Consumer Insights Session

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2 Consumer Insights Session Rick Husted, John Lundeen, Wendy Neuman Checkoff Funded Market Research Team February 4 th 2

3 Today s Discussion Target Audience - Millennials Beef Experience Foundational Tracking Consumer Beef Index, Consumer Image Index, NPD National Eating Trends, Technomics Foodservice Volumetric 3

4 Overview of Millennials Why we re focused on Millennials and how we can engage with them 4

5 Customer of Tomorrow Millennials Born between million strong 5

6 Changing Life Stages Attitudes and Behaviors Are Being Formed Rationale for Millennials as Target Larger than Boomer generation Just starting to have kids 97% own computers; 94% cell phones Online recipes, food photography, video tips Socially, politically progressive A time for developing long-term food choices Same target audience for promotion and issues management 6

7 Approaching peak earning years Source: Mintel - Marketing to Millennials - US - August

8 Millennials are more likely to pay more for food Source: Mintel - Cooking Enthusiasts - US - October

9 Millennials cook to be frugal and healthy, and to learn to cook and impress others Source: Mintel - Cooking Enthusiasts - US - October

10 They generate vast online food-related activity 2.5 MILLION Estimated daily food-related social media posts by Millennials 4.5 MILLION Estimated daily page views on the top five cooking sites by Millennials 5.5 MILLION Estimated daily food-related searches by Millennials Source: R/GA analysis of data from comscore and Crimson Hexagon 10 10

11 Social Marketing Is Mobile Marketing 71% of people use their mobile devices to access social media Social media is the 55% #1 mobile activity of total social media time is spent via mobile device Source: ComScore, Mobile Future in Focus Report, February 2013 and Adobe 2013 Mobile Consumer Survey 11 11

12 Millennials and Beef So what do we know about Millennial s beef eating experiences? 12

13 Beef Occasions by Generation Millennials Gen X Boomers Eating Occasions 40% 29% 31% From Food Service 42% 30% 28% From Retail 39% 29% 32% Ground beef 40% 30% 31% Steak/roast/other whole muscle 40% 28% 32% Millennials represent more beef eating occasions than any other generation. 13 Source: Consumer Beef Index, July

14 Millennials and the Price of Beef So inexpensive that you actually doubt its quality Inexpensive and worth it Just about right 3% 2% 33% Steak at Retail 1% 3% 2% 6% 7% 0% 17% 27% 47% 1% 7% 48% Ground Beef at Retail 1% 0% 2% 2% 5% 13% 55% 43% 44% 45% Expensive but worth it Too expensive and definitely not worth it 39% 23% 29% 19% 29% 44% 23% 31% 12% 23% 8% 36% 19% 35% 13% Total Millennial Gen-X Baby- Boomers Total Millennial Gen-X Baby- Boomers 14 Source: Consumer Beef Index, July 2013

15 Preference for Beef Versus Chicken July % 45% 40% 35% 30% 38% 27% 37% 28% 42% 39% 39% 29% 30% 27% 36% 31% 37% 29% 36% 30% 37% 33% 38% 37% 30% 30% 39% 40% 28% 29% 38% 30% 44% 8% 17% The gap for Millennials is even greater 25% 27% 20% 15% Strongly/Somewhat Prefer 10% Chicken 5% Beef 0% Prefer Equally Eat Neither 32% 3% Jan 07 31% 3% May 07 26% 3% Feb 08 29% 2% Jul 08 31% 3% Mar 09 30% 2% Jul 09 33% 2% Feb 10 32% 2% Jul 10 28% 2% Feb 11 30% 2% Jul 11 31% 2% Mar 12 31% 2% Jul 12 28% 2% Feb 13 31% 1% Jul 13 Base: Total (N = 1,000+ per wave) Q.34: Overall, thinking about beef and chicken, which do you prefer to eat for dinner? 15

16 Beef/Chicken Superiority Traditional All-American food Great for grilling Taste Protein content Provides lasting satisfaction Makes memorable meals Very pleasurable to eat Many lean cuts available Ease of preparation Good source of fuel for body Variety of preparation methods Low fat content Nutritional content Good any night of the week Value for the money A worry-free food Calorie content Not feeling guilty about eating Good for kids 62% 56% 58% 44% 43% 39% 34% 35% 29% 30% 26% 21% 20% 22% 19% 18% 13% 13% 15% Chicken is better Beef is better Base: Total Key: Significant change from July 2012 () or in same season trend () Q.37: For each of the factors listed below, please rate whether you think that beef is better than chicken, that chicken is better than beef or that the two are about the same. 16 5% 14% 13% 13% 12% 11% 10% 9% 9% 8% 18% 27% 25% 23% 23% 21% 30% 30% July %

17 Traditional All-American food Great for grilling Taste Protein content Provides lasting satisfaction Makes memorable meals Very pleasurable to eat Many lean cuts available Ease of preparation Good source of fuel for body Variety of preparation methods Low fat content Nutritional content Good any night of the week Value for the money A worry-free food Calorie content Not feeling guilty about eating Good for kids Beef/Chicken Superiority Millennials 56% 56% 50% 44% 46% 46% 46% 38% 37% 38% 32% 29% 25% 24% 22% 24% 18% 20% 14% Chicken is better Beef is better Base: Total in segment (N = 591) Key: Significantly higher/lower than non-segment ( ) Q.37: For each of the factors listed below, please rate whether you think that beef is better than chicken, that chicken is better than beef or that the two are about the same. 17 8% 13% 12% 10% 14% 12% 10% 18% 16% 19% 18% 23% 26% 24% 30% 28% 31% July % 39%

18 Millennial Parents - Chicken vs. Beef Q.16 You said you prefer chicken the MOST to prepare and serve to your child/children, from the list below please let us know why. (n =373), Top 10 Shown CHICKEN CAN BE PREPARED IN A WIDE VARIETY OF WAYS CHICKEN IS EASY TO PREPARE MY CHILD/CHILDREN PREFER THE TASTE OF CHICKEN CHICKEN GOES WELL WITH A WIDE VARIETY OF SIDES AND OTHER FOODS MY CHILD/CHILDREN LOVE CHICKEN NUGGETS OR CHICKEN FINGERS/STRIPS CHICKEN IS ALWAYS A CROWD PLEASER - EVEN FOR FINICKY EATERS Ease of Preparation and Preference for Chicken 61% 59% 57% 56% 52% 52% I KNOW HOW TO PREPARE AND SERVE CHICKEN 47% CHICKEN GOES A LONG WAY AND IS GOOD FOR LEFTOVERS CHICKEN IS NOT EXPENSIVE CHICKEN HAS BECOME A FAST FAMILY MEAL CHOICE 36% 40% 40% Millennial Parents and Beef, December 2012 Total 18

19 Millennials: Beef s Performance & Information Needs What Millennials Think Why Millennials Are Confused Total Moderates Millennials 90% 83% Agree Completely/Somewhat 78% 83% 78% 71% Millennials are confused about beef cuts which inhibits their use of steak. They want lean cuts but don t know there are many available. 54% say its hard to know what cuts to choose in the meat case 50% would buy more beef if they knew more about the different cuts Key: Significantly lower than non-segment ( ) Easy to pick out cuts Many lean cuts available Base: Split sample (N = 505) Ranked by at-home importance Q.32a: How much do you agree or disagree with each of the following statements when eating each food type at home. Consumer Beef Index July Millennial s & Beef

20 Millennials: Beef s Performance & Information Needs What Millennials Think What Millennials Want Total Moderates Millennials Agree Completely/Somewhat 85% 88% 75% Millennials don t know how to cook beef and have disappointing results with steaks & burgers. 75% would like information about steaks and how to cook and prepare them 55% would like more information on preparing & serving beef to children 67% would like to see trained butchers on staff at stores to provide cooking advice Know how to prepare well Key: Significantly lower than nonsegment ( ) Base: Split sample (N = 505) Ranked by at-home importance Q.32a: How much do you agree or disagree with each of the following statements when eating each food type at home. Consumer Beef Index July Millennials & Beef

21 Key Insights Millennials are developing their taste and preference for food. They look to impress friends when cooking and social media is the best way to communicate with millennials; they are connected. Millennials need convenience, including on demand information Millennials are busy (i.e., eat on the go, enjoy a fast-paced lifestyle). When buying beef, they look for cuts that can be prepared quickly. Millennials are less knowledgeable about beef and love chicken. They prefer chicken (44%) Funded to beef by (27%) The for Beef dinner Checkoff by a higher margin than do older consumers. They tend to buy it all the time because they consider it easy, versatile, worry-free, low fat, low calorie and great tasting. They are less sensitive to rising food prices and tend not to take the time to carefully pre-plan their food shopping trips. 21

22 The Beef Experience Hypothesis - The Beef Experience Establishes Value Fix as Way to Add Value Beef Challenge Positive Equity of Beef Protect At Tipping Point Neutral 22

23 The Beef Experience Beef Challenge Positive Equity of Beef Neutral 23

24 The Beef Experience (Subjective viewpoint) Where Safety Was Convenience Steak Dinner Confidence Millennial Beef Cooking Skill Beef Challenge Neutral Memorable Taste Positive Equity of Beef Special Situations Grilling, Celebratory Ground Beef Everyday Versatility Convenience Fast Food Hamburgers Nutrition Tenderness Where Safety Is Today Production 24

25 The Beef Experience (Subjective viewpoint) Memorable Taste Beef Challenge Positive Equity of Beef Neutral 25

26 91% 92% 86% (Page 1 of 3) Extremely/Very Important Agree Completely/Somewhat 83% 83% 78% 63% Importance and Performance At Home 61% 85% 87% 83% 82% 83% 78% 78% 75% 74% 72% 74% 71% 67% Importance Beef Performance Chicken Performance 68% 68% 67% 67% 67% 65% 60% 54% 84% 88% 84% 84% 87% 82% 82% July 2013 Base: Split sample (N = 501) Q.13a: How important is each of the following characteristics when choosing whether to have beef, chicken, fish, pork or other main dish alternatives for dinner at home? Q.32a: How much do you agree or disagree with each of the following statements when eating each food type at home. 26

27 Reasons Reportedly Consuming More Beef Among consumers (17%) who feel they are eating more beef Extremely important Very important July 2013 Taste of beef 53% 25% 78% Grilling more often 33% 21% 54% Great prices 31% 24% 55% Quick and easy 30% 34% 64% The right choice for many occasions 28% 38% 66% Adding protein to your diet 28% 27% 55% Better availability of cuts 28% 24% 52% A family favorite 26% 31% 57% Less price-conscious now 26% 17% 43% Less worried about safety 25% 23% 48% Learned new ways to prepare beef 23% 24% 47% Hearing better news about it being healthy 21% 17% 38% Lean beef fits a healthy diet 20% 25% 45% Tired of the other meats 18% 22% 40% Base: Those eating more beef (N = 174) Q.38d: As you noted earlier, you have been eating more beef in the last six months. How important or what impact did each of the following have on your decision to eat more beef? 27

28 Beef Experience Drivers Serving steak, in particular, and even home made burgers seem to surface richly articulated & motivational triggers for beef Many of these triggers connect directly back to the BIWFD campaign Taste Trigger Memories Trigger Emotional Benefits Tender/juicy Thick/hearty Bold/Flavorful Melts in mouth Stands on its own (no cover needed) Filling Center of the plate/the star Taste in 1 st bite Outdoor Grill/BBQ Fourth of July Birthdays Dinner date Reunion Social/family gathering Dad grilling Luxury/special Belong/family The best The original protein Winner/Success All American Deep down tradition Progress Foundation 28

29 The Beef Experience (Subjective viewpoint) Convenience Steak Dinner Confidence Millennial Beef Cooking Skill Beef Challenge Positive Equity of Beef Neutral 29

30 Chicken Wins for Convenience Almost 5 of the last 10 meals are last minute decisions (after 4:30 pm) 53% 13% 30

31 (Page 1 of 4) Agree Completely/Somewhat 95% 93% 91% 94% 88% 75% 80% Beef Performance by Segments 77% 65% 66% 63% 64% 62% 61% 61% 85% 79% 82% 78% 78% At Home Total Moderates Millennials Bucket 1 Bucket 2 87% 92% 92% 88% 87% 85% 78% 78% 75% 75% 72% 73% 74% 71% 71% 69% 62% 54% 56% 52% July % 66% 64% 60% 61% Base: Split sample (N = 505) Ranked by at-home importance Key: Significantly higher/lower than non-segment ( ) Q.32a: How much do you agree or disagree with each of the following statements when eating each food type at home. 31

32 Agree Completely/Somewhat Beef Performance by Segments At Home July 2013 Total Moderates Millennials Bucket 1 Bucket 2 85% 88% 92% 87% 75% Top Box Score: Millennials = 45% Gen X = 58% Boomers = 68% Know how to prepare well Base: Split sample (N = 505) Ranked by at-home importance Key: Significantly higher/lower than non-segment ( ) Q.32a: How much do you agree or disagree with each of the following statements when eating each food type at home. 32

33 Convenience - Issues with Defrosting Online study ranked dozens of convenience concerns consumers had with beef: Improving these convenience points will very likely increase beef use MAJOR POTENTIAL IMPACT Being able to cook from frozen Shortening defrost time New faster defrosting method for ground beef in the works There s a way to do it better find it. - Thomas Edison SOURCE: Convenience Study,

34 The typical beef meal preparation process has a number of pain points (from a qualitative study ethnographic study) For most, meat items drive the meal plan. Scheduling and coordinating is focused on the meat cooking schedule. = pain points Estimate time req d by meal item Assemble items for prep Pre-heat cooking unit Prep process Cook Set table Test meat for doneness Remove cooked dishes Serve Cleanup Remove from package and examine Touching with hands Trim fat, season Tending the meat while cooking Visual or cut and feel or thermometer Rest, cut Planning and fretting over the meat cooking and the possible family rejection of the finished meat. Handling meat Trimming excess fat. Absorbing or pouring off excess fat. Testing and fretting about the doneness. Worrying about the family s reactions to the meat. Germs Pots and pans 34

35 Consumer Insights Foundational Tracking Consumer Beef Index Consumer Image Index NPD National Eating Trends Technomic Foodservice Volumetric 35

36 Funded by The Beef Checkoff 36

37 Consumer Insights Consumer Beef Index Conducted twice a year About 1,000 consumers online Informs Beef Industry Long Range Plan Strategic direction Checkoff planning Checkoff program execution 37

38 CBI - Overall Consumer Perceptions of Beef 23% 26% Beef Bucket 1 Positives strongly outweigh negatives 70% 75% 26% 46% 45% Bucket 2 48% 52% 47% Positives somewhat outweigh negatives 24% Chicken 91% Jul 13 44% Bucket 3 20% 20% Negatives somewhat 18% 17% outweigh positives 7% 2% 10% 8% Bucket 4 Negatives strongly outweigh positives 8% 7% Jan 07 May 07 Feb 13 Jul 13 38

39 CBI - Importance and Performance At Home Top 5 Most Important Factors to Consumers July 2013 Importance Beef Performance Chicken Performance 91% 92% 86% Great Tasting 83% 83% 78% 67% 63% 61% Good Value for the Money Extremely Safe to Eat 82% 83% 75% 72% 78% 78% Balance of Taste and Nutrition Good Results Consistently Extremely/Very Important Agree Completely/Somewhat Base: Split sample (N = 505) Q.13a: How important is each of the following characteristics when choosing whether to have beef, chicken, fish, pork or other main dish alternatives for dinner at home? Q.32a: How much do you agree or disagree with each of the following statements when eating each food type at home. 39

40 CBI - Importance and Performance At Home Factors 6-8 July 2013 Importance Beef Performance Chicken Performance 83% 74% 71% 74% 85% 87% 68% 54% 65% Feel Good About Eating Know How to Prepare Well Is Always Tender Extremely/Very Important Agree Completely/Somewhat Base: Split sample (N = 505) Q.13a: How important is each of the following characteristics when choosing whether to have beef, chicken, fish, pork or other main dish alternatives for dinner at home? Q.32a: How much do you agree or disagree with each of the following statements when eating each food type at home. Source: Consumer Beef Index, February

41 CBI - Consumption Frequency Servings Per Week Number of beef meals (combined in-home and foodservice) eaten per week is down July Jan '07 May '07 Feb '08 Jul '08 Mar '09 Jul '09 Feb '10 Jul '10 Feb '11 Jul '11 Mar '12 Jul '12 Feb '13 July '13 Past Week Servings (mean) Chicken Beef Pork Fish Veal Base: Total (N = 1,000+ per wave)) Key: Significant change from 2012 () or in same season trend () Q.19: Thinking about all of your meals breakfast, lunch, dinner and snacks both at home and away from home, how frequently do you eat 41 each of the following types of food? Q.20: How many times did you eat this type of food in the past week?

42 Key Insights Beef has shown steady improvement over the past six years especially with Bucket 2 consumers Most important attributes continue to be Taste, Safety, Value, Nutrition and Consistency Beef and Chicken perform about the same for Taste Beef lags behind chicken in most high importance categories, especially being Extremely Safe to Eat Servings per week for beef and chicken have been on a steady decline 42

43 Consumer Image Index October 2013 Funded by The Beef Checkoff 43

44 Consumer Insights Consumer Image Index Conducted once a year About 1,000 consumers online Informs Beef Industry Long Range Plan Strategic direction Checkoff planning Checkoff program execution 44

45 CII - Favorability -- Product versus Production Practices October, 2013 Consumer Image Index, July 2013 Consumer Beef Index Beef How Cattle are Raised Bucket 1 Positives strongly outweigh negatives Bucket 2 Positives somewhat outweigh negatives 24% 52% 76% 12 percentage point shift downwards 20% 44% 64% Up only 2 percentage points Bucket 3 Negatives somewhat outweigh positives Bucket 4 Negatives strongly outweigh positives 17% 7% 25% 11% Q.12/13: Considering all you know about beef, would you say? Q.21/22: Thinking specifically about how cattle are raised for food in the U.S., do you believe that? 45

46 Perceptions of the Product and Production Practices The Product The Production BEEF CHICKEN BEEF CHICKEN Bucket 1 Positives strongly outweigh negatives Bucket 2 Positives somewhat outweigh negatives 32% 46% 52% 39% 44% 20% 20% 78% 92% 64% 66% 46% Bucket 3 Negatives somewhat outweigh positives Bucket 4 Negatives strongly outweigh positives 15% 7% 5% 2% 25% 23% 11% 11% Q.12/13/14: Considering all you know about beef/chicken/pork, would you say? Q.21/22: Thinking specifically about how cattle/chickens are raised for food in the U.S., do you believe that? 46

47 Market Segments Non-Socially Conscious (23%) Socially Conscious Consumers (78%) Socially Conscious FHI (45%) SocCon Proactive FHI (11%) N = 1,187 Consumer between the ages of 18 and

48 Knowledge About Production Practices Cattle Chickens Hogs Feel knowledgeable about 30% 33% 37% 50% 31% 34% 39% 56% 24% 26% 29% 41% Know almost nothing about 41% 39% 33% 21% 38% 35% 31% 18% 49% 47% 43% 29% Total Key: Significantly higher/lower than non-segment ( ) Q.15: Please indicate how knowledgeable you are about each of the following Socially Conscious SocCon FHI SocCon Proactive FHI 48

49 Concerns Increased From Recent Information Anything Increasing Concerns About How Cattle are Raised for Food Anything Increasing Concerns About How Chickens are Raised for Food Yes No Yes No 23% 77% 25% 75% 27% 73% 28% 72% 26% 74% 28% 72% 41% 59% 46% 54% Overall, 18% Note Specific Concerns, Including: Antibiotic/hormone use Mad Cow/diseased/sick cattle Inhumane, crowded conditions The method of slaughtering What cattle are fed/unnatural diet Overall, 20% Note Specific Concerns, Including: Caged, over-crowded conditions at chicken factories (Dominant mention) Salmonella/recalls/people getting sick Unsanitary processing Antibiotic/hormone use Key: Significantly higher/lower than non-segment ( ) Q.31j/l: Have you recently read, seen or heard anything that concerns you about how [cattle/chickens] are raised for food? 31k/m: What, specifically, was it that you read, saw or heard that made you concerned? Total Socially Conscious SocCon FHI SocCon Proactive FHI 49

50 Importance Versus Performance Extremely/Very Important Beef Performance Chicken Performance 89% 88% 87% 86% 69% 66% 64% 64% 69% 67% 67% 65% Strict processing sanitation guidelines Hold consumers safety as utmost in importance Stringent disease prevention protocols Dedicated to animal health Performance = Strongly believe/fairly certain industry is doing it Q.16: How important is it to you that U.S. meat industries? Q.23: Now, just thinking about chickens or cattle raised for food, how much do you agree or disagree with each of the following statements about each of these two industries in the U.S.? 50

51 Importance Versus Performance Extremely/Very Important Beef Performance Chicken Performance 83% 83% 83% 77% 63% 60% 53% 50% 39% 41% 43% 42% Continually improving food safety Use antibiotics responsibly Products free of added hormones Openly share information with the public Performance = Strongly believe/fairly certain industry is doing it Q.16: How important is it to you that U.S. meat industries? Q.23: Now, just thinking about chickens or cattle raised for food, how much do you agree or disagree with each of the following statements about each of these two industries in the U.S.? 51

52 Importance Versus Performance Beef outperforms chicken in several animal care categories. Extremely/Very Important Beef Performance Chicken Performance 79% 77% 74% 54% 38% 50% 51% 43% 40% Animals have room to roam/exercise Continually improving animal care Raise animals in natural settings Performance = Strongly believe/fairly certain industry is doing it Q.16: How important is it to you that U.S. meat industries? Q.23: Now, just thinking about chickens or cattle raised for food, how much do you agree or disagree with each of the following statements about each of these two industries in the U.S.? 52

53 Key Insights Consumers are less positive about beef production than beef the product Consumers attitudes about the production of beef and chicken are similar About one-third of consumers say they are knowledgeable about beef production About one in four say they have recently seen, heard or read something concerning about beef/chicken Beef concerns focus on animal welfare and antibiotic or hormone use Most important production factors center on similar criteria Beef outperforms chicken in several key animal care criteria 53

54 Consumption Patterns of In- Home Beef January 2014 Copyright The NPD Group, Inc. All Rights Reserved. This presentation is Proprietary and Confidential and may not be disclosed in any manner, in whole or in part, to any third party without the express written consent of NPD.

55 Consumer Insights NPD In-Home Consumption Ongoing in-home electronic diary 2,000 consumer households 5,000 individuals Online survey Informs Beef Industry Long Range Plan Strategic direction Competitive response Checkoff planning Checkoff program execution 55

56 Despite a growing population, in-home beef consumption has been on the decline for two Projected consecutive In-Home Beef years Consumption now. Trend (in Billions) Annual Eatings Down a half a billion eatings in-home. AEPC Population (000 s) Data for two years ending August Data represents total beef consumption Source: The NPD Group/National Eating Trends/ In-Home Database and US Census Bureau 2008 National Population Projections 56

57 Steaks and roasts both saw decade-lows in in-home consumption over the past year In-Home Beef Consumption Trend by Cut Annual Eatings Per Capita Pt. Change vs 08 GROUND BEEF STEAKS Ground Beef/Hmbgr BSD Dishes Steaks Other Cuts* Beef Roasts Beef Ribs *Other Cuts Includes Cubes, Chipped, Chucked, Loin/Tenderloin, Stew Meat, and Unspecified beef Data represents total beef consumption Data for two years ending August Source: The NPD Group/National Eating Trends/ In-Home Database 57

58 Key Insights Despite a growing population, in-home beef consumption has been on the decline for two consecutive years now In-home beef eatings account for roughly 2/3 rd of the total; the balance coming from foodservice From a dollar value standpoint, the reverse is true with foodservice contributing about 60% of total beef value Steaks and roasts both saw decade-lows in in-home consumption over the past year 58

59 Usage and Volumetric Assessment of Beef in Foodservice: 2013 Edition December 2013 Project #15361 Prepared by

60 Consumer Insights Foodservice Volumetric Conducted once a year Solicit feedback from protein purchasing executives at top 180 restaurant chains Online survey Informs Beef Industry Long Range Plan Strategic direction Checkoff planning Checkoff program execution 60

61 Foodservice Volumetric - Total Protein Market in Foodservice The total foodservice protein market represents billion pounds. Volume is up 343 million pounds from 2012, and 242 million pounds since Of the total protein pound increase in 2013, Beef accounts for 23%, while chicken accounts for 41%. Segment Since 2009, however, Beef represents the largest pound increase of any protein at 178 MM Lbs. % MM Lbs. % MM Lbs. % MM Lbs. % MM Lbs. % million pounds. Beef 8,072 32% 7,994 32% 7,855 32% 7,947 32% 7,894 32% MM Lbs Chicken 7, , , , , Pork 5, , , , , Seafood 2, , , , , Turkey 1, , , , , Veal All Others* Total 25, % 24, % 24, % 24, % 24, % +242 *Game, Cornish hen, duck, buffalo, etc. Note: Numbers may not add due to rounding. Source: Technomic, Inc. 61

62 Foodservice Volumetric Beef versus Chicken Beef and Chicken Foodservice Wholesale Market Volume and Value 2013 Volume 2013 Dollar Value Chicken 7,630 MM lbs. 49% Beef $32,061MM 59% Beef 8,072 MM lbs. 51% Chicken $22,313MM 41% 62

63 Year-over-year change All major beef categories grew volume in 2013 with the exception of Other Beef Ribs and Pre-Cooked Roast Beef were the only two major beef categories to grow dollar value Annual Total = Billion Lbs. Lb. Change 2013 vs = +79 Million Lbs Ground Beef Steaks Ribs Roasts (subprimal) Pre-Cooked Roast Beef -5 Other Beef 2013 Annual Total = $ Million Dollar Change 2013 vs = -$884 Million $91 $10 $(15) $(85) Note: Numbers may not add due to rounding. Ribs Pre-Cooked Roast Beef Other Beef Roasts (subprimal) $(396) Steak $(489) Ground Beef 63

64 Beef Market Volume During the recession, beef volumes declined less than overall traffic. 8,181 Recovery for beef has been stronger than overall foodservice industry. 7,894 In MM Lbs. 7,948 7,855 7,994 8,072 In $MM (wholesale) $32,945 $30,401 $32,061 $26,300 $26,977 $24, *At the operator purchases, or distributor sales level. Source: Technomic, Inc. 64

65 Key Insights Beef s continues to have the largest share of the foodservice protein market; chicken continues to be a close second Chicken accounted for the largest percentage growth in 2013 of all foodservice proteins, including beef Since 2009, beef has represented 75% of incremental pounds sold in foodservice While beef and chicken continue to share similar volumes in foodservice beef s overall dollar value is considerably higher Beef realized volume growth in most major categories Beef s dollar value growth was limited to Ribs and Pre-Cooked Roast Beef Beef s recovery from the recession has been stronger than the overall foodservice industry 65

66 Thank you. 66