2

3 Total Tea Sales Were Relatively Stable Consumer Sales of Total Tea Total Grocery-Mass-Drug (Millions) % Chg 2%-1%7%5% PoundsDollars % Chg Total U.S. -*52 Weeks Ending 7/22/00

4 The Pounds Sale Decline Was Driven By Less Tea Purchasing Per Shopping Trip Household Purchase Dynamics of Total Tea All Outlets Penetration (Millions Households Purchasing) +2.2% Buying Rate (Annual Spending per Household) -1.3% Average Purchasing Trips per Year +1.6% Average Total Shopping Basket when Tea Is Purchased +0.7%

5 Grocery Remains The Dominant Tea Channel Consumer Sales Of Total Tea (Millions) PoundsDollars Note: Mass Merch includes SuperCenters Total U.S. -*52 Weeks Ending 7/22/00

6 Grocery Dollar Sales Are Gaining Due To Higher Prices And The Increasing Importance Of R-T-D Consumer Sales Of Total Tea Dollars Grocery $2MM+ (Millions) Total U.S. - *52 Weeks Ending 7/24/99 or 7/22/00

7 However, Grocery Tea Dollars Are Continuing Recent Declines Consumer Sales Of Total Tea Pounds Grocery $2MM+ (Millions) Total U.S. - *52 Weeks Ending 7/24/99 and 7/22/00

8 The Growth Of Mass And Drug Have Offset Grocery Consumer Sales Of Total Tea Total Grocery-Mass-Drug (Millions) Total – All OutletsGroceryMassDrug 130$1,715112$1,48615$1573$72 Total U.S. -*52 Weeks Ending 7/22/00

9 All Kinds Of Tea

10 Ready-To-Drink Contributes Significantly To Dollars, But Is A Great Deal Less Important To Pound Sales Share Of Tea Sales By Type Dollars Versus Pounds – Total Grocery-Mass-Drug PoundsDollars Total U.S. -*52 Weeks Ending 7/22/00 ** Three Outlets = Grocery $2MM+, Drug, Mass Merch

11 Tea Bags/Green Tea Has Stabilized, While RTD Continues To Impact Iced And Instant Share Of Tea Pound Sales By Type — Grocery $2MM+ Note: Tea Bags include Green Tea (4.9 share in 2000*) Total U.S. - *52 Weeks Ending 7/24/99 or 7/22/00 R-T-D Iced Tea Instant Herbal Tea Bags (includes Green Tea) Loose Tea

12 Volume Expansion Was Fueled By Green Tea Gains, While Dollar Growth Was Powered By Ready-To-Drink Tea Sales Growth By Type Total Grocery-Mass-Drug (‘000) Total Tea Regular Tea Bags Iced Tea Mix Instant Tea Ready-To-Drink Tea Herbal Tea Green Tea Loose Tea PoundsDollars Total U.S. -*52 Weeks Ending 7/22/00

13 Both Buying Households And Increased Tea Purchasing Drove Green And R-T-D Gains % Change in Penetration — All Outlets Iced Tea MixHerbal TeaGreen TeaRTD Tea Total U.S. -*52 Weeks Ending June 2000

14 Dollar Sales Growth Was Fueled By Increased Pricing Across All Tea Types … Tea Price Per Pound Changes Total Grocery-Mass-Drug Price Per Pound % Chg vs Year Ago Total Tea Regular Tea Bags Decaf Tea Bags Iced Tea Mix Instant Tea RTD Tea Herbal Tea Loose Tea Green Tea Total U.S. -*52 Weeks Ending 7/22/00

15 Green & Herbal Achieve Significantly Higher Premium Pricing To Mainstream Tea Tea Dollar Sales by Price Point Total Grocery-Mass-Drug Opportunity? $ Price per Pound Dollars (Millions) Instant Tea Regular Tea Bags Iced Tea Decaf Tea Bags Loose Tea Green Herbal Total U.S. -*52 Weeks Ending 7/22/00

16 Ready-To-Drink Is Especially Important In Drug, However Tea Bags Dominate Across All Outlets Division of Tea Pound Sales within Channels By Type – Grocery $2MM+ Mass Merchant Grocery $2MM+ Drug Stores Total U.S. -*52 Weeks Ending 7/22/00

17 Grocery Is Still The Key Outlet For Regular Tea Bag Sales Consumer Sales Of Regular Tea Bags PoundsDollars Total U.S. -*52 Weeks Ending 7/22/00

18 Regular Tea Bag Volumes Declined Slightly, But Dollars Sales Gained Consumer Sales Of Regular Tea Bags (Millions) Total – All OutletsGroceryMassDrug 71$49762$43110$572$9 Total U.S. -*52 Weeks Ending 7/22/00

19 RTD Tea Continues Strong Dollar Growth, Capturing 37% Of Tea Grocery Dollars Ready-To-Drink Tea — Grocery $2MM+ Dollar Sales (Millions)Dollar Share of Tea Total U.S. -*52 Weeks Ending 7/24/99 or 7/22/00

20 Ready-To-Drink Provided The Sole Tea Gains Within The Supermarket ($2MM+) Channel Volume Gains — Tea Pounds (000s) Regular Tea Bags Herbal Tea Instant Tea Iced Tea Mix Loose Tea Green Tea Ready-To-Drink Tea Regular Tea Bags Herbal Tea Instant Tea Iced Tea Mix Loose Tea Green Tea Ready-To-Drink Tea Regular Tea Bags Herbal Tea Instant Tea Iced Tea Mix Loose Tea Green Tea Ready-To-Drink Tea Drug Stores Mass Merchandisers Grocery $2MM+

21 Finally, There Are Distinct Differences In The Demographics For The Growth Segments Demographic Insights Tea Bags Large Families, Older Children, South, Rural, Less Affluent Green Tea Small Households, No Kids, 55+, East/West, Urban Ready-To-Drink Large Families, Middle-Aged (35-54), East, Urban Kids 6-17 Ethnic Households, Affluent Demographic profiles are largely unchanged since 1996 Total U.S. -*52 Weeks Ending June 2000

22 A Closer Look At Decaffeinated Tea

23 Decaf Tea Growth Is Outpacing Regular, Accounting About 13% Of Sales Total Grocery-Mass-Drug +4% -1% +9% +4% Decaf Regular Total U.S. -*52 Weeks Ending 7/22/00

24 In Fact, Decaf Tea Bag Sales Helped Offset Regular (Caffeinated) Tea Bag Losses Tea Bags Gains By Caffeination Total Grocery-Mass-Drug (‘000s) RegularDecafRegularDecaf -2.0%+4.4%-0.8%+9.4% DollarsPounds Total U.S. -*52 Weeks Ending 7/22/00

25 Decaf’s Presence Is Strongest In Tea Bags Volume Share Of Decaf Tea By Type Total Grocery-Mass-Drug Note: Dollar Mix is similar to Volume Mix Total U.S. -*52 Weeks Ending 7/24/99 and 7/22/00 ** Three Outlets = Grocery $2MM+, Drug, Mass Merch

26 Decaffeinated Growth Was Sourced Almost Entirely From Tea Bags And Ready-To-Drink Decaffeinated Tea Sales Growth By Type Total Grocery-Mass-Drug (‘000s) Regular Tea Bags Iced Tea Mix Instant Tea Ready-To-Drink Tea Herbal Tea Green Tea Loose Tea PoundsDollars Total U.S. -*52 Weeks Ending 7/22/00

27 Don’t Miss The Opportunity

28 Bottled Water Market Has Grown 10 Fold Since 1976 U.S. Bottled Water Market , Gallonage Thousands of Gallons Year Source: Beverage Marketing Corporation, New York

29 Water Is A $2.6 Billion Dollar Market, Growing Over 20% U.S. Bottled Water Market — , Gallonage % Chg13%12%17%21% * Food, Drug, Mass, Convenience, Petro

30 We Must Continue To Find New Ways To Leverage The Benefits Of Tea Tea Based Beverages i.e. Minute Maid and Snapple Iced Tea, Lemonade/Lemonade Iced Tea Tea Based Frozen Specialties i.e. Tea Flavored Ice Pops (recruit young consumers early) Dietary Supplements i.e. Anti-Oxidant Tea Pills Tea Based __________________