,000 14 35 12 2,500 30 10 2,000 25 8 1,500 20 15 6 1,000 10 4 500 5 2 ‐ 0 0 2009 2010 2011 2012 2013 2014 2015 2016 YTD 2009 2010 2011 2012 2013 2014 2015 2016 YTD 2017 2017

Angel Seed Series A Series B Series C Series D+ Growth equity Average deal size (LHS) Median deal size (RHS)

Source: CB Insights, Goldman Sachs Global Investment Research Source: CB Insights, Goldman Sachs Global Investment Research

Exhibit 23: US and China lead new funding since 2009 Exhibit 24: By subsector, e-commerce has received the majority of share of % of new funding since 2009 by country for food and non-alcoholic beverage funding % of funding by subsector

90% 80% 70% 60% funding

50% 40% total

of 30%

% 20% 10% 0% 2009 2010 2011 2012 2013 2014 2015 2016 YTD 2017

E‐commerce Mobile commerce

Source: CB Insights, Goldman Sachs Global Investment Research Source: CB Insights, Goldman Sachs Global Investment Research

Goldman Sachs Global Investment Research 19 June 11, 2017 Americas: Food: Packaged & Manufacturing

Exhibit 25: Highlighting emerging companies; start-up funding for companies founded after 2010 with more than $75 mn Year founded (LHS) and total funding amount $ mn (RHS); total funding above $75 mn

2016 Masan Nutri‐ Picnic Science Flagstone Foods 2015 Thrive Swiggy Market MissFresh 2014

Juicero DoorDash Deliveroo 2013 Benlai Blue Suja Plated Life Apron Life foodpanda Instacart 2012 Woowa Hampton Brothers HelloFresh 2011 Creek iFood Munchery BigBasket

2010 Valeo Foods

2009 ‐ 100 200 300 400 500 600 700

Source: CB Insights, Goldman Sachs Global Investment Research

Goldman Sachs Global Investment Research 20 June 11, 2017 Americas: Food: Packaged & Manufacturing

Exhibit 26: Key PE/VC investments in food and beverage categories Total funding/amount by round in $ mn; includes deals with total known funding of over $10 mn

Date of Year Total Company Company description Round Amount Country City funding founded Funding Soylent Maker of nutritional meal‐replacement drinks and reduces environmental impact. Series B 5/4/2017 2013 $50 $72 United States Los Angeles Juicero The first home cold‐pressed juicing system. Series B 3/31/2016 2013 $70 $100 United States Lafayette Blue Bottle Coffee Small network of cafes, wholesale partners, an espresso cart, a coffee kiosk, and vintage German coffee roasters. Series C 6/5/2015 2002 $70 $116 United States Oakland Non‐alcoholic beverages Suja Life Handcrafted lines of cold‐pressured juices Series C 12/1/2014 2012 $20 $196 United States San Diego All Market All Market is the manufacturter of Vita Coco Coconut Water. Series D 5/24/2012 2012 $11 $208 United States New York Joint Juice Ready‐to‐drink glucosamine supplement that builds stronger bone cartilage and lubricates joints. Series E 10/25/2011 1999 $73 $124 United States San Francisco HelloFresh Global provider of fresh food at home via its soft subscription model business. Series G 12/20/2016 2011 $89 $367 Germany Berlin Yiguo Ego is a Chinese online fresh‐food eCommerce platform. Series C ‐ II 11/9/2016 2005 $200 $200 China Shanghai Deliveroo End‐to‐end food delivery service that brings high‐quality local restaurant food to homes and offices. Series E 8/5/2016 2013 $275 $475 United Kingdom London BigBasket Online grocery store. Series D 3/22/2016 2011 $150 $253 India Bengaluru DoorDash On‐demand delivery service that connects customers with local businesses. Series C 3/22/2016 2013 $127 $187 United States San Francisco E‐commerce Womai Sells imported products from overseas markets directly to Chinese consumers. Series C 10/12/2015 2008 $220 $320 China Beijing Ele.me China‐based online food ordering site. Website and apps enable users to search for restaurants nearby. Series F 8/27/2015 2008 $630 $2,335 China Shanghai Blue Apron Once‐a‐week subscription service, delivering all the fresh ingredients needed to make 3 meals. Series D 6/9/2015 2012 $135 $193 United States Brooklyn NatureBox Allows consumers to discover new & healthy foods through a monthly subscription service. Series C 5/5/2015 2012 $30 $59 United States San Carlos Delivery Hero Online food ordering and delivery sites. More than 150,000 restaurants are connected to its service. Series H 6/8/2015 2011 $110 $1,753 Germany Berlin Picnic App to place orders, and suppliers then deliver the goods to a central distribution center run by Picnic. Series B 3/28/2017 2015 $109 $109 Netherlands Instacart Mobile app that allows users to shop for groceries directly from a phone. Series D 3/8/2017 2012 $400 $675 United States San Francisco Mobile commerce MissFresh Fresh produce e‐commerce mobile application which enables users to order fresh produce and get it delivered. Series C 1/23/2017 2014 $100 $177 China Beijing Meicai Mobile e‐vendor of agricultural products, which serves tens of thousands of restaurants in China. Series D 6/22/2016 2014 $200 $200 China Beijing Masan Nutri‐Science Fully‐integrated branded meat platform, focused on driving productivity in Vietnam's animal protein industry. Private Equity 4/3/2017 2015 $150 $150 Vietnam Ho Chi Minh City Icelandic Provisions Brand of Traditional Icelandic Skyr which is packed with more protein than yogurt. Series B 1/24/2017 2015 $9 $20 United States New York Beyond Meat Offers a plant protein that looks, feels, tastes, and acts like meat. Series F 10/10/2016 2009 $23 $40 United States El Segundo

Protein‐based Hampton Creek 100% vegan, cholesterol and gluten free, egg substitute. Series D 7/29/2015 2011 $120 $240 United States San Francisco The Chia Company Producer of Chia, a plant based source of omega 3, fiber and protein with a fully traceable global supply chain. Series B 5/27/2015 2003 $6 $28 Australia Port Melbourne COFCO Meat Engaged in feedstuff processing, livestock and poultry breeding, slaughtering, processing, and more. Private Equity 6/6/2014 2002 $270 $270 China Beijing Justin's Manufacturer of almond butter snacks including nut butters and candy bars. Private Equity 10/17/2013 2004 $47 $48 United States Boulder Rhythm Superfoods Develops nutrient‐rich, delicious, raw, vegan, gluten‐free, no cholesterol and non‐GMO foods. Series D 1/18/2017 2009 $6 $17 United States Austin Free‐from Kite Hill Maker of non‐dairy cheese. Series A 5/20/2016 2013 $18 $25 United States Hayward

Source: CB Insights, Goldman Sachs Global Investment Research

Goldman Sachs Global Investment Research 21 June 11, 2017 Americas: Food: Packaged & Manufacturing

Appendix

Love List Rankings

Exhibit 27: Beverage occasion relative ranking of brands within categories **brands with no data or ranking are brands where less than 10 people answered survey

Rank within sub‐ Rank within sub‐category Overall favorite rank Overall favorite rank Category Occasion category for national for Millennial Foodie for national sample for Millennial Foodie sample set Influencers set Influencers Beverage Occasion International Delight Beverage enhancer Beverage 1 1 32 14 Coffee‐Mate Beverage enhancer Beverage 2 2 42 21 Crystal Light Beverage enhancer Beverage 3 133 Minute Maid Beverage enhancer Beverage 4 3 141 107 Country Time Beverage enhancer Beverage 5 4 153 113 Nespresso Coffee/hot chocolate Beverage 1 1 1 5 Starbucks Coffee/hot chocolate Beverage 2 1 3 5 Folgers Coffee/hot chocolate Beverage 3 3 8 83 Peet's Coffee Coffee/hot chocolate Beverage 4 10 Maxwell House Coffee/hot chocolate Beverage 5 89 Swiss Miss Coffee/hot chocolate Beverage 6 4 159 123 Simply Orange Juice Beverage 1 1 13 23 Tropicana Juice Beverage 2 7 37 63 V8 Juice Beverage 3 3 39 37 Bolthouse Farms Juice Beverage 4 5 67 51 Odwalla Juice Beverage 5 91 Bai Juice Beverage 6 6 96 58 Naked Juice Beverage 7 4 123 40 Gatorade Juice Beverage 8 2 148 28 Powerade Juice Beverage 9 8 154 105 Horizon Organic Milk Beverage 1 2 24 48 So Delicious Milk Beverage 2 38 Silk Milk Beverage 3 1 53 43 Coca‐Cola Soda Beverage 1 1 5 13 Pepsi Soda Beverage 2 2 43 57 Lipton Tea Beverage 1 1 52 55 Honest Tea Tea Beverage 2 2 136 69 Nestea Tea Beverage 3 3 164 129 San Pellegrino Water/enhanced water Beverage 1 1 2 1 Perrier Water/enhanced water Beverage 2 6 31 119 Poland Spring Water/enhanced water Beverage 3 2 34 5 Smart Water Water/enhanced water Beverage 4 3 63 29 Vitamin Water Water/enhanced water Beverage 5 5 71 63 Dasani Water/enhanced water Beverage 6 4 151 48 Aquafina Water/enhanced water Beverage 7 7 155 125

Source: Conde Nast-Goldman Sachs Love List, Goldman Sachs Global Investment Research

Goldman Sachs Global Investment Research 22 June 11, 2017 Americas: Food: Packaged & Manufacturing

Exhibit 28: Breakfast occasion relative ranking of brands within categories **brands with no data or ranking are brands where less than 10 people answered survey

Rank within sub‐ Rank within sub‐category Overall favorite rank Overall favorite rank Category Occasion category for national for Millennial Foodie for national sample for Millennial Foodie sample set Influencers set Influencers Breakfast Occasion Special K Cereal/granola Breakfast 1 2 17 29 Kashi Cereal/granola Breakfast 2 1 25 14 Cheerios Cereal/granola Breakfast 3 3 45 33 Quaker Cereal/granola Breakfast 4 4 62 51 Bear Naked Cereal/granola Breakfast 5 5 115 69 Cascadian Farm Cereal/granola Breakfast 6 132 Chex Cereal/granola Breakfast 7 6 135 81 Noosa Yogurt Breakfast 1 2 6 10 Fage Yogurt Breakfast 2 3 9 20 Yoplait Yogurt Breakfast 3 1 19 5 Siggi's Yogurt Breakfast 4 21 Chobani Yogurt Breakfast 5 4 29 36 Dannon Yogurt Breakfast 6 5 130 83 Oikos Yogurt Breakfast 7 6 138 96

Source: Conde Nast-Goldman Sachs Love List, Goldman Sachs Global Investment Research

Exhibit 29: Condiment/dressing occasion relative ranking of brands within categories **brands with no data or ranking are brands where less than 10 people answered survey

Rank within sub‐ Rank within sub‐category Overall favorite rank Overall favorite rank Category Occasion category for national for Millennial Foodie for national sample for Millennial Foodie sample set Influencers set Influencers Condiment/dressing Occasion Hellmann's or Best Foods Dairy/spread Condiment/dressing 1 4 36 101 Land O'Lakes Dairy/spread Condiment/dressing 2 3 40 94 Miracle Whip Dairy/spread Condiment/dressing 3 1 69 23 Philadelphia Dairy/spread Condiment/dressing 4 6 84 112 Breakstone's Dairy/spread Condiment/dressing 5 121 I Can't Believe It's Not Butter Dairy/spread Condiment/dressing 6 5 125 110 Country Crock Dairy/spread Condiment/dressing 7 2 127 37 Reddi‐Wip Dairy/spread Condiment/dressing 8 146 PAM Dairy/spread Condiment/dressing 9 7 156 117 Hidden Valley Salad dressing Condiment/dressing 1 1 117 108 Wish‐Bone Salad dressing Condiment/dressing 2 137 Sabra Sauce/salsa Condiment/dressing 1 1 64 46 Pace Sauce/salsa Condiment/dressing 2 65 Prego Sauce/salsa Condiment/dressing 3 2 145 97 Knorr Meal enhancer Condiment/dressing 1 1 90 45 Old El Paso Meal enhancer Condiment/dressing 2 2 143 122

Source: Conde Nast-Goldman Sachs Love List, Goldman Sachs Global Investment Research

Goldman Sachs Global Investment Research 23 June 11, 2017 Americas: Food: Packaged & Manufacturing

Exhibit 30: Lunch/dinner occasion relative ranking of brands within categories **brands with no data or ranking are brands where less than 10 people answered survey

Rank within sub‐ Rank within sub‐category Overall favorite rank Overall favorite rank Category Occasion category for national for Millennial Foodie for national sample for Millennial Foodie sample set Influencers set Influencers Lunch/dinner Occasion Bush's Beans Canned and frozen vegetables Lunch/dinner 1 1 26 63 Green Giant Canned and frozen vegetables Lunch/dinner 2 2 66 90 Ore‐Ida Canned and frozen vegetables Lunch/dinner 3 3 79 98 Hunt's Canned and frozen vegetables Lunch/dinner 4 4 168 119 Cracker Barrel Cheese Cheese Lunch/dinner 1 1 15 72 Kraft Singles Cheese Lunch/dinner 2 2 103 83 Velveeta Cheese Lunch/dinner 3 2 113 83 Annie's Homegrown Dry meals Lunch/dinner 1 1 32 23 Kraft Mac and Cheese Dry meals Lunch/dinner 2 2 49 72 Back to Nature Meals Dry meals Lunch/dinner 3 170 Stouffer's Frozen meals Lunch/dinner 1 6 12 63 Amy's Frozen meals Lunch/dinner 2 5 23 56 Lean Cuisine Frozen meals Lunch/dinner 3 8 30 83 MorningStar Farms Frozen meals Lunch/dinner 4 3 48 33 Birds Eye Frozen meals Lunch/dinner 5 10 70 135 DiGiorno Frozen meals Lunch/dinner 6 2 81 32 Weight Watchers Frozen meals Lunch/dinner 7 86 P.F. Chang's Frozen meals Lunch/dinner 8 91 Bertolli Frozen Frozen meals Lunch/dinner 9 1 98 5 Marie Callender's Frozen meals Lunch/dinner 10 9 107 116 Healthy Choice Frozen meals Lunch/dinner 11 7 118 76 Hot Pockets Frozen meals Lunch/dinner 12 4 142 44 Banquet Frozen meals Lunch/dinner 13 149 Udi's Gluten Free Lunch/dinner 1 51 Glutino Gluten Free Lunch/dinner 2 100 Boar's Head Meat Lunch/dinner 1 1 11 75 Nathan's Famous Meat Lunch/dinner 2 56 Hebrew National Meat Lunch/dinner 3 2 59 76 Tyson Meat Lunch/dinner 4 4 102 114 Jimmy Dean Meat Lunch/dinner 5 2 105 76 Hillshire Farm Meat Lunch/dinner 6 6 111 127 Jennie‐O Meat Lunch/dinner 7 116 Ball Park Meat Lunch/dinner 8 147 Oscar Mayer Meat Lunch/dinner 9 5 152 115 Hormel Meat Lunch/dinner 10 162 Skippy Nut butter/jam/jelly Lunch/dinner 1 4 46 105 Smucker's Nut butter/jam/jelly Lunch/dinner 2 2 68 91 Welch's Nut butter/jam/jelly Lunch/dinner 3 3 72 98 Justin's Nut Butters Nut butter/jam/jelly Lunch/dinner 4 1 73 12 Campbell's Soup Lunch/dinner 1 2 101 110 Progresso Soup Lunch/dinner 2 1 104 69 Swanson Soup Lunch/dinner 3 166

Source: Conde Nast-Goldman Sachs Love List, Goldman Sachs Global Investment Research

Goldman Sachs Global Investment Research 24 June 11, 2017 Americas: Food: Packaged & Manufacturing

Exhibit 31: Snack occasion relative ranking of brands within categories **brands with no data or ranking are brands where less than 10 people answered survey

Rank within sub‐ Rank within sub‐category Overall favorite rank Overall favorite rank Category Occasion category for national for Millennial Foodie for national sample for Millennial Foodie sample set Influencers set Influencers Snack Occasion Tate's Biscuit/cookie Snack 1 17 Oreo Biscuit/cookie Snack 2 1 47 51 Pepperidge Farm Biscuit/cookie Snack 3 2 55 88 Snackwell's Biscuit/cookie Snack 4 58 Keebler Biscuit/cookie Snack 5 5 88 134 Belvita Biscuit/cookie Snack 6 3 95 98 Famous Amos Biscuit/cookie Snack 7 157 Newtons Biscuit/cookie Snack 8 4 160 123 Duncan Hines Baking Snack 1 1 60 4 Pillsbury Baking Snack 2 2 82 17 Betty Crocker Baking Snack 3 3 110 104 Hostess Baking Snack 4 4 161 133 Haribo Candy Snack 1 1 114 3 Sour Patch Candy Snack 2 2 122 76 Swedish Fish Candy Snack 3 3 144 132 Cape Cod Chips Snack 1 2 27 42 Food Should Taste Good Chips Snack 2 34 Stacy's Chips Snack 3 1 61 37 Lay's Chips Snack 4 5 76 60 Doritos Chips Snack 5 4 87 54 Ruffles Chips Snack 6 6 109 63 Tostitos Chips Snack 7 3 120 48 Pringles Chips Snack 8 7 163 127 Ghirardelli Chocolate Snack 1 8 14 89 Hershey Chocolate Chocolate Snack 2 3 16 22 Dove Chocolate Chocolate Snack 3 2 22 16 M&M's Chocolate Snack 4 5 54 41 Reese's Chocolate Snack 5 4 77 29 Snickers Chocolate Snack 6 7 78 82 Ferrero Rocher Chocolate Snack 7 1 97 11 Brookside Chocolate Snack 8 6 119 76 Cheez‐It Cracker Snack 1 1 41 19 Triscuit Cracker Snack 2 3 50 129 Ritz Cracker Snack 3 2 80 58 Ben & Jerry's Ice cream Snack 1 1 4 27 Haagen‐Dazs Ice cream Snack 2 2 20 46 Dreyer's or Edy's Ice cream Snack 3 3 93 119 Krave Meat Snack 1 129 Slim Jim Meat Snack 2 150 Sahale Snacks Nuts Snack 1 57 Planters Nuts Snack 2 1 139 95 Angie's Popcorn Snack 1 1 7 2 Popcorn Indiana Popcorn Snack 2 73 Smartfood Popcorn Snack 3 3 83 62 Skinny Pop Popcorn Snack 4 2 85 61 Orville Redenbacher's Popcorn Snack 5 4 131 102 Kind Snack bar Snack 1 2 44 63 Larabar Snack bar Snack 2 106 Clif Snack bar Snack 3 1 124 18 Pop Tarts Snack bar Snack 4 3 128 91 Nature Valley Snack bar Snack 5 6 140 108 Fiber One Snack bar Snack 6 3 158 91 Nutri‐Grain Snack bar Snack 7 5 165 102

Source: Conde Nast-Goldman Sachs Love List, Goldman Sachs Global Investment Research

Goldman Sachs Global Investment Research 25 June 11, 2017 Americas: Food: Packaged & Manufacturing

Day part roadmap: What it takes to win in breakfast, lunch/dinner, snacks, beverage etc. We examined the similarities and differences of what drives growth, scale and loyalty for different eating occasions for the national sample set. We grouped brands based on day part: breakfast, lunch/dinner, snacks, condiments/dressings and beverages.

Exhibit 32: What it takes to succeed in breakfast Exhibit 33: Which brands straddle these buckets Brand attributes with positive correlation to GS-defined buckets of scale, growth Top 5 ranked brands for aggregate of attributes by % for each GS-defined bucket and loyalty for breakfast (ex. Fage appeared the most in the top 5 for the various growth attributes; it “checks the most boxes” for the growth attributes); more than 5 listed for ties

SCALE SCALE

‐Affordable ‐Made by a ‐Consistent manufacturer I ‐Convenient trust ‐Cheerios ‐Easy to find ‐One that ‐Chex ‐Expensive ‐Natural ‐Good value remainds me of ‐Bear Naked ‐Fresh ‐Organic ‐Good variety my childhood ‐Chobani ‐Dannon ‐Good variety ‐Trendy ‐Trusted ‐Fage ‐Innovative ‐Unique ‐Quaker ‐Less processed ‐Transparent about how it ‐Noosa ‐Special K ‐Made by a manufacturer I is produced ‐Siggi's trust ‐A brand not many people LOYALTY ‐Made with clean know of ingredients ‐One I recommend to ‐One that reminds me of friends/family GROWTH my childhood LOYALTY GROWTH

Source: Conde Nast-Goldman Sachs Love List, The Nielsen Company, Goldman Sachs Global Investment Source: Conde Nast-Goldman Sachs Love List, The Nielsen Company, Goldman Sachs Global Investment Research Research

Goldman Sachs Global Investment Research 26 June 11, 2017 Americas: Food: Packaged & Manufacturing

Exhibit 34: What it takes to succeed in lunch/dinner Exhibit 35: Which brands straddle these buckets Brand attributes with positive correlation to GS-defined buckets of scale, growth Top 5 ranked brands for aggregate of attributes by % for each GS-defined bucket and loyalty for lunch/dinner (ex. Udi’s appeared the most in the top 5 for the various growth attributes; it “checks the most boxes” for the growth attributes); more than 5 listed for ties

SCALE SCALE ‐Cracker Barrel Cheese ‐Affordable ‐Consistent ‐Easy to find ‐Good value ‐Banquet ‐Good ‐Good variety ‐A brand not many ‐One of my ‐Campbell's tasting ‐Made by a manufacturer I people know of favorites trust ‐Expensive ‐Organic ‐Trusted ‐Hunt's ‐One that reminds me of ‐Amy's ‐Fresh ‐Safe for me/my ‐Lean Cuisine my childhood ‐Annie's Homegrown ‐Innovative family ‐Smucker's ‐Less processed ‐Transparent about ‐Back to Nature Meals ‐Made with clean how it is produced ‐Stouffer's ingredients ‐Trendy LOYALTY ‐Justin's Nut Butters ‐Natural ‐Unique ‐Udi's ‐One I recommend ‐Progresso to friends/family GROWTH GROWTH LOYALTY

Source: Conde Nast-Goldman Sachs Love List, The Nielsen Company, Goldman Sachs Global Investment Source: Conde Nast-Goldman Sachs Love List, The Nielsen Company, Goldman Sachs Global Investment Research Research

Goldman Sachs Global Investment Research 27 June 11, 2017 Americas: Food: Packaged & Manufacturing

Exhibit 36: What it takes to succeed in snacks Exhibit 37: Which brands straddle these buckets Brand attributes with positive correlation to GS-defined buckets of scale, growth Top 5 ranked brands for aggregate of attributes by % for each GS-defined bucket and loyalty for snacks (ex. Clif appeared the most in the top 5 for the various growth attributes; it “checks the most boxes” for the growth attributes); more than 5 listed for ties

SCALE SCALE ‐One of my favorites

‐Angie's ‐Betty Crocker ‐Affordable ‐Made by a ‐Clif ‐Duncan Hines ‐Consistent manufacturer I ‐Hershey Chocolate ‐Convenient trust ‐Food Should Taste Good ‐Abrand not many ‐One I recommend ‐Easy to find ‐One that reminds ‐Keebler people know of to friends/family ‐Krave ‐Good value me of my childhood ‐Pillsbury ‐For me/my lifestyle‐Organic ‐Good variety ‐Trusted ‐Larabar ‐Fresh ‐Safe for me/my ‐Innovative family ‐Sahale Snacks ‐Less processed ‐Transparent about ‐Skinny Pop ‐Made with clean how it is produced ingredients ‐Trendy LOYALTY ‐Natural ‐Unique LOYALTY GROWTH GROWTH

Source: Conde Nast-Goldman Sachs Love List, The Nielsen Company, Goldman Sachs Global Investment Source: Conde Nast-Goldman Sachs Love List, The Nielsen Company, Goldman Sachs Global Investment Research Research

Goldman Sachs Global Investment Research 28 June 11, 2017 Americas: Food: Packaged & Manufacturing

Exhibit 38: What it takes to succeed in beverages Exhibit 39: Which brands straddle these buckets Brand attributes with positive correlation to GS-defined buckets of scale, growth Top 5 ranked brands for aggregate of attributes by % for each GS-defined bucket and loyalty for beverages (ex. Silk appeared the most in the top 5 for the various growth attributes; it “checks the most boxes” for the growth attributes); more than 5 listed for ties

SCALE SCALE ‐Starbucks ‐Affordable ‐One of my ‐Folgers ‐Consistent favorites ‐Convenient ‐One that ‐Lipton ‐Abrand not many ‐One I recommend ‐Easy to find reminds me of ‐Maxwell House people know of to friends/family ‐Good ‐Good value my childhood ‐Expensive ‐Organic tasting ‐Made by a ‐Bolthouse Farms ‐Minute Maid ‐For me/my ‐Safe for me/my manufacturer I ‐Naked ‐Poland Spring lifestyle family trust ‐Good variety ‐Transparent about ‐Nespresso ‐Swiss Miss ‐Innovative how it is produced ‐Odwalla ‐Less processed ‐Trendy LOYALTY ‐Made with clean ‐Unique ‐Silk ingredients ‐Natural ‐So Delicious LOYALTY GROWTH GROWTH

Source: Conde Nast-Goldman Sachs Love List, The Nielsen Company, Goldman Sachs Global Investment Source: Conde Nast-Goldman Sachs Love List, The Nielsen Company, Goldman Sachs Global Investment Research Research

Goldman Sachs Global Investment Research 29 June 11, 2017 Americas: Food: Packaged & Manufacturing

Exhibit 40: What it takes to succeed in condiments/dressings/sauces Exhibit 41: Which brands straddle these buckets Brand attributes with positive correlation to GS-defined buckets of scale, growth Top 5 ranked brands for aggregate of attributes by % for each GS-defined bucket and loyalty for condiments/dressings/sauces (ex. Sabra appeared the most in the top 5 for the various growth attributes; it “checks the most boxes” for the growth attributes); more than 5 listed for ties

SCALE SCALE ‐Hellmann's/Best Foods

‐Land O'Lakes ‐Philadelphia ‐Expensive ‐Fresh ‐Prego ‐Breakstone's ‐Made with clean ‐Consistent favorites ‐Affordable ‐Reddi Wip ingredients ‐Good tasting ‐One that ‐Good value ‐Heinz Ketchup ‐Natural ‐MAde by a reminds me of ‐Sabra manufacturer I my childhood ‐Pace trust ‐Trusted ‐One of my ‐Convenient ‐Transparent GROWTH ‐Old El Paso ‐Easy to find about how it ‐Abrand not LOYALTY ‐Knorr ‐Good variety is produced many people ‐Organic ‐Trendy know of ‐Less GROWTH processed LOYALTY

Source: Conde Nast-Goldman Sachs Love List, The Nielsen Company, Goldman Sachs Global Investment Source: Conde Nast-Goldman Sachs Love List, The Nielsen Company, Goldman Sachs Global Investment Research Research

Goldman Sachs Global Investment Research 30 June 11, 2017 Americas: Food: Packaged & Manufacturing

Disclosure Appendix Reg AC We, Jason English, Mitch Collett, CFA, Dylann B. Katz and Vivek Srivastava, hereby certify that all of the views expressed in this report accurately reflect our personal views about the subject company or companies and its or their securities. We also certify that no part of our compensation was, is or will be, directly or indirectly, related to the specific recommendations or views expressed in this report.

Unless otherwise stated, the individuals listed on the cover page of this report are analysts in Goldman Sachs' Global Investment Research division. GS Factor Profile The Goldman Sachs Factor Profile provides investment context for a security by comparing key attributes of that security to its conviction sector and the market. The four key attributes depicted are: growth, returns, multiple and an integrated IP score. Growth returns and multiple are indexed based on composites of several methodologies to determine the stocks percentile ranking within the region's coverage universe. The precise calculation of each metric may vary depending on the fiscal year, industry and region but the standard approach is as follows: Growth is a composite of next year's estimate over current year's estimate, e.g. EPS, EBITDA, Revenue. Return is a year one prospective aggregate of various return on capital measures, e.g. CROCI, ROACE, and ROE. Multiple Multiple is a composite of one-year forward valuation ratios, e.g. P/E, dividend yield, EV/FCF, EV/EBITDA, EV/DACF, Price/Book. Integrated IP score is a composite of Growth, Return and Multiple scores. Quantum Quantum is Goldman Sachs' proprietary database providing access to detailed financial statement histories, forecasts and ratios. It can be used for in-depth analysis of a single company, or to make comparisons between companies in different sectors and markets. GS SUSTAIN GS SUSTAIN is a global investment strategy aimed at long-term, long-only performance with a low turnover of ideas. The GS SUSTAIN focus list includes leaders our analysis shows to be well positioned to deliver long term outperformance through sustained competitive advantage and superior returns on capital relative to their global industry peers. Leaders are identified based on quantifiable analysis of three aspects of corporate performance: cash return on cash invested, industry positioning and management quality (the effectiveness of companies' management of the environmental, social and governance issues facing their industry). Disclosures Coverage group(s) of stocks by primary analyst(s) Jason English: America-Food: Packaged & Manufacturing, America-Household Products/Personal Care. Mitch Collett, CFA: Europe-Beverages, Europe-Food. America-Food: Packaged & Manufacturing: Amplify Snack Brands Inc., Campbell Soup Co., Conagra Brands Inc., General Mills Inc., Hershey Co., J. M. Smucker Co., Kellogg Co., Kraft Heinz Co., Mead Johnson Nutrition Co., Mondelez International Inc., Pinnacle Foods Inc., Post Holdings. America-Household Products/Personal Care: Church & Dwight Co., Clorox Co., Colgate-Palmolive Co., Edgewell Personal Care, Energizer Holdings, Estee Lauder Co., Freshpet Inc., Kimberly-Clark Corp., Procter & Gamble Co., Valvoline Inc.. Europe-Beverages: Anheuser-Busch InBev, Britvic Plc, Carlsberg, Coca-Cola HBC AG, Davide Campari, Diageo, Heineken, Pernod Ricard, Remy Cointreau. Europe-Food: Agrana, Aryzta, Barry Callebaut, Chr Hansen, Danone, Kerry, Lindt & Sprungli, Nestle, Novozymes, Orkla ASA, Suedzucker AG, Tate & Lyle, Unilever, Unilever Plc. Company-specific regulatory disclosures The following disclosures relate to relationships between The Goldman Sachs Group, Inc. (with its affiliates, "Goldman Sachs") and companies covered by the Global Investment Research Division of Goldman Sachs and referred to in this research. Goldman Sachs has received compensation for investment banking services in the past 12 months: Campbell Soup Co. ($56.54), Kraft Heinz Co. ($90.83), Mondelez International Inc. ($45.62) and Nestle (SFr80.95) Goldman Sachs expects to receive or intends to seek compensation for investment banking services in the next 3 months: Campbell Soup Co. ($56.54), Hershey Co. ($114.02), Kraft Heinz Co. ($90.83), Mondelez International Inc. ($45.62) and Nestle (SFr80.95) Goldman Sachs had an investment banking services client relationship during the past 12 months with: Campbell Soup Co. ($56.54), Kraft Heinz Co. ($90.83), Mondelez International Inc. ($45.62) and Nestle (SFr80.95) Goldman Sachs had a non-investment banking securities-related services client relationship during the past 12 months with: Campbell Soup Co. ($56.54), Kraft Heinz Co. ($90.83) and Nestle (SFr80.95) Goldman Sachs had a non-securities services client relationship during the past 12 months with: Campbell Soup Co. ($56.54), Hershey Co. ($114.02), Kraft Heinz Co. ($90.83), Mondelez International Inc. ($45.62) and Nestle (SFr80.95) Goldman Sachs makes a market in the securities or derivatives thereof: Campbell Soup Co. ($56.54), Hershey Co. ($114.02), Kraft Heinz Co. ($90.83) and Mondelez International Inc. ($45.62)

Goldman Sachs Global Investment Research 31 June 11, 2017 Americas: Food: Packaged & Manufacturing

Distribution of ratings/investment banking relationships Goldman Sachs Investment Research global Equity coverage universe

Rating Distribution Investment Banking Relationships Buy Hold Sell Buy Hold Sell Global 33% 53% 14% 63% 57% 50% As of April 1, 2017, Goldman Sachs Global Investment Research had investment ratings on 2,857 equity securities. Goldman Sachs assigns stocks as Buys and Sells on various regional Investment Lists; stocks not so assigned are deemed Neutral. Such assignments equate to Buy, Hold and Sell for the purposes of the above disclosure required by the FINRA Rules. See 'Ratings, Coverage groups and views and related definitions' below. The Investment Banking Relationships chart reflects the percentage of subject companies within each rating category for whom Goldman Sachs has provided investment banking services within the previous twelve months. Price target and rating history chart(s) Ne s tle ( NESN.S) Campbell Soup Co. (CPB) Stock Price Currency : Sw iss Franc Stock Price Currency : U.S. Dollar Goldman Sachs rating and stock price target histor Goldman Sachs rating and stock price target histor y y 90 550 70 2,400 61 66 81 85 59 59 90 82 530 65 50 62 59 63 60 2,300 64 60 65 510 80 70 67 64 60 36 65 490 47 2,200 75 70 71 55 37 41 38 40 45 68 470 35 60 70 450 50 41 39 2,100 66 63 430 45 61 65 2,000 410 60 40 61 390 62 1,900 55 61.5 370 35 50 Dec 2 Sep 13 350 30 Jul 14 Feb 28 1,800 N S B N S N M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M 2014 2015 2016 2017 2014 2015 2016 2017 Index Price Index Price Stock Price Stock Price Source: Goldman Sachs Investment Research for ratings and price targets; FactSet closing prices as of 3/31/2017. Source: Goldman Sachs Investment Research for ratings and price targets; FactSet closing prices as of 3/31/2017. Rating Covered by Mitch Collett, CFA Rating Covered by Jason English Pric e tar get Pric e tar get Price target at removal Not covered by current analyst Price target at removal Not covered by current analyst FTSE World Europe S&P 500 (GBP)

The price targets show n should be considered in the context of all prior published Goldman Sachs research, which may or The price targets show n should be considered in the context of all prior published Goldman Sachs research, which may or may not have included price targets, as w ell as developments relating to the company, its industry and financial markets. may not have included price targets, as w ell as developments relating to the company, its industry and financial markets. He rs he y Co. (HSY) Kraft Heinz Co. (KHC) Stock Price Currency : U.S. Dollar Stock Price Currency : U.S. Dollar Goldman Sachs rating and stock price target histor Goldman Sachs rating and stock price target histor y y 120 2,400 100 2,400 94 99 83 89 115 107 106 93 2,300 90 72 82 83 84 2,300 110 101 92 90 89 2,200 80 55 73 95 2,200 105 92 93 91 89 59 54 70 2,100 100 2,100 60 98 95 60 91 2,000 105 2,000 93 94 90 101 73 98 107 106 110 1,900 50 1,900 85 93 100 80 Apr 8 Jan 15 1,800 40 Jan 15 1,800 S N N B M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M 2014 2015 2016 2017 2014 2015 2016 2017 Index Price Index Price Stock Price Stock Price Source: Goldman Sachs Investment Research for ratings and price targets; FactSet closing prices as of 3/31/2017. Source: Goldman Sachs Investment Research for ratings and price targets; FactSet closing prices as of 3/31/2017. Rating Rating Apr 1, 2014 N Covered by Jason English Covered by Jason English Pric e tar get Pric e tar get Price target at removal Not covered by current analyst Price target at removal Not covered by current analyst S&P 500 S&P 500

The price targets show n should be considered in the context of all prior published Goldman Sachs research, which may or The price targets show n should be considered in the context of all prior published Goldman Sachs research, which may or may not have included price targets, as w ell as developments relating to the company, its industry and financial markets. may not have included price targets, as w ell as developments relating to the company, its industry and financial markets.

Goldman Sachs Global Investment Research 32 June 11, 2017 Americas: Food: Packaged & Manufacturing

Mondelez International Inc. (MDLZ) Stock Price Currency : U.S. Dollar Goldman Sachs rating and stock price target histor y 50.00 2,400 46 45 48.00 45 46 45 2,300 46.00 44 43 44 43 47 44.00 42 41 41 2,200 42.00 39 40.00 2,100 46 38.00 49 47 2,000 36.00 45 46 49 34.00 1,900 32.00 30.00 Jul 30 1,800 B N M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M 2014 2015 2016 2017 Index Price Stock Price Source: Goldman Sachs Investment Research for ratings and price targets; FactSet closing prices as of 3/31/2017. Rating Covered by Jason English Pric e tar get Price target at removal Not covered by current analyst S&P 500

The price targets show n should be considered in the context of all prior published Goldman Sachs research, which may or may not have included price targets, as w ell as developments relating to the company, its industry and financial markets.

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Goldman Sachs Global Investment Research 33 June 11, 2017 Americas: Food: Packaged & Manufacturing

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