Vegetarian Foods - US - November 2003

Introduction & Abbreviations

Executive Summary

Market Drivers

Market Size & Trends

Market Segmentation

Supply Structure

Advertising & Promotion

Retail Distribution

The Consumer

Future & Forecast

Appendix: Trade Associations

Appendix: New Product Briefs

Vegetarian Foods - US - November 2003

Table of Contents

Introduction & Abbreviations

INTRODUCTION

OTHER RELEVANT REPORTS

DEFINITION

ABBREVIATION & TERMS

Abbreviations

Terms

Executive Summary

CONTROLLING HEALTH THROUGH DIET

SOY IMPROVEMENTS, HEALTH CLAIM

WIDE APPEAL ACROSS DEMOGRAPHICS

NEW PRODUCTS FUEL GROWTH

MOVE TO MAINSTREAM RETAILING AND MARKETING

GROWTH RATES VARY BY SEGMENT

MAJOR FOOD SUPPLIERS DOMINATE THROUGH ACQUISITION, R&D

SAMPLING AND IN-STORE PROMOTIONS

NATURAL VS. MAINSTREAM RETAILERS

CONSUMERS: MEAT REDUCERS

THE FUTURE IS PROMISING FOR VEGETARIAN FOOD

Market Drivers

HEALTH AND NUTRITION

HEALTH CLAIM AWARENESS

SOY IMPROVEMENTS

CONSUMERS SLOW TO EMBRACE HEALTHY LIFESTYLES

WIDE APPEAL ACROSS AGE GROUPS

Figure 1 U.S. population projections 1998-2008

EXPANDING PRODUCT SELECTION AND DISTRIBUTION

Figure 2 New milk, meal center, prepared meals, and meat substitute vegetarian product introductions, by positioning claim, October 2001-2003

GROWTH OF ORGANICS ASSISTS VEGETARIAN FOODS

VEGETARIAN DIET AND LIFESTYLE MISPERCEPTIONS

OCCASIONAL VEGETARIANS

Market Size & Trends

Figure 3 Total U.S. retail sales of vegetarian foods and dairy milk alternatives, at current and constant prices, 1998-2003

Graph 1 Total U.S. retail sales of vegetarian foods and dairy milk alternatives, at current and constant prices, 1998-2003

Market Segmentation

OVERVIEW

Figure 4 U.S. FDM sales of vegetarian foods, segmented by type, 2001 & 2003

Graph 2 U.S. FDM sales of vegetarian foods, by segment, 2003

Figure 5 U.S. FDM sales of dairy milk alternatives, segmented by type, 2001 & 2003

MEAT ALTERNATIVES AND TOFU

Frozen meat alternatives

Figure 6 U.S. FDM sales of frozen meat alternatives, 1998-2003

Tofu

Figure 7 Total U.S. retail sales of tofu, by segment, 1998-2003

Refrigerated meat alternatives

Figure 8 U.S. FDM sales of refrigerated meat alternatives, 1998-2003

Vegetarian entrées

Figure 9 U.S FDM sales of vegetarian entrées, 1998-2003

Canned meat alternatives

Figure 10 U.S. FDM sales of canned meat alternatives, 1998-2003

DAIRY MILK ALTERNATIVES

Refrigerated dairy milk alternatives

Figure 11 U.S. FDM sales of refrigerated dairy milk alternatives, 1998-2003

Shelf-stable dairy milk alternatives

Figure 12 U.S. FDM sales of shelf-stable dairy milk alternatives, 1998-2003

Supply Structure

COMPANIES AND BRANDS

Kellogg’s

Boca Foods (Kraft)

Gardenburger

White Wave, Inc. (Dean Foods/Suiza)

8th Continent (General Mills)

Hain Celestial Group

Eden Foods, Inc.

BRAND SALES BY SEGMENT

Meat/Poultry Substitutes

Figure 13 FDM sales of frozen meat/poultry substitutes, by manufacturer and brand, 2000 & 2002

Figure 14 FDM sales of refrigerated meat/poultry substitutes, by manufacturer and brand, 2000 & 2002

Vegetarian Entrées

Figure 15 FDM sales of vegetarian entrées, by manufacturer and brand, 2000 & 2002

Canned Meat Substitutes

Figure 16 FDM sales of canned meat substitutes, by manufacturer and brand, 2000 & 2002

Soy and Other Non-Dairy Milks

Figure 17 FDM sales of refrigerated dairy milk alternatives, by manufacturer and brand, 2000 & 2002

Figure 18 FDM sales of shelf-stable dairy milk alternatives, by manufacturer and brand, 2000 & 2002

Advertising & Promotion

INTRODUCTION

COMPANY AND BRAND ACTIVITY

Boca Burger (Kraft)

Worthington Foods (Kellogg’s)

Gardenburger

White Wave

Retail Distribution

OVERVIEW

Figure 19 U.S. retail sales of vegetarian foods and dairy milk alternatives, by channel, 2001 & 2003

SUPERMARKETS

Overview

Figure 20 U.S. supermarket sales of vegetarian foods and dairy milk alternatives, at current and constant prices, 1998-2003

Supermarket operating data

Figure 21 Top supermarket operating statistics, latest financial year-end

Figure 22 Percentage change from latest financial year-end versus year prior

NATURAL FOOD STORES

Figure 23 U.S. natural food store sales of vegetarian foods and dairy milk alternatives, 1998-2003

The Consumer

INTRODUCTION

MEAT OR SEAFOOD CONSUMPTION

Figure 24 Meat or seafood consumption, October 2003Base: 1,012 adults age 18 and older

Figure 25 Meat or seafood consumption, by gender, October 2003“Which of the following do you eat…?”Base: 1,012 adults age 18 and older

Figure 26 Meat or seafood consumption, by age, October 2003“Which of the following do you eat…?”Base: 1,012 adults age 18 and older

Figure 27 Meat or seafood consumption, by household income, October 2003 “Which of the following do you eat…?”Base: 1,012 adults aged 18 and older

Figure 28 Meat or seafood consumption, by race, October 2003“Which of the following do you eat…?”Base: 1,012 adults age 18 and over

VEGETARIANS, ATTITUDES TOWARDS HEALTH

Figure 29 Degree of agreement with statement “I am a vegetarian”, January-June 2003Base: 9,882 adults age 18 and over

Figure 30 Attitudes towards health, by those who ‘agreed a lot’ to “I am a vegetarian”, January-June 2003Base: 9,882 adults age 18 and over; 218 respondents who agree ‘a lot’ that they are vegetarians

REGULAR CONSUMPTION OF VEGETARIAN FOODS

Figure 31 Regular consumption of vegetarian foods and dairy milk alternatives, October 2003Base: 1,012 adults age 18 and over

Figure 32 Regular consumption of vegetarian foods and dairy milk alternatives, by gender, October 2003“Which, if any, do you eat or drink regularly, that is, at least once a month?”Base: 1,012 adults age 18 and over

Figure 33 Regular consumption of vegetarian foods and dairy milk alternatives, by age, October 2003 “Which, if any, do you eat or drink regularly, that is, at least once a month?”Base: 1,012 adults age 18 and over

Figure 34 Regular consumption of vegetarian foods and dairy milk alternatives, by red meat consumption, October 2003“Which, if any, of the following do you regularly eat?”Base: 1,012 adults age 18 and over

Figure 35 Regular consumption of vegetarian foods and dairy milk alternatives, by household income, October 2003“Which, if any, do you eat or drink regularly, that is, at least once a month?”Base: 1,012 adults age 18 and over

Figure 36 Regular consumption of vegetarian foods and dairy milk alternatives, by level of education, October 2003“Which, if any, do you eat or drink regularly, that is, at least once a month . . . ?”Base: 1,012 adults age 18 and over

PERSONAL CONSUMPTION OF MEAT ALTERNATIVES

Figure 37 Types of meat alternatives consumed, October 2003Base: 201 adults aged 18 and older who eat meatless products

Figure 38 Types of meat alternatives consumed, by red meat consumption, October 2003“Which of the following do you eat meatless versions of?”Base: 201 adults aged 18 and older who eat meatless products

Figure 39 Type of meat alternatives consumed, by age, October 2003“Which of the following do you eat meatless versions of?”Base: 201 adults aged 18 and older who eat meatless products

Figure 40 Types of meat alternatives consumed, by gender, October 2003“Which of the following do you eat meatless versions of?”Base: 201 adults aged 18 and older who eat meatless products

HOUSEHOLD CONSUMPTION OF MEAT ALTERNATIVES

Figure 41 Use of meat alternatives, June 2002-May 2003Base: 25,030 adults age 18 and older

Figure 42 Household consumption of meat alternatives, June 2002-May 2003Base: 4,929 adults age 18 and older whose households use meat alternatives

Figure 43 Household consumption of meat alternatives, frequency, June 2002-May 2003“Mark the number of packages used in the last 30 days.”BurgersHot dogsChicken or poultryBreakfast itemsDeliGround/crumblesTempeh/seitanTofuOtherBase: adults aged 18 and older whose households use each type of meat alternative, as specified in table

ATTITUDES TOWARDS VEGETARIAN DIETS

Figure 44 Attitudes towards the vegetarian diet, October 2003 “Please tell me whether you agree or disagree with each of the following statements?Base: 1,012 adults age 18 and older

Figure 45 Attitudes towards the vegetarian diet, by race, October 2003“Please tell me whether you agree or disagree with each of the following statements?Base: 1,012 adults age 18 and over

Figure 46 Attitudes towards the vegetarian diet, by red meat consumption, October 2003“Please tell me whether you agree or disagree with each of the following statements?Base: 1,012 adults age 18 and over

CONCLUSION

Future & Forecast

FUTURE TRENDS

Expanding Semi-Vegetarian Customer Base

New Product Innovation

Dietary Trends

MARKET FORECAST

Figure 47 Forecast of U.S. retail sales of vegetarian foods and dairy milk alternatives, at current and constant prices, 2003-2008

Graph 3 U.S. retail sales of vegetarian foods and dairy milk alternatives, at current prices, 2003-2008

Figure 48 Forecast of U.S. FDM sales of vegetarian foods, at current and constant prices, 2003-2008

Figure 49 Forecast of U.S. FDM sales of dairy milk alternatives, at current and constant prices, 2003-2008