1. Where Commerce & Culture Collide Hispanic Insights POPAI University - On the Web January 22, 2009

2. Agenda Speaker Introduction Changing Face of America Cultural Nuances - Hispanics Hispanic Shopper Insights In-Store Opportunities Insights into Action - 7UP Case Study Questions

3. Becky Arreaga Agency Partner & Founder Over 23 years industry experience specializing in client management, strategic planning and marketing integration Began career at nation’s largest Hispanic advertising agency, now Bromely Communications BA from Texas Tech University, MA from The University of Texas at Austin Appointed to the National Board of Directors of the College of Mass Communications at Texas Tech University

4. Full-service Hispanic agency specialize in strategic below-the-line marketing driven by real-time consumer and marketplace insights Seasoned team of marketing junkies with 20+ years experience in segment marketing and sales activation Network of Market Ambassadors in the top 25 Hispanic markets Based in Austin, TX and are 100% minority and woman owned Mercury Mambo

5. Motivate Hispanic consumers to take action!

6. Create brand experiences designed to make a positive and meaningful impact on consumers Work with some of the most recognized brands on the planet Do amazing things with amazing clients Named to Inc. Magazine’s 500/5000 Fast Growing Companies in 2007 and 2008 Mercury Mambo

7. The changing face of America

8. Increasing Cultural Diversity Source: US Census Bureau (1980&1990) and Geoscape (2020) The non-ethnic market is shrinking

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12. 12 Percent Hispanic of the Total Population in the United States 1970 to 2050 *Projected Population as of July 1 Source: U.S. Census Bureau, 1970, 1980, 1990, and 2000 Decennial Censuses; Population Projections, July 1, 2010 to July 1, 2050 CensusProjections 7/1/08: Hispanic population surpassed 45 million, representing 15.1% of total pop!

13. Market Opportunities Current PopulationPopulation Growth 2000 - 2008 CAGR StateHisp. Pop. (mil)Hisp. as % of TotalHispanicTotal Largest Markets States with the largest Hispanic Populations California13.536%3%1% Texas8.836%4%2% Florida3.820%5%2% New York3.116%1%0% Illinois2.015%3%1% Concentrated Markets States with the highest concentration of Hispanics New Mexico0.944%2%1% Arizona2.030%5%3% Nevada0.725%7%4% Colorado1.020%4%2% New Jersey1.416%2%1% Growing Markets States with fastest Hispanic population growth Georgia0.88% 2% Tennessee0.23%8%1% South Carolina0.24%7%1% North Carolina0.77% 2% Maryland0.36%5%1% U.S. Total47.215%4%1% Source: U.S. Census Bureau, Geoscape® American Marketscape DataStream™” 2008 Series; Latin Force Group LLC and Goldman Sachs Research

14. Acculturation Skews Foreign BornIncludes both foreign and U.S. bornU.S. Born (2nd & 3rd generations) Typically married, less education, rent vs. own Skews slightly femaleMore likely to be college-educated Avg. HHI approx. $53kAverage HHI $65kAverage HHI $81k Todo en españolFastest growing segmentEnglish only Desire to belong, connect to home, familiar brands Blend both languages, embrace heritage and innovation Brands = reconnect, retro-acculturation Source: Adapted from Yankelovich MONITOR Multi-Cultural Marketing Study 2005, Simmons NHCS/NCS Spring 2006 Full Year Study, Hispanic adults 18+

15. Understanding Hispanic Cultural Insights

16. Macro Trends Sources: Adapted from Yankelovich MONITOR Multi-Cultural Marketing Study 2005, Simmons NHCS/NCS Spring 2006 Full Year Study, 2006 ACNielsen Values Orientation Economic Impact Pop Culture

17. Understanding Hispanic Cultural Values LatinoAmerican Interactions Family Interdependence Relationship Oriented Sympatía y Harmony We decide as a family Individual Achievement Task Oriented Healthy Competition I make my own decisions Success Get aheadGet more joy out of life Authority Respect AuthorityChallenge Authority Source: adapted from Isabel Valdes Paramount Publishing, Inc., AHAA Identity Project, GFK Roper. Lionel Sosa. Felipe Korzenny.

18. Understanding Hispanic Cultural Values LatinoAmerican Gender Roles Machismo - provide & protect family Marianismo - sacred duty, sacrifice Gender equality is prized. Initiative Como Dios quiera. However God wants. Tread carefully. Avoid verguenza/embarrassment. ¡Dale ganas! Give it your all! God helps those that help themselves. Blow your own horn. Take the bull by the horns. Higher Education Greatest Emphasis on High School Diploma College = Fear Greatest emphasis on College Degree Source: adapted from Isabel Valdes Paramount Publishing, Inc., AHAA Identity Project, GFK Roper. Lionel Sosa. Felipe Korzenny.

19. Pop culture - influencing & creating Recognize, celebrate and affirm cultural affiliations Creating their own culture Inspired by the past but facing the future Spanish & English, American & Latino: you can have it both ways Examples Plentiful Ugly Betty, American Idol, George Lopez, Nickelodeon, YouTube, MySpace LatinoLit - Barnes & Noble Spanish books grew 3X since 2000. Latino Theatre: In the Heights, Celia Cruz, Macho Men & The Women Who Love Them

20. Economic Impact Buying power of over $800 BILLION today....expected to reach $1.2 TRILLION by 2010! Source: Selig Center of Economic Growth 1990s to mid-2000s were financially strong for Latinos Disposable income and home ownership grew disproportionately among Hispanics, education rates improved Source: Global Insight, 2008 Latinos more likely to be cash consumers than total market so high proportion are debt-free Source: CFSI, 2008 Hispanics are price sensitive but willing to spend on value. 40% of unacculturated Latinos say they always look for a brand name vs 33% of Non-Hispanics Source: Simmons 2007/2008

21. Hispanic Shopper Insights

22. Total CPG Spending Source: IRI Multi-Outlet Panel Data for 52 week ending 8/5/07 Note: % indicates difference between Hispanic Basket and Non Hispanic Basket Hispanics spending is 13% higher than Non-Hispanics Dif = +13% Dif = +1% Dif = -2% Dif = +37%Dif = -7% Dif = +10% Dif = +2% Dif = +21%

23. CPG Dollar Share by Channel Among Hispanic Consumers Channel2008 Share Share Index vs. Total Panel Point Change vs. 2007 Grocery53.4960.0 Supercenter11.9811.9 Mass10.2122-0.7 Club11.01390.2 Drug5.191-0.1 Dollar1.393-0.1 Other (Specialty, Convenience) 7.0106-1.1 Source: IRI Consumer Network™; 52 weeks ending 3/9/08 vs. prior year Mass & Club stores earn an above average share of Hisp. spending, but Supercenters are gaining ground.

24. Each month, Hispanic shoppers make 26 grocery trips, 3 times greater than the General Market who makes 8.8 trips per month. Cycle through food faster, stretches the budget, proximity of small stores in urban areas. Most fill-in trips for baby products, frozen desserts/refrigerated treats, dairy, bakery, deli meats or cheeses Most quick trips (speed related) for pharmacy, health/beauty/personal, pet or car care, non-food items (books, clothes, toys) or beverages. Retail budgeting behaviors Source: Unilever, Winning the Hispanic Shopping Trip

25. Shopping Trips Hispanics are somewhat more likely to shop early in the week Source: Diary Data: Q. What time did you start shopping

26. Shopping Trips Afternoon and especially evening trips are a good time to reach Hispanics In-Store Source: Diary Data: Q. What time did you start shopping

27. Product preferences change with acculturation Source: 2006 ACNielsen CategoriesLeast AcculturatedMost Acculturated Beer RTE Cereal Toothpaste Bodywash Soap Fabric Softener

28. In-store Opportunities

29. Importance of Advertising Hispanics are much more likely than General Market to be aware of specials before going to the store Source: Diary Data: Q. If yes, where did you notice these advertised specials

30. Things that people always refer to when shopping in-store Hispanic Non- Hispanics Unacculturated MESSAGE/OFFERS AT THE SHELF7.4%5.7%8.7% IN-STORE SAMPLES5.7%6.5% ANNOUNCEMENTS IN STORE12%3%14% Source: Unilever, Winning the Hispanic Shopping Trip Hispanics are more likely than non-Hispanics to always refer to offers at the shelf, in- store samples, and announcements in-store. Hispanics are more attuned to value messages

31. Merchandising Mandates Know your audience Level of acculturation How they use your product Brand lifecycle Use appropriate language Avoid slang, geek-speak Walter Cronkite Spanish Translate the message not the words Understand retailer requirements Language guidelines Acceptable formats Pricing requirements Space availability/display standards

32. Insights into Action - 7UP Case Study

33. 7UP Celebrity Chef Mobile Tour & Recipe Contest Challenge Drive frequency of 7UP 100% Natural Flavors new product innovation and stay ahead of competitive pressure. Insight Unacculturated Hispanic women are heavy Lemon- Lime CSD users, but were not aware that 7UP had undergone a innovation of 100% Natural Flavors in 2007. The natural message is highly compelling to Unacculturated Hispanic moms who want to feel they have made a better choice for themselves and their families without sacrificing taste. The use of fresh, natural ingredients is inherent to their culture.

34. 7UP Celebrity Chef Tour - 360º Focus Market Integration

35. 7UP Celebrity Chef Mobile Tour & Recipe Contest Merchandising Kits Standee Pole Sign w/info tearpads Rack Cards Door Posters Neckringer recipe booklets Danglers Results 100% Natural Flavors awareness doubled between a pre and post wave study (DPSG Qualitative Study, Sept. 2008.) Campaign markets experienced a +8% sales lift.

36. Questions?

37. For more information, please feel free to contact: Becky Arreaga becky@mercurymambo.com 512.447.4440 xt 111