Category Captains 2021

2021

CATEGORY

CAPTAINS

An Industry Leadership Supplement from Canadian Grocer

PUBLISHER

Vanessa Peters

vpeters@ensembleiq.com

ART DIRECTOR

Trinh Phipps

DIRECTOR OF PRODUCTION

Michael Kimpton

mkimpton@ensembleiq.com

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AN INDUSTRY LEADERSHIP SUPPLEMENT FROM CANADIAN GROCER

Donna Kerry

dkerry@ensembleiq.com

VICE PRESIDENT, OPERATIONS

Derek Estey

destey@ensembleiq.com

SENIOR DIRECTOR AUDIENCE STRATEGY

Lina Trunina

ltrunina@ensembleiq.com

SENIOR DIRECTOR, DIGITAL CANADA & SPECIAL PROJECTS

Valerie White

vwhite@ensembleiq.com

SALES NATIONAL ACCOUNT MANAGER

Katherine Frederick

kfrederick@ensembleiq.com

ACCOUNT MANAGER

Karishma Rajani

krajani@ensembleiq.com

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Printed in Canada

Bread Canned Tomatoes Cold Pressed Condiments Cream Cheese Dry Packaged Dinners Frozen Food Health and Wellness Peanut Butter Premium Mixers Snacks

5 7 9 11 13 15 17 19 21 23 25

MADE BY CANADA For well over 100 years, Dempster’s® has baked up our very best for Canadians.

From bread to buns and rolls, to bagels and tortillas, we have expanded our products as this great nation has grown and diversified.

With our 12 bakeries coast to coast, we are committed to Canada and take pride in everything we do. We buy Canadian wheat flour sourced from Canadian wheat farms and use ingredients that Canadian families can feel good about putting on their table. Dempster’s® products do not contain Sodium Stearoyl-2-Lactylate or Acetylated Tartaric Acid Esters of Mono-and Diglycerides. Because if you ask us, simpler just tastes better.

Helping to feed our nation also means our responsibility to feed Canadians in all communities. Dempster’s® has already donated millions of slices of bread to the Food Banks of Canada and continues to support programs for those in need.

Because we feel it’s about more than what’s on your plate: It’s about everything it took to get it there, too.

BREAD With $2.8 billion in sales for the last 52 weeks ending August 14, 2021* and sales growth over $70 million in Canada*, Commercial Bread is a large grocery category and plays a significant role at retail.

White Bread continues to be the largest segment in Commercial Bread with 18%* dollar share, followed by Buns & Rolls at 17%*, Higher Health at 13%* and Bagels at 8%*. These four major segments account for 57%* of the Commercial Bread category.

Higher Health, which is comprised of grains, dietary needs (weight management, no fat, no sugar, and gluten free) and organic breads, is the second largest segment in the category and is supporting consumers’ growing awareness and demand for healthy, nutritious and “better-for-you” products.

New product innovation plays a key factor in category growth with innovation coming mainly from the Bagels, Buns & Rolls and Higher Health segments.

INNOVATION KEY GROWTH DRIVERS

Established Items

NielsenIQ Market Track L52W Period ending August 14, 2021

*

New Items/Innovation

Commercial Bread

97%

Bagels

90%

Buns & Rolls

10%

92%

*Higher Health

3%

8% 98%

2%

White Bread

99%

1%

Wheat Bread

99%

1%

Tortillas & Wraps

99%

1%

Source: NielsenIQ Market Track L52W Period Ending August 14, 2021, Excludes all Control Label Items, * Higher Health = Grains + Dietary Needs + Organic Needs

COMMERCIAL BREAD SEGMENTATION ($ SHARE/GROWTH) Commercial Bread = 100 (+3%)

All Other 5.2 (+7%) Rye 5.1 (+2%) Hearth 7.4 (+1%) Pita & Naan 3.8 (+6%)

White Bread 18.1 (-2%) Wheat Bread 7.2 (-7%) *Higher Health 13.3 (-1%) Buns & Rolls 17.4 (+7%)

Tortillas & Wraps 8.4 (+7%) Fruit & Sweet & Raisin Bread 2.3 (+6%) English Muffins 3.0 (+2%) Bagels 8.6 (+13%)

Source: NielsenIQ Market Track L52W Period Ending August 14, 2021, * Higher Health = Grains + Dietary Needs + Organic Needs

CATEGORY CAPTAINS 2021

5

T CER IFIE

ES FRO TO

D PRO UCT

100%

D

M

ITALIAN N • TOMA IO

CANNED TOMATOES The Canned Tomato category in Canada*, taking 2019 as a baseline - since 2020 saw an abnormal increase in consumption caused by the Covid 19 pandemic - has increased in value by 11.3%* (excl. Pizza Sauce). This is the result of all the main subcategories growing: Diced and Other Cut (+3,9%*), Strained Tomatoes (+22.9%)*, Tomato Paste (+20%*), Tomato Sauce (+16.3%*), and Whole Peeled Tomatoes (+14.3%*). It is also worth mentioning that the Pizza Sauce subcategory has increased in value by a swift +31.5%* (Private Label included) and Organic has also been a high-performing segment of the category with a +21%* growth.

The Covid experience has given Canadian consumers a new awareness of how important it is to consume products that are made by prioritizing premium quality and the natural nutritional properties of the raw material.

The preference for authentic Italian products, rather than just Italian sounding, continues to increase, as the ever-growing interest for healthy premium food favours new consumption habits also in the canned tomatoes category.

* NielsenIQ MAT August 28, 2021 vs MAT August 31, 2019

YTD AUGUST 2021 VS YTD AUGUST 2019

$ SALES IN MILLIONS

50 40 30

48 41

38

2019

46

2021 VS 2019

3.9%

20

16.3%

20.0%

20

19

18

15

14

PRIVATE LABEL

DICE + CUT + GROUND TOMATOES

TOMATO SAUCE

14.3%

17

10 0

2021

39

37

7.4%

2020

TOMATO PASTE

10

16

12

WHOLE PEELED TOMATOES

22.9%

7

3.0%

10 9

6

STRAINED TOMATOES

8

201.6%

6 1

CRUSHED TOMATOES

3

3

STEWED TOMATOES

Source: NielsenIQ MAT August 28, 2021 vs MAT August 31, 2019

TOMATO CATEGORY CONSUMPTION

$ SALES IN MILLIONS

PIZZA SAUCE CATEGORY 2019

25 20 15 10

17 12

2021

+1.8%

16

3 PIZZA SAUCE

5

2.5 KG/ pro capita

2.4 KG/ pro capita

38.7%

29.7%

5 0

2020

2021 VS 2019

(EXCL. PIZZA SAUCE)

4

August 2021 August 2019

PRIVATE LABEL

Source: NielsenIQ MAT August 28, 2021 vs MAT August 31, 2019

Source: NielsenIQ MAT August 28, 2021 vs MAT August 31, 2019 Statistics Canada Agency (www.statcan.gc.ca)

CATEGORY CAPTAINS 2021

7

is

s

L s i ’s inno ati in f col juic , oothi , sin s i ss tan stan a o hn ss, nut ition, an liciousn s. C aft n ou tat -of-th -a t facilit , ou o ucts a a un ast u iz , ith no s ati s, no a iti , an nothin a tificial. lant- as oo n ss!

Jus u

tL ’ o

PROUDLY MADE IN CANADA

s i licious lantos a ou a out ho

col s u tail-focus

o ucts a nl alf th to . olutions can h l ou succ !

COLD PRESSED Cold Pressed is an emerging category for grocery retailers as Canadian consumers increasingly seek out convenient ways to increase their consumption of health and wellness products with all natural ingredients. 46% of Canadians list quality and freshness as leading factors when purchasing food products1 and as the plant-based, vegan and gluten free trends continue, Canadians will look for cold pressed products such as juices and dressings, driving substantial growth in the category.

Globally the cold pressed juice market size was estimated at more than $6.0 billion in 2019, and the market demand is projected to grow at a CAGR of 9.5% to 10.5% from 2019 to 2024.2 North America dominates the consumption of cold pressed juices representing about a third of the global market in 2018. There is a wide variety in this category with the most popular fruit juices being apple, orange, blueberry, goji, and grapes and the most highly consumed vegetable juices being tomato, carrot, cucumber and beetroot.

With cold pressed dressings being a relatively new category there is huge opportunity for growth. Innovation and building awareness by merchandising in the fresh aisle are keys to driving growth in this subsegment as it signals a fresh and healthy product to the consumer appealing to the trends noted above.

DOLLAR SALES OF COLD BEVERAGES IN CANADA IN 2019, BY TYPE 1391

Flavoured soft drinks

Variety Environmental friendliness

274

Carbonated water

Other

143

Extreme energy drinks Flavoured drink mixes

91

Low alcohol beverages

78

RTD iced tea cans

66

Coconut water

45

Milkshakes & eggnogs

39

Drink powders & liquids - cold

35

Iced tea mixes

29

Coffee type drinks

28

Cordials & syrups

18

0

0

5%

27.3%

10.8%

10%

15%

20%

25%

30%

SHARE OF RESPONDENTS Grocery Experience National Survey Report, Dalhousie University. Canada, Fall 2018.

1053 respondents. Respondents were required to be 18 years old and must have been living in Canada for at least the last 12 months

LEADING HEALTHY OPTION CONCERNS FOR SHOPPERS IN CONVENIENCE STORES IN CANADA IN 2021 Fresh Sugar

27% 25% 25% 23% 23%

Non-processed All-natural

9

Cocktail mixes

5.4% 4.6% 4.4% 4.4% 1.7% 1%

Grown and/or produced locally

307

Soya & rice & alternative beverages

Freshness of products

Availability

535

Flat water

21.3% 19%

Lowest price possible

Health Benefits

814

Juices & drinks - refrigerated

Industry Arc

Quality of food products

Food safety and cleanliness

919

Juices & drinks - shelf stable

2

GENERALLY, WHAT IS THE MOST IMPORTANT FACTOR YOU CONSIDER WHEN PURCHASING FOOD PRODUCTS?

2552

Milk

Grocery Experience National Survey Report, Dalhousie University.

Canada, Fall 2018. 1053 respondents. Respondents were required to be 18 years old and must have been living in Canada for at least the last 12 months

1

Sodium

500

1000

1500

2000

2500

3000

SALES IN MILLION CANADIAN DOLLARS

Calories Ingredients I can understand

21% 21% 20%

Fat Protein

Source: NielsenIQ L52W Period ending July 20, 2019.

46%

32%

Locally sourced/produced

0

10%

20%

30%

40%

50%

SHARE OF RESPONDENTS Source: Convenience Store News Canada, EnsembleIQ; Canadian Viewpoint, 2021.

906 respondents, 18 years or older.

CATEGORY CAPTAINS 2021

9

tomato ketchup 1l

NOW PROUDLY PREPARED IN CANADA

Transition to Canadian production expected to be completed in 2022

CONDIMENTS How Canadians eat and drink continues to change and evolve. The Covid-19 pandemic is, of course, a major unprecedented event, impacting all aspects of daily life. This has also prompted an increase in pantry loading while rediscovering the joys of cooking habits at home. It cannot be understated how impactful the re-discovery of the pantry has been to both re-defining on-hand convenience and promoting increased relevance of packaged foods. Apart from initial stock-piling frenzy, pantry-loading habits trigger the creation of a new tier of grocery essentials. Sixty-three percent of Canadians report that they will continue to pantry-load grocery essentials in the post-pandemic period.1 Within the Condiments category, Viscous (Mayo & Spoonable Salad Dressing) is a large and mature segment, with non-flavoured dollar sales staying relatively flat. Meanwhile, spoonable salad dressing (SSD) which is a unique offering with a distinct flavour profile still holds a strong exclusive buyer set across Canada which reinforces importance to maintain the right assortment at shelf.

Traditional sauces still span a large segment of the Condiment category, but are relatively flat or beginning to experience decline. Some of the fastest growing segments in sauces are bold-flavoured & internationally-inspired sauces. We see a similar trend in viscous where flavoured viscous is outpacing the total viscous category dollar growth, driven significantly through new innovations ideal for various occasions, including burgers, chicken, fries etc.2

IPSOS FAB - Syndicated Group_Canada CHATS 2021 Final

1

CAD Sauces Global Strat Plan, 03 Dec 2018, Lightspeed/Mintel, “Condiments and Seasonings Interactive Databook – Canada”, Apr 2018

2

ITEMS CONSIDERED ESSENTIAL TO PANTRY-LOADING Pre-packaged non-perishable items Frozen foods Snacks Hot beverages Baking products Cold beverages Fresh/refridgerated foods Dairy foods Baked goods Alcholic beverages Confectionery Prepared foods, deli foods, meal kits

53% 51% 51% 49% 48% 43%

29% 24% 22% 21%

72% 68%

Source: Ipsos FIVE Pandemic Data Period BME Nov ‘20 vs. ‘19; % Occasion – Meal Preparer Lens; Cold Bevs (exc. Tap Water) Source: CHATS 2021 Omnibus Study, November 2020 % Adult Individuals

% OF BUYERS

Spoonable Salad Dressing 17.5%

Mayo 21.5%

60.9%

Source: NielsenIQ Homescan, Cross Purchase Analysis, L52W Period Ending Q1 2021

CATEGORY CAPTAINS 2021

11

NEW CANADA’S FAVOURITE CREAM CHEESE,

NOW IN LACTOSE FREE!

Philly is the consumer cream cheese of choice!

• Brand equity is 10x stronger than the next leading competitor2 • Philly ranks as the highest against Trust, Quality, Taste & “Good for Baking” vs its leading Competitor2

Same taste & texture, now in Lactose Free • Philly Lactose Free delivers on the growing market of consumers who are lactose free or looking to reduce their lactose intake1 • Lactose Free consumers consider brand first when decision making, placing Philly as the brand of choice due to its current #1 position within Cream Cheese (74 $ Shr)3 • Philly Lactose Free is sourced from 100% Canadian Milk • Proudly prepared in Canada • No artificial colours or flavours

1. 2 IPSOS Plant-Based U&A – Report – August 28, 2018 2. Cream Cheese 2019 BVC Equity 3. Nielsen, MarketTrack, National GR+DR+MM, Cream Cheese, L52W, Period Ending August 22 2021

CREAM CHEESE Across Canada, Cream Cheese continues to be a staple product within households, driving over $276 million in annual retail sales.1 Despite lapping heavy macro trends and sales growth due to the COVID-19 pandemic, the Cream Cheese category continues to see growth (+4% vs. PY)1 driven by its importance within the breakfast occasion. With 7 in 10 Canadians reporting that breakfast is an extremely/very important meal, convenience is a factor that is heavily prioritized.3 Additionally, price and value creation continue to play a large role in the Cream Cheese category. This trend is showcased through the growth of Soft Cream Cheese, as it remains the largest contributor for category sales (63% of category)1, with an increase in sales (in pounds) of +7% versus previous year1 as consumers continue to upsize to larger formats due to the value offerings.

The Cream Cheese category has also benefitted through the introduction of lactose free and better-for-you offerings as it evolves to adhere to consumer’s specialized diets. With 1 in 6 Canadians considering themselves lactose intolerant & 37% looking to reduce their lactose intake, Lactose Free is a growth opportunity for the category.2

CREAM CHEESE TRENDED PERFORMANCE

$

L52W 2YA

IPSOS 2021 Canada Chats, Kraft Heinz Highlights Jan 2021

3

Large Format $

59,502,006 (+14.5%)

51,974,636 (+17.5%)

44,236,289

IPSOS Plant-Based U&A – Report – August 28, 2018

2

276,751,758 (+3.6%)

267,143,662 (+13.0%)

236,320,599

NielsenIQ Market Track, National GR+DR+MM, Cream Cheese, L52W, Period Ending August 22 2021

1

L52W YA

L52W

*Large format includes 340g + 450g soft cream cheese products Source: NielsenIQ Market Track, National GR+DR+MM, Cream Cheese, L52W, Period Ending August 22, 2021

CREAM CHEESE HOUSEHOLD PENETRATION GROWTH

LACTOSE FREE CREAM CHEESE GROWTH 3,200,000

3,058,365

68.6%

68.8% +0.2%

69.7% +0.9%

$ SALES

+66.8%

2,400,000 1,600,000

1,834,007 1,274,649

+43.9%

800,000 2019

2020

2021 0

Source: NielsenIQ Market Track, National GR+DR+MM, Cream Cheese, L52W, Period Ending August 22, 2021

L52W 2YA

L52W YA

L52W

Source: NielsenIQ Market Track, National GR+DR+MM, Cream Cheese, L52W, Period Ending August 22, 2021

CATEGORY CAPTAINS 2021

13

Gotta be KD • Made with 100% real cheese • KD is made with no artificial flavours, colours or preservatives • Proudly prepared in Canada

DRY PACKAGED DINNERS Dry Packaged Dinners (DPD) is a large and mature category that spans across several sub-segments. DPD has shown healthy growth with +4% CAGR over the last 3 years.1 In the period ending October 24, 2020, DPD has proven to be a popular meal option as consumers ate out less and consumed more meals at home.2 Canadians are consuming and preparing meals differently with seven out of 10 consumers prepping and cooking dinner under 30 minutes with 50% of all food and beverage choices motivated by the convenience-oriented trend.3 Macaroni & Cheese represents roughly half of the DPD category sales4 with an average household penetration of 49% over the last three years.5 In 2021, Macaroni & Cheese delivered over $106MM YTD in consumption, up +23% compared to 2019.6 Macaroni & Cheese Cups are driving this trend, growing +10% YOY.6 Macaroni & Cheese Cups are incremental to the category due to the unique occasion that they satisfy. Consumers are primarily loyal to the method of preparation they are used to (i.e. microwave vs. stovetop) driving low interaction between different formats.

Macaroni & Cheese packaged meals also have a high degree of impulse for grocery categories with a split of 37% for unplanned purchases and 63% for planned purchases.7

HOUSEHOLD PENETRATION MAC & CHEESE

Kraft Heinz Shopper Data, “Interaction between Product Groups as a function of Customers”, L52W March 2021.

1

NielsenIQ Market Track Nat xNfld GB+DR+MM | Dry Packaged Dinners | L52W Period ending Oct 24, 2020.

2

NPD Food Service Trends 2018. IPSOS Lumiere Study.

3

NielsenIQ Market Track, Nat xNfld GB+DR+MM, Monthly, Period ending Dec 19, 2020.

4

NielsenIQ, TOTAL National L52W Period Ending Apr 03, 2021

5

NielsenIQ Market Track, National GB + DR + MM, L52W Period ending Sept 21, 2021.

6

IPSOS Lumiere Study.

NielsenIQ Market Track Nat xNfld GB+DR+MM 2018.

7

MAC & CHEESE IS GROWING IN IMPORTANCE IN THE DPD CATEGORY $ Share

48.4%

48.7%

2019

2020

49.4% 2021

Source: NielsenIQ, TOTAL National - L52W Period Ending Apr 03, 2021

62.1

64.5

65.3

2019

2020

2021

Source: NielsenIQ Market Track, National xNFLD GB + DR + MM, L52W Period Ending Sept 18, 2021

STRONG GROWTH IN UNITS AND SALES $ FROM 2019 150

MILLIONS

120,477,480 100

95,857,829 57,752,192

$ Units

64,885,125

50

0

YTD 2019

YTD 2021

Source: NielsenIQ Market Track, National xNFLD GB + DR + MM, L52W Period Ending Sept 18, 2021

CATEGORY CAPTAINS 2021

15

WE BRING SOMETHING

good TO THE TABLE.

Good service. Good insights. And most importantly, good food.

Our approach is simple: connect retailers with the foods Canadians are craving, fueled by market trends and delivered with a smile.

With one of the highest fill rates in the industry, we keep your shelves stocked and your most profitable customers satisfied.

HELPING CANADA EAT WELL AND LIVE WELL

@TreeLifeCan

@TreeofLifeCan

Tree of Life Canada

treeoflife.ca

FROZEN FOOD The Frozen food category in Canada has grown +18% in dollars1. Sales particularly soared during the pandemic as consumers rushed to stock their freezers with convenient, healthy food. Dinners and Entrees represent the largest volume share of the sales in the category with +16% growth1, followed by Frozen Seafood with +25% growth1.

Almost 40% of Canadians are cooking more often at home than prior to the pandemic2. Consumers are routinely looking for globally-inspired and/or gourmet flavours to achieve a restaurant experience at home or to reminisce about authentic food from prior travels.

Home cooking has also leveraged strong growth in Seafood. Social media platforms like TikTok and Instagram have played a defining role as popular seafood conversations appear to be centering around healthier eating, natural ingredients and making seafood more approachable through cooking lessons and demonstrations.

The frozen category is also seeing more Plant-Based food options. Consumers are making healthier food choices - in fact 71% of Canadians say they target eating healthy foods all or most of the time3. All plant-based categories grew by double digits in 20204. Brands that offer plant-based products that combine convenience with a short list of clean, recognizable ingredients will have the longest staying power.

FROZEN CATEGORY GROWTH IN CANADA SEGMENT

$ Vol % Chg Units Vol % Chg

Dinners & Entrees - Frozen

16

10

Seafood - Frozen

25

21

Pizza & Subs - Frozen

13

7

Ice Cream & Related Products

19

12

Confections - Frozen

20

9

Fruit - Frozen

20

16

Vegetables - Frozen

12

8

Potatoes - Frozen

27

25

Meat Patties - Frozen

20

9

Breakfast - Frozen

9

10

Baked Desserts - Frozen

14

12

Pizza Snacks - Frozen

8

5

Meat - Frozen - Remaining

19

1

Dough & Pastry - Frozen

24

23

Fruit Beverages - Frozen

15

1

Yogurt - Frozen

11

-2

Water Based Freezable Confections

1

-8

Frozen Foods - Remaining

19

10

TOTAL

18%

12%

Source: NielsenIQ, Category Performance, National All Channels, L52W Period ending March 27, 2021

NielsenIQ, Category Performance, National All Channels, L52W Period ending March 27, 2021

1

Mintel Canada, Meal Planning and Preparation – May 2021

2

Mintel Canada, Attitudes toward Healthy Eating, December 2020

3

NielsenIQ Canada National L52W Period ending January 2021 – custom closed groups

4

AS CONSUMERS ADJUST TO SOCIAL DISTANCING, CANADIANS ARE COOKING MORE AT HOME Eating In/ Home Cooking Food Delivery

4%

55%

14%

Take-Out

40%

35%

28%

Less Often

9% 55%

Same

More Often

9% Do Not Use

Source: NielsenIQ Survey – Impact of COVID 19 on consumers – April 17 2020 Canada

GROWTH OF PLANT-BASED FOODS Category

Sales

Growth

Total Soya, Rice, Alternative Beverages

$349M

19%

Meat Alternatives

$152M

34%

Total Non-Dairy Cheese

$31M

38%

Total Non-Dairy Yogurt

$30M

49%

Total Non-Dairy Dips, Spreads, Sauces

$17M

21%

Total Plant-Based Meals

$10M

39%

Total Tofu

$58M

24%

Total Plant-Based Food & Beverage (Custom Closed Group)

$647M

25%

Source: NielsenIQ, National Excl NFLD GB+DR+MM, L52W Period ending January 2021, Custom Closed Groups

CATEGORY CAPTAINS 2021

17

WE BRING SOMETHING

good TO THE TABLE.

Good service. Good insights. And most importantly, good food.

Our approach is simple: connect retailers with the foods Canadians are craving, fueled by market trends and delivered with a smile.

With one of the highest fill rates in the industry, we keep your shelves stocked and your most profitable customers satisfied.

HELPING CANADA EAT WELL AND LIVE WELL

@TreeLifeCan

@TreeofLifeCan

Tree of Life Canada

treeoflife.ca

HEALTH & WELLNESS Overall health and wellbeing is at the forefront of many shopping decisions. Whether it’s buying a functional beverage to improve mental focus or consuming an energy bar to aid an afternoon workout, Canadians deem “eating healthy” as their top priority when it comes to managing their wellness goals1.

The pandemic, in large part, has fueled this wellness approach, which has boosted the popularity of natural and organic foods. More than 75% of Canadians cite that COVID-19 has had a major influence on them buying from the natural and organic category2. All told, organic food and beverage sales reached $6.5 billion in 2020 and now represents 3.3% of mainstream retailer market share (up from 1.7% in 2012 and 2.6% in 2017)3.

As the category continues to grow, so too are consumer needs. There exists strong sentiment around food and drinks that contain recognizable ingredients and those that are free of artificial components. More than 50% of consumers are looking for these elements (or lack thereof) when buying food2.

HEALTH PRIORITIES Eating healthy

33%

Improving my quality of sleep

31%

Maintaining an exercise routine Managing my weight

31%

Managing my stress

30%

Limiting exposure to germs/ common illness

29%

27%

Taking time for myself Maintaining my energy levels Limiting technology use/exposure

Mintel, The Natural/Organic Shopper – Canada, April 2021.

2

Canadian Organic Trade Association, The Canadian Organic Market Report 2021, September 2021.

3

STATEMENTS ON NATURAL/ORGANIC FOODS/DRINKS (% AGREE) 38%

are healthier than mainstream products are better for the environment than mainstream products

33% 25%

are safer than mainstream products

22%

are worth paying more for are fresher than mainstream products

20%

taste better than mainstream products

22%

Strengthening my immune system

48%

Mintel, Healthy Lifestyles – Canada, February 2021.

1

19%

are a gimmick

19%

18%

are not different from traditional/ mainstream products

5%

18%

Source: Lightspeed/Mintel, Healthy Lifestyles – Canada, February 2021

Source: Lightspeed/Mintel, The Natural/Organic Shopper – Canada, April 2021

ORGANIC & NATURAL TODAY VS PRE-COVID

IMPORTANT CLAIMS/ATTRIBUTES WHEN BUYING FOOD (% AGREE) 58%

Simple ingredients

39%

52%

Free of artificial ingredients

33%

Locally produced

50%

43% 36%

Recyclable packaging Short ingredients list

32%

GMO free Biodegradable packaging

9%

7%

Ethical sourcing Social mission Biodynamic

Organic Buying more

9%

27% 23%

8%

Natural Buying less

Source: Lightspeed/Mintel, The Natural/Organic Shopper – Canada, April 2021

Base: 1,422 internet users aged 18+ who purchased food or beverages in the past 12 months Source: Lightspeed/Mintel, The Natural/Organic Shopper – Canada, April 2021

CATEGORY CAPTAINS 2021

19

PEANUT BUTTER Peanut Butter is the main driver for consumers shopping the spreads grocery section1, reaching $298 million in annual sales.2 Although the category declined over the last year, driven by a lap in COVID-19 pantry loading, dollar sales grew +5% and tonnage volume +4% vs. pre-pandemic baselines.2 The Regular (stabilized) Peanut Butter segment makes up about 79% of sales in the category and has declined -4% vs. prior year.2 Natural Peanut Butter, representing 21% of the category, maintains momentum with +1% growth as consumers search for healthier options.2 The main subsegments include Creamy, representing 67% of category sales, Crunchy (19%), Light (12%), and Dark Roast (2%).2 Peanut Butter remains a pantry staple with a household penetration of 77%.3 Peanut Butter, often paired with jam, offers consumers with a convenient snack and meal solution.

As Canadians become heavier users of Peanut Butter 4, retailers should ensure a well-stocked shelf variety of value and premium Peanut Butter to cater to all types of consumers.

$ SALES IN MILLIONS

PEANUT BUTTER 3-YEAR TREND 300

283

IMI JJM/PB Aisle Review Shopper Intercepts March 2018

1

NielsenIQ Market Track, National All Channels, L52W Period Ending Aug 14, 2021

2

Numerator Panel, L52W Period Ending June 30, 2021

3

Numerator Panel, L52W Period Ending February 27, 2021

4

Tonn Vol (KG)

308

298

200 100

56,764,167

0

L52W 2YA

61,778,216

L52W YA

58,895,233

L52W

Source: NielsenIQ Market Track, National All Channels, L52W Period ending Aug 14, 2021

21% 79%

Natural PB $62,331,672 Regular PB $235,628,709 Total PB $297,960,381

PEANUT BUTTER SUB-SEGMENTS $ VOL IN MILLIONS

PEANUT BUTTER SEGMENTS

200 150 100

56

50 0

Source: NielsenIQ Market Track, National All Channels, L52W Period ending Aug 14, 2021

200

36 Creamy

Crunchy

Light

6 Dark

Source: NielsenIQ Market Track, National All Channels, L52W Period ending Aug 14, 2021 Note: Creamy and Crunchy calculations exclude overlap of Light and Dark Sub-Segments

CATEGORY CAPTAINS 2021

21

VOTED #1 BY THE WORLDS BEST BARS FOR 7 CONSECUTIVE YEARS #1 PREMIUM MIXER 1 BRAND IN CANADA #1 SELLING TONIC 2

BY VALUE IN CANADA 500 mL Bottles

4x200 mL Bottles

8x150 mL Cans

TO ORDER, CONTACT: TFB ASSOCIATES LIMITED 905.940.0889 | tfb.ca 1,2 Source: Nielsen Canada Mixer Market Report, L52 Ending 19th June 2021

@fevertreecanada | #mixwiththebest | fever-tree.com

PREMIUM MIXERS Premium mixers are an exciting and quickly growing category with a CAGR of +48% between 2019 and 20211. The premium category, worth over $26m2, is driving value back into a beverage category where margins are typically razor-thin. Rapid premiumization has been evident as Canadian consumers seek to mix premium spirits with high quality mixers.

These include tonics, ginger beers, ginger ales, and sodas to create world-class, restaurantquality drinks that are delicious and easy to make at home.

The Premium Mixers have catapulted to represent 11%2 of the total mixer value, up from 8% in 2020, with retail value growing more than almost 7x faster than the mainstream mixers. There is a potential to continue to grow the Premium Mixer segment to match Premium Spirit’s 26% share of the Spirit category. Consumers are eager to treat themselves, so it is critically important that retailers designate premium shelf and display space to a fastgrowing category to earn more profit.

$ Sales in millions

PREMIUM MIXER CATEGORY GROWTH Compound Annual Growth Rate +48%

Three NielsenIQ Total Canada Mixer Market Reports, L52W Period ending June 22, 2019, L52W Period ending June 19, 2020, and L52W Period ending June 19, 2021

1

NielsenIQ Canada Mixer Market Report, L52W Period ending June 19, 2021

2

$26.2m $19.6m

$12.0m

2019

2020

2021

Source: Three NielsenIQ Total Canada Mixer Market Reports, L52W Period ending June 22, 2019, L52W Period ending June 19, 2020, and L52W Period ending June 19, 2021.

Premium Market = >$5 per litre

MIXER MARKET (% SHARE & % CONTRIBUTION TO GROWTH) Market Share $7 billion Premium

25.6%

Mainstream

74.4%

Spirits

Market Share $245 million

$ Contribution $17 million

10.6% 38.7%

Premium

89.4% 61.3%

Mainstream

Mixers

Source: NielsenIQ Canada Mixer Market Report, L52W Period ending June 19, 2021 IWSR, 2020, Exchange Rate used 1 USD = 1.25 CAD, Mixer Market includes Tonic Water, Ginger Beer, Ginger Ale and Club Soda Categories

CATEGORY CAPTAINS 2021

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MEAT SNACKS  SATISFY YOUR HUNGER NEEDS  MEATY GOODNESS

SLIMJIM.CA

 CONVENIENT  VERSATILE  EAT ON-THE-GO

DUKESMEATS.CA

SNACKS Snacks are essential to consumers’ lives, and for many, day-to-day snacking has increased over the past year. While hunger is the main motivation behind snacking, other factors such as convenience, location and food availability affect a consumer’s motive for noshing, and this can be further validated by the growing number of Canadians who have swapped mealtimes for snacking over the last year.

While 75% of snacking occasions occur at home, a quarter of Canadians snack on the go1. Nearly one third of Canadians are motivated by protein content when selecting snacks2, with nutrition ranked as the second attribute when choosing salty snacks3.

Meat Snacks are high in protein and low in sugar, and consumers rely on them for nutrition and as a filling, satisfying snack4. High-protein foods consumed as snacks help control cravings by keeping us feeling fuller for longer periods of time.

Meat Sticks and Beef Jerky is the fastest growing category within overall Snacks over the last three years5. In addition, the category is in the top 10 for growth in all of food over the past year, with a dollar increase of +13%6. Meat Sticks is the growth driver, with $211 million in retail sales, growing at +21%7.

With one third of Canadians eating snacks instead of meals when pressed for time8, Meat Sticks provide a versatile and easy option to enjoy while on the go. Meat Sticks provide options to suit consumers’ everyday needs, and many grocery operators are meeting these needs with vast in-store selections – all while benefiting from the tremendous growth opportunity the category offers.

% GROWTH 2019 – 2021

IPSOS: 2019 Snacking Nation

1

Salty Snacks: Canada, April 2019

2

Mintel: Snacking Eating Habits, May 2021 Canada

3

Maru: Meat Snacks Exploratory, August 2021

4

NielsenIQ: Category Performance Report, L52W Period ending June 26, 2021, All Channel

5

NielsenIQ: Category Performance Report, L52W Period ending June 26, 2021, All Channel

6

NielsenIQ: National excl NFLD GDM, L52W Period ending June 26, 2021

7

8

Mintel: Salty Snacks, 2019

3 YEAR CAGR

12% 10.4% 7.7% 4.7% MEAT STICKS & BEEF JERKY

SNACKING FRUITS, NUTS, & SEEDS

SALTY SNACKS

4.4% CRACKERS

COOKIES

NUTRITIOUS PORTABLE FOODS

-1.9%

Source: NielsenIQ: Category Performance Report, L52W Period ending June 26, 2021, All Channel

$ SALES (IN MILLIONS)

MEAT STICKS & BEEF JERKY GROWTH VS YEAR AGO

2020 2021

250 200

75%

211

175

+21%

150 100

46

50 0

SNACKING HABITS

MEAT STICKS

54

+17%

BEEF JERKY

25% snack on the go

of snacking occasions occur at home1

1

IPSOS: 2019 Snacking Nation

2

Salty Snacks: Canada, April 2019

of Canadians

1/3

1

of Canadians are motivated by protein content when selecting snacks2

Source: NielsenIQ: National excl NFLD GDM, L52W Period ending June 26, 2021

CATEGORY CAPTAINS 2021

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