1. Formulating Gluten-free Baked Goods Sunday, October 6, 2013 Smarter Ingredients…Smarter Solutions NASDAQ: PENX

2. Smarter Ingredients…Smarter Solutions 2 Why Gluten-free  Health Conditions  Celiac Disease = an autoimmune disorder one in 133 in U.S./Canada one in 100 in the UK one in 200 in Germany one in 300 in Europe  Wheat Allergy/Intolerance/Sensitivity  ADD/ADHD  Autism

3. Smarter Ingredients…Smarter Solutions 3 Why Gluten-free  Globally, 15 million consumers are gluten-intolerant  3 million U.S. consumers remain undiagnosed  6% to 8% of U.S. population  U.S. gluten-free market = $4.2B 1  U.S. growth = $6.2B by 2018 2  Gluten-free was one of the top 10 culinary trends for 20113 Sources: (1) Packaged Facts, 2012 (2) Markets and Markets, 2013(3) National Restaurant Association, 2010

4. Smarter Ingredients…Smarter Solutions 4 What is Gluten?  Gluten is a composite of the proteins gliadin and glutenin  These proteins, along with starch, are found in the endosperm of cereal grains such as wheat, rye and barley  Primary market segments that contain gluten:  Baked goods - breads, pastries, waffles, cookies, cakes, doughnuts, bagels  Pasta  Snacks - crackers, biscuits

5. Smarter Ingredients…Smarter Solutions 5 Gluten-free Challenges  Viscosity and Elasticity  Dough = more batter-like  Finished bread = dense texture  Stabilization and Texture  No structure = crumbly, no body  Minimal water holding = short shelf-life = staling  Leavening  No cell formation = dense  Gluten-free Certification  Gluten-free foods made from certified gluten-free  National Foundation for Celiac Awareness Resource for gluten-free training and certification

6. Smarter Ingredients…Smarter Solutions 6 Gluten-free Ingredients Primary Flours Specialty Flours StarchesProteinFiberHydrocolloids Brown RiceAmaranthCorn BambooCellulose RiceBuckwheatPeaEggBranGuar SorghumChiaPotatoHempChiaKonjac TapiocaLegumeRiceLegumeFlaxPectin Waxy RiceMilletTapiocaPeaInulinTara NutSoyPsylliumXanthan QuinoaWheyResistant Starch TeffSugarcane Vegetable

7. Smarter Ingredients…Smarter Solutions 7 Generation One: Gluten Replacement  Market Need  No trace of gluten in the formulation—less than 20 ppm  Texture/quality equal to or better than gluten-containing products  Non-allergenic No soy, wheat, corn, egg, dairy  Same product availability as gluten-containing products

8. Smarter Ingredients…Smarter Solutions 8 Starches Used in Gluten-free Baking  Native Starch  Potato, rice, tapioca, corn  Use level: 5%-50%  Provides structure  Clean label  Modified Food Starch  Use level: 15%-30%  Provides structure and volume  Improves shelf life  Pregelatinized Starch  Use level: 5%-10%  Provides raw dough viscosity  Improves resilience and chew to the cooked dough  Improves texture

9. Smarter Ingredients…Smarter Solutions 9 Generation Two: Gluten-free Nutrition  Market Need  Nutritionally balanced  Non-allergenic  Minimal reformulation efforts  No gluten  Good tasting products  No off-flavors  Shelf-life  Functionality  Solution  Use varying fortification and enrichment techniques

10. Smarter Ingredients…Smarter Solutions 10 Gluten-free Nutrition Enhancement Trends  Whole Grain/Flours  Teff, amaranth, quinoa, chia, sorghum, brown rice, buckwheat, millet  Proteins  Soy, pea, rice, corn, whey, legumes  Oils  Flax, fish, algal, soy, canola, phytosterols  Fibers  Brans, gums, specialty soluble fibers, resistant starches

11. Smarter Ingredients…Smarter Solutions 11 Gluten-free Dietary Fiber  Rice bran  Protein & fiber  Sugar cane  Inulin  Chicory, agave or Jerusalem artichoke-based  Bamboo  Psyllium  Flax  Protein, fiber, calcium, Omega-3, vitamin & minerals  Resistant starch  Potato & tapioca-based

12. Smarter Ingredients…Smarter Solutions 12 Gluten-free Muffins with Resistant Starch Ingredient(%) Milk39.83 Eggs20.13 Butter14.29 Gluten-free flour blend14.00 Sugar5.25 Modified Food Starch5.60 Baking powder0.61 Baking soda0.17 Salt0.06 Xanthan gum0.06 Total100.00

13. Smarter Ingredients…Smarter Solutions 13 Resistant Starches  Description  Contains dietary fiber  Resists digestion and passes through to the large intestine  Some provide prebiotic effects  Low caloric contribution  Derived from varying botanical sources  Soluble and insoluble products  Used in baked goods, snacks, pastas, nutrition bars, smoothies, yogurts, sauces, breakfast cereals, pet food, vegetarian/vegan foods

14. Smarter Ingredients…Smarter Solutions 14 Resistant Starches  Health Benefits  Fiber fortification  Caloric reduction  Digestive health  Glycemic health  Functionality Benefits  High process stability  Improves texture (i.e. crunch, crispiness)  Bland taste/ smooth mouth-feel  Good tolerance

15. Smarter Ingredients…Smarter Solutions 15 Resistant Starches  Insoluble resistant starch benefits  Low water binding capacity  Higher fiber content  Soluble resistant starch benefits  Binds water  Cook-up and instant varieties

16. Smarter Ingredients…Smarter Solutions 16 Resistant Starches  Packaging Claims  Nutrient content claims Good or high source of fiber Contains fiber Reduce/less calorie Reduce/less sugar  Structure/function claims Dependent on effective dose proven by clinical research Potato and tapioca favored in the community– NON-ALLERGENIC

17. Smarter Ingredients…Smarter Solutions 17 Thank You Penford Food Ingredients www.penford.com Jennifer Williams Senior Applications Scientist jwilliams@penford.com (303) 643-1699 Booth # 1922 Monday: Fiber enriched gluten-free cheddar scone Wednesday: Gluten-free apple empanada

18. Smarter Ingredients…Smarter Solutions 18