Understanding Tomorrow’s Consumer

June 2019 CONSUMER WHO CONSUMES BUTTER?

2 Butter is nearly universal

Consumer use in the past 3 months 98% 80% 79% 44%

Butter, or oil Butter Oil Margarine

3 Source: Mintel Butter, Margarine and Oils US March 2018. Lightspeed Base: 2,000 internet users aged 18+ Household income and size influence butter usage

4 Source: Mintel Butter, Margarine and Oils US March 2018. Lightspeed Base: 2,000 internet users aged 18+ Parents are most willing to pay more for healthy, premium options

5 Source: Mintel Butter, Margarine and Oils US March 2018. Lightspeed Base: 1,960 internet users aged 18+ who used butter, margarine or oil in the last 3 months Generation Z over-consumes butter

Difference: category share vs. population share

Age Butter & Spreadable Group 0-15 +2.05% 16-24 +1.97% 25-34 -1.61% 35-44 -0.41% 45-54 +0.92% 55+ -2.92%

% category share % of population Over/under consumption - share = index score

6 Source: Global Data Dashboard; Interactive Consumer Data, USA only, butter and spreadable fats, data updated on 11/11/2019 Regular stick butter is the most commonly used

7 Source: Mintel Butter, Margarine and Oils US March 2018. Lightspeed Base: 2,000 internet users aged 18+ Taste and format are most important to butter consumers

8 Source: Mintel Butter, Margarine and Oils US March 2018. Lightspeed Base: 1,960 internet users aged 18+ who used butter, margarine, or oil in the last 3 months Butter Consumer Summary

• Butter is consumed universally.

• Parents with kids under 18 in the house are top consumers and the most willing to pay for premium butter. Commonly, they would be identified as older Millennials (30-39) or Generation X (40-54).

• Baby Boomers and Gen Z over-consume butter.

• Younger Millennials (24-29) are the least engaged with butter. They are more likely to have a smaller household, indicating they may be cooking less and/or for fewer people.

9 MARKET SALES & FORECAST

10 Butter volume sales are growing in the U.S.

Volume Sales (pounds) 820,000,000 +2.3% 800,000,000 -0.3% 795,954,454

780,350,734 +3.2% 777,862,695 780,000,000

760,000,000 +4.4% 756,014,362

740,000,000

724,138,272

720,000,000

700,000,000

680,000,000 Calendar Year 2014 EndingCalendar Year 2015 EndingCalendar Year 2016 EndingCalendar Year 2017 EndingCalendar Year 2018 Ending 01-04-15 01-03-16 01-01-17 12-31-17 12-30-18

11 Source: IRI Custom Dairy Database; Butter sales total U.S. Multi Outlet + Convenience Butter is showing growth in dollar sales in the U.S.

Dollar Sales $3,200,000,000 +2.4% $3,081,698,819 $3,100,000,000 +4.2% $3,010,561,215 $3,000,000,000 +6.9% $2,889,748,120 $2,900,000,000 +3.6% $2,800,000,000

$2,703,774,713 $2,700,000,000 $2,610,329,203 $2,600,000,000

$2,500,000,000

$2,400,000,000

$2,300,000,000 Calendar Year 2014 Ending Calendar Year 2015 Ending Calendar Year 2016 Ending Calendar Year 2017 Ending Calendar Year 2018 Ending 01-04-15 01-03-16 01-01-17 12-31-17 12-30-18

12 Source: IRI Custom Dairy Database; Butter sales total U.S. Multi Outlet + Convenience 12% of U.S. butter sales in 2018 were in the Midwest market 2018 butter/butter blend dollar sales

12% 12%

9% 14%

9% 15%

8% 12%

22%

Midwest region California Great Lakes Mid-South Northeast Plains South Central Southeast West

13 Source: IRI Custom Dairy Database; Butter sales total U.S. Multi Outlet + Convenience; Midwest Dairy MULO Butter sales in the U.S. are forecasted to continue growing

14 Source: Mintel Butter, Margarine and Oils US March 2018. Based on IRI InfoScan® Reviews; US Census Bureau, Economic Census/Mintel TRENDS BASED ON SALES & NEW PRODUCT LAUNCHES

15 What’s going well with butter, and what is not?

GROWING IN DOLLAR SALES DECLINING IN DOLLAR SALES Sales dollars % change YTD as of 5/19/19

Non-GMO Butter Light and reduced butter +302.1% -24.7% Savory flavored +33% Whipped butter -11.7% +24.9% Butter with No Preservatives Irish Butter -7.7% +18.2% European Style Butter Organic butter +13.6% -6.1% 16 Source: IRI Custom Dairy Database; Butter sales total U.S. Multi Outlet + Convenience There’s been an increasing number of new butter product launches in the U.S.

All NPL’s for Butter January 2016-June 2019 in the U.S. 100

90

80

70

60

50 40 YTD 30

20

10

0 2016 2017 2018 2019

17 Source: Innova database; January 2016- June 2019; butter; About half of butters are unflavored

TOP 5 FLAVORS FROM ALL U.S. BUTTER NPL’s JANUARY 2016-MAY 2019

• Unflavored (135)

• Salt (71)

• Garlic (18)

• Sea Salt (16)

• Truffle Mushrooms (7)

18 Source: Innova database; January 2016-May 2019; butter; United States Of the flavored butters, salted is the most common and sea salt shows the most growth

% of total NPL’s for Butter January 2016- June 2019 in the U.S. By Flavor 35.00%

30.00%

25.00%

20.00%

15.00%

10.00%

5.00%

0.00% Garlic (%) Herbs (%) Salt (%) Sea Salt (%) Truffle Mushrooms (%)

2016 2017 2018 2019

19 Source: Innova database; January 2016-May 2019; butter; United States Creamy is most common texture claim TOP 5 TEXTURE CLAIMS FROM ALL U.S. BUTTER NPL’s JANUARY 2016-MAY 2019

• Creamy (92)

• Luscious (17)

• Smooth (5)

• Soft (5)

• Chewy (1)

20 Source: Innova database; January 2016-June 2019; butter; United States Paper wrapper and box are most common packaging types

TOP 5 PACKAGING TYPES FROM ALL U.S. BUTTER NPL’s JANUARY 2016-MAY 2019

• Wrapper (131) • Box (110) • Tray (83) • Jar (37) • Sleeve (9)

21 Source: Innova database; January 2016-June 2019; butter; United States Convenience, Kosher and Allergen Free are top claims

Top 10 Claims on Butter NPL’s in the U.S. Launched January 2016- June 2019 300 285

250

200 160 143 150

100 84 81 53 53 50 34 29 28

0

Source: Innova database; January 2016-May 2019; butter; United States Ethical packaging and -free claims have experienced the most growth

Top 10 Claims on Butter NPL’s in the U.S. 2016-2018 100 +9.19% 90 CAGR 80 70 +5.83% +11.8% CAGR 60 CAGR 50 +16.1% +22.47% 40 CAGR +15.47% CAGR +6.07% CAGR 30 -53.71% +22.47% -21.55% CAGR 20 CAGR CAGR CAGR 10 0

2016 2017 2018

Source: Innova database; January 2016-May 2019; butter; United States There are more branded butters vs. private label

Butter NPL’s in the U.S. January 2016- June 2019 Branded vs. Private 100

90

80 33 70 17 36 60

50

40

30 61 60 11 46 20

10 21

0 2016 2017 2018 2019

Branded Private Label

Source: Innova database; January 2016-June 2019; butter; United States Of all U.S. butter products launched 2016 – June 2019, 1.75% are vegan butters.

Total Butter NPL's January 2016- June 2019

5

280

Dairy Butter Vegan Butter

Source: Innova database; January 2016-June 2019; butter; United States INNOVATION IN ACTION

26 Younger consumers have the most interest in experimenting with new butter products

27 Source: Mintel Butter, Margarine and Oils US March 2018. Lightspeed Base: 1,960 internet users aged 18+ who used butter, margarine or oil in the last 3 months Amish Country – Roll Butter - Salted

WHAT MAKES THIS PRODUCT INNOVATIVE?

• Kosher, gluten free. • Amish butter is old fashioned and slow churned, making it creamier than traditional butters. • The clear packing demonstrates transparency. • The Amish Country brand translates to natural, simple, and authentic.

28 Source: Global Data Product Launch Analytics; Categories, Dairy, Spreadable Fats, United States Finlandia Spreadable Butter with – 25% Reduced Fat

WHAT MAKES THIS PRODUCT INNOVATIVE?

• Offers "great taste" is claimed to be made from "fresh" Finnish with simple ingredients and uses "unique" milk mineral concentrate that has minerals naturally found in milk. • Flagged as free from GMO, and artificial hormones, the product is mentioned to contain 80% less sodium than table salt.

29 Source: Global Data Product Launch Analytics; Categories, Dairy, Spreadable Fats, United States Tin Star 100% Grassfed Ghee – Brown Butter

WHAT MAKES THIS PRODUCT INNOVATIVE?

• Ethical Glass packaging.

• Ghee is naturally lactose free, making it an ideal substitute for butter to the many Americans who suffer from food or intolerances.

30 Source: Global Data Product Launch Analytics; Categories, Dairy, Spreadable Fats, United States Land O Lakes Soft Squeeze - Spread

WHAT MAKES THIS PRODUCT INNOVATIVE? • Great taste offered in a convenient squeezable bottle.

• This container is molded to be more form-fitting for the user and it has a flip-top cap that makes it easier for food preparation such as cooking buttery fried eggs, making stacks of fluffy pancakes, or topping sweet corn on the cob with less mess.

31 Source: Global Data Product Launch Analytics; Categories, Dairy, Spreadable Fats, United States ACTIVATION

32 Target premium butter products to parents with kids in the household

33 Communicate new uses to draw consumers into the category more deeply

34 Prioritize reaching Generation Z to ensure growth today and tomorrow Gen Z has an annual purchasing power of $44B and will account for 40% of the population by 2020.

GENERATION Z CARES & SHARES • Ethics • Sustainability • Labels • Ingredients • Convenience • Technology • Holistic health • Transparency

35 Source: Nielsen Population Facts & Datassential;; IRI Growth Summit 18 Gen Z the next zeneration for brands and retailers Connect with consumers who are in transitional periods in their lives

Establishing a household Empty nest

Starting/ growing family

“Which of the following statements about butter, margarine, or oil do you agree with? Please select all that apply.”

Base: 1,960 internet users aged 18+ who used butter, margarine, or oil in the last 3 months

Source: Lightspeed/Mintel Innovate with ethical packaging 43% Of U.S. consumers agree that reducing packaging waste is important to them. 20% Of U.S. iGeneration consumers (Gen Z) rate recyclability as a purchase factor when buying food. 43% Of U.S. consumers are hesitant to purchase food and drink online because of concerns about packaging.

37 Source: Mintel 2019 Global Packaging Trends Remove controversial ingredients

38 Be a solution for meal occasions

When families and friends do come together to eat they want to maximize the occasions with exciting and indulgent experiences.

39 Key Insights

• Butter is consumed universally, however there are segments of the market that can be targeted for growth such as Generation Z and consumers in transitional periods of life.

• Butter is increasing in volume and dollar sales and is forecasted to continue growth through 2022.

• The Midwest region is butter-rich making up 12% of total U.S. sales.

• Higher fat European style and Irish butters are growing in sales as well as butters free of GMOs.

• Consumers are looking for allergen-friendly food options which is fueling the quick success of Ghee, a lactose-free butter.

• Consumers are looking for ethical packaging options making this an opportunity for future butter innovation.

40 Questions? BUTTER INSIGHTS JUNE 2019