Transcript NCA

National Confectioners
Association
State of the Industry
Conference
Miami, FL
February 20, 2010
Agenda
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Company Overview & Footprint
Market Review & Outlook
DFI Capabilities
Consumer Trends
Company Overview
Florida Crystals Corporation and the Sugar Cane Growers Cooperative have created the first fully integrated
®
®
sugar cane company in North America, taking products from field to shelf. The addition of the Domino , C&H ,
®
and Redpath brands has created a North American distribution capability.
Farming
Refining
Consumer Goods
®
®
 Farms 180,000 acres in South
Florida
 Operates 2000 pieces of farm
equipment
 Crop is harvested between
October and April
 Uses rice for crop rotation
 Operates refineries in New York,
Baltimore, South Florida, New
Orleans, San Francisco, Toronto
 Operates a 130 Megawatt
cogeneration plant
 Produces more than 3,000,000
tons of refined sugar annually
 Operates three sugar mills and a
rice mill
 Mills process 800,000 tons of raw
sugar annually
®
®
®
®
 Only sugar supplier with national brands
 Distribution channels include
Ingredients, Food Service and Grocery
customers
 Produces more than 1500 SKUs of both
branded and private label products
 First Sugar Cane Company to produce
certified organic sugar
 Produces a full line of rice products,
including half of all the rice consumed in
South Florida
Our North American Footprint
Market Outlook
• World market deficit becomes very evident
in December 2009.
The 2010 DEFICIT in pictures
– Historically…
Global Sugar Balance v NY11
20
US c/lb
'000 mt
60
50
15
40
10
30
5
20
-
10
-5
0
-10
-10
Surplus/Deficit
-15
NY11 monthly av (RHS)
-20
-20
-30
-40
66 69 72 75 78 81 84 87 90 93 96 99 02 05 08
Market Outlook
• World market deficit becomes very
evident in December 2009.
• Brazil crop ends – fails to meet
expectations.
Brazilian Industrial Yields:
kg/tonne of cane - bi-weekly
Source: UNICA
Jenkins Sugar Group
Market Outlook
• World market deficit becomes very
evident in December 2009.
• Brazil crop ends – fails to meet
expectations.
• India becomes consistent importer due
to crop shortfalls
INDIA
Exports and Imports in Million MTRV
Exports and Imports
5.5
5.0
4.5
4.0
3.5
3.0
2.5
2.0
1.5
1.0
0.5
0.0
-0.5
-1.0
-1.5
-2.0
-2.5
-3.0
/05
04
/06
05
/07
06
Exports
/08
07
E
/09
8
0
Imports
• Cane shifts with prices
• This year’s deficit not fully addressed yet; election delayed
decisions
•Yield could be impacted by fertilizer usage
•Poor Monsoon – El Nino
E
/10
9
0
DEMAND DESTRUCTION - HOW LIKELY?
Difficult to model…
Unclear until it actually happens.
 Export volume test, or elasticities of demand?
Government intervention can accentuate and accelerate
it – seizures, hoarding rules, price
This time LDC’s are importers.
Market Outlook/Summary
• 2010/2011 shows a more balanced market
• Projected surplus is small and in places that
tend to “stock build” and “not export”.
• Brazil & India offer huge swing potentials.
• Funds, who hold a record 18.0 million mt of
sugar, could lighten.
• As always, WEATHER is a huge and
unpredictable variable.
Raw Sugar Prices - #16 Market
Domino * C&H * Florida Crystals * Redpath
• Reliable provider to the Confectioners
Industry for over 100 years.
• Current supply source in all of North
America (USA, Canada & Mexico)
• Supplier to confectionery industry of all
grades of sugar (granulated, liquid, Invert,
Large Grain, Fondants, Molasses, Colored
Crystals & Grain Extracts).
Specialty Ingredients
INNOVATIVE FUNCTIONAL INGREDIENTS
SPECIALTY INGREDIENTS WITH
APPLICATION TO CONFECTIONERY INDUSTRY
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Molasses
Grain Extracts – Malt & Rice
Invert Syrups
Fondant Sugars
Confectioners Colored Sugar Crystals
© 2007 Domino Specialty Ingredients. All Rights Reserved.
Liquid Molasses
INNOVATIVE FUNCTIONAL INGREDIENTS
MOLASSES FLAVOR:
 Flavor Profile: caramelized sugar, mild to robust,
licorice, bitter to sweet
 Sweetness
 Mask Unpleasant Flavors: e.g. bitter taste of bran
 Enhances Flavors of:
 Praline
 Licorice
 Caramel
 Butterscotch
 Roasted Peanuts
© 2007 Domino Specialty Ingredients. All Rights Reserved.
Rums
Maple
Coffee
Chocolate
Malt Extract
INNOVATIVE FUNCTIONAL INGREDIENTS
MALT PRODUCT RANGE
 100 % Malt Extract – Conventional and Organic
 Dry Malt Extract
 Co-Extracts
 Malt/Corn Blends

Traditional Applications
 Specialty Breads – French & Italian, Rolls, Bagels Crackers
 Cookies – Peanut Butter, Malt
 Confections – Malted Milk Balls
 Snack Items – Pretzels, Bread Sticks, Pizza Dough
 RTE Cereals
 Malt Vinegar
© 2007 Domino Specialty Ingredients. All Rights Reserved.
Invert Syrup
INNOVATIVE FUNCTIONAL INGREDIENTS
INVERT SYRUPS
 Product Types
 Full Invert – Liquid – FreshVert®/Nulomoline®
 Paste – FreshVert Creamy/Nulomoline Congealed
 Partial Invert - #11 Nulomoline® & Crystal 50
 Invert/Honey – Mate ‘N Match™ Honey
 Traditional Applications
 Bakery
 Cakes & Cookies
 Icings/Confectionery
 Snacks
© 2007 Domino Specialty Ingredients. All Rights Reserved.
Fondant Sugars
INNOVATIVE FUNCTIONAL INGREDIENTS
FONDANT SUGARS
 Product Types
 Nulofond® – Sucrose Agglomerate
 Bakers Drivert®/Drifond® – 7 to 9% Invert
 EasyFond® – 3 to 4% Invert
 Amerfond® – 5% Invert
 Functional Properties
 Rapid Rate Particle Dispersion
 Eliminates Cooking Process
 Free-Flowing
 Traditional Applications
 Confections – Cream Centers, Fudge, Cherry Cordials, Mints
© 2007 Domino Specialty Ingredients. All Rights Reserved.
Confectioners Colored Crystals Sugar
INNOVATIVE FUNCTIONAL INGREDIENTS
ADDITIONAL PRODUCTS
 Confectioners Colored Sugar Crystals Coarse grain sugar available in 8 individual colors or a “rainbow” of all
colors combined: red, orange, yellow, green, blue, violet, pink, white
© 2007 Domino Specialty Ingredients. All Rights Reserved.
Major Consumer Trends Impacting Sugar
Consumption
• Conversions from HFCS to Sucrose
• Concerns about “Effectiveness” of Artificial
Sweeteners
• Concerns about “Healthfulness” of Artificial
Sweeteners
HFCS–55 Deliveries for Human Consumption, Calendar Years 1998 – 2009
5,637
5,700
5,565
5,561
5,593
HFCS–55 Total Deliveries
5,599
-863,000 strv = - 15.4%
Avg. -123,285/ yr.
5,443
5,374
5,400
Thousand Short Tons, Refined Value
5,314
5,292
5,150
5,100
Projection based
on comparable CY
2005 – CY 2008 9–
month deliveries
4,968
4,800
4,500
+ 300
4,736
1998
1999
2000
+ 270
2001
2002
2003
2004
2005
2006
2007
2008
- 142
- 159
2009
Change From Previous Calendar Year
+ 76
+ 28
+6
- 69
- 72
- 60
- 22
- 156
 300
Source: USDA. Economic Research Service, Briefing Room. Sugar and Sweetener Yearbook Tables: Excel (.xls)
Spreadsheets, Tables 28 and 30. http://www.ers.usda.gov/briefing/sugar/Data/data.htm. Accessed November 23, 2009.
- 232
© The Sugar Association, Inc.
November 24, 2009
List of Products which have
Switched from HFCS to Sugar
•
•
•
•
Thomas’ English Muffins
Capri Sun
Bull’s Eye BBQ Sauce
Ocean Spray Drinks &
Craisins
• Fuze
• Vitamin Water
• Throwback (Pepsi)
•
•
•
•
•
•
•
•
Snapple
Red Bull & Monster
Prego Tomato Sauce
Sips
Flowers Brands
Hunt’s Ketchup
Heinz Ketchup
Jones Soda
Select Learnings from Positioning Research
Brand, Private Label, Artificial Sweetener Users
• Consumers think of Domino/C+H as the brand they can trust, and
value that Domino has been around for generations/100 years
• Artificial sweetener users were just as likely as brand and private
label users to value the natural purity of sugar, expressing some
guilt over consuming artificial ingredients
• The taste of sugar remains unrivaled by other sweeteners, all
consumers prefer to use real sugar for baking
• Artificial sweetener users are less likely to care about the taste of
real sugar when it comes to coffee and other hot beverages
• Nearly all consumers were pleasantly surprised to learn that sugar is
just 15 calories per teaspoon, adding that knowing this would make
them more likely to use sugar in their hot beverages at a minimum
• Many were convinced by the “sugar in moderation” studies read in
magazines
Artificial Sweeteners actually cause
weight gain
• Studies in rats show they don’t lose weight when they eat artificially
sweetened food. They eat more, and gain more. (Dr. Susan Swithers,
Purdue University, article in Behavioral Neuroscience Feb. 2009) http://www.amaassn.org/amednews/2008/04/07/hlsa0407.htm
• “A paper in the Feb. 12 Circulation, for instance, associated drinking
one can of diet soda per day with a 34% increased risk of
developing metabolic syndrome compared with those who did not
drink any carbonated beverages. People who drank the sugarsweetened versions had a 10% increase in risk.” http://www.amaassn.org/amednews/2008/04/07/hlsa0407.htm
• "I'm wondering if maybe the artificial sweetener makes you feel
hungrier somehow," said Lyn Steffen, MPH, PhD, one of the authors
and associate professor at the University of Minnesota in
Minneapolis. "You drink this artificially sweetened drink, and you
might feel satisfied for a short time. At the end of the day, it actually
makes you eat more.“ http://www.ama-assn.org/amednews/2008/04/07/hlsa0407.htm
Select Findings – Artificial
Sweetener Users
• Number of calories are very important to these consumers; however
they are the second least likely (behind health conscious
consumers) to know that there are only 15 calories
– On average people think there are 62 calories per teaspoon
•
•
•
•
Brand sugar
Artificial Sweetener
Health Conscious
Organic
48
73
78
55
• They feel some guilt about using artificial ingredients and many say
they “would never let my kids use artificial sweeteners”
• They use zero calorie sweeteners predominantly in hot beverages
• Several were aware that zero calorie sweeteners create cravings so
you end up eating more calories