3. Joyce Chandler Chief of Perishables, Acting

4. Industry:DeCA: Al Oliver – Military Produce GroupJoyce Chandler David McMurtry – Kraft FoodsBonita Moffett Randy Meador - Kraft FoodsLes Simpson Tim Brown – Empower IT, Inc.Bridget Bennett Kimberly Dressler – Sara LeeDavid Leffert Lou Kennedy Randi Robinson Amy Perkinson

5. DeCA’s Vision of the Perimeter/Importance Increasing sales and patron awareness Perimeter drives patron savings Perimeter offers the greatest opportunity to build and solidify customer loyalty and capture sales lost to civilian retailers

6. Fresh Meat $3.22/lbDairy $2.51/unit Fresh Seafood $5.28/lbFrozen $3.51/unit Deli $6.04/lbBakery$4.42/transaction Chilled Meat (UPC) $2.76/lb Chilled Meat (Random Wt.) $1.85/lb Fresh Fruits/Vegetables (FF&V)$0.98/lb Produce w/Grocery$2.26/lb Combined Average$1.62/lb

7. Kimberly Dressler Manager, Space Strategy Category Management Sara Lee

8. While the center aisles still account for the majority of sales, it is the perimeter where customers are spending most of their time. Why? Less Processed Food Renewed interest in consuming more healthful, less processed food, and the perimeter is simply more interesting. Shopper Experience There is also more variance at play that can influence the time needed: customer service, meal planning, price, seasonality and quality. Healthier Foods When you stay on the perimeter of the store, you'll find that you end up eating a healthier and more nutritious diet. You are now eating real food- filled with vitamins and nutrients straight from nature, not imitation fare created both to last forever on the shelf and to satisfy our society's cravings for fat, sugar and salt. Article Source: http://EzineArticles.com/?expert=A._Chris_Moreno, Published: March 10, 2010

9. Common Shopping Method Today, the more common way to shop is to only go down select aisles. 50% of consumers shop this way, which is a 6% increase since 2008. Path to Purchase Shoppers are highly focused on specific sales and specific coupons when shopping conventional supermarkets. This strongly suggests consumers are cherry picking grocery stores. Shoppers are not going down most aisles at the frequency they used to Article Source: UBS cites research from Kantar Retail Published: March 13, 2012 Military shoppers are highly planned & actively seek information to plan their shopping trips

10. Source1: SymphonyIRI Group Infoscan Syndicated Reviews Data, Total US- FDMx, Latest 52 WE Mar 18, 2012 Source2: Nielsen Perishables Group FreshFacts®, TotUS, 52 weeks ending 2/25/12 Department Dollar Sales (millions) Dollar % Chg vs. YAGO Unit Sales (millions) Unit % Chg vs. YAGO Total Edible Sales (1)$267,544.63.7%107,078.1-1.5% Chill$67,110.40.1%25,656.80.0% Frozen$34,198.50.0%11,003.00.0% Total Perishables (2)$87,837.75.1%37,266.1-0.3% Bakery$6,925.64.3%2,645.10.8% Meat$32,580.85.4%10,740.2-1.6% Produce$28,812.74.4%20,248.8-0.3% Deli$15,306.46.9%3,007.34.0% Seafood$4,212.03.9%624.5-2.6% Perishables are out-pacing Edible Food in dollar and unit sales growth versus YAGO

11. Quarterly dollar sales trends for Perishables continue to see 5% or greater growth versus YAGO Source: Nielsen Perishables Group FreshFacts®, TotUS, 52 weeks ending 2/25/12 % Chg vs. YAGO 5.0% 5.7% 6.6% 5.0%

12. Perimeter categories are important for generating sales Source: SymphonyIRI Group Infoscan Syndicated Reviews Data, Total US- FDMx, Dollar Sales, Latest 52 WE Mar 4, 2012 All Categories (millions) Top 25 (millions) % of Sales# of Cats +5% $ vs YAGO Non-Perimeter(1)$149,183.5$69,960.846.9%4 Perimeter(2)$98,324.8$66,811.467.9%6 Perimeter Non-Perimeter

13. Total Grocery stores sales are poised for continued growth as food prepared at home – the highest in 30 years! Distribution of Eating Opportunities (Share Change 2006 – 2011) At Home 51% (+4.2 share pts) Away from Home 34% (-4.2 share pts) *Source: NPD Group / National Eating Trends and CREST Services U.S. 2011 (+4.1 pts) (+0.1 pts) (+1 pt) (-0.3 pts) (-1.4 pts) (-0.7 pts) -0.2 pts) (-0.3 pts) (-2.2 pts)

14. 7 of the top 10 foods consumed at home are from Perimeter categories *Source: NPD National Eating Trends, 2011 Percent of Individuals Consuming In-Home at Least Once in Two Weeks Perimeter Non-Perimeter

15. Across the store, Perimeter categories hold high share of sales made during pantry stock-up trips Source: SIG Consumer Network 52wks ending 8/11, Every SIG Reviews Category Compared Trip Types defined by SIG Share of Category Dollar Sales Made During Pantry Stock Up Trips Top store categories ranked on dollar share Perimeter Non-Perimeter 60% of Military trips are Stock-Up

16. Eat Better: Quick Tips - Grocery Shopping Avoid shopping on an empty stomach. You’re more likely to make impulse purchases on less nutritious items that cost more. Make a shopping list. If you keep a running list at home of items that need to be replaced, you won’t have to worry about forgetting anything. Use this sample grocery list. Shop the perimeter of the store. The freshest and best foods are generally located around the outside aisles (or perimeter) of the store. You may need to go to specific aisles for other healthy items such as canned beans, nuts and natural peanut butter, dried fruit, and high fiber cereal, although these are sometimes found along the perimeter also. Shopper is focused on eating healthy, most health-base web-sites are steering consumers to the Perimeter Article Source: http://www.inshapeindiana.org/93.htmhttp://www.inshapeindiana.org/93.htm

17. Tim Brown VP, Business Solutions Empower IT, Inc.

18. Perimeter Overview Total Perimeter category dollars +5.4% 2011 vs 2010 Perishable categories outpacing total Edible categories DeCA Perishable growth slightly ahead of retail, but Chill/Frozen outperforming DepartmentDollar Sales (millions) Dollar % Chg vs. YAGO Retail Dollar % Chg vs. YAGO TOTAL DeCA5,669.92.8% Total Edible (1) 4,408.64.2%3.7% Chill 768.87.6%0.1% Frozen 510.81.6%0.0% Total Perishable (2) 1,113.15.7%5.1% Produce481.94.4% Meat443.37.6%5.4% Deli140.96.0%6.9% Bakery47.0.9%4.3% Source1: Empower IT, Inc., Worldwide, 52 weeks ending 12/24/11 Source2: DeCA Perishables Division, Worldwide, 52 weeks ending 12/31/11

19. Perimeter - 2 Year Sales Trends by Period Perishables sales increased 2011 vs. 2010 in each period Source1: Empower IT, Inc., Worldwide, 52 weeks ending 12/24/11 Source2: DeCA Perishables Division, Worldwide, 52 weeks ending 12/31/11 Bakery, Deli, Meat, Produce

20. Perimeter - 2 Year Sales Trends by Period Total Perimeter sales also increased each period 2011 vs. 2010. Source1: Empower IT, Inc., Worldwide, 52 weeks ending 12/24/11 – June number represents average of scan periods 6 & 7. Source2: DeCA Perishables Division, Worldwide, 52 weeks ending 12/31/11 Total Perimeter (Perishable+Fzn+Chill)

21. Perimeter contribution to Edible dollar sales has continued to increase Source1: Empower IT, Inc., Worldwide, 52 weeks ending 12/24/11 Source2: DeCA Perishables Division, Worldwide, 52 weeks ending 12/31/11 % of Total Edible Dollars +.6 pts vs YAGO *Estimated % of Total Edible $ in Retail: 53.2%

22. Perimeter increases have been greatest in… Source1: Empower IT, Inc., Worldwide, 52 weeks ending 12/24/11 Source2: DeCA Perishables Division, Worldwide, 52 weeks ending 12/31/11 2010 31.5% 18.1% 2011 32.1% 18.5% % Chill % Meat +.7 +.4

23. Perimeter sales highest in December, but peak periods vary by department Source1: Empower IT, Inc., Worldwide, 52 weeks ending 12/24/11 Source2: DeCA Perishables Division, Worldwide, 52 weeks ending 12/31/11

24. Perimeter sales highest in December, but peak periods vary by department Source1: Empower IT, Inc., Worldwide, 52 weeks ending 12/24/11 Source2: DeCA Perishables Division, Worldwide, 52 weeks ending 12/31/11 Peak: Dec Peak: Mar, July Peak: Mar, J-A, Dec Peak: Feb, Dec Peak: July, Dec Peak: Dec

25. Perimeter Top 25 Categories by Dollar Sales (91% of Total Perimeter) Source1: Empower IT, Inc., Worldwide, 52 weeks ending 12/24/11 Source2: DeCA Perishables Division, Worldwide, 52 weeks ending 12/31/11 All but 4 have increased dollar sales vs. year ago.

26. Importance of Perimeter Categories to Edible $ Sales Source1: Empower IT, Inc., Worldwide, 52 weeks ending 12/24/11 EDIBLE CATEGORIES All Categories (millions) Top 25 (millions) % of Sales# of Cats +5% $ vs YAGO Non-Perimeter$2,016.0$ 1,008.850.0%2 Perimeter$1,279.6$ 799.162.4%7 > +5% Growth vs YAGO

27. Top Perimeter Categories Price Comparison 2011 vs. 2010 Source1: Empower IT, Inc., Worldwide, 52 weeks ending 12/24/11 Average Category Price Based on 52 week total dollar and package sales. Actual items carried in each channel may vary by size and by year. Promotional activity will also effect average price comparisons.

28. Top 25 Stores - Perimeter Index to ConUS 4 Stores generate 10% more from Perimeter sales than ConUS average Of the Top 25 stores by Perimeter Index, 18 are class 1 or 2 stores Source1: Empower IT, Inc., Worldwide, 52 weeks ending 12/24/11 Source2: DeCA Perishables Division, Worldwide, 52 weeks ending 12/31/11

30. Les Simpson Program Manager Fresh Meat & Seafood

31. Go Lean with Protein Merchandising Initiatives Industry Opportunities

32. Bridget Bennett Program Manager Produce

33. Standardize Produce Promotions Standardize Data Increase Sales Clean Up Commodities and Create POGS (Items other than FF&V) Eliminate USDA Grading Inspections Implement Produce Manager Career Path Improve Produce Inventory Process Improve Produce Pricing Procedures

34. Dave Leffert Program Manager Deli/Bakery & Sushi

35. The average per pound price of a core deli item- ham, turkey, bologna, etc is $6.04 Deli/bakery accounts for 3.2% of store’s sales Of total customer transactions, 17.9% consist of deli purchases (11.4% from the bakery) YTD sales for the deli and bakery are up 8.3% and 1.6%, respectively Deli and bakery contributes $8.43 and $4.42 respectively, to DeCA’s $62.60 average ring

36. YTD sushi sales are $12.7 million Up 13.3% Growth has exceeded 20% for each of the last three years YTD hot food sales are $5.2 million, up 31.6% The popularity of rotisserie chicken has made it a fixture in many ‘grab-n-go’ merchandisers Freshly made sandwiches have become one of the best selling items in the deli In Europe, they are the number one selling item

37. Contractors are motivated to generate sales to increase revenue- increased sales for the contractors equates to greater sales and surcharge funds for DeCA Contracted deli/bakeries do not impact DeCA appropriated funds when they hire personnel Customers are attracted to and willing to pay for convenience

38. Lou Kennedy Category Manager Frozen & Chill

39. Total sales of $1.45 billion, nearly 25% of DeCA’s total Category Reviews Frozen Snacks (November 2011) Prepared Meals (January 2012) Prepared and IQF Chicken (April 2012) Pizza (June 2012) Vegetable (August 2012) Planograms – Percentage based to facing specific

40. Chill Dairy Category Reviews Cheese (October 2011) Yogurts (November 2011) Chill Meat Category Reviews Breakfast Meats (November 2011) Hot Dogs (January 2012) Lunch Meats (March 2012) Fresh Chicken and Frozen Whole Turkey Agreements

41. Promotions New Model Manager’s Special (4-6) Power Buys (6-8) K1 Primary/Features (10) K3 Primary/Features (10-12) K1/K2 stores total items on display (24) K3 stores total items (36)

44. Bonita Moffett Lead Store Operations Specialist Joyce Chandler Chief, Perishables (Acting)

45. Never Out Lists Top 20 Lists Al Oliver Military Produce Group

46. Having the “Right Items” at the “Right Time” at the “Right Price” is a great formula for success that will satisfy our DeCA patrons. Utilize the Top 20 Item Lists, Never Out Lists and Cross Merchandising Opportunities by department provided in the subsequent pages to build perimeter sales. The Top 20 and Never Out Lists help plan stock levels for our best sellers and core items. The goal is to purchase enough of these products, so they are never out of stock for our patrons. Now more than ever, customers are looking for convenience when shopping in the perimeter. Not only are they looking for delicious products at a great value, they are looking for complete meal solutions to solve their dinner dilemmas. All it takes is a little teamwork! Work together with other departments to develop cross merchandising strategies, plans, displays and signs. Cross merchandise in other departments and invite other departments to cross merchandise within your section. Patrons may not plan on purchasing complementary items, but they make the unplanned, impulse purchase when they see these items in a meal solution display. That’s a win-win-win! and vendor stockers to promote sales and Add a Perimeter Pound - “APP” FRESH MEAT – PRODUCE – DELI & BAKERY – FREEZE – CHILL DAIRY – CHILL MEAT

47. Additional Ways to Increase ADD A POUND from the PERIMETER Utilize Pricing Comparison Boards 5:00 PM “Grand Re-Opening” Stocking Demos, Recipes, Meal Solutions Signage – including multiple pricing, savings Engage associates and vendor stockers to promote sales and Add a Perimeter Pound - “APP” FRESH MEAT – PRODUCE – DELI & BAKERY – FREEZE – CHILL DAIRY – CHILL MEAT

48. David McMurtry Kraft Foods