The Confectionery Industry Year in Review 2004

CategoryRetail Sales Manf. Sales % Lb. Sales % Total$26.3 Billion $17.1 billion +2.3%7.2 Billion +1.9% Chocolate$15.1 Billion $9.8 billion +3.9%3.4 Billion +2.8% Non-Choc.$7.8 Billion $5.1 billion +1.6%2.9 Billion +1.8% Gum$3.3 Billion $2.1 billion +4.1%0.5 Billion +1.4% NCA Estimates base on 2004 U.S. Dpt. Of Commerce 311D Report 2004 Retail Confectionery Sales

Candy & Gum Retail Performance 2004 IRI Sales Results As of December 26, 2004 Channel52 Week52 Week $ Sales% Change Supermarkets$4.2 billion+0.8% Drug$2.2 billion+3.7% Mass X Wal-Mart$1.2 billion+1.3% Convenience$2.7 billion+7.5% Total Candy and Gum$10.3 billion+3.3% IRI $ Sales as of 12/26/04 FDMC

Retail Landscape is Changing Channel 2004 $ Sales 2004 % Growth Supermarkets$ % Convenience Stores$ % Drug Stores$ % *Wal-Mart$ % Mass X Wal-Mart$ % *Warehouse Clubs$ % *Dollar Stores$.8+7.2% Vending$ % *Bulk$ *estimates

Candy and Gum Ranked 3rd Among 2004 Food Categories IRI Food, Drug & Mass Excluding Wal-Mart 12/26/ %

Candy and Gum Ranked 1st Among 2004 Snack Categories IRI Food, Drug & Mass Excluding Wal-Mart 12/26/04

What Affects Seasonal Sales? Date/Day of Holiday The Economy Consumer Confidence Consumer Mood Shopping Patterns/Habits Merchandising Strength/Visibility

Holiday Dates/Days Holiday Valentine’s Day SaturdayMondayTuesday Easter 4/113/27 4/16 Halloween SundayMondayTuesday Christmas SaturdaySundayMonday Thanksgiving11/2511/2411/23 Shopping Days303132

Seasonal Confectionery Trends VALENTINE’S -3.0%-7.6%+6.5%-0.5% +4.7% -2.1% EASTER +5.5%+2.2%-2.2%-2.4% +11.0% -0.1% HALLOWEEN +2.4%+0.7% -0.4%+0.2% +4.7% +6.1% CHRISTMAS -3.5%-1.4%-3.0%+0.7% +1.7% -0.8% * IRI FD&M -3.0% +5.5% +2.4% -3.5%

Candy & Gum Retail Performance 2004 Sales Results 12/26/04 Confectionery+1.6% Chocolate +1.9% Everyday Sales+3.1% Seasonal Sales-3.1% Non-Chocolate-1.0% Everyday Sales-0.8% Seasonal Sales-2.1% Breath Fresheners-2.9% Gum+7.1% IRI $ Sales as of 12/26/04 FDM

Christmas Shopping Patterns Holiday shopping consolidated  Polarized Shopping  Thanksgiving – Christmas - Post Losing early impulse purchases Impact of Gift Cards  Starbucks, Department Stores

New Trends Sugar-free candy and gum Low-carb candies? Limited edition candies Brand line extensions Smaller sizes (servings) Increasing Dark Chocolate sales

New Trends +35%+13% Sugar-free Candy and Gum Low-carb Candies

New Trends Limited Edition Candies

New Trends Increasing Dark Chocolate Sales +17%

New Trends Brand Line Extensions

2004 Highlights Retail Sales +2.3% Easter Sales +6% New Item Introductions Strong Halloween Sales +2.4%

Confectionery Continues to Grow Consumers know what they are buying Choice of sizes Variety of nutritional choices Candy fits in a healthy lifestyle Economy Improving 3 Favorable Seasonal Dates