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The document discusses trends in fruit and vegetable consumption in the United States based on data from The NPD Group. It finds that total fruit and vegetable consumption has declined 7% over the last 5 years. Fruit juice consumption saw the largest decline, dropping 14% since 2009, primarily driven by declines in orange, apple, and berry juices consumed at breakfast. Vegetable consumption also declined, with staple side dishes like lettuce and green beans seeing the biggest drops. However, consumption of some fresh fruits and vegetables, as well as ingredients used in main dishes, has increased. Younger age groups and working women/families eat more fruits and vegetables, while consumption among seniors has significantly decreased.

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The NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and Confidential Copyright 2014. The NPD Group, Inc. All Rights Reserved. This presentation is Proprietary and Confidential and may not be disclosed in any manner, in whole or in part, to any third party without the express written consent of NPD. Copyright 2014. The NPD Group, Inc. All Rights Reserved. This presentation is Proprietary and Confidential and may not be disclosed in any manner, in whole or in part, to any third party without the express written consent of NPD. State of the Plate: Fruit & Vegetable Consumption Trends March 2015
The NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and Confidential Trends in Fruits & Vegetables Consumption 2
The NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and Confidential Is Fruit & Vegetable Consumption Growing? 3
The NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and Confidential 736 710 706 726 740 746 733 730 729 714 697 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Trend in Total Fruit & Vegetable Consumption (Annual Eatings Per Capita) -7% over the last 5 years Both categories are declining… 4
The NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and Confidential 427 431 402 2004 2009 2014 Total Vegetables 187 204 201 2004 2009 2014 Total Fruit Excl. Juice 123 111 96 2004 2009 2014 Fruit Juice But the decline in fruit is primarily driven by fruit juice. -2% -14% -7% Trend in Fruit vs. Vegetable Consumption (Annual Eatings Per Capita) 5
The NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and Confidential 9 16 51 Berry/Combo Juice Apple Juice Orange Juice Fruit Juice: 12 13 14 24 32 46 Grapes Melons Oranges Berries Apples Bananas Total Fruit: Top Fruit/Fruit Products Consumed (Annual Eatings Per Capita) The large juices are driving the decline while the larger non-juice forms are growing. DRIVING GROWTH (Pt.  ’14 vs. ‘09) Berries (+4 vs. 2009) Bananas (+2 vs. 2009) DRIVING DECLINES (Pt.  ’14 vs. ‘09) Orange Juice (-6 vs. 2009) Apple Juice (-2 vs. 2009) Berry Juice (-2 vs. 2009) 96 AEPC (-14%, ‘14 vs. ‘09)196 AEPC (-2%, ‘14 vs. ‘09) 6
The NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and Confidential Staple side dishes like lettuce, green beans, and corn are leading the decline in consumption. 25 28 29 39 44 69 75 Green Beans Corn Carrots Tomatoes (Excl. Cherry) Onions Lettuce/Vegetable Salads Potatoes Top Vegetable/Vegetable Products Consumed (Annual Eatings Per Capita) DRIVING GROWTH (Pt.  ’14 vs. ‘09) DRIVING DECLINES (Pt.  ’14 vs. ‘09) Carrots (+1 vs. 2009) Lettuce/Salad (-9 vs. 2009) Spinach (+1 vs. 2009) Green Beans (-4 vs. 2009) Avocado (+1 vs. 2009) Corn (-4 vs. 2009) Kale (+1 vs. 2009) Onions (-3 vs. 2009) Mixed Veg (-3 vs. 2009) Total Vegetables: 402 AEPC (-7%, ‘14 vs. ‘09) 7
The NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and Confidential 44.9% 33.6% 84 '85 '86 '87 '88 '89 '90 '91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 11 12 13 14 Beef/Pork/Poultry/Seafood (% of In-Home Main Dishes at Dinner that included a piece of Meat/Poultry/Seafood) The days of animal meat as the main entrée are fading. 8
The NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and Confidential 1 -8 -5 2004 vs. 2014: +20 AEPC 2004 vs. 2014: +8 AEPC Vegetables Fruits FRESH PROCESSED FROZEN HOMEGROWN DRIED 5 Year Trend by Form (Point Diff. in Annual Eatings Per Capita, 2009 vs. 2014) Store fresh fruits and vegetables have both grown. JUICE 6 -2 -2 -2 -14 N/C N/C N/C N/C PROCESSED FROZEN HOMEGROWN DRIED JUICEFRESH 9
The NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and Confidential 119 111 2009 2014 Lunch Total In-Home & Away-From-Home Prepared Vegetables (Annual Eatings Per Capita) 292 269 2009 2014 Dinner -8% vs. ‘09 -7% vs. ‘09 Dinner and lunch are driving the decline in vegetables. 10
The NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and Confidential Dish Position for Total In-Home Vegetables (Annual Eatings Per Capita) 173 182 172 2004 2009 2014 Side Dish (-5% vs. ‘09) 85 94 97 2004 2009 2014 Used as an Add/Ing to a Main Dish 40 40 37 2004 2009 2014 Eaten "as is“ as part of Main Dish (+3% vs. ‘09) (-8% vs. ‘09) Most vegetables are eaten as a side dish but this behavior is declining. Ingredient usage has grown. 11
The NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and Confidential 1.79 1.59 '85 '86 '87 '88 '89 '90 '91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 Number of Side Dishes Served When a Side Dish is Present at Dinner The number of side dishes served at an in-home dinner meal is at an all time low. 12
The NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and Confidential 55 60 59 27 27 20 2004 2009 2014 (-2% vs. ’09)Carried/Snack (-26% vs. ’09)Dessert Fruit consumed either as a side dish or main dish has grown, while that eaten as a dessert has lost favor. 41 50 56 28 32 36 2004 2009 2014 (+10% vs. ’09)Side Dish (+13% vs. ’09)Main Dish Dish Position for Total Fruit Excl. Juice (Annual Eatings Per Capita) 13
The NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and Confidential 67% of Fruit Juice is consumed at the breakfast occasion, which has the largest declines (-16% vs. 2009). Daypart Consumption of Total Fruit Excl. Juice (Annual Eatings Per Capita) Fruit is up both at breakfast and as a snack, but these gains are offset by losses at both lunch & dinner. -8% vs. ‘09-10% vs. ‘09 56 61 56 2004 2009 2014 Lunch 38 39 35 2004 2009 2014 Dinner +5% vs. ‘09 53 61 64 2004 2009 2014 Breakfast +5% vs. ‘09 (driven by a.m. snacking) 40 43 45 2004 2009 2014 Snacks 14
The NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and Confidential 26% 13% 6% Morning Occasions Lunch Occasions Dinner Occasions Percent of Occasions Motivated Primarily By Health Health motivations are most prevalent in the morning, fueling fruit’s growth at breakfast and morning snack. 15
The NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and Confidential 15% 13% 10% 8% 5% 5% 5% 4% 4% 3% 1. Candy 2. Fruit 3. Gum 4. Chips 5. Breath Mints/Strips 6. Ice Cream 7. Nuts 8. Cookies 9. Bars 10. Crackers Top Snack Foods Eaten as a Between-Meal-Snack (% Eatings) Fruit is the second most popular snack so should benefit from the changing mindset on snacking. 16
The NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and Confidential 250 270 290 310 330 350 370 390 410 430 '06 '07 '08 '09 '10 '11 '12 '13 Better-For-You Snacks + 14% vs. 2006 Sweet Snacks - 6% vs. 2006 Savory Snacks + 3% vs. 2006 Better-For-You Snack Foods is the growth area. Ready-to-Eat Snack Foods (Annual Eatings Per Person) 17
The NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and Confidential In summary, changes in fruit and vegetable consumption have been driven by several factors: Losses for … • In-home • Processed/Canned Fruit, Homegrown • Lunch, Dinner, Dessert Use Fruit Juice: -14% vs. 2009, driven by breakfast -30 AEPC vs. ‘09 (-7%)-4 AEPC vs. ‘09 (-2%) Losses for … • In-home and Away-from-home • Lettuce/Salad, Green Beans, Corn, Onions, Mixed Vegetables • Processed/Canned, Homegrown • Dinner, Lunch • Side Dish Use • Eaten “As Is” Total Fruits Total Vegetables Gains for … • Berries, Bananas • Store Fresh Fruit • Breakfast, Snack (Morning Snack) • Side Dish Fruit, Main Dish Fruit Gains for … • Store Fresh Vegetables • Additive/Ingredient use in Main Dishes 18
The NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and Confidential Consumer Demographics 19
The NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and Confidential 364 374 376 351 358 374 439 487 378 384 418 456 489 < 6 6-12 13-17 18-34 35-44 45-54 55-64 65+ 18-34 35-44 45-54 55-64 65+ Total Fruit excl. Juice Total Vegetables 305 227 180 128 130 135 199 267 172 171 196 238 296 < 6 6-12 13-17 18-34 35-44 45-54 55-64 65+ 18-34 35-44 45-54 55-64 65+ Adult Males Adult Females Adult Males Adult Females Individual Age of Eater (annual eatings per capita) Fruit juice age of eater is similar to Total Fruit Excl. Juice. 20
The NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and Confidential -80 -60 -40 -20 0 Females 65+ Females 55-64 Females 45-54 Females 35-44 Females 18-34 Males 65+ Males 55-64 Males 45-54 Males 35-44 Males 18-34 13-17 6-12 <6 Total Vegetables -75 -50 -25 0 25 50 Females 65+ Females 55-64 Females 45-54 Females 35-44 Females 18-34 Males 65+ Males 55-64 Males 45-54 Males 35-44 Males 18-34 13-17 6-12 <6 Fruit Excl. Juice -50 -25 0 Females 65+ Females 55-64 Females 45-54 Females 35-44 Females 18-34 Males 65+ Males 55-64 Males 45-54 Males 35-44 Males 18-34 13-17 6-12 <6 Fruit Juice Trend of Individual Age of Eater (Pt. Diff. in Annual Eatings Per Capita, 2009 vs. 2014) 21
The NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and Confidential Total Fruits (including juice) -56 -17 -14 -36 -64 Singles Working Women Traditional Families Empty Nester Seniors 65+ Total Vegetables Singles Working Women Traditional Families Empty Nester Seniors 65+ -29 23 24 -28 -66 Trend by Lifecycle (2009 vs. 2014 Point Difference in Annual Eatings Per Capita) Working Women/Traditional Family HH’s are consuming more fruit per capita over time. Older consumers declining. Greatest declines for fruit juice led by Seniors 22
The NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and Confidential 348 394 387 475 473 118 158 211 270 259 62 86 91 98 96 Fruit Juice Total Fruit excl Juice Total Vegetables Consumption by NET® Segment (Annual Eatings Per Capita) Natural Health Embracers and Traditional Health Followers consume the most while Short Cut Fuelers consume the least. Health Strugglers Natural Health Embracers Trad’l Health Followers Family Pleasers Short Cut Fuelers 23
The NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and Confidential -26 -19 -58 -60 -44 Total Vegetables 2 1 -38 -38 -26 Trend by NET® Segment (2009 vs. 2014 Point Difference in Annual Eatings Per Capita) Natural Health Embracers and Health Strugglers have shown the greatest declines in fruit & vegetables over time. Greatest declines for fruit juice led by Health segments. Health Strugglers Natural Health Embracers Trad’l Health Followers Family Pleasers Short Cut Fuelers Total Fruits (incl. Juice) Health Strugglers Natural Health Embracers Trad’l Health Followers Family Pleasers Short Cut Fuelers +2 +1 24
The NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and Confidential The Future of Fruits & Vegetables 25
The NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and Confidential TREND EFFECT NPD’s Cohort Aging Analysis & Forecast: POPULATION EFFECT AGING EFFECT GENERATIONAL EFFECT 5 or 10 Year Forecast Identify opportunities & risks associated with changing consumer behavior before they occur. 26
The NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and Confidential 1. TREND EFFECT 427 431 402 309 315 296 187 204 201 175 183 183 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Trend of Total Fruit & Vegetable Consumption (Annual Eatings Per Capita) ‘04 vs. ’14: -7% ‘04 vs. ’14: - 5% ‘04 vs. ’14: +7% ‘04 vs. ’14: +3% Total Vegetables Total Fruit Total Fruit Excl. Juice Total Fresh Vegetables 27
The NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and Confidential 2. POPULATION EFFECT 364 374 376 365 372 397 448 488 305 227 180 152 153 167 220 282 158 119 107 83 73 76 92 115 < 6 6-12 13-17 18-34 35-44 45-54 55-64 65+ Total Vegetables Total Fruit Excl. Juice Fruit Juice -20% 0% 20% 40% 60% 0 3 6 9 12 15 18 21 24 27 30 33 36 39 42 45 48 51 54 57 60 63 66 69 72 75 78+ Overall Growth- 2019 vs. Today Percent Change in Population by Age Trend of Total Fruit & Vegetables Project Eatings (Annual Eatings Per Capita) 28
The NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and Confidential 3. AGING EFFECT Aging Curve (Annual Eatings Per Capita) 0.00 100.00 200.00 300.00 400.00 500.00 600.00 700.00 LT1 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 - 1,000,000 2,000,000 3,000,000 4,000,000 5,000,000 6,000,000 Age of Eater Pop '19 Pop '14 Total Vegetables Total Fruit 29
The NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and Confidential 0-9 10-19 20-29 30-39 40-49 50-59 60-69 70+ Total Fruits (AEPC Indexed to Total) 2004 2014 102 111 83 100 73 76 77 84 82 81 107 95 140 124 190 149 0-9 10-19 20-29 30-39 40-49 50-59 60-69 70+ Total Vegetables (AEPC Indexed to Total 2004 2014 67 75 88 95 84 92 92 97 104 98 117 108 138 122 147 124 4. GENERATIONAL EFFECT 30
The NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and Confidential 3.8% 3.9% 0.8% -0.9% Forecasted Impact of the Cohort Effects (over the next 5 years) Overall Population effect Age Effect Trend Effect What is the forecast for Total Fruit consumption? AEPC 296 289 289 85,887,414 91,505,701 95,002,270 2004 2014 2019 Total Fruit (Actual and Projected Annual Eatings) % Change today vs. 10 years ago: +6.5% % Change forecast vs. today: +3.8% Fruit consumption will stay on par with population growth. 31
The NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and Confidential 85,887,414 91,505,701 95,002,270 2004 2014 2019 Total Fruit (Actual and Projected Annual Eatings) AEPC 296 289 289 % Change today vs. 10 years ago: +6.5% % Change forecast vs. today: +3.8% What is the forecast for Fruit consumption when Juice is excluded? 51,367,840 61,094,398 66,690,699 2004 2014 2019 Total Fruit Excl. Juice (Actual and Projected Annual Eatings) % Change today vs. 10 years ago: +18.9% % Change forecast vs. today: +9.2% AEPC 177 193 203 32
The NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and Confidential 4.3% 3.9% 1.4% -0.9% Forecasted Impact of the Cohort Effects (over the next 5 years) Overall Population effect Age Effect Trend Effect What is the forecast for Total Vegetable consumption? AEPC 411 393 395 119,304,506 124,398,668 129,800,889 2004 2014 2019 Total Vegetables (Actual and Projected Annual Eatings) % Change today vs. 10 years ago: +4.3% % Change forecast vs. today: +4.3% Vegetable consumption will slightly outpace population growth. 33
The NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and Confidential AEPC 411 393 395 119,304,506 124,398,668 129,800,889 2004 2014 2019 Total Vegetables (Actual and Projected Annual Eatings) % Change today vs. 10 years ago: +4.3% % Change forecast vs. today: +4.3% What is the forecast for Fresh Vegetable consumption? 48,829,851 55,888,416 60,052,259 2004 2014 2019 Total Fresh Vegetables (Actual and Projected Annual Eatings) % Change today vs. 10 years ago: +14.5% % Change forecast vs. today: +7.5% AEPC 168 177 183 34
The NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and Confidential What to Focus on Next 35
The NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and Confidential What to focus on next: 1. Reposition Fruits & Vegetables 2. Extend Partnerships 3. Remember Pricing Strengths 4. Advance Away-From-Home Opportunities 36
The NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and Confidential Reposition Fruits and Vegetables Your core essence regarding health has lost meaning in the world of health. 1. 37
The NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and Confidential 0-9 10-19 20-29 30-39 40-49 50-59 60-69 70+ Total Fruits (AEPC Indexed to Total) 2004 2014 102 111 83 100 73 76 77 84 82 81 107 95 140 124 190 149 0-9 10-19 20-29 30-39 40-49 50-59 60-69 70+ Total Vegetables (AEPC Indexed to Total 2004 2014 67 75 88 95 84 92 92 97 104 98 117 108 138 122 147 124 4. GENERATIONAL EFFECT 38
The NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and Confidential The decline in fruit & vegetable is being driven by ‘health’ oriented consumers. 2% 5% -16% -12% -12% -5% -1% -14% -9% -7% Trend by NET® Segment (2009 vs. 2014 % Difference in Annual Eatings Per Capita) Health Strugglers Natural Health Embracers Trad’l Health Followers Family Pleasers Short Cut Fuelers Health Strugglers Natural Health Embracers Trad’l Health Followers Family Pleasers Short Cut Fuelers Total Vegetables Total Fruits (incl. Juice) 39
The NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and Confidential Summary of NET® Segment Descriptions: o Driven by convenience o Tend to repetitively eat same foods o Least likely to try new foods o 45+, No kids <18 in HH o Lower income o Tend to have health condition Health Strugglers o Driven by health and nutrition o Not driven by convenience o Prefers natural/herbal remedies o Preferences for organic foods o Younger, female o Lower income o Less to report health condition Natural Health Embracers o Driven by health & nutrition o Like to try new foods o Less sensitive to food prices o Older 65+ o Upper income o Educated o Tend to have health condition Trad’l Health Followers Short Cut Fuelers o Lives are hectic & rushed o Driven by convenience o View food as just “fuel” o Skews male o Less concern w/ price, health Family Pleasers o Influenced by kids o Focus on pleasing the family o Lives feel hectic & rushed o Tend to be females 18-34 o Food choices not driven by health/convenience 40
The NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and Confidential LUNCH ■ Easy to prepare ■ Quick to clean up ■ Make quickly ■ Didn’t cost a lot ■ Could eat quickly ■ My favoriteDINNER ■ Taste ■ Easy to prepare ■ Fills me up ■ Something everyone likes ■ Requires little planning ■ Quick to clean up MORNING ■ Easy to prepare ■ Routine ■ Taste ■ Fills me up ■ Requires little planning ■ Make quickly Top Motivations Driving Food and Beverage Selections At-Home and Away-from-Home Combined Your positioning must differentiate in health and meet broader needs of the occasion. 41
The NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and Confidential 3. AGING EFFECT Aging Curve (Annual Eatings Per Capita) 0.00 100.00 200.00 300.00 400.00 500.00 600.00 700.00 LT1 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 - 1,000,000 2,000,000 3,000,000 4,000,000 5,000,000 6,000,000 Age of Eater Pop '19 Pop '14 Total Vegetables Total Fruit 42
The NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and Confidential DRIVER BARRIERTRUTH I wish… I hate...
The NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and Confidential Extend Partnerships Continue to work with core partners who can use your help… but also look to new partnerships. 2. 44
The NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and Confidential • Poultry Entrees • Sandwiches • Beef Entrees • Fruit Eaten “As Is” • Bread • Rice • RTE Cereal • Poultry Entrees • Eggs/Omelettes • Vegetables & Legumes • Potatoes • Salads MAIN DISHES SIDE DISHES MAIN DISHES SIDE DISHES Accompaniments to Vegetables Eaten “as is” Accompaniments to Fruit Excl. Juice Eaten “as is” Overdeveloped Accompaniments to Vegetables and Fruit Eaten “As Is” (Based on Index >120) Main dish affinities to vegetables tend to be dinner oriented items while breakfast foods such as cereal and eggs are popular accompaniments to fruit. 45
The NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and Confidential Top Host Foods to Add/Ing Total Vegetables: Salads 26 AEPC, -18% (2009 vs. 2014) Sandwiches 24 AEPC, -7% Hmde Variety Dishes 16 AEPC, +3% Italian Dishes 15 AEPC, -4% Top Host Foods to Add/Ing Fruit Excl. Juice: RTE Cereal 8 AEPC, -11% (2009 vs. 2014) Hot Cereal 5 AEPC, N/C Salads 4 AEPC, -14% Top Host Foods to Additive/Ingredient Total Vegetables and Fruit Excl. Juice (% Eatings) 35% of Total Vegetables are used as an Additive/Ingredient to another dish 17% of Total Fruit Excl. Juice is used as an Additive/Ingredient to another dish However, usage in these key host foods are declining and can use your help. 46
The NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and Confidential 12.5 10.7 9.6 9.0 8.3 7.0 6.7 6.2 6.1 5.3 1. Yogurt 2. Bottled Water 3. Pizza 4. Poultry Sandwiches 5. Mexican Food 6. Fresh Fruit 7. Bars 8. Frozen Sandwiches 9. Chips 10. Pancakes Top Ten Foods/Beverages that are Part of More American Diets (Pt. Change in % of Americans Consuming At Least Once in Two Weeks) And while our diet changes slowly, there are shifts happening.In addition, you may want to look to these new partners that have enjoyed solid growth during the past decade. 2014 vs. 2004 47
The NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and Confidential Remember Your Pricing Strengths Think broader about your pricing decisions. 3. 48
The NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and Confidential 23.4 ’30s ’40s ’50s ’60s ’70s ’80s ’90s 1929 2012 Food Spending as Percent of U.S. Disposable Personal Income ’00s 10.0 We do not let food costs rise faster than our incomes. 9.5 9.7 9.7 9.8 10.0 2008 2009 2010 2011 2012 49
The NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and Confidential Cost of Average Meal per Eater Restaurant meals cost more than those made at home. $6.96 $2.24 Purchased at Restaurant Made in-home 50
The NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and Confidential $4.62 $5.25 $5.89 $6.48 $6.96 $1.44 $1.60 $1.93 $2.08 $2.24 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Average Cost of Restaurant Meal per Person Average Cost of Meal Made In-Home per Person Trended Cost of Average Meal per Eater Has your pricing outpaced the cost of away from home meals to garner a larger share of wallet? 51
The NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and Confidential Advance Away- From-Home Opportunities Focus primarily on home but efforts to increase presence at Foodservice are still needed. 4. 52
The NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and Confidential 32% 64% 49% 21% 12% 22% 27% 14% 9% Fast Food Family/Coffee Shp Highr Pricd Rest. School % of Indiv. Who Visit in 2 wks % of Indiv. Who Consume AFH Fruit/Veg in 2 wks Away-From-Home Sources of Fruits and Vegetables (2 week % Penetration) Fast Food presents an opportunity for growth. Opportunity 53
The NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and Confidential (Share of Traffic) 19% 9% 14% 20% 22% 16% Most likely to have kids Notable cut backs continued for consumers 25-49, while visits increased for those 65+ 146 178 216 215 219 200 149 193 206 205 215 204 150 188 200 191 213 219 Under 18 18-24 25-34 35-49 50-64 65+ YE Nov'12 YE Nov'13 YE Nov'14 Restaurant Meals and Snack Occasions Per Capita 54
The NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and Confidential 6% 6% 9% 8% 7% QSR YE Nov'14 Traffic 0% YE Nov'10 YE Nov'11 YE Nov'12 YE Nov'13 YE Nov'14 0% 1% 1% 0% 1% -1% 0% 1% 0% 0% F.C. Unit PCYA 4% 6% 7% 7% 6% Fast Casual is the only QSR segment that has shown consistent growth year over year. QSR excluding Retail and Fast Casual (77%) Retail (17%) C-Stores Morning Meal Fast Casual (6%) 47% CTG Traffic % Change vs. Year Ago 55
The NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and Confidential In summary, there has never been a better time to be in the fruit and vegetable business: The demographics are favorable There is a consumer need Though fighting inertia…advanced innovation and marketing can pay big dividends 56
The NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and Confidential Sometimes it’s hard to see! Joe.Derochowski@npd.com 57

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NPD Presentation

  • 1. The NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and Confidential Copyright 2014. The NPD Group, Inc. All Rights Reserved. This presentation is Proprietary and Confidential and may not be disclosed in any manner, in whole or in part, to any third party without the express written consent of NPD. Copyright 2014. The NPD Group, Inc. All Rights Reserved. This presentation is Proprietary and Confidential and may not be disclosed in any manner, in whole or in part, to any third party without the express written consent of NPD. State of the Plate: Fruit & Vegetable Consumption Trends March 2015
  • 2. The NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and Confidential Trends in Fruits & Vegetables Consumption 2
  • 3. The NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and Confidential Is Fruit & Vegetable Consumption Growing? 3
  • 4. The NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and Confidential 736 710 706 726 740 746 733 730 729 714 697 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Trend in Total Fruit & Vegetable Consumption (Annual Eatings Per Capita) -7% over the last 5 years Both categories are declining… 4
  • 5. The NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and Confidential 427 431 402 2004 2009 2014 Total Vegetables 187 204 201 2004 2009 2014 Total Fruit Excl. Juice 123 111 96 2004 2009 2014 Fruit Juice But the decline in fruit is primarily driven by fruit juice. -2% -14% -7% Trend in Fruit vs. Vegetable Consumption (Annual Eatings Per Capita) 5
  • 6. The NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and Confidential 9 16 51 Berry/Combo Juice Apple Juice Orange Juice Fruit Juice: 12 13 14 24 32 46 Grapes Melons Oranges Berries Apples Bananas Total Fruit: Top Fruit/Fruit Products Consumed (Annual Eatings Per Capita) The large juices are driving the decline while the larger non-juice forms are growing. DRIVING GROWTH (Pt.  ’14 vs. ‘09) Berries (+4 vs. 2009) Bananas (+2 vs. 2009) DRIVING DECLINES (Pt.  ’14 vs. ‘09) Orange Juice (-6 vs. 2009) Apple Juice (-2 vs. 2009) Berry Juice (-2 vs. 2009) 96 AEPC (-14%, ‘14 vs. ‘09)196 AEPC (-2%, ‘14 vs. ‘09) 6
  • 7. The NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and Confidential Staple side dishes like lettuce, green beans, and corn are leading the decline in consumption. 25 28 29 39 44 69 75 Green Beans Corn Carrots Tomatoes (Excl. Cherry) Onions Lettuce/Vegetable Salads Potatoes Top Vegetable/Vegetable Products Consumed (Annual Eatings Per Capita) DRIVING GROWTH (Pt.  ’14 vs. ‘09) DRIVING DECLINES (Pt.  ’14 vs. ‘09) Carrots (+1 vs. 2009) Lettuce/Salad (-9 vs. 2009) Spinach (+1 vs. 2009) Green Beans (-4 vs. 2009) Avocado (+1 vs. 2009) Corn (-4 vs. 2009) Kale (+1 vs. 2009) Onions (-3 vs. 2009) Mixed Veg (-3 vs. 2009) Total Vegetables: 402 AEPC (-7%, ‘14 vs. ‘09) 7
  • 8. The NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and Confidential 44.9% 33.6% 84 '85 '86 '87 '88 '89 '90 '91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 11 12 13 14 Beef/Pork/Poultry/Seafood (% of In-Home Main Dishes at Dinner that included a piece of Meat/Poultry/Seafood) The days of animal meat as the main entrée are fading. 8
  • 9. The NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and Confidential 1 -8 -5 2004 vs. 2014: +20 AEPC 2004 vs. 2014: +8 AEPC Vegetables Fruits FRESH PROCESSED FROZEN HOMEGROWN DRIED 5 Year Trend by Form (Point Diff. in Annual Eatings Per Capita, 2009 vs. 2014) Store fresh fruits and vegetables have both grown. JUICE 6 -2 -2 -2 -14 N/C N/C N/C N/C PROCESSED FROZEN HOMEGROWN DRIED JUICEFRESH 9
  • 10. The NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and Confidential 119 111 2009 2014 Lunch Total In-Home & Away-From-Home Prepared Vegetables (Annual Eatings Per Capita) 292 269 2009 2014 Dinner -8% vs. ‘09 -7% vs. ‘09 Dinner and lunch are driving the decline in vegetables. 10
  • 11. The NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and Confidential Dish Position for Total In-Home Vegetables (Annual Eatings Per Capita) 173 182 172 2004 2009 2014 Side Dish (-5% vs. ‘09) 85 94 97 2004 2009 2014 Used as an Add/Ing to a Main Dish 40 40 37 2004 2009 2014 Eaten "as is“ as part of Main Dish (+3% vs. ‘09) (-8% vs. ‘09) Most vegetables are eaten as a side dish but this behavior is declining. Ingredient usage has grown. 11
  • 12. The NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and Confidential 1.79 1.59 '85 '86 '87 '88 '89 '90 '91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 Number of Side Dishes Served When a Side Dish is Present at Dinner The number of side dishes served at an in-home dinner meal is at an all time low. 12
  • 13. The NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and Confidential 55 60 59 27 27 20 2004 2009 2014 (-2% vs. ’09)Carried/Snack (-26% vs. ’09)Dessert Fruit consumed either as a side dish or main dish has grown, while that eaten as a dessert has lost favor. 41 50 56 28 32 36 2004 2009 2014 (+10% vs. ’09)Side Dish (+13% vs. ’09)Main Dish Dish Position for Total Fruit Excl. Juice (Annual Eatings Per Capita) 13
  • 14. The NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and Confidential 67% of Fruit Juice is consumed at the breakfast occasion, which has the largest declines (-16% vs. 2009). Daypart Consumption of Total Fruit Excl. Juice (Annual Eatings Per Capita) Fruit is up both at breakfast and as a snack, but these gains are offset by losses at both lunch & dinner. -8% vs. ‘09-10% vs. ‘09 56 61 56 2004 2009 2014 Lunch 38 39 35 2004 2009 2014 Dinner +5% vs. ‘09 53 61 64 2004 2009 2014 Breakfast +5% vs. ‘09 (driven by a.m. snacking) 40 43 45 2004 2009 2014 Snacks 14
  • 15. The NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and Confidential 26% 13% 6% Morning Occasions Lunch Occasions Dinner Occasions Percent of Occasions Motivated Primarily By Health Health motivations are most prevalent in the morning, fueling fruit’s growth at breakfast and morning snack. 15
  • 16. The NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and Confidential 15% 13% 10% 8% 5% 5% 5% 4% 4% 3% 1. Candy 2. Fruit 3. Gum 4. Chips 5. Breath Mints/Strips 6. Ice Cream 7. Nuts 8. Cookies 9. Bars 10. Crackers Top Snack Foods Eaten as a Between-Meal-Snack (% Eatings) Fruit is the second most popular snack so should benefit from the changing mindset on snacking. 16
  • 17. The NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and Confidential 250 270 290 310 330 350 370 390 410 430 '06 '07 '08 '09 '10 '11 '12 '13 Better-For-You Snacks + 14% vs. 2006 Sweet Snacks - 6% vs. 2006 Savory Snacks + 3% vs. 2006 Better-For-You Snack Foods is the growth area. Ready-to-Eat Snack Foods (Annual Eatings Per Person) 17
  • 18. The NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and Confidential In summary, changes in fruit and vegetable consumption have been driven by several factors: Losses for … • In-home • Processed/Canned Fruit, Homegrown • Lunch, Dinner, Dessert Use Fruit Juice: -14% vs. 2009, driven by breakfast -30 AEPC vs. ‘09 (-7%)-4 AEPC vs. ‘09 (-2%) Losses for … • In-home and Away-from-home • Lettuce/Salad, Green Beans, Corn, Onions, Mixed Vegetables • Processed/Canned, Homegrown • Dinner, Lunch • Side Dish Use • Eaten “As Is” Total Fruits Total Vegetables Gains for … • Berries, Bananas • Store Fresh Fruit • Breakfast, Snack (Morning Snack) • Side Dish Fruit, Main Dish Fruit Gains for … • Store Fresh Vegetables • Additive/Ingredient use in Main Dishes 18
  • 19. The NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and Confidential Consumer Demographics 19
  • 20. The NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and Confidential 364 374 376 351 358 374 439 487 378 384 418 456 489 < 6 6-12 13-17 18-34 35-44 45-54 55-64 65+ 18-34 35-44 45-54 55-64 65+ Total Fruit excl. Juice Total Vegetables 305 227 180 128 130 135 199 267 172 171 196 238 296 < 6 6-12 13-17 18-34 35-44 45-54 55-64 65+ 18-34 35-44 45-54 55-64 65+ Adult Males Adult Females Adult Males Adult Females Individual Age of Eater (annual eatings per capita) Fruit juice age of eater is similar to Total Fruit Excl. Juice. 20
  • 21. The NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and Confidential -80 -60 -40 -20 0 Females 65+ Females 55-64 Females 45-54 Females 35-44 Females 18-34 Males 65+ Males 55-64 Males 45-54 Males 35-44 Males 18-34 13-17 6-12 <6 Total Vegetables -75 -50 -25 0 25 50 Females 65+ Females 55-64 Females 45-54 Females 35-44 Females 18-34 Males 65+ Males 55-64 Males 45-54 Males 35-44 Males 18-34 13-17 6-12 <6 Fruit Excl. Juice -50 -25 0 Females 65+ Females 55-64 Females 45-54 Females 35-44 Females 18-34 Males 65+ Males 55-64 Males 45-54 Males 35-44 Males 18-34 13-17 6-12 <6 Fruit Juice Trend of Individual Age of Eater (Pt. Diff. in Annual Eatings Per Capita, 2009 vs. 2014) 21
  • 22. The NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and Confidential Total Fruits (including juice) -56 -17 -14 -36 -64 Singles Working Women Traditional Families Empty Nester Seniors 65+ Total Vegetables Singles Working Women Traditional Families Empty Nester Seniors 65+ -29 23 24 -28 -66 Trend by Lifecycle (2009 vs. 2014 Point Difference in Annual Eatings Per Capita) Working Women/Traditional Family HH’s are consuming more fruit per capita over time. Older consumers declining. Greatest declines for fruit juice led by Seniors 22
  • 23. The NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and Confidential 348 394 387 475 473 118 158 211 270 259 62 86 91 98 96 Fruit Juice Total Fruit excl Juice Total Vegetables Consumption by NET® Segment (Annual Eatings Per Capita) Natural Health Embracers and Traditional Health Followers consume the most while Short Cut Fuelers consume the least. Health Strugglers Natural Health Embracers Trad’l Health Followers Family Pleasers Short Cut Fuelers 23
  • 24. The NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and Confidential -26 -19 -58 -60 -44 Total Vegetables 2 1 -38 -38 -26 Trend by NET® Segment (2009 vs. 2014 Point Difference in Annual Eatings Per Capita) Natural Health Embracers and Health Strugglers have shown the greatest declines in fruit & vegetables over time. Greatest declines for fruit juice led by Health segments. Health Strugglers Natural Health Embracers Trad’l Health Followers Family Pleasers Short Cut Fuelers Total Fruits (incl. Juice) Health Strugglers Natural Health Embracers Trad’l Health Followers Family Pleasers Short Cut Fuelers +2 +1 24
  • 25. The NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and Confidential The Future of Fruits & Vegetables 25
  • 26. The NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and Confidential TREND EFFECT NPD’s Cohort Aging Analysis & Forecast: POPULATION EFFECT AGING EFFECT GENERATIONAL EFFECT 5 or 10 Year Forecast Identify opportunities & risks associated with changing consumer behavior before they occur. 26
  • 27. The NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and Confidential 1. TREND EFFECT 427 431 402 309 315 296 187 204 201 175 183 183 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Trend of Total Fruit & Vegetable Consumption (Annual Eatings Per Capita) ‘04 vs. ’14: -7% ‘04 vs. ’14: - 5% ‘04 vs. ’14: +7% ‘04 vs. ’14: +3% Total Vegetables Total Fruit Total Fruit Excl. Juice Total Fresh Vegetables 27
  • 28. The NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and Confidential 2. POPULATION EFFECT 364 374 376 365 372 397 448 488 305 227 180 152 153 167 220 282 158 119 107 83 73 76 92 115 < 6 6-12 13-17 18-34 35-44 45-54 55-64 65+ Total Vegetables Total Fruit Excl. Juice Fruit Juice -20% 0% 20% 40% 60% 0 3 6 9 12 15 18 21 24 27 30 33 36 39 42 45 48 51 54 57 60 63 66 69 72 75 78+ Overall Growth- 2019 vs. Today Percent Change in Population by Age Trend of Total Fruit & Vegetables Project Eatings (Annual Eatings Per Capita) 28
  • 29. The NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and Confidential 3. AGING EFFECT Aging Curve (Annual Eatings Per Capita) 0.00 100.00 200.00 300.00 400.00 500.00 600.00 700.00 LT1 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 - 1,000,000 2,000,000 3,000,000 4,000,000 5,000,000 6,000,000 Age of Eater Pop '19 Pop '14 Total Vegetables Total Fruit 29
  • 30. The NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and Confidential 0-9 10-19 20-29 30-39 40-49 50-59 60-69 70+ Total Fruits (AEPC Indexed to Total) 2004 2014 102 111 83 100 73 76 77 84 82 81 107 95 140 124 190 149 0-9 10-19 20-29 30-39 40-49 50-59 60-69 70+ Total Vegetables (AEPC Indexed to Total 2004 2014 67 75 88 95 84 92 92 97 104 98 117 108 138 122 147 124 4. GENERATIONAL EFFECT 30
  • 31. The NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and Confidential 3.8% 3.9% 0.8% -0.9% Forecasted Impact of the Cohort Effects (over the next 5 years) Overall Population effect Age Effect Trend Effect What is the forecast for Total Fruit consumption? AEPC 296 289 289 85,887,414 91,505,701 95,002,270 2004 2014 2019 Total Fruit (Actual and Projected Annual Eatings) % Change today vs. 10 years ago: +6.5% % Change forecast vs. today: +3.8% Fruit consumption will stay on par with population growth. 31
  • 32. The NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and Confidential 85,887,414 91,505,701 95,002,270 2004 2014 2019 Total Fruit (Actual and Projected Annual Eatings) AEPC 296 289 289 % Change today vs. 10 years ago: +6.5% % Change forecast vs. today: +3.8% What is the forecast for Fruit consumption when Juice is excluded? 51,367,840 61,094,398 66,690,699 2004 2014 2019 Total Fruit Excl. Juice (Actual and Projected Annual Eatings) % Change today vs. 10 years ago: +18.9% % Change forecast vs. today: +9.2% AEPC 177 193 203 32
  • 33. The NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and Confidential 4.3% 3.9% 1.4% -0.9% Forecasted Impact of the Cohort Effects (over the next 5 years) Overall Population effect Age Effect Trend Effect What is the forecast for Total Vegetable consumption? AEPC 411 393 395 119,304,506 124,398,668 129,800,889 2004 2014 2019 Total Vegetables (Actual and Projected Annual Eatings) % Change today vs. 10 years ago: +4.3% % Change forecast vs. today: +4.3% Vegetable consumption will slightly outpace population growth. 33
  • 34. The NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and Confidential AEPC 411 393 395 119,304,506 124,398,668 129,800,889 2004 2014 2019 Total Vegetables (Actual and Projected Annual Eatings) % Change today vs. 10 years ago: +4.3% % Change forecast vs. today: +4.3% What is the forecast for Fresh Vegetable consumption? 48,829,851 55,888,416 60,052,259 2004 2014 2019 Total Fresh Vegetables (Actual and Projected Annual Eatings) % Change today vs. 10 years ago: +14.5% % Change forecast vs. today: +7.5% AEPC 168 177 183 34
  • 35. The NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and Confidential What to Focus on Next 35
  • 36. The NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and Confidential What to focus on next: 1. Reposition Fruits & Vegetables 2. Extend Partnerships 3. Remember Pricing Strengths 4. Advance Away-From-Home Opportunities 36
  • 37. The NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and Confidential Reposition Fruits and Vegetables Your core essence regarding health has lost meaning in the world of health. 1. 37
  • 38. The NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and Confidential 0-9 10-19 20-29 30-39 40-49 50-59 60-69 70+ Total Fruits (AEPC Indexed to Total) 2004 2014 102 111 83 100 73 76 77 84 82 81 107 95 140 124 190 149 0-9 10-19 20-29 30-39 40-49 50-59 60-69 70+ Total Vegetables (AEPC Indexed to Total 2004 2014 67 75 88 95 84 92 92 97 104 98 117 108 138 122 147 124 4. GENERATIONAL EFFECT 38
  • 39. The NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and Confidential The decline in fruit & vegetable is being driven by ‘health’ oriented consumers. 2% 5% -16% -12% -12% -5% -1% -14% -9% -7% Trend by NET® Segment (2009 vs. 2014 % Difference in Annual Eatings Per Capita) Health Strugglers Natural Health Embracers Trad’l Health Followers Family Pleasers Short Cut Fuelers Health Strugglers Natural Health Embracers Trad’l Health Followers Family Pleasers Short Cut Fuelers Total Vegetables Total Fruits (incl. Juice) 39
  • 40. The NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and Confidential Summary of NET® Segment Descriptions: o Driven by convenience o Tend to repetitively eat same foods o Least likely to try new foods o 45+, No kids <18 in HH o Lower income o Tend to have health condition Health Strugglers o Driven by health and nutrition o Not driven by convenience o Prefers natural/herbal remedies o Preferences for organic foods o Younger, female o Lower income o Less to report health condition Natural Health Embracers o Driven by health & nutrition o Like to try new foods o Less sensitive to food prices o Older 65+ o Upper income o Educated o Tend to have health condition Trad’l Health Followers Short Cut Fuelers o Lives are hectic & rushed o Driven by convenience o View food as just “fuel” o Skews male o Less concern w/ price, health Family Pleasers o Influenced by kids o Focus on pleasing the family o Lives feel hectic & rushed o Tend to be females 18-34 o Food choices not driven by health/convenience 40
  • 41. The NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and Confidential LUNCH ■ Easy to prepare ■ Quick to clean up ■ Make quickly ■ Didn’t cost a lot ■ Could eat quickly ■ My favoriteDINNER ■ Taste ■ Easy to prepare ■ Fills me up ■ Something everyone likes ■ Requires little planning ■ Quick to clean up MORNING ■ Easy to prepare ■ Routine ■ Taste ■ Fills me up ■ Requires little planning ■ Make quickly Top Motivations Driving Food and Beverage Selections At-Home and Away-from-Home Combined Your positioning must differentiate in health and meet broader needs of the occasion. 41
  • 42. The NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and Confidential 3. AGING EFFECT Aging Curve (Annual Eatings Per Capita) 0.00 100.00 200.00 300.00 400.00 500.00 600.00 700.00 LT1 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 - 1,000,000 2,000,000 3,000,000 4,000,000 5,000,000 6,000,000 Age of Eater Pop '19 Pop '14 Total Vegetables Total Fruit 42
  • 43. The NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and Confidential DRIVER BARRIERTRUTH I wish… I hate...
  • 44. The NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and Confidential Extend Partnerships Continue to work with core partners who can use your help… but also look to new partnerships. 2. 44
  • 45. The NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and Confidential • Poultry Entrees • Sandwiches • Beef Entrees • Fruit Eaten “As Is” • Bread • Rice • RTE Cereal • Poultry Entrees • Eggs/Omelettes • Vegetables & Legumes • Potatoes • Salads MAIN DISHES SIDE DISHES MAIN DISHES SIDE DISHES Accompaniments to Vegetables Eaten “as is” Accompaniments to Fruit Excl. Juice Eaten “as is” Overdeveloped Accompaniments to Vegetables and Fruit Eaten “As Is” (Based on Index >120) Main dish affinities to vegetables tend to be dinner oriented items while breakfast foods such as cereal and eggs are popular accompaniments to fruit. 45
  • 46. The NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and Confidential Top Host Foods to Add/Ing Total Vegetables: Salads 26 AEPC, -18% (2009 vs. 2014) Sandwiches 24 AEPC, -7% Hmde Variety Dishes 16 AEPC, +3% Italian Dishes 15 AEPC, -4% Top Host Foods to Add/Ing Fruit Excl. Juice: RTE Cereal 8 AEPC, -11% (2009 vs. 2014) Hot Cereal 5 AEPC, N/C Salads 4 AEPC, -14% Top Host Foods to Additive/Ingredient Total Vegetables and Fruit Excl. Juice (% Eatings) 35% of Total Vegetables are used as an Additive/Ingredient to another dish 17% of Total Fruit Excl. Juice is used as an Additive/Ingredient to another dish However, usage in these key host foods are declining and can use your help. 46
  • 47. The NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and Confidential 12.5 10.7 9.6 9.0 8.3 7.0 6.7 6.2 6.1 5.3 1. Yogurt 2. Bottled Water 3. Pizza 4. Poultry Sandwiches 5. Mexican Food 6. Fresh Fruit 7. Bars 8. Frozen Sandwiches 9. Chips 10. Pancakes Top Ten Foods/Beverages that are Part of More American Diets (Pt. Change in % of Americans Consuming At Least Once in Two Weeks) And while our diet changes slowly, there are shifts happening.In addition, you may want to look to these new partners that have enjoyed solid growth during the past decade. 2014 vs. 2004 47
  • 48. The NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and Confidential Remember Your Pricing Strengths Think broader about your pricing decisions. 3. 48
  • 49. The NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and Confidential 23.4 ’30s ’40s ’50s ’60s ’70s ’80s ’90s 1929 2012 Food Spending as Percent of U.S. Disposable Personal Income ’00s 10.0 We do not let food costs rise faster than our incomes. 9.5 9.7 9.7 9.8 10.0 2008 2009 2010 2011 2012 49
  • 50. The NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and Confidential Cost of Average Meal per Eater Restaurant meals cost more than those made at home. $6.96 $2.24 Purchased at Restaurant Made in-home 50
  • 51. The NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and Confidential $4.62 $5.25 $5.89 $6.48 $6.96 $1.44 $1.60 $1.93 $2.08 $2.24 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Average Cost of Restaurant Meal per Person Average Cost of Meal Made In-Home per Person Trended Cost of Average Meal per Eater Has your pricing outpaced the cost of away from home meals to garner a larger share of wallet? 51
  • 52. The NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and Confidential Advance Away- From-Home Opportunities Focus primarily on home but efforts to increase presence at Foodservice are still needed. 4. 52
  • 53. The NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and Confidential 32% 64% 49% 21% 12% 22% 27% 14% 9% Fast Food Family/Coffee Shp Highr Pricd Rest. School % of Indiv. Who Visit in 2 wks % of Indiv. Who Consume AFH Fruit/Veg in 2 wks Away-From-Home Sources of Fruits and Vegetables (2 week % Penetration) Fast Food presents an opportunity for growth. Opportunity 53
  • 54. The NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and Confidential (Share of Traffic) 19% 9% 14% 20% 22% 16% Most likely to have kids Notable cut backs continued for consumers 25-49, while visits increased for those 65+ 146 178 216 215 219 200 149 193 206 205 215 204 150 188 200 191 213 219 Under 18 18-24 25-34 35-49 50-64 65+ YE Nov'12 YE Nov'13 YE Nov'14 Restaurant Meals and Snack Occasions Per Capita 54
  • 55. The NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and Confidential 6% 6% 9% 8% 7% QSR YE Nov'14 Traffic 0% YE Nov'10 YE Nov'11 YE Nov'12 YE Nov'13 YE Nov'14 0% 1% 1% 0% 1% -1% 0% 1% 0% 0% F.C. Unit PCYA 4% 6% 7% 7% 6% Fast Casual is the only QSR segment that has shown consistent growth year over year. QSR excluding Retail and Fast Casual (77%) Retail (17%) C-Stores Morning Meal Fast Casual (6%) 47% CTG Traffic % Change vs. Year Ago 55
  • 56. The NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and Confidential In summary, there has never been a better time to be in the fruit and vegetable business: The demographics are favorable There is a consumer need Though fighting inertia…advanced innovation and marketing can pay big dividends 56
  • 57. The NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and Confidential Sometimes it’s hard to see! Joe.Derochowski@npd.com 57