Value Added Oat Products William A. Bonner ConAgra Mills July 23, 2006

Outline Whole Grain Trends Consumer Trends Conventional Value Add Component Values

Whole Grain Trends Never strayed from whole grain Practical reasons – oil separation

Whole Grain Trends Wheat – biggest usage in baking Varieties specific to end product Integrity in finished product Actual amount labeling Milk fat example

Whole Grain Trends Rice – crisped rice to Brown Rice Corn – corn germ shelf life implications Barley

Consumer Data – Hot Cereal Year end 2003 – 352,974,560 # Year end 2004 – 353,750,016 Year end 2005 – 369,195, Mo 6/18/06 – 370,942,848

Consumer Data – Hot Cereal % Change year ago Year end 2003 – (3.1) Year end 2004 – 0.2 Year end 2005 – Mo 6/18/06 – 1.0

Consumer Data – RTE Cereal Year end 2003 – 2,223168,000 # Year end 2004 – 2,169,517,056 Year end 2005 – 2,143,369, Mo 6/18/06 – 2,131,229,568

Consumer Data – RTE Cereal % Change year ago Year end 2003 – (3.3) Year end 2004 – (2.4) Year end 2005 – (1.2) 12 Mo 6/18/06 – (1.0)

Consumer Data – Granola Bars Year end 2003 – 122,563,944 # Year end 2004 – 128,589,464 Year end 2005 – 140,274, Mo 6/18/06 – 142,443,888

Consumer Data – Granola Bars % Change year ago Year end 2003 – 7.5 Year end 2004 – 4.9 Year end 2005 – Mo 6/18/06 – 7.1

Consumer Trends INDUSTRY ENVIRONMENT CONVENTIONAL OAT MILLING ›Increasingly diverse consumer population creates new eating habits ›Chewy granola bars and cereal bars in general strong expansion ›Hot cereal consumption renewed. Indicated growth in Hispanic market ›Continuing health trends and positive findings for whole grains ›Glycemic index and diabetes ›Obesity

Test foods are compared against glucose solution or white bread on an equal available carbohydrate basis GI <55 is Low GI (compared to glucose solution=100) Applicable for carbohydrate- based foods Crisped rice cereal, GI = 82 White bread, GI = 70 Oatmeal, GI = 58 Pasta = 55 Hours Blood Sugar Level Glycemic Index Glycemic Indexing is a ranking of foods based on the effect on blood sugar levels

Conventional Value Add WOG/SCOG Gruel Flakes Flavored instant oatmeal Precooked – heat & serve Drinks Smoothie/Vegetable based Nutraceutical

Conventional RTE Value Add Whole Grain Product Functionality

Conventional Flake Value Add Coated Oats/Grains Whole grain appearance Bland toasted background note Designed textures

Component Value Add Oat Fiber Pure clean insoluble fiber No heart health claim 80 – 90 % TDF Relatively bland Moisture control Best in conventional baked goods Oat Cellulose

Component Value Add Oat Protein – Hydrolyzed – greater solubility than native Hair and skin applications Replace animal derived proteins Fat binding

Component Value Add Oat Oil – Dermatological applications – Linoleic Emulsification Antioxidant Polar, bipolar and non polar lipids

Component Value Add Oat Starch Oat Bran Phytochemical Separations Colloidal Oatmeal

Value Added Oat Products William A. Bonner ConAgra Mills July 23, 2006