1. Public Perceptions of Animal Health in the Cattle Herd January 17, 2013 Carrie Thomas Merck Animal Health Food Animal Resource Management

2. Consumers are confused by conflicting messages about beef:  Organic advocacy  Animal welfare activists  Media/popular authors Beef industry must help consumers feel more confident about beef by:  Understanding what shoppers believe and want  Providing shoppers with a strong reason to believe in traditional beef Beef is at a Crossroads

3. Love / Hate Relationship Taste Burgers & Steaks Grilling Cows Cowboy Imagery Versatility Hormones & Antibiotics Food, Inc. Corn-fed vs. Grass-fed Saturated Fat “Factory Farms” LoveHate “A relatively doomed diet, because of environment & health implications.” “I feel conflicted about beef” “It’s American comfort food” Source: NCBA

4. Today’s Discussion Topics 1.Better understand the “public” 2. What questions drive public perception? Are we sending the right message? In the right way? 3. User-friendly beef resources

5. A Deep Investigation into Shopper Attitudes Toward Beef (2010 - 2011)  Just Ask a Woman ­ Expert Salon: Opinion leaders, food editors, trend-spotters and nutrition experts ­ Just Ask a Woman Live: TV talk-show style research with 100 moms ­ DocuDiaries: A deeper understanding of shopper behavior  The Hartman Group ­ Survey of 2,818 beef consumers focused on moms and thought leaders

6. Who is She…Really? There is a spectrum of shopper personalities, each of which has an impact on the beef industry.

7.  35-year-old mother of two  High school graduate  Works full time outside the home  Annual household income: $50,000  Large social network and active in the community Meet Julie, a Typical Mom

8.  Primary shopper  Favorite stores: Walmart, Kroger, Sam’s Club and Costco  Purchases beef often (primarily traditional)  Top purchasing criteria: Safety, quality, appearance and value  Believes: ­ She knows what is best for her family ­ Likes the choices she has when buying meat ­ The food her family eats is safe ­ Beef is as safe as other meat ­ Regulatory agencies (USDA, FDA, etc.), farmers and ranchers keep her family’s food safe ­ Organic food can be too expensive Julie’s Purchase Behavior

9.  Gary: The orator –50-year-old college graduate –Married empty nester who works full time –Household income: $60,000 –Asserts his opinion through traditional means  David: The techie –33-year-old college graduate –Single, no children –Household income: $40,000 –Asserts his opinion online Meet Gary and David, Thought Leaders

10.  Beliefs ­ Less convinced that food is safe ­ Organic food may be more expensive, but it’s better for you ­ Experts are credible sources and gatekeepers for what the family eats  Behavior ­ Less focused on price, more on perceived quality ­ More likely to buy natural beef ­ More likely to consider the opinions of others ­ Considers factors such as sustainability, animal welfare and buying local ­ Confident in selection ­ Seek information Beliefs and Behaviors for Thought Leaders like Gary and David

11. Beef Consumers by the “Bucket” Bucket 1Bucket 2Bucket 3 Positives strongly outweigh negatives 30% of population Positives somewhat outweigh negatives 47% of population Negatives somewhat outweigh positives 15% of population Surprised and motivated by beef’s health story Most DO NOT want to hear about production Surprised and motivated by beef’s health story Willing listeners when someone shares what they have heard Skeptical about beef’s health benefits Actively researching/ reading/talking about beef production issues Source: NCBA

12. Limiters of Demand Study (May 2012) Source: NCBA Moderate beef eaters eat beef 1 – 2 times per week. Moderates are a target segment because they represent the segment of beef consumers who are most likely to be persuaded to increase beef consumption by one more beef meal a week. Millennials Younger consumers born between 1980 – 2000 and currently represent about a third of all adults. Largest generational cohort at 80 million (larger than the boomers). Highly educated, not very health conscious, difficult to market to. Decisions and information driven by social media. Just now finding their niche in life and society. Total 18-65 Year Old Consumers 100% 42% 35%

13. Top Limiters of Beef Consumption (Top 10 Frequent Limiters for each consumer segment) PRICE CONCERNS Percent Frequently Limiting Beef Consumption because of concern Source: NCBA, May 2012

14. Top Limiters of Beef Consumption (Top 10 Frequent Limiters for each consumer segment) Source: NCBA, May 2012 Percent Frequently Limiting Beef Consumption because of concern QUALITY & SAFETY CONCERNS

15. They like Farmers, but not the Farming… What is your attitude towards… Source: Maslansky survey, October 2011

16. Who Should Tell the Story?

18. What matters? Source: USFRA  People want good food, not cheap food that may have long-term health consequences – Closer to home: Keep me and my family safe first What concerns you most …? Total Unintended long-term health effects 37% Poor treatment of animals 23% Environmental harm 12% Unintended short-term health effects 11% None of these really concern me 17% “Do I want low cost at the expense of a healthy item? NO.” – Opinion Influencer, New York “Do I want low cost at the expense of a healthy item? NO.” – Opinion Influencer, New York

19. What questions drive public perception? Source: USFRA What we’re answeringWhat they’re asking “How are modern farming practices affecting my family’s long term health?”

20. What do they want to hear? Source: USFRA What do you believe America’s farmers and ranchers should try to accomplish? Total Continuously improve the methods they use to provide healthy food 44% Help consumers know more about where their food comes from 40% Reassure consumers their food is safe and healthy37% Identify and share best practices29% Start a dialogue about how food is grown and raised25% Give consumers a chance to connect directly with the farmers and ranchers who grow America’s food 25% “I like hearing that farming is evolving.” – Opinion Influencer, Washington, DC “I like hearing that farming is evolving.” – Opinion Influencer, Washington, DC

21.  Consumers want to hear from the farmers and ranchers who raise cattle and produce their beef  Make sure you answer their questions and speak in their terms  Consumers have powerful memories associated with beef Telling the Beef Story

22. Rethink Your Terms

23. Resources for Consumers  USFRA: FoodSource FoodDialogues.com  NCBA: FactsAboutBeef.com & @BeefFacts

24. FoodSource Search Optimization Source: USFRA

25. FoodSource  Launched October 24, 2012  27,594 unique visitors to date (representing 26% of all visitors to fooddialogues.com over the same time period)  Average Time Spent with FoodSource: 2:50 (almost triple the site wide average)  31,511 pageviews  FoodSource branding established  Extensive StumbleUpon and SEM program launched Nov. 26  FoodSource already being used as landing page/destination to combat negative press (e.g., Consumer Reports — per ad below)  FoodSource callout above the fold to debut mid-December  Work already starting on FoodSource2.0 (in the context of wider site revamp) Source: USFRA, as of December 2012

26. FactsAboutBeef.com & @BeefFacts Source: NCBA

27. FactsAboutBeef.com & @BeefFacts Source: NCBA  2,048 views of FactsAboutBeef.com during the week of Dec. 10  About 1.6 million impressions from 322 @BeefFacts Twitter mentions  Doubled @BeefFacts Twitter followers (200 at beginning of week to 400 at end of week)  FactsAboutBeef.com Videos – More than 200 views combined

28. Focus the Beef Story on Consumers  First focus on aligning shared values, then on specific topics related to beef-production technology  In order to be credible, speak to consumers in their language and address their personal benefits and values  Despite basic level of comfort, concerns about beef technologies must be addressed  Majority of consumers eat beef and are comfortable with traditional beef

29. Questions? E-mail: beef@merck.com

30. Traditional Beef: Beef You Can Count On No compromises in safety or quality  Consumers trust cattle farmer families  Today’s best practices and monitoring protocols have made beef the safest and freshest it’s ever been No loss of control, access or choice  No fear of being taken for a ride  Shoppers should have the right to choose and buy what works for their families, at every price range

31. Source: USFRA

32. In 2012, USFRA changed the way Agriculture communicates From Defending Practices and the Past To Focused on the Future/ Continuous Improvement Stick to the messages Answer the questions people really have Safe, Affordable, AbundantHealthy choices for everyone Status quo – the way it is done Dynamic change – the way it could be done Right and wrong, us vs. themSolving complicated issues together Black and whiteIt’s grey Consumers aren’t interested in the details Transparency

33. FoodSource (Launched During Food Day) One place that brings best information around nine key issues to life – Easy to navigate in language consumers use – Questions people really want answered – Easy to find and to share for everyone – Best information from across commodities and industry partners in one place (USFRA POV, facts, videos, white papers, links to other sites, news articles, etc.) Creates thought leadership expertise to share with media, influencers, policymakers and entertainment industry 9/3/201533

34. 9/3/201534 Infographic Questions & Topics Videos

35. FoodSource Top 5 Viewed Topics: – Biotech seeds – Animal Welfare – Antibiotics – Farm Size/Ownership – Food Safety Top 5 Paid Keywords: – Pig Farming – Dairy farm – Beef raising – Raising pig – Food source Top 5 Viewed Questions: – What are the advantages/disadvantages of biotech seeds? – Organic farming doesn't use pesticides or fungicides, right? – Why can't farmers stop using pesticides, herbicides and fertilizers? – Farmers and ranchers give antibiotics to animals all the time, right? – Are antibiotics used for farm animals creating superbugs?