Category Captains 2023 by ensembleiq

2023

CATEGORY

CAPTAINS

An Industry Leadership Supplement from Canadian Grocer SPECIAL PROMOTIONAL FEATURE

20 Eglinton Ave. West, Suite 1800, Toronto, ON M4R 1K8 (877) 687-7321 Fax (888) 889-9522 www.canadiangrocer.com

BRAND MANAGEMENT SVP, GROCERY & CONVENIENCE CANADA Sandra Parente (416) 271-4706 - sparente@ensembleiq.com

PUBLISHER Vanessa Peters vpeters@ensembleiq.com

AN INDUSTRY LEADERSHIP SUPPLEMENT FROM CANADIAN GROCER

EDITORIAL EDITOR-IN-CHIEF Shellee Fitzgerald sfitzgerald@ensembleiq.com

MANAGING EDITOR Kristin Laird klaird@ensembleiq.com

DIGITAL EDITOR Jillian Morgan jmorgan@ensembleiq.com

ADVERTISING SALES & BUSINESS NATIONAL ACCOUNT MANAGER Katherine Frederick (647) 287-3714 - kfrederick@ensembleiq.com

ACCOUNT MANAGER Karishma Rajani (437) 225-1385 - krajani@ensembleiq.com

SALES COORDINATOR Juan Chacon jchacon@ensembleiq.com

DESIGN/PRODUCTION/MARKETING CREATIVE DIRECTOR Nancy Peterman npeterman@ensembleiq.com

ART DIRECTOR Trinh Phipps SENIOR PRODUCTION DIRECTOR Michael Kimpton mkimpton@ensembleiq.com

MARKETING MANAGER Jakob Wodnicki jwodnicki@ensembleiq.com

EDITORIAL ADVISORY BOARD BONNIE BIROLLO, SOBEYS; RAY HEPWORTH, METRO; KEN KEELOR, CALGARY CO-OP; BRENDA KIRK, PATTISON FOOD GROUP; CHRISTY MCMULLEN, SUMMERHILL MARKET; GIANCARLO TRIMARCHI, PRESIDENT, VINCE’S MARKET

SUBSCRIPTION SERVICES Subscriptions: $102.00 per year, 2 year $163.20, Outside Canada $163.20 per year, 2 year $259.20 Single Copy $14.40, Groups $73.20, Outside Canada Single Copy $19.20. Digital Subscriptions: $60.00 per year, 2 year $95.00 Category Captain: Single Copy $20.00, Outside Canada Single Copy $30.00 Fresh Report: Single Copy $20.00, Outside Canada Single Copy $30.00 Subscription Questions: contactus@canadiangrocer.com Phone: 1-877-687-7321 between 9 a.m. to 5 p.m. EST weekdays Fax: 1-888-520-3608 Online: www.canadiangrocer.com/subscription

CORPORATE OFFICERS CHIEF EXECUTIVE OFFICER Jennifer Litterick CHIEF FINANCIAL OFFICER Jane Volland CHIEF OPERATING OFFICER Derek Estey CHIEF PEOPLE OFFICER Ann Jadown CHIEF STRATEGY OFFICER Joe Territo

MAIL PREFERENCES: From time to time other organizations may ask Canadian Grocer if they may send information about a product or service to some Canadian Grocer subscribers, by mail or email. If you do not wish to receive these messages, contact us in any of the ways listed above. Contents Copyright © 2023 by EnsembleIQ, may not be reprinted without permission. Canadian Grocer receives unsolicited materials (including letters to the editor, press releases, promotional items and images) from time to time. Canadian Grocer, its affiliates and assignees may use, reproduce, publish, republish, distribute, store and archive such submissions in whole or in part in any form or medium whatsoever, without compensation of any sort. ISSN# 0008-3704 PM 42940023 Canadian Grocer is Published by Stagnito Partners Canada Inc., 20 Eglinton Avenue West, Ste. 1800, Toronto, Ontario, M4R 1K8. Printed in Canada

Bread Canned Tomatoes Coffee Coffee Creamers Dry Packaged Dinners Fresh and Deli Frozen Food Peanut Butter Personal Care Plant-Based Specialty Foods Yogurt

5 7 9 11 13 15 17 19 21 23 25 27

BREAD

Commercial Bread is $3.3 billion in sales1 for the latest 52 weeks (ending August 12, 2023) with sales growth of +10% and gaining over $290 million in Canada. Commercial Bread is a large grocery category and plays a significant role at retail with a high household penetration of 97.7%2. Higher Health—comprised of grains, rye, dietary needs (weight management, no fat, no sugar, gluten free) and organic breads— is the largest segment in Commercial Bread with a 19% dollar share, followed by White Bread at 18%, Buns & Rolls at 18%, and Breakfast at 15%. These four major segments account for 70% of the Commercial Bread category. Higher Health is the segment that supports consumers’ growing awareness and demand for healthy, nutritious and “better-for-you” products.

fig 1. INNOVATION KEY GROWTH DRIVERS

Established Items

New Items/Innovation

Commercial Bread

99%

Higher Health

99%

White Bread

99%

Wheat Bread

100%

Breakfast

99%

Buns & Rolls

99%

Flatbread

99%

Specialty

100%

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

fig 2. COMMERCIAL BREAD SEGMENTATION ($ SHARE/GROWTH %) Commercial Bread = 100 (+3%)

Specialty 10.8 (+6%) Flatbread 13.1 (+3%) Breakfast 15.2 (+3%)

Higher Health 18.17 (+3%)*

Buns & Rolls 17.9 (+4%)

White Bread 17.8 (+3%) Wheat Bread 6.4 (+2%)

1 NielsenIQ MarketTrack National Incl NFLD GB+DR+MM L52W Period Ending August 12, 2023 2 NielsenIQ Paneldata National Total Outlets L52W Period Ending Jun 17, 2023 fig 1. NielsenIQ MarketTrack BRANDED ONLY L52W Period Ending August 12, 2023 fig 2. NielsenIQ MarketTrack L52W Perieod Ending August 12, 2023

CATEGORY CAPTAINS 2023

CANNED TOMATOES

In the L52W period ending June 2023, the Total Tomato category is valued at $289.9M dollars and experiencing growth at 14.1% (sales) with declines in tonnage at – 6.4%. The Canned Tomato category is valued at $101.6M and is also showing growth of + 11.2% (sales) with declines in tonnage (-5.9%). Diced, ground + cut continues to be the largest segment, contributing 22.1% of category sales. Private label contributes 27.4% and is growing in sales (+20,6%) and declining in tonnage (-6.1%). All remaining segments are growing in sales, (except for Stewed Tomatoes which is relatively flat), and declining in volume (except for Crushed which is growing +1.4%). Paste is the fastest growing segment at +20.1% sales and -2.1% tonnage and is followed by Crushed at +16.6% sales and +1.4% tonnage. As spending power continues to be pressured by inflation, consumers continue to show a greater interest in higher quality canned tomatoes, as we see consumers paying double the price for a premium Italian brand over a value brand. This trading up is a key driver for growth in the Tomato category.

fig 1. SEGMENT SALES

65.9

64.2 56.9

20.6%

12.8%

34.8

30 20

28.9

29.4 27.1

20.1%

8.4%

28.6

26.3

8.7%

20.2 19.1

16.6%

16.2 14.6

5.7% PRIVATE LABEL

DICE + CUT + GROUND TOMATOES

TOMATO PASTE

TOMATO SAUCE

PIZZA SAUCE

13.3 11.4

WHOLE PEELED TOMATOES

STRAINED TOMATOES

CRUSHED TOMATOES

fig 2. TOTAL TOMATO CATEGORY

fig 2. TOTAL CANNED TOMATO

(excluding Pizza) 83,049,768

77,516,157 -6.7%

2022

2023

35,362,715

-0.7%

3.9 3.9

11%

SALES VOLUME

$ SALES YA

% CHG - $ SALES

SALES VOLUME

$ SALES IN MILLIONS

SALES

79.4

STEWED TOMATOES

33,285,933 -5.9%

2022

2023

Source: NielsenIQ Grocery+Drug+Mass – L52W Period Ending June, 2023 – Whole, Diced+Cut, Strained, Paste, Pizza

CATEGORY CAPTAINS 2023

Same Bears New Grind

Everyone’s favourite Bears are taking over the coffee aisle!

4 NEW SKUs

Kraft Café Barista Medium Roast & Dark Roast Coffee

Single Serve Pods 30 pack / Ground Coffee 875 – 900g

Now made with 100% Rainforest Alliance Certified Coffee Beans that are proudly roasted and packaged in Canada.

New recyclable* canister made with paper-based materials from renewable resources. *Excludes freshness seal

Nabob Roast and Ground Coffee 340 g

COFFEE

Coffee is a $1.5B category in Canada and is found in over 80% of households, a triedand-true grocery staple. While consumers continue to reacclimate post lockdown and post pandemic this past year, in-home coffee consumption was faced with a new change in routine as businesses have reopened and begun resuming pre-lockdown operational hours. Consumers are left with more preference in choice of coffee consumption. However, the past year has resulted in a change in routine for Canadian coffee drinkers as the popularity of hybrid working models has helped maintain consumption. Coffee category household penetration reached a three-year high at the peak of the pandemic in 2020 at 80%. However, despite consumers engaging in more away-from-home channels, retail coffee has maintained its household penetration in 2023 to prior year. The past year we saw a rise in commodity prices leading to an increase in coffee prices at retail which has continued an upward trend in 2023. Retail coffees’ price per ton is 20% over the past two years. Coffee category sales are up 2% previous year and up +5% vs 2YA, proving that Canadians are willing to pay more for their daily cup of coffee. The Coffee category remains optimistic and shows promising success with the introduction of new formats and flavour innovation hitting the shelves and will challenge the current breakfast and snack occasion.*

fig 1. TOTAL COFFEE - HOUSEHOLD PENETRATION EVOLUTION 100 80

80.30%

79.13%

80.32%

2021

2022

2023

60 40 20 0

fig 2. TOTAL COFFEE - $ PRICE/POUND

EVOLUTION

$13.01

$13.00 $11.89

$12.00 $11.50 $11.00

$10.95

$10.50 $10.00 $9.50

Avg $/LB 2YA

Avg $/LB YA

Avg $/LB

$ BILLIONS SALES

$13.50 $12.50

fig 3. TOTAL COFFEE - $ SALES EVOLUTION

1.5

1.448B

1.463B

L52W $2YA

L52W $YA

1.538B

1 0.5 0

L52W $

* NielsenIQ Market Track, National GR+DR+MM, Coffee, Period Ending September 23, 2023 fig 1-3. NielsenIQ Market Track, National GR+DR+MM, Coffee, L52W Period Ending September 23, 2023

CATEGORY CAPTAINS 2023

pour

some

flavour in your

coffee

COFFEE CREAMERS

Canadians love their coffee. As such, their consumer experiences and habits have undoubtedly been among the most heavily impacted by the unprecedented inflationary pressures and hybrid/remote work trends in recent years. Coffee consumers swiftly transitioned from buying their favourite brews outside to preparing them at home. This shift prompted consumers to seek ways to replicate their preferred flavours, leading them to explore Coffee Creamers and Flavourings to satisfy their cravings. We can see this in the rapid growth of the Coffee Creamers category vs regular dairy-based coffee cream (+10.8% vs +2.9% in the last 3 years). Both Traditional and Plant-Based Creamers experienced nearly a 3-point growth in household penetration during the same period (2.9 and 2.4-point increases, respectively). Likewise, Refrigerated and Shelf Stable Creamers followed similar trends in household penetration, with growth rates of 3.2 and 3.4 points, respectively. Despite this momentum, the Coffee Creamers category remains at only 33% household penetration, with tons of upside for growth remaining to be unlocked through meaningful and exciting innovation.*

fig 1. HOUSEHOLD PENETRATION COFFEE CREAMERS

28.8%

32.7%

33.1%

July 2021

July 2022

July 2023

fig 2. COFFEE CREAMER SEGMENTATION AND SHIFTING Dollars

Plant-based 31% CAGR: +30.9%

Coffee Cream 51% CAGR: +4.4%

Coffee Creamers 49% CAGR:+16.7%

Traditional 69% CAGR: +11.7%

* Nielsen Homescan, 52W Period Ending July 3, 2021 to July 1, 2023. fig 1-3. Nielsen Homescan, L52W Period Ending July 1, 2023

CATEGORY CAPTAINS 2023

DRY PACKAGED DINNERS

Dry Packaged Dinners (DPD) is a large and mature category of $281MM ($CAD) and a 6.30% CAGR over the last two years1, that spans across several sub-segments. Within this category, macaroni & cheese represents a whopping 69% of the DPD category sales with an average household penetration of 51.6% over the last two years2. In the last 52 weeks, DPD delivered over $281.8MM, up +7.1% compared to the year before with macaroni & cheese driving this trend growing +4.6% YOY. Dry Packaged Dinners reach two main consumption occasions, lunch and dinner as a main or a side, with snacking occasions on the rise as new formats become available. 79% of people decide they’re going to eat macaroni & cheese within an hour before consumption3 driving high impulse purchases on the shelf and consumption at home. Macaroni and cheese also demonstrates expandable consumption, with consumers trading up to larger pack sizes and increasing consumption after it is in the pantry with households purchasing every 36 days with 2.7 units bought per trip4.

fig 1. HOUSEHOLD PENETRATION

fig 2. MACARONI & CHEESE IS GROWING IN

MACARONI & CHEESE

IMPORTANCE IN THE DPD CATEGORY

$ Share

48.7%

49.4%

52.2%

50.1%

2020

2021

2022

2023

64.5

65.3

69.6

68.8

2020

2021

2022

2023

fig 3. MACARONI & CHEESE GROWTH IN SALES BUT DECLINE IN

UNITS YOY DUE TO PRICE INFLATION

MILLIONS

300

200

249,454,698

262,305,965

281,857,364

140,524,599

132,572,973

128,319,241

L52W 2YA

L52W YA

L52W

$ Units

100

1. Nielsen MarketTrack Data – L52W ending August 19, 2023 2. KHC Nielsen Homescan Factbook L52W - week ending July 01, 2023 3. IPSOS Lumiere Study. NielsenIQ Market Track Nat xNfld GB+DR+MM 2018 4. Nielsen IQ, Shopper Tracking, TOTAL – BMO – Total Outlets – L52W – week ending Oct 01, 2022 Fig 1. NielsenIQ, TOTAL National - BMO-TOTAL OUTLETS – L52W - week ending Jul 01, 2023 Fig 2. Nat xNfld GB +DR +MM - L52W > week ending Jun 17, 2023 vs year ago Fig 3. NielsenIQ, TOTAL National - L52W period ending August 19, 2023

CATEGORY CAPTAINS 2023

Now Exhibiting:

We are curators of unique brands, helping to elevate brands in Canada and build customer demand through our appetite for fresh insights and data.

Join our tasteful collection, and showcase your products nationwide. Visit treeoflife.ca to learn more.

FRESH AND DELI

Rising food prices and buying less food to stay on budget continues to be the mindset for many Canadian consumers. According to Statistics Canada, the leading culprits driving food inflation are meat (up 6.9%), bakery items (up 12.9%), and dairy products (up 7.4%)1. Adapting to these cost pressures, consumers are shifting preferences toward the centre store (+0.4%) while avoiding the store perimeter (-0.3%)2 to save money. Deli cheese prices in Canada have surged by 10% in the past two years3. While these increases have pushed the category to be worth more than $850M in sales4, it has negatively impacted deli cheese consumption5. In response, many consumers are opting for pre-packaged cheeses in the dairy aisle. While Canadians will not stop eating cheese, half are willing to forego their deli staple to save a buck or two6. Offering tiered cheese assortments and weekly deals can be effective to drive sales and encourage trial for new consumers. Additionally, cross-category promotions with segments like crackers, wine or cured meat ensures that the cheese will not stand alone.

fig 1. PERFORMANCE BY STORE SECTIONS Centre of Store Food

Centre of Store Non Food

Perimeter

$ Shr

19.7

30.1

$ Shr Chg YA

+0.4

+0.3

-0.3

Confectionery 0.8 Cold Beverages Prepared Foods Snack Hot Beverages Condiments & Sauces Refrig/Dairy Dessert Frozen Foods Baking Needs Alcoholic Beverages

Cosmetics OTC 12.2 Pet Needs 8.1 Body Care 9.1 Hair Care 8.4 Shaving 6.7 Baby Care 7.2 Oral Hygiene -2 9.4 Paper Products 7.5 Household Products 11 General Merch

fig 2. IMPORTANT FACTORS WHEN CHOOSING

WHAT CHEESE TO PURCHASE, 2022

Price Flavour Format Made-in-Canada All-natural Added Benefits Artisan Organic Lactose-free Vegan

5.6 10.4

6.7

13.7 9.2 6.4

Bakery Deli Produce Meat & Seafood

12.1 8 2.7 6.2

10.8 6.8 4.6 6.7 12.6

fig 3. CHEESE INFLATION TRACKER

CANADA, AUGUST 2023

66% 64% 45% 39% 28% 16% 13% 13% 11% 4%

Which of the following factors do you consider when choosing what cheeses to purchase? Base: 1,901 internet users aged 18+ who eat cheese

1. Statistics Canada. Consumer Price Index, monthly 2. Nielsen IQ MarketTrack, National All Channels, Total FMCG, WE July 01 2023 3 and 5. Ibid 4. AC Neilsen, National All Channels, 52W Period Ending December 31, 2022 6. Mintel Cheese Canada 2022 fig 1. NielsenIQ Market Track, National All Channel, Total FMCG, L52W, Period Ending July 1, 2023 fig 2. Kantar Profiles/Mintel, April 2022 fig 3. Statistics Canada’s Consumer Price Index Tracker

+3.5%

+10%

1—Year Change

2—Year Change

CATEGORY CAPTAINS 2023

FROZEN FOOD

Since the start of the pandemic, food shopping and consumption habits have shifted regularly. But a few key habits appear to be here to stay, including shoppers’ purchasing and leveraging of Frozen Food. Canadians are still preparing more meals at home, but life has come back to busy schedules and more time away from home, as well as the added layer of a 40-year high inflation. As a result, consumers are increasingly relying on Frozen Food to help, evident in Frozen Foods unit sales growth vs pre-pandemic (+2.8%4-YR CAGR)1. The category is driven by multiple factors including: Ethnic: In 2022, a record 400,000+ immigrants came to Canada, making the new total share of immigrants/permanent residents hitting 23% of the total Canadian population2. As the influence of global flavours continues to grow, retailers will evolve their current assortments to cater to new immigrants as well as Canadians who choose to try new flavours. Asians, particularly Chinese and Southeast Asian individuals, while making up just under 22% of total Frozen Food occurrences3, over-index compared to other food departments. Particularly, Asian backgrounds over-index compared to Frozen Meals and Frozen Appetizers making these categories a gateway into Frozen Foods. Restaurant-inspired foods, particularly multicultural, are also appearing in the Frozen aisles as consumers seek restaurant-inspired cuisines. Convenience and Home Cooking: Partially homemade options remain strong and amongst the largest growing preparation method as Canadians seek convenience (chart 2)4. Not surprisingly the #1 motivator when purchasing Frozen Food was the “easiness to prepare” and “required little to no planning” according to 31% of Canadians, particularly amongst Frozen Meals over-indexing in importance to the total department3. As a result, Frozen manufacturers are providing more convenience options – whether a steamer pack without the removal of the bag to cook, or an all in one, one-pan meal for the family - to accommodate the busier lifestyles of Canadians.

fig 1. FROZEN FOOD DEPARTMENT PERFORMANCE CANADA1 $5.2B +23.7%

Dollars Units

$4.2B +5.1%

867.8M

886.9M, +2.2%

1.0B, +153.6%

1.0B, -1.3%

970.8M, -4.1%

Jan 2019

Jan 2020

Jan 2021

Jan 2022

Jan 2023

+2.8% 4-YR CAGR

PT ∆ VS. PT ∆ VS. 2021 2019

Home prepared

72%

Completely homemade/ scratch

Meal Kit

$5.6B +6.1%

$4.0B

fig 2. CANADIAN PREPARATION HABITS4

Partially homemade

$5.3B +2.3%

49% 17% 7%

1 NIQ Market Track Canada L52W Jan 2023-Jan 2019 2 IPSOS Canada Chats (IPSOS), September 2022 3 IPSOS FIVE Frozen Food, April 2023 4 Immigration Refugees and Citizenship Canada (CanadaVisa), Feb 2022 fig 1. NIQ Market Track Canada L52W Jan 2023-Jan 2019 fig 2. IPSOS Canada Chats (IPSOS), September 2022 fig 3. IPSOS FIVE Frozen Food, April 2023

0.2

0.7

-0.1

0.5

1.2

1.3

-0.9

-1.0

fig 3. CANADIAN MOTIVATIONS TO

EATING FROZEN FOODS3

31.1% 45.9%

Easy to prepare

30.5% 27.3% 30.2% 33.4% 29.8% 42.2% 25.3% 29.3%

Satisfies a craving Wanted something tasty Satisfies my hunger Could be eaten quickly Total Frozen Foods

Frozen Meals & Entrees Index 148 90 111 142 116

Frozen Meals & Entrees

CATEGORY CAPTAINS 2023

Over

0 0 1,3 nuts Peinaevery jar

*1 kg Jif® Creamy Peanut Butter based on average production (excluding Light). TM/©/® Smucker Foods of Canada Corp. or its affiliates.

PEANUT BUTTER

The Peanut Butter category has seen consistent consumption year over year, reaching $330 million in annual sales1 and a 76% household penetration.2 The category experienced inflationary growth in dollar sales +8%, while tonnage volume slightly declined -2%.1 The Regular (Stabilized) Peanut Butter segment leads the category, representing 80% of sales, with +9% dollar growth vs. year ago.1 While the Natural Peanut Butter segment appeals to health-conscious consumers, Regular Peanut Butter continues to be a pantry staple for Canadians. As inflationary pressures persist and Canadians prioritize their physical and mental well-being, consumers are seeking accessible food alternatives to balance healthy lifestyles and economic stressors.3 Peanut Butter offers a quick and affordable protein solution with 72% of Peanut Butter users agreeing that it is a good source of plant-based protein.4 PB&J sandwiches are a classic comfort meal that appeals to consumer’s connection with food and value for convenience. Nostalgic foods will grow in popularity as consumers focus on emotional well-being as part of an integrated approach to a healthy mindset.3 Peanut Butter acts as a healthy, comforting, and convenient meal that is suitable for all occasions. Despite inflation being top of mind, brand name is still a significant factor for Canadian shoppers and remains a top two purchase driver.5 Retailers should ensure shelves are stocked with Peanut Butter brands and varieties to meet evolving consumer tastes and needs.

300

304

330

305

200 100 0

59,742,885

56,843,410

55,839,657

L52W 2YA

L52W YA

L52W

fig 2. PEANUT BUTTER SEGMENTS

20% 80%

Tonn Vol (KG)

Natural PB $66,265,412 Regular PB $263,908,894 Total PB $330,174,306

fig 3. PEANUT BUTTER SUB-SEGMENTS 250 $ VOL IN MILLIONS

$ SALES IN MILLIONS

fig 1. PEANUT BUTTER 3-YEAR TREND

200 150 100

50 0

1. NielsenIQ, National All Channels, L52W Period Ending July 15, 2023 2. Numerator Panel, L52W Period Ending July 15, 2023 3. Ipsos, A New World Disorder? Navigating a Polycrisis and Global Trends (2023) 4. Erikson Research, American Peanut Council Evaluation – Canada (2021) 5. Nielsen Inflation Report (2022) fig 1—3. NielsenIQ, National All Channels, L52W Period Ending July 15, 2023 Note for fig 3. : Creamy and Crunchy calculations exclude overlap of Light and Dark Roast Sub-Segments

223

Creamy

Crunchy

40 Light

4 Dark

CATEGORY CAPTAINS 2023

Discover Dove’s Moisturizing Care

CARE MAKES A MAN STRONGER

PERSONAL CARE

(Personal Wash & Deodorants) Personal care is a massive $1.1Bn category that has grown 10.3%^ $ share and declined by -3.6% in tonnage (vol) share^. The category comprises items consumed daily to maintain personal health and hygiene which reflects in the high penetration numbers within Canadian households~ (77.8% for Personal Wash and 67% for deodorants). Personal wash encompasses bars, body washes and hand washes to make up 61% of the category while deodorants make up the remaining 39% of the category. Barring hand washes which saw a surge in demand in 2020 due to Canadians seeking anti bacterial formulas during Covid -19, all other formats saw a massive decline in demand with people staying at home due to the lockdown. However, with the exception of deodorants, absolute tonnage sold has bounced back on all these formats in 2023 to levels comparable to pre-COVID times (2019). With consumer preferences evolving, naturals as a trend continues to grow as more consumers are conscious of what they choose to use for their bodies. One of the key purchase drivers for natural buyers within cleansing is mild/gentle formulations for sensitive skin and within deodorants is aluminum free formulations. When it comes to sweat and odour protection, consumers are increasingly gravitating towards dry sprays versus antiperspirant sticks because of ease of use and the non-sticky sensorial that a stick doesn’t necessarily provide. In deodorants, efficacy of product and trust are the biggest drivers of brand strength while in body washes (biggest segment within personal wash), it is a product that delivers on meeting the needs of the whole family and helps attain glowing and pampered skin*. Despite current inflationary pressures, the category will continue to see innovations leveraging macro trends of enhanced performance, naturals, value added benefits (premium ingredients, derm focused offerings, health and wellbeing) and self care.

fig 1. ANTIPERSPIRANT & DEODORANT (APDEO)

$ AND TONNAGE (EQ) BY FORMAT

(growth)

+7%

600 500 +11%

200

700

+17%

300

100

(growth)

MILLIONS

400

fig 2. PERSONAL WASH $ AND (EQ) BY FORMAT

+23% +25%

+2%

-3%

+6%

+5%

TL APDEO

Sticks AP

Sticks DEO

Dry Sprays

+10%

400 300 200 100 0

-5% Hand Wash

10.4%

4.9%

61.9%

39.8%

Dry Spray

Roll On

Sticks/Solids

Bars

L52W Penetration % June 2023

+6%

-2%

-4%

-2%

-8% Bars

Bodywash

Personal Wash

53.1%

40.9%

Bodywash

Hand Wash

L52W Penetration % June 2023 All formats exclude baby

^ Nielsen IQ Market Track August12th, 2023 L52W ˜ Nielsen IQ Shopper Track June 17th, 2023 * KANTAR Brand Audit. Female Bodywash 2022, Female Deodorants 2023 and Kantar Brand Power Deep dive for APDEO and Bodywash fig 1-2. Nielsen IQ Track August12th, 2023 L52W and Nielsen IQ Shopper Track June 17th, 2023

CATEGORY CAPTAINS 2023

Plant-based has never tasted so good.

Lactose-free

High in Calcium

Blend of oat, soy & coconut

PLANT-BASED

In Canada, the plant-based category has experienced successful growth with consumers over the past decade. Nearly 50% of global consumers have made changes to their diet in the last 2 years to lead a more sustainable lifestyle1, and with 15% of individuals trying to cut back on weekly dairy intake2, the runway for plant-based beverage remains strong. Most consumers shift to plant-based in pursuit of taste, health, and variety in diet, reflecting a flexitarian diet that complements animal-protein intake3. This has propelled growth in a variety of plant-based bases, with almond maintaining its leadership in beverages, and incremental gains observed in oat, soy, coconut, and cashew for various uses in cooking, breakfast, snacking, and coffee4. As plant-based beverages grow in popularity, expanding beyond the most common occasions presents a big opportunity for the category. Today 2/3 of occurrences are additives/ingredients (such as in smoothies or cereal). This means that only 34% of plant-based beverage occurrences are consumed by the glass with drinking rates vs 51% of Dairy Milk glass occasions.5 As such, the Dairy-like segment is making a strong case for the by-the-glass occasion as the #2 base $ contributor to category growth (after oat)4.

fig 1. $ SHARE OF SEGMENT — PLANT-BASED

BEVERAGE 2023 YTD

fig 1. PURCHASED DAIRY AND/OR NON-

DAIRY MILK, BY AGE, 2023

Dairy and non-dairy milk purchased 73%

Dairy-like 2% Oat 27%

68%

57%

Cashew 3%

34%

Coconut/Almond 1%

67%

55%

43% 30%

27%

Coconut 4% Soya 15% Almond 48 %

Any non-dairy milk

Dairy milk and non-dairy milk 18–34

35–54

Dairy milk only

55+

fig 3. REASONS FOR CONSUMING NON-DAIRY MILK, 2023 Reasons for consuming non-dairy milk

31%

Healthier than dairy milk

31%

Prefer the taste

29%

For variety in diet 25%

Trying to consume more plant-based foods/drinks

24%

Dairy/lactose intolerance 18%

Better for the environment than dairy milk For animal welfare Prefer the texture

15% 14%

1. FMCG Gurus 2022 2. Ipsos FIVE R12ME September 2022 – % Individuals; CHATS Custom Study October 2022 3. Mintel Report–Dairy & Non Dairy Milk 2023 4. The Nielsen Company, Marketrack, National incl NFLD GDM, L52W Period Eending September 9, 2023 5. Ipsos FIVE R12ME November 2022; % Occurrences with change vs. Pre-Pandemic Period R12ME November 2019 fig 1. The Nielsen Company, Marketrack, National incl NFLD GDM, YTD Period Eending September 9, 2023 fig 2. Mintel Report– Dairy & Non Dairy Milk 2023. Base: 1,952 internet users aged 18+ who have purchased dairy or non-dairy milk in the past three months. fig 3. Mintel Report– Dairy & Non Dairy Milk 2023. Base: 1,011 internet users aged 18+ who have purchased non-dairy milk in the past three months.

CATEGORY CAPTAINS 2023

Importing Brand Management Tri-Temperature Warehousing Market Insights National Distribution Advanced Data Reporting

National Retail Coverage National Food Service Coverage

@treeoﬂifecan Tree of Life Canada

www.treeoﬂife.ca

SPECIALTY FOODS

The correlation between international cuisine and immigration continues to heavily influence our grocery landscape and instore experiences. Canada’s population has now reached 40 million people, many with diverse and vibrant backgrounds.1 Currently, 80% of ethnic consumers feel that their ethnic food and ingredient needs are satisfied in their local communities, but recent newcomers (those who immigrated between one and four years ago) continue to look outside of their communities to find familiar foods.2 This indicates an opportunity for retailers to identify their regional consumer base and adjust item assortments accordingly. Another indicator of international influence is the proliferation of Asian and Indian cooking sauces on shelf. Not immune to inflationary pressures, consumption of Asian and Indian Cooking Sauces are flat, but the category represents a sizable $195M.3 Global cultures continue to be well represented on a multitude of food trend lists. Ingredients such as ube (a purple yam used frequently in Filipino desserts), crispy chili oil and pandan (a fragrant green leaf used in Southeast Asian cuisine) are frequently mentioned. Meanwhile aromatic and versatile curries have found a permanent place in Canadian households, with several cultural variations widely explored.

fig 1. TOP 3 COUNTRIES OF ORIGIN BY RECENT

IMMIGRANTS, 2016 AND 2021 2021

2016

India

18.6%

12.1%

Philippines

18.6%

12.1%

fig 2. SELECTING A STORE

26.1%

Purchase all from mainstream grocery stores

36.5%

vs.

Purchase most from mainstream grocery stores 18.6%

China

4.1%

Purchase all from ethnic grocery stores

33.3%

Purchase most from ethnic grocery stores

12.1%

$ SALES IN MILLIONS

fig 3. SAUCES AND PASTES 160 140

159,642,526

% Change

10.1%

120 110 100 80 60 40

30,240,721

20 0

Asian Sauces

18.7%

2,787,514 2.6%

2,379,163 -6.4%

Indian Sauces

Indian Pastes

Asian Pastes

1. Statistics Canada, June 2023 2. Caddle Survey, July 2022 3. Nielsen Canada, National, GR+DR+MM, L52W Period Ending, Sept 2 2023 fig 1. Census of Population, 2016 and 2021 (3901). “Recent immigrant” refers to a person who obtained landed immigrant or permanent resident status in the five years preceding a given census. For the 2021 Census of Population, this refers to the period from January 1, 2016 to May 11, 2021. fig 2. Caddle Survey, July 2022 fig 3. Nielsen Canada, National, GR+DR+MM, L52W Period Ending, Sept 2 2023

CATEGORY CAPTAINS 2023

BRINGING HEALTH THROUGH FOOD TO CANADIANS

* 2g of sugar and 8g of protein per 95g serving. **With more than 109 CFU Bifidobacterium lactis per serving, a probiotic that contributes to healthy gut flora. ***per portion than the leading 200ml drinkable yogurt. Activia® / Danone® / Two GoodTM used under lic., © 2023 Cie Gervais Danone. Oikos® used under lic., © 2023 Danone US, LLC. All rights reserved.

DANONE CANADA IS A CERTIFIED B CORPTM

YOGURT

Yogurt remains a highly relevant category, answering Canadian consumers’ everchanging health needs, which is reflected in its YTD growth (11.5%)1. In fact, consumers are increasingly selecting food for health reasons and favoring benefit-led options: Protein is the third most important dietary need for Canadians, with 4 in 10 looking for foods that are a good source of protein and yogurt is one of the top foods those “increaser” households have turned to for protein, contributing to +$60M growth in the category. As interest in probiotics and gut health continues to grow year over year, Active Health follows in segment growth (+$19.6M YTD) followed by Plain (+$15.5M) as consumers increasingly leverage yogurt in cooking and baking occasions. Not to be ignored is the fastest growing segment in the yogurt category: Indulgence, growing at +19.5% YTD pushing the boundaries of the yogurt occasion beyond breakfast into snacking and late night treats. Non-dairy yogurt remains an opportunity to stimulate category penetration amidst continued plant-based trends, as well as customer interest around adopting a flexitarian diet, sustainability and animal welfare. Moreover, the potential of this segment is palpable with 97% of its growth coming from market expansion2.

fig 1. ABSOLUTE $ GROWTH OF THE YOGURT SEGMENT (‘000) Greek

+60310$

Active Health

+19613$

Kids Regular

+13243$ +7314$

Plain Light

+15511$ +1692$

Indulgent

+12896$

Plant Based and Organic -273$

fig 2. $ SHARE OF SEGMENT — YOGURT Indulgent 6% Light 5% Plain 8% Regular 9% Kids 15%

Plant-based and Organic 5% Greek 32% Active Health 21%

1. The Nielsen Company, Marketrack, National incl NFLD GDM, YTD Period Ending September 9, 2023). 2. NielsenIQ, Homescan, TOTAL CANADA, 52W Period Ending, 25th Feb 2023 vs YA

CATEGORY CAPTAINS 2023