Weekly Update Monday, February 6, 2017

Strong January 2017 Jobs Report Help Boost Stocks. Mary Burke Partner With news of a stronger-than-expected January 2017 jobs report, U.S. stocks 312.348.7081 [email protected] finished higher on Friday with the Dow returning above the 20,000 level.

Overall, this helped lift major indexes into positive territory for the week. William Whipple

Partner The Dow Jones Industrial Average decreased 0.1% on the week, 312.348.7076 finishing at 20,071. [email protected]

The S&P 500 rose 0.1% on the week, finishing at 2,297. Philip Zoloto Partner The NASDAQ Composite increased 0.1% on the week, finishing at 312.348.7077 5,667. [email protected]

Yield on the 10-year Treasury rose 1 basis points on the week, ending at Lakeshore Advisors, LLC 2.49%. 20 North Wacker Drive

Suite 1701 Crude oil declined 0.1% on the week, ending at $53.17 per barrel. Chicago, IL 60606

Corn futures fell 1.9% on the week, ending at $3.62 per bushel.

NASDAQ Highs: None Lows: Buffalo Wild Wings, Inc., United Natural , Inc., Whole Foods Market, Inc.

NYSE Highs: Campbell Soup Company, Constellation Brands, Inc., Dean Foods Company, Dr. Pepper Snapple Group, Inc., Hormel Foods Corporation, Incorporated, The J.M. Smucker Company, Kellogg Company, McDonald’s Corporation, Sysco Corporation, Tyson Foods, Inc. Lows: Darling Ingredients Inc.,

Featured Stocks of the Week: The Scotts Miracle-Gro Company (NYSE: SMG) 10-year History Ingredion Inc. (NYSE: INGR) 10-year History 120 160 100 140 120 80 100 60 80 40 60 40 20 20 0 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

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The Lakeshore Food Chain Price Price as Compared to Enterprise Value to Total Debt Price Compared to 52-Week Range YE: Forward LTM: to LTM Company Name 2/3/17 1/27/17 High Low 2015 2014 P/E Revenue EBITDA EBITDA Dow Jones Industrial Average 20,071 (0.1%) 20,101 15,660 15.2% 12.6% 19.0x S&P 500 2,297 0.1% 2,298 1,829 12.4% 11.6% 17.7 NASDAQ Composite Index 5,667 0.1% 5,667 4,267 13.2% 19.7% 25.3 Sector Average: 13.6% 14.6%

AGRICULTURAL LAND HOLDINGS Farmland Partners Inc. $11.38 (0.2%) $11.98 $10.00 3.7% 9.3% 45.3x 36.77x 64.2x 23.7x Gladstone Land Corporation 12.22 2.3% 12.34 7.50 41.3% 14.2% 215.5 21.98 31.5 19.7 Limoneira Company 17.19 (0.1%) 21.78 11.30 15.1% (31.2%) 42.3 3.12 23.0 6.3 Sector Average: 20.0% (2.6%) 43.8x 20.63x 39.6x 16.6x 20071.46 INPUTS *Agrium Inc. $134.59 (1.7%) $146.99 $104.70 8.8% 22.4% 19.6x 1.46x 11.6x 3.7x American Vanguard Corporation 16.75 (5.4%) 20.00 11.05 19.6% 44.1% 30.9 1.72 13.0 1.1 CF Industries Holdings, Inc. 35.68 (2.3%) 37.72 20.77 (12.6%) (34.5%) 106.5 3.92 12.5 4.3 DuPont 76.43 (1.6%) 78.36 55.94 14.8% 3.4% 20.6 2.81 13.4 1.7 FMC Corporation 60.30 (2.3%) 62.84 32.24 54.1% 5.7% 18.9 3.00 14.8 2.9 Intrepid Potash, Inc. 2.03 (5.6%) 3.04 0.65 (31.2%) (85.4%) NM 1.64 NM NM Monsanto Company 108.87 (0.5%) 114.26 83.73 10.5% (8.9%) 23.2 3.89 13.5 2.1 The Mosaic Company 31.85 1.4% 33.99 22.20 15.4% (30.2%) 36.4 1.93 11.5 3.1 * Potash Corporation of Saskatchewan Inc. 24.19 (1.6%) 26.62 19.93 2.1% (41.1%) 33.8 5.02 14.5 3.6 S&W Seed Company 4.65 1.1% 5.35 3.90 10.2% 16.3% 48.9 1.07 20.4 NM The Scotts Miracle-Gro Company 90.08 (4.2%) 98.82 62.72 39.6% 44.5% 22.1 2.44 14.2 NM *Syngenta AG 424.70 0.6% 434.90 360.50 8.3% 32.7% NA 3.36 17.2 2.1 Zoetis Inc. 55.92 2.3% 56.07 38.26 16.7% 30.0% 25.6 6.44 19.4 2.7 Sector Average: 12.0% (0.1%) 35.1x 2.98x 14.7x 2.7x

AGRICULTURAL EQUIPMENT *Ag Growth International Inc. $54.10 (1.9%) $57.69 $24.68 62.7% (4.3%) 22.3x 2.03x 14.8x 4.8x AGCO Corporation 63.18 (0.4%) 64.38 43.75 39.2% 39.8% 26.5 0.94 11.1 3.5 Art's-Way Manufacturing Co., Inc. 3.30 2.0% 4.70 2.50 6.5% (36.6%) NA 0.88 66.5 22.7 * Buhler Industries Inc. 4.46 (3.0%) 6.00 4.40 (18.0%) (25.4%) NA 0.48 NM NM CNH Industrial N.V. 9.27 (0.3%) 9.51 5.84 35.5% 15.0% 23.2 1.41 17.6 13.8 Deere & Company 107.99 0.0% 108.47 74.91 41.6% 22.1% 24.2 2.51 17.5 9.4 Lindsay Corporation 75.84 (2.9%) 89.98 65.78 4.8% (11.5%) 31.6 1.63 19.6 2.8 Titan Machinery Inc. 13.42 (4.5%) 15.93 7.87 22.8% (3.7%) NM 0.60 33.7 23.0 Sector Average: 24.4% (0.6%) 25.6x 1.31x 19.0x 9.5x

AGRIBUSINESS AGT Food and Ingredients Inc. $36.25 (1.4%) $42.16 $31.56 6.6% 31.6% 15.7x 0.71x 11.6x 4.4x The Andersons, Inc. 37.20 (1.5%) 44.90 23.25 17.6% (30.0%) 17.8 0.36 12.9 4.7 Archer-Daniels-Midland Company 43.99 (1.2%) 47.88 31.30 19.9% (15.4%) 15.5 0.51 11.9 3.0 Bunge Limited 69.63 1.4% 74.00 46.08 2.0% (23.4%) 11.5 0.37 9.4 3.3 Darling Ingredients Inc. 12.33 3.4% 15.93 7.78 17.2% (32.1%) 24.1 1.15 6.9 4.3 * Gruma, S.A.B. de C.V. 282.48 (0.9%) 297.04 240.01 16.8% 79.6% 19.6 2.05 12.4 1.3 Ingredion Incorporated 117.12 (8.6%) 140.00 96.01 22.2% 38.0% 15.4 1.74 9.7 1.9 Landec Corporation 12.30 (5.7%) 15.50 9.48 4.0% (10.9%) 18.3 0.73 14.9 2.1 * Olam International Limited 2.01 0.5% 2.17 1.56 10.4% (0.5%) 15.6 0.83 12.7 10.2 Omega Protein Corporation 25.95 0.4% 26.99 14.58 16.9% 145.5% 14.1 1.42 5.7 0.1 Sector Average: 13.4% 18.2% 16.8x 0.99x 10.8x 3.5x

DIVERSIFIED FOODS B&G Foods, Inc. $44.70 1.0% $52.84 $31.81 27.6% 49.5% 19.3x 3.24x 13.3x 4.8x Campbell Soup Company 63.28 1.1% 67.89 52.59 20.4% 43.8% 20.1 2.86 14.4 2.3 , Inc. 39.37 1.0% 48.86 33.61 (6.6%) 8.5% 21.8 1.71 9.8 1.9 General Mills, Inc. 62.73 0.0% 72.95 54.84 8.8% 17.6% 19.2 2.90 13.3 2.8 The Hain Celestial Group, Inc. 39.41 0.3% 56.99 33.32 (2.4%) (32.4%) 19.2 1.69 13.2 2.5 The J. M. Smucker Company 138.78 2.4% 157.31 121.79 12.5% 37.4% 17.7 2.85 12.7 3.2 Kellogg Company 73.36 0.5% 87.16 70.33 1.5% 12.1% 19.1 2.55 16.3 3.9 The Company 89.27 (0.2%) 90.54 70.01 22.7% NA 23.6 5.15 15.8 3.8 Lancaster Colony Corporation 133.68 3.3% 149.30 95.78 15.8% 42.8% 27.2 2.98 15.8 0.0 , Inc. 44.36 0.4% 46.40 35.88 (1.1%) 22.1% 22.1 3.17 18.2 4.0 * Nestlé S.A. 72.85 (0.4%) 80.05 67.00 (2.3%) (0.1%) 20.7 2.70 13.4 1.5 Pinnacle Foods Inc. 54.03 1.7% 54.45 39.37 27.2% 53.1% 22.8 3.15 15.7 5.3 Post Holdings, Inc. 85.37 3.1% 89.00 59.74 38.4% 103.8% 31.3 1.87 10.7 5.4 SunOpta Inc. 8.86 (8.3%) 10.09 4.14 (6.3%) (35.6%) 20.2 0.88 15.1 6.9 Treehouse Foods, Inc. 76.37 5.4% 104.53 62.64 (2.7%) (10.7%) 23.1 1.36 13.5 5.5 * N.V. 37.94 (0.2%) 43.11 36.22 (5.4%) 16.2% 18.7 2.29 12.7 1.8 Sector Average: 9.3% 21.9% 21.6x 2.58x 14.0x 3.7x

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Price Price as Compared to Enterprise Value to Total Debt Price Compared to 52-Week Range YE: Forward LTM: to LTM Company Name 2/3/17 1/27/17 High Low 2015 2014 P/E Revenue EBITDA EBITDA

ETHANOL Pacific Ethanol, Inc. $6.95 (0.7%) $10.95 $2.87 45.4% (32.7%) 9.9x 0.31x 13.8x 6.4x Green Plains Inc. $22.75 3.2% $29.85 $12.39 (0.7%) (8.2%) 13.0x 0.47x 12.4x 7.5x Renewable Energy Group, Inc. 8.60 (3.9%) 10.60 6.22 (7.4%) (11.4%) 6.1 0.25 3.7 1.8 Sector Average: 12.4% (17.4%) 9.7x 0.34x 10.0x 5.2x

FRUIT & VEGETABLE Calavo Growers, Inc. $57.35 3.1% $71.48 $46.56 17.0% 21.2% 23.5x 1.08x 14.5x 0.3x Fresh Del Monte Produce Inc. 58.77 2.8% 66.86 36.68 51.2% 75.2% 14.1 0.79 9.5 0.4 Lamb Weston Holdings, Inc. $38.90 6.8% $39.47 $28.75 NA NA 18.4x 2.66x 13.2x 4.6x Seneca Foods Corporation 37.35 0.3% 42.65 26.98 28.9% 38.2% NA 0.58 9.6 4.9 * Total Produce plc 1.81 (1.3%) 1.97 1.25 23.1% 69.2% 15.5 0.25 9.4 3.0 The WhiteWave Foods Company 54.97 (0.6%) 56.82 31.40 41.3% 57.1% 35.4 2.83 22.3 4.0 Sector Average: 32.3% 52.2% 21.4x 1.37x 13.1x 2.9x

PROTEIN AdvancePierre Foods Holdings, Inc. $28.18 2.4% $29.86 $22.99 NA NA 17.6x 2.03x 13.3x 4.6x Cal-Maine Foods, Inc. $41.15 (0.6%) $55.43 $35.65 (11.2%) 5.4% 37.0x 1.46x 40.1x 0.5x Hormel Foods Corporation 36.14 0.1% 45.72 33.18 (8.6%) 38.7% 21.1 1.99 13.0 0.2 Industrias Bachoco, S.A.B. de C.V. 49.08 3.5% 56.10 42.76 (0.3%) (1.6%) 14.2 0.75 7.0 0.7 * JBS S.A. 12.46 4.4% 12.95 8.20 0.9% 11.3% 10.9 0.48 7.8 5.2 Nathan's Famous, Inc. 64.95 3.9% 66.80 40.04 26.0% (18.8%) NA 3.59 12.6 4.8 Pilgrim's Pride Corporation 19.42 3.5% 27.79 17.15 (12.1%) (40.8%) 9.0 0.73 6.7 NM Sanderson Farms, Inc. 91.26 1.2% 99.40 74.07 17.7% 8.6% 10.5 0.65 4.9 0.0 Seaboard Corporation 3,997.75 2.1% 4,545.00 2,540.00 38.1% (4.8%) NA 0.76 10.7 2.2 Tyson Foods, Inc. 65.39 4.2% 77.05 55.72 22.6% 63.1% 13.5 0.82 8.4 1.6 Sector Average: 8.1% 6.8% 16.7x 1.33x 12.5x 2.2x

BAKING & INGREDIENTS * ARYZTA AG $28.58 (0.4%) $49.73 $26.14 (44.0%) (62.9%) 10.0x 1.05x 8.0x 4.8x Balchem Corporation 84.65 (0.9%) 88.76 56.60 39.2% 27.0% 32.9 5.41 21.9 2.2 Flowers Foods, Inc. 20.24 1.4% 21.24 14.35 (5.8%) 5.5% 21.9 1.32 11.7 2.2 * Grupo Bimbo, S.A.B. de C.V. 47.50 0.1% 60.86 43.90 3.4% 16.7% 27.7 1.25 10.3 2.9 J&J Snack Foods Corp.127.70(2.2%) 135.05 97.73 9.5% 17.4% 28.9 2.23 14.5 0.0 *Kerry Group plc 64.30 (2.1%) 84.65 61.03 (15.7%) 12.7% 19.3 2.12 15.0 2.3 McCormick & Company, Incorporated 95.86 (0.0%) 107.84 85.10 12.0% 29.0% 23.5 3.02 16.9 1.9 *Tate & Lyle plc 6.76 1.2% 8.50 5.29 12.9% 12.1% 14.5 1.41 9.7 2.1 Sector Average: 1.4% 7.2% 22.3x 2.23x 13.5x 2.3x

CANDY, NUTS, & SNACKS Amplify Snack Brands, Inc. $10.26 3.5% $17.53 $8.76 (10.9%) NA 19.5x 5.80x 15.0x 6.7x The Hershey Company 106.98 1.4% 117.79 87.38 19.8% 2.9% 22.5 3.41 15.4 1.8 Inventure Foods, Inc. 6.21 1.0% 10.15 4.91 (12.5%) (51.3%) 51.0 0.87 31.5 15.5 John B. Sanfilippo & Son, Inc. 64.07 (3.8%) 72.84 40.75 18.6% 40.8% 19.0 0.83 11.0 0.7 Rocky Mountain Chocolate Factory, Inc. 10.95 (0.9%) 12.17 9.50 1.9% (16.5%) NA 1.63 8.6 0.6 Snyder's-Lance, Inc. 38.89 1.8% 39.19 27.93 13.4% 27.3% 27.4 2.46 19.3 5.1 , Inc. 38.20 0.5% 41.65 29.47 24.6% 32.2% NA 5.08 23.6 0.1 Sector Average: 7.8% 5.9% 27.9x 2.87x 17.8x 4.3x

PET FOOD AND PRODUCTS Blue Buffalo Pet Products, Inc. $25.41 3.8% $28.80 $15.19 35.8% NA 29.3x 4.52x 18.7x 1.4x Central Garden & Pet Company 32.80 (3.8%) 35.38 13.69 142.6% 273.6% 23.4 1.06 10.7 2.1 Freshpet, Inc. 11.15 0.5% 11.81 5.69 31.3% (34.6%) 112.9 2.96 43.5 1.0 Sector Average: 69.9% 119.5% 55.2x 2.85x 24.3x 1.5x

WINE & BEVERAGE The Boston Beer Company, Inc. $155.00 0.7% $202.77 $145.30 (23.2%) (46.5%) 24.4x 2.05x 10.3x 0.0x Brown-Forman Corporation 45.70 0.2% 51.71 43.72 (7.9%) 4.1% 25.5 6.55 18.1 2.1 The Coca-Cola Company 41.54 0.2% 47.13 39.88 (3.3%) (1.6%) 21.5 4.74 16.1 4.1 Constellation Brands, Inc. 149.07 0.1% 173.55 130.23 4.7% 51.8% 20.4 5.20 15.4 3.6 * Cott Corporation 13.96 0.4% 22.66 12.65 (8.4%) 74.3% 52.0 1.20 10.4 6.5 Craft Brew Alliance, Inc. 15.45 1.3% 22.40 7.50 84.6% 15.8% 35.0 1.59 25.9 2.5 Crimson Wine Group, Ltd. 9.25 (0.5%) 9.93 7.58 5.1% (2.6%) NA 3.15 14.4 1.1 Dr Pepper Snapple Group, Inc. 91.72 1.9% 98.80 81.05 (1.6%) 28.0% 19.7 3.05 11.9 2.0 Monster Beverage Corporation 42.64 0.8% 55.50 37.69 (14.1%) 18.1% 30.1 8.07 20.8 0.0 Jones Soda Co. 0.50 4.2% 0.74 0.33 30.7% 42.9% NA 1.38 NM NM National Beverage Corp. 52.98 7.2% 64.73 32.35 16.6% 134.2% 24.5 3.04 16.8 0.0 Pepsico, Inc. 105.11 1.6% 110.94 96.09 5.2% 11.2% 20.7 2.77 14.2 2.9 Starbucks Corporation 55.06 (1.9%) 61.64 50.84 (8.3%) 34.2% 24.9 3.75 15.4 0.6 Willamette Valley Vineyards, Inc. 8.00 0.0% 9.00 6.75 13.0% 37.9% NA 2.50 9.4 1.0 Sector Average: 6.6% 28.7% 27.2x 3.50x 15.3x 2.0x

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Price Price as Compared to Enterprise Value to Total Debt Price Compared to 52-Week Range YE: Forward LTM: to LTM Company Name 2/3/17 1/27/17 High Low 2015 2014 P/E Revenue EBITDA EBITDA

DAIRY * Danone $59.10 0.9% $70.53 $57.59 (5.1%) 8.5% 18.1x 2.02x 11.6x 3.0x Dean Foods Company 20.22 0.4% 22.31 15.69 17.9% 4.3% 12.7 0.35 6.0 2.0 Lifeway Foods, Inc. 10.80 (2.1%) 18.48 8.68 (2.7%) (41.7%) 33.8 1.40 19.5 0.8 * Saputo Inc. 45.55 (5.5%) 48.98 35.61 37.6% 30.4% 22.0 1.69 14.3 1.2 The WhiteWave Foods Company 54.97 (0.6%) 56.82 31.40 41.3% 57.1% 35.4 2.83 22.3 4.0 Sector Average: 17.8% 11.7% 24.4x 1.66x 14.7x 2.2x

WHOLESALE, FOOD SERVICE, & DISTRIBUTION The Chefs' Warehouse, Inc. $16.85 4.3% $20.79 $10.31 1.0% (26.9%) 40.8x 0.65x 12.2x 5.4x Core-Mark Holding Company, Inc. 34.15 (5.0%) 50.00 31.54 (16.6%) 10.3% 21.5 0.17 14.5 2.5 Performance Food Group Company 22.25 (0.7%) 28.13 18.82 (3.8%) NA 19.3 0.22 11.5 4.1 Sysco Corporation 52.54 (0.3%) 57.07 42.05 28.1% 32.4% 20.9 0.69 12.8 2.8 United Natural Foods, Inc. 45.79 (0.6%) 52.18 29.75 16.3% (40.8%) 17.8 0.33 9.5 2.0 Sector Average: 5.0% (6.2%) 24.1x 0.41x 12.1x 3.4x

MASS MERCHANDISE & CLUB STORES Costco Wholesale Corporation $168.32 3.9% $169.59 $138.57 4.2% 18.7% 27.8x 0.61x 14.5x 1.0x Wal-Mart Stores, Inc. 66.50 1.3% 75.19 62.35 8.5% (22.6%) 15.5 0.52 7.6 1.5 Sector Average: 6.4% (1.9%) 21.7x 0.57x 11.1x 1.3x

DOLLAR STORES Dollar General Corporation $73.14 4.0% $96.88 $66.50 1.8% 3.5% 15.8x 1.09x 9.8x 1.3x Dollar Tree, Inc. 76.69 3.6% 99.93 72.52 (0.7%) 9.0% 17.9 1.20 10.8 3.1 Fred's, Inc. 14.11 0.0% 21.77 7.89 (13.8%) (19.0%) NM 0.28 NM NM Sector Average: (4.2%) (2.2%) 16.9x 0.86x 10.3x 2.2x

TRADITIONAL RETAIL * Ahold Delhaize $20.04 0.0% $23.03 $17.89 (3.2%) 27.8% 14.6x 0.65x 10.8x 2.8x Ingles Markets, Incorporated 47.70 6.5% 52.40 31.77 8.2% 28.6% 17.3 0.48 7.8 3.8 The Kroger Co. 34.02 2.0% 40.91 28.71 (18.7%) 6.0% 16.0 0.40 7.7 2.4 SpartanNash Company 38.63 1.5% 40.38 18.73 78.5% 47.8% 16.9 0.25 8.5 2.2 SUPERVALU Inc. 3.82 (3.3%) 6.17 3.72 (43.7%) (60.6%) 9.9 0.21 4.7 3.4 Village Super Market, Inc. 30.65 0.8% 36.42 23.30 16.3% 12.0% NA 0.25 6.2 0.7 Weis Markets, Inc. 60.38 1.9% 68.88 37.14 36.3% 26.3% NA 0.53 9.2 0.2 Sector Average: 10.5% 12.5% 14.9x 0.40x 7.8x 2.5x

SPECIALTY RETAIL Natural Grocers by Vitamin Cottage, Inc. 11.99 (10.6%) 22.20 10.46 (41.1%) (57.4%) 24.4 0.45 7.2 1.3 Sprouts Farmers Market, Inc. 18.78 0.3% 30.00 17.96 (29.4%) (44.7%) 20.9 0.74 9.5 1.1 Whole Foods Market, Inc. 29.80 (1.7%) 35.58 27.67 (11.0%) (40.9%) 20.7 0.62 7.2 0.8 Sector Average: (27.2%) (47.7%) 22.0x 0.55x 6.0x 1.1x

TRADITIONAL RESTAURANTS Bob Evans Farms, Inc. $56.53 2.4% $60.95 $35.63 45.5% 10.5% 23.8x 1.12x 12.3x 3.0x Brinker International, Inc. 43.93 (0.3%) 55.84 43.30 (8.4%) (25.1%) 13.7 1.10 7.6 3.0 The Cheesecake Factory Incorporated 59.57 (0.2%) 64.41 46.13 29.2% 18.4% 19.8 1.25 9.8 0.4 Darden Restaurants, Inc. 71.82 (2.4%) 79.43 55.77 12.9% 22.5% 17.6 1.32 9.9 0.5 DineEquity, Inc. 67.62 (0.2%) 98.82 66.90 (20.1%) (34.8%) 11.0 3.88 9.6 5.4 Jack in the Box Inc. 108.31 1.1% 113.30 61.78 41.2% 35.5% 23.1 2.75 13.2 3.0 McDonald's Corporation 124.24 1.1% 131.96 110.33 5.2% 32.6% 20.1 5.15 13.5 2.8 The Wendy's Company 13.83 0.4% 14.07 8.89 28.4% 53.1% 32.3 3.52 13.7 6.3 Yum! Brands, Inc. 66.23 0.5% 91.99 59.57 (9.3%) (9.1%) 25.1 2.38 10.1 3.1 Sector Average: 13.8% 11.5% 20.7x 2.50x 11.1x 3.0x

HIGH-GROWTH RESTAURANTS Bojangles', Inc. $20.00 2.6% $20.70 $13.42 26.0% NA 20.7x 1.75x 11.4x 2.5x Chipotle Mexican Grill, Inc. 404.08 (3.0%) 542.50 352.96 (15.8%) (41.0%) 48.7 2.88 54.8 0.0 El Pollo Loco Holdings, Inc. 12.20 (2.0%) 15.44 10.08 (3.4%) (38.9%) 17.5 1.53 9.1 1.7 The Habit Restaurants, Inc. 14.20 (4.4%) 21.79 13.20 (38.4%) (56.1%) 49.3 0.96 9.4 0.2 Noodles & Company 4.35 0.0% 13.65 3.51 (55.1%) (83.5%) NM 0.43 8.1 3.4 Panera Bread Company 213.17 1.6% 224.15 182.64 9.4% 22.0% 29.0 1.94 13.7 1.1 Papa Murphy's Holdings, Inc. 4.41 0.0% 12.96 3.56 (60.8%) (62.0%) 77.8 1.49 8.6 5.1 Potbelly Corporation 12.60 (4.2%) 14.99 9.82 7.6% (2.1%) 31.8 0.72 7.3 0.0 Shake Shack Inc. 35.40 1.0% 43.99 30.90 (10.6%) NA 66.0 3.48 31.1 0.0 Wingstop Inc. 28.73 2.0% 33.42 20.73 26.0% NA 45.5 11.24 32.4 5.2 Zoe's Kitchen, Inc. 21.79 0.1% 41.76 20.20 (22.1%) (27.1%) 187.2 1.66 18.8 1.2 Sector Average: (12.5%) (36.1%) 57.3x 2.55x 18.6x 1.9x Notes: * Denotes local currency. Source: Capital IQ. Summary multiples adjusted for extraordinary and non-recurring items; outliers excluded from mean calculation.

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Major Indices (1-year & 12-year History)

S&P 500 Dow Jones Industrial Average 2,400 21,000

2,200 19,000 2,000 17,000 1,800 15,000 1,600 13,000 1,400 11,000 1,200 1,000 9,000 800 7,000 600 5,000

Months/Years Months/Years

1-year 12-year 1-year 12-year

10-year Treasury CBOE Market Volatility Index – VIX 6.0 80

70 5.0 60 4.0 50

3.0 40

30 2.0 20 1.0 10

0.0 0

Months/Years Months/Years

1-year 12-year 1-year 12-year

Lakeshore Sector Indices vs. S&P 500 (1-year Only)

130

120

110

100

90

80

70 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17

S&P 500 Inputs & Agribusiness Diversified Foods Protein Baking & Ingredients Grocery

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Food For Thought…

Partner Column Written By Mary L. Burke

The Super Bowl LI. What a game last night! The Patriots come back will be written about for years, and Tom Brady has probably won his place as one of the greatest, if not the greatest, quarterback of all time. As most people stayed up watching the commercials and the game, I am going to make this article short and to the point, but I will follow-up more in a forthcoming article.

Certifications For Animal Welfare. What does organic, free-range or cage free mean? Consumers look for these labels on the products they purchase, but do they consistently mean the same thing? We all know there is little regulation on when these words can be placed on a label and when not. Companies utilize such labels as an attempt to attract consumers to purchase their products. In the meat and egg sector, the products are trying to indicate the animals are treated humanely. But what does that mean? For each of the three certifying organizations, it means something different when their logos are used on products. As the chart below shows, the requirements are very different. The processors intentionally chose a certifying organization for a number of reasons. In the end, the processors are trying to prove something to the consumer. I think all of the different play on words and lack of clarity diminish the effectiveness of these certifications. To be effective, one set of words is needed so the consumer knows what is happening. Transparency and accountability are what consumers are seeking.

Animal Humane Association Humane Farm Animal Care Animal Welfare Approved PIGS Tail Docking Allowed Not allowed routinely Prohibited Minimum Indoor Area 7.2 square feet 7.2 square feet 12 square feet (per 180 lb. pig) CATTLE Prohibited, unless required by law, Face branding prohibited; other Hot Iron Brandings Prohibited chance of theft, or accidental humane types allowed mixing with other herds Not required for period before Not required for period before Incessant access required for Access to Pasture slaughter slaughter animals CHICKENS Ideally less than 10 parts per Ideally less than 10 parts per Less than 5 parts per million; if Ammonia Levels in Cages from million; must not exceed 25 parts million; must not exceed 25 parts farmer can smell ammonia, action Feces per million per million must be taken to eliminate source 6 hours minimum, except in first Continuous Darkness 4 hours minimum 8 hours minimum few days and last three days of life NESTING HENS 1.5 sq. feet per hen with no 1.5 sq. feet per hen with no 1.8 sq. feet per hen indoors, plus 4 Indoor Space additional space outdoors additional space outdoors sq. feet outdoor foraging area Allowed only when concerned Allowed, as a preventative Beak Trimming about cannibalism, or to prevent Prohibited measure injurious feather-pecking Source: Consumers Union, New York Times:

Enacted Legislation. On a different note, the Wall Street Journal recently showed the percentage of enacted legislation by party in the White House, which I found interesting and thought I would share it. Our country is extremely divided. The Constitution, which we all live by in this country, established the balance of power for good reasons. Just food for thought.

ParPartner Column Continued on Page 7.

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Food For Thought…

Saputo Sees Cost Controls Pay Off; Reports Record EBITDA. Central Garden & Pet Delivers in Seasonally Slowest The world’s tenth largest dairy processor, Saputo Inc. (TSE: Quarter. Recent acquisitions provided a healthy boost for SAP), announced its results for its third quarter on Thursday. Central Garden & Pet (NASDAQ: CENT). Net sales improved The Montreal-based dairy company revenues for the three 16.6% to $419.5 million in the fourth quarter from year-ago months ended December 31st increased 2.2% to $2.97 billion. levels. Excluding one-time charges, operating income Adjusted EBITDA jumped 8.2% to a record $346.6 million as a increased to $17.9 million, and diluted earnings per share result of higher sales volume, a favorable product mix, lower increased to $0.12 from $0.01 in the prior period. Of the $59.7 ingredient costs, and better operating efficiencies. million jump in net revenue, $41.8 million came from acquisitions in the last year. Commenting on the company’s In light of a difficult operating environment over the past year, M&A activity, CEO George Roeth noted, “I will say that the company closed two plants and is planning another closure M&A demand is going to be a key growth lever for us, and for December 2017. In an attempt to further control costs, the we will continue to be active. We bought three significant company is transferring merchandising duties in its Atlantic properties in the last 18 months. We hope to at least continue region to retailers effective April 1st. However, given recent that pace, and as we look out… we feel the pipeline is as pricing movements, CEO Lino Saputo spoke optimistically on strong as it’s ever been.” the industry’s 2017 outlook. “We are looking at improved market conditions in the dairy space. We’re looking at the Central Garden & Pet (Nasdaq: CENT) 10-year History international markets becoming a lot more favorable with rises 40 in cheese selling prices as well as byproducts selling prices.” 35 30 The company announced two leadership transitions: CFO 25 Louis-Philippe Carrière and Founding Chairman Emanuele 20 Saputo will both retire August 1st, after 30 and 63 years, 15 respectively, with the company. Emanuele’s son and current 10 5 CEO, Lino Saputo, will be appointed Chairman, and the 0 company’s current EVP of Finance & Administration, Maxime 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Therrien, will take over as CFO.

( Partner Column Continued from page 6…) Ingredion Ends Year with Record EPS and Operating Income Percentage of Enacted Legislation by Party in White House With Projections of 2017 Net Sales to Increase As Well. 7% Leading global ingredients solution company, Ingredion, Inc. Shaded areas mark clean sweep (NYSE: INGR), reported its earnings for the fourth quarter and 6% fiscal-year 2016 on Thursday. Full-year sales increased $83 million, or 1%, due to the addition of acquisition-related 5% ingredients, a more favorable mix in specialty and core ingredients, and favorable pricing in North and . 4% Gross profit increased $160 million, or 13%, due to a favorable price and product mix and optimization efforts. Diluted 3% earnings per share for the year were $6.55 compared to $5.51 for 2015. The company reported adjusted EPS of $7.13 compared to 2% year-ago adjusted EPS of $5.88; adjustments for the year included addbacks related to acquisition/integration costs, 1% impairment/restructuring costs, and a tax settlement of $0.36 per share. 0% 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 Looking forward, management anticipates 2017 net sales to be Carter Regan G. Clinton G.W. Bush Obama Bush up and adjusted earnings per share of $7.40 to $7.80. Shares traded down $10.82 from Wednesday’s close of $126.63, or 8.5%. Source: Govtrack.us, House.gov Have a good week!

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Heard on the Street…

Convenience Store Operator GPM Receives $62.5 Million AgTech Funding Falls In 2016, Deal Activity Rises. Private Equity Deal. Private equity investor Harvest Partners Investment in agriculture technology startups reached $3.23 SCF invested $62.5 million for a minority interest in GPM billion in 2016, a 30% year-over-year decline from 2015 Investments. GPM Investments is the largest privately-owned according to a new report available from AgFunder. convenience store operator in the U.S., and the investment However due to a pickup in seed stage activity, the total provides liquidity to the existing owners of GPM. GPM operates number of deals rose 10%. After a record breaking 2015, more than 1,000 convenience stores in the Midwest, Southeast, when 526 agtech funding deals raised $4.6 billion, a pullback Mid-Atlantic, and Northeast U.S., including the Fas Mart, Shore was expected in 2016. The dynamics of the global markets Stop, Village Pantry, Apple Market, and Jiffi Stop brands. had an impact in 2016, and investor caution was particularly Harvest Partners is a non-control private equity investor based felt at the Series A stage. For the full year, 2016 posted a 43% in New York. It previously announced earlier this month it decline in Series A value and a 31% decline in the number of inteds to invest in specialty food supplier Rolan Foods as well. Series A deals. While the exact reason for the decline is Sean Murphy, managing director of Harvest Partners SCF, unknown, many analysts speculate that investors struggled described the acquisition as, “GPM and its leadership team have with rising valuations, similar to the global VC pullback in proven they are the leading consolidators in the convenience Series A, as well as drawbacks to having a limited pool of store sector. With strength of GPM’s platform, we feel the investors available to the sector. In contrast, seed stage deal company has significant prospects for further growth.” funding rose 77% to $230 milllion in 2016. This is likely due to the increased availability of resources such as accelerators and incubators for early stage startups. Online Grocery Sales Surging, Controlling 20 Percent of Market by 2025. Online grocery shopping is estimated to grow The drones and delievery sectors experienced significant five-fold over the next 10 years as American consumers spend declines in 2016, ultimately hindering agtech funding. Food an upwards of $100 billion on food-at-home items. Both the Marketplace and e-Commerce startups decreased Food Marketing Institute and Nielsen believe online channel is approximately 25% year-over-year as it raised only $1.3 likely to capture significantly more market share in the decade billion. Robotics, Mechanization & Other Equipment ahead from the bricks-and-mortar stores. Around 25% of companies also plummeted as these companies raised a mere American households currently buy some groceries online, an $109 million, decreasing 89%. The Robotics category decline increase from 19% in 2014. It is also estimated more than 70% was predominately driven by drone technologies. Drones will engage with online food shopping in the next ten years. were a popular technology in 2015 as the technology was expected to help farm operations; however, as they became According to the FMI-Nielson report, “Grocery shopping will more widespread, the drones did not save as much time or reach digital maturity and saturation faster than other industries money as anticipated. Food delievery also faltered this year, that went online before, such as publishing or banking. ultimately leading to declining funds. Many of the large Younger, newer, and more engaged digital shoppers adopt delivery funds closed, creating a volatile year despite the digital technologies more quickly, and will hasten the expansion market outlook in 2015. This sector was certainly overheated of digital grocery shopping further.” in 2015, however, it is still expected to be worth an estimated $100 billion by 2025 as many brick and mortar stores move to A major takeaway from the report indicates online grocery online platforms. spending could grow during the 2016-2025 forecasted period to as much as a 20% share of the total U.S. food and beverage sales. Ag biotechnology and novel farming systems grew in 2016 Presently, online grocery spending equates to about 4.3%. The off-setting investment trends. Agtech funding grew year- study also indicates center store products such as canned goods, over-year in four categories: Ag Biotechnology grew 150% to condiments, spices and others will likely shift faster to online $719 million; Farm Management Sofware, Sensing, & IoT than traditionally perimeter items, such as fresh produce and increased by 3.7% to $363 billion, novel farming systems rose meats. The authors of the study do not anticipate the rise in 63% to $257 million, and lastly supply chain technologies online sales will lead to the demise of brick and mortar stores, improved 3% reaching an estimated $180 million. The main though; it will simply reconfigure the role of the grocery store reason for the increased trends is attributed to several for the digital food shopper. startups in this space maturing.

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M&A

Worldwide M&A activity decreased 16 percent in 2016 from the U.S. Quarterly M&A Completed Activity outstanding 2015 levels. The fourth quarter of 2016 rescued the 600,000.00 3,000 year, as global deal volume increased 50 percent compared to 500,000.00 2,500 the third quarter of 2016. Many analysts expect the fintech and 400,000.00 2,000 financial service industries to lead deal flow in 2017, though food and beverage will also likely increase. 300,000.00 1,500 200,000.00 1,000 2017 started with a bang as chocolatier Mars announced it was 100,000.00 500 purchasing animal hospital company VCA, Inc., for $9.1 billion. 0.00 0 Many other large food and confectionery companies are seeking diversification because of recent food deflation trends. M&A trends from the fourth quarter 2016 are carrying over into 2017, as pet food and health, alcoholic beverage, and confectionery Transaction Value Transaction Count deals remain abundant.

Recent U.S. Food & Agribusiness M&A Activity ($ in millions) Mergers & Acquisitions

Enterprise Enterprise Value / Date Target Acquirer Value Revenue EBITDA Target Description 2/2/2017 Archer Daniels Midland facility TRU Aseptics, LLC n/a n/a n/a Former WILD Flavors Aseptics Facility in Beloit, Wisconsin

2/1/2017 Bottom Line Food Processors, Inc. Sovos Brands Intermediate, Inc. n/a n/a n/a Bottom Line Food Processors, Inc., doing business as Michael Angelo’s Gourmet Foods, Inc., engages in producing, packaging, and supplying Italian appetizers, entrees, and sauces. 2/1/2017 Calbee , LLC CALBEE, Inc. 170.0 n/a n/a Calbee North America LLC processes and markets products and frozen food products in Oregon.

1/31/2017 Macy's Frango Garrett Brands, LLC n/a n/a n/a Frango produces chocolate.

1/26/2017 Kentucky Owl, LLC Stoli Group USA, LLC n/a n/a n/a Kentucky owl produces whiskey.

1/24/2017 Pineland Farms Potato Co. Bob Evans Farms 140.0 n/a n/a Pineland Farms is a value-added potato processor serving the retail and food service markets. The company also operates a cheese processing business. 1/24/2017 Bob Evans Restaurants Golden Gate Capital 565.0 n/a n/a Bob Evans Restaurants operated full-service Bob Evans Restaurants in 18 states, primarily in the Midwest, mid-Atlantic, and Southeast regions of the U.S. 1/24/2017 Native Maine Produce & Specialty Foods, LLC RLJ Equity Partners, LLC; SJ Partners, n/a n/a n/a Native Maine Produce & Specialty Foods, LLC is a wholesale distributor of produce and specialty LLC products. 1/23/2017 NuSted Foods, Ltd. The Riverside Company 413.0 n/a n/a NuStef Foods Limited manufactures and sells waffle cookies and crackers in Canada.

1/20/2017 Daymon Worldwide, Inc. Bain Capital Private Equity, LP; Yonghui n/a n/a n/a Daymon Worldwide, Inc. provides consumables retailing services. The company primarily engages in Superstores Co., Ltd. branding, sourcing, and commercializing customized retail solutions. 1/20/2017 Click Distributing, Inc. C. Stein, Inc.; The Odom Corporation n/a n/a n/a Click Wholesale Distributing, Inc. and Click Distributing East, Inc. distribute alcoholic beverages.

1/19/2017 Hi-Pro Feeds Nutreco n/a n/a n/a Hi-Pro Feeds is a full-service animal nutrition supplier, supplying complete and specialty feeds, premixes, concentrates and commodity ingredients 1/17/2017 Love & Quiches, Ltd. Indulge Desserts Holdings, LLC n/a n/a n/a Love & Quiches Ltd. produces gourmet desserts and quiches for foodservice operators, food retailers, and distributors worldwide. 1/15/2017 Earl Brown and Sons, Inc. Foreman Fruit Company n/a n/a n/a Earl Brown and Sons, Inc. produces apples.

1/13/2017 Franklin Foods Holdings, Inc. Hochland SE n/a n/a n/a Franklin Foods Holdings, Inc. manufactures and packs cream cheese products.

1/11/2017 Banvit BRF n/a n/a n/a A fully integrated business, Banvit produces chicken, turkey, deli products

1/11/2017 American Harvest Vodka Beach Whiskey, LLC n/a n/a n/a American Harvest Vodka comprises an organic vodka manufacturing brand.

1/10/2017 Ridgeway Biologicals, Ltd. IDT Biologika n/a n/a n/a Ridgeway Biologicals is the leading manufacturer for autogenous vaccines in the U.K. It developsbacterial vaccines for poultry, pig, ruminant and aquaculture vaccines. 1/10/2017 Crosswind Industries, Inc. Archer Daniels Midland Company n/a n/a n/a Producer of pet treats

1/9/2017 VCA Inc. Mars, Incorporated 9,100.0 4.26 n/a Animal healthcare network with over 800 locations throughout U.S. and Canada

1/9/2017 Clara Street Company Vintage Wine Estates, Inc. 15.5 n/a n/a Clara Street Company, doing business as Cameron Hughes Wine Inc., produces wines.

1/9/2017 Garden Fresh Restaurant Corp. Cerberus Capital Management, LP n/a n/a n/a Garden Fresh Restaurant Corp. owns and operates a chain of restaurants.

1/4/2017 Bigsal H.I.G. Capital n/a n/a n/a Bigsal operates in the animal nutrition market with a broad portfolio ranging from basic minerals to complete feeds for cattle, fish, pet and other animal species. 1/4/2017 Bascom Maple Farms, Inc., candy and butter Runamok Maple, LLC n/a n/a n/a Bascom Maple Farms Inc. engages in maple farming, and production, packaging, and distribution of operations maple products. 1/4/2017 Bubbies Homemade Ice Cream & Dessert, Inc. Kenex Holdings, LLC n/a n/a n/a Bubbies Homemade Ice Cream & Dessert Inc. produces and sells mochi ice creams and ice cream cakes.

1/3/2017 Clougherty Packing / PFFJ Smithfield Foods n/a n/a n/a Clougherty Packing LLC is an integrated producer and processor of a line of branded pork products.

1/3/2017 Agranix Neovia n/a n/a n/a Agranix produces nutritional and dietary ranges for animals and, in particular, ruminants and horses.

1/3/2017 Hill & Valley, Inc. J&J Snack Foods Corp. n/a n/a n/a Hill & Valley, Inc. produces and markets sugar free and no sugar added bakery products for customers in the United States. 12/22/2016 Duc S.A. Plukon Food Group n/a n/a n/a DUC Group is the leading European of certified poultry, specializing in the production, slaughter, packaging and marketing of poultry. 12/20/2016 Flagship OSI Group n/a n/a n/a Flagship Europe is a supplier to the UK foodservice market of frozen poultry, sous vide products, and pies mayonnaise, sauces and dressings. 12/19/2016 Solbiosur Alltech n/a n/a n/a Solbiosur is a specialised provider of innovative agricultural and horticultural solutions dedicated to improving yield and efficiency for the producer. 12/19/2016 Tilly Sabco Wegdam Holding n/a n/a n/a The new Tilly Sabco will be concentrating on the production of chicken sausages and packing frozen foods. 12/12/2016 Maxi Canada, Inc. Altamont Capital Partners n/a n/a n/a Maxi develops frozen poultry products that are sold under the Yummy and Dino Buddies brands.

Source: Capital IQ.

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Commodities Overview (1-year & 12-year History)

Soybeans Sugar $20.00 $0.40 18.00 16.00 0.30 14.00 12.00 0.20 10.00 8.00

Dollars per Bushel Dollars 0.10 6.00 per Pound Dollars 4.00 2.00 0.00

Months/Years Months/Years

1-year 12-year 1-year 12-year

Live Cattle Milk 1.90 $0.30

1.70 0.25 1.50

1.30 0.20

1.10 0.15 0.90 Dollars per Pound Dollars per Pound Dollars 0.10 0.70

0.50 0.05

Months/Years Months/Years

12-year 1-year 12-year 1-year 12-year

Cotton Oil $2.50 $160

2.00 130

1.50 100

1.00 70 Dollars per Pound Dollars 0.50 Dollars per Barrel 40

0.00 10

Months/Years Months/Years

1-year 12-year 1-year 12-year

Broiler price based off spot closing price. All other commodity prices are based off the closing price of their respective nearby futures contract.

Sources: Thomson Financial Data Securities, Capital IQ, Reuters, Edgar Online, Wall Street Journal, Barron’s, New York Times, Bloomberg, Chicago Tribune, Denver Post, MarketWatch, USDA, The Economist, BusinessWeek, Food Institute, Food Business News, Supermarket News, LPC, Company Press Releases. The information contained in this publication is compiled using publicly available news/media sources and industry-specific sources that Lakeshore Food Advisors, LLC (“LFA”) believes to be reliable, but the accuracy and completeness of which LFA cannot guarantee.

Please send your feedback and comments to Rachel Huser at 312.348.6387 or [email protected].

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