1. US Beef Market Update Consumer Trends from the US Retail and Foodservice Markets Jim Ethridge Executive Director, Strategic Account Management

2. About the Beef Checkoff A catalyst for change Everything we do is focused on maintaining and building strong demand for beef Founded, funded and governed by America’s beef farmers, ranchers and importers $1 paid every time a beef animal is sold Used to educate consumers and to research, innovate and promote beef

3. Why We’re Here Today - INNOVATION US Market Update Supply Demand US Consumer Trends Millennial Opportunities

4. Cattle Inventory

5. Herd Expansion Limits Ground Beef Supplies

6. Per Capita Beef Supply

7. Wholesale Beef Demand Index

8. Wholesale Beef Prices

9. Productivity and Carcass Weights

10. Carcass Weights Reach Record Highs

11. Innovation - New Ways to Menu Mainstay Steaks

12. Consumer Beef Trends

13. Over Half of Adults Are Seeking More Protein in Their Diets “Disclosed with permission of The NPD Group solely for the purpose for which it is being provided by NCBA (a contractor to the Beef Checkoff). The reproduction, dissemination, or use of this information for any other purpose is strictly prohibited without NPD’s prior written consent.” 13

14. 14 73% of fresh meat eaters said they include protein in their diet on a daily basis Meat Eaters Are Shifting to Other Protein Sources SOURCE: NPD’s Bi-Weekly Dieting Monitor and NPD National Eating Trends Change in Annual Eatings per Capita 2009-2014 -10.3 eatings +2.6 eatings +4.3 eatings +2.6 eatings+9.6 eatings Source: Midan Marketing/Meatingplace PLATE research, 2015

15. Home still owns the last-minute meal What consumers do most often for an unplanned dinner Cook a meal at home using whatever ingredients I can find 45% Cook a quick meal at home that does not require much effort 18% Shop at a grocery store for food to prepare at home 8% Stop at a fast food restaurant 7% Stop for a take-out meal 6% 15 Source: Midan Custom NPD Survey, 2014, Midan Marketing/Meatingplace PLATE research, 2015

16. Center of Plate vs. Ingredient Use of FRESH Home Prepared Meats (Annual Eatings per Capita) Meat usage is shifting…from center of the plate to ingredient 16 Source: The NPD Group/National Eating Trends®, Midan Marketing/Meatingplace PLATE research, 2015

17. 17 Favorite Meals when Fresh Meat is used as Ingredient Pasta – 60% Tacos/Burritos – 54% Casseroles – 44% Proportion of Consumers Who Say This Is One of Favorite Ways to Use Fresh Meat as an Ingredient Source: Midan Custom NPD Survey, 2014, Midan Marketing/Meatingplace PLATE research, 2015 Burgers/Sandwiches – 54% Stir Fry – 43% Soups, Stews – 57% Favorite Meals when Fresh Meat is used as Ingredient

18. Consumers choosing methods to prepare meat Overall Trends in Appliances Used to Prepare Dinner - Non Leftover Food Only (Annual Eatings Per Capita) Source: NPD’s National Eating Trends®, Midan Marketing/Meatingplace PLATE research, 2015 4 6 Half of Millennials and Gen Xers Use the Slow Cooker Monthly 18

19. 76% of Millennials say they like to cook 89% of Millennials say they want to get better at it Millennials and Food Source: YPulse 19

20. Source: YPulse 20

21. 19% of 21-24-year-olds have borrowed someone else’s food to take a picture of it and post on social media 9% of 30-32-year-olds have bought food to post a picture of it on social media, but not even eaten it Is Food the New Status Symbol? Is Food the New Status Symbol? Source: YPulse

22. Millennials “Generation YUM” - the Social Foodie Diversity is king Food is a reason to gather Considered adventurous “foodies” Food is central to their lives Eat out to gather ideas Willing to splurge, but looking for value 22

23. Millennials Love Beef 23 Already, Millennials Account for the Majority of Beef Eating Occasions MillennialsGen XBoomers Eating Occasions 40%29%31% From Food Service 42%30%28% From Retail39%29%32% Source: Consumer Beef Index, July 2007-2013

24. Millennials Crave the Beef Experience Perceive beef as manly, flavorful, celebratory, sociable Versus chicken, which is seen as every day, boring, low fat Or pork, which is seen as simple, less versatile, not filling, bland 24 1. Conversion Marketing-Communication: Millennials and Beef Report, December 2012

25. What Millennials WANT Beef to Be 1. Conversion Marketing-Communication: Millennials and Beef Report, December 2012 25

26. Key Takeaways for Foodservice Engage social media/build loyalty Beef as centerpiece for global flavors Authentic flavors that pair with beef Promote shareable beef items Leverage the popularity of protein Add healthy kid’s beef items Quality/taste trumps price

27. Key Takeaways for Retail Beef’s versatility and convenience Emphasize beef’s nutrition Boost Millennials’ confidence in the kitchen Provide the information they seek