All Hands on Deck Meeting Eastern Europe Season 2015-2016 Tatiana Novikova, Regional Representative October 22, 2015

Market update, Russia - Putin’s decree “destruction on the border” of all food brought into the country against import bans on Western products. In June first food deflation (0.4%) recorded since August 2014; growth for food prices slowed to 18.8%. In the end of August Russian ruble crashed to its weakest level since January. 71.65rub/usd August 2015 – 36rub/usd August 2014. So-called "import substitution" has become a central plank in Russia's response to an economic crisis, actively promoted by the government. Far East salmon catch is expected on the level of 330 th tons, which is around 10% less than in 2013 Retailers lowered their quality requirements for caviar. GOST standard was changed to milder TU – which will result in lower quality of caviar on shelves. Russian President Vladimir Putin signed a decree ordering the “destruction on the border” of all food brought into the country against import bans on Western products. in June, for the first time since August 2014, food deflation was recorded in Russia, in monthly terms it was 0.4% (inflation in May was 0.1%); growth for food prices slowed to 18.8% from 20.2%. In the end of August, plunge in prices for Russia’s main export, crude oil, sent the ruble crashing to its weakest level since January. Russia’s ruble eased as far as 71.65 to the U.S. dollar on Monday, August 25 as concerns over the Chinese economy drove the price for Brent crude below $45 a barrel for the first time since March 2009. The ruble was trading around 36 to the dollar this time in 2014. So-called "import substitution" has become a central plank in Russia's response to an economic crisis. The trend is driven in part by the sharp decline in the rouble, which has the effect of making imports more expensive, helping the competitiveness of goods made locally. It is also being actively promoted by the government. Far East salmon catch is expected on the level of 330 th tons, which is around 10% less than in 2013 Retailers lowered their quality requirements for caviar. GOST standard was changed to milder TU – which will result in lower quality of caviar on shelves. Retailers are trying to reduce prices and preserve the level of sales in the light of slow consumer demand.

Market update, Ukraine Standard & Poor's lowered its ratings for Ukraine to “selective default” The International Monetary Fund has once again revised its forecast for Ukraine's GDP in 2015 downwards, to 11% from 9% projected in June. Devaluation of the local currency and following decrease of the purchasing power of population by 35% approximately Fluctuation of the US dollar rate and as a result the import of goods becomes unprofitable. Import of food products, alcoholic beverages and tobacco products reduced by 25%. On Dec 1,2016, 10% customs duty recalled. Increase of import volume expected. Importers buy on spot. Ukrainian fish processors diversify their business sending valued added products to CIS countries. The credit rating agency Standard & Poor's lowered its ratings for Ukraine's short-term debts in foreign currencies to "selective default." The move means the American credit rating agency does not believe Ukraine will be able to fully pay back its debt to commercial bondholders. The International Monetary Fund (IMF) has once again revised its forecast for Ukraine's GDP in 2015 downwards, to 11% from 9% projected in June. According to Fitch forecasts, the Ukrainian economy decrease in 2015 will total 9%, while the World Bank is a bit more optimistic and estimates GDP decline of 8% by the end of 2015. Devaluation of the local currency and following decrease of the purchasing power of population by 35% approximately; Fluctuation of the US dollar rate and as a result the import of goods becomes unprofitable. The significantly reduced purchasing power had a strong negative impact on the consumer goods market, which in turn led to decline of import of consumer goods and light industry products. For example, import of food products, alcoholic beverages and tobacco products reduced by 25%: 4502 containers in the second half of 2014 against 3349 in the first half of 2015. On Dec 1,2016, additional 10% customs duty recalled. Increase of import volume is expected. For the moment importers by on spot. Ukrainian fish processors diversify their business sending valued added produce to CIS countries.

FY2016 EEU Strategy Russia, Ukraine: Support Alaska sales in Ukraine in spite of economic issues, preserve market share. Changes: -       Reduce price per promotion -       Partner with most reliable players on the market -       Cost share with FAS/other cooperators – ATO/USMEF interested Maintain contact to Russian/Ukrainian fish trade: -       Attend relevant trade shows, communicate through season -       Monitor situation on the market, report changes For Russia/Ukraine we plan to continue with trade servicing and emphasize roe/surimi products. Most likely projects will happen with contacts that we have known for several seasons. We are planned to coordinate a retail promo with Fozzy Group – leading retailer on Ukrainian market, that imports directly from the U.S. Also, US Embassy has become more active with promotions, so we might be able to join funds. 4

FY2016 EEU Strategy New markets geography:  - Create opportunities for Alaska sales on new markets. Build ASMI brand: top and consistent quality, wide assortment, wild, sustainable. Focus: importers, retailers, HRI, media, GR. Activities: trade shows, trade servicing, representational events, market analysis. Global ranking/GDP per capita GRP per capita, USD popultation, th people Kazakhstan 51 24,020 17,498 Romania 60 19,712 19,861 Azerbaijan 69 17,618 9,593 Georgia 112 7,653 3,729 Armenia 116 7,374 3,010 Moldova 129 4,979 3,555 For Kazakhstan and Azerbaijan we plan to attend relevant shows in order to meet target trade, as well as coordinate representational events on both markets. Most likely, in partnership with other U.S. suppliers and U.S. mission. We plan to display the product, arrange tasting and chef demo to highlight the quality of Alaska Seafood. Conduct PR campaign in professional media in order to spread the word out to target trade. We will also continue with market research in Georgia, Romania, Armenia, Moldova. 5

EEU Activity Highlights Trade servicing. Trade shows: World Food Moscow, PIR Moscow, Armenia Food&Drinks. Goal: maintain contact to trade and HRI partners. Retail merchandising: trial salmon roe tastings in Silpo supermarkets of Fozzy Group.

Upcoming activities EEU Russia, Ukraine: Trade shows: Attend: World Food Kiev, ProdExpo Moscow Retail merchandising: Fozzy Group (leading Ukr retailer, importing directly) + old partners (Alaska Group, UFC, Optim Alliance) HRI: Cooperation with Ukrainian Chefs Association

Upcoming activities EEU Representational events in Kazakhstan (beginning of December) and Azerbaijan (May) with participation of U.S. diplomatic mission (present product to trade, strengthen established connections, get media attention) Visit trade shows in new markets, incl Georgia (AgroFood, Tbilisi, November), Romania (Indagra, Bucharest, October), Moldova. Continuation of market research, trade lead collection, database development Work on ASMI brand through advertorials in professional media

Thank you!