1. Now and for Generations to Come Anchorage 2003

2. AGENDAAGENDA l Darden Restaurants l Growth of Aquaculture l Global Supply l Global Demand – USA Focus l Buyer’s Perspectives l Guest Drivers (Romance Food) l Recommendation

3. FY’02 June ’01 – May ‘02

4. Population Trends Are Favorable for Seafood in the USA CONCEPTRESTAURANTSMARKET SHARE Red Lobster 673 46% of Casual Seafood Dining Olive Garden 516 35% of Casual Italian Dining Bahama Breeze 31 Smokey Bones 33

5. Growth of Aquaculture (A Model of Consistency) l Effects on Alaskan Fisheries – Decreased demand, thus price for Wild Caught Salmon – Increased competition against Fresh Fish (Halibut, Cod, Sole, etc.) – Conversion of Japanese preference to Atlantic Salmon alternatives Why did this happen? What changed?

6. Global Wild Harvest Fish Supply History & Forecast SOURCE: FAO

7. World Population Growth 1968 – 2020E SOURCE: U.S. Census Bureau 2000-2020 are Projections

8. Relative Consumption of Seafood in the World: 1968 – 2000, Per Capita SOURCE: FAO

9. World Supply of Beef, Pork, Poultry & Seafood: 1968 – 1998, Per Capita SOURCE: FAO

10. FY’02 June ’01 – May ‘02

11. Beef, Pork, Poultry & Seafood Price Trends: 1968 -- 2000 SOURCE: U.S. Bureau of Labor Statistics

12. Wild vs. Aquaculture Species Cod and Salmon Prices: 1990 -- 2000 SOURCE: Urner Barry

13. U.S. Population Historical & Projections (Estimate.9% average annual change from base of 1999 @ 272,690,813) SOURCE: U.S. Census Bureau

14. Population Trends are Favorable for Seafood Age19982008% Change Index to Casual Dining Total270.0292.98% < 10 39,14138,922-1%46 10 – 19 38,79742,2269%43 20 – 29 36,01939,76310%119 30 – 39 42,76837,193-13%118 40 -- 49 40,62442,9296%127 50 – 59 28,10839,12439%138 60 – 69 19,83326,05031%129 70+24,71226,7198%95 SOURCE: CREST, 2001 Includes Sandwiches and Entrees

15. Population Trends Are Favorable for Seafood Seafood BeefPoultry Under 18 52 53 124 18 - 34 83 86 112 35 - 49 105 117 93 50 - 64 135 129 83 65+ 153122 78 SOURCE: U.S. Census Bureau Protein Consumption Indexed to Age

16. U.S. Per Capita Consumption of Seafood: 1980 – 2007E SOURCE: FAO, University of Southern Illinois

17. Future U.S. Seafood Supply To maintain per capita status quo (15.6 lbs.) will require approximately one billion additional pounds (edible wt.) by 2025 SOURCE: University of Southern Illinois

18. Total U.S. Seafood Supply – Estimated Share of Supply (%) Wild vs. Aquaculture

19. The Four Sources of Seafood Supply and Outlook to the U.S. l Domestic Wild – Stable to gradual decrease over time l Domestic Aquaculture – Modest increase in production, but niche seafood only l Imported Wild – Stable to gradual decrease over time l Imported Aquaculture – Will produce to fill any supply vacuum

20. From a U.S. Restaurant Buyer’s Perspective l Seafood industry is supply driven. l Consumption of seafood in the USA projected to increase in response to aging population and consumer preferences. l A shortfall of seafood supply is anticipated (one billion pounds {454 million kgs} edible weight by 2025). l Wild harvest is expected to remain stable to declining.

21. From a U.S. Restaurant Buyer’s Perspective l Aquaculture Offers: – Ability to partner with suppliers and contract prices – Consistency in supply – Price stability – Uniform quality

22. Importance of Price and Supply Stability l Food Service and Retailers benefit: – Fixed menu prices with reasonable margins – Base menu applications…eliminates the need to re-print menus – Product moves from seasonal to everyday availability – Ability to nationally promote products without fear of supply disruptions or price escalation during a promotion

23. The Cod Example l Demise of Cod at Red Lobster – Prior to 1999, Red Lobster purchased 2.5 million pounds of frozen Cod annually. – In 1999, once frozen Cod prices soared to over $3.50 per pound. – Red Lobster promptly removed Cod from the menu. – To this day, Cod has not returned to the Red Lobster menu.

24. The Cod Example (Continued) l Important Lessons – Consumers determine a product’s worth…not restaurant’s, retailer’s, processor’s, or fishermen’s expectations – There are abundant seafood alternatives. Each product competes for a “share of stomach”.

25. Drivers of Guest Traffic l Shrimp, Crab, and Lobster are considered guest count drivers – Red Lobster consistently nationally promotes Lobster, Crab, and Shrimp. – These shellfish are considered gourmet and guest relate them to Red Lobster. – With current health trends, Fresh Fish has increased in popularity and preference. – Frozen Fish, for the most part, is considered a commodity. Most food service establishments offer frozen fish in some form. What’s special about that?

26. Alaskan Snow Crab Quotas l Note the lack of stability in quota l No stability = no ability to maintain the reputation of Alaskan Snow Crab Live Wt. Quota MM lbs.

27. Alaska Fishing Industry Weaknesses l Crab – Very volatile quotas lead to erratic market availability – Regional equity / marketing allure is diminished.

28. Alaska Fishing Industry Weaknesses (Continued) l Fresh Fish – Limited market exposure for fresh Salmon products – Underdevelopment of distribution system to the United States – Long-term dependence on Japanese buying – Inability to offer market forms that meet current consumer needs

29. Alaska Fishing Industry Weaknesses (Continued) l Frozen Fish – Lack of a customer-focused marketing program – Higher cost of production than in other countries  Twice frozen fish processed in other countries are arguably equal in quality to U.S. produced once-frozen fish. – Inability to offer market forms that meet consumer needs

30. Recommendations “Regaining Competitive Advantage” l Develop a better management program for Snow and King Crab – Decrease volatility of quotas – The availability of Crab offers Alaska the strongest marketing tool to increase guest awareness for all Alaskan products.

31. Recommendations (Continued) l Develop better Fresh Fish distribution systems – Comprehensive system that delivers product throughout the United States l Process product to market forms demanded by guests (i.e. pre-portioned Sockeye Salmon)

32. Recommendations (Continued) l Determine the viability of processing frozen product in Alaska vs. other countries. Is the perceived difference in quality valued by the American consumer?

33. Recommendations (Continued) l Explore the possibility of developing Aquaculture fishing farming – Sockeye Salmon – Arctic Char – Turbot – Atlantic Salmon

34. ClosingClosing l We are in this together! – Our guest is your guest l We will help champion your ideas. l We believe that Alaskan seafood products should be… Now and for generations to come!