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.

Where Is Fresh Headed?

An excerpt from the Future of Eating Report

2003 2013

Projected Annual Fresh Eatings

Consumption of fresh foods in the U.S. has grown by 20% to over 100 billion eatings over the last 10 years.

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Source: The NPD Group / National Eating Trends® Fresh definition: Fresh fruits and vegetables, refrigerated meats and processed meats (excludes frozen), and eggs

+20%

Historical Perspective of Fresh Foods

100 Billion Meals

Additional Insight:

Over the last 10 years, the largest incremental growth in “fresh” was sourced from breakfast.

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Age of Eater

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As people age they are more likely to consume fresh foods; however, the largest momentum occurs from young adults to the age of 40, followed by slower increases thereafter.

Consumption Increases with Aging

Consumption Increases with Aging

Aging Curve: Change in Fresh Eatings as Individuals Age

Source: The NPD Group / National Eating Trends® Fresh definition: Fresh fruits and vegetables, refrigerated meats and processed meats (excludes frozen), and eggs

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Age of Eater

Population in 2018 Population in 2013 Aging

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Population shifts for Generations Y and Z will align with increased fresh consumption.

Aging Curve: Change in Fresh Eatings as Individuals Age

Source: The NPD Group / National Eating Trends® Fresh definition: Fresh fruits and vegetables, refrigerated meats and processed meats (excludes frozen), and eggs

2003 2013 2018

Projected Annual Fresh Eatings

Using the fresh food aging curve, population changes, and other proprietary modeling elements, NPD forecasts eatings of fresh foods will continue to grow at a rate faster than U.S. population growth (4%).

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+6%

Five-Year Forecast for Fresh Foods

120 Billion Meals

Additional Insights:

Forecast: Percent Growth

+9% = Breakfast

+7% = Lunch

+5% = Dinner

Source: The NPD Group / National Eating Trends® Fresh definition: Fresh fruits and vegetables, refrigerated meats and processed meats (excludes frozen), and eggs

Generations Z and Y will drive the forecasted growth of fresh food consumption and will far outpace their percent of population change.

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Five-Year Forecast by Generation

Forecast Percent Change in Fresh Food Consumption

2018 vs. 2013

Population Percent Change 2018 vs. 2013

Total Individuals +5.9% +4%

Generation Z +11.1% +2%

Generation Y +7.5% +2%

Generation X +1.2% -1%

Younger Boomers -0.5% -3%

Older Boomers -4.6% -6%

Silent/GI Gen -28.6% -25%

Source: The NPD Group / National Eating Trends® Fresh definition: Fresh fruits and vegetables, refrigerated meats and processed meats (excludes frozen), and eggs

Understanding preferences by generation and how they change over time is important for developing strategies for future growth.

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Top Fresh Foods - 2013

Generation Z Fresh Chicken

Eggs/Omelets

Potatoes

Store Fresh Bananas

Store Fresh Apples

Bacon

Carrots

Hot Dogs

Source: The NPD Group / National Eating Trends® Fresh definition: Fresh fruits and vegetables, refrigerated meats and processed meats (excludes frozen), and eggs

Action Items

■  Develop future “what-if” scenarios to help pick the appropriate consumer target that yields the biggest future impact.

■  Reach your target (for example, younger generations) via marketing messages and media platforms that will appeal to them.

■  Consider innovative ways to link your products to fresh foods.

■  Look for ways to target this behavior with adjacencies and placement in the store.

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Forecasting Methodology Components

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1)  Aging Dynamics (aging and generational) The impact of changes in behavior that occur with aging in terms of changes in consumption rates as well as preferences from one generation to another; assessed by individual year of age

2)  Population Dynamics Population growth – overall and by individual year of age

The changing distribution of the population by age

3)  Trend Momentum The inherent momentum of the behavior based on past seven years of trend

10-Year Forecast

Identify opportunities and risks associated with changing consumer behavior before they

occur.

Industries Automotive Beauty Consumer Electronics Entertainment Fashion Food / Foodservice Home Luxury Mobile Office Supplies Sports Technology Toys Video Games

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Thank You

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