Agricultural Product DifferentiationIndustry Perspective

November 15, 2004

CORNY GALLAGHERAGRIBUSINESS EXECUTIVE

More than $14 billion in commitments to the industry sector.

Clients value our industry knowledge and expertise as well as our ability to provide a complete range of financial products and services.

Bank of America is one of the largest providers of financial services to agribusiness and food processing industries throughout the United States.

FOOD FORESIGHTPRIORITY TRENDSFALL 2004

GATHERS TRENDS AND ISSUES INFORMATION FROM AROUND THE GLOBEIDENTIFIES EMERGING ISSUES AND TRENDS

2004 TREND 1

PRODUCERS FIND THEMSELVES IN AN EVER-TIGHTENING VICE:Increasing scrutinyMust trace and document practicesIncreasingly legislation and regulation leads to unequal playing field for U.S. agriculture

2004 TREND 2

VULNERABILITIES TO TERRORISM ADD A NEW WRINKLE OF INSECURITY AND ARE REDEFINING ROUTINE AGRICULTURAL PRACTICES:Department of Homeland Security will play increasing leadership role GMO wars will continue and trickle-down

2004 TREND 3BIG GLOBAL COMPETITORS AND MARKETS ARE ENGINEERING A WILD RIDE FOR THE AGRI-FOOD CHAIN:

Rising affluence and demand for high-value products with tastes of home

2004 TREND 4

OBESITY IS OVERWHELMING THE DIET/HEALTH LANDSCAPE : -Is high fructose corn syrup the real villain? - Is it caused by the micronutrients? Perception shifted from food is healthful to food is bad for me

2004 TREND 5NEW SCIENCES AND GENETIC INNOVATION ARE ACCELERATING THE ARRIVAL OF A NEW FRONTIERPERSONALIZED NUTRITION YOUR OWN RUBICS CUBE RATHER THAN THE FOOD PYRIMID

2004 TREND 5

2004 TREND 5CONCEPTSGenotyping - individuals' genetic make-up Metabolic profiling finger-stick tests Nanotechnology, in wrong hands used as bio terrorism?DARPA is driving radical nutrition research in biochemical pathways and processes like ketogenic dietsmicronutrients in certain foods lead to new opportunities

2004 TREND 6

WHAT CONSUMERS WANT, CONSUMERS WILL GET . . .Shift to a genuine "pull" marketing environment"if you don't like this, you might like this" suggestions tied to likes and needs

2004 TREND 7FOOD SERVICE SECTOR IS SURGINGDominant share of consumer food spendingInnovating through an explosion in ethnic flavors and cuisine

2004 TREND 7CONCEPTS

Confluence of mega trends; the dramatic rise in ethnic foods, blurring between "formal" and "casual" eatingAsian flavors are the top trend gainer in the top 200 chainsFood service providers must offer more choices

FOOD SYSTEM OPPORTUNITIESHealth benefits of ag products and parts.Changing demographics = New products.Food Service Chefs looking for menu ideas.Health Consciousness driving product choices.Environmental improvement. Its not waste it is ..