Confidential & Proprietary Copyright © 2009 The Nielsen Company PLMA Q Return of the Cautious Consumer 15 th December, 2009 Rob Prosser

Confidential & Proprietary Copyright © 2009 The Nielsen Company PLMA Q Today’s discussion How has the global recession impacted the industry? How have consumers responded? What’s the PL outlook for 2010?

Confidential & Proprietary Copyright © 2009 The Nielsen Company PLMA Q Consumers looking beyond the Global Economic Crisis and focussing on recovery Grocery channel still showing positive growth in Australia Grocery suppliers looking more optimistic but concern around external pressures and impact on profitability How has the global recession impacted the industry?

Confidential & Proprietary Copyright © 2009 The Nielsen Company PLMA Q Government spending at unprecedented levels Source: The Standard, 2 April 2009

Confidential & Proprietary Copyright © 2009 The Nielsen Company PLMA Q Consumer sentiment plummeted in the midst of the GFC but latest data shows clear signs of recovery Source: Nielsen Global Consumer Confidence survey Consumer Confidence

Confidential & Proprietary Copyright © 2009 The Nielsen Company PLMA Q Base (AUS): All Manufacturers: Nov 2005 (n=117) May 2006 (n=118), Nov 2006 (n = 131), May 2007 (n= 129). Nov 2007 (n=112), May 2008 (n=102), Jan 2009 (n=93), May 2009 (n=105) Base (NZ): All manufacturers Feb 2006 (66), Nov 2006 (64), May 2007 (60), Nov 2007 (54), Jun 2008(67), Nov 2008 (55), Jun 2009 (66) Source: Aus – Homescan (Packaged grocery incl. Fresh); NZ – ScanTrack Business conditions are improving but NZ suppliers still feeling the heat… January % - 49% Net: - 31% Q. Compared to the same time last year, do you think business conditions in your industry have improved or deteriorated? May % - 33% Net: + 5% November % - 85% Net: - 83% June % - 61% Net: - 44% Packaged grocery growth MAT Oct 2009 vs YA Value: +5.6%, Units: +1.4% Packaged grocery growth MAT Oct 2009 vs YA Value: -2.5%, Units: -9.1%

Confidential & Proprietary Copyright © 2009 The Nielsen Company PLMA Q Global recession 2.Private Label growth 3.Increased cost of raw materials 4.Increase in promotional sales/ erosion in baseline 5.Pressure on trading terms 1.Maintaining margins 2.Pressure on trading terms 3.Ability to pass on price increases 4.Australian recession 5.Private Label growth Underlying supplier concerns centre on profitability driven by local economic conditions Base: All Manufacturers: Aus (n=105); NZ (66) – Retail Barometer June 2009 Q Which of the following issues concern you in terms of the impact they may have on your business? Rank the top five issues that concern you.

Confidential & Proprietary Copyright © 2009 The Nielsen Company PLMA Q Global recession has changed consumer values, spending habits and lifestyle choices – restraint is the new mantra Thrifty consumers will refrain from unnecessary spending and are prepared to shop around for the best value Adoption of Private Label as an attractive value proposition The ‘Masterchef effect’ – consumers cooking and entertaining at home more often How have consumers responded?

Confidential & Proprietary Copyright © 2009 The Nielsen Company PLMA Q Consumers coming to terms with the new economy but underlying caution remains Tough but moderating conditions: Free fall is over Fundamental shift in consumer spending: Restraint is the new mantra Denial Uncertainty Fear Acceptance $ Food $ Fuel Unemployment Savings? Discretionary Spending?

Confidential & Proprietary Copyright © 2009 The Nielsen Company PLMA Q The worst might be over but we know we’re not completely in the clear… Major concerns: 1)Work/life balance 2)Economy 3)Increase in utility bills Impacting the way we spend our spare cash… 1) Saving 2) Debt recovery … & influencing where we cut back expenses: ↓New clothes ↓Take-away meals Save on utilities ↓OOH entertainment Switch to cheaper grocery brands Source: Nielsen Global Online Consumer Survey, October 2009 (Pacific results)

Confidential & Proprietary Copyright © 2009 The Nielsen Company PLMA Q Significant fragmentation – Increase in the amount of households now shopping across more than four banners Source: Nielsen Consumer : Homescan % households shopping across 4+ banners Oct 2008: 58.7% Oct 2009: 60.8% An increase of 219,694 additional households Sept 2008: 63.9% Sept 2009: 64.5% An increase of 6,600 additional households

Confidential & Proprietary Copyright © 2009 The Nielsen Company PLMA Q PL $ share of grocery: 22.9% Average household PL spend per QTR: $186 Average spend change vs YA: +4.6% Private Label remaining an attractive proposition to the value conscious consumer Source: Homescan, QTR to Sept09

Confidential & Proprietary Copyright © 2009 The Nielsen Company PLMA Q Source: AC Nielsen | Homescan (Australia) ALDI continues growth in penetration, almost a third of all Australian Households now shopping at ALDI

Confidential & Proprietary Copyright © 2009 The Nielsen Company PLMA Q Source: AC Nielsen | Homescan (Australia) WW’s claw back average spend to Dec 08 levels as shoppers move back to more premium PL.

Confidential & Proprietary Copyright © 2009 The Nielsen Company PLMA Q Source: AC Nielsen | Homescan (Australia) Coles reverse declines in spend per buyer somewhat. PL share remains consistently above that of WW & IGA

Confidential & Proprietary Copyright © 2009 The Nielsen Company PLMA Q Source: AC Nielsen | Homescan (Australia) – Issue# , , , 38591, , , IGA ‘Signature’ has done little to increase penetration or share. Average spend per buyer has also remained fairly stagnant

Confidential & Proprietary Copyright © 2009 The Nielsen Company PLMA Q Opportunity for PL in a concentrated market What’s the PL outlook for 2010?

Confidential & Proprietary Copyright © 2009 The Nielsen Company PLMA Q Strong correlation between PL share and retailer concentration, except… Is it scale that limits PL share in these markets?

Confidential & Proprietary Copyright © 2009 The Nielsen Company PLMA Q The ‘Masterchef effect’: 15/20 fastest growing categories linked to in-home entertainment, cook-from-scratch meals and more inspired/gourmet cooking Top 20 fastest growing categories Based on Top 50 fastest growing categories ($ value) and ranked by % value change vs YA MAT 03/10/2009, Australia – all outlets NZ fastest growing categories reflect same trend: Pasta + rice: +29% Fats+oils:+22.1% Coffee: +14.5% Canned fish/seafood: +13.7% Tea: +13.5% Bottled/canned sauces: +11.9%

Confidential & Proprietary Copyright © 2009 The Nielsen Company PLMA Q PL Tiers and exclusive brands will remain a key part of retailer strategy Innovation – delivering on today’s most exciting food trends Convenient packaging, portion sizes and nutrition Mainstream advertising support Converting consumers looking for value into shopper loyalty Poised to grow as a lifestyle choice Private Label trends and outlook in the Pacific

Confidential & Proprietary Copyright © 2009 The Nielsen Company PLMA Q Consumers are more optimistic but their shift in spending behaviour (restraint) may be here to stay In order to feed their growing demand for value – shoppers will channel switch, rely heavily on promotions and buy more Private Label The grocery trade is performing better than other food trade channels, but we’re not out of the woods yet… Key takeouts

Confidential & Proprietary Copyright © 2009 The Nielsen Company PLMA Q Thank you