Sustainability as a Market Driver

Katrina Heinze January 7, 2017 Our Brands Our Legacy: 150 Years of Making Food People Love

Yoplait U.S. licensing rights acquisition to are acquired created Cheeri Oats debut

CPW joint venture launched

Cadwallader Washburn builds first flour mill 1866 1869 1921 1924 1928 1941 1961 1977 1984 1990 2001 2011 2012 2014 2016

General Mills Häagen-Dazs goes stock trades international (Japan)

Yoki acquisition

Charles Pillsbury invests in first mill launches as James Ford Bell completes purchase Whole Wheat Flakes Research Center opens of cross-town 5 varieties of rival Pillsbury become gluten free General Mills Natural & Organic Portfolio Our Consumers Are Paying More Attention

Frequency That Purchase Decisions Are Based on Environmental and Social Concerns

18% 18% Frequent purchasers of sustainable 26% 26% 29% products are more likely to be:

• Core 64% • Millennials 42% • Hispanic 50% • Income $100K+ 41% 62% 58% 45% • College graduate+ 37% 50% 45%

Usually/Always 29% 26% Sometimes 20% 24% 24% Rarely/Never

2007 2008 2010 2013 2015 Significant change since 2007/2008

Q9. How often are your purchasing decisions based upon your concerns for issues such as the environment and social well-being? Base: All consumers - 2007 (n=1,606), 2008 (n=1,856), 2010 (n=1,982), 2013 (n=1,841), 2015 (1,779). Consumers Show Increased Interest in Social and Environmental Attributes

Importance of Food & Beverage Attributes Product Safety/Healthfulness 56% Products that Save Money 51% Supporting US Economy 41% +11 pts Product Effectiveness 37% Animal Welfare 37% +10 pts Several areas are becoming Supporting Local Economy 30% +5 pts increasingly important to Employment Practices 26% +7 pts consumers. Among them, Animal Welfare is up +10 Maintain Natural Resources 25% +5 pts points and Employment Air and Water Pollution 25% practices is up +7. Natural Agricultural Methods/Practices 24% +5 pts Environmental Impact of Disposal 24% Maintain Natural Habitats 24% +5 pts Fair Trade 23% Minimal/Ecofriendly Packaging 22% Energy Conservation 22% Water Conservation +5 pts 21% Personal Benefit Zone Local Community Involvement 19% Social Zone Ownership of Company 14% +6 pts Economic Zone Wider Community Involvement 11% Environmental Zone Large Company Impact 10% Small Company Adaptability 8% Significant increase over 2013 at 95% CL Profit Sharing Company 8%

Q43. Of the following attributes, which are the most IMPORTANT to you when deciding which FOODS AND BEVERAGES to purchase? Select all that apply Base: Significant shoppers: 2013 (n=1,673); 2015 (n=1,701). Sustainability Imperative

Declining resources and ecosystem services

Increasing demand for resources and ecosystem services Drivers of Food Sustainability

The Sustainability Landscape

A growing middle class will add to Purchasing more doubling the 9.6 Billion People 50-70% protein rich foods agricultural output in middle class estimated by 2050

facing a decreased extreme changing weather patterns climate rainfall

70% 37% 1/3 fresh water used of land use edible food lost or wasted

Strong Ecosystems

Soil Health

Pollinators & Biodiversity

Integrated Pest Management

Organic Farmland Pollinators & Biodiversity

Habitat Is the Answer

“The best way to really help bees is to provide them really good nutrition and places where they can forage and nesting sites where they can live,” says Dr. Marla Spivak, professor and entomology and bee researcher at the University of .

• 4000+ Native bee species in North America

• Billons of dollars in free pollination annually

• Wild bees increase pollination significantly in all crops

• Honey bees also need habitat

• Diverse wildflower diets enhance honey bee disease resistance

Pollinators $6 million invested since 2011 to support pollinator and biodiversity efforts Kernza® perennial grain (intermediate wheatgrass)

• Our Commitment

• Purchase an initial amount of the perennial grain to enable farmers to plant on commercial-scale fields

• Plant a test plot on Cascadian Farm home farm (Eastern Skagit County, WA)

• Summer 2018 cereal or snack product

• Continued partnership & commercialization

Cascadian Farm’s Heritage Is Rooted in Leading the Organic Movement

Cascadian Farm 1972 founded by Gene Kahn in rural Skagit Valley, Washington

Found use for berries with short shelf 1970s life; started freezing in 5 gallon tubs Partners to grow 300 acres • Intrigued by the fragile balance between nature and of farm land. Launched humans…he wanted to grow crops in a way that 1980s fruit spreads, pickles, IQF would not harm the land fruit and veggies and fruit sorbet into national markets • Gene’s method was to work in harmony with nature, preserving the soil and protecting the rivers and Shaped by Gene Kahn, the Organic Foods Production 1990 streams around the farm act passed by Congress (1990 Farm Bill) • “…probably has done as much as anyone to move organic food into the mainstream, getting it out of the 2000 GMI Acquisition food co-op and into the supermarket”

Back-Up General Mills’ Climate Ambition Sustainable Sourcing

Palm Oil Fiber Packaging US Wheat Oats US Corn 100% 99% 36% 50% 33%

Dairy Sugarcane US Sugar Beets Cocoa Vanilla 38% 67% 68% 46% 22% Strategies vary by ingredients

Cocoa Oats Palm Oil Collaborating to improve global water stewardship

We’re committed to improving the sustainability of water use throughout our supply chain. Advancing socially responsible supply chains