Projecting Future Nut Consumption:Investment in a Disciplined Approach

INC 2012 Congress, Singapore

May 18, 2012

Richard Waycott

How best to move beyond our baseline?

• The California Almond crop is growing!� Fastest growing tree nut crop….by far� Largest tree nut crop in the world

• Almond influence is growing!� An important California crop� An important export crop� An important food product to manufacturers and consumers� An important dietary solution for manufacturers, health

professionals and consumers� Leader in tree nut food safety

This is all good but………

We need to keep asking ourselves…

• Is the industry’s and the market growth strategy correctly positioned?

• We’ve done well but can’t we do better?

• What are the specific product categories in priority markets in which we should focus?

• Are we employing the right market development resources in the right proportions?

• How best to deploy resources in the future?

Foundation for answering these questions has to be based on comprehensive analysis

Narrowing Scope to Drive Industry Success

maximize Return on Investment

with…Limited Resources

leveraging… Socio

Economic Trends

and…Health and Lifestyle

Awareness

balancing…Short Term

Opportunities

with…Long Term

Sustained Growth

Strategic Planning Comes First

Project Resources Analytical Objectives

Identify current consumption, forecast growth for key regional markets and market categories

Identify specific growth opportunities within regional

markets and market categories

Deliver recommendations on strategic direction and

investment opportunities

• Money

• Dedicated Time

• Objective Expertise

Options under consideration

Phase 1:Region Selection

Phase 2:Current Market Sizing

Phase 3:Future Market Sizing

Phase 4:Opportunity Prioritization

Establish filtering criteria to evaluate and select the most impactful and high potential markets for model inclusion

Develop baseline of almond consumption for key selected markets through production, category and consumption data inputs

Forecast future consumption patterns and opportunities by analyzing global category trends, product innovation, and consumer preferences

Identify the most attractive opportunities for ABC to focus on and invest in based on various execution oriented considerations

PhaseObjectives

KeyActivities

Four phases to identify and evaluate growth opportunities

Agreement on the appropriate “sizing filters” mitigates subjectivity

First Determine the Population

Overlay “Addressable” Filter

Insights Filter Output

Projected Population 2021

Region Total Addressable %

1 United States 339,685,242 334,734,620 99%

2 China 1,398,653,940 1,164,966,725 83%

3 Japan 124,452,649 121,584,759 98%

4 Brazil 211,707,407 184,535,433 87%

5 India 1,401,888,600 774,393,506 55%

6 Russia 140,688,183 121,319,469 86%

7 Mexico 127,009,575 113,926,224 90%

8 Indonesia 264,540,464 188,988,281 71%

9 Germany 80,877,368 78,688,211 97%

10 France 66,149,953 64,772,934 98%

11 U.K. 66,167,985 63,371,307 96%

12 Canada 37,457,985 36,629,985 98%

13 South Korea 49,916,247 49,258,789 99%

14 Middle East 53,955,396 48,892,998 90%

1. Population Projections2. Urbanization Projections

1. GDP per Capita2. Disposable Income3. Food Spend per capita4. Grocer Retail Sales 5. Life Expectancy6. Retail outlets per Million7. Retail Network Rating8. Addressable Market9. Political environment

Phase 1 and 2: Region Selection;Ranking Market Size and Attractiveness

Options under consideration

Phase 1:Region Selection

Phase 2:Current Market Sizing

Phase 3:Future Market Sizing

Phase 4:Opportunity Prioritization

Establish filtering criteria to evaluate and select the most impactful and high potential markets for model inclusion

Develop baseline of almond consumption for key selected markets through production, category and consumption data inputs

Forecast future consumption patterns and opportunities by analyzing global category trends, product innovation, and consumer preferences

Identify the most attractive opportunities for ABC to focus on and invest in based on various execution oriented considerations

PhaseObjectives

KeyActivities

Four phases to identify and evaluate growth opportunities

Narrow focus to the specific

Food Category Examples

1. Snacking

2. Confectionery

3. Cereal

4. Ice Cream

5. Bakery

6. Food Service

7. Other

Phase 3: Define and understand categories within each market opportunity

Opportunities exist where categories

and markets “intersect”

0%

5%

10%

15%

20%

25%

2 3 4

Growth Opportunities and “attractiveness”: risk-reward trade off

Low High

Low

Hig

hV

olum

e of

Gro

wth

Market Attractiveness

No Opportunities Offer Both High Growth and High

Attractiveness (i.e., No Risk)

Established Opportunities

Up-and-Coming Opportunities

High Growth with Risk

Options under consideration

Phase 1:Region Selection

Phase 2:Current Market Sizing

Phase 3:Future Market Sizing

Phase 4:Opportunity Prioritization

Establish filtering criteria to evaluate and select the most impactful and high potential markets for model inclusion

Develop baseline of almond consumption for key selected markets through production, category and consumption data inputs

Forecast future consumption patterns and opportunities by analyzing global category trends, product innovation, and consumer preferences

Identify the most attractive opportunities to focus on and invest in based on various execution oriented considerations

PhaseObjectives

KeyActivities

Four phases to identify and evaluate growth opportunities

Make choices – can’t do it all (at least not simultaneously)

Phase 4: Where do we focus??Prioritization Factor Weightings and Definitions

Total score can then

be used to compare

and assess options

Total Score: 4.0 3.7

Strategies based on Market Type

ExploratoryMarket Access Focus

EmergingTrade Stewardship and Marketing Focus

EstablishedTrade Management and Marketing Focus

� First insights on trade, market access, and consumer channels

� Foundation for further development work

� Marketing activities are not yet recommended

- Primary focus of market efforts - Supporting focus - Ongoing and maintenance efforts

� Expands stakeholder group engagement

� Education and technical information

� Initial marketing activities; market and consumer research

� Deeper customer and consumer insights

� Continued trade development support

� Shifts focus to demand generation

- Readiness for market efforts not established

Market Type Protocols Focus of Protocol

Be in the Driver’s Seat and Maximize ROI

Maximized Return on Investment

Optimal use ofLimited Resources

Socio Economic Trends understood and

leveraged

Broad-based Health and Lifestyle Awareness

Balanced Short & LongTerm Sustained

Growth

Right Sized Portfolio of Established, Emerging and

Exploratory Markets

Invest in a Disciplined Approach!!!