Agreement with the Beverage Sector
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- Sheena Gordon
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1 Agreement with the Beverage Sector (Announced September 2014) A key solution to reduce consumption of Sugar Sweetened Beverages
2 Our Vision We believe ALL young people deserve the chance to live healthier lives. Our Mission We work to empower kids to develop lifelong healthy habits by ensuring the ENVIRONMENTS that surround them provide and promote good health.
3 Our Strategies Healthier Marketplace Healthier Environments
4 Change Supply Create Demand Increase Access
5 2-Part Goal National Goal Reduce beverage calories consumed per person per day by 20% by 2025 Communities Goal Achieve equivalent reductions in 8-10 communities where the challenge is believed to be greatest Communities Selected to Date Little Rock & Los Angeles September 2014 New York City May 2015 Counties in MS & AL April 2016
6 Agreement includes: Calorie counts and promotion of calorie awareness on all company-controlled point-of-sale equipment in convenience stories, restaurants and other locations: Vending machines Retail coolers Self-serve fountain dispensers Complete business practice change: innovation, distribution and marketing to change and sustain consumer interest in no- and low-calorie beverages Consumer education and outreach: taste tests, sampling programs, coupons and other incentives, in-store displays, community engagement
7 Evaluation Independent, third party evaluator Selected through a competitive RFP process Track progress and interim benchmarks NATIONAL GOAL Baseline Report for the National Initiative March Progress on the National Initiative November 2016 COMMUNITIES GOAL Communities Initiative Baseline Report & 2015 Update Pending distribution
8 The Alliance negotiated an agreement with the beverage industry that resulted in a 90% reduction in beverage calories being shipped to the nation s schools between
9 National Calorie Awareness Program (Vending & Coolers)
10 Reformulation, New Products, Smaller Packages
11 Coke Freestyle Pepsi Spire Glass Front Vending
12 Company Efforts Merchandising & Distribution Marketing & Advertising Marketing & Advertising Pre-Planogram Reset Post-Planogram Reset
13 Timeline of Events: Key Dates Related to the Evaluation Effort SEPTEMBER 2014 Announcement May 2015 Keybridge Selected as Evaluator MARCH 2016 National Baseline Report Released AUTUMN 2016 National Progress Report Released SEPTEMBER 2014 Little Rock & LA Selected January 2015 RFP Released MAY 2015 NYC Selected APRIL 2016 MS & AL Selected SPRING 2017 Communities Baseline & Progress Report Released
14 Evaluation Research Scope National Analysis Analysis WHAT: Measure progress toward the overall calorie per person goals HOW: Measure implementation efforts and determine key drivers of overall changes
15 Factors Contributing to Beverage Calorie Reductions Calories Person = Calories Ounce X Ounces Beverage X Beverages Person Reduced Calories per Person Reduced Calories per Ounce Smaller Portion Sizes Fewer Servings
16 National Calorie Goal: Key Data Sources BEVERAGE MARKETING CORPORATION Measuring Progress Towards the National Goal BEVERAGE DIGEST NIELSEN SCANTRACK
17 National Data Source Assessment Data Assessment Criteria Beverage Digest Beverage Marketing Nielsen Scantrak Nielsen Homescan NPD Group (CREST) Company Data National Geographic Granularity MSA Zip Code SKU / Package Size Product Granularity Beverage Product / Flavor Brand / Trademark - Fountain - - Channel Vending Stores with >$2M sales - Stores with <$2M sales - - Publicly Available Full LRB Coverage Demographic Information Yes/No - Yes/No - Yes/No - - -
18 National Goal
19 National 2014 Baseline & 2025 Target Average Daily Per Capita Beverage Calories DrinkTell, % Baseline* 2025 Target* * Revisions to the underlying data from DrinkTell may result in revisions to the baseline and target estimates. Source: Beverage Marketing Corporation: DrinkTell Database; U.S. Census Bureau, 2015
20 Measuring Progress Towards the National Calorie Goal Average LRB Calories Per Person Per Day: DrinkTell* % DECLINE Baseline Target * Revisions to the underlying data from DrinkTell resulted in revisions to the baseline and target estimates originally published in Source: Beverage Marketing Corporation: DrinkTell Database, 2015; U.S. Census Bureau, 2015
21 Corroborating Data: Beverage Digest Average LRB Calories Per Person Per Day: Beverage Digest* % DECLINE Baseline Target * Beverage Digest data does not include significant portions of LRB volume, including many juices and RTD Teas. Source: Beverage Marketing Corporation: DrinkTell Database, 2015; U.S. Census Bureau, 2015
22 Corroborating Data: Nielsen Scantrack Average LRB Calories Per Person Per Day: Nielsen Scantrack* % DECLINE Baseline Target *Nielsen Scantrack data does not include several important sales channels, such as fountain. Source: Beverage Marketing Corporation: DrinkTell Database, 2015; U.S. Census Bureau, 2015
23 Long-Term Shifts and Potential Headwinds Sales Volume Trends, No- & Low-Calorie CSDs and Bottled Waters, Millions of 8 oz. Servings 100,000 Single-Serve Bottled Water 80,000 60,000 40,000 No- & Low- Calorie CSDs 20, Source: Beverage Digest Fact Book, 2015
24 Slowdown of Calorie Reduction Trend Average Calories per Person per Day, Calories from Beverages Included in Beverage Digest (Excludes some Non-Carbs) Sources: Beverage Digest Fact Book,
25 Key Conclusions from the 2015 Progress Report 1 Calorie declines must accelerate to meet the 2025 goal 2 Calorie reduction momentum has stalled and must be regenerated 3 Growth of bottled water was notable, but had limited caloric effects 4 Falling no- and low-calorie CSD consumption represents a headwind 5 Companies laid groundwork in 2015 for future calorie reductions
26 Communities Goal
27 Communities Selected To Date Los Angeles, CA Boyle Heights Lincoln Heights El Sereno East Los Angeles Little Rock, AR Downtown South Little Rock Southwest Little Rock Midtown Little Rock New York, NY South Bronx Bedford Stuyvesant & Crown Heights in Brooklyn Mississippi Delta, MS Counties of: Coahoma Panola Quitman Tunica Greater Montgomery, AL Counties of: Montgomery Lowndes
28 Key Dates for National & Communities Initiatives Selection Announced Implementation Initiated Baseline Year National Initiative September 2014 January Little Rock, Arkansas September 2014 May Los Angeles, California September 2014 May Bronx-Brooklyn, New York May 2015 January Montgomery-Lowndes, Alabama April 2016 October Mississippi Delta, Mississippi April 2016 October
29 Communities with 2014 Baseline Total Population (2014) Median Household Income (2014) % of Pop. Below Poverty Line (2014)* Eastern Los Angeles 286,898 $37,282 29% Little Rock 98,277 $31,749 27% * In 2015, National average percentage of population below the poverty line was 15%. The National median household income was $53,889. Sources: U.S. Census Bureau(2014); CDC (2012); New York City Department of Health and Mental Hygiene(2015)
30 2016 Selection Process 1 Identify High Obesity Counties & MSAs Data from the CDC Behavioral Risk Factor Surveillance System (BRFSS) was used to rank counties by adult obesity rates and to determine the top 6-10 most obese counties and MSAs. 2 Narrow Lists to Identify Set of Areas of Interest The companies and ABA narrowed the list based on: (1) internal capability to implement the initiative and report data; (2) learning potential for different regions, and (3) input from the Alliance and potential partners. 3 Select Communities in Mississippi & Alabama The selected communities include 2 nd and 4 th most obese U.S. counties and parts of the 10 th most obese MSA with a population between 200K-500K. 4 Construct Contiguous Area In order to select a sufficiently large area, ACS population data was used to select multiple contiguous counties around the areas selected.
31 Communities with 2015 Baseline Total Population (2015) Median Household Income (2015) % of Pop. Below Poverty Line (2015)* Mississippi Delta 79,093 $32,198 29% Montgomery-Lowndes 238,964 $45,483 23% Bronx-Brooklyn 310,797 $37,648 31% * In 2015, National average percentage of population below the poverty line was 15%. The National median household income was $53,889. Sources: U.S. Census Bureau(2014); CDC (2012); New York City Department of Health and Mental Hygiene(2015)
32 Top Data Challenges: Level Analysis 1 No existing data sources for measuring consumption in small geographies. 2 Company shipment data does not include sales for (1) brands of non- Agreement companies; (2) some Agreement company warehouse brands; and (3) sales by third-party distributors. 3 Nielsen Scantrack is (1) based on data from a small, unrepresentative samples of stores, and (2) does not include small independent stores, restaurants/fountain, and vending/other channels.
33 Baseline Estimate: Calorie Consumption LRB Calories Per Person Per Day Baseline for Communities & National Average 2014 BASELINE 2015 BASELINE National: National: Little Rock Eastern L.A. 0 Montgomery- Lowndes Mississippi Delta Bronx-Brooklyn * * Bronx-Brooklyn is likely biased downward due to data limitations Sources: Company-Reported Volumes and Nielsen Scantrack
34 Baseline Estimate: Volume Consumption LRB Volumes, in Ounces, Per Person Per Day Baseline for Communities & National Average 2014 BASELINE 2015 BASELINE National: National: Little Rock Eastern L.A. 0 Montgomery- Lowndes Mississippi Delta Bronx-Brooklyn excluded due to data limitations Sources: Company-Reported Volumes and Nielsen Scantrack
35 Baseline Estimate: Calories Per Serving LRB Calories Per 8-Ounce Serving Baseline for Communities & National Average 2014 BASELINE 2015 BASELINE National: National: Little Rock Eastern L.A. 0 Montgomery- Lowndes Mississippi Delta Bronx-Brooklyn excluded due to data limitations Sources: Company-Reported Volumes and Nielsen Scantrack
36 Changes from 2014 Baseline: LRB Calorie Consumption Percent Change in LRB Calories Per Person Per Day Change from 2014 Baseline 3% 2% 0.4% 0% -0.2% -2% -3% National Little Rock -2.6% Eastern L.A. Sources: Company-Reported Volumes and Nielsen Scantrack, 2014 and 2015
37 Test and Learn Los Angeles
38 # Stores & Restaurants Total Number of Stores (includes Grocery, Convenience, Drug, Dollar, Club, and Bodega) Total Number of Restaurants Total Number of Large Grocery Stores Total Number of Medium Grocery Stores Total Number of Club/Mass Merchandisers Total Number of Other Small Food Stores Total Number of Restaurants Not Serviced by Any Company Total Number of Food Stores Not Serviced by Any Company Los Angeles LR NYC AL Analysis not conducted Analysis not conducted MS Analysis not conducted Analysis not conducted
39 Consumer Behavior Change Research and Development Test and Learn Marketing 10 years Sustainability
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