The Evolving Agricultural Landscape: Enabling a Plant Based Future

David Grotto, MS, RDN, LDN, FAND Kellogg US Wellbeing Affairs Manager Sponsors

Plant-based Serving plant-based for over for over A CENTURY FORTY YEARS

2 DISCLOSURES

1. I amDavid the Grotto, Kellogg MS, RDN, LDN, US Kellogg Wellbeing US Wellbeing Affairs Manager, SpecialtyManager Channels

2. I am a card-carrying omnivore…

3 OBJECTIVES

 Examine the evolving terrain of protein and how various options can help nourish an increasingly populated world

 Describe the consumers who are driving the plant based protein category

 Debunk concerns about the nutritional adequacy of plant based diets

 Incorporate on-trend proteins on menus to satisfy today’s vegans, vegetarians and flexitarians

4 FEEDING THE WORLD

5 THE LANDSCAPE IS BECOMING MORE CROWDED

Projected world population of 9.8 billion by 2050 and 11.2 billion by 2100

EVOLVING LANDSCAPE AND POPULATION DEMANDS Although the growth rate is declining, the reality is we will have 11.2 billion mouths to feed by 2100.

https://ourworldindata.org/world-population-growth https://www.un.org/development/desa/en/news/population/world- population-prospects-2017.html 6 US HAS THE 3RD LARGEST POPULATION IN THE WORLD

7 EVOLVING LANDSCAPE AND POPULATION DEMANDS HOW DO WE FEED 10 BILLION PEOPLE?

8 Source: WRI 2018 GREENHOUSE GAS EMISSIONS (KG)

2 1

1. Source: IPCC (2014); based on global emissions from 2010. Details about the sources included in these estimates can be found in the Contribution of Working Group III to the Fifth Assessment Report of the Intergovernmental 2 9 Panel on Climate Change. CALORIES OF FEED TO = 1000 KCAL OF FOOD

Raising animals to feed humans requires growing a much larger amount of primary vegetable material than if humans consume the vegetable material directly rather than raising and consuming the meat.

36,200 11,300 8,800 6,300 5,900

Average calories of feed required to produce 1,000 calories of food

10 Source: Food Navigator 2018 NON-ANIMAL PROTEINS BEING EXPLORED IN AND OUT OF MEAT PRODUCTS

Legumes Nuts Seeds Grains Fungi Other Chickpea Almond Canola Corn Chlorella Algae Faba Brazilnut Chia Flax Koji Cranberry Lentil Cashew Pumpkin Hemp Mycelium Duckweed Lupin Coconut Sacha Inchi Oats Moringa Mung Sesame Quinoa Nettles Pea Sunflower Rice Pomegranate Soy Wheat Potato Air!

11 Defining Plant-Based VEGETARIAN CONSUMER

Currently, there is no FDA regulatory definition of “vegan” ,“vegetarian” or “plant-based”.

Lacto = Dairy Ovo = Eggs Pesco = Fish

Five percent of Americans identify as vegetarian, a rate that has remained unchanged since the previous survey in 2012.

13 Gallup, July 1-11, 2018 n=1,033 adults, aged 18 and older VEGAN CONSUMER

Just the plants and nothing but the plants…

• Grains • Vegetables • Fungi • Fruits • Beans • Nuts • Soy products

14 “PLANT-BASED”: MOST ARE FLEXITARIAN AND REDUCE-ITARIANS

Flexitarianism is the act of consciously cutting back on meat but still enjoying a serving of animal protein when the timing is right.

While flexitarians primarily eat plants with the occasional inclusion of meat, eggs, and dairy, reduce-itarians mindfully and gradually reduce their consumption of animal products with respect to their own diet.

Did you know at least 1/3 of the people In the U.S. can be described as Flexitarian?

15 PLANT-BASED FOODS DEFINED

PBFA Certification

The most important thing to understand is that for PBFA, “plant-based” means 100% free from animal ingredients. We make no exceptions to this rule. While Certified Plant Based provides the same animal-ingredient free assurance as the vegan label, ours reaches more consumers. In the U.S. 39 percent of consumers are trying to eat more plant-based foods while only 3 percent are vegan. Vegan is a specific lifestyle and label, while plant-based can include a wider array of people who enjoy Meatless Mondays or are flexitarian.

16 https://plantbasedfoods.org/how-is-pbfas-certified-plant-based-seal-different-from- vegan/ THE PLANT-BASED ALTERNATIVE MARKET IS GROWING 17%

Plant-based alternatives are a $3.7 billion market growing 17%, but still less than 1% of total US food sales

$2.0 B 40%

35% $1.6 B 30%

$1.2 B 25%

20% Sales

$0.8 B 15% $ % Chg YA Chg % $

10% $0.4 B 5%

$0.0 B 0% and Plant-based Plant-based Other Plant- Plant-based Plant-based Tempeh Meat Milk based Dairy Meals Eggs and Mayo Sales $ % Chg YA

Source: Nielsen custom defined data set, xAOC + WFM, 52 weeks ending 8/11/18. 17 54% OF CONSUMERS WANT TO REDUCE MEAT AND INCREASE PLANT PROTEINS

WHAT PEOPLE EXCLUDE WHAT PEOPLE WANT MORE OF IN A FLEXITARIAN DIET among self-identified flexitarians

Red meat 69% Want to Eat MORE Poultry 24% Vegetable proteins 49% (beans, nuts, etc.) Pork/Ham 60% Fish 39% Dairy 28% Poultry 25% Fish 22% Shellfish 26% Dairy beverage 22% Other seafood 27% Dairy products 20% Analog proteins 15% (tofu, tempeh, seitan) Red meat (beef/lamb) 14% Pork/Ham 12%

18 Drivers of Consumer Behavior

19 VARIETY, HEALTH, PLANET…

Millennials and Gen Z say sustainability, ethical, social and environmental impact, is a shopping priority1

Nutritional: Personal Health Planet Health • Lower Saturated • People are interested The extent of the improvement • Lower Cholesterol in losing weight, varies widely, but overall, • Lower Calories lowering their environmental impact can be cholesterol and lessened by nearly 40% by improving their overall switching from meat- health.2 containing meals to veggie ones.3

20 DRIVER: VARIETY

MOTIVATIONS FOR LIMITING ANIMAL PROTEIN

I want variety in my meals (to have foods other than meat) 36%

Non-animal proteins help me keep a healthier lifestyle (lower calories and saturated fat than meat, etc.) 28%

To help me/my kids eat more vegetables and plant-based protein 22%

To support animal welfare / prevent animal cruelty 19%

Non-animal proteins are safer than meat (no antibiotics, hormones, diseases, etc.) 17%

To be more environmentally-friendly (e.g. CO2 footprint, water and land usage) 16%

Non-animal proteins are lighter than meat (won’t weigh me down) 13%

To help reduce food waste 12%

Non-animal proteins have lower prices compared to meat 10%

To help satisfy both the vegetarians and the meat eaters in my household 9%

Non-animal proteins provide the same amount of protein as meat 9%

I don’t like the taste / texture 9%

Non-animal proteins have more consistent prices compared to meat 6%

Religious reasons (Kosher, Halal, etc.) 4%

21 IFMA Consumer Planning Program, Plant-Based Entry, 2017-18. DRIVER: HEALTH

Why do you limit or avoid meat consumption?

It's just generally better for me 37% More energy 39%

To eat more vegetables and grains 34% It's a taste preference 38%

To avoid harming animals 15% Helps prevent disease 37%

Promotes long-term health It's less expensive to not eat meat 14% 37%

I don't like the taste of meat that Promotes daily health 37% much 13% Eating clean 30% It's better for the environment 11%

Health reasons - I'm managing a It's a lifestyle preference 28% disease 8% Better treatment of animals I don't like handling or cooking 27% meat 7% Environmental/sustainability reasons 25% No particular reason 22%

Q4av) Why do you limit or avoid meat consumption? (Base: Those who do not eat Q21c) Rate the importance of each of the following in driving your plant-based meat almost daily) food/beverage choices.

22 TAKING ADVANTAGE OF A PLANT-BASED DIET’S BENEFITS

“A vegetarian diet can be nutritionally adequate containing high intakes of fruits, vegetables, whole grains, nuts, soy products, fiber, phytochemicals, and antioxidants.” Academy of Nutrition and Dietetics, Dietitians of Canada, and the American College of Sports Medicine. Position Statement: Nutrition and Athletic Performance

23 EXAMPLE: “BLUE ZONES”

Blue Dietary Plant Zone Staples/Patterns Based?

Ikaria, Potatoes, goat’s milk, honey, Greece , wild greens, some fruit and relatively small amounts of fish.

Okinawa, Seaweed, turmeric, sweet potato, Japan bitter melons, tofu, garlic, brown rice, green tea and shitake mushrooms.

Sardinia, Flat and sourdough bread, barley, Italy fennel, fava beans, chickpeas, tomatoes, almonds, goat’s milk, sheep’s cheese, milk thistle tea, and wine from Grenache grapes.

Loma Lina, Grains, fruits, nuts and vegetables, California drink only water, avocados, salmon, nuts, beans, oatmeal, whole wheat bread, and soy milk.

Nicoya Beans, corn and squash, papayas, Peninsula, yams, bananas, peach palms. Costa Rica

https://www.npr.org/sections/thesalt/2015/04/11/398325030/eating-to-break-100- longevity-diet-tips-from-the-blue-zones

24 https://www.bluezones.com/recipes/food-guidelines/ DRIVER: THE PLANET

SOURCES: A comparative Life Cycle Assessment of Plant-Based Foods and Meat Foods Summary (Quantis & Morningstar Farms, 2016) 25 PROTEIN ALTERNATIVES

26 CELLULAR AGRICULTURE

27 CELLULAR AGRICULTURE

28 Datassentials 2018 Trends PROS AND CONS

Amy Myrdal Miller, MS, RDN, FAND…"There are so many other more viable, appealing, affordable options for meeting human protein needs," she says. "I'd rather see more people eat more plant protein from crops like legumes such as beans, peas, lentils, chickpeas, and peanuts.

Chris Vogliano, MS, RD… "Meat is the biggest source of our dietary carbon and water footprints," he says. "Some may be turned off by lab-grown meat due to its 'ick factor,' but I believe it deserves further consideration." In Vogliano's opinion, cultured meat "will significantly reduce our carbon footprints in a meaningful way and is a necessary technology if we truly want to begin mitigating our diet-related carbon emissions."

Pros: Cons: https://www.todaysdietitian.com/news/exclusive • Consumers maintain their • Costly 0217.shtml dietary preference • Not practical on a large scale (technology and cost) • Decreased resource use • Weird factor • no antibiotics • Not exact taste yet • no animals slaughtered • Same nutritional profile • Same nutritional profile

https://www.sciencedirect.com/science/article/pii/S1369703X1830024X 29 https://www.gfi.org/images/uploads/2017/06/Mapping-Emerging-Industries.pdf A BLENDED WORLD

30 VEGGIE

31 People of All Ages Want to Eat More Plant and Vegetarian Protein

67% 72% Gen Z Millennial

57% 46% Gen X Boomers

1IFMA/Datassentials CPP 2016

32 ALTERNATIVE PROTEINS MENU ADOPTION CYCLE

refried bean cashew navy bean almond

pinto bean

edamame peanut pea black bean

lentil quinoa peanut butter baked bean pistachio sunflower seed kidney bean snap peas wild rice chickpea seitan lupin bean soy bean wheatberry steel cut oat hemp mung bean red bean sweet pea garbanzo bean tempeh cannellini bean tofu snow pea

amaranth fava bean chia bulgur flax barley spelt freekeh spirulina farro

millet sorghum kamut nut butter

teff buckwheat pine nut white bean lima bean muesli black eye pea

inception adoption proliferation ubiquity chain restaurants + mainstream fine dining, mixology, earliest stage trendy restaurants + specialty grocers find it just about anywhere grocery

33 Source: Datassential MenuTrends™, April 2018 OPPORTUNITY ON KEY ATTRIBUTES OF TASTE, INDULGENCE, AND SATIATION

What do consumers think?

What’s working? Meat substitutes are perceived as significantly more healthy, more unique, more environmentally friendly and more natural than conventional meat products.

What’s not working? Meat substitutes must work to improve their tasty and indulgent image as they score significantly lower than meat products on the high impact purchase intent drivers “tasty” and “indulgent”.

Key Insight: Meat substitutes must focus on delivering tasty perception while continuing to highlight health and environmental benefits of plant- based products.

34 Source: Mintel Protein Alternatives IFT 2018 MENU GROWTH OF PULSES OUTPACES ANIMAL PROTEINs

MENU GROWTH seeds 163 INDEX Datassential MenuTrends CHIA +813% 4-year growth pulses 146

FLAX +146% pork 117 4-year growth

chicken 99

beef 97 SEAWEED +54% 12-year growth

35 SOURCE: Datassentials October 2017 CONSUMERS SPLIT ON WHETHER PLANT-BASED PROTEINS SHOULD MIMIC MEAT

Regardless of gender or generation, people are split right down the middle. But there’s far greater variance in the acceptability of plant-based options if they don’t taste as good as real meat; Millennials and Z are more willing to compromise on taste, while Boomers are not.

TASTE ATTITUDES FOR PLANT-BASED EATING PLANT-BASED

should MIRROR the taste & 50% 48% 52% 51% 53% 51% 46% texture of real meat and fish

should have ITS OWN UNIQUE 50% 52% 48% 49% 47% 49% 54% craveable taste & texture

63% 59% won’t taste quite as good as 43% 40% 47% 41% meat, but that’s OKAY because 25% of the other benefits 15% 19% 31% 36% 27% 32% 46% won’t taste quite as good as meat, but that’s NOT OKAY because of the other benefits

Total Male Female Gen Z Millennial Gen X Boomer+ XC12a: Please select the statement you most agree with. XC12b: Please rate your agreement: “I understand plant-based proteins will not taste quite as good as meat and that’s acceptable to me because of their other benefits.”

36 FOR MEAT LOVERS, PROTEIN AND TASTE RULE!

37 BEST OF BOTH WORLDS!

38 BUT WHAT ABOUT PROTEIN?

39 TWO FACTORS DETERMINE PROTEIN QUALITY

Digestibility

Amino acid content

40 EVALUATING PROTEIN QUALITY

Complete Protein

Legumes Grains

Complete Protein

Legumes Nuts and Seeds

Complete Protein

Legumes Corn

PDCAAS is a value between 0 and 1.0. The value may be determined by a lab, or may be determined mathematically when provided an AA score and digestibility of the ingredient. Many scores on newer plant proteins are not published or widely available to the public. 41 “Adequate” nitrogen retention PROTEIN IS NOT LACKING FOR MOST

SOURCES: 1. DGA 2015-2020 42 SOY MYTH BUSTING

Myth 1: Eating soy increases breast cancer risk

Myth 2: Soy has feminizing effects on men

Myth 3: Soy negatively impacts status

Myth 4: You can’t build muscle by eating soy.

Source: http://www.soyconnection.com/newsletters/soy- connection/facts-vs-myths-%E2%80%93-part-two

43 META-ANALYSIS (36 COMPARISONS)

No effects of soy or isoflavones Fertility Sterility 94: 997, 2010 on levels of testosterone

44 SOYFOODS ARE SAFE FOR BREAST CANCER PATIENTS

45 RESPONSIBLE FOR 90% OF THE FOOD ALLERGIC REACTIONS IN THE US

Eggs Shellfish Fin fish

Big 8 Wheat Food Peanuts Allergens

Tree nuts Soy Milk

Lowest among the Big 8

Prevalence of ~2/1,000 adults

Soy Allergy 70% of children outgrow their allergy by age 10 46 ENOUGH PROTEIN?

“…Protein from a variety of plant foods, eaten during the course of a day, supplies enough of all indispensable (essential) amino acids when caloric requirements are met. The regular use of legumes and soy products will ensure an adequate protein intake for the vegetarian, as well as providing other essential nutrients.” J Acad Nutr Diet. 2016;116:1970-1980.

Examples of Vegan Athletes

Yolanda Presswood Carl Lewis Venus Williams Torre Washington Karl Bruder

47 Feeding the Future: Menu Solutions

Plant based sources of protein provide a more sustainable plan for feeding the future, is just as nutritious, and can be tasty with the right recipe and menu offerings.

48 PLANT-BASED IS JUST GETTING STARTED IN FOODSERVICE

MEATBALLS $3.8;2% BREAFAST BREAST SAUSAGE INGREDIENT $4.6;3% $10.4;6% $4.3;2% In foodservice, the plant-based protein NUGGETS 1 $3.1;2% category is $197MM growing +36.9%

ALL While Burger is the #1 format, driving $43MM OTHERS $19.3;11% in growth, Chicken & Pork are growing +20% Y-Y and turning a higher Value of Placement than Beef.1 BURGERS $129.3;74 % Commercial restaurant plant-based protein has grown 47.3% in the last 12 months1 FOODSERVICE VEGGIE MIX1

49 1NPD Supplytrack Latest 12 Months, Apr 2019 – Exl Tofu THERE'S A GIANT GAP IN FOODSERVICE

While 75% of consumers are open to eating more plant-based protein1, plant-based penetration is only 22% in retail2 and 13% in foodservice3

Consumer Interest in Additional PBP Options by Segments4

55% 53% 47% 47% 20% 18% 10% QSR Fast Casual Midscale Casual Cafeterias C-Stores None

1Kellogg Veggie Demand Landscape, 2016 2Nielsen P52W Rolling, Oct 2016 3NPD Supply Track 12 Months, Ending Nov 2018 4The NPD Group/Crest OnSite®, YE Mar 2019 50 5Datassential Menu Trends Food Profile, Jan 2018 PLANT-BASED IS GOOD FOR BUSINESS TOO

86% of operators say plant- based offerings positively impact sales and traffic1

65% of consumers are more likely to order a plant-based protein with a brand they recognize2

51 1Technomic Healthy Eating Report, 2017 2Datassential & Kellogg’s Plant Based Protein A&U, May 2019 OPERATORS ARE EXTREMELY OPEN TO CONTINUED GROWTH OF THE CATEGORY

72% of operators are interested in offering more veggie-focused entrees and continue to look for OPERATOR ways to make them the star of the plate OPPORTUNITIES 42% of school operators plan to offer more vegetarian items in the next two years

52 Foodservice Director MENU SOLUTIONS

53 MENU SOLUTIONS

54 CREATE CRAVINGS

Romance the menu and use descriptive flavor adjectives to entice guests. Menu as “Plant Based” Quality & Quantity Menu as “Plant Based or “Plant When choosing plant-based, the Forward” versus “Vegetarian” quality and quantity of the or “Vegan” protein is a top consideration2

Look for claims, such as:

High Protein & Free from GMOs, Save water, Low Saturated Fat Preservatives, Artificial greenhouse gas (most desired)2 Flavor & Colors and land

55 1Morning Consult, Consumer Trends in the Food & Beverage Industry 2DataEssentials, CPP 2017_2018 - Plant Based Entry GLOBAL FLAVOR TRENDS

• Greater access to information is adding demand in heightened demand for authenticity.

• 66% of operators (both commercial and noncommercial) say they are menuing more ethnic dishes with ethnic flavors than they did two year ago.

• Gen Z diners are drawn to flavor of food, service elements and attention. Efforts should focus on taste and craveability of menu items, appealing to unique flavors.

SNA 2017 School Nutrition Trends Report “Gen Z Flavor Trends: Spice is Nice!,” Somma Foods, April 11, 2018 HYPER-CONVENIENCE & PORTABILITY

Traditional eating patterns built around three “square,” structured meals a day has given way to frequent snacking that occurs throughout the day and is highly individualized.

MODERN SNACKING MODEL

of consumers depart from traditional eating routines (three meals a day with snacks limited to in-between % meals). This includes snacking any 88 time of day, snacking often, and skipping meals.

of these consumers forego meals % altogether in favor of all-day 7 snacking.

57 Hartman Group Eating Occasions Compass 2018, Base - Total 2018 consumers (n=7,186). FAMILIAR WITH A TWIST

• 86% of kids surveyed enjoy eating foods at restaurants that they don’t get at home1

• 92% of kids order their favorite foods, something they are familiar with1

• 53% of Gen Z consumers are looking for their favorite brands away from home2

58 1 Technomic Consumer Trend Report May 2016 2 Y-Pulse (ypulse.org) 2017 MSF ANNOUNCEMENT

59 Questions? THANK YOU!

Serving plant-based protein for over FORTY YEARS

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