Fresh Ground Chubs Jennie-O® Fresh Ground Chubs Building a bridge to ground turkey

Brand Overview Consumer & Category Trends Products Table of Contents

Brand Overview

We believe that eating well shouldn’t come at the expense of taste. Who We Are We believe that eating well shouldn’t come at the expense of taste. From ground turkey and sausages to deli meat and tenderloins, we offer more than 1500 products with a taste people love.

Our Brand Mission Jennie-O Turkey Store is on a mission to show people that turkey is as lean as it is delicious. Using our bold MAKE THE SWITCH™ theme, we’re asking people to switch to turkey in their favorite foods.

Our Consumer Personality Demographics The Good Intender W 25-54 Upscale, with HHI $60K+ Likely to have graduated college Works on a part-time basis Principal shopper in a large HH 65% have children, typically several Personality Have good intentions but find it hard to make good choices when it comes to eating better Cook meals frequently Trying to eat healthy and watch their nutrition 78% will recommend a food product she likes to friends Our Consumer The Good Intender Source: MRI Doublebase 2010

Value of Our Consumer The Good Intender spends almost twice as much at checkout when we are in the basket. Source: Nielsen Basket Facts – Syndicated, Total US – All Outlets, 8/14/11-8/25/12

We experience growth year after year in our key categories Consistent Growth We experience growth year after year in our key categories 5 Year CAGR: Frozen Burgers: 9% Fresh Ground: 13% Fresh Tray Pack: 9% Source: Nielsen, Market Summary Data, Sept 2012

1.2 M more households purchasing JENNIE-O fresh ground in 2012 Growing Penetration We continue to bring new consumers to the category by consistently increasing Household Penetration and are the brand driving the growth in the category 1.2 M more households purchasing JENNIE-O fresh ground in 2012 Source: Nielsen, Market Summary Data, Sept 2012

Leader in Category We spent 3 times more in advertising efforts in 2011 than any other turkey company and are the most recognized brand in the category Brand Unaided Awareness Aided Awareness Purchase Intent 54 (+32%) 90 (+13%) 53 (+27%) 29 (-17%) 98 (-1%) 63 (+15%) 9 (+5%) 59 (+20%) 27 (+16%) 2 (-2%) (+7%) 16 (+2%) 5 (+1%) 72 (+4%) 30 Source : Marketing Evolution, Reports December 2009, November 2010, November 2011

Consumer & Category Trends

Meat & Poultry Production Total U.S. meat and poultry output topped out in 2008 and has maintained total production levels Source: CME Group, Daily Livestock Report, 9/7/12. & Livestock Marketing Information Center in Denver

Meat & Poultry Consumption While production has remained steady, consumption has been falling since 2008 It is projected that next year consumption will drop below 200 pounds per person Source: CME Group, Daily Livestock Report, 9/7/12. & Livestock Marketing Information Center in Denver

Meat & Poultry Expenditures Why the decline? Higher prices U.S. consumers cannot afford as much meat and poultry as they once could They have continued to spend more each year and get less Source: CME Group, Daily Livestock Report, 9/7/12. & Livestock Marketing Information Center in Denver

Prices Will Remain High Input costs will remain high In August, the USDA dropped its corn crop estimate and predicted corn prices would average $7.50 to $8.90 per bushel in the coming year USDA is also forecasting alfalfa production at 20% less and other hay products at 12% less than their 5-year averages resulting in record high prices Source: CME Group, Daily Livestock Report, 9/6/12 & Meatingplace, September 2012.

Prices Will Remain High U.S. pork, beef and chicken industries all set annual export records in 2012 A growing and, more importantly, an increasingly affluent world population continues to draw more and more product out of the U.S. market U.S. consumers will have to compete with buyers in other countries for these products Source: CME Group, Daily Livestock Report, 9/7/12..

Prices Will Remain High Production will decline “Losses in animal industries will be enormous over the next year,” warns Purdue University Ag Economics Professor Chris Hurt. Their primary option is to reduce production. Beef In July, USDA reported the smallest U.S. cattle herd since the agency started tracking the data nearly 40 years ago. And they expect beef production to fall nearly 4% in 2012 and another 2.4% in 2013. The bulk of the drought-related decline in beef supply won’t kick in until 2014 and beyond Pork Pork supplies are very likely to decline, year-on-year, in the second half of 2013. U.S. per capita pork consumption/availability is already sharply lower than just a few years ago. As recently as 2007 it was 50.8 lbs. per person. It is forecast to be 46.0 lbs. this year and 44.6 next year, declines of 10% and 12% respectively. Source: Meatingplace September 2012 & CME Group, Daily Livestock Report, 9/26/12.

Prices Will Remain High Supply Demand Prices

How are consumers managing higher prices? Price takes on an ever-greater role in the meat purchasing decision. In addition to price per pound solidifying its #1 ranking as the most important decision factor, total package cost is now the second most important, surpassing product appearance Source: The Power of Meat 2012, AMI/FMI/Cryovac

How are consumers managing higher prices? The two predominant trends in money-saving behaviors specific to meat and poultry are: Simply buying less, as we saw in consumption charts Finding ways to purchase the product less expensively Source: The Power of Meat 2012, AMI/FMI/Cryovac

And in 2012 there was similar or even less interest How are consumers managing higher prices? Buying Less Expensively Interest in volume-based discounts remain subdued. Last year, participation in volume discounts plummeted Buying in bulk: -15% Stocking up when on sale: -5% Buy large quantities to freeze: -8% However, interest in other money-saving measures grew Buying Private Brands +14% Coupons +8% Total Package Cost +7% Less expensive cuts +5% And they are comparing prices… And in 2012 there was similar or even less interest Source: The Power of Meat 2012, AMI/FMI/Cryovac

Ground Turkey Solution Consumers are looking for ways to buy less expensively Brand switching, comparing prices between stores and comparing prices between items in stores Opting for a less expensive cut, price/lb. or total package price Protein prices will continue to rise The Solution: A high quality, value option

Category Trends Ground Turkey Chub Segment Outpacing Category Growth The majority of ground turkey is sold in trays – 93% But chubs are gaining share and are outpacing the category growth rate 24 wks 12 wks Ground Turkey Category: +12% +9% Ground Turkey Trays: +11% +8% Ground Turkey Chubs: +28% +29% Jennie-O is driving the ground turkey chub growth Jennie-O Grnd Turkey Chubs +84% +75% And increasing brand share, at 36% in the most recent 12 weeks Source: Nielsen, weeks ending 1/05/13

Category Trends Jennie-O SKU performance Source: Nielsen, weeks ending 1/05/13

Cannibalization of Tray Pack? Loyalty and Cross Purchase interactions show that tray buyers are more loyal to package form Tray Buyers meet 95% of their Fresh Ground Turkey Purchases with trays Chub buyers meet 56% of their Fresh Ground Turkey Purchases with chubs Overlap between Tray and Chub purchases remained at 8% over the past several years 8% of Tray Buyers also Buy Chub 49% of Chub Buyers also Buy Tray Main demographic difference between buyers is income Tray buyers indexing high at $75,000+ Chub buyers indexing high at $40,000 - $49,999 Conclusion: Chub buyers are more likely to “trade up” to trays, than Tray buyers are to “trade down” to chubs Source: 2011 Nielsen Market Summary

Cannibalization of Tray Pack? Jennie-O Account Case Studies: No Erosion of Ground Turkey Trays 52 Week Chg in Volume 12 Week Chg in Volume 12 Week Share in Volume Northeast Account Trays +18% +12% 84% Chubs +34% +48% 16% Southeast Account +17% +6% 85% +27% +33% 15% West Account +60% +4% +119% +53% Source: Nielsen, weeks ending 1/05/13

Creating a Value Bridge Recommendation Merchandise fresh Ground Turkey Chubs with ground beef to give the consumer value options when price comparing at shelf

Products

Ground Turkey Chubs Lean Ground Turkey, 90/10 1 lb. and 3 lb. High Pressure Processed (HPP) The Math of HPP: 4 log reduction Presumed infective dose of Salmonella is 5 cells Maximum observed Salmonella count of 4 cells/gram At 4 cells/gram a 149 gram serving of ground turkey would contain 596 cells 4 log kill => 0.0596 cells 25 days of shelf life on arrival guaranteed

Product Specs

Appendix

Ground Beef down 19 M lbs. in the most recent 13 weeks Chubs gaining share

93/7 users shifting down to 90/10 80/20 users shifting down to 70/30   TOTAL VOLUME AVERAGE RETAIL SHARE OF VOLUME % Lean 13 Weeks Ending 10/27/12 13 Weeks Ending 10/29/11 % Chg Pnt Chg 80-84% Lean (80/20) 182,255,798 195,751,602 -6.9% $3.24 $2.96 9.6% 37.9% 38.9% -1.0 Up to 79% Lean (70/30) 133,260,518 131,716,294 1.2% $2.69 $2.55 5.4% 27.7% 26.2% +1.5 93 & Above % Lean (93/7 +) 55,556,392 64,844,567 -14.3% $4.61 $4.14 11.2% 11.6% 12.9% -1.3 85-89% Lean (85/15) 61,031,988 65,041,959 -6.2% $3.93 $3.67 7.0% 12.7% -0.2 90-92% Lean (90/10) 46,958,314 44,683,334 5.1% $4.15 $3.77 10.1% 9.8% 8.9% +0.9 NA 1,682,575 715,490 135.2% $3.16 $3.32 -5.1% 0.3% 0.1% +0.2 Total 480,745,584 502,753,247 -4.4% $3.42 $3.17 8.0% 100.0%

Fresh Ground Beef Tray Fresh Ground Beef Chub TOTAL VOLUME   TOTAL VOLUME AVERAGE RETAIL SHARE OF VOLUME % Lean 13 Weeks Ending 10/27/12 13 Weeks Ending 10/29/11 % Chg Pnt Chg 80-84% Lean 128,896,966 137,547,340 -6.3% $3.27 $3.00 9.1% 38.9% 39.2% -0.4 93 & Above % Lean 46,835,563 54,084,616 -13.4% $4.63 $4.19 10.6% 14.1% 15.4% -1.3 85-89% Lean 49,099,435 51,325,750 -4.3% $3.86 $3.62 6.7% 14.8% 14.6% +0.2 Up to 79% Lean 61,750,432 65,848,573 -6.2% $3.01 $2.79 8.0% 18.6% 18.8% -0.2 90-92% Lean 43,451,203 41,236,615 5.4% $4.09 $3.71 10.4% 13.1% 11.8% +1.3 NA 1,682,163 598,445 181.1% $3.16 $3.28 -3.7% 0.5% 0.2% +0.3 Total 331,715,762 350,641,338 -5.4% $3.61 $3.32 8.8% 100.0% Fresh Ground Beef Chub 67,145,707 61,315,814 9.5% $2.35 $2.27 3.6% 56.9% 50.7% +6.1 38,242,529 44,593,917 -14.2% $2.89 $2.65 32.4% 36.9% -4.5 6,745,394 8,809,946 -23.4% $4.32 $3.72 16.0% 5.7% 7.3% -1.6 4,902,191 4,816,747 1.8% $3.83 $3.50 9.6% 4.2% 4.0% 1,026,921 1,206,831 -14.9% $4.71 15.1% 0.9% 1.0% -0.1 118,062,742 120,858,795 -2.3% $2.72 $2.58 5.3%

(Food Demand Anaylsis, USDA, ERS, June 2012) About half of the beef volume lost in the category due to higher prices is captured by other proteins in the meat case. (Food Demand Anaylsis, USDA, ERS, June 2012) (See next two slides) In the past 5 years, household penetration on value grinds (85/15) has grown twice as fast as premium grinds as consumers migrate into the turkey category and then trade up. Loyalty and cross purchase analysis show 49% of value (chub) buyers “trade up” to tray pack grinds. Food Demand Analysis: USDA, ERS June 2012 For every 1% increase in beef prices: * Beef volume will drop by 0.621% * Pork volume will increase by 0.192% * Chicken volume will increase by 0.103% * Turkey volume will increase by 0.089% Based on per capita consumption, the increases in pork, chicken and turkey only make up for about 48% of the beef loss.

ERS's ordinary food demand system for the United States contains 1,640 estimated demand elasticities covering 39 food categories and an aggregate nonfood sector. The demand system, in which food quantities demanded are functions of food prices and per capita income, is an effective model for forecasting food consumption and analyzing the effects of retail price changes on quantities of food purchased. For an outlook projection, information about changes in prices and income can be used to forecast food quantities demanded. For a program analysis, various scenarios of changes in prices and income can be used to evaluate the program effects on food quantities demanded. In table 1, each estimate of price elasticity shows the percentage change of a food quantity demanded in response to a 1-percent change in a food price or per capita income. For example, the own-price elasticities show that for a 1-percent increase in a food price, the demand for its own quantity would decrease by 0.621 percent for beef, 0.728 percent for pork, and 0.372 percent for chicken. The estimates of income elasticities in the last column show that for a 1-percent increase in per capita income, for example, the quantities demanded would increase by 0.392 percent for beef, 0.659 percent for pork and 0.077 percent for chicken. For the estimates of cross-price elasticities, the positive signs imply substitution relationships and the negative signs imply complementary relationships. For example, the cross-price elasticity of beef in response to a 1-percent increase of the price of pork is 0.114, which means that the quantity of beef would increase by 0.114 percent to substitute for a decrease of pork because of its higher price. On the other hand, the cross-price elasticity of beef in response to a 1-percent increase in the price of cheese is -0.026, which means that the quantity of cheese would decrease causing beef consumption to decrease by 0.026 percent because of their complementary relationships. http://www.ers.usda.gov/topics/food-choices-health/food-consumption-demand/food-demand-analysis.aspx Food Demand Analysis: USDA, ERS June 2012 For every 1% increase in beef prices: * Beef volume will drop by 0.621% * Pork volume will increase by 0.192% * Chicken volume will increase by 0.103% * Turkey volume will increase by 0.089% Based on per capita consumption, the increases in pork, chicken and turkey only make up for about 48% of the beef loss.

Selected price increase by 1-percent of Table 1-Price elasticity estimates Food quantity of Own price Selected price increase by 1-percent of Income Beef Pork Chicken Cheese Milk Oranges Tomatoes   Percent -0.621 0.114 0.018 -0.026 -0.011 0.000 -0.012 0.392 -0.728 0.192 0.013 -0.006 0.002 -0.021 -0.005 0.659 Other meats -1.874 0.818 0.355 0.280 0.358 -0.071 0.200 0.068 -0.574 -0.372 0.103 0.047 -0.039 -0.058 0.001 0.097 0.077 Turkey -0.535 0.089 0.141 -0.077 0.222 0.432 -0.056 -0.099 -0.127 Fresh and frozen fish 0.121 -0.113 0.256 -0.049 0.011 -0.431 -0.013 -0.141 0.429 Canned and cured fish 0.009 0.104 0.059 0.129 0.198 -0.110 0.060 0.394 Eggs 0.092 0.012 0.042 0.004 0.287 -0.247 -0.227 -0.069 0.032 -0.070 0.418 Food Demand Analysis: USDA, ERS June 2012 For every 1% increase in beef prices: * Beef volume will drop by 0.621% * Pork volume will increase by 0.192% * Chicken volume will increase by 0.103% * Turkey volume will increase by 0.089% Based on per capita consumption, the increases in pork, chicken and turkey only make up for about 48% of the beef loss. For full chart go to: http://www.ers.usda.gov/topics/food-choices-health/food-consumption-demand/food-demand-analysis/table-1.aspx

Tier 2 Targets Tier 1 Targets Tier 3 Targets (1M+ lbs. of JA in 2012) Ralph’s Meijer Target Publix Safeway Nor Cal Safeway Von’s Tier 2 Targets (700K+ lbs. of JA in 2012) Smart & Final HEB Roundy’s Tier 3 Targets (Add 85/15 Chub to Mix) Kroger Fry’s & Smith’s SV Oregon SV Utah Brookshire