1. Private Label: Market Overview Innova Market Insights August 2010

2. Where are the Private Label opportunities? 2

3.  In-line with Health & Wellness Trends  Innovating in Niche Areas  Matching Competitors  Pushing Premium Boundaries  Knock-offs and Price Comparisons 3

4. In-Line with Health & Wellness Trends 4

5. Global Growth: Organic-> Natural-> Traditional-> Sustainable  There is growing trend in the food industry for all things “natural”  Consumers demanding natural-> healthy  Organic lends itself to the natural trend  Traditional farming methods: –without pesticides –more natural food –sometimes more labour intensive - demands premium pricing  Sustainability & Environment: –traditional methods more environmentally friendly ClaimsNorth AmericaWest Europe 200720082009 % Change (2007-2009) Health launches 200720082009 % Change (2007-2009) Health launches Natural20.2%23.6%25.2%+5.0%8.7%10.8%11.3%+2.6% No Additives/ Preservatives 12.7%15.2%16.2%+3.5%24.8%32.4%35.2%+10.4% 5

6. Health Messages are Everywhere 6

7. Company Launches Dominated by Health Claims Health Claims – % Product Launches 20082009% Change Danone77.1%78.3%+1.2% Nestle45.3%48.0%+2.7% General Mills56.8%63.0%+6.2% Kellogg57.1%65.2%+8.1% 7 Health Claims – % Product Launches 20082009% Change Marks & Spencer42.4%67.0%+24.6% Carrefour49.3%39.4%-9.9% Albert Heijn82.0%78.8%-3.2% Safeway42.6%47.3%+4.7% 7

8. Private Label Mainstream Organic Netherlands, Albert Heijn UK, Marks & Spencer Germany, Rewe Switzerland, COOP Switzerland, Migros France, Monoprix France, Carrefour UK, Waitrose 8

9. Organic Differentiation  Dutch supermarket Albert Heijn have launched a “puur and eerlijk” (pure and honest) brand. These products are produced, grown or sourced with extra care for people, animals, nature or the environment. AH pure & honest is comprised of the following product categories: AH pure & honest organic, fairtrade, sustainable catch (fish), free-range meat and ecological cleaning products. AH Puur & Eerlijk Fairtrade Rooibos met Specerijen: Pure and Honest Fairtrade Rooibos Tea with Spices AH Puur en Eerlijk Duurzame Visvangst Variatie met Broccoli en Kaas: Fish Fillet with Broccoli & Cheese AH Puur & Eerlijk Biologische Macaroni Grande: Pure & Honest Organic Macaroni Grande 9

10. Increase in PL Launches with Ethical Claims 10

11. Offering Sustainable Choices  Sustainable farming practices followed for private label products. 11

12. The Importance Of Cleaner Labels  With the natural trend, there are more and more products with claims stating, for example “no artificial colors, flavors or preservatives”. This type of claim is being used as a selling point to consumers and is boldly displayed on the front of the packaging. -1.4% +0.6% +1.8% 12

13. Total Transparency For Natural Appeal Netherlands: AH Albert Heijn Alleen met Natuurlijke Ingredienten Hollandse Gehaktbal met Spercieboontjes: Dutch Meat Ball with French Beans and Potatoes, in Gravy Sauce Only natural ingredients 13

14. Sense of Simplicity: Back to Basics  Complex and stressful times are calling for simpler products, which is why Sense of Simplicity tops our trend list for 2010  The downturn is making people nostalgic for simpler times, and simpler foods. The interest in “back to basics” has driven interest in natural and clean-label foods  More natural ingredients are on the rise, including natural sweeteners extracted from source such as: –apple –agave –maple syrup 14

15. Sense of Simplicity: Homemade 15 Using the word “homemade ” or “homestyle” in the promotion of new products is on the rise 15

16. Real Authenticity: The Face Of Europe Is Changing  It is no longer enough to simply create a product with a regional positioning: the product should be based on ingredients from that region and ideally even be produced there  With the growing number of immigrants and a rising interest in authenticity, regionally-produced foods will undoubtedly be on the rise  Ethnic and exotic products have become more specific. Mainstream Indian style products shifted from being merely Indian, to indicating the region of India where the product originated 16

17. Real Authenticity UK: Sainsbury's Taste the Difference Israeli Couscous & Nanjing Black Rice. A blend of Israeli couscous, black rice, puy lentils, edamame beans, and red peppers, with a chilli and soy dressing. UK: Marks & Spencer Messicani. Authentic Italian pasta, made and air dried in the Italian Alps by the Felicetti family, using selected Italian wheat and a bronze die for a rough texture that picks up every drop of sauce. 17

18. Inherent Nutrition: Keeping It Simple With Ingredients Netherlands: AH Albert Heijn Water & Fruit Rood: Fruit Juice with Red Fruit & Water. With 9 sorts of fruit. France: Casino Ondilege Mousse Aux Fruits Peche- Mangue: Yogurt with Peach & Mango Mousse Flavor. Contains 50% fruits. These dairy specialties contain sugars which are naturally present in milk and fruit. 0% fat. 0% sugar. 18

19. Healthy Soil, Healthier Vegetables  Selenium enhanced soil could hold great potential for better health. UK: Marks & Spencer Young Super Spinach. Young super spinach grown in selenium enhanced soil. Fresh and prepared. Rich in vitamin A. Natural source of calcium. Grown in selenium rich soil. Selenium is an essential mineral which is important for a healthy immune system. Washed, prepared, and ready-to-cook. 19

20. Offering Healthy Alternatives South Africa: Woolworths Slimmer's Choice Kerala Chicken Curry with Basmati Rice. Low fat and kilojoule controlled. Eat well. This product represents a better choice for dieters. It is low in fat and kilojoule controlled, a convenient, satisfying and delicious way to lose weight. USA: Archer Farms Simply Balanced Hawaiian Style Veggie Patties. Hawaiian style frozen whole grain veggie patties made with a brown and wild rice blend, bell peppers, mangoes, pineapples and coconut milk. Simply nutritious. Simply delicious. Contains 100 calories per serving. Contains 2.5g fat per serving. 0g trans fat. Contains 4g sugar per serving. Contains 5mg sodium per serving. No artificial flavors or synthetic colors. Contains 6g protein per serving. 20

21. Healthy Innovation  Private label offers consumers many healthy, innovative choices. USA: Trader Joe’s Shortbread Blueberry Bites with Almonds and Omega-3’s Brazil: Carrefour Viver Light Quiche Integral Legumes: Light Wholegrain Quiche with Vegetables. "Viver" is a health line product from Carrefour brand. 26% less calories. This is a microwavable product. 63% less saturated fat. Source of fiber. UK: Aldi Optifit Liquid Breakfast Probiotic Yogurt Drink with Apple and Mango Flavors with Added Vitamin C 21

22. Fresh Daily Offerings  Combining freshness, health and convenience on a daily basis. 22

23. Innovating in Niche Areas 23

24. Innovating By Addressing Allergies  Private Label has led the way with their “free from” ranges.  Recognised a gap in the market. Gluten free product launches in particular, have shown significant growth in recent years. UK: Sainsbury's Freefrom 5 Muesli Bars. Five gluten, wheat and dairy free muesli bars with mixed dried fruits, flaked almonds and hazelnut nibs. France: Auchan Mieux Vivre Spaghetti A La Farine de Mais: Spaghetti Made From Corn Flour. Gluten free. 24

25. Catering For Individual Needs  Identifying demand and supplying the solution. USA: Kroger Carb Master Strawberry and Banana Flavored Yogurt. Vitamins A and D and calcium added. Net carbs 3 grams. Netherlands: Albert Heijn 1 person Japanese Sukiyaki Wok Dish Cooking For OneCarb-Conscious Dieters 25

26. In-Store Bakery Innovation Booms Hungary: Fitberry Vorosszolos Kenyer: Bread Loaf with Red Grape Concentrate and sunflower and caraway seed. The red grape extract contains flavonoids which has a significant antioxidant effect. USA: Safeway Premium Wheat Hot Dog Buns Netherlands: C1000 Melkbroodjes. Milk Bread for Children UK: Marks & Spencer Green Olive Ciabatta Rolls Germany: VollkornBrot. Wholemeal bread with sunflower seeds. 26

27. Wowing With Flavours  Unique flavours represent an opportunity to stand out from the rest on the shelf. Greece: AB Tangerine Sanguine Carrot Juice USA: Trader Joe's Rice & Bean Chips with Adzuki Beans France: Auchan Dark chocolate with violet. USA: Safeway Select Mandarin Orange Naturally Low Fat Sherbet 27

28. Innovate By Flavour Canada: President's Choice Ice Cream Shop Flavors Banana Split Ice Cream South Africa: Woolworths Pomegranate Flavoured Turkish Delight Australia: Woolworths Chicken Sausages: Mango & Sweet Chilli Netherlands: AH Albert Heijn Kauwgomballen Smaak Thee: Herbal Tea with Chewing Gum Flavour 28

29. New Texture & Flavour Experiences UK: Snackrite Be Light Satin Crunch Thai Sweet Chilli Flavour. Six packs of Thai sweet chilli flavored crisps. 70% less fat. Less than 2% fat per pack. Only 80 calories per 20g pack. No artificial color, flavors or preservatives. Suitable for vegetarians. France: Casino Ondilege Mousse Aux Fruits Peche-Mangue: Yogurt with Peach & Mango Mousse Flavor Belgium: Delicieux Aardbeien sorbet Sorbet Fraises: Strawberries Sorbet. Strawberries sorbet, a refreshing sorbet for one intense strawberry experience. 29

30. Exclusive Ingredients Canada: President's Choice Dine-In Tonight Porcini and Truffle Tortelloni. A 340g box of frozen delectable porcini and truffle tortelloni. The exquisitely rich tasting filling contains wild porcini mushrooms and truffle oil, tucked inside delicate egg- pasta pillows. Good for 2 servings. UK: Optifit Multi Fruit 8 Probiotic Yogurt Drinks. Eight bottles of prebiotic and probiotic multi fruit flavored yogurt milk drink with oligofructose, l-carnitine, and vitamins C, E, and B6. Australia: Specially Selected Mountain Muesli. Muesli with treacle, honey, almonds, pepita seeds, and raisins. Offering the consumer something extra with special ingredients. 30

31. New Product Ideas South Africa: Woolworths Breakfast Fruit Booster. Ready-to-eat dried bananas, apricots, and raisins in a plastic bag. UK: Tesco Apple & Blackcurrant Juicy Water. 75% fruit juice + 25% water = 100% natural. Australia: Coles Hot Smoked Salmon Portion USA: Market Pantry Mozzarella Double Twist String Cheese. Twelve individually wrapped mozzarella double twist (yellow and white) string cheese. Great for snacking. 31

32. Plain Fruit & Veggies Can Stand Out South Africa: Woolworths Organic Easy Peelers France: Carrefour Carottes Rapees Grated Carrots. Contains natural beta-carotene. 32

33. Packaging Advantages Which Stand Out UK: Sun Quench Fruity Shots Orange. Six bottles of orange flavored drink with squirty sports cap. With added vitamins. No artificial colors or flavorings. Suitable for vegetarians. 10% fruit from concentrate. Netherlands: Plus Tuinerwten Extra Fijn Vriesvers: Frozen Extra Fine Fresh Garden Peas in a cardboard box with see-through aperture. 33

34. Speedy Step-by-Step  Accommodating single person households with cooking for 1 dishes. Netherlands: AH Albert Heijn 1 Persoons Wok Schotel Japanse Sukiyaki: Stir & Fry Meal Japanese Yukiyaki. Ready to stir and fry Japanese sukiyaki meal with chicken breast, white rice, Chinese cabbage and sauce, separately held in a PET dish. With ingredients ready prepared and simple step-by-step instructions, the consumer can have a freshly cooked meal from the wok in not much more time than a microwave ready meal. 34

35. Big Idea: Small Serves  “Small meal small salad small soup” is a range from AH which includes ready salads, ready meals and soups, all in small servings (280g).  Can be consumed for snacks or main meals. AH Albert Heijn SmallMeal SmallSalad SmallSoup Beef Japanse Teriyaki - Japanese Teriyaki Meal 35

36. So Easy With Steaming Netherlands: AH Albert Heijn Stoommaaltijd Tilapiafilet Kormasaus - Steam Dish Tilapia Fillet with Korma Sauce. Contained in a special plastic microwave dish, with a unique steam valve. Ready to heat in microwave. Microwave 750W 5 ½ minutes or 1000W 4 ½ minutes with innovative steam valve. Steaming is associated with healthy cooking. 36

37. Clever Use Of Secondary Packaging France: Auchan dos de Hoki-Hoki with Potatoes The steam valve which is unique to the product is highlighted with a clever aperture in the secondary package, drawing the consumer’s attention to it. 37

38. Secondary Packaging Colour  Using secondary packaging to convey the meal theme. UK: Waitrose Crab & Chilli Linguine. Prime Scottish crab dressed in a sunblush tomato and chilli oil, served on a bed of egg pasta in a plastic bowl held in a cardboard sleeve. UK: Sainsbury's Espana Paella. Spiced rice seasoned with smoked paprika, garlic and white wine, mixed with red peppers, chorizo, chicken and prawns. 38

39. Sub-Branding To Convey Message UK: Waitrose Cooks' Ingredients. A Measure of Italian Cut Mixed Peel for Baking Australia: Coles Market Place Australian Ginger Paste UK: Sainsbury's Be Good To Yourself Reduced Fat Cherry Cheesecake Australia: Woolworths Naytura Rice & Corn Chips: Sweet Chilli & Sour Cream Flavor. Suitable for vegetarian. No added artificial colors, flavors, or preservatives. Gluten free. 39

40. Seasonal/Limited Edition  Offering the consumer a unique flavour and experience for a limited time. South Africa: Woolworths Limited Edition Moroccan Lamb & Lentil Soup Netherlands: AH Albert Heijn Seizoens Vla Appel-Kaneel: Apple Cinnamon Custard USA: Publix Premium Limited Edition Monkey Business Banana Ice Cream 40

41. Private Label Seasonal Launches 41

42. Private Label Profiting From Upcoming Events South Africa: Woolworths Soccer Champion Shapes Pasta South Africa: Woolworths England and Argentina Money Box World Cup Soccer Selection Jellies 42

43. Novel Niches UK: Waitrose Mini Meringue Shells UK: Marks & Spencer Risotto with Garden Vegetables. A plastic bag of authentic risotto mix with tomatoes, garlic, aubergine, courgettes, red peppers, and green peppers. Canada: President's Choice High Protein Ultra Shake Meal Replacement: Vanilla Flavor. High protein. Lactose free. Excellent source of calcium. Contains 24 vitamins and minerals. 50% more protein than PC Ultra Shake Meal Replacement. Provides all the nutrition of a complete meal. UK: Sainsbury's Football Boot Money Bank with Foiled Milk Chocolate Balls 43

44. Matching Competitors 44

45. Tesco Competes With Discounters  At the end of 2008 UK retailer Tesco launched a new range of 350 products under new discount brands in 10 categories to compete with Aldi.  Similar packaging and price scales to Aldi products.  Tesco also cut prices on existing Tesco and branded products. Tesco or Aldi? 45

46. Carrefour Fights Back in France  Carrefour has launched a new range of 400 low cost food and non-food items and is promoting them via a dedicated Carrefour Discount website.  The launch of 'Carrefour Discount' is the company's latest initiative to defend itself against falling spending from the increasing cost-sensitive consumer.  As well as providing product information on each of the 400 items in the Carrefour Discount range, the website provides low cost recipe ideas and explains in detail its quality promise. 46

47. Carrefour Goes For Clean Look  www.carrefourdiscount.com is a dedicated website to promote its new range of low cost own brand products. www.carrefourdiscount.com 47 Clean- looking packaging with simple, yet effective graphics. color on packaging makes it look “less cheap” and more enticing. Carrefour’s discount range reinforces their brand, which is in contrast to Tesco, who have chosen multiple new discount brand names and packaging styles. 47

48. Getting Back to Basics  Offering more value in basic lines can win over consumers on a budget but still wanting a choice.  Discounters do not offer much choice. 48

49. PL Copy Cats UK: Tesco Crunch Duo Mix Banana Choc Crunch. Deliciously thick and creamy vanilla flavored yogurt with a separate portion of crunchy milk chocolate coated cornflakes. UK: Asda 2 Chapattis: 2 Flatbreads. Two unleavened Indian style flatbreads. Australia: Coles Chocolate Mint Supremes UK: Asda Loaded Cookies & Cream Ice Cream 49

50. Pushing Premium Boundaries 50

51. Differentiating Through Premium  Premium is an area where private label in recent times has excelled -providing the consumer with excellent quality  Excellent, select, choice etc are all examples of premium ranges. 51

52. Provenance = Premium 52

53. Many Fine Dining Options  Consumers staying in to save money may take advantage of private label premium dining options. 53

54. Restaurant Inspired Products UK: Menu from Waitrose Mains for 2 Shepherd's Pie. Slow-cooked minced lamb, carrots, celery, mashed potato. UK: Tesco Finest Oriental Duck & Plum Noodle Bowl. Description : Egg noodles tossed with shredded aromatic duck, pak choi, and spring onion, with a rich, sweet, plum and five spice sauce. Netherlands: Plus Appetit Pappardelle Dried Pasta 54

55. Following Foodservice  Angus beef has been promoted heavily in foodservice (eg McDonalds angus beef burgers)- private label follows trend. UK: Asda Extra Special 2 6oz Aberdeen Angus Beef Burgers Canada: President's Choice Angus All Beef Frankfurters 55

56. Packed For Effect  Beautiful packaging make premium private label products more appealing. 56

57. Knock-offs and Price Comparisons 57

58. Special K  EUR 2.49 Spain: El Corte Ingles Fit Way Copos de Arroz y Trigo Integral Tostadas con Frutas Rojas: Rice & Wholemeal Wheat Toasted Flakes with Red Fruit EUR 2.69 or EUR 8.97/KG Netherlands: AH Albert Heijn Special Flakes: Breakfast Cereal with Red Fruits EUR 2.49 or EUR 8.30/KG EUR 12.97/KG 58

59. Muller Yogurt 0.39 EUR or 2.23 EUR/KG0.49 EUR or 3.27 EUR/KG Germany: Real Knick-Jogurt with Chocolate and Vanilla Balls Germany: MullerJoghurt Ecke with Chocolate Balls 59

60. Magnum (Almond) Launched Internationally Magnum Almond 4.99 EUR or 14.51 EUR/KG Germany: Real Mattea mit Mandel 1.99 EUR or 4.15 EUR/L 60

61. Ferrero Nutella Hungary: Auchan Pate a Tartiner aux Noisettes et au Lait Ecreme: Hazelnut Spread 1.67 EUR or 4.18 EUR/KG Netherlands: Spar Hazelnut Spread 1.65 EUR or 4.12 EUR/KG Greece: Ferrero Nutella Chocolate & Hazelnut Spread 2.28 EUR or 5.70 EUR/KG 61

62. Functional Copy Cats  Private label functional products with the same active ingredients (plant sterols) but come with a cheaper price tag. 3.18 EUR 4.28 EUR 4.97 EUR 5.19 EUR Price/Kg 62

63. Summary  Private Label product launches numbers are growing annually, with the most product launch activity happening in the UK, USA and France.  Difficult economic times have called for some private label brand restructuring and deep discounting in order for retailers to compete with discounters such as Aldi.  Private label also has been innovative in its own right, with super premium offerings, innovating in niche areas and offering comparable and sometimes better products than their branded competitors. 63

64. THE END Send me an email if you would like a copy Glen.Wells@innova-food.com.au 64