Natural Marketing Institute

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Table of Contents Page # Page # 7 Introduction 46 Belief that Healthy Foods are Too Expensive, Trended 12 Health and Wellness Database Overview 47 Chapter 3: Natural and Organic Food and Beverage 15 Health and Wellness Segmentation (Overview) Highlights 48 Importance of Natural and Organic Foods and Beverages in Maintenance of a Healthy Lifestyle 17 Executive Summary 49 Relationship between Toxins the Body and Staying Healthy, Trended 29 Chapter 1: Proactiveness in Maintaining Personal Health 50 Accountability of Pesticides for the Growth of Food Allergies, Trended 30 Importance of Leading a Healthy Lifestyle, Trended 51 Accountability of Pesticides for the Growth of Food Allergies, by Generation 31 Personal Responsibility in Health Maintenance 52 Association of Organic Foods and Beverages with Safety, Health and Nutrition Attributes, by Segments and Natural Channel Shoppers 32 Taking Whatever Means Necessary to Control Health, Trended 53 Use of Organic and Natural Foods and Beverages, Trended 33 Those Seeking Self Care Methods, by Generation 54 Growth Rates of Organic Sales 34 Concern about Preventing Specific Health/Medical Conditions 55 Household Penetration of Natural Foods and Beverages, Trended 35 Importance of Various Methods in Maintaining a Healthy, Balanced Lifestyle 36 Importance of Various Healthy Lifestyle Methods, by Generation 57 56 Household Penetration of Organic Foods and Beverages, Trended Household Penetration of Organic and Natural Foods and Beverages, by Segment 37 Chapter 2: Healthy Eating Attitudes and Barriers 58 Change in Usage of Specific Organic Foods and Beverages, by Generation 38 Association of Healthy Eating with Control Over Life, Trended 59 Trends of Specific Products Purchased in an Organic Version 39 Association of Healthy Eating with Control Over Life, by Segment 60 Product Usage Trends Among Organic Consumers (Length 1 Year or Longer) 40 Belief that Eating Healthy is a Challenge, Trended 61 Organic Product Frequency of Use 41 Belief that Eating Healthy is a Challenge, by Specific Condition Managers 62 Detractors of Organic Product Purchase (Barriers) 42 Top Food and Beverage Selection Criteria 63 Detractors of Organic Product Purchase, Trended 43 Top Food and Beverage Selection Criteria, by Segment 64 Chapter 4: Fortified and Functional Food and Beverage 44 Unwillingness to Sacrifice Taste for Health, by Segment 65 Use of Fortified and Functional Foods/Beverages, Trended 45 Choosing Foods Based on Emotional Payoff, Trended 66 Willingness to Pay a Premium for Fortified/Functional Products, Trended 2

Table of Contents (continued) Page # Page # Chapter 4: Fortified and Functional Food and Beverage (continued) 82 Consumers Primary Association of Benefits with Key Ingredients 67 Usage of Fortified or Functional Foods/Beverages Among Households with Children 68 Usage of Fortified or Functional Foods/Beverages, by Generation 84 83 Consumers Who Use Specific Foods/Beverage Types Consumers Who Perceive Themselves to Be Deficient in Protein, Check for Protein Most Often on Label and Seek out Foods High in Protein 69 Usage of Fortified or Functional Foods/Beverages, by Segment 85 Chapter 6: Genetically Modified Ingredients: Knowledge and Avoidance 70 Belief that Functional Foods and Beverages Can Replace Some Medications 86 Consumers Who Have Heard About GMOs 71 Belief that Fortified Foods and Beverages Provide Daily Vitamins, by Generation 87 Issues of Concern for Consumers (including GMOs) 72 Chapter 5: Food and Beverage Ingredient Preferences 88 Consumers Perceived Level of Knowledge of GMOs 73 Selection of Food Based on Labels, Trended 89 Importance of Store Having Products That Don t Include GMOs, by Generation and Organic Food/Beverage Users 74 Selection of Foods Based on Nutritional Claims on Front of Package, Trended and by Households with Kids vs. Those Without 90 Consumers Who Use Non GMO Labeled Foods 75 Concern About Absorption, by Energy Managers 91 Items Checked Most Often on Label 76 Desire for Foods That are Minimally Processed, Have Short List of Ingredients 92 Consumers Change in Purchase Decision Due to GMOs, by Segment 77 Items Checked Most Often on Food/Beverage Label 93 Chapter 7: Sweetener Insights 78 Items Checked Most Often on Food/Beverage Label, Shown as CAG vs. 2009 94 Monitoring Sugar Content, Trended 79 Ingredients Consumers Desire More of 95 Read Label for Sugar and Type of Sweetener, Trended 80 Ingredients Consumers Desire More of, by Segment 96 Types of Sweeteners Used Regularly, by Weight Loss and Diabetes Managers 81 Consumers who Don t Know Any Benefits of Key Ingredients 97 Types of Sweeteners Used Regularly 3

Table of Contents (continued) Page # Page # Chapter 7: Sweetener Insights (continued) 113 Desire for Lifestyle Simplification to Reduce Stress, by GP and Condition Managers 98 Types of Sweeteners Used Regularly, by Natural and Organic F/B Users 114 Desire for Lifestyle Simplification to Reduce Stress, by Generation 99 Using Artificial Sweeteners to Reduce Weight Management Pitfalls 115 Actively Managing High Cholesterol, High Blood Pressure and Heart Disease, Trended 100 Concern About Artificial Sweeteners, Trended 116 Actively Managing Diabetes, Trended 101 102 Importance of Store Having Foods Free From Artificial Sweeteners Natural Sweetener Usage, Trended 117 Use of Low Sugar/Sugar Free/Artificial Sweeteners, Past Year 118 Belief in Connection Between Diet and Health, Trended 103 Low Sugar and Sugar Free Foods/Beverages Usage Patterns 119 Belief of Ability to Manage Health Issues via Nutrition, Trended 104 Increased Use of Low Sugar and Sugar Free Foods/Beverages, by Generation 120 Those Seeking Foods/Beverage that Provide Energy, by Condition Managers 105 Chapter 8: Condition Management and Prevention 121 Those Seeking Foods that are High in Protein, by Condition Managers 106 Actively Managing vs. Concern About Preventing Top Health Conditions 122 Actively Managing Celiac Disease, Trended and by Generation 107 Actively Managing vs. Concern About Preventing Obesity; BMI 123 Use of Gluten Free Foods/Beverages, Trended 108 Actively Managing Digestive Issues 124 Use/Increased Use of Gluten Free Foods/Beverages, Past Year 109 Actively Managing Other Health Conditions 125 Association of Probiotics with Digestive Health, Trended 110 Condition Managers Who Are Managing Multiple Conditions 126 Management of Digestive Issues vs. Association of Probiotics with Digestive Health 111 Actively Managing Stress, Trended 127 Association of Probiotics with Immune Support, Trended 112 Actively Managing Stress, by Condition Managers 128 Management of Need to Boost Immunity vs. Association of Probitics with Immune Support 4

Table of Contents (continued) Page # Page # Chapter 8: Condition Management and Prevention (continued) 144 Use of Alternative Healthcare, Trended 129 Used/Increased Use of Digestive Health Foods/Beverages 145 Use/Increased Use of Alternative Healthcare, Past Year, by Segment 130 Desire for More Probiotics vs. Usage of Digestive Health Foods/Beverages 146 Use of Alternative Healthcare Important in Maintaining Healthy Lifestyle, Trended and by Generation 131 Chapter 9: Weight Management 147 Interest in Healthcare/Insurance Plan that Provides Alternative Options, by Segment 132 Actively Managing Weight (for Appearance or Health Reasons), Trended 148 Interest in Healthcare/Insurance Plan that Provides Alternative Options, by Generation 133 Importance of Maintaining Proper Weight in Maintaining Healthy Lifestyle, Trended and by Segment 149 Use of Milk Alternatives (Soy, Almond, Coconut, Rice), Past Year, by Segment 134 Incidence of Those Who Do Not Work Out and Average BMI, by Segment 150 Use of Milk Alternatives (Soy, Almond, Coconut, Rice), Past Year, by Generation 135 Number of Days of Exercise, Per Week, by Weight Managers 151 Level of Involvement in Vegetarianism, Trended 136 Actively Managing Weight for Health or Appearance, and Average BMI, by 152 Level of Involvement in Vegetarianism, by Segment Condition Managers 137 Actively Managing Weight for Health or Appearance and Average BMI, by 153 Level of Involvement in Vegetarianism, by Generation Generation 138 Weight Management Methods Used, Past Year 154 Use of Meat Substitutes, Past Year, by Generation 139 Weight Management Methods Used, Past Year, by Weight Managers 155 Use of Soy Foods and Soy Beverages, Past Year, by Segment 140 Internet Tools Used by Gen X and Weight Managers, for Weight Management, Past Year 156 Use of Soy Foods and Soy Beverages, Past Year, by Generation 141 Use/Increased Use of Weight Loss Foods/Beverages, Past Year 157 Chapter 11: Supplement Trends 142 Use of Weight Loss Bars, Drinks/Shakes or Other Weight Loss Supplements 158 Incidence of VMHS Users and Integrated VMHS Users 143 Chapter 10: Alternatives 159 Use of VMHS, Trended 5

Table of Contents (continued) Page # Page # Chapter 11: Supplement Trends (continued) 175 Most Important Supplement Attributes to WELL BEINGS and FENCE SITTERS 160 Number of VMHS Used a Day 176 Chapter 12: Influencers, Product Adoption and Shopping Insights 161 Incidence of VMHS Usage, by Segment 177 Sources of Influence for Purchasing Healthy/Natural Products 162 Health and Wellness Segmentation of VMHS and Integrated VMHS Users 178 Point of Sale Influences, Trended 163 Importance of Taking Vitamins and Minerals in Maintaining a Healthy Lifestyle 179 Comparison of Sources of Influence, by Generation 164 Importance of Taking Vitamins and Minerals Daily, to Overall Health 180 Comparison of Sources of Influence, by Segment 165 Importance of Taking Vitamins and Minerals Daily, to Overall Health, by Segment 181 Influencing and Early Adopters, by Generation 166 Use of Specific VMHS Types, by Segment 182 Store Brand Purchases, in the Past Year, by Generation 167 Use of Condition Specific Supplements 183 Attitudes Toward Store Brands Vis a Vis Quality and Price, by Generation 168 Use of Condition Specific Supplements, by Segment 184 Trended Incidence of Brand Trial and Loyalty 169 Perceived Nutrient Deficiencies 185 Shopping Patterns by Channel, Past Three Months 170 Concern About Body Not Absorbing Nutritional Supplements, Trended and by Segment 186 Appendix 171 Dissatisfaction With Quantity of Pills Taken 187 Definitions of Groups 172 Dissatisfaction With Quantity of Pills Taken, by Segment 190 NMI s Health and Wellness Consumer Segmentation 173 174 Preference to Get Supplements in Forms Other Than Pills and Capsules, Trended Preference to Get Supplements in Forms Other Than Pills and Capsules, by Segments 201 Demographic Profiles of Segments 6

Introduction: The Health and Wellness Compendium NMI s Health and Wellness Compendium is a compilation of 14 years of trended consumer data, since 1999, based on U.S. adult consumers. This research seeks to examine consumer attitudes and behaviors toward health and how these behaviors and attitudes have transformed, adjusted, and realigned over the past decade in response to an ever changing and uncertain world. Global insights are available from NMI across 25+ countries. Many consumers remain shaken, having dealt with a turbulent economy, corporate mistrust and global political turmoil. Consumers are makingchanges in their life, they re shifting their priorities and forming new behaviors, which for most involve being more frugal, sustainable and living a healthier lifestyle. While it may appear that many healthy attitudes and even behaviors have flattened, it is more likely the case that consumers are regrouping, rethinking, and making a more strategic plan for how best to traverse the health landscape. This report seeks to provide insights into how today s consumer is confronting their own health and wellness, uncover factors that are creating health challenges, and reveal some underlying dynamics that may help to provide a glimpse into what lies ahead. In addition, insight into specific populations is given through the lens of NMI s health and wellness segmentation. Some examples of the general issues which are discussed include Mainstreaming of personal involvement in health and wellness Increasing sense of personal responsibility Generational differences in health maintenance methods 7

Introduction: The Health and Wellness Compendium (continued) The healthiest segment within the population, identifiedasthewellbeingsbynmi sproprietaryhealthand wellness segmentation model, continues to set the bar for healthy behaviors. They are considered a highly influential segment and the healthy standards they set provide the benchmarks for the more aspiring mainstream segments. The level of mainstreaming across many attitudes and behaviors is examined through the segmentation lens to understand psychographic motivations. Although healthy eating is among the many important methods of maintaining a healthy lifestyle, consumers continue to face distinct challenges, when it comes to eating right. These challenges are magnified among certain groups of the population. There are also key differences among certain groups in their food/beverage selection criteria and non negotiables, that food and beverage manufacturers must be aware of, in order to gain a clear picture of who their target is. For example, there is a notable market of consumers who embrace the benefits of various levels of vegetarianism and meatless meals whether for taste, health, ethical or financial reasons. We identify and discuss the various groups to show these market opportunities. The natural and organic sector of the US agricultural and food industry is garnering increasing interest from producers, consumers, policymakers and those interested in farm, environmental and nutrition issues. They have become two of the fastest growing market segments within the food and beverage industry over the past few decades. Neither, however, are without problems in consumer perception and understanding. While they have garnered high market presence and household penetration, marketers need to understand the specifics to avoid market pitfalls. 8

Introduction: The Health and Wellness Compendium (continued) While many consumers use functional and fortified foods and beverages, there has been a shift in usage. This report examines that shift and the change in willingness to pay a premium for these categories, with a special focus on which groups are most impacted by cost. Attributes of functional and fortified foods and beverages that appeal to consumers vary by specific groups and understanding this is key to marketers of these products, to ensure their products appeal to the correct consumer for the correct reason. Supplements remain a popular way for consumers to get their daily nutrients and fill in nutritional gaps. There are certain groups of the population for which there have been a notable shifts in overall supplement use and quantity of supplements taken, on a daily basis, making certain groups stronger targets than others. There are also key differences in types of supplements used, which are important for supplement manufacturers to understand. Certain attitudes regarding supplement use and preferred format type have shifted over the past several years and reveal unique differences among certain subsets of the population. And, while consumers are managing an array of conditions, concern over preventing certain conditions literally dwarfs the number who are managing. This level of concern not only reveals strong opportunities for industries involved in health management (including the food and supplement industries) it also reveals that consumers are ever conscious about their health and have underlying fears and concerns over health issues with which they may not yet be afflicted. Market opportunities, therefore, exist for various products and services which help allay consumer concern and provide a better sense of control over future health. This report examines the size of the market for each of these opportunities as well as the required attributes of any proposed consumer solutions. 9

Introduction: The Health and Wellness Compendium (continued) The nation is currently experiencing a major health crisis, as two thirds of American adults are obese or overweight. Obesity is the #2 cause of preventable death, as it increases the risk of many other disease states such as inflammation, heart disease, diabetes, and even cancer, to name just a few. Within this section, we examine various methods of weight loss management including the use of internet tools, various food types and programs. Lastly, there are many influences on purchases of healthy products, and there has been a change in their effect over time. Consumers are more proactive in searching for information and desire to be approached in new ways. It is increasinglyimportanttotargetconsumersnotonlywith the right marketing communications but where and how they want to be reached. As always, we appreciate your interest in our research as well as your questions and feedback on any content in The Health and Wellness Compendium. We hope this is a useful tool to increase your understanding of consumer approaches to health and wellness. Let us know how we can help you apply the learning here or explore our custom consulting and research at www.nmisolutions.com 10

Health and Wellness Trends Database (HWTD) Overview 2013, 2012, Natural Marketing Institute 11

NMI Health and Wellness Trends Database Overview Most comprehensive data available on health and wellness; based on attitudes, behavior and product usage within the world of health and wellness across 90+ product categories and 20 shopping channels Annual consumer research among U.S. general population adults and primary grocery shoppers Currently 14 years of trended data: 1999 through 2012, inclusive; a total of 40,000+ consumers in the database Nationally representative sample of the U. S. population statistically valid at 95% confidence level to +/ 1.8% 2012 survey was conducted on line among 3,031 general population consumers; 2,053 primary grocery shoppers are also identified Utilization of a leading on line research firm 12

Discover Leverageable Health Topics NMI s Health and Wellness Trends Database Health & Wellness Health and Lifestyle Focus Food Beverage Personal care Supplements HH products Sports nutrition General merch Healthy lifestyle drivers Association of ingredients with specific health benefits Lifestyle and demographic measures Usage patterns across foods, supplements, healthcare, personal care Shopping Behavior Brands, influence and media Health & Wellness Trends Database Most comprehensive data available on health and wellness; based on attitudes, behavior and product usage within the world of health and wellness Annual consumer research among U.S. general population adults and primary grocery shoppers Currently 14 years of trended data: 1999 through 2012, inclusive; a total of 40,000+ consumers in the database Nationally representative sample of the U. S. population statistically valid at 95% confidence level to +/ 1.8% 2012 survey was conducted among 3,031 general population consumers Conducted via on line methodology 2012, 2013, NMI Natural Marketing Institute 13

The Health & Wellness Trends Database Summary Content & Scope Attitudinal Drivers: Healthy lifestyle drivers Awareness of terminology Ingredients health benefits, avoidance vs. fortification Attitudinal statements & beliefs diet, nutrition, supplementation, exercise Health conditions preventing, managing/treating Shopping/Dining Behavior HWTD Shopping patterns across 20 channels Shopping at 60 specific stores Dining at 6 specific fast food restaurants Usage Patterns: 42 general products & services ~120 specific categories Duration, frequency, reason for use for 8 general ctgys Spending patterns Economic changes Brands, Influence & Media: Usage across 100+ specific food, beverage, VMHS brands Brand influence/preference 25 sources of influence Lifestyle activities Readership across 40+ magazines; 30+ websites used Demographics 2012, 2013, NMI Natural Marketing Institute 14

NMI s Health & Wellness Consumer Segmentation Highlights Opportunities & Challenges with Personal Health & Wellness WELL BEINGS : 17% Most health proactive Market leaders & Influencers Highest organic usage Use some supplements Use many health modalities Most Green FOOD ACTIVES : 18% Mainstream healthy Basics, balance and control Desire inherently healthy foods Take variety of supplements Least eco-friendly Most price driven MAGIC BULLETS : 24% Lack commitment to healthy lifestyle Skew Boomer/Senior, lower income Health managers vs. preventers Weight managers Least likely to exercise FENCE SITTERS : 19% Wannabe healthy Most likely to have kids Stressed out, want help and control More health kicks but no clear goals Eco-friendly Active weight loss EAT, DRINK & BE MERRYS : 22% Least health active Unconcerned about prevention Choose taste over health Younger Least likely to be PGS Leader Group: Target for Innovation Clients leverage this tool optimizing their target messages as well as identifying primary and secondary targets U.S. General Population 15