Natural & Organic Beef Sales in Retail Supermarkets

2 Natural Beef Defined Natural BeefNatural Beef  Minimally processed  Contains no additives  Applies to all meat that does not have an ingredient label Most who label their product “natural” for marketing purposes make additional claims such as no hormones, no antibiotics, etc.Most who label their product “natural” for marketing purposes make additional claims such as no hormones, no antibiotics, etc.

3 Organic Beef Defined Certified Organic BeefCertified Organic Beef  Must meet USDA National Organic Program standards 100% organic feed100% organic feed May not be given hormones or antibiotics for any reasonMay not be given hormones or antibiotics for any reason Access to pastureAccess to pasture

4 Category Growth Organic foods sales grew by 22.1 percent in 2006 to reach $16.9 billion. Sales in 2005 were $13.8 billion.Organic foods sales grew by 22.1 percent in 2006 to reach $16.9 billion. Sales in 2005 were $13.8 billion.  In 2006 organic foods represented approximately 3 percent of all retail sales of food and beverage dollars Source: Organic Trade Association's (OTA's) 2007 Manufacturer Survey, May 6, 2007

5 Natural & Organic Annual Dollar Sales Source: FreshLook Total US Natural Organic $ Sales for by primal. Millions

6 Natural & Organic Annual Pounds Sold Source: FreshLook Total US Organic/Natural pounds sold data for 2003 through 2006 by primal. Millions

7 Natural & Organic Annual Dollar Sales Source: FreshLook Total US Natural Organic $ Sales for by primal. Thousands

8 Natural & Organic Annual Pounds Sold Source: FreshLook Total US Organic/Natural pounds sold data for 2003 through 2006 by primal. Thousands

9 Organic/Natural vs All Beef Monthly Total US $ Sales January March 2007 Source: FreshLook Total US Beef & Natural Organic $ sales data for January 2003 through March Natural/Organic Beef Sales (Millions) Total Beef Sales (Millions)

10 Organic/Natural vs All Beef Monthly Total US Pounds Sold January March 2007 Natural/Organic Beef Sales (Millions) Total Beef Sales (Millions) Source: FreshLook Total US Beef & Natural Organic pounds sold data for January 2003 through March 2007.

11 Natural/Organic Beef Market Share Unit Volume Natural/Organic Beef comprises 1.3% of total beef volume (pounds) and 2.0% of total beef sales (dollars) in the retail supermarket channel. Natural/Organic Beef 1.3% All Other Beef 98.7% Source: FreshLook Marketing IRI Scanner Data for Natural/Organic Sales data compared to Total Beef, 52 weeks ending 4/1/07. Dollar Volume Natural/Organic Beef 2.0% All Other Beef 98.0% Natural/Organic Beef Share in the Retail Supermarket Channel Natural/Organic Beef Share in the Retail Supermarket Channel (52 wks ending 4/9/06 through 4/1/07)

12 Beef Sales at Retail Results of FreshLook Marketing Data for 52 Weeks Ending April 1, 2007: Total Fresh BeefTotal Fresh Beef  Sales = 15.4 Billion dollars  Volume = 4.3 Billion pounds  Sales grew 0.6% and volume grew 2.2% versus Year Ago  Average price per pound = $3.48 (1st quarter 2007) Natural/Organic BeefNatural/Organic Beef  Sales = million dollars (2.0% of total annual beef sales)  Volume = 57.1 million pounds (1.3% of total annual beef volume)  Sales grew 25.9% and volume grew 31.8% versus Year Ago  Average price per pound = $5.23 (1st quarter 2007) Source: FreshLook Marketing Data for Total US Total Beef & Natural Organic $ and Pound Sales the 52 Weeks Ending April 1, 2007.

13 In the Q1 2007, natural/organic beef sales grew by 20.6% vs. Year Ago compared to 2.5% for total beef.In the Q1 2007, natural/organic beef sales grew by 20.6% vs. Year Ago compared to 2.5% for total beef. Natural/organic beef volume increases range from a low of 13.9% in Q2 ‘05 to a high of 32.9% for Q1 ‘06.Natural/organic beef volume increases range from a low of 13.9% in Q2 ‘05 to a high of 32.9% for Q1 ‘06. Change in Dollar Sales vs. Last Year Percent Change Source: FreshLook Marketing IRI Scanner Data for Natural/Organic $ Sales compared to Total Beef, Q1 ‘05 through Q1 ‘07.

14 Change in Pound Volume vs. Last Year In 2006, natural/organic beef volume grew by 22.6% vs. Year Ago compared to 2.0% for total beef.In 2006, natural/organic beef volume grew by 22.6% vs. Year Ago compared to 2.0% for total beef. Natural/organic beef volume increases range from a low of 5.9% in Q2 ‘05 to a high of 26.3% for Q3 ‘06.Natural/organic beef volume increases range from a low of 5.9% in Q2 ‘05 to a high of 26.3% for Q3 ‘06. Source: FreshLook Marketing IRI Scanner Data for Natural/Organic Pounds Sold compared to Total Beef, Q1 ‘04 through Q1 ‘07. Percent Change

15 While natural/organic beef sales are gaining market share nearly every quarter, they still constitute only 2.1% of total beef sales at retail.While natural/organic beef sales are gaining market share nearly every quarter, they still constitute only 2.1% of total beef sales at retail. Natural/Organic Beef Dollar Share by Quarter Percent of Total Beef Sales Source: FreshLook Marketing IRI Scanner Data for Natural/Organic $ Sales compared to Total Beef, Q1 ‘04 through Q1 ‘07.

16 While natural/organic beef volume is growing, it still constitutes only 1.4% of total beef volume at retail.While natural/organic beef volume is growing, it still constitutes only 1.4% of total beef volume at retail. Natural/Organic Beef Pound Share by Quarter Percent of Total Beef Sales Source: FreshLook Marketing IRI Scanner Data for Natural/Organic Pounds Sold compared to Total Beef, Q1 ‘04 through Q1 ’07.