1. DEFENSE COMMISSARY AGENCY Your Commissary … It’s Worth the Trip! Perishable/Perimeter Categories April 21, 2016

2. Miranda Internicola DeCA STATE OF THE BUSINESS ANNUAL 2015

3. Copyright ©2013 The Nielsen Company. Confidential and proprietary. 3 Win against Walmart in HBC and Grocery in Dairy/Produce Identify low conversion items in DeCA to increase basket Determine top UPCs for DeCA shoppers in Walmart and Grocery to drive assortment/promotion FOCUS DEPT RESOURCES INCREASE $ PER TRIP Increase in baskets by $2 can result in 3% sales increase Focus on converting Medium shoppers to Heavy shoppers DeCA OPPORTUNITIES Within key stores, alter merchandising for these groups Tailor promotions and communications on the digital platforms TARGET YOUNGER FAMILIES AND HISPANICS

4. Copyright ©2013 The Nielsen Company. Confidential and proprietary. 4 BASKET DECREASE SIGNIFICANT Buyers / Shoppers (% Penetration) How much they buy / spend (Buying Rate) DeCA Total Sales How many times they buy it (Purchase Frequency) How much they buy on each trip (Purchase / Basket Size) X $879 (-$60.5 per HH per year) 13.9 trips/HH (-0.6) $63 per trip (-$2) Source: Nielsen Homescan 52 Weeks Ending 12/26/15 v YAGO, Total Product Line, DECA Shopper at DECA 2.6% (+0.1%)

5. Copyright ©2013 The Nielsen Company. Confidential and proprietary. 5 DeCA SHOPPERS LOYAL TO THE MILITARY BASE Source: Nielsen Homescan 52 Weeks Ending 12/26/15 vs YAGO, Total Product Line DeCA SHOPPER SHARE OF WALLET BY CHANNEL +0.5 -0.3 Grocery and Supercenters make up over 40% of DeCA shopper SOW -1.2 +0.2 0.0 +0.2 -0.20.0

6. Copyright ©2013 The Nielsen Company. Confidential and proprietary. 6 MILITARY CHANNEL TRIPS AND BASKET DOWN DeCA HHs $/trip at Supercenters has increased Source: Nielsen Homescan 52 Weeks Ending 12/26/15 vs YAGO, Total Product Line DeCA SHOPPER – CHANNEL PURCHASE DYNAMICS

7. Copyright ©2013 The Nielsen Company. Confidential and proprietary. 7 WALMART IS DeCA’S LARGEST COMPETITOR Sam’s and Costco are a distant 2 nd & 3 rd ; Exchanges are steady RETAILER DeCA SHOPPER SOW Pt CHG YA WAL- MART TOTAL20.31.3 COSTCO5.40.2 SAM’S5.40.1 EXCHANGES ALL TYPES 3.3(0.5) TARGET TOTAL2.9(0.3) KROGER3.00.5 SAFEWAY1.80.5 HEB & HEB PLUS1.6(0.7) ALL OTHER36.3(0.5) +0.9 Source: Nielsen Homescan 52 Weeks Ending 12/26/15 v YAGO, Total Product Line, DECA Shopper DeCA SHOPPER – ALL OUTLET SHARE OF WALLET - 0.7

8. Copyright ©2013 The Nielsen Company. Confidential and proprietary. 8 COMMISSARIES ARE STILL PATRON’S #1 DESTINATION Source: Nielsen Homescan, SOW 2015 UPC CODED PRODUCT ONLY

9. Copyright ©2013 The Nielsen Company. Confidential and proprietary. 9 FOCUS ON INCREASING BASKETS DeCA shopper trips on decline on Military Base, non military channel store count growth continues DeCA shopper base is stable DeCA increase in shoppers most likely softened basket size; opportunity to increase Heavy shoppers Increase of 0.4 Trips (assumes $63 per trip) Increase of $2/Trip (assumes 13.9 trips per year) OR +3% Sales Increase Source: Nielsen Homescan 52 Weeks Ending 12/26/15, Total Product Line

10. DeCA OPPORTUNITIES

11. Copyright ©2013 The Nielsen Company. Confidential and proprietary. 11 FOCUS ON DAIRY & PRODUCE AGAINST GROCERY CHANNEL DeCA SHOPPERS - DEPARTMENT SHARE OF WALLET- UPC CODED ITEMS Source: Nielsen Homescan, 52 weeks ending 12/26/15, Total US, DECA Shopper Department DeCA TOTAL GROCERY WAL- MART TOTAL Value of 1 pt SOW (MM) $(MM) Upside Against Grocery $(MM) Upside Against WM Bakery 20.237.623.2$3.7$64.3$11.1 Beauty Care 13.28.725.5$7.9$97.5 Dairy 26.237.619.4$13.2$149.9 Deli 25.337.516.5$1.9$23.1 Frozen Foods 27.036.319.0$10.6$99.0 Grocery 24.426.219.5$55.8$100.4 Health Care 11.912.222.8$8.0$2.4$87.7 Meat 29.333.521.1$4.8$20.2 Pet Food And Accessories 19.314.731.8$0.6$7.4 Produce 19.337.517.0$5.5$100.7 Total Product Line 20.124.320.3$136.2$572.2$27.2 Grocery

12. Copyright ©2013 The Nielsen Company. Confidential and proprietary. 12 BEAT GROCERY ON THESE DAIRY/PRODUCE ITEMS DeCA Shopper Buyer Conversion Source: Nielsen Channel Facts 52 WE 6/30/12, Publix RTA, Total Trips, UPC Sales Source: Nielsen Homescan 52 Weeks Ending 12/26/2015, DECA Shopper, Total US DeCA Item $/ Item trip 3.321.7% 4.023.3% 6.633.5% 5.08.5% 3.523.5% 4.722.5% 3.321.4% 3.727.0% 3.821.7% 2.025.4% Patron Savings Q4 Patron Savings vs RM: 25.2%

13. DeCA SEGMENT OPPORTUNITIES

14. Copyright ©2013 The Nielsen Company. Confidential and proprietary. 14 HEAVY SHOPPER GROUP CONTINUES TO DECLINE Source: Nielsen Homescan 52 Weeks Ending 12/26/15 (4 YEAR TREND) Total Product Line Buyer Distribution - 6.9% CAGR Are shoppers converting from Heavy to Medium and Medium to Light?

15. Copyright ©2013 The Nielsen Company. Confidential and proprietary. 15 Heavy Shopper Upper Income 1-2 person HH, 5+ skew FHOH 35-54, 55+ Couples & Families Medium Shopper Middle Income Families FHOH Age 55+, <35 skew Light Shopper Lower Income skew 1-2 person HHs Age 35 and Under, 55+ Singles & Couples Nielsen Homescan ASP, Distribution of Shoppers, 52 weeks ending 12.26.15, HML at COMMISSARY HEAVY SHOPPERS SKEW TOWARDS LARGE HOUSEHOLDS Migration of Younger Bustling Families

16. Copyright ©2013 The Nielsen Company. Confidential and proprietary. 16 OPPORTUNITY AMONG YOUNGER, FAMILIES AND NON WHITE HOUSEHOLDS These groups either underperform in % $ versus % shoppers or underdeveloped DeCA Shopper - Demographics Source: Nielsen Homescan, Account Shopper Profiler, 52 we 12/26/2015; Total US; DECA Shopper

17. 17 Copyright ©2015 The Nielsen Company. Confidential and proprietary. YOUNGER BUSTLING FAMILIES Source: Nielsen Spectra; total US HHs with children, 4+ members in HH, oldest child 6+ and HOH under 40 Average adult age is 34 while average child age is 8.4 Hispanics are key components, more than 1 in five households in Younger bustling Families in US is Hispanic 50% are 4 person HHs while other half is 5+ 89% only have kids under 15 years of age Very busy as kids are old enough to have quite a few activities outside the home but few have children old enough to cart the younger ones around Digitally Savvy

18. Copyright ©2013 The Nielsen Company. Confidential and proprietary. 18 TARGET YOUNG FAMILIES WITH QUICK MEAL-TIME SOLUTIONS AND SNACKING OCCASIONS Source: Spectra Best Products Report, Younger Bustling Families, March 2016 Prioritize quick meal-time solutions and snacking for busy families on the go through merchandising and assortment Basket Building SNACKING OCCASIONS QUICK SOLUTIONS GRANOLA & YOGURT BARSDRY DINNERS – PASTA CRACKERS – CHEESEFRANKFURTERS – REFRIGERATED FRUIT-DRIED & SNACKSMEXICAN TORTILLAS DESSERTS – RTS SINGLE SERVINGSLUNCHMEAT – DELI POUCHES SNACKS - MEATTOASTER PASTRIES FROZEN/REFRIG SNACKSSOUP MIXES – DRY & BASES CRACKERS – SANDWICH & SNACK PACKSBAGELS & CREAM CHEESE SNACKS – PUFFED CHEESEFROZEN WAFFLES & PANCAKES BAKERY - DOUGHNUTSSAUSAGE – BREAKFAST FRUIT JUICESANDWICHES – REFRIGERATED/FROZEN CAKE & BROWNIE MIXESCOMBINATION LUNCHES

19. Copyright ©2013 The Nielsen Company. Confidential and proprietary. 19 HISPANIC HOUSEHOLDS DRIVE $/BASKET AT WALMART AND GROCERY Source: Nielsen Homescan, 52 we 12/26/15, Total US, DECA Shopper groups % HHs% Dollars Dollars/HH Index$/HH DeCA $/Trip Walmart $/Trip Grocery $/Trip DeCA Shopper100 $879$63$40$28 DeCA Caucasian Shopper6365104$912$64$44$31 DeCA African American Shopper222196$845$63$29$23 DeCA Asian Shopper57119$1,047$59$41$23 DeCA All Other Races Shopper10875$657$64$44$30 DeCA Hispanic Shopper181689$785$60$47$32

20. Copyright ©2013 The Nielsen Company. Confidential and proprietary. 20 GI Gen Gen X Millennial Boomer Gen Next EACH GENERATION BECOMES MORE MULTICULTURAL Gen Next population, under age nine, already reaching the “tipping point” Source: Nielsen The Multicultural Edge: Super Consumers Rising March 2015 Report % U.S. Population

21. WHAT DO WE DO NOW?

22. Copyright ©2013 The Nielsen Company. Confidential and proprietary. 22 NEXT STEPS Drive increased $2 per trip spend at DeCA in store Identify categories with low buyer conversion and +$2 per item trip spend Leverage displays in store to cross promote items with high conversion categories with low conversion categories; focus on meal solutions Create recipe suggestions online that contain the high/low conversion categories; allow to download into shopping list Use social media to drive interest Focus investments In Dairy/Produce against Grocery Identify key items driving DeCA shopper Dairy/Produce trips at Grocery (Key Item Report) Target the Younger Bustling Families and Hispanics shoppers Create a bilingual social media alternative for Hispanic shoppers Ensure you have “Hispanic brands” in Hispanic designated stores…on display Leverage Facebook as gateway for communication Interconnect recipes on digital platform; link to YouTube to create an “online cooking series” Offer mobile coupons and downloadable shopping lists from website Embed offers within recipes and allow to download ingredients into shopping list

23. DEFENSE COMMISSARY AGENCY Your Commissary … It’s Worth the Trip! Frozen Foods Mr. James Taylor Category Manager

24. Your Commissary … It’s Worth the Trip! Defense Commissary Agency Sales Tracker 24 Source: Business Objects – DeCA Worldwide, FYTD Week Ending 3/26/2016 Above categories make up 77.3% of total dollar sales in Frozen Foods

25. Your Commissary … It’s Worth the Trip! Defense Commissary Agency $ Share & Patron Savings 25 Source: Nielsen, RDH; Patron Savings

26. Your Commissary … It’s Worth the Trip! Defense Commissary Agency Strategies Eliminate duplication – Variety within categories SKU Optimization – Alignment with RM Removal of Poor Performers First to Market with Innovation Promotional Annual Planning – Maximize trade fund usage – Aligned with RM/XAOC – Seasonally appropriate Increased demos during peak selling periods Strategically aligned with market trends 26

27. DEFENSE COMMISSARY AGENCY Your Commissary … It’s Worth the Trip! Dairy Mr. Steve Villeneuve Category Manager

28. Your Commissary … It’s Worth the Trip! Defense Commissary Agency Sales Tracker 28 Source: Nielsen, RDH – DeCA Worldwide, FYTD Week Ending 3/26/2016 Above categories make up 89.1% of total dollar sales in Dairy

29. Your Commissary … It’s Worth the Trip! Defense Commissary Agency $ Share & Patron Savings 29 Source: Nielsen, RDH; Patron Savings

30. Your Commissary … It’s Worth the Trip! Defense Commissary Agency Strategies Continued focus on top selling categories – Milk, Eggs, Cheese, and Yogurt Growth opportunities – Natural, Non GMO, Organic items – Merchandising Dairy Success being seen in merchandising – MilkPEP Campaigns: – Built with Chocolate Milk Flavored Milk sales increased +15% – Milk Your Morning Protein 30

31. DEFENSE COMMISSARY AGENCY Your Commissary … It’s Worth the Trip! Produce Ms. Bridget Bennett Category Manager

32. Your Commissary … It’s Worth the Trip! Defense Commissary Agency Sales Tracker 32 Source: Business Objects, FYTD Week Ending 3/26/2016; 2014 & 2015 Price Comparison Survey Category $ Share Patron Savings vs AOC

33. Your Commissary … It’s Worth the Trip! Defense Commissary Agency Strategies 33 Focus – Fresh and full – Promo items – Top categories – Combat leakage between trips Impulse Buys

34. Your Commissary … It’s Worth the Trip! Defense Commissary Agency Strategies 34 Opportunity – Organics – Buy local – Strategic merchandising – Build the basket Reaching our Sales Potential

35. DEFENSE COMMISSARY AGENCY Your Commissary … It’s Worth the Trip! Meat Mr. Charlie Dowlen Category Manager

36. Your Commissary … It’s Worth the Trip! Defense Commissary Agency Sales Tracker 36 Source: Business Objects, FYTD Week Ending 3/26/2016

37. Your Commissary … It’s Worth the Trip! Defense Commissary Agency $ Share & Patron Savings Meat FreshPre-Pack Source: 2014 & 2015 Price Comparison Survey 37

38. Your Commissary … It’s Worth the Trip! Defense Commissary Agency Strategies Category Review for Dinner Sausage and Lunchmeat Analyze market share in Fresh Poultry for maximum holding power Push additional volume through Pre-Pack and Meat Manager Specials Marketing initiatives to increase patron awareness 38

39. Your Commissary … It’s Worth the Trip! Defense Commissary Agency Strategies Cross-merchandising opportunities Pre-pack trends: Natural, Organic, and smaller portions Ethnic flavors: “Authentic” Hispanic selections of Beef, Pork, Chicken, and Chorizo Regional items 39

40. DEFENSE COMMISSARY AGENCY Your Commissary … It’s Worth the Trip! Industry Assistance

41. Your Commissary … It’s Worth the Trip! Defense Commissary Agency 41 Industry Assistance Patron Savings Product Availability Category Resets/POG Speed to Shelf Promotions F ACING THE F UTURE T OGETHER