A key solution to reduce consumption of Sugar Sweetened Beverages

Agreement with the Beverage Sector (Announced September 2014)

Our Mission We work to empower kids to develop lifelong healthy habits by ensuring the ENVIRONMENTS that surround them

provide and promote good health.

Our Vision We believe ALL young people deserve the

chance to live healthier lives.

Healthier Marketplace

Healthier Community

Environments

Our Strategies

Change Supply

Increase Access

Create Demand

National Goal Reduce beverage calories consumed per person per day by 20% by 2025 Communities Goal Achieve equivalent reductions in 8-10 communities where the challenge is believed to be greatest

Little Rock & Los Angeles | September 2014

New York City | May 2015

Counties in MS & AL | April 2016

2-Part Goal

Communities Selected to Date

Agreement includes:

• Calorie counts and promotion of calorie awareness on all company-controlled point-of-sale equipment in convenience stories, restaurants and other locations:

— Vending machines — Retail coolers — Self-serve fountain dispensers

• Complete business practice change:

innovation, distribution and marketing to change and sustain consumer interest in no- and low-calorie beverages

• Consumer education and outreach: taste tests, sampling programs, coupons and other incentives, in-store displays, community engagement

Evaluation

• Independent, third party evaluator

• Selected through a competitive RFP process

• Track progress and interim benchmarks

NATIONAL GOAL • Baseline Report for the National Initiative

March 2016

• 2015 Progress on the National Initiative November 2016

COMMUNITIES GOAL • Communities Initiative Baseline Report &

2015 Update Pending distribution

The Alliance negotiated an agreement with the beverage industry that resulted in a 90% reduction in beverage calories

being shipped to the nation’s schools between 2004-2010.

National Calorie Awareness Program (Vending & Coolers)

Reformulation, New Products, Smaller Packages

Coke Freestyle Pepsi Spire Glass Front Vending

Company Efforts

Marketing & Advertising Merchandising & Distribution

Post-Planogram Reset Pre-Planogram Reset

Marketing & Advertising

SEPTEMBER 2014 Little Rock & LA Selected

January 2015 RFP Released

May 2015 Keybridge Selected as Evaluator

MAY 2015 NYC Selected

SEPTEMBER 2014 Announcement

MARCH 2016 National Baseline Report Released

AUTUMN 2016 National Progress Report Released

SPRING 2017 Communities Baseline & Progress Report Released

APRIL 2016 MS & AL Selected

Timeline of Events: 2014-2017 Key Dates Related to the Evaluation Effort

National Analysis

Community Analysis

WHAT: Measure progress toward the overall calorie per person goals

HOW: Measure implementation efforts and determine key drivers of overall changes

Evaluation Research Scope

X X =

Reduced Calories per

Ounce

Smaller Portion Sizes

Fewer Servings

Reduced Calories

per Person ≈

Calories

Person

Calories

Ounce

Ounces

Beverage

Beverages

Person

Factors Contributing to Beverage Calorie Reductions

BEVERAGE MARKETING CORPORATION

NIELSEN SCANTRACK

BEVERAGE DIGEST

Measuring Progress

Towards the National Goal

National Calorie Goal: Key Data Sources

Beverage Digest

Beverage Marketing

Nielsen Scantrak

Nielsen Homescan

NPD Group(CREST)

Company Data

National

MSA - - -

Zip Code - - -

SKU / Package Size - - - -

Beverage Product / Flavor - - - -

Brand / Trademark -

Fountain - -

Vending - - -

Stores with >$2M sales -

Stores with <$2M sales - -

Publicly Available Yes/No -

Full LRB Coverage Yes/No -

Demographic Information Yes/No - - -

Data Assessment Criteria

Geographic Granularity

Product Granularity

Channel

National Data Source Assessment

National Goal

199 159

0

50

100

150

200

250

2014Baseline*

2025Target*

Average Daily Per Capita Beverage Calories DrinkTell, 2015

20%

* Revisions to the underlying data from DrinkTell may result in revisions to the baseline and target estimates. Source: Beverage Marketing Corporation: DrinkTell Database; U.S. Census Bureau, 2015

National 2014 Baseline & 2025 Target

199.0 198.7

159.2

0

50

100

150

200

2014Baseline

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025Target

Average LRB Calories Per Person Per Day: DrinkTell*

* Revisions to the underlying data from DrinkTell resulted in revisions to the baseline and target estimates originally published in 2014.

20% DECLINE

Source: Beverage Marketing Corporation: DrinkTell Database, 2015; U.S. Census Bureau, 2015

Measuring Progress Towards the National Calorie Goal

177 177

142

0

50

100

150

200

2014Baseline

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025Target

Average LRB Calories Per Person Per Day: Beverage Digest*

* Beverage Digest data does not include significant portions of LRB volume, including many juices and RTD Teas.

20% DECLINE

Source: Beverage Marketing Corporation: DrinkTell Database, 2015; U.S. Census Bureau, 2015

Corroborating Data: Beverage Digest

119.8 117.9

95.8

0

50

100

150

200

2014Baseline

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025Target

Average LRB Calories Per Person Per Day: Nielsen Scantrack*

*Nielsen Scantrack data does not include several important sales channels, such as fountain.

20% DECLINE

Source: Beverage Marketing Corporation: DrinkTell Database, 2015; U.S. Census Bureau, 2015

Corroborating Data: Nielsen Scantrack

0

20,000

40,000

60,000

80,000

100,000

2000 2002 2004 2006 2008 2010 2012 2014

Single-Serve Bottled Water

No- & Low- Calorie CSDs

Sales Volume Trends, 2000-2014 No- & Low-Calorie CSDs and Bottled Waters, Millions of 8 oz. Servings

Source: Beverage Digest Fact Book, 2015

Long-Term Shifts and Potential Headwinds

Average Calories per Person per Day, 2000-2014 Calories from Beverages Included in Beverage Digest (Excludes some Non-Carbs)

Sources: Beverage Digest Fact Book, 2013-2016

198 196 195 193 191 189 187 185 184 182 180

200

178 175 177 177

0

50

100

150

200

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Slowdown of Calorie Reduction Trend

Calorie declines must accelerate to meet the 2025 goal 1

Calorie reduction momentum has stalled and must be regenerated 2

Growth of bottled water was notable, but had limited caloric effects 3

Falling no- and low-calorie CSD consumption represents a headwind 4

Companies laid groundwork in 2015 for future calorie reductions 5

Key Conclusions from the 2015 Progress Report

Communities Goal

Los Angeles, CA • Boyle Heights • Lincoln Heights • El Sereno • East Los Angeles Little Rock, AR • Downtown • South Little Rock • Southwest Little Rock • Midtown Little Rock

Communities Selected To Date

New York, NY • South Bronx • Bedford Stuyvesant &

Crown Heights in Brooklyn

Mississippi Delta, MS Counties of: • Coahoma • Panola • Quitman • Tunica Greater Montgomery, AL Counties of: • Montgomery • Lowndes

Community Selection Announced

Implementation Initiated Baseline Year

National Initiative September 2014 January 2015 2014

Little Rock, Arkansas September 2014 May 2015 2014

Los Angeles, California September 2014 May 2015 2014

Bronx-Brooklyn, New York May 2015 January 2016 2015

Montgomery-Lowndes, Alabama April 2016 October 2016 2015

Mississippi Delta, Mississippi April 2016 October 2016 2015

Key Dates for National & Communities Initiatives

Community Total Population (2014)

Median Household

Income (2014)

% of Pop. Below Poverty Line

(2014)*

Eastern Los Angeles Community 286,898 $37,282 29%

Little Rock Community 98,277 $31,749 27%

Sources: U.S. Census Bureau(2014); CDC (2012); New York City Department of Health and Mental Hygiene(2015)

* In 2015, National average percentage of population below the poverty line was 15%. The National median household income was $53,889.

Communities with 2014 Baseline

Data from the CDC Behavioral Risk Factor Surveillance System (BRFSS) was used to rank counties by adult obesity rates and to determine the top 6-10 most obese counties and MSAs.

Identify High Obesity Counties & MSAs 1

The selected communities include 2nd and 4th most obese U.S. counties and parts of the 10th most obese MSA with a population between 200K-500K.

Select Communities in Mississippi & Alabama 3

The companies and ABA narrowed the list based on: (1) internal capability to implement the initiative and report data; (2) learning potential for different regions, and (3) input from the Alliance and potential partners.

Narrow Lists to Identify Set of Areas of Interest 2

In order to select a sufficiently large area, ACS 2009-13 population data was used to select multiple contiguous counties around the areas selected.

Construct Contiguous Area 4

2016 Community Selection Process

Community Total Population (2015)

Median Household

Income (2015)

% of Pop. Below Poverty Line

(2015)*

Mississippi Delta Community 79,093 $32,198 29%

Montgomery-Lowndes Community 238,964 $45,483 23%

Bronx-Brooklyn Community 310,797 $37,648 31%

Sources: U.S. Census Bureau(2014); CDC (2012); New York City Department of Health and Mental Hygiene(2015)

* In 2015, National average percentage of population below the poverty line was 15%. The National median household income was $53,889.

Communities with 2015 Baseline

1 No existing data sources for measuring consumption in small geographies.

3 Nielsen Scantrack is (1) based on data from a small, unrepresentative samples of stores, and (2) does not include small independent stores, restaurants/fountain, and vending/other channels.

2 Company shipment data does not include sales for (1) brands of non-Agreement companies; (2) some Agreement company warehouse brands; and (3) sales by third-party distributors.

Top Data Challenges: Community Level Analysis

246

167

0

100

200

300

Little RockCommunity

Eastern L.A.Community

2014 National: 199.0

265 244

111

0

100

200

300

Montgomery-Lowndes

Community

MississippiDelta

Community

Bronx-BrooklynCommunity*

2015 National: 198.7

* Bronx-Brooklyn Community is likely biased downward due to data limitations Sources: Company-Reported Volumes and Nielsen Scantrack

LRB Calories Per Person Per Day Baseline for Communities & National Average

2015 BASELINE 2014 BASELINE

Baseline Estimate: Calorie Consumption

38 35

0

10

20

30

40

50

Montgomery-Lowndes

Community

Mississippi DeltaCommunity

31

24

0

10

20

30

40

50

Little RockCommunity

Eastern L.A.Community

2014 National: 34

2015 National: 35

LRB Volumes, in Ounces, Per Person Per Day Baseline for Communities & National Average

Bronx-Brooklyn Community excluded due to data limitations Sources: Company-Reported Volumes and Nielsen Scantrack

2015 BASELINE 2014 BASELINE

Baseline Estimate: Volume Consumption

55 56

0

25

50

75

100

Montgomery-Lowndes

Community

Mississippi DeltaCommunity

63 55

0

25

50

75

100

Little RockCommunity

Eastern L.A.Community

LRB Calories Per 8-Ounce Serving Baseline for Communities & National Average

2014 National: 47

2015 National: 46

Bronx-Brooklyn Community excluded due to data limitations Sources: Company-Reported Volumes and Nielsen Scantrack

2015 BASELINE 2014 BASELINE

Baseline Estimate: Calories Per Serving

Sources: Company-Reported Volumes and Nielsen Scantrack, 2014 and 2015

-0.2%

0.4%

-2.6% -3%

-2%

0%

2%

3%

Little Rock Community

Eastern L.A. Community National

Percent Change in LRB Calories Per Person Per Day Change from 2014 Baseline

Changes from 2014 Baseline: LRB Calorie Consumption

“Test and Learn”

Los Angeles

Community

Total Number of

Stores (includes Grocery,

Convenience, Drug, Dollar, Club,

and Bodega)

Total Number of Restaurants

Total Number of

Large Grocery

Stores

Total Number of Medium

Grocery Stores

Total Number of Club/Mass

Merchandisers

Total Number of Other Small Food Stores

Total Number of Restaurants

Not Serviced by Any Company

Total Number of Food Stores

Not Serviced by Any Company

Los Angeles 459 392 13 - 1 445 142 91

LR 221 184 11 - 2 208 19 22

NYC 900 535 0 17 0 883 250 240

AL 216 336 13 - 5 198 Analysis not conducted Analysis not conducted

MS 117 95 6 - 2 109 Analysis not conducted Analysis not conducted

# Stores & Restaurants

10 years

Test and Learn Research and Development

Marketing

Consumer Behavior Change

Sustainability