1 RESEARCH

2 THE U.S. HISPANIC MARKET “If [Hispanics] were a standalone country, the U.S. Hispanic market buying power would make it one of the top 20 economies in the world.” Source: The Nielson Company – State of the Hispanic Consumer Report 2012

Hispanic Population Growth in the U.S. is Growing, While All Other Ethnicities are Shrinking 3 Source: U.S. Census Bureau Estimated population of the U.S. in 2014 = 321 million Estimated U.S. Hispanic/Latino population = 55 million Number of U.S. Hispanic family households in the U.S. = 11.9 million Anticipated U.S. Hispanic population growth = Increase from 17.8% to 21.9% by 2030 In the next decade, Hispanics will contribute 59% of growth among Millennials and 62% of growth among A18-49

Hispanic Buying Power 4 Source: Food Business News, 12/3/14; Association of Hispanic Advertising Agencies (AHAA), 5/10/12 Hispanic consumers account for 1/6 of the U.S. population, and have increased spending by more than 200% since 2000 Buying power is expected to exceed $1.7 trillion by 2017 Hispanics drive the highest consumer spending potential due to younger age and larger household size (3.8 person per Latino HH vs. 2.5 persons in a non-Latino HH)

5 Targeting the Hispanic Population is Critical to Success Trillion U.S. dollars Source: Statista.com

CPG Growth Depends on Hispanic Consumers 6 Source: Food Business News, 12/3/14; Association of Hispanic Advertising Agencies (AHAA), 5/10/12 Hispanic Buying Power Hispanic consumers account for 1/6 of the U.S. population, and have increased spending by more than 200% since 2000 Buying power is expected to exceed $1.7 trillion by 2017 Consumers drive the highest consumer spending potential due to younger age and larger household size (3.8 person per Latino HH vs. 2.5 persons in a non-Latino HH) Households spend more for food at home: 5.7% annual growth vs. 2.5% for non-Hispanic HHs In the next decade, Hispanics will contribute 59% of growth among Millenials and 62% of growth among A Hispanics consistently spend more money on CPG brands, and are more brand-centric than other demographics Hispanic consumers are willing to pay more for their preferred brands

7 Source: AMG Strategic Advisors, Acosta Sales & Marketing, May 2013 Hispanics over-index on mobile and social media Latinos shop in groups and spend more on groceries vs. the total U.S. population Hispanics prefer to consume Spanish-language media Hispanic consumers seek quality and are loyal to national brands Latinos plan quality family meals in advance Incremental holidays = incremental shopping occasions Hispanics use digital tools as part of their grocery shopping strategy Receive future s (including recipes) Sign up for brand- or store-run sweepstakes, contests or games Visit a brand’s websites and Facebook pages to see if they support similar causes or tell a product story Compare prices on smartphones and computers Multi-platform ad spending is critical for CPG brands to reach high-spending, brand-centric Hispanics Hispanics Spend More on Consumer Packaged Goods

8 Hispanic Trends Reflect Value is Vital in the CPG Category Hispanics are more influenced by strong brands as the best indication of quality The motto is “You get what you pay for,” so they are willing to pay more if the value proposition is there CPG brands that invest in high-growth emerging channels such as club, dollar stores, discount and e-commerce see significant growth Hispanics also over-index in: Dried fruits and grains Fresh fruits and vegetables Beef Pork Poultry Top Hispanic product categories (at Wal-Mart): Fresh eggs Bottled juices Refrigerated juices Soap Mexican foods Source: 2012 Customer and Management Channel Survey, IRI

9 Recent research from I.R.I. has demonstrated that effective marketing to Hispanics and improved insights and activation of these shoppers can result in significant sales and market share uplift for CPG products Recommendations for attracting and growing Hispanic customers: Consistent outreach - Respond to the most appropriate cultural insights Corporate-wide integration and investment Take advantage of local distribution - Differentiate from competitors Focus on Hispanic heritage products and be Hispanic-friendly - Embrace diversity with authentic ingredients Provide healthy and fresh alternatives that appeal to Hispanic shoppers Allow for exploration of products Communicate multi-generational meal solutions that are engaging and entertaining Leverage key Hispanic categories as a gateway for shoppers to spend more Invest in digital strategies customized for the U.S. Hispanic shopper Have highly tailored in-store marketing strategies based on the unique demos of each local market Optimize the retail experience with tailored products, store layouts and attractive promotions Source: AMG Strategic Advisors, Acosta Sales & Marketing, May 2013; Association of Hispanic Advertising Agencies (AHAA), 5/10/12 Investing in Hispanic Consumers is an Investment in Your Brand’s Growth

Defining the Hispanic Convenience Store Consumer Young men are the most frequent C-store shoppers 1/3 of young Hispanic men shop at a C-store at least once a week Spanish dominants spend twice as much on non-gasoline purchases Hispanics spend longer in the C-store and spend more time selecting products prior to making a purchase Households with incomes <$25K spend $11 more on average per trip on non-gasoline purchases than those with a HH income of $75K+ Women are more likely than Men to purchase snack in a C-store, while Men are more likely than Women to purchase all other types of food items Source: © 2012 Mintel Group Ltd.

Acculturated Hispanics Median income of $62K Seek value Willing to compromise on product quality for a good deal More digitally savvy and more concerned with their physical appearance than non-Hispanics Bicultural Hispanics Bilingual, but choose to follow Hispanic traditions More inclined to buy products marketed specifically to Hispanics Most digitally savvy; most likely to try new things Consume both English- and Spanish-language media Unacculturated Hispanics Rely on Spanish translations on packaging and buy products specifically marketed to them Money is tight Passionate about cooking healthy and traditional meals More easily influenced by advertising before buying a product U.S. Hispanics’ Birthplace and Acculturation Influence Shopping Behavior 11 Source: Food Business News, 12/3/14