Avocado Category Channel Trends: Bagged vs. Bulk 2017 Retail Channel Study Part 3 Avocado Category Channel Trends: Bagged vs. Bulk Bagged and Bulk Avocado Insights and Category Growth Opportunities by Retail Channel

Table of Contents Terms and Definitions 3 Executive Summary 5 Overview and Channel Comparisons 8 Channel-by-Channel Insights & Opportunities 15 Grocery 16 Walmart 23 Club 30 Mass/Supercenter 37 Internet 44 Dollar 51

Terms and Definitions Channels:* Purchase Type All Channels – An aggregation of the following channels Grocery – Grocery stores Walmart – All Walmart non-Club stores including Supercenters Club – Costco, Sam’s Club, BJ’s, and Other Club Mass/Supercenter – Excludes Walmart Internet – All online avocado purchase sites (e.g. Amazon, Walmart.com, etc.) Dollar – Dollar stores All Other – An aggregate of all other/miscellaneous store formats Purchase Type Bulk Avocados – avocados purchased individually/loose Bagged Avocados – avocados purchased in bags, clamshells or any other multi-avocado packaging Metrics: All metrics in this report are rounded Annual Spend/Buying Rate – Average annual avocado dollar spend per avocado buying household Number of Trips – Average annual avocado purchase occasions per avocado buying household Spend per Trip – Average avocado dollar spend per purchase occasion Purchases – Throughout this report, “purchases” refers to dollar purchases. Volume/units/eaches are not available Shoppers – Throughout this report, “shoppers” refers to households that purchase avocados Time Periods: Current Year (CY) – 2016 Calendar year Prior Year (PY) – 2015 Calendar year Source Data: IRI Consumer NetworkTM 2016 (Details on page 4) *Within each channel, miscellaneous retailers may be captured as “Other”. For example, Club includes Costco, Sam’s Club, BJ’s and “Other Club”

Data Source: IRI Consumer NetworkTM This report is based on household purchasing data from the IRI Consumer NetworkTM. IRI receives its household purchasing data from the National Consumer Panel (NCP), an operational joint venture by IRI and Nielsen. The NCP is a continuous household purchasing consumer panel that consists of a representative sample of U.S. households who electronically record all purchases. Households are recruited to the NCP and are incented to record all of their purchases, regardless of where purchased, using a handheld in-home scanning device. Electronically recorded at home In-store purchases For categories such as avocados, which are sold individually (bulk) and in a bag/package, panelists occasionally encounter technical issues when scanning the bagged UPC code. These purchases may then be recorded as bulk to ensure the purchase is captured. However, this can cause bagged purchases to be understated and bulk purchases to be overstated. Note: The findings in this study show the strength of bagged avocado trends, and it is likely that the impact of bagged avocados is even greater than shown due to understated bagged purchases. This is particularly evident in the Club channel, where the data shows bulk purchases although the Club channel does not generally sell bulk avocados.

Executive Summary Objective The objective of this study is to identify actionable, data-based insights and growth opportunities for Hass avocados by analyzing shopper purchase trends for Bulk and Bagged avocados in each of the major retail channels. Background Fresh avocados can be purchased in a variety of retail channels, with retailers in each channel tailoring their product offerings to meet the needs of their target shoppers. This means more choice and greater convenience for shoppers. One key choice for avocado shoppers at point of purchase is whether to buy loose avocados (Bulk) or whether to purchase avocados in a multi-pack (Bagged). This report, Part 3* in a series of shopper insights studies by channel, examines the influence of shoppers’ Bulk vs. Bagged choices on category performance in each channel, and identifies data-based opportunities for future category growth. Highlights of Key Findings Grocery: Traditional Grocery stores have long been a primary destination for avocado purchases, and Grocery leads all other channels in avocado buying rate at $19.44 per household. This spend rate is driven primarily by high trip frequency for Bulk avocados (5.3/year). Maintaining and increasing Bulk trip frequency is a key category growth opportunity for the channel. Bagged avocados have clearly gained market prominence in general, as well as in Grocery, but sometimes at the expense of Bulk. Shopper data shows that a key category growth opportunity for Grocery is to drive incremental Bagged purchases. * HAB - 2017 Avocado Category Channel Overview – Part 1 * HAB - 2017 Avocado Category Shopper Segmentation by Channel – Part 2

Executive Summary – Cont. Highlights of Key Findings – Cont. Walmart: The analysis found that strong category growth in the Walmart channel was due in part to several positive shopper trends: Bagged and Bulk purchase types both posted incremental gains. Additionally, Walmart gained new avocado shoppers in 2016 (+4.8%), annual household purchase rates rose for Bagged (+6.8%) and for Bulk (+0.4%), and trip frequency for Bagged and for Bulk increased over prior year. Maintaining this positive momentum in avocado shopper trends is a key category growth opportunity for the channel. Club: Whereas shoppers have a Bulk vs. Bagged option in most channels, Club sets itself apart from the other channels by focusing on Bagged avocados. In 2016, category growth at Club was due in part to an increase in avocado shoppers (+5.6%). Bagged purchase frequency slid -2.4%, but spend per trip rose +1.9% to $6.00, the top Bagged spend rate of all the channels. Reversing the slide in frequency while continuing to grow shoppers and spend per trip are key growth opportunities for the Club channel. Mass/Super: The Mass/Super channel also posted category growth, driven in part by an increase in category shoppers and higher annual household spend for Bulk and Bagged. However, in 2016, avocado purchase frequency fell off for Bulk (-3.7%) and was essentially flat (-0.1%) for Bagged. Increasing the number of trips is a key category growth opportunity for the channel. Internet: Whereas brick-and-mortar stores are still the primary destination for avocado purchases, Internet is emerging as another option for shoppers. In 2016, however, the channel lost avocado shoppers (-20.6%) and spend per household also fell, driven in part by a decline in trip frequency for both Bagged (-18.6%) and Bulk (-6.9%). Retaining and adding shoppers, and improving the frequency of purchase, are key category growth opportunities for the channel.

Executive Summary – Cont. Highlights of Key Findings – Cont. Dollar: Although Dollar is a brick-and-mortar channel, it is still emerging as a destination for fresh produce. Avocado purchases in the channel declined in 2016 due to a loss of shoppers (-13.9%) and a drop in household avocado spend in the channel. Negative trends in Bulk drove the decline: Bulk shoppers fell -20.3%, Bulk trip frequency slipped -1.3%, and Bulk spend per trip fell -3.0%. Reversing these negative shopper trends is a key category growth opportunity for the channel. Detailed Findings and Additional Information Detailed findings follow on the pages below. For additional channel insights and information, the prior studies can be found on the Hass Avocado Board website at: https://www.hassavocadoboard.com/retail/market-basket-shopper-trends Or access the reports directly using the links here: HAB 2017 Avocado Category Channel Overview – Part I HAB 2017 Avocado Category Shopper Segmentation by Channel – Part 2

overview and channel comparisons Avocado Category Channel Trends: Bagged vs. Bulk overview and channel comparisons

Bulk avocados hold the dominant share of total category purchases, but Bulk lost one share point vs. prior year All Channels All Channels Bulk avocados lost -1 share point vs. prior year, for an 87% share of category Bagged avocados make up 13% of total category purchases, up +1 percentage point vs. prior year Data Source: IRI Consumer NetworkTM 2016 vs. 2015 (All figures are rounded). See slide 4 for more information on bulk/bagged avocado data

Total category net purchases grew +$9. 3M vs. prior year Total category net purchases grew +$9.3M vs. prior year. Bagged purchases drove the category’s gain All Channels Purchases of Bagged avocados increased +$21.8M in 2016, in contrast to the -$12.5M decline in purchases of Bulk This resulted in an overall category net gain of +$9.3M Data Source: IRI Consumer NetworkTM 2016 vs. 2015 (All figures are rounded). See slide 4 for more information on bulk/bagged avocado data

Bulk avocados make up the majority of avocado purchases in all channels except Club Purchase Share: $1,052.0 73.2% $176.4 12.3% $141.2 9.8% $12.7 0.9% $6.1 0.4% $5.0 0.3% Aside from Club, purchase share of bagged avocados ranged from a low of 4.8% in Grocery to a high of 24.5% in Mass/Super Data Source: IRI Consumer NetworkTM 2016 (All figures are rounded). See slide 4 for more information on bulk/bagged avocado data

Despite a relatively small share of overall category purchases, Bagged avocados were a strong category growth-driver in the larger channels Total Incremental Purchases ($) +$9,333,237 -$1,826,853 +$10,696,424 +$6,301,942 +$1,389,048 -$2,442,998 -$951,716 -$3,832,609 Bagged avocados contributed significant incremental purchases to the three largest channels (Grocery, Walmart and Club) Bulk purchases declined in all channels except Walmart and Mass/Super All Other is an aggregate of all other/miscellaneous store formats Data Source: IRI Consumer NetworkTM 2016 vs. 2015 (All figures are rounded). See slide 4 for more information on bulk/bagged avocado data

The number of Bulk avocado trips is highest in Grocery, while the number of Bagged trips is highest in Club Grocery leads the channels in category trip frequency, driven by the high number of trips for Bulk avocados (5.32 trips/household) Walmart ranks second behind Grocery in total category trips (3.30 trips) and Bulk trips (3.22 trips) Club leads the channels in bagged trips (2.65 trips) Data Source: IRI Consumer NetworkTM 2016 (All figures are rounded). See slide 4 for more information on bulk/bagged avocado data

Average spend per trip varies by channel and purchase type Club leads the channels with the highest category spend per trip at $6.30 Dollar trails all other channels with the lowest spend per trip for the total category and for Bagged and Bulk Data Source: IRI Consumer NetworkTM 2016 (All figures are rounded). See slide 4 for more information on bulk/bagged avocado data

Channel-by-channel INSIGHTS & OPPORTUNITIES Avocado Category Channel Trends: Bagged vs. Bulk Channel-by-channel INSIGHTS & OPPORTUNITIES

In the Grocery channel, Bulk avocados hold a dominant share of avocado purchases Total Grocery Avocado Purchase Dollars = $1,052.0M In 2016, Bulk avocados accounted for 95% of avocado purchases in the Grocery channel But Bulk purchases lost one share point to Bagged in 2016 Data Source: IRI Consumer NetworkTM 2016 (All figures are rounded). See slide 4 for more information on bulk/bagged avocado data

In the Grocery channel, net category purchases declined -$1. 8M vs In the Grocery channel, net category purchases declined -$1.8M vs. prior year. The gain in Bagged avocado purchases was not enough to offset the decline in Bulk +23.1% Grocery -0.2% -1.1% Bagged avocado purchases grew nearly +$9.6$M over prior year, but did not fully offset the decline in Bulk purchases (-$11.4M) This resulted in a net decline in total category purchases of -$1.8M in the Grocery channel Data Source: IRI Consumer NetworkTM 2016 vs. 2015 (All figures are rounded). See slide 4 for more information on bulk/bagged avocado data

Grocery gained additional avocado shoppers in 2016 The number of shoppers who purchased Bagged avocados increased +22.8% over prior year The number of shoppers who purchased Bulk avocados increased +1.6% over prior year However, the total number of avocado shoppers in the channel rose only +1.9%. This indicates that some of the gain in Bagged and Bulk shoppers was due to shoppers switching between product types Data Source: IRI Consumer NetworkTM 2016 vs. 2015 (All figures are rounded). See slide 4 for more information on bulk/bagged avocado data

In Grocery, the average avocado spend per household declined in 2016 The average annual avocado spend in Grocery was $19.44/household in 2016 This represents a -2.1% decline from prior year when average annual household spend was $19.84 Data Source: IRI Consumer NetworkTM 2016 vs. 2015 (All figures are rounded)

In Grocery, the average annual spend for Bulk avocados was more than twice that of Bagged avocados Average annual household spend on all avocados Average annual household spend by Bagged and Bulk $19.44 Grocery -2.1% The 2016 average annual spend for avocados of $19.44/household* was predominantly driven by purchases of Bulk avocados at $18.83/household The spend rate for Bulk avocados was nearly twice the Bagged rate of $8.70, but the Bulk rate fell -2.7% vs. prior year * Bulk and Bag buying rates are not additive – and some households purchase both Bagged and Bulk avocados Data Source: IRI Consumer NetworkTM 2016 vs. 2015 (All figures are rounded). See slide 4 for more information on bulk/bagged avocado data

In Grocery, shoppers purchase Bulk avocados more frequently, but spend more per trip when purchasing Bagged avocados Average annual spend on Bagged avocados Average annual spend on Bulk avocados $8.70 $18.83 +0.2% -2.7% Grocery 2.1 $4.10 5.3 $3.54 -0.0% +0.2% +0.1% -2.8% # of Trips Spend per Trip # of Trips Spend per Trip In 2016, households averaged 5.3 trips for Bulk avocados – two and a half times the frequency of Bagged avocado trips of 2.1/household However, average spend per trip was only +16% higher for Bagged avocados ($4.10) vs. Bulk ($3.54) Data Source: IRI Consumer NetworkTM 2016 vs. 2015 (All figures are rounded). See slide 4 for more information on bulk/bagged avocado data

Grocery – Key Insights and Opportunities Key Opportunities for Hass Avocados in the Grocery Channel Traditional grocery stores have long been a primary destination for avocado purchases as reflected in their shopper trends Grocery leads the channels in category buying rate with an average annual spend of $19.44/household. This high category spend rate is driven primarily by high trip frequency for Bulk avocados Maintaining and growing trip frequency for Bulk is a key category growth opportunity for the channel Bagged avocados grew in prominence in 2016, taking one share point from Bulk, and gaining shoppers and purchases at the expense of Bulk Increasing incremental Bagged shoppers and Bagged purchases is a key category growth opportunities for the channel Grocery Data Source: IRI Consumer NetworkTM 2016 vs. 2015 (All figures are rounded). See slide 4 for more information on bulk/bagged avocado data

In Walmart, Bulk avocados hold a dominant share of avocado purchases Total Walmart Avocado Purchase Dollars = $176.3M In 2016, Bulk avocados accounted for 88% of avocado purchases in Walmart Bagged avocados held a 12% share, up +2 points over prior year Data Source: IRI Consumer NetworkTM 2016 (All figures are rounded). See slide 4 for more information on bulk/bagged avocado data

In Walmart, net category purchases grew +$10. 7M vs In Walmart, net category purchases grew +$10.7M vs. prior year, driven by increases in purchases of Bulk and Bagged avocados Walmart +4.3% +6.5% +26.7% Bulk and Bagged avocado purchases rose incrementally at Walmart, lifting category purchases +$10.7M over prior year Incremental Bulk purchases (+$6.4M) made up 60% of the category increase with incremental Bagged purchases (+4.3M) driving 40% of the category gain Data Source: IRI Consumer NetworkTM 2016 vs. 2015 (All figures are rounded). See slide 4 for more information on bulk/bagged avocado data

Walmart gained additional avocado shoppers in 2016 The number of shoppers purchasing Bagged avocados in Walmart grew +18.7% over prior year The number of shoppers purchasing Bulk avocados grew +3.9% over prior year However, total avocado shoppers in the channel rose only +4.8%, indicating that some of the increase in Bagged and Bulk shoppers was due to shoppers switching between product types Data Source: IRI Consumer NetworkTM 2016 vs. 2015 (All figures are rounded). See slide 4 for more information on bulk/bagged avocado data

In Walmart, the average annual avocado spend per household increased in 2016 The annual avocado spend per household in 2016 ($9.59) represents a +1.6% increase from prior year when average annual spend was $9.44 Data Source: IRI Consumer NetworkTM 2016 vs. 2015 (All figures are rounded)

Walmart avocado shoppers purchase Bulk and Bagged avocados at similar rates Average annual household spend on all avocados Average annual household spend by Bagged and Bulk $9.59 Walmart +1.6% Walmart avocado shoppers purchase Bulk and Bagged avocados at similar rates ($8.92/household for Bulk and $8.36/household for Bagged) While the spend rate was similar for both, Bagged spend increased +7% vs. prior year * Bulk and Bag buying rates are not additive – and some household purchase both Bagged and Bulk avocados Data Source: IRI Consumer NetworkTM 2016 vs. 2015 (All figures are rounded). See slide 4 for more information on bulk/bagged avocado data

In Walmart, shoppers purchase Bulk avocados more frequently, but spend considerably more per trip when purchasing Bagged avocados Average annual spend on Bagged avocados Average annual spend on Bulk avocados $8.36 $8.92 +6.8% +0.4% Walmart 1.8 $4.59 3.2 $2.77 +4.4% +2.3% +2.4% -2.0% # of Trips Spend per Trip # of Trips Spend per Trip In 2016, households averaged 3.2 trips for Bulk avocados vs. 1.8 trips for Bagged avocados. However, Bagged trip frequency rose +4.4% vs. prior year and Bulk frequency rose +2.4% Not only is Bagged trip frequency trending upward, but Bagged spend per trip is +66% higher than for Bulk, and also increased vs. prior year (+2.3%) Data Source: IRI Consumer NetworkTM 2016 vs. 2015 (All figures are rounded). See slide 4 for more information on bulk/bagged avocado data

Walmart – Key Insights and Opportunities Key Opportunities for Hass Avocados in the Walmart Channel Walmart is showing strong category growth (+$10.7 net purchase gain vs. prior year), driven by strong avocado shopper trends in the channel While Bagged avocados show positive trends across multiple channels, in Walmart, Bagged and Bulk purchases both posted net incremental gains. Continuing this trend is a key category growth opportunity for the channel Walmart also gained avocado shoppers in 2016 (+4.8%), and category spend per household rose for both Bagged (+6.8%) and Bulk (+0.4%) Increased trip frequency for Bagged and for Bulk drove the spending gains, along with higher spend per trip for Bagged Maintaining this strong momentum in shopper trends is a key category growth opportunity for the channel Walmart Data Source: IRI Consumer NetworkTM 2016 vs. 2015 (All figures are rounded). See slide 4 for more information on bulk/bagged avocado data

The Club channel focuses on Bagged avocados Total Club Avocado Purchase Dollars = $141.2M Bagged avocados dominate and define the Club channel for the category, setting this channel apart from the others in terms of product assortment and shopper trends* Data Source: IRI Consumer NetworkTM 2016 (All figures are rounded). See slide 4 for more information on bulk/bagged avocado data

In the Club channel, net category purchases rose 4.7% vs. prior year +8.4% club +4.7% -7.1% Bagged purchases* drove 100% of the net category purchase gain in Club Data Source: IRI Consumer NetworkTM 2016 vs. 2015 (All figures are rounded). See slide 4 for more information on bulk/bagged avocado data

Club gained new category shoppers in 2016 The number of avocado shoppers in Club increased +5.6% in 2016 This helped drive the year-over-year increase in shopper purchases Data Source: IRI Consumer NetworkTM 2016 vs. 2015 (All figures are rounded). See slide 4 for more information on bulk/bagged avocado data

In Club, the average annual avocado spend per household declined slightly in 2016 The average annual avocado spend per household in Club was $17.28 in 2016, down -0.9% from $17.44 per household the prior year Data Source: IRI Consumer NetworkTM 2016 vs. 2015 (All figures are rounded)

Club’s focus on Bagged avocados is reflected in its high average annual category spend of $17.28/household Average annual household spend on all avocados Average annual household spend by Bagged and Bulk $17.28 club -0.9% Of all the channels, Club had the second-highest annual category spend at $17.28/household in 2016 This rate reflects the predominance of Bagged avocados* in the channel, which had an annual category spend of $15.89/household Data Source: IRI Consumer NetworkTM 2016 vs. 2015 (All figures are rounded). See slide 4 for more information on bulk/bagged avocado data

Club shoppers averaged 2 Club shoppers averaged 2.7 trips per year for Bagged avocados, and spent an average of $6.00 per trip Average annual spend on Bagged avocados Average annual spend on Bulk avocados $15.89 $12.40 -0.5% +3.1% club 2.7 $6.00 1.6 $7.65 -2.4% +1.9% +3.2% -0.1% # of Trips Spend per Trip # of Trips Spend per Trip Bagged avocado* trip frequency declined -2.4% in 2016, but spend per trip rose +1.9% to $6.00/trip – the highest Bagged spend per trip of all the channels Data Source: IRI Consumer NetworkTM 2016 vs. 2015 (All figures are rounded). See slide 4 for more information on bulk/bagged avocado data

Club – Key Insights and Opportunities Key Opportunities for Hass Avocados in the Club Channel Club channel is showing strong category growth (+$6.3M net purchase gain vs. prior year), driven by strong shopper trends in the channel Club gained new category shoppers in 2016 (+5.6%), which helped drive growth in category purchases Continuing to bring new avocado shoppers to the channel is a key category growth opportunity for Club Bagged avocados dominate and define the Club channel for the category Bagged purchase frequency declined -2.4% in 2016, but Bagged spend per trip rose +1.9% to $6.00/trip – the highest Bagged spend rate of all the channels Reversing the slide in trip frequency and maintaining high spend per trip are key category growth opportunities for Club club Data Source: IRI Consumer NetworkTM 2016 vs. 2015 (All figures are rounded). See slide 4 for more information on bulk/bagged avocado data

In the Mass/Super channel, Bulk avocados hold a large and growing share of the category Total Mass/Super Avocado Purchase Dollars = $12.7M In 2016, Bulk avocados accounted for 76% of category purchases in the Mass/Super channel, up +6 points vs. prior year Asides from the Club channel, Mass/Super has the largest share of Bagged avocados at 24%, but Bagged lost share to Bulk in 2016 Data Source: IRI Consumer NetworkTM 2016 (All figures are rounded). See slide 4 for more information on bulk/bagged avocado data

In the Mass/Supercenter channel, net category purchases grew +$1.4M vs. prior year on growth of Bulk +21.4% +12.3% -8.9% Purchases of Bulk avocados increased +$1.7M over prior year Purchases of Bagged avocados posted a decline in the channel Data Source: IRI Consumer NetworkTM 2016 vs. 2015 (All figures are rounded). See slide 4 for more information on bulk/bagged avocado data

Mass/Super gained additional avocado shoppers in 2016, but some of that growth came at the expense of Bagged shoppers Mass/Super The number of shoppers who purchased Bulk avocados in Mass/Super increased +14.1% over prior year, while the number of shoppers who purchased Bagged avocados declined -11.7% This resulted in a net category shopper gain of +7.3% for the channel Data Source: IRI Consumer NetworkTM 2016 vs. 2015 (All figures are rounded). See slide 4 for more information on bulk/bagged avocado data

In Mass/Super, the average annual avocado spend per household increased in 2016 The annual avocado spend per household ($6.36) in 2016 represents a +4.6% increase from prior year when average annual spend was $6.09 Data Source: IRI Consumer NetworkTM 2016 vs. 2015 (All figures are rounded)

In Mass/Super, the average annual household spend rose for Bagged purchases and for Bulk purchases Average annual household spend on all avocados Average annual household spend by Bagged and Bulk $6.36 Mass/Super +4.6% In Mass/Super, the average annual household spend for Bagged purchases was $7.45/household, +34% higher than the rate for Bulk purchases But the average annual household spend rose for purchases of Bagged avocados and for purchases of Bulk, with both product types contributing to the +4.6% increase for the category’s overall spend rate * Bulk and Bag buying rates are not additive – and some household purchase both Bagged and Bulk avocados Data Source: IRI Consumer NetworkTM 2016 vs. 2015 (All figures are rounded). See slide 4 for more information on bulk/bagged avocado data

In Mass/Super, trip frequency is similar for Bagged and Bulk purchases, but both declined in 2016 Average annual spend on Bagged avocados Average annual spend on Bulk avocados $7.45 $5.58 +3.2% +6.4% Mass/Super 1.7 $4.34 1.6 $3.45 -0.1% +3.2% -3.7% +10.6% # of Trips Spend per Trip # of Trips Spend per Trip In 2016, households averaged 1.7 purchase trips for Bagged avocados and 1.6 purchase trips for Bulk avocados, but both declined in 2016 Rising spend per trip for Bagged avocados (+3.2%) and for Bulk (+10.6%) helped to mitigate the drop in frequency Data Source: IRI Consumer NetworkTM 2016 vs. 2015 (All figures are rounded). See slide 4 for more information on bulk/bagged avocado data

Mass/Super – Key Insights and Opportunities Key Opportunities for Hass Avocados in the Mass/Super Channel Mass/Super channel category purchases grew +$1.4M vs. prior year on an increase in category shoppers (+7.3%) and an increase in annual household spend for Bulk (+6.4%) and for Bagged (+3.2%) purchases Continuing to bring new avocado shoppers to the channel, and continuing to increase their annual household avocado spend, are key category growth opportunities for Mass/Super Trip frequency is relatively low in Mass/Super compared to the other channels and declined -3.7% to 1.7 trips/year for Bagged and -0.1% to 1.6 trips/year for Bulk purchases Rising spend per trip for Bagged avocados (+3.2%) and for Bulk (+10.6%) helped to mitigate the drop in frequency, but increasing trip frequency is a key category growth opportunity for the channel Mass/Super Data Source: IRI Consumer NetworkTM 2016 vs. 2015 (All figures are rounded). See slide 4 for more information on bulk/bagged avocado data

In the Internet channel, Bulk avocados hold a dominant share of avocado purchases Total Internet Avocado Purchase Dollars = $6.1M In 2016, Bulk avocados accounted for 85% of avocado purchases And Bulk took +5 share points from Bagged avocados Data Source: IRI Consumer NetworkTM 2016 (All figures are rounded). See slide 4 for more information on bulk/bagged avocado data

In the Internet channel, net category purchases declined vs. prior year -47.8% -28.4% Internet -23.5% Purchases of Bulk avocados fell vs. prior year, with purchases of Bulk down -$1.6M and purchases of Bagged off -$840K This resulted in a decline of -$2.4M for the category in the channel Data Source: IRI Consumer NetworkTM 2016 vs. 2015 (All figures are rounded). See slide 4 for more information on bulk/bagged avocado data

The Internet channel lost avocados shoppers in 2016 The number of shoppers making Bagged purchases via Internet declined -31.6% vs. prior year The number of shoppers making Bulk purchases via Internet declined -19.2% vs. prior year This resulted in a net avocado shopper loss of -20.6% for the channel Data Source: IRI Consumer NetworkTM 2016 vs. 2015 (All figures are rounded). See slide 4 for more information on bulk/bagged avocado data

In the Internet channel, the average annual avocado spend per household declined in 2016 The average annual avocado spend via Internet was $8.75/household in 2016 This represents a -9.9% decline from prior year when average annual spend was $9.70 Data Source: IRI Consumer NetworkTM 2016 vs. 2015 (All figures are rounded)

In the Internet channel, the average annual spend for Bulk avocados was higher than the spend for Bagged avocados, but spend declined vs. prior year for both purchase types Average annual household spend on all avocados Average annual household spend by Bagged and Bulk $8.75 internet -9.9% At $8.80/household, the average annual spend for Bulk avocados was +39% higher than the spend for Bagged ($6.33/household) However, the spend rate fell for purchases of Bulk avocados (-5.3%) and fell in double- digits (-23.7%) for purchases of Bagged avocados, driving down the overall category rate * Bulk and Bag buying rates are not additive – and some household purchase both Bagged and Bulk avocados Data Source: IRI Consumer NetworkTM 2016 vs. 2015 (All figures are rounded). See slide 4 for more information on bulk/bagged avocado data

In the Internet channel, purchase frequency declined for purchases of Bulk and Bagged avocados Average annual spend on Bagged avocados Average annual spend on Bulk avocados $6.33 $8.80 -23.7% -5.3% internet 1.2 $5.12 2.3 $3.87 -18.6% -6.2% -6.9% +1.9% # of Trips Spend per Trip # of Trips Spend per Trip In 2016, “trip” frequency averaged 2.3/household for Bulk purchases and 1.2/household for Bagged purchases However, purchase frequency declined significantly for both purchase types (-18.6% for Bagged and -6.9% for Bulk). The small increase in Bulk spend per trip (+1.9%) was not sufficient to offset the negative frequency trend Data Source: IRI Consumer NetworkTM 2016 vs. 2015 (All figures are rounded). See slide 4 for more information on bulk/bagged avocado data

Internet – Key Insights and Opportunities Key Opportunities for Hass Avocados in the Internet Channel In 2016, category purchases via Internet declined -$2.4M resulting from a -20.6% drop in number of category shoppers, which was compounded by a decline in average spend per household (Bagged -23.7%, Bulk -5.3%) Retaining shoppers and bringing new shoppers to the channel, and growing their annual avocado purchases, are key category growth opportunities for the Internet channel The annual spend rate decline noted above resulted from fewer category purchase “trips” in the channel vs. prior year Purchase frequency fell for both purchase types (-18.6% for Bagged and -6.9% for Bulk). Reversing the decline in purchase frequency is a key category growth opportunity for the channel internet Data Source: IRI Consumer NetworkTM 2016 vs. 2015 (All figures are rounded). See slide 4 for more information on bulk/bagged avocado data

In the Dollar channel, Bulk avocados hold a dominant share of avocado purchases Total Dollar Avocado Purchase Dollars = $5.1M In 2016, Bulk avocados accounted for 90.4% of avocado purchases in the Dollar Channel Bagged avocados held a 9.6% share of avocado purchases in 2016, taking 9.2 share points from Bulk Data Source: IRI Consumer NetworkTM 2016 (All figures are rounded). See slide 4 for more information on bulk/bagged avocado data

In the Dollar channel, net category purchases declined vs. prior year In the Dollar channel, net category purchases declined vs. prior year. The gain in Bagged avocado purchases was not enough to offset the decline in purchases of Bulk +2152.0% Dollar -16.0% -23.7% Bagged avocado purchases increased +458K over prior year, but did not offset the decline in purchases of Bulk, which fell -$1.4M This resulted in a net decline in total category purchases of -$952K in the Dollar channel Data Source: IRI Consumer NetworkTM 2016 vs. 2015 (All figures are rounded). See slide 4 for more information on bulk/bagged avocado data

The Dollar channel lost shoppers in 2016 as a result of a marked decline in number of shoppers purchasing Bulk avocados Dollar In 2016, the number of shoppers who purchased Bagged avocados increased ten-fold (+902.7%) vs. prior year The number of shoppers purchasing Bulk avocados declined -20.3%, resulting in a -13.9% net shopper loss in the Dollar channel Data Source: IRI Consumer NetworkTM 2016 vs. 2015 (All figures are rounded). See slide 4 for more information on bulk/bagged avocado data

In the Dollar channel, the average annual avocado spend per household declined in 2016 The average annual household avocado spend in the Dollar channel was $5.50 in 2016 This represents a -2.4% decline from prior year when average annual spend was $5.63 Data Source: IRI Consumer NetworkTM 2016 vs. 2015 (All figures are rounded)

In the Dollar channel, the average annual household spend for Bulk avocados was twice that of Bagged avocados Average annual household spend on all avocados Average annual household spend by Bagged and Bulk $5.50 dollar -2.4% The 2016 average annual spend for avocados of $5.50/household* was predominantly driven by purchases of Bulk avocados at $5.41/household The spend rate for Bulk avocados was twice the Bagged rate of $2.69, but the Bulk rate fell -4.3% vs. prior year * Bulk and Bag buying rates are not additive – and some household purchase both Bagged and Bulk avocados Data Source: IRI Consumer NetworkTM 2016 vs. 2015 (All figures are rounded). See slide 4 for more information on bulk/bagged avocado data

In the Dollar channel, shoppers purchase Bulk avocados more frequently and spend more per trip than for Bagged avocados Average annual spend on Bagged avocados Average annual spend on Bulk avocados $2.69 $5.41 +124.5% -4.3% dollar 1.5 $1.85 2.1 $2.59 +45.6% +54.3% -1.3% -3.0% # of Trips Spend per Trip # of Trips Spend per Trip In 2016, shoppers averaged 2.1 trips for purchases of Bulk avocados and 1.5 trips for purchases of Bagged avocados Shoppers also spent more per trip for Bulk avocados ($2.59) than for Bagged avocados ($1.85), but Bulk purchase frequency and spend per trip declined in 2016. In sharp contrast, Bagged purchase frequency increased +45.6% and spend per trip grew +54.3% Data Source: IRI Consumer NetworkTM 2016 vs. 2015 (All figures are rounded). See slide 4 for more information on bulk/bagged avocado data

Dollar – Key Insights and Opportunities Key Opportunities for Hass Avocados in the Dollar Channel In 2016, category purchases in the Dollar channel declined -$952K, resulting from a -13.9% drop in avocado shoppers and a -2.4% decline in average annual avocado spend per household Bringing new shoppers to the channel, and growing their annual avocado purchases, are key category growth opportunities for the Dollar channel The overall category decline noted above resulted from negative purchase trends for Bulk avocados: number of Bulk shoppers fell (-20.3%), Bulk trip frequency slipped (-1.3%), and Bulk spend per trip declined (-3.0%) While Bagged avocados showed positive trends, the gains were not large enough to offset Bulk’s negative trends. Maintaining momentum for Bagged avocados, and reversing the negative purchase trends for Bulk are key category growth opportunities for the Dollar channel Dollar Data Source: IRI Consumer NetworkTM 2016 vs. 2015 (All figures are rounded). See slide 4 for more information on bulk/bagged avocado data

Thank you For additional retail information and insights please visit the Hass Avocado Board website at: hassavocadoboard.com