BRYANA STEVENS THOMAS SMITH Brownie Mix BRYANA STEVENS THOMAS SMITH

Brownie Category Snapshot TOTAL BROWNIES (BKG MIX) OZ. Total Consumption BehaviorScape Framework   LifeStyle Behavior Stage Cosmopolitan Centers Affluent Suburban Spreads Comfortable Country Struggling Urban Cores Modest Working Towns Plain Rural Living Total Start-Up Families HHs with Young Children Only < 6 84 104 126 123 107 105 108 Small Scale Families Small HHs with Older Children 6+ 122 134 139 74 138 Younger Bustling Families Large HHs with Children (6+), HOH <40 96 131 156 99 116 142 Older Bustling Families Large HHs with Children (6+), HOH 40+ 165 200 186 128 179 196 180 Young Transitionals Any size HHs, No Children, < 35 58 70 79 62 89 75 71 Independent Singles 1 person HHs, No Children, 35-64 45 55 59 53 51 Senior Singles 1 person HHs, No Children, 65+ 50 65 36 57 Established Couples 2+ person HHs, No Children, 35-54 72 121 100 101 Empty Nest Couples 2+ person HHs, No Children, 55-64 95 115 120 118 Senior Couples 2+ person HHs, No Children, 65+ 86 83 81 114 77 94 Highest for Older Bustling Families Lowest for Independent Singles

Category Definition Older bustling families with kids, and HOH is over 40. Significant across all lifestyle categories with a slightly lesser presence in Struggling Urban Core

Brownie Brands Duncan Hines Betty Crocker Ghirardelli Private Label Key Consumers: Families with 4+ members. Very high in 5+ Not significant among any ethnicities People aged 35-44 Kids aged 6 – 17 Betty Crocker Key Consumers: Families with 4+ members. Very high in 5+ Not significant among any ethnicities People aged 35-44 Kids aged 6 -17 Ghirardelli Key Consumers: Families with 4+ members Dominates High Income ($75,000+) More popular with Asians Kids aged <6 – 17 Private Label Key Consumers: Families with 4+ members. Very high in 5+ Other Minorities Income of $20,000 - $50,000 Kids aged 6 – 17

Demographic Variables % Volume Index   Duncan Hines Betty Crocker Ghirardelli Private Label Demographic Variables % Volume Index Race of Head of Household White 74.9% 109 76.7% 111 72.1% 104 77.4% 112 Black 9.1% 76 6.8% 57 7.9% 66 6.7% 56 Hispanic 10.7% 85 11.5% 91 12.0% 96 72 Asian 3.4% 79 3.3% 77 5.7% 133 4.0% 94 Other 1.9% 1.8% 80 2.4% 106 2.7% 120 Number of Persons 1 Person 15.2% 12.8% 47 14.1% 52 20.5% 2 Persons 31.1% 30.2% 93 33.0% 102 28.2% 87 3 Persons 18.0% 18.2% 113 18.8% 116 15.7% 97 4 Persons 17.3% 131 17.8% 135 138 16.5% 125 5+ Persons 18.4% 165 21.0% 189 16.1% 144 19.1% 171 Household Income Under $10,000 6.2% 81 5.4% 70 3.9% 51 9.0% 117 $10,000 - $19,999 8.7% 8.3% 75 6.5% 58 11.3% 100 $20,000 - $29,999 10.6% 9.8% 90 6.4% 13.3% 122 $30,000 - $39,999 11.0% 108 10.2% 6.9% 68 11.4% $40,000 - $49,999 10.4% 7.3% 10.8% 121 $50,000 - $74,999 18.9% 105 17.5% 98 107 $75,000 - $99,999 12.9% 13.5% 114 128 $100,000 - $149,999 13.8% 14.3% 20.4% 9.4% $150,000 or More 8.6% 16.0% 177 4.9% 54 Age of Head of Household Age 18 - 24 2.5% 3.8% 4.2% 99 4.4% 103 Age 25 - 34 12.6% 83 14.0% 13.2% 86 Age 35 - 44 21.4% 123 21.6% 124 20.0% 115 16.4% Age 45 - 54 22.2% 110 23.7% 118 22.4% 21.9% Age 55 - 64 18.7% 19.8% 19.4% Age 65 - 74 12.4% 13.6% Age 75 or More 88 8.0% 74 Age and Presence of Children Age < 6 7.8% 84 Age 6 - 17 26.0% 140 27.6% 149 25.4% 137 26.7% Age < 6 & 6 - 17 10.1% 153 174 8.2% 154 No Children 56.6% 53.2% 57.4% 57.0%

Category Role Brownies has a low penetration (37.8 in our region, and 40.5 nationwide) Brownies are an ‘Under Fire’ category because of its size (100 M < Brownies < 1 B) Deal or No Deal The category offers significant percentage on deal in both our region and nationwide.

ITEM TRIPS PER ITEM BUYER ITEM $ PER ITEM TRIP DOLLAR SHARE ITEM BUYERS (000) ITEM PENETRATION ITEM $ PER ITEM BUYER ITEM TRIPS PER ITEM BUYER ITEM $ PER ITEM TRIP ITEM UNITS PER ITEM TRIP PURCHASE CYCLE (IN ELAPSED DAYS) % REPEAT BUYERS (% 2+ TIME BUYERS) LOYALTY (SHARE OF $ REQ.) % ITEM $ ON DEAL % DOLLARS WITH MANUFACTURER COUPON MIXES - BROWNIES TOTAL U.S. 286,872.7 100.0 46,982.8 40.5 6.1 2.4 2.5 1.6 65.8 56.0 33.5 8.1 WEST SOUTH CENTRAL 28,235.9 4,912.8 37.8 5.8 1.5 65.7 55.4 24.5 9.1 BETTY CROCKER - MIXES - BROWNIES 113,496.6 39.6 24,858.7 21.4 4.6 1.7 2.7 75.0 36.7 60.7 6.7 11,923.2 42.2 2,631.3 20.3 4.5 2.6 71.7 36.8 62.7 27.6 7.6 BETTY CROCKER WARM DELIGHTS - MIXES - BROWNIES 19,121.8 5,278.7 3.6 65.3 25.2 50.2 37.4 19.8 2,441.4 8.7 674.5 5.2 1.4 63.3 22.9 51.7 26.4 16.7 CTL BR - MIXES - BROWNIES 15,627.2 5.5 5,733.3 4.9 31.8 39.5 14.2 0.0 1,416.3 5.0 596.3 70.0 28.4 34.2 8.4 DUNCAN HINES - MIXES - BROWNIES 59,179.4 20.6 17,534.6 15.1 3.4 2.2 81.3 31.6 45.8 39.3 11.5 6,534.7 23.1 2,096.8 16.1 3.1 2.0 78.9 32.2 47.6 27.7 13.5 GHIRARDELLI - MIXES - BROWNIES 29,832.0 10.4 6,275.6 5.4 4.8 3.5 77.4 22.5 51.5 2,538.2 9.0 467.6 1.3 69.7 23.0 56.7 6.8 3.7 NO PUDGE! - MIXES - BROWNIES 6,119.2 2.1 651.5 0.6 9.4 1.9 47.1 29.5 72.1 8.0 0.2 NA PILLSBURY - MIXES - BROWNIES 1,691.0 779.4 0.7 1.1 1.2 54.9 7.3 24.9 30.0 6.5 PILLSBURY BROWNIE CLASSICS - MIXES - BROWNIES 22,200.9 7.7 8,254.2 7.1 74.5 24.0 33.6 48.0 10.7 1,689.9 6.0 630.5 1.8 60.6 27.5 31.2 31.0 11.2 PILLSBURY FUDGE SUPREME - MIXES - BROWNIES 9,584.2 3.3 3,378.7 2.9 2.8 78.8 13.9 33.2 38.8 430.7 192.1 57.2 8.9 42.1 14.4

Brownies Under Fire We are ‘Under Fire’ because our gross margin is 17.48% We have less than $1 billion in revenue We have more than $100 million in revenue

Store Demographics 4-6 foot area for facings. Located near the middle of the aisle, at eye level and below. We also saw some holiday decorations and specials on the end-of-aisle displays to attract customers to buy and to enter the aisle. Private label was not significant (only 1 SKU in Walmart, and 2 in Harps)

Understanding Our Demographics We feel that the retailers we audited are missing out on sales by not carrying more private label items. There is a huge lack in products bought by mid to low income single person households, college students and young professionals, who have a tendency to buy private label, so we would want to market to them.

Walmart Pleasant Grove #5260 Circular Trade Areas: Northwest Arkansas Walmart MLK #144 Walmart Pleasant Grove #5260 Walmart Joyce #359 Walmart NBHD Mission #2745 Harps College #355 Demography 2 mile Ring % HHs HHs Index Race of Head of Household   White 80.4% 117 74.8% 108 85.6% 124 90.4% 131 81.9% 119 Black 6.6% 55 2.6% 22 5.6% 47 3.4% 29 6.5% 54 Hispanic 4.9% 39 18.5% 148 3.6% 2.1% 17 4.1% 33 Asian 4.6% 2.5% 58 1.9% 45 1.6% 38 97 Other 3.5% 156 73 3.3% 145 2.4% 105 150 Number of Persons 1 Person 47.7% 176 23.7% 87 43.1% 159 32.5% 120 44.2% 163 2 Persons 33.2% 103 28.3% 32.2% 100 35.7% 110 31.8% 98 3 Persons 10.4% 64 15.6% 96 13.7% 84 15.9% 13.2% 81 4 Persons 5.9% 16.7% 127 7.2% 11.0% 83 7.1% 5+ Persons 2.8% 25 15.7% 141 3.7% 34 5.0% 3.8% Household Income Under $10,000 26.4% 345 21 12.4% 162 8.2% 107 16.8% 220 $10,000 - $19,999 24.7% 221 9.3% 11.7% 104 16.1% 144 $20,000 - $29,999 12.2% 112 7.6% 69 13.3% 123 11.9% 14.1% 129 $30,000 - $39,999 10.3% 102 6.2% 61 18.9% 186 12.9% 15.5% 153 $40,000 - $49,999 8.0% 89 11.4% 72 6.1% 68 6.0% 67 $50,000 - $74,999 9.0% 50 22.2% 13.8% 77 9.9% $75,000 - $99,999 3.2% 27 60 10.6% 6.3% 53 $100,000 - $149,999 4.2% 14.6% 8.7% 70 128 8.4% $150,000 or More 14.7% 164 7.0% 78 13.0%

Walmart Pleasant Grove #5260 Circular Trade Areas: Northwest Arkansas Walmart MLK #144 Walmart Pleasant Grove #5260 Walmart Joyce #359 Walmart NBHD Mission #2745 Harps College #355 Demography 2 mile Ring % HHs HHs Index Age of Head of Household   Age 18 - 24 25.4% 604 5.1% 122 10.8% 258 7.2% 171 16.4% 389 Age 25 - 34 29.2% 193 109 23.1% 153 19.8% 131 26.5% 175 Age 35 - 44 14.4% 83 21.1% 16.5% 95 16.9% 97 16.1% 92 Age 45 - 54 10.7% 53 22.0% 110 13.9% 69 17.2% 86 12.7% 63 Age 55 - 64 10.9% 56 14.2% 73 18.8% 66 Age 65 - 74 5.4% 41 9.7% 74 8.3% 11.8% 90 7.3% 55 Age 75 or More 3.9% 37 9.4% 88 13.1% 8.2% 77 78 Age and Presence of Children Age < 6 3.8% 52 9.3% 126 112 4.1% 6.2% 84 Age 6 - 17 8.4% 45 16.2% 87 12.3% 18.7% 101 13.5% Age < 6 & 6 - 17 2.9% 44 12.0% 183 60 4.2% 64 3.0% 46 No Children 84.9% 62.5% 93 75.5% 73.0% 108 77.3% 114 Housing Tenure Own 19.5% 30 60.5% 38.6% 59 60.9% 94 34.3% Rent 80.5% 230 39.5% 113 61.4% 39.1% 65.7% 188 Education of Head of Household Not a High School Graduate 8.6% 124 5.9% 5.6% 43 High School Graduate 16.6% 65 25.0% 98 23.0% 12.6% 49 18.6% Some College 38.5% 134 26.8% 25.6% 89 34.7% 121 College Graduate 20.4% 107 20.7% 24.9% 30.6% 161 22.7% 119 Post College Degree 15.9% 116 117 19.4% 141 27.3% 198 18.5%

Category Assessment Price Gap: Private label products were around 60% of the price of manufacturer brands. From store to store, all the brands had relatively the same cost to stay competitive. Perceived Quality: All products were perceived the same across brands regardless of price. Private label was missing out on not carrying speciality flavor/varieties like manufacturer brands. Ex: Supreme, Caramel, Triple Fudge, With Nuts, etc.

Brownie Mix, Share of Display Space, Fall 2014   Manufacturer Walmart MLK Facings Walmart Pleasant Grove Facings HARPCollege Facings WalmartJoyce Facings NeighWM Mission Facings Continental Mills % of Total Sum 10.5% 11.5% 5.1% 11.8% 18.2% % of Total N 12.9% 13.2% 8.7% 12.1% 19.0% N 4 5 2 General Mills 42.1% 42.3% 25.6% 35.3% 31.8% 38.7% 34.2% 26.1% 36.4% 33.3% 12 13 6 7 Nestle 2.6% 3.8% 3.2% 4.3% 1 Pinnacle Foods Group 31.6% 30.8% 43.6% 32.3% 39.1% 28.6% 10 9 11 Private Label 1.9% 10.3% 2.9% 3.0% The J.M. Smucker Company 9.6% 12.8% 14.7% 9.7% 13.0% 15.2% 3 Total 100.0% 31 38 23 33 21 Brownie Mix, Share of Display Space, Fall 2014 Continental Mills Ghirardelli General Mills Betty Crocker Nestle Toll House Pinnacle Foods Duncan Hines J.M. Smucker Pillsbury

Brownie Mix, Share of Gross Margin $s, Fall 2014   Manufacturer Walmart MLK GM$ Walmart P. G. GM$ Harps College GM$ Walmart Joyce GM$ NBHD Walmart GM$ Continental Mills % of Total Sum -0.1% 3.4% 8.8% 2.9% 4.3% Mean -.0033 .0700 1.2000 .0675 N 3 5 2 4 General Mills 51.3% 42.9% 11.6% 47.8% 26.2% .3095 .3420 .5283 .3685 .2344 12 13 6 7 Nestle 7.1% 4.9% 2.3% .5130 .6148 1 Pinnacle Foods Group 38.7% 38.4% 44.0% 36.9% 25.8% .2796 .3063 1.3338 .3412 .2693 10 9 Private Label 4.6% 3.2% 13.1% 3.6% .3350 1.7912 The J.M. Smucker Company -1.6% 7.2% 20.2% 8.7% 43.6% -.0380 .1486 1.8350 .1612 .6819 Total 100.0% .2411 .2729 1.1859 .2889 .2978 30 38 23 32 21 Brownie Mix, Share of Gross Margin $s, Fall 2014 Continental Mills Ghirardelli General Mills Betty Crocker Nestle Toll House Pinnacle Foods Duncan Hines J.M. Smucker Pillsbury

Brownie Mix, Share of Gross Margin %, Fall 2014   Manufacturer Walmart MLK GM% Walmart P. G. GM% Harps College GM% Walmart Joyce GM% NBHD WalmartGM% Continental Mills Mean -0.18% 3.54% 38.10% 3.41% Std. Deviation 5.536% 4.517% 2.245% 5.206% N 3 5 2 4 General Mills 12.15% 13.69% 24.68% 15.02% 8.17% 21.835% 21.580% 8.545% 20.931% 21.585% 12 13 6 7 Nestle 16.13% 18.73% . 1 Pinnacle Foods Group 15.60% 14.62% 47.97% 19.31% 12.93% 20.662% 22.396% 7.093% 17.963% 20.229% 10 9 Private Label 26.80% 67.21% 20.120% The J.M. Smucker Company -3.04% 6.61% 61.37% 7.24% 24.44% 0.000% 21.574% 5.973% 22.997% 40.157% Total 11.17% 43.19% 14.06% 11.72% 19.134% 19.739% 16.930% 18.884% 23.217% 30 38 23 32 21 Brownie Mix, Share of Gross Margin %, Fall 2014 Continental Mills Ghirardelli General Mills Betty Crocker Nestle Toll House Pinnacle Foods Duncan Hines J.M. Smucker Pillsbury

Audit SKU Summary Store Location SKU'S Unique SKU'S Audited By:   Walmart Martin Luther King 38 5 Bryana S Pleasant Grove 52 9 Thomas S Walgreens 1 Garland Street Harps College 39 7 Joyce Blvd 34 6 NeighWM Mission and Crossover 22 8 24 Target Shiloh Dr. 17 2 13 4

Category Strategy In the stores we audited, the retailers were more favorable to Duncan Hines and Betty Crocker. Almost nothing in Private Label (1 SKU) Needed more shelf space for products (change from a 4 foot area to 8 foot) Lots of deals on products

Category Tactics Private label is essentially a non-factor with only 1-2 SKUs per store. We believe retailer have a big opportunity to grow that area starting with specialty flavors. This category is being carried by Duncan Hines (Pinnacle Foods) and Betty Crocker (General Mills).

Category Review Category is shrinking, especially in private label. (Last year they found 14 SKUs in Walmart, Walgreens, and Harps, and now we only have 3. We believe poor sales performance is driven by growing health concerns. (There are now gluten-free mixes)