Global Soy & Soy Products

Market Drivers, Products, Trends and Innovation

Presented by Peter Golbitz Director of International Business Development SunOpta Grains and Foods Group Minnesota, USA

Soybeans for Food

Production Disposition Food Use

Soya 21st Century Food Platform

Soybeans are an extremely versatile food source and are the base of a new food platform for the 21stCentury Soybeans can be used as a primary component in virtually ever major food category including:

Meat and meat alternatives Dairy and dairy alternatives Fresh vegetables Dried beans and grain Cooking oils and fats Flour-based products Fermented foods and pastes
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Abundant & Growing Food Source

Soybeans are widely grown and available worldwide at a reasonable cost Total production for 2010/11 should reach over 250 million metric tons Production has grown at an average rate of 3.5 percent annually for the past 10 years Soybeans are the largest protein and oilseed crop in the world today
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Where Soybeans are Grown

World soybean production is heavily concentrated in North and South America with the U.S. being the largest producer, followed by Brazil and Argentina The top 7 producing countries account for 95% of world production Production is expected to continue to grow in South America due to available land and water resources

World Soybean Production by Major Producing Nations, 2010/11 Projection

World Soybean Use

On average, the worlds soybean crop is used as follows:

Use of World Soy Production(average of 2005

2010)

87% is crushed into soybean meal for animal feed, proteins and vegetable oil 7% is used directly as animal feed, seed or other 6% is used for direct human food (some portion of above also likely used as food through direct farm sales)

World Soybean Use for Food

The world will use about 15 million metric tons of soybeans as direct food in 2010/11

Use growing by 2% per year for the past five years These beans are either commodity soybeans that have been cleaned to a higher standard or Identity Preserved soybeans grown specifically for food use Use of soybeans for crush is growing more quickly, at about 2.5% per year
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Leading Countries for Food Use

Asian countries lead the world in direct food use of soybeans accounting for over 95% of estimated use in 2010/11

China is by far the worlds largest consumer of soybeans for food major uses include soymilk, tofu and fermented foods Indonesia, with heavy use of soybeans for tempeh, is #2 Japan follows with heavy use for tofu, fermented foods and soymilk

World Soyfoods Market

Market Drivers Products Trends Innovation

Soybeans: An Important Functional Food

Nutritionally dense

Only plant food that is a complete protein Provides all 8 essential amino acids Contains healthy fats and dietary fiber Vitamins and minerals Cholesterol-free, low in saturated fats
FDA: 25 grams of soy protein per day may reduce risk of heart disease Can be used as a functional ingredient in food systems and for human health Applications in dairy and meat alternatives, baking, snack foods, cereals and more
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Heart Healthy

Functional Food Ingredient

Soyfood Market Drivers

Market forces such as health concerns, need to reduce cost in food processing and functionality drive the demand for soybeans and soy protein. In addition, soy proteins are considered to be an essential ingredient in many processed meats, increasing both the quality and weight of the product.

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Soyfood Market Drivers

Low Cost:

Soybeans and soy proteins, by virtue of their being lower in the value chain, will likely be less expensive than animal-based ingredients
Extremely versatile and functional, soy proteins can easily be formulated into many existing food products as a nutritional enhancement or lowcost extension Soy proteins can also be used to replace whole soybeans in many traditional soyfoods such as soymilk, tofu and meat alternatives

Functionality:

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Soyfood Market Drivers

Health Benefits:

In 1999, the U.S. FDA approved a soy protein health claim allowed foods containing 6.25 grams of soy protein per serving to state that they are heart healthy foods Other benefits being researched include cancer prevention, bone health, kidney health and weight management due to the satiety of proteins Hundreds of research papers have been written touting the benefits of adding soyfoods and soy protein to the diet

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Soyfood Market Drivers

Sustainability

Soybeans are the worlds most efficient, abundant and low cost source of protein They can be grown world wide - they enrich the soil by fixing needed nitrogen and reduce chemical fertilizer inputs for other crops, such as corn As the world looks to use resources more efficiently, we will come to rely more heavily upon plant proteins to provide an ever-increasing portion of the human diet if everyone is to be fed

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World Soyfood Sales

The estimated value of all soyfoods sold in the world today is between $15 and $20 billion and growing at between 2 and 5% per year, with soymilk accounting for about one third of the markets value
(SunOpta est.)

Soyfood Product Launches, 2005 - 2009

Based on data fromMintel, Asia-Pacific region is showing the greatest growth in soy products along with Latin America, while the U.S. is in decline, Europe shows slow growth and the Middle East & Africa has yet to emerge
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Soyfoods in the U.S.

U.S. food marketers have become creative with soy and found ways to use it in many familiar food products, creating new healthier snacks, drinks, dairy alternatives, foods and beverages In 2009, total sales of all soy-based foods in the U.S. totaled over $4.0 billion at the retail level

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Soymilk in the U.S.

In 2009, there were over 600 soymilk products in the U.S. market, not including private label products, with total retail sales of over $1.1 Billion Vanilla and plain were the leading flavors, followed by chocolate

Two-liter carton was the leading package

75% of soymilk products are made with organic soybeans For the fourth year running, private label products were the fastest growing brand (29%+ in 2008) indicating a growing preference for generic vs. leading brand products

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Other soymilk-based foods in the U.S.

Soymilk, in powdered and liquid form is also processed into other dairy alternatives such as: Yogurts Drinkable yogurts Frozen desserts Puddings Coffee creamers Cheese products And of course, tofu!

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Soyfoods in Europe

The market for soyfoods in Europe is dominated by meat and dairy alternatives and varies considerably from country to country based on regional taste preferences Soymilk products sales are over 600 million according to a recent report from ProSoy Recent trends include a rapid growth in soy yogurts and functional soymilk products

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Soyfoods in Europe

The market in Europe is driven by:

Rapid growth in private label store brands Demand for organic products

Vegetarianism or meat-free as part of a mainstream diet

Overall health concerns Concern about consumption of animal products (mad-cow) New convenient offerings in R-TE meals

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Soyfoods in Asia

The market for soy foods in Asia is filled with traditional foods such as:

Tofu Miso Soy Sauce Tempeh Edamame Soy Sprouts Yuba Natto

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Soymilk in Asia

Soymilk sales in Asias packaged food market was estimated at nearly $1 billion in 2007 and is growing at over 10% per year, according to AC Neilsen In addition to plain and sweetened products, many traditional flavors are available including Black Sesame, Brown Sugar, Corn and Vegetable flavor In China, half of the leading products on the market are in powdered form and most contain dairy ingredients

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Soymilk in Asia

Soymilk packaging includes fresh, aseptic and retort bottles that can be sold alongside of other soft drinks, broadening the appeal and reach of these products For many Asians, the traditional beany flavored soymilk is preferred, and it is usually lighter in protein and higher in sugar content than a milk alternative product

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Soymilk in Asia

New soymilk product introductions in the Asia/Pacific area have been growing rapidly, with China showing the greatest number of products, followed by Japan, Hong Kong and others With the exception of China, where there are many powdered products being introduced, the vast majority of these products are in liquid form and in either glass or plastic bottles, or Tetra Pak cartons

Soymilk Introductions Asia/Pacific Region, 2005 2009

Source: Mintel GNPD

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Soymilk in Southeast Asia

According to The South-East Asian Market for Non-Dairy Drinks(2007, Organic Monitor)

Growth in the region is projected at 8.4% per year through 2013 to reach 735 million liters with a value of $600 million Per capita consumption was 1.2 liters per year and increasing

The market is heavily concentrated in Thailand, Malaysia and Singapore, with Indonesia and the Philippines having low consumption due to high prices and lack of domestic production The leading companies in the region are:

Green Spot Lactasoy YeoHiapSeng Ace Canning Dutch Mill

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Soyfoods in India

Textured soy protein, soymilk and tofu are available in India, with soymilk sales growing rapidly According to the American Soybean Association, there were approximately 32.5 million liters of soymilk produced in India in 2008, up from 400 thousand liters in 2000 Given the overall population, expansion of the hypermarket trade, growth of the middle class and large vegetarian community, there appears to be abundant opportunity for growth
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Soyfoods in Latin America

Throughout Latin America, including Mexico and Central and South America, sales of soyfoods are growing quickly Textured soy protein meat alternatives, soymilk products, energy bars and cereal mixes are appealing to consumers looking for healthier, low fat and high protein foods

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Soymilk in Latin America

Across Latin America, soymilk comes in a variety of forms and flavors including regular soymilk, soy/juice blends, soy/cow milk blends, powdered products and canned evaporated soymilk

Lactose intolerance is a big factor in market development, as is cost

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Soyfoods in Africa

Throughout Africa soyfoods find their way to consumers through both consumer products and government programs Popular foods include textured soy protein, soy/maize cereal blends and soymilk

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Soymilk in South Africa

While still in an emerging market phase, soymilk products are becoming more popular in South Africa with domestic and imported products available The most popular package now is the aseptic Tetra Pak, with no fresh or chilled product available Private label soymilks are showing up in supermarkets, indicating some level of mass market appeal
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In conclusion..

Soy-based foods are growing in popularity worldwide and will continue to play an ever-increasing role in the feeding of our planet The soybeans high nutritive value, low cost and versatility allow it to be used in wide range of foods and preparations Whether it be a traditional or modern soyfood product, sold on the street corner or packaged and sold in a supermarket, many people will consume more soybeans in their diet for years to come
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For more information, please contact: Peter Golbitz, Director of International Business Development at peter.golbitz@sunopta.com

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