Food Market Overview September 2005  BMI FOODPACK

Presentation outline… SA market context Food market size Soya market Soya Trends Attitudes towards food Soya in the protein category Conclusion

SA Market context… Growth in health consciousness Consumers sourcing alternatives – changing consumption patterns Substitutions – CSDs for mineral water/iced tea Functional foods, wellness Prebiotics, Probiotics Less processed food types Greater opposition to perceived unhealthy foods Follows international trends Pressure on multi-nationals – contribution to obesity Organic foods – popular but limited, premium

SA Market context (cont)… Food labeling,  awareness Ingredient adjustments eg. Reduced sugar Convenience driven lifestyles 2002 food inflation, 2003 correction in market dynamic 2004 continued increase in disposable income, stable market R/$ fluctuations – competitive local situation Pack functionality Global food trends – move away from conventional eg. Thai

Food market size - 2003… 19 736 458 Tons/Kl

Food category movement…

Category movement (cont)…

Category movement (cont)…

Channel data - 2003…

Channel data (cont)…

Soya  BMI FOODPACK

International soya background… Historically, constituted only a small portion of the agricultural economy Globally, soya dominates world supply of edible vegetable oil, high protein animal feeds USA, Brazil and Argentina account for more than 90% of the world soy bean production

Soya in SA… Mpumalanga main soy bean cultivation area KwaZulu-Natal, Free State - second tier crops 2002 year South Africa harvested approx 220 000 tons of soy bean Comprised only 0.7% of total agricultural value

Soy bean utilisation in SA – 1999 – 2000… 205 000 Tons

Food market size - 2003… 19 736 458 Tons/Kl Confectionery Infant Formulae 19 736 458 Tons/Kl

Soya trends in United Kingdom… Estimated to grow to the value of £750m in 2005 32% of the population in UK believe meat free meals are more healthy 42% of the people in UK seek to reduce meat in their diets 72% of the Population in UK will enjoy meat free meals each week

Soya market trends in SA… Consistent annual growth, peaked 2002/2003 2004 saw a decline in production - effect of minimum wage laws Cost effective protein source Meal “extender”, especially poorer consumers Used in processed meat industry Foodservices Social catering Usage in school feeding schemes Cost effective, within budgetary constraints

SAARF Universal LSM® By Province Mpumalanga Eastern Cape Free State Gauteng KwaZulu-Natal Northern Cape North West Western Cape Limpopo Lsm 1- 4 Lsm 5 Lsm 6 Lsm 7 Lsm 8 Lsm 9 Lsm 10 % of Province that is Rural More than 60 % 31 to 60 % 11 to 30 % up to 10 % SAARF AMPS 2004 LSM – Living Standard Measure

SA Attitudes towards food… Lower end: LSM 2 - 4 Health foods are for fanatics Vegetarian skew – possibly due to meat costs Price/affordability is issue Perception – fast food = junk food Middle market: LSM 5 - 7 Prepared to pay more for healthy food Eat food lower in additives Avoid health issues through healthy eating Upper end: LSM 8 - 10 Opt for high fibre More use of diet products – linked to over-indulgence Convenience driven consumption Source: Target Group Index (TGI)

SA Attitudes towards food… SA and other developing countries have wider spread between rich and poor Not as homogenous as First World Countries Very different food trends Lower end: LSM 2 - 5 Use soya for nutritional value Price/affordability is issue Remains cost effective alternative Upper end: LSM 7 - 10 Purchase soya for health benefits Yoghurts, ice cream, soya bars Two distinct groups Different marketing strategies required

LSM consumption incidence… Source: AMPS

Protein market size – 2003… 2 066 828 Tons

Soya volume trends in SA… Tons 30 000 1998 2004 2006f 23 038 15 269 26 255 *Provisional data, centre of plate soya

Soya growth trends in SA… *Provisional data, centre of plate soya

Soya distribution in SA – 2004… 23 038 Tons, provisional data, centre of plate soya

Soya growth trends in SA… *Provisional data, centre of plate soya

Conclusion… Potential for increased use of soya in staple products for nutritionally disadvantaged sectors of the population Improved nutrition helps in the fight against AIDS pandemic Greater inclusion into alternative categories as wellness, health benefit for upper end of the market Established use in infant formulae Need to improve taste educate consumer remain cost effective to participate against established food products

Food Market Overview Thank You  BMI FOODPACK