1. Brought to you by: David Donnan, Partner A.T. Kearney November 2012 Can We Feed the World? Recipe for Change:

2. Limited and Constrained Resources 7 Billion Consumers Capital Markets Supply Chain Farmers Producers/Extractors Retailers/Buyers Brands Manufactures Traders Processors 300-500 companies control ~70& of choice Emerging New and Diverse Consumers The Food Industry Bottleneck EnergyLand Water By 2020...  Very few companies will control the vast majority of food supply  Farmers and producers are more likely to be corporations  Consumers will be serviced by large global retail and restaurant chains By 2020...  Very few companies will control the vast majority of food supply  Farmers and producers are more likely to be corporations  Consumers will be serviced by large global retail and restaurant chains Source: Jason Clay WWF, A.T. Kearney The global agrifood industry is undergoing significant change.

3. Population Growth = Opportunity PopulationIncomeHealth Urbanization The world population continues to grow and provide opportunity for food & beverage companies As a result, we are witnessing a global shift in diet and consumption 26 cities with > 10 million people 60% of global population in cities by 2025 Today 7 billion people By 2050 over 9 billion people People over 60 will outnumber those under 15 By 2015 more middle class households in China than USA Brazil and India rapidly increasing middle class populations Obesity and longevity expectations are shifting diets in Europe and North America Increased protein consumption in Asia

4. While supply systems face new challenges Food Advocacy Resource Availability Food Safety Package Waste & Sustainability The future will be more about assured supply, than price Water, land and energy are all limited resources Continued use of crop land for biofuels Consumer perceptions of safe and nutritious food Lack of global standards and protocols - FSMA Driving strategy for many large CPG companies Sourcing sustainable ingredients (e.g. Palm oils) European restrictions of GMO’s California Proposition 37 – GMO labeling

5. After 20 years of stability…a future of commodity volatility FAO — Annual Food Price Indices (2002 – 2004 = 100) 400 350 300 250 200 150 100 50 0 1/19901/19931/19961/19991/20021/20051/20081/2011 Food Price Index Cereals Price Index Meat Price Index Oils Price Index Dairy Price Index Sugar Price Index

6. Can we feed 9 billion people by 2050? The Green Revolution

7. Emerging technologies will play an important role in shaping the global agricultural landscape

8. Food & Beverage companies need to focus on four key priorities Consumer ChoiceProduct Innovation Supply AssuranceIndustry Consolidation

9. 2020: Four Future Scenarios

10. Scenario #1: Global Scarcity Agricultural output continues along its same path with no new technology innovations Commodity volatility continues as demand outpaces supply resulting in sporadic supply shocks Increasing gap between ‘have’ vs. “have not” nations Companies focus on reducing risk through operating and financial hedges

11. Scenario #2: Supply Exclusivity Increased regulation and traceability creates constraints on supply sources Supplier qualifications become more intense reducing the number of qualified suppliers Product differentiation through innovation and product exclusivity Competition between supply networks of companies

12. Scenario #3: Stagnation Improved agricultural innovations improve output and yields Supply matches and then outpaces demand Food prices drop as companies take advantage of agricultural surpluses Manufacturing efficiency becomes the main focus of food companies

13. Scenario #4: The World in Balance Continued innovation in agricultural technology Demand increases as middle class consumers consume higher valued products Government and international trade become more harmonized New era of strong global trade

14. Many thanks to our contributor For additional information go to www.atkearney.com