Innovations in Chocolate

Innovations in ChocolateHealthier ChocolatesKey driving forces of Barry CallebautsInnovative products, tomorrow and for thefutureLaura Bergan, Mark AdriaenssensIFT ChicagoNovember 15, 2012

2012:Trends in Food & BeveragesConfidential by Barry Callebaut, Inc.

5 KEY CONSUMER & MARKET DRIVERSin food & drinks, today and tomorrowLegislationHealth &WellnessSimplicity &EthicsTravel &MigrationIndulgenceLabelingNutritionalquantity &qualitySustainabilityInterest in theunusualGourmetingredientsClaimsFood allergies& intolerancesProvenanceExposure tonewingredientsRewarding &PamperingNatural/geneticmodificationConfidential by Barry Callebaut, Inc.PreventivehealthFarmingmethodsExperimental &adventurousexperiencePriority givento the selfSource: Emerging ingredients in food and drinks Business Insights; 08-2010

Pure is the New NaturalPurity Raw No artificial ingredientsRealNo E-numbersUnprocessedPure & SimpleGoodness from nature

1. Pure is the New NaturalNatural products are becoming the ruleConfidential by Barry Callebaut, Inc.US: Funley'sDelicious PeanutButter Stix In TheMud. Made withPure MilkChocolateIssues with definition of natural: 100% Natural, 100% GoodnessOngoing use of purity, pure origin, true to natureGMO Free claims surgeCombines with simplicity and convenience for more effectUS: Sunspire DarkChocolate Dream PureDarkUS: Endangered Species.Chocolate Extreme DarkChocolateWholeUnrefinedRaw100% purePure & SimplePure & NaturalPurityUnprocessed100% realSimple ingredientsNo artificialingredientsGoodness fromnature

Natural Is AcceleratingSales of US Natural Food and Beverages($B)By 2020, projected:$115B+7.7%Sources: 1 Navigating the Natural Marketplace, IFT.org July 2011Top 10 Food Trends, IFT.org April 201139%% of consumers that cited chemicals in foodas most important food safety issue (+9% YA)Confidential by Barry Callebaut, Inc.

Inclusion of Natural Sweetener SteviaThe Low Sugar and No Added Sugar positioning both experienced growth in H1 2012 fromH1 2011 indicating that sugar free products are becoming more mainstream. The applicationof natural Stevia has been a facilitator of growth.US: LilysChocolate. DarkChocolateSweetened withStevia. All NaturalSweetened usingErythritol andStevia. DistributedNationally.Spain: Torras Dark Chocolatewith Stevia. Sugar free darkchocolate made with Stevia.Chocolates Torras is at theforefront in the use of newingredients giving more value tothe products.Confidential by Barry Callebaut, Inc.

Reducing Sugars and Fats Through NaturalSweeteners Is Exploding in The MarketSugar free products continue to attract modern and calorie consciousconsumers which has resulted in the adoption of natural sweeteners forconfectionery.Confidential by Barry Callebaut, Inc.Source: Innova Analysis 2012

Green is a givenGreen is a givenReUseReduceCompostableBiodegradableSustainableEnvironmentally friendlyCertifiedLower energy consumption

2. Green is a GivenSustainability now a compulsory issue for food companiesCorporate social responsibility playing an increasingly importantroleFairtrade, Rainforest Alliance continue to move mainstream, UTZmakes stridesGiving back importantSustainableReduceReuseEnvironment10% of all profitsCertifiedFairtradeBiodegradableClimate neutralLower energyconsumptionCompostableEnvironmentallyfriendlyFree RangeWaste reductionConfidential by Barry Callebaut, Inc.

Sustainability Is Increasingly Importantfor CPG Companies Dramatic increases in consumer messaging and new product launchesGlobal Product Launches with Ethical ClaimsGlobal Product Launches with Sustainable Messages onPackagingSource: Innova Newsletter December 2010Innova, Ingredient Trends- Top 52Confidential by Barry Callebaut, Inc.

Ethical In Chocolate Confection Is Small But GrowingIn 2010, Ethical Chocolate IsRelatively SmallOrganic3.2%Ethical4.5%The US market for certifiedcocoa expected to nearlydouble by 2020Other92.3%BUT:500450400350300250200150100500+98%(tons 000)2010 2020Innova Chocolate Product Trends Jan-Jun 2010, Published January 2011Tropical Commodity Coalition Barometer 2010. Note Certified Organic Numbers are actually EU Organic Numbers)2Confidential by Barry Callebaut, Inc.

Location, Location, LocationOriginRegionSourcedCertificationAuthenticitySmall batchesLocally grown & produced

3.Location, location, locationLocal appeal the new sustainable trendConfidential by Barry Callebaut, Inc.ItalyExtra Dark Chocolatewithcacao selected from theDominican RepublicDemand for local products to support suppliersInterest in traditional and regional foodsDesire for authentic products from specific regionsUKLuxury Artisan Chocolates withthe finest roasted and refinedSicilian pistachiosMexicoPremium Dark Chocolatewith Italian Whole CherriesRegionOriginLocally grownLocally producedSourcedFood milesProtectedDesignation ofOriginFarmSmall batchesFamilyReared with careCertificationAuthenticityTraditionally made

Premium Stands OutPleasureGuilt freeSelectTreatOfferLuxuryIndulgenceTasteBonusTake a moment

4. Premium Stands OutA question of adapting to changingconsumer demandsConfidential by Barry Callebaut, Inc.Recession, cutbacks and lack of confidence continueCenter-ground squeezed between discount and premiumDemand for small treats and indulgences: quality ingredients,crispy & crunchy textures, smoothy & multi-texture fillingsDark chocolate and Cacao % are key trendsOverall shift in premium chocolate marketUS: Scharffen Berger 62%Cacao Nibby Dark Chocolatewith Roasted Cacao NibsIndulgenceSelectPleasureTake a momentTreat yourselfGuilt freeAffordableluxuryIntroductoryofferBonusBuy 2, get 1 freeLuxury for lessIntroductorypriceSpecial priceEvery day value

4. Premium Stands OutA question of adapting to changingconsumer demandsUnited States: TheoClassic CollectionSpicy Chile DarkChocolate. A rich 70%dark chocolateUnited Kingdom: CadburyDairy Milk Bubbly MilkChocolate with MilkChocolatey Bubbles.Kraft: Milk chocolate withstrawberry yogurt filling, in arecloseable foil wrap.United States: Dagoba OrganicChocolate with Lemon Ginger.Organic dark chocolate madewith lemon essence, andcrystallized ginger.Confidential by Barry Callebaut, Inc.United States: BioplexPure Nutrition PumpkinSeeds Coated with MilkChocolate. Roastedpumpkin seeds coatedwith milk chocolateNEWTREE (Belgium) VELVETY notes ofapricot and cherry, the SPICY sensationsof cinnamon, gingerand pink peppercorn, the FRESHNESS ofmint and bitter orange and enjoy theFLOWERY flavors of lavender.

Seniors draw attentionActiveEasy to openTreatReduced acidAging wellNutritionally balancedEasy to DigestEasy to read labelImproved health

5. Seniors draw attentionNutrient-dense, palate-pleasing &affordableConfidential by Barry Callebaut, Inc.Recognition of extent of aging population issuePotential from specific nutritional requirements; vitD, folic acid,glucosamine, chondroitinDemand for targeted products with adapted textures, flavors,Need for easier-open packaging and clearer labelingSpecificallyformulatedEasy openEasy to digestNutritionallybalancedGuideline dailyamountReduced acidFor strong bonesFor a healthy heartReduce cholesterollevelsAging wellImproved healthActiveEasy to read labels

Forty is the new twentyVitalityNutritionFor a long lifeEnergyStress FreeBalanceAnti-agingGuilt FreeConfidential Barry Callebaut Inc.

6. Forty is the new twentyThe art of Aging GracefullyGermany offersSchoko Bang a Darkchocolatewith Green MatchaTea.Desire to maintain active lifestyleDemand for products to aid successful aging: heart health,cognitive or brain health, eye health,Potential for targeted nutritionMore interest in anti-aging ingredients: resveratrol, omega-3,lutein, zeaxanthin, coenzyme Q10, ginkgo biloba, polyphenols, L-carnitine and green teaActiveAnti-agingFor a long lifeFunctionalingredientsLongevityHealth & fitnessNutritionStaying youngVitalityEnergyStress FreeImproved lifestyleBalanceGuilt freeConfidential by Barry Callebaut, Inc.UK: Ombar Superfood ChocolateProbiotic Chocolate: ProbioticStrawberry

Grounded in scienceStudiesApprovedRecommendedGround breaking researchTechnological advancesEvidenceProduct trialsScientifically provenConfidential Barry Callebaut Inc.

7. Grounded in scienceGreater use of scientifically proven claimsNeed for repacking, repositioning of ingredients not approved withoutclaims but message deliveringScientificallyprovenApprovedProprietaryRecommendedGuaranteed resultsClinically testedStudiesWorld firstTechnologicaladvancesProduct trialsEvidenceGround breakingresearchR&DConfidential by Barry Callebaut, Inc.Optimalperformance

Regulators force a rethinkDaily amountsReducedRecommendationsDaily amountsGovernmentRegulationsReformulation

8. Regulators Force a RethinkControversy over role of governments/regulators in healthylifestyles:Changes in formulation to improve nutritional profiles: salt, sugar,trans fat and fatVoluntary undertakings from some multinationalsConcerns over consumer acceptance of reformulated linesDietary guidelinesGovernmentReformulationNutritional profileLessReducedUS: Hershey:Milk chocolatewith filling.Reduced Fat.RegulationsExerciseRecommendationsDaily amountsConfidential by Barry Callebaut, Inc.US: FannieMay No SugarAdded FineChocolates

CustomizationExclusiveFacebookUnique For YouTargetsCustomizationTailored

9. CustomizationConfidential by Barry Callebaut, Inc.Rise of new communication via social mediaSmaller players can compete more successfullyMultinationals need to emphasis local aspects and sourcingMore tailoring of products to small groups or individualsPERFECTPERSONALISEDCHOCOLATE:Boxes of tailormade MaisonCailler chocolateswill be handpickedto match people'sindividualpreferences.CustomizationIndividual needsTailoredspecificallyUniqueEarly adoptersFacebookTwitterNew marketingmethodsNiche toMainstreamTargetsConsumerGroupsSpecializationExclusiveFor you

Boom for proteinLentils PeasBeansNatural source of proteinMeatlessVegetarianPure ProteinHigh Quality Protein

10. Boom for proteinEating less meat gains interestConfidential by Barry Callebaut, Inc.Rising population numbers and need to feed everyoneDemand for new protein sources, conventional andunconventional: soy, wheat, lupin, potatoSustainability a key issue in promotion of protein sourcesUnited States: Emilys MilkChocolate CoveredMacadamiasBig buttery macadamianuts, bursting with proteinand fiber, an energizingtreat.United States: Tuxedos Milk ChocolateCovered Almonds. Contains calcium,iron, fiber, and protein. PremiumCalifornia almonds.Vegetarian societyApprovedPure proteinComplete proteinHigh in proteinNatural source ofproteinHigh quality proteinMeatlessProtein packedFiber & ProteinSustainable proteinsourceBeansLentilsPeasLegumes

2012:Innovation in ChocolatesHealthy ChocolatesConfidential by Barry Callebaut, Inc.

5 KEY CONSUMER & MARKET DRIVERSin food & drinks, today and tomorrowHealth &WellnessIndulgenceLegislationWhat is BarryCallebaut doing tomeet theseconsumer trends?Simplicity &EthicsTravel &MigrationConfidential by Barry Callebaut, Inc.Source: Emerging ingredients in food and drinks Business Insights; 08-2010

Barry Callebaut is theInnovator in theChocolate IndustryLet us show you why

Confidential by Barry Callebaut, Inc.NEW Sweet solutions

Rebalanced ChocolateWhat if you could fundamentally change the nutritional profile of chocolate?1098Caloric Content (kcal/g)76543210Fat Cocoa Liquor Full CreamMilk PowderSugar Proteins WheyProteinsSkimmedMilk PowderCocoaPowderDietaryFibresConfidential by Barry Callebaut, Inc.

Rebalanced Chocolate SolutionsSUGAR REDUCTIONsugar partly replaced byDietary FibersWAS / SUGAR FREEsugar totally replaced byMaltitol / Lactitol / ErOH( + dietary fibres)FAT/SAT FAT REDUCED(ONLY 25% OF FAT)Unique Processing TechnologyConfidential by Barry Callebaut, Inc.

Rebalanced Chocolate Sugar ReductionGoal:ü At least 25 - 30% Sugar reduction/fiber enrichmentwithout compromising product qualityRebalanced chocolate MUST:ü Achieve parity taste acceptance vs. standard chocolateü Deliver significantly improved nutritional profileü Not contain artificial sweeteners or additivesü Not increase fat contentü Not produce digestive discomfort or laxative effectsConfidential by Barry Callebaut, Inc.

Chocolatewith Stevia extractNew sweet chocolatesto fall in love withConfidential Barry Callebaut Inc.

Chocolate with steviol glycosidesStevia rebaudiana Bertoni is a herb, also known asSweet leaf or Sugar leafHigh grade extract (steviol glycosides) is used asa high intensive sweetenerClaims areas based on stevia strenghtsAvailable in Milk & DarkAll applications possible depending on choice ofrecipe; Customizable sweetener solutionsStevia concept possible in all sugar containing productsConfidential by Barry Callebaut, Inc.

Positioning based on strengths ofSteviaREDUCEDCALORIEAPPLICATIONSStevia = Zero CaloriesNOLAXATIVEWARNINGNo Negative Side EffectsSteviol GlycosidesAll Natural&Intensive SweetenerALLNATURALNatural Sugar Replacer(stevia, fibers & erythritol)NO SUGARADDEDWith Added FiberConfidential by Barry Callebaut, Inc. 40

Reason why & claimsReason why Trend towards less sugar consumption More healthy and natural alternatives EU and other countries commitments to make WHO globalstrategy on Diet, Physical Activity & Health successfulConfidential by Barry Callebaut, Inc.Claims With sweeteners from stevia With steviol glycosides from the stevia plant With stevia-extract, steviol glycosides With sweetener of natural/plant origin Steviol glycosides occur naturally in stevia leaves Naturally sweet Naturally sweet taste

Sweet by Fruits ChocolateWith 100% natural sugarsstraight from the fruitConfidential by Barry Callebaut, Inc.

Sweet by Fruits Chocolateü This chocolate contains the best of the cocoa fruitand orchard fruits: sugars from apples and grapesü Great taste with a sweet fruity touchü Lovely mouth feelü No added refined sugarsü No artificial sweetenersü Only sugars straight from fruits and entirely fromfruitsü Minimal processing: within hours after harvesting,the fruit juice is squeezed and the sugars physicallyextractedü No chemical extraction or processingü Ideal for a wide variety of applications:confectionery, biscuits, etcü Ideal for adults and children looking for a moreconscious, healthier lifestyleConfidential by Barry Callebaut, Inc.

Chocolate is the fuel for the heart

ACTICOA ® Chocolate - Cocoa FlavanolsANTIOXIDANTSMolecules capable of slowing or preventing theoxidation of other molecules and provide protectionagainst free radicalsFLAVONOIDS*Biggest class of antioxidants. Polyphenoliccompounds found in a variety of foods of vegetableorigin (cocoa)FLAVANOLSSpecific subclass of flavonoid compoundsspecifically recognized for their ability to act asantioxidantsConfidential by Barry Callebaut, Inc.*NOTE: Flavonoids are the largest and best studied class of polyphenols

ACTICOA® Processü ACTICOA® chocolate is produced without adding extracts or other chemical substancesü ACTICOA® preserves the natural high levels of active flavanols present in the cocoa beanConfidential by Barry Callebaut, Inc.ü ACTICOA® makes the difference: this process preserves up to 80% of the naturally presentflavanols in the finished productü ACTICOA® cocoa and chocolate therefore offer uniquely high amounts of the naturalantioxidants from the cocoa beanThe Cocoapro logo is a trademark of Mars, Inc. and is used with permission.

EFSA Health claim7 years of fundamental research9 different countries tested18 clinical research partners500 healthy participantsConfidential by Barry Callebaut, Inc.

EFSA Health claimJuly 2012: The European Food Safety Authority gave a positive opinion :cocoa flavanols** help maintainendothelium- dependent vasodilationwhich contributes to normal bloodflowcocoa flavanols contributeto a healthy blood flow** Based on the intake of 200 mg cocoa flavanols provided by 2,5 g high flavanol cocoapowder or 10 g high flavanol dark chocolade per dayConfidential by Barry Callebaut, Inc.

ACTICOA® Consumer-Friendly WordingAlternative claim wording, some examples:*ü ACTICOA® chocolate products are clinically-proven to improve bloodflow.ü ACTICOA®, the natural, scientifically substantiated cocoa solutioncontributing to a healthy blood flowü ACTICOA® is proven to stimulate blood flow ACTICOA® is effective toimprove your blood flow and manage your well-being.ü Healthy veins, healthy blood flowü Improves blood vessel healthü Enhances nutrient flow into the musclesü Reduces cold feet and hands in the winterü Improves blood flow to the brainConfidential by Barry Callebaut, Inc.Any commercial claim with a scientific link to improved blood circulation canbe requested to the European commission.*Example Claims - All claims should be verified for legal and regulatorycomplianceThe Cocoapro logo is a trademark of Mars, Inc. and is used with permission.

ACTICOA ® ChocolateConfidential by Barry Callebaut, Inc.Barry Callebaut has created a special process which retains theflavanols that naturally occur in cocoa beans that are normallylost during chocolate productionACTICOA ® Chocolateü Retains the excellent flavor of true chocolateü Is made using a special process that preserves 80% ofthe naturally occurring cocoa flavanols. Standard cocoaprocessing retains only 30% of cocoa flavanolsü Is produced without adding extracts preserving thoseantioxidants that are naturally present in the cocoabeanü Is a natural source of cocoa antioxidantsThe Cocoapro logo is a trademark of Mars, Inc. and is used with permission.

Confidential by Barry Callebaut, Inc.High Protein Innovations- Vegetable Protein- Greek Yogurt

Vegetable Protein - PeaIngredient Overviewü The use of vegetable protein, as an ingredient, is growingworldwide.ü Rich in protein.ü The extraction process eliminates most of pea-type flavors.ü Concentrated and highly digestible.Confidential by Barry Callebaut, Inc.

Nutritional Benefitü The essential amino acid profile of vegetable proteins is veryclose to that of the ideal protein for human nutrition. Lysine: human growth and bone health Branched-chain amino acids: maintenance of muscle protein Arginine: Physical effort and immune system efficiency Glutamine + Glutamic acid: source of energy for muscles duringstressü Contains 80% unsaturated fatty acids, as opposed to high levels ofsaturated fatty acids in dairy proteins.Confidential by Barry Callebaut, Inc.

Green is Good!ü Introduction of peas in a conventional crop rotation enables areduction in: fossil energy demand, greenhouse gas emissions,acidification, ozone formation. Does not require nitrogen fertilizers.ü Pea Protein is extracted from dry pea (Pisum sativum) withoutthe use of chemical solvents.ü When replacing dairy protein for pea protein there is a reductionin: Water consumption Feed plus cereal consumption Animal waste (nitrogen and organic matter rejection)Confidential by Barry Callebaut, Inc.

Confidential by Barry Callebaut, Inc.Greek Yogurt Confectionery

Greek Yogurt ConfectioneryGreat combination of health and indulgenceü 2 - 3 x more protein than standard yogurt coatingLeverage the trend within the refrigerated yogurtcategoryProduct Information:ü Offered in EZ melts or chip inclusionsü Ready to use for a variety of applications, includingbakery, snacks, desserts or ice creamü Handling and processing are the same as othercompoundsConfidential by Barry Callebaut, Inc.

Sustainability in Every Aspect..From farmer to consumerSustainable cocoa/chocolate

Partnering with farmersfor sustainable cocoa cultivationThe Quality Partner Program is a long-term commitmentbased on direct partnerships between Barry Callebautand selected cocoa farming cooperatives.Confidential Barry Callebaut Inc.Confidential by Barry Callebaut, Inc.

Confidential by Barry Callebaut Inc.Lets keep the passionburning