1. Magnus Gustafsson Future Sales and Supply of Seafood in the United States Future Sales and Supply of Seafood in the United States Magnus Gustafsson

2. Spring SP05 “He who foretells the future, lies… even if he tells the truth.” -Chinese Proverb

3. ($ billions) Food Sales in U.S. 2004 (Source: Technomic 2004) ($ in Billions)

4. Sea...The Future of Seafood Magnus Gustafsson Seafood Statistics…  Seafood sales will increase the next 5 years by 10%  Per Capita Consumption will rise +5 %  Population will increase +5%  10% increase is 220,000 tons edible weight  Supply needs to increase 650,000 tons catch weight

5. Winter WI02 US Consumer Demographics  78 million Baby Boomers enter a new life stage  73 million Gen Y’ers are becoming adults  Ethnic groups keep growing rapidly, Asian & Hispanic +30% Source: IFMA 2004

6. Winter WI02 US Consumer Demographics 1.The Baby Boomers  78 million Baby Boomers enter a new life stage, Empty Nesters, and move toward retirement and grand parenting (born 1946-1964)  Healthier, wealthier, more mobile than past  Want to prolong life  Live with chronic illnesses  Won’t sacrifice flavor or experience/adventure  More disposable income to spend at restaurants …where seafood is eaten most!  Will pay for quality (like Icelandic®), pedigree, presentation, service  Focus on healthy eating and foods  Seafood an important part of ethnic lifestyles Implications for Seafood Market

7. Summer SU12  Time is THE most valuable commodity  Time saving technology is IT!  Technology is focused on …eliminating task …simplifying task …multi-tasking Culture of Convenience Source: IFMA 2004

8. Summer SU12  Time is THE most valuable commodity  Time saving technology is driving the world  Don’t make task easier...eliminate it!  Not just doing it in less time...make it time well spent!  Not one thing...multi-task!  Simplify task...make it effortless!  Lesser quality or experience no longer accepted! Culture of Convenience - Implications  Time rushed population favors eating out  Fully cooked seafood...environmentally friendly package  3 meals a day disappears, 5 “rushed meals” a day  However, increased snacking is issue/opportunity for seafood Source: IFMA 2004

9. Summer SU12  Time is THE most valuable commodity  Time saving technology is driving the world  Don’t make task easier...eliminate it!  Not just doing it in less time...make it time well spent!  Not one thing...multi-task!  Simplify task...make it effortless!  Lesser quality or experience no longer accepted! Affordable Luxuries  Don’t want possessions…experience  “Mass Luxuries”…like Starbucks  Want quality for less…Wal-mart factor  Want more, faster, better, different

10. Summer SU12  Time is THE most valuable commodity  Time saving technology is driving the world  Don’t make task easier...eliminate it!  Not just doing it in less time...make it time well spent!  Not one thing...multi-task!  Simplify task...make it effortless!  Lesser quality or experience no longer accepted!  Don’t want possessions…experience  “Mass Luxuries”…like Starbucks  Want quality for less…Wal-mart factor  Want more, faster, better, different Affordable Luxuries Implications  Seafood perceived as upscale  Shellfish items will continue to increase in popularity …shrimps …crabs …lobster  “Wild” will get premium vs. “Farmed”  Delicate balance in what consumer will pay

11. Summer SU22  Obesity epidemic  Boomers obsessed with looking young  Functional foods used for disease management  Fresh=healthy  Instant communication of studies, diets, drugs  New Dietary Guidelines positive...! Health Issues

12. Summer SU08 +...two a day...twice a week

13. Summer SU04  Boomers wanting to live longer is primary quest  Healthy menu items like seafood will be “hot”  Diet compatible menu offerings  New cuisines and more intense flavors to replace fat and sugars  Functional foods...”Omega 3 ‘s”  Greater emphasis on fresh To Your Health-Implications

14. Summer SU02 Outside Influences  Activist based consumers  Empowered consumers demand more  Hold corporations/officers accountable  Litigation by special interest groups  Humane treatment of food source  Food safety

15. Winter WI08  New labeling and information regulations  Ideology based dining forms  Humane treatment of fish?  Pressure on raw material sourcing- “Is that country/supplier a risk?”  Farmed vs. Wild Takes Center Stage Outside Influences - Implications

16. Winter WI14 Food Distribution Trends  Further distributor consolidation  Operator conducting business via computer  Traditional distributor sales rep disappears  How to be the Wal-mart of the foodservice business

17. Spring SP03  Automation and technology replace labor  Retaining labor huge issue  “Kitchenless” restaurant  Technology to pin point consumers & needs  Chains sophistication puts independents at risk  Must be high quality, authentic, ever changing  Food as food disappears...experience!  “On the Go” menu  Automation and technology replace labor  Retaining labor huge issue  “Kitchenless” restaurant  Chains sophistication puts independents at risk  “On the Go” menu Restaurant Segments Trends

18. Winter WI26 AK - Pollock6.7202.885(57) Cod2.5101.159(54) N-Atlalandic2.070807(61) Iceland392206(47) Pacific440352(20) Hakes1,3801,043(24) Hoki180374107 NA-Pollock480374(21) Redfish440247(44) Haddock400263(34) Total12,1106,349(48) Farmed fish3503,600929 1987 2003 % Change World Supply - Reduction in Wild - Increase in Farmed

19. Winter WI16 U.S. Seafood Consumption in 2010 Quantity in thousand tons 199020032010 Shrimp247525590 Tuna416447425 Salmon82292370 Catfish79149175 AK-Pollock143159170 Tilapia071155 Crab3380100 Cod15585 Clams69 70 Flatfish644255 Scallops344345 Haddock202130 Other345158170 Total1,6862,1412,440 Yellow Bar = Farmed

20. Iceland 25%(47%) Russia 20%(14%) Asia 25%(13%) South America 5%(2%) USA 20%(14%) Canada 5%(3%) Iceland 30%(47%) Russia 15%(14%) Asia 25%(13%) South America 4%(2%) USA 20%(14%) Canada 5%(3%) % weight Figures for 2004 in ( ) Icelandic ® Operations in 2010 New Zealand 1% (1%)

21. Winter WI08 Manufacturer Sales and Service (emphasis on Foodservice) 800 Customers Sourcing Icelandic Group and Other Producers Icelandic ® Operations in 2010

22. Winter WI08 800 Customers Sourcing Icelandic Group and Other Producers Sales Network Direct Sales 43 Broker Companies 70% of Volume Direct Sales Distributors 1,300 Foodservice Distributors of Frozen Seafood Icelandic ® Operations in 2010 Manufacturer Sales and Service (emphasis on Foodservice)

23. Winter WI08 Sales Network Consumer Retail Direct Sales 311 Mil. Consumers Food Sales $1 Trillion 43 Broker Companies Direct Sales $455 B- 55% $467 B 45% Sourcing Icelandic Group and Other Producers Distributors Channel Food service 1300 Foodservice Distributors of Frozen Seafood Source: Technomic 2004 Icelandic ® Operations in 2010 Manufacturer Sales and Service (emphasis on Foodservice)

24. Thank You! “I never think of the future - it comes soon enough.” - Albert Einstein