Fresh-Cut Fruits and Vegetables Market & Consumer Information August 2014

U.S. Fresh-Cut Produce Is An Estimated $27 Billion Market and Sales Are Increasing U.S. Market Size: U.S. retail* sales growing for fresh-cut fruit and vegetables Fresh cut fruit retail sales increase 2012-2013: +10.3% dollars, +13.9% volume Fresh cut vegetable retail sales increase 2012-2013: +5.5% dollars and volume Fresh-cut produce accounts for 16% of total retail produce sales Foodservice accounts for the larger share of fresh cut sales (60%) Note – Retail includes all grocery retail channels Source: Freshcut.com, UC Davis 2012 Study, Roberta Cook “Trends in the Marketing of Fresh Value Produce and Fresh-Cut/Value-added Produce”; Nielsen 52 weeks ending July 13 2013 – *Select US Retailers

Share of U.S. Fresh-Cut Fruit & Vegetables by Category in Retail Mixed fruit, apples, pineapple and watermelon account for the largest dollar and unit share of fresh cut fruit sales in U.S. grocery retail Excluding bagged salads, carrots and mixed vegetables account for the largest dollar share of fresh cut vegetable sales in U.S. grocery retail

Share of U.S. Fresh-Cut Fruit & Vegetables by Packaging Fresh-cut fruit packaging types and share of sales: Fresh cut with no preservative (72.4%) Characteristics include chunk, cubed, cored, cup, cut, wedge, spear, sliced, boat Tray with plastic overwrap (19.3%) Jars & cups with fruit in juice (8.2%) Sold in a plastic cup or jar – fruit in juice or preservatives Fresh-cut vegetable packaging types and share of sales: Side dish (54.6%) Can often be cooked in the microwave directly in the bag Trays (19.4%) – vegetable only with or without dip Meal prep (17.2%) Diced, sliced, chopped and shredded items ready to incorporate into a meal or recipe Snacking (8.8%) – single serve (5 oz. or less) typically for on the go Source: FreshFacts on Retail Q2 2012 – Vegetable excludes bagged salads

Aside From Convenience, New Eating Occasions & Quality Also Drive Fresh Cut Purchases in the U.S. Fresh-cut produce offers consumers value for the following reasons: Convenience – it is the #1 reason for purchase Grab & go is needed for busy families Shifting consumption patterns – more grab & go needed for breakfast & snacking Option for a side dish Quality – consumers know fresh-cut produce is ripe vs. figuring it out with the whole item Barriers to consumers’ purchases of fresh-cut include price, poor quality from past experience and limited shelf life Retailers and Foodservice providers also find value in fresh cut produce Fresh-cut reduces labor costs, stabilizes price and offers consistent sizing & supply Source: Euromonitor International; Fresh Cut Magazine Jan 2014 “Food for Thought: Experts offer snapshots on fresh-cut industry”

Fresh-Cut Produce In the U. S Fresh-Cut Produce In the U.S. Appeals To More Affluent, Upscale Consumers As Well As “Healthy Living Families” Who consumes the most fresh-cut produce in the U.S.? Affluent and suburban consumers Upscale urban consumers “Healthy Living Families” - households with children ranging from lower income to affluent Large households College-educated consumers Primarily Caucasian consumers, but also Asian consumers Source: Beth Padera, The Perishables Group January 2011