Agricultural Product Differentiation Industry Perspective November 15, 2004 CORNY GALLAGHER AGRIBUSINESS EXECUTIVE

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FOOD FORESIGHT PRIORITY TRENDS FALL 2004  GATHERS TRENDS AND ISSUES INFORMATION FROM AROUND THE GLOBE  IDENTIFIES EMERGING ISSUES AND TRENDS

2004 TREND 1   PRODUCERS FIND THEMSELVES IN AN EVER-TIGHTENING VICE:  Increasing scrutiny  Must trace and document practices  Increasingly legislation and regulation leads to unequal playing field for U.S. agriculture

2004 TREND 2   VULNERABILITIES TO TERRORISM ADD A NEW WRINKLE OF INSECURITY AND ARE REDEFINING “ROUTINE” AGRICULTURAL PRACTICES:   Department of Homeland Security will play increasing leadership role   GMO wars will continue and trickle-down

2004 TREND 3   BIG GLOBAL COMPETITORS AND MARKETS ARE ENGINEERING A WILD RIDE FOR THE AGRI-FOOD CHAIN:   Rising affluence and demand for high- value products with tastes of home

2004 TREND 4   OBESITY IS OVERWHELMING THE DIET/HEALTH LANDSCAPE : -Is high fructose corn syrup the real villain? - Is it caused by the micronutrients?   Perception shifted from food is healthful to food is bad for me

2004 TREND 5   NEW SCIENCES AND GENETIC INNOVATION ARE ACCELERATING THE ARRIVAL OF A NEW FRONTIER   PERSONALIZED NUTRITION   YOUR OWN RUBICS CUBE RATHER THAN THE FOOD PYRIMID

2004 TREND 5

2004 TREND 5 CONCEPTS   Genotyping - individuals' genetic make-up   Metabolic profiling finger-stick tests   Nanotechnology, in wrong hands used as bio terrorism?   DARPA is driving radical nutrition research in biochemical pathways and processes like ketogenic diets   micronutrients in certain foods lead to new opportunities

2004 TREND 6   WHAT CONSUMERS WANT, CONSUMERS WILL GET...   Shift to a genuine "pull" marketing environment   "if you don't like this, you might like this" suggestions tied to likes and needs

2004 TREND 7   FOOD SERVICE SECTOR IS SURGING   Dominant share of consumer food spending   Innovating through an explosion in ethnic flavors and cuisine

2004 TREND 7 CONCEPTS   Confluence of mega trends; the dramatic rise in ethnic foods, blurring between "formal" and "casual" eating   Asian flavors are the top trend gainer in the top 200 chains   Food service providers must offer more choices

FOOD SYSTEM OPPORTUNITIES  Health benefits of ag products and parts.  Changing demographics = New products.  Food Service Chefs looking for menu ideas.  Health Consciousness driving product choices. choices.  Environmental improvement. It’s not waste it is …..