The evolutionof sugar reductionConsumers are tempering theirlove for sugary foods in response to globalrecommendations to limit calories from addedsugars.1 In fact, a recent study found that80% of respondents said they were trying tolimit or avoid sugars in general.2 Many factorscontribute to this shift in behavior. One suchfactor is healthcare messaging linking excessivesugar consumption, poor eating habits, and asedentary lifestyle to obesity and other healthconcerns.3 It has sparked a focus on healthierlifestyles and “clean” eating. 2020 Cargill, Incorporated. All rights reserved.InsightsReportGovernment agencies and lawmakers havealso enacted laws targeting sugar. In the UnitedStates, new federal regulations require addedsugars to be included on the Nutrition FactsLabels. Also some cities, states and countriesare now imposing a tax on high-sugar productslike soft drinks.While the United States is leading the way,concern about added sugar in foods andbeverages is a growing global issue.4

Changing regulatory landscapeThe increased focus on sugar consumption in relation to weight management is leading to newregulatory guidelines in numerous markets around the world:U.K.U.S.34%22%ChinaSugar content influencespurchase decisionsworldwide19%Germany36%Spain38%Mexico% of consumers whosepurchases are influencedby low/no sugar claims29%Source: Innova Market Insights 2019Consumer Lifestyle SurveyFDA has extendedthe compliancedates for changesto labeling addedsugars and dietaryfiber to providemore time formanufacturers toreview FDA guidanceon the rules oncefinalized andimplement them.5Implementation ofthe changes to theNutrition Facts Labeltook effect January2020 for companieswith 10 million ormore in annual foodsales; January 2021for companies withless than 10 millionin sales.CURRENT L ABELN EW LA BELNutrition FactsNutrition FactsServing Size 2/3 cup (55g)Servings Per Container About 8Serving sizesAmount Per ServingCalories 230 Calories from Fat 72 % Daily Value*Total Fat 8g 12%Saturated Fat 1g Trans Fat 0gCholesterol 0mg 5%0%Sodium 150mg 7%Total Carbohydrate 37g Dietary Fiber 4g 12%16%Sugars 1gProtein 3gVitamin A 10%Vitamin C 0%Calcium 20%Iron 5%* Percent Daily Values are based on a 2,000calorie diet. Your daily value may be higher orlower depending on your caloric needs.CaloriesTotal FatLess thanSat FatLess thanCholesterolLess thanSodiumLess thanTotal CarbohydrateDietary g2,400mg375g30gare more realisticto reflect howmuch peopletypically eat ordrink at one time(sugar andcalorie numbersmay increaseon the label)Caloriesare shown ina larger sizeDaily value %shave been updatedand will be listedmore prominentlyAdded sugarsare called outseparatelyA daily valueof 50 grams isused to calculatethe % for AddedSugars line8 servings per containerServing size 2/3 cup (55g)Amount per servingCalories 230% Daily Value*Total Fat 8gSaturated Fat 1g10%5% Trans Fat 0gCholesterol 0mg0% Sodium 160mg7% Total Carbs 37gDietary Fiber 4g13%14%Total Sugars 12gIncludes 10g Added Sugars20%Protein 3gVitamin D 2mcg10% Calcium 260mg20% Iron 8mg45% Potassium 235mg6% * The % Daily Value (DV) tells you how mucha nutrient in a serving of food contributes toa daily diet. 2,000 calories a day is used forgeneral nutrition advice.

Taxes on sugarybeverages gainmomentumaround the worldExperts are mixed as to whether sugar taxes are a good idea.6,7,8One reason is that the link between sugary beverages and obesity is notconclusive, as many other factors may play a role in causing a person to gainweight. Detractors also debunk the taxes as being imposed in order to providea revenue source, rather than a legitimate effort to reduce sugar consumption.Nevertheless, while research continues to examine the impacts of sugar intakeon long-term health, it is likely these taxes will continue to gain ground.9,10,11,12DenmarkIn effect since the 1930s; but repealedin 2014 amid concerns that it washurting the economy and causingDanes to travel to other countries topurchase soft drinks.MexicoPhiladelphia, PACook County(Chicago, IL)United Kingdom,South AfricaIn effect since2013In effect sinceJan 1, 2017In effect on Aug. 2, 2017 butrepealed three months later*In effect sinceApril 2018FranceBerkeley, CAIn effect since2012In effect since2015Boulder, CO,San Francisco, CA,Oakland, CA,and Albany, NYSeattle, WAIn effect sinceJan. 1, 2018Passed Nov. 2016Source: “The Short and Sweet on Taxing Soda,” Institute on Taxation and Economic Policy. pdf*Chicago’s Cook County Board Rolls Back Tax on Sweetened Drinks. The Wall Street Journal, Oct. 10, 2017.The sugar and health connectionCurrent scientific findings and theregulatory spotlight are bolstering existingconsumer perceptions that sugar is badfor health. Weight gain is the most citedhealth issue attributed to excess sugarconsumption by consumers,13 but otherfactors such as concern about diabetesand a general feeling that less sugar ishealthier and better for kids are also ofimportance to consumers. Some of theseissues gain relevance for consumersas they are directly affected by personalhealth concerns like diabetes or as theystart a family. According to findingsfrom Cargill’s proprietary research onthe “clean label” trend and consumerperceptions, consumers focus on reducingsugar because of a general belief that it ishealthier (36%), because they are tryingto lose weight (19%) and those with kidsin the household say they don’t want theirchildren to have too much sugar (23%).15The Evolution of Sugar Reduction 3

The impact on productsTo say that these trends are having an impact on brands andproduct purchases may be an understatement. Research continuesto show that sugar reduction is among the top product claims soughtafter by consumers. The drive to reduce sugar in their diet is promptingconsumers to take a variety of actions:49%now say theyare eliminatingcertain foods andbeverages fromtheir diets.*34%are using theNutrition Factslabel to chooseproducts withless sugar*23%are usinglow-caloriesweetenersinstead of sugar*22%are switchingfrom caloricbeverages to lowand no-calorieoptions*Sugaravoidanceis on the rise*IFIC Food and Health Survey, 2019That said, many consumers also have a mixed opinion about low- andno-calorie sweeteners, although 26 percent of consumers now believethat these sweeteners help them reduce their consumption of sugar.*Low sugar tops the product claimsshoppers are looking forLOW SUGAR33%NO ARTIFICIAL INGREDIENTS33%32%WHOLE GRAIN28%NO TRANS FATS27%HIGH FIBER27%NO ADDED HORMONES27%NON-GMO27%For the past several years, sugarhas been the top ingredient thatconsumers are seeking to limitor avoid in their diet, and thenumbers continue to rise.34%LOW SODIUMNO PRESERVATIVESUnprecedented numbers ofconsumers say they are looking toreduce their sugar intake or avoidit altogether.1348%of U.S. shopperscheck labels for sugar contentSource: NPD, Nov. 2017NATURAL 25%LOW CALORIE23%NO HFCS23%Source: FMI US Grocery Shopper Trends, 201980%said they are tryingto avoid or limit their sugar intakeSource: 2019 IFIC Food and Health Survey

Who is theconsumer forsugar reductionproducts?A perfect storm for formulatorsAs the debate about sugar takes center stage, companies are scrambling toreformulate existing products and/or introduce new low-sugar or no-sugar-addedoptions. Though there are increasing numbers of new ingredients available, thelingering question for formulators is: “what ingredient should I use?” There isno clear answer, because there is no one-size-fits-all solution. Formulators haverelied on sugar for a variety of functions, from taste and texture to mouthfeel andviscosity. That is a tall order for any single ingredient. Plus, what works well in acake might not be best for a dairy product.Furthermore, when it comes to sugar reduction in products, certain food categoriesseem to be more important than others. For example, consumers are less worriedabout sugar content in indulgent products like candy, but categories such as softdrinks and foods for children are on the front lines of sugar scrutiny. This is likelyhigher among parents, with 73% of consumers who say they have children in thehousehold noting they pay attention to sugar in foods for kids.15Consumers are paying attention to sugar in . . .NON-CARBONATED BEVERAGE54%READY TO EAT CEREAL60%FOODS CONSUMED BY CHILDRENNUTRITION BARSCARBONATED SOFT DRINKSYOGURTSNACK BARS58%58%57%54%51%Sugar reduction is of growingconcern for consumers acrossmany different demographic groups.Here are a few insights into what isimportant for them: More than half of women (52%)say they are looking to reducetheir sugar intake.14 Millennials, just starting theirfamilies, express growing concernabout sugar content, especially inproducts geared toward children.15 Baby Boomers are reaching thatage when they are starting to feelthe effects of a poor diet and aremotivated to make improvementsthat will maintain good health asthey age. Eight in ten say they are takingmore responsibility for their healthas compared to ten years ago.16 Six in ten consumers view sugarnegatively, but they still largelyprefer the taste of sugar toartificial sweeteners.17 Overall, healthy eating is importantto all of these consumers whoare seeking sugar reduction,but weight management is likelya top motivator.17Source: Transparency and Simplicity: The New Normal in Product Development Proprietary Research, 2017The Evolution of Sugar Reduction 5

Anatomy of a category:Soft drinks in the hot seatSoft drinks have beenat the center of debateabout sugar content fromthe start.18 But as a result,the category is well aheadof the curve with respectto reduced-sugar productformulation. According toInnova Market Insights, sugarcontent influences a majorityof consumers’ decisionsto purchase a soft drink: ofthe 2018 product launchesfeaturing a sugar-reductionclaim, 23% were in the softdrink category.19The attention on soft drinkshelped to propel developmentand interest in high-intensitysweeteners from the steviaplant with both large andsmall consumer brands.In recent years, stevia hasincreasingly been used inother beverage categories,such as juice drinks andflavored waters. Accordingto Innova, 25% of globalbeverage product launchesinclude stevia-basedsweeteners, making itthe most used alternativesweetener in the category.Next-generation productsare utilizing blends of steviaextracts and erythritol, whichcan provide a closer match toconsumer taste expectationsin these product formulations.Penetration of sweeteners in soft drinks category(Global, 2015 vs. 2019)Global soft drinks that include:SteviaAspartameSucraloseHigh Fructose Corn .5%51.4%Four-yearCAGRAcesulfame K8.1%7.7%12.8%1.4%14.8%7.4%47.7%Stevia. 7.8%Aspartame. 6.1%Sucralose. 4.8%Saccharin. -11%Acesulfame K. 6.50%High Fructose Corn Syrup. -4.4%Sugar. -0.1%Innova Market Insights 2020Does the sugar content of soft drinks influence consumerpurchasing decision?2018 Answer: Yes52%U.S.Innova Market Insights 201899%63%U.K.Mexico

Claims and label insightsFDA has updated the Nutrition Facts label for packaged foods to help consumersmake healthy, more informed decisions when buying products. The new labelincreases the focus on serving sizes, calorie counts and includes a new line for addedsugars. The following product categories are likely to see the biggest impact.20The influence of sugar on purchase decisionsFinding asolutionsprovider Brands that are successfullyreformulating rely onsuppliers with expertise inthe sugar reduction space. Look for a supplier withdeep experience insugar-reduction productdevelopment and a broadportfolio of sugar-reductionsolutions. Partner with a supplier withapplication expertise—along history and experiencewith top-tier technicalservice and applications.If you reformulate . . .Overall, consumers arebecoming more educatedabout nutrition and health,but they are still misinformedabout alternative sweetenersand they likely do not knowthe breadth of new naturalsweetener ingredients for sugarreduction, so there remains akey educational opportunity.What consumers say they wantand what they actually purchaseare not always in sync.% of consumers who say that low sugar is an importantattribute when making purchase decisionsCategories with sugar could be affected by label changes45%40%Juice35%30%YogurtSnack andgranola barsReady-to-eat cereal25%20%15%Salad dressing10%Condiments5%0%70%75%Bread and buns80%85%90%95%100%% of category UPCs that have added sugarsGrowing Category, But Less Than 1%Declining CategorySource: Nielsen/Label Insights Transparency ROI Study, 2016As a result, ingredient suppliers are rising to the challenge with innovations insweetener technologies that are raising the bar and producing products that arenot only lower in sugar and calories, but also taste great.So, experts now advise thatbrands should approach sugarreduction with many factorsin mind, such as a deepunderstanding of what theirconsumers are looking for in theirparticular product. Once a branddecides to provide a lowor no-sugar option, themanufacturer should work tomeet taste expectations whileusing ingredients that offer asimple, label-friendly appeal.It is best to be as clear andtransparent as possible aboutyour sugar reduction efforts(what ingredients you are usingand why), so that consumerswill understand the reasoningbehind the ingredient changes.Ultimately, they will likely thankyou for it with ongoing trust andrepeat purchases.To learn more about Cargill’sgrowing portfolio of sugarreduction ingredients please*FDA does not define natural.The Evolution of Sugar Reduction 7

References1World Health Organization. Guideline Sugars Intake for Adultsand Children; World health Organization; Geneva, Switzerland,2015; pp.1-49. Hess, J; Latulippe, M.E.; Ayoob, K.; Slavin, J.The confusing world of dietary sugars; Definitions, intakes, foodsources and international dietary recommendations. Food Funct.2012, 3, 477-486.2International Food Information Council (IFIC) 2019 Food andHealth Survey, accessed at vey3WHO calls on countries to reduce sugar intake among adultsand children. March 2015. sugar-guideline/en/11 Briggs AD et al. The potential impact on obesity of a 10% taxon sugar-sweetened beverage in Ireland, an effect assessmentmodelling stud. BMC Public Health 2013 Sept. 437012 Hagenaars LL, et al. The taxation of unhealthy energy-densefoods (EDFs) and sugar-sweetened beverages (SSBs): Anoverview of patterns observed in the policy content and policycontext of 13 case studies. Health Policy 2017. Aug;121(8):887-894. Ibid. 2019 Food and Health Survey from IFIC.14 Label Insight. “Americans are Planning to Avoid Sugar and EatMore Sustainably in 2018.” January 4, 2018.4“The Sweet Danger of Sugar.” Harvard Health Publishing, Nov.2019 eetdanger-of-sugar5FDA proposed to extend compliance dates for nutrition factslabel final rules. ates/ucm577264.htm6The Short and Sweet on Taxing Soda, Institute on Taxationand Economic Policy pdf17 IFIC Food and Health Survey, 2017.7Arsenault BJ, et al. Targeting overconsumption of sugarsweetened beverages vs overall poor diet quality for cardiometabolic diseases risk prevention: Place your bets. Nutrients2017. June 13;9(6). piiE600. Bray GA, et al. Dietary sugar and body weight: have wereached a crisis in the epidemic of obesity and diabetes andobesity?: health be damned! Pour on the sugar. DiabetesCare. 2014 Apr;37(4):950-956. estrollo M et al. Impact of sugars and sugar taxation onbody weight control. A comprehensive literature review. Obesity(Silver Spring). 2016 July;24(7):1410-1426. Innova Market Insights research cited in Chemical EngineeringNews, “The Sugar Wars Are About to Change Your Food Label.Here’s Why.” October 20, 2019. ugar-wars-change-food-label/97/i419Donaldson, EA, et al. Public Health Nutr. 2015. Aug;18(12):22632273. Nielsen/Label Insight Transparency ROI Study, -study10 Briggs AD, et al. Overall and income specific effect onprevalence of overweight and obesity of 20% sugar sweeteneddrink tax in UK; econometric and comparative risk assessmentmodelling study. BMJ. 2013 Oct 31;347:f6189. 2020 Cargill, Incorporated. All rights reserved.15 Transparent, Simple, Clean: The New Norm. Cargill ProprietaryResearch 201716 Natural Market institute Research. 2017 reportedin Boomers have desire, need for healthy products.NaturalProductsINSIDER. Oct. 2017. .aspx

Government agencies and lawmakers have also enacted laws targeting sugar. In the United . States, new federal regulations require added sugars to be included on the Nutrition Facts Labels. Also some cities, states and countries are now imposing a tax on high-sugar products like