The German Organic Market Prepared for Bord Bia, Dublin November 30, 2017

GS Client profile presentation to GS Group, AGM, Stockholm, June 2014 28/04/2014| 1 is about SIZE!

Population: 82.8m

Food industry: 5,940 companies

Food : 35,253 outlets

Source: Eurostat; BVE (Confederation of the German Food & Drink industry); Nielsen Trade Dimensions

The German Organic Market, Bord Bia Dublin 30/11/2017 2 Different regions, different habits

790km

Munich

The German Organic Market, Bord Bia Dublin 30/11/2017 3 Food is turning more and more into a status symbol

Convenient

Source: Food report 2017, Federal Ministry of Food and Agriculture

The German Organic Market, Bord Bia Dublin 30/11/2017 4 Grocery retail is the most important channel for organic product sales

. +10% +11.1% € 9.48bn € 8.62bn +2.2% 1.18 12% Other sales channels € 7.76bn 1.15 (Bakeries, butchers, fruit & +5.6% vegetable shops, health food 1.09 shops, weekly farmers‘ markets, mail order, box schemes, petrol stations) 5.45 4.76 58% +13.2% +14.6% 4.21 Grocery retail (including drugstores)

+10% +5% 2.47 2.71 2.85 30% Natural food specialists (including large farm shops)

2014 2015 2016

Source: Bund Ökologische Lebensmittelwirtschaft e. V. (Federal Association for Ecological Food Industry) (BÖLW)

The German Organic Market, Bord Bia Dublin 30/11/2017 5 The relevance of organic differs per product category and per segment

Organic shares of household purchases of selected ambient, fresh and chilled products in Germany in 2016, volume shares in %

Eggs 11.7 Fresh vegetables 6.8 Drinking milk 6.8 Vegetable oils 6.3 Fresh fruit 6.0

Yoghurt 5.5 Potatoes 5.5 Bread 4.1 Cream cheese 3.4 Butter 3.0 Cheese 2.3 Meat 1.8 Milk drinks 1.6 Poultry 1.4 Meat products 1.3 Margarine 0.6

Source: Agrarmarkt Informations-Gesellschaft (Agricultural Market Information Society)

The German Organic Market, Bord Bia Dublin 30/11/2017 6 Organic meat

Source: www.-sued.de, www.alnatura.de, www.ruegenwalder.de

The German Organic Market, Bord Bia Dublin 30/11/2017 7 Organic dairy „white line“

Source: www.bergbauernmilch.de, www.soebbeke.de, www.andechser-natur.de

The German Organic Market, Bord Bia Dublin 30/11/2017 8 Organic dairy „yellow line“

Source: www.andechser-natur.de, www.aldi-sued.de, www.kaeserei-schlierbach.at, www.weissenhorner.de

The German Organic Market, Bord Bia Dublin 30/11/2017 9 Organic chilled food

Source: www.isana.de, www.lizza.de, www.soto.de, www.tukan-vegan.de

The German Organic Market, Bord Bia Dublin 30/11/2017 10 Organic ambient grocery

Source: www.rapunzel.de

The German Organic Market, Bord Bia Dublin 30/11/2017 11 Trends in organic

NürnbergMesse

Source: www.ecoinform.de, www.biofach.de

The German Organic Market, Bord Bia Dublin 30/11/2017 12 Once upon a time in Germany…

The German Organic Market, Bord Bia Dublin 30/11/2017 13 Organic goes mainstream

1st store opening 1987 124 stores today

Source: Welt am Sonntag, November 12, 2017, retailer and manufacturer websites

The German Organic Market, Bord Bia Dublin 30/11/2017 14 Germans spend an average of € 106 per capita and year on organic food – why?

Animal welfare 90

Fewer additives and processing aids 90

Regional origin/support of regional companies 87

Lowest possible pollution levels 87

Healthy diet for increased well-being 84

Contribution to support organic farming 82

Contribution to effective environmental protection 81

Certainty that products are not genetically modified 78 Contribution to the conservation/ 73 promotion of biodiversity Accessibility of products in 71 usually frequented stores Taste 68

Simultaneously/often fairly traded 59

Diet for children or during pregnancy 56

Food scandals 52

Advice from qualified staff 35 Source: Ökobarometer 2017

The German Organic Market, Bord Bia Dublin 30/11/2017 15 Demand in organic products increasing

Almost 2/3 of organic product turnover is generated in , discounters and drugstores

Organic specialists

42% Supermarkets, discounters, drugstores Lebensmittel Zeitung 58%

Source: Lebensmittel Zeitung September 5, 2017

The German Organic Market, Bord Bia Dublin 30/11/2017 16 Grocery retail market

Edeka Mediathek

The German Organic Market, Bord Bia Dublin 30/11/2017 17 German grocery retail is continuously growing, store numbers are declining

161775.0 166555.0 170905.0 175665.0 177310.0 Grocery retail (incl. discounters) and drugstores increased by 0.9% to € 177.3bn in 2016

2012 2013 2014 2015 2016 Sunday

37641.0 37109.0 36655.0 35731.0 32253.0 Number of stores at 35,253 and declining year on year

2013 2014 2015 2016 2017

Source: Nielsen „Handel, Verbraucher, Werbung“ 2017, published September 2017

The German Organic Market, Bord Bia Dublin 30/11/2017 18 38% of grocery retail turnover is generated in discounters

8 9

3 2 8 8

Drugstores

38 38 Small supermarkets

Large supermarkets

Discounters

18 18 Small superstores

Large superstores

25 25

2015 2016

Source: Nielsen „Handel, Verbraucher, Werbung“ 2017, published September 2017

The German Organic Market, Bord Bia Dublin 30/11/2017 19 The Top 5 German retail groups have a market share of almost 75%

Others 13%

02% 25% 02% 03%

04%

05%

05%

15%

12%

15%

Source: Bundesvereinigung der Deutschen Ernährungsindustrie e.V. 2017 (Confederation of the German food & drink industry) – based on € 195.5bn grocery retail turnover in 2016

The German Organic Market, Bord Bia Dublin 30/11/2017 20 Natural food specialists

Alnatura

The German Organic Market, Bord Bia Dublin 30/11/2017 21 Natural food specialists come in different shapes and sizes

Big players

Regional multiples

Individual owner-managed stores

The German Organic Market, Bord Bia Dublin 30/11/2017 22 Alnatura generating highest sales*, denn‘s Biomarkt has more stores

Turnover in €m Number of stores 2015/2016** 124 Alnatura* 762

denn's Biomarkt 305 215

Bio Company 145 53

Basic 142 32

Ebl Naturkost 58 27

Super Bio Markt 51 23

Source: Company websites, BIOwelt March 2017; *incl. wholesale; **partly estimated

The German Organic Market, Bord Bia Dublin 30/11/2017 23 A peek at Alnatura

Alnatura

The German Organic Market, Bord Bia Dublin 30/11/2017 24 A peek at Alnatura

Alnatura

The German Organic Market, Bord Bia Dublin 30/11/2017 25 A peek at Alnatura

Alnatura

The German Organic Market, Bord Bia Dublin 30/11/2017 26 A peek at Alnatura

Alnatura

The German Organic Market, Bord Bia Dublin 30/11/2017 27 Organic wholesalers play an important role in the natural food channel

The German Organic Market, Bord Bia Dublin 30/11/2017 28 Route to market differs per channel and depends on various aspects

Manufacturer

Wholesalers

Grocery retail Distributors Natural food stores Speciality stores Foodservice outlets

Brokers National Regional Selected Distribution Distribution Stores

Consumer Consumer

The German Organic Market, Bord Bia Dublin 30/11/2017 29 SWOT German organic market for Irish suppliers

Strengths Weaknesses

- Fourth largest economy in the world and thriving - General low price level for food with organic - The largest Euro market products price-driven in grocery retail - Interesting market size with over 82m consumers - Complex market mechanics - Size of organic market (t/o € 9.48bn) - Strict requirements - Double digit growth of organic market in recent - Listing fees are standard years - Language can be a barrier - Loyal, relatively affluent and well-educated consumers - Loyal trade partners Opportunities Threats

- Positive consumer perception of Ireland and Irish - Very competitive market products, in particular dairy and beef - Regional, local trend - Unique product propositions - High discounter share of around 40 % - Market size means that even niches or individual trade customers can be promising - Retailers have recognised that product differentiation is the way to position themselves against discounters - Private label progressing well and differentiating more

The German Organic Market, Bord Bia Dublin 30/11/2017 30 Thank you!

Green Seed Germany GmbH, Kennedyallee 93, 60596 Frankfurt am Main Tel: +49 69 971 291-0 www.greenseedgroup.de

The German Organic Market, Bord Bia Dublin 30/11/2017 31