Contract Manufacturers for Food & Beverage: In-demand Assets

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2 Contract Manufacturers for Food & Beverage: In-demand Assets Over the last 25 years, contract manufacturers of food & beverage products (often called co-packers) were considered much less attractive assets, from an investment/acquisition standpoint, than other food producers. The criticisms of these types of companies were plentiful: They don t own a brand, they don t have a direct link with the consumer, they are at risk for losing customers because production can be brought in-house, they don t have pricing power, they are often exposed to commodity risk, and they often have customer concentration. Furthermore, contract manufacturers had to saddle the burden of meaningful capital expenditures, often leveraging their balance sheets with debt in the process. Given the risk factors mentioned above, and coupled with the heavy capital requirements necessary to grow with customers, many investors (especially PE Groups) stayed clear of these assets or penalized them from a valuation standpoint. However, this has changed in recent years. BIG FOOD There are several factors contributing to why the contract manufacturing of F&B products is a growing (and now thriving) segment. Admittedly there are some outsourced food verticals that still have overcapacity resulting in thin margins, but overall the tide is rising. Many Big Food Companies have been outsourcing a portion of production allowing them to focus on their core sales and marketing competencies. Several have quietly sold off manufacturing facilities and entered into long term comanufacturing agreements with their acquirers. At the same time most have been intensely focused on cost cutting measures, with the elimination of significant capital expenditures supporting these cost cutting initiatives. PRIVATE LABEL KEY TAKEAWAYS Demand for contract manufacturers is on the rise, making them much more valuable assets than ever before. If you have an executive level contact in the contract manufacturing segment, now is an excellent time to discuss M&A and investment opportunities. If you are interested in discussing these opportunities, please contact Brian Boyle in the Food & Beverage Investment Banking Group. Additionally, in the U.S., Private Label brands continue to grab share now representing about 22% of the market. Most national grocery chains and mass market retailers do not own manufacturing facilities, relying instead on an outsourced manufacturing model. Private label brand penetration still lags significantly behind Europe s percentages, so continued and steady growth is expected by most experts. Co-packers that supply industrial clients are also in a great position to service retailers since there are no brand conflicts. EMERGING BRANDS Furthermore, we are seeing significant contract manufacturing demand from smaller, typically earlier stage companies. Earlier this year, I attended Expo West, arguably the largest F&B show in the world, with close to 4,000 exhibitors. The amount of innovation taking place within potentially disruptive F&B Companies (and displayed at the show) 2

3 was staggering. Yet the vast majority of the companies that we spoke with were asset light, meaning they require a third party manufacturer to produce their products. Needless to say demand for co-packers is strong and we expect this trend to continue. According Mattson, a premier F&B design and development firm, only about 12% to 15% of food production in the U.S. is outsourced. This percentage is low because Big Food still controls such a large share of the market and maintains most their production in-house. But with persistent stagnant sales, these companies will continue to rationalize their manufacturing footprint and outsource more production. TO WHOM MUCH IS GIVEN, MUCH WILL BE REQUIRED As demand for outsourced manufacturing has increased, the requirements and responsibilities for co-packers have also increased as well. The standards for quality assurance (QA), for example, have become quite rigorous usually exceeding regulatory requirements. Also, many larger customers are asking co-packers to assume full responsibility for managing the supply chain, finished goods inventory, and even the coordination of warehousing and distribution. Lastly, some co-packers are being relied on for R&D and other product development capabilities as well. While these additional responsibilities clearly increase operational costs for manufacturers, in the long run, the relationship between contract manufacturers and their customers are becoming increasingly intertwined and sticky. With more value added services being tethered, the importance of co-manufacturers for branded food businesses is higher than ever. And with increased demand for line space, contract manufacturers are gaining leverage to negotiate better terms making them much more valuable assets than ever before. RECENT M&A ACTIVITY Private equity investors are increasingly investing in food and beverage contract manufacturing. With record fundraising levels and the need to deploy capital combined with high levels of innovation and the positive secular headwinds outlined prior it is an opportune time for investment in this space. Cold Spring Brewing to Acquire Carolina Beverage (May 2018) On May 16, 2018, Cold Spring Brewing Company agreed to acquire the Carolina Beverage Group for $270 million, or 9.0x EBITDA based on LTM EBITDA of $30 million. Carolina Beverage manufactures high-quality products out of its three manufacturing facilities located in Cold Spring, MN, Mooresville, NC, and Fort Worth, TX. By combining Cold Spring and Carolina Beverage, the sponsor, Brynwood Partners, has created one of the largest contract manufacturers in the beverage sector. Charlesbank Capital Partners and Partners Group to Acquire Hearthside Food Solutions (April 2018) On April 17, 2018, Charlesbank Capital Partners and Partners Group agreed to acquire Hearthside Food Solutions for $2.4 billion, or 11.0x EBITDA based on LTM EBITDA of $213 million. Headquartered in Downers Grove, IL, Hearthside produces a broad range of high-quality nutrition bars, cookies, cereals, and other baked foods & snacks for some of the world's premier food brands. It operates 25 manufacturing facilities across the U.S. and Europe and employs around 7,900 people. The investor consortium will work closely with Hearthside's management team on a number of value creation initiatives. These will be focused on promoting organic growth through innovative product solutions, executing add-on acquisitions, and optimizing existing manufacturing processes and KPIs. 3

4 New Water Capital Partners to Invest in Pegasus Foods (March 2018) On March 20, 2018, New Water Capital announced it has made an investment in Pegasus Foods. Founded in 1998, family-owned Pegasus Foods produces frozen snacks and other products for retail grocers, club stores, restaurants, and packaged foods businesses. New Water Capital, providing growth capital to Pegasus, will support the company's recent expansion into a second manufacturing plant, a 135,000-square-foot facility in Rockwall, Texas. Berner Food and Beverage Weighs Strategic Options (October 2017) On October 13, 2017, Berner Foods retained Goldman Sachs to explore strategic options. The Company is a co-manufacturer of shelf-stable dips, sauces, aerosol cheese, and ready-to-drink coffee for large food and beverage companies. Berner is currently owned by Austin-based Peak Rock Capital. 4

5 RECENT TRANSACTIONS: CONTRACT MANUFACTURING Date Target Enterprise Enterprise Value / Announced Acquirer Target Description Segment Location Value (US $MM) LTM Rev LTM EBITDA May- 18 Cold Spring Brewing Carolina Beverage Carolina Beverage manufactures high- quality beers for beverage clients out of its three manufacturing facilities in Cold Spring, MN, Mooresville, NC, and Fort Worth, TX Beers USA x Apr- 18 Charlesbank Capital Partners; Partners Group Hearthside Food Solutions Engaged in the contract manufacturing and packaging of granola bars, croutons, cereals, popcorn and snack mixes Grains; Snacks and Sweets USA 2, x 11.3x Apr- 18 FGF Brands Hill Country Bakery Contract manufacturer and supplier of bakery products such as tandoori naans, sandwich flats, pizzas for larger food companies Frozen USA n.a. - - Mar- 18 New Water Capital Pegasus Foods Company produces frozen snacks and other products for retail grocers, club stores, restaurants, and packaged foods businesses Frozen USA n.a. - - Nov- 17 Freiberger USA Richelieu Foods Private label developer, manufacturer, and supplier of frozen pizza, dressings, and sauces Frozen USA x 12.0x Oct- 17 Hearthside Food Solutions Standard Functional Foods Group Engaged in contract manufacturing of nutritional bars, healthy snacks, candy bars, and confectionary Snacks and Sweets; Confectionary USA x 11.4x Oct- 17 The Riverside Company Parker Products Developer and manufacturer of bakery products, confectionary, and specialty ingredients for food and beverage companies Bakery; Confectionary USA n.a. - - Jun- 17 Imperial Frozen Foods Greystone Foods Engaged in manufacturing and packaging provider of private label frozen vegetables for larger food companies, as both final products and inputs Frozen USA n.a. - - Jan- 17 Blackford Capital Ellison Bakery US- based contract manufacturer of cookies and cookiebased products Bakery USA x 10.2x Aug- 16 Cott Corporation S&D Coffee Coffee and tea coffee blender and roaster that sells through several channels and specializes in contract manufacturing for larger companies Coffee and Tea USA x 6.0x Aug- 16 Hearthside Food Solutions Oak State Products Contract manufacturer of cookies, bars and other baked foods Snacks and Sweets USA x 9.2x Aug- 16 Kettle Cuisine Del Monaco Foods Company specializing in custom recipe formulation and manufacturing for wholesale refrigerated and frozen soup Frozen USA n.a. - - Me a n 1.1x 9.9x Source: MergerMarket and Capital IQ. Me dia n 1.1x 10.2x Note: Transactions between 1/1/2016 and 7/1/2018 that derive majority of revenue from contract manufacturing. >$50MM transaction value. 5

6 PUBLIC COMPS Stock Price EPS Longterm Total Debt 7/12/18 % 52 Week Market Enterprise EV/Revenue EV/EBITDA P/E Growth Growth to LTM Company Name High Low Cap Value LTM 2017A 2018E LTM 2017A 2018E LTM 2017A 2018E Rate Rate (5Y) EBITDA Diversified Foods Associated British Foods plc $ % 122% $30,343 $29, x 1.41x 1.34x 11.5x 11.5x 11.0x 18.7x 18.7x 21.0x 46.6% 10.1% 0.5x B&G Foods, Inc % 117% 2,304 4, x 3.00x 2.36x 12.7x 12.9x 10.8x 22.9x 20.0x 15.5x NA NA 5.7x Bridgford Foods Corporation % 120% x 0.74x NA 7.4x 7.4x NA 13.5x 14.7x NA NA NA NA Campbell Soup Company % 105% 14,162 17, x 2.25x 2.17x 8.9x 8.7x 9.9x 16.5x 16.3x 15.9x 59.7% 4.6% 1.8x Conagra Brands, Inc % 118% 15,498 18, x 2.41x 2.41x 10.8x 11.5x 12.6x 22.7x 30.9x 19.9x NM 6.3% 2.1x Farmer Bros. Co % 110% x 1.03x 0.89x 13.1x 12.6x 10.2x 24.6x 21.9x 76.7x -73.2% 8.0% 0.7x General Mills, Inc % 120% 33,807 43, x 2.79x 2.79x 13.2x 12.5x 12.9x 21.8x 21.4x 19.1x 0.0% 8.9% 3.0x Kellogg Company % 117% 23,744 31, x 2.42x 2.49x 13.8x 14.1x 11.7x 30.8x 35.1x 16.1x NA 6.8% 3.6x McCormick & Company, Incorporated % 114% 13,379 18, x 4.21x 3.45x 22.3x 23.5x 16.7x 28.3x 27.7x 21.8x NA 10.3% 6.7x Mondelez International, Inc % 109% 63,781 82, x 3.17x 3.10x 16.9x 18.1x 14.9x 29.8x 40.6x 18.1x NA 10.7% 4.2x Nestlé S.A % 117% 264, , x 3.13x 2.98x 15.4x 15.6x 15.2x 27.9x 30.3x 21.7x NA 7.8% 1.5x Pinnacle Foods Inc % 112% 7,026 9, x 3.17x 3.11x 14.7x 15.3x 13.3x 39.7x 33.0x 21.1x NA 12.6% 4.4x Post Holdings, Inc % 106% 5,296 11, x 2.13x 1.89x 11.8x 11.8x 9.4x 160.0x 160.0x 21.4x NA 10.0% 7.8x SunOpta Inc % 125% 696 1, x 0.86x 0.97x 19.4x 15.3x 12.9x NM NM 73.0x NA NA 7.5x The Hain Celestial Group, Inc % 131% 4,214 4, x 1.77x 1.62x 17.6x 18.7x 13.9x 53.5x 62.5x 24.6x 41.3% 8.6% 2.8x The J. M. Smucker Company % 125% 14,130 19, x 2.60x 2.60x 11.9x 11.5x 11.4x 25.2x 24.4x 15.9x -11.5% 9.4% 3.3x Treehouse Foods, Inc % 124% 2,855 5, x 0.87x 0.87x 8.4x 8.8x 8.5x NM NM 18.0x NA 1.8% 4.2x Mean: 2.20x 2.23x 2.19x 13.5x 13.5x 12.2x 35.7x 37.2x 26.2x 10.5% 8.3% 3.7x Median: 2.42x 2.41x 2.39x 13.1x 12.6x 12.2x 25.2x 27.7x 20.5x 20.7% 8.8% 3.4x Candy, Nuts, & Snacks Amplify Snack Brands, Inc. $ % 257% $923 $1, x 5.48x 3.83x 18.3x 19.0x 17.2x 88.7x 34.1x 46.3x NA 12.5% 7.2x The Hershey Company % 111% 23,686 26, x 3.61x 3.43x 15.0x 16.4x 13.7x 33.6x 33.7x 21.3x NA 9.2% 1.8x John B. Sanfilippo & Son, Inc % 115% x 0.92x 0.90x 10.8x 10.7x NA 19.8x 20.0x 19.1x 18.3% 4.0% 0.9x J&J Snack Foods Corp % 124% 2,795 2, x 2.48x 2.33x 16.5x 16.5x 15.5x 35.6x 35.6x 32.0x 4.0% 7.0% 0.0x Rocky Mountain Chocolate Factory, Inc % 120% x 1.75x NA 10.0x 10.0x NA 20.4x 20.7x NA -20.5% NA 0.5x Snyder's-Lance, Inc % 161% 4,873 5, x 2.84x 2.67x 21.3x 21.7x 17.8x NM 111.4x 38.3x NA 14.1% 4.0x Tootsie Roll Industries, Inc % 105% 2,261 2, x 4.14x NA 19.4x 18.6x NA 34.3x 34.3x NA NA NA 0.1x Mean: 2.80x 3.03x 2.63x 15.9x 16.1x 16.0x 38.7x 41.4x 31.4x 0.6% 9.4% 2.1x Median: 2.68x 2.84x 2.67x 16.5x 16.5x 16.3x 33.9x 34.1x 32.0x 4.0% 9.2% 0.9x Baked Goods ARYZTA AG $ % 145% $3,462 $5, x 1.25x 1.25x 10.6x 10.6x 11.4x NM NM 19.6x NA -9.7% 5.6x Flowers Foods, Inc % 113% 3,980 4, x 1.25x 1.23x 11.7x 10.9x 10.4x 47.5x 24.3x 20.4x NA 2.5% 2.1x George Weston Limited % 104% 11,088 25, x 0.67x 0.66x 7.4x 8.6x 7.7x 18.3x 27.8x 15.0x NA 10.0% 3.0x Grupo Bimbo, S.A.B. de C.V % 104% 10,661 14, x 1.10x 0.98x 9.0x 9.0x 8.6x 48.2x 34.8x 21.2x NA 27.5% 2.5x Lancaster Colony Corporation % 113% 3,530 3, x 2.82x 2.73x 15.8x 15.4x 15.4x 31.8x 30.6x 27.4x -5.4% 10.0% NA Mean: 1.40x 1.42x 1.37x 10.9x 10.9x 10.7x 36.4x 29.4x 20.7x -5.4% 8.1% 3.3x Median: 1.23x 1.25x 1.23x 10.6x 10.6x 10.4x 39.6x 29.2x 20.4x -5.4% 10.0% 2.7x Dairy Danone $ % 122% $53,469 $75, x 2.84x 2.41x 15.2x 16.4x 13.0x 24.0x 25.3x 18.5x NA 10.7% 5.4x Dean Foods Company % 129% 1,057 1, x 0.26x 0.27x 5.8x 4.3x 5.6x 34.1x 8.8x 14.1x NA 2.7% 2.8x Emmi AG % 116% 3,806 4, x 1.27x 1.21x 12.6x 12.7x 11.8x 25.5x 26.4x 23.2x NA NA 1.9x Glanbia plc % 101% 5,004 5, x 1.82x 2.03x 12.7x 13.3x 14.3x 17.8x 19.6x 15.0x NA 7.3% 2.6x Lifeway Foods, Inc % 113% x 1.03x 1.02x 18.8x 14.3x NA 69.9x 37.9x 40.8x NA NA 0.9x Parmalat S.p.A % 110% 6,978 6, x 0.87x 0.79x 14.6x 15.1x 10.3x 90.4x 73.8x 25.7x NA NA 1.6x Saputo Inc % 112% 13,718 14, x 1.69x 1.61x 14.1x 14.4x 13.6x 23.3x 24.1x 22.5x 21.9% 9.1% 1.2x Savencia SA % 118% 1,331 1, x 0.37x 0.33x 4.9x 5.2x 4.9x 8.4x 10.9x 10.4x NA NA 2.9x Mean: 1.22x 1.27x 1.21x 12.3x 12.0x 10.5x 36.7x 28.3x 21.3x 21.9% 7.5% 2.4x Median: 1.16x 1.15x 1.12x 13.4x 13.8x 11.8x 24.8x 24.7x 20.5x 21.9% 8.2% 2.2x 6

7 PUBLIC COMPS CONTINUED Stock Price EPS Longterm Total Debt 7/12/18 % 52 Week Market Enterprise EV/Revenue EV/EBITDA P/E Growth Growth to LTM Company Name High Low Cap Value LTM 2017A 2018E LTM 2017A 2018E LTM 2017A 2018E Rate Rate (5Y) EBITDA Non-Alcoholic Beverages A.G. BARR p.l.c. $ % 135% $1,031 $1, x 2.93x 2.78x 14.4x 15.3x 14.2x 22.4x 21.8x 22.0x 3.6% NA 0.2x Cott Corporation % 152% 2,289 3, x 1.09x 1.33x 8.9x 9.8x 9.6x NM NM 42.5x NA -1.5% 3.6x Dr Pepper Snapple Group, Inc % 115% 17,290 21, x 3.41x 3.13x 13.8x 13.2x 12.8x 24.0x 21.1x 19.2x NA 8.2% 2.9x Jones Soda Co % 127% x 0.98x NA NM NM NA NM NM NA NA NA NM Lassonde Industries Inc % 126% 1,399 1, x 1.34x 1.30x 11.5x 11.6x 10.8x 23.5x 25.7x 21.3x NA NA 1.1x Monster Beverage Corporation % 154% 35,733 34, x 11.35x 9.17x 26.3x 28.6x 23.2x 46.3x 53.2x 36.4x NA 18.9% NA National Beverage Corp % 210% 4,452 4, x 5.33x 4.40x 21.3x 24.6x 19.3x 35.6x 41.7x 32.0x 74.8% NA NA Pepsico, Inc % 117% 168, , x 3.05x 2.88x 15.0x 15.6x 13.7x 24.5x 27.1x 21.0x NA 7.5% 3.1x The Coca-Cola Company % 115% 196, , x 5.19x 7.08x 18.2x 17.6x 18.9x 44.4x 30.9x 23.1x NA 5.1% 4.5x Mean: 3.73x 3.85x 4.01x 16.2x 17.0x 15.3x 31.5x 31.7x 27.2x 39.2% 7.6% 2.6x Median: 2.98x 3.05x 3.00x 14.7x 15.5x 13.9x 24.5x 27.1x 22.6x 39.2% 7.5% 3.0x Alcoholic Beverages Anheuser-Busch InBev SA/NV $ % 102% $220,161 $342, x 6.54x 5.90x 16.5x 18.3x 14.5x 42.2x 146.5x 22.4x NA 21.2% 5.9x The Boston Beer Company, Inc % 146% 2,186 2, x 2.38x 2.42x 11.3x 11.3x 12.6x 25.8x 27.7x 27.6x NA 1.2% NA Brown-Forman Corporation % 156% 25,959 27, x 9.40x 8.62x 24.5x 26.6x 24.0x 35.5x 39.8x 34.4x -34.5% 10.1% 1.9x Carlsberg A/S % 125% 18,384 22, x 2.20x 2.17x 10.0x 10.8x 10.0x 23.2x 25.5x 21.3x NA 12.8% 2.1x Constellation Brands, Inc % 157% 44,155 52, x 7.30x 6.94x 19.4x 21.0x 18.8x 25.9x 30.0x 26.8x 45.2% 17.4% 3.3x Craft Brew Alliance, Inc % 159% x 1.95x 1.77x 27.6x 35.0x 18.0x 211.3x NM 61.7x NA 49.0% 1.8x Crimson Wine Group, Ltd % 118% x 3.89x NA 25.6x 25.3x NA 76.7x 78.0x NA NA NA 2.5x Diageo plc % 126% 89, , x 6.42x 6.14x 18.1x 18.1x 17.8x 24.8x 24.8x 23.1x 20.9% 8.7% 2.4x Heineken N.V % 126% 59,966 76, x 3.05x 2.76x 13.5x 13.8x 11.7x 27.3x 32.3x 20.5x NA 9.4% 3.4x Kirin Holdings Company, Limited % 160% 23,183 28, x 1.82x 1.68x 13.2x 13.5x 12.4x 16.3x 22.1x 25.0x NA -3.0% 2.3x Pernod Ricard SA % 128% 41,826 51, x 4.76x 4.73x 16.4x 16.4x 16.1x 25.0x 25.0x 23.0x 12.9% 6.8% 3.3x Sapporo Holdings Limited % 124% 2,404 4, x 0.92x 0.89x 11.7x 10.8x 10.3x 28.2x 28.6x 24.4x NA NA 5.6x Willamette Valley Vineyards, Inc % 111% x 2.63x NA 9.1x 9.5x NA 20.9x 19.0x NA NA NA 1.6x Mean: 3.99x 4.10x 4.00x 16.7x 17.7x 15.1x 44.9x 41.6x 28.2x 11.1% 13.3% 3.0x Median: 3.00x 3.05x 2.76x 16.4x 16.4x 14.5x 25.9x 28.1x 24.4x 16.9% 9.7% 2.5x Protein Cal-Maine Foods, Inc. $ % 131% $2,127 $2, x 1.90x 1.51x NM NM 15.7x NM NM 30.9x NA 12.5% NM Hormel Foods Corporation % 123% 19,307 19, x 2.08x 1.94x 13.5x 13.5x 13.0x 23.2x 23.2x 22.1x -4.3% 9.0% 0.2x Industrias Bachoco, S.A.B. de C.V % 128% 2,898 2, x 0.90x 0.67x 5.0x 6.4x 6.0x 12.1x 15.1x 11.6x NA NA 0.6x JBS S.A % 189% 8,367 22, x 0.43x 0.44x 6.2x 6.4x 5.1x 15.7x 71.7x 7.4x NA 70.9% 5.0x Nathan's Famous, Inc % 141% x 4.00x NA 13.7x 13.9x NA 42.0x 41.9x NA 29.9% NA 4.7x Pilgrim's Pride Corporation % 163% 7,331 9, x 1.25x 0.88x 7.9x 10.7x 6.6x 11.7x 17.0x 9.9x NA NA 2.1x Sanderson Farms, Inc % 153% 3,058 2, x 0.82x 0.76x 5.0x 5.0x 5.4x 10.9x 10.9x 11.4x 47.0% 3.0% NA Seaboard Corporation 4, % 135% 5,132 4, x 0.82x NA 10.7x 10.4x NA 15.7x 16.5x NA NA NA 1.6x Tyson Foods, Inc % 140% 30,082 39, x 1.05x 0.99x 10.1x 10.1x 9.1x 16.7x 16.7x 13.7x 5.7% NA 2.6x Mean: 1.40x 1.47x 1.03x 9.0x 9.5x 8.7x 18.5x 26.6x 15.3x 19.6% 23.9% 2.4x Median: 1.05x 1.05x 0.88x 9.0x 10.2x 6.6x 15.7x 16.9x 11.6x 17.8% 10.8% 2.1x Fruit & Vegetables Calavo Growers, Inc. $ % 177% $1,517 $1, x 1.39x 1.20x 21.7x 21.7x 17.3x 40.6x 40.6x 30.4x -2.3% NA 0.3x Fresh Del Monte Produce Inc % 112% 2,397 2, x 0.66x NA 11.1x 7.6x NA 17.8x 11.1x 18.1x NA NA 1.2x Seneca Foods Corporation % 110% x 0.59x NA 16.0x 13.0x NA 66.1x 24.0x NA -76.6% NA 9.8x Total Produce plc % 138% 952 1, x 0.34x 0.27x 9.6x 11.9x 11.1x 22.1x 27.6x 18.1x NA 4.5% 2.6x Mean: 0.74x 0.74x 0.74x 14.6x 13.5x 14.2x 36.7x 25.8x 22.2x -39.4% 4.5% 3.5x Median: 0.61x 0.62x 0.74x 13.6x 12.4x 14.2x 31.4x 25.8x 18.1x -39.4% 4.5% 1.9x Ingredients & Flavors Balchem Corporation $ % 112% $2,572 $2, x 5.03x 4.48x 20.1x 20.3x 18.3x 40.6x 45.9x 29.8x NA 2.0% 1.7x Givaudan SA 2, % 135% 21,789 23, x 4.76x 4.30x 22.8x 23.2x 18.9x 32.4x 33.2x 26.8x NA 10.8% 1.7x Ingredion Incorporated % 125% 10,122 11, x 2.01x 1.95x 10.8x 11.2x 10.0x 20.2x 21.5x 17.0x NA 11.0% 1.8x Innophos Holdings, Inc % 112% 908 1, x 1.62x 1.47x 10.0x 9.9x 8.7x 21.4x 19.1x 16.1x NA 8.8% 2.5x International Flavors & Fragrances Inc % 136% 12,144 13, x 4.30x 3.81x 19.4x 20.1x 16.4x 29.5x 30.4x 24.3x NA 8.0% 2.4x Kerry Group plc % 145% 19,657 21, x 2.90x 2.62x 20.7x 21.1x 17.7x 30.5x 30.6x 24.9x NA 9.7% 2.1x MGP Ingredients, Inc % 184% 1,268 1, x 4.13x 3.57x 23.3x 24.0x 20.4x 34.8x 41.8x 35.8x NA 14.5% 0.6x Sensient Technologies Corporation % 104% 3,221 3, x 2.74x 2.65x 14.6x 14.8x 13.1x 30.6x 27.0x 19.5x NA 9.6% 2.4x Symrise AG % 132% 11,236 13, x 3.71x 3.41x 17.5x 17.7x 15.8x 35.7x 36.8x 30.3x NA 10.6% 3.2x Tate & Lyle plc % 110% 4,312 4, x 1.31x 1.27x 7.5x 8.1x 8.0x 12.9x 12.7x 13.8x NM 0.6% 1.3x Mean: 3.16x 3.25x 2.95x 16.7x 17.1x 14.7x 28.9x 29.9x 23.8x #DIV/0! 8.6% 2.0x Median: 3.23x 3.30x 3.03x 18.5x 18.9x 16.1x 30.5x 30.5x 24.6x #NUM! 9.7% 1.9x 7

8 PUBLIC COMPS CONTINUED Stock Price EPS Longterm Total Debt 7/12/18 % 52 Week Market Enterprise EV/Revenue EV/EBITDA P/E Growth Growth to LTM Company Name High Low Cap Value LTM 2017A 2018E LTM 2017A 2018E LTM 2017A 2018E Rate Rate (5Y) EBITDA Agribusiness AGT Food and Ingredients Inc. $ % 123% $526 $ x 0.58x 0.58x 14.3x 10.1x 12.0x NM 25.3x 17.8x NA NA 4.8x Archer-Daniels-Midland Company % 105% 22,622 29, x 0.47x 0.46x 9.9x 10.3x 10.0x 18.9x 18.7x 15.0x NA 16.0% 2.9x Bunge Limited % 110% 9,909 15, x 0.36x 0.33x 12.6x 9.4x 9.0x 21.6x 13.9x 14.8x NA 15.0% 4.7x Darling Ingredients Inc % 160% 3,033 4, x 1.39x 1.28x 9.9x 9.3x 10.0x 47.9x 29.7x 27.1x NA NA 4.0x Gruma, S.A.B. de C.V % 108% 5,515 6, x 1.82x 1.62x 10.8x 11.2x 9.8x 17.5x 17.9x 15.4x NA 8.5% 1.8x Landec Corporation % 115% x 0.75x 0.75x 18.2x 14.4x 12.9x 43.1x 33.9x 25.0x NA 29.0% 2.6x Olam International Limited % 110% 4,802 12, x 0.83x 0.79x 13.4x 15.3x 12.3x 16.1x 18.3x 14.4x NA NA 9.8x The Andersons, Inc % 108% 896 1, x 0.34x 0.34x 9.8x 11.9x 8.4x NM 77.7x 18.6x NA 13.0% 3.8x Mean: 0.79x 0.82x 0.77x 12.3x 11.5x 10.5x 27.5x 29.4x 18.5x #DIV/0! 16.3% 4.3x Median: 0.64x 0.67x 0.67x 11.7x 10.8x 10.0x 20.3x 22.0x 16.6x #NUM! 15.0% 3.9x Agricultural Equipment Ag Growth International Inc. $ % 114% $694 $1, x 2.56x 1.60x 13.3x 16.0x 9.5x 27.1x 42.4x 17.0x NA NA 5.7x AGCO Corporation % 124% 5,732 7, x 1.01x 0.85x 11.0x 12.1x 10.1x 28.4x 36.8x 19.4x NA 13.6% 3.2x Art's-Way Manufacturing Co., Inc % 150% x 0.85x NA NM 64.7x NA NM NM NA NA NA NM Buhler Industries Inc % 109% x 0.39x NA 31.2x 31.2x NA 216.3x 216.3x NA NA NA 3.6x CNH Industrial N.V % 161% 19,010 40, x 1.70x 1.47x 15.5x 16.8x 14.1x 43.6x NM 20.8x NA 20.3% 10.1x Deere & Company % 154% 51,499 83, x 2.83x 2.62x 18.5x 18.5x 16.4x 23.9x 23.9x 19.6x 38.9% 7.4% 8.9x Lindsay Corporation % 121% x 1.84x 1.70x 15.9x 16.9x 13.5x 37.3x 41.0x 28.3x 17.3% 18.2% 1.9x Titan Machinery Inc % 202% x 0.68x 0.75x 28.6x 32.3x 32.5x NM NM NM NA 22.5% 13.7x Mean: 1.41x 1.48x 1.50x 19.1x 26.1x 16.0x 62.8x 72.1x 21.0x 28.1% 16.4% 6.7x Median: 1.30x 1.36x 1.54x 15.9x 17.7x 13.8x 32.9x 41.0x 19.6x 28.1% 18.2% 5.7x Food Retail Costco Wholesale Corporation $ % 126% $83,035 $82, x 0.63x 0.60x 14.7x 15.1x 13.8x 30.1x 31.1x 28.9x 14.1% 9.7% 1.2x Ingles Markets, Incorporated % 169% 712 1, x 0.39x 0.39x 6.6x 6.6x 6.7x 13.2x 13.2x 13.8x -0.6% 6.5% 3.7x J Sainsbury plc % 109% 7,168 9, x 0.26x 0.24x 6.1x 6.6x 4.9x 23.8x 14.6x 12.7x -26.5% 2.2% 2.0x Koninklijke Ahold Delhaize N.V % 125% 27,692 31, x 0.52x 0.42x 6.2x 8.3x 6.0x 18.7x 22.8x 12.9x NA 12.2% 1.8x Natural Grocers by Vitamin Cottage, Inc % 181% x 0.33x 0.31x 5.7x 5.7x 5.5x 28.3x 28.3x 34.6x -39.8% -5.2% 1.4x Sprouts Farmers Market, Inc % 139% 3,224 3, x 0.92x 0.70x 11.8x 12.6x 10.3x 25.0x 29.2x 21.5x NA 12.1% 1.6x SUPERVALU Inc % 144% 804 2, x 0.20x 0.15x 5.0x 4.9x 5.0x NM 34.5x 8.9x -69.0% 7.0% 3.8x Tesco PLC % 128% 23,264 30, x 0.41x 0.39x 8.6x 9.6x 7.9x 37.7x 239.7x 21.1x -72.9% 14.3% 4.2x The Kroger Co % 137% 23,779 38, x 0.34x 0.31x 6.8x 6.5x 6.5x 16.0x 13.2x 13.3x -0.5% 4.5% 2.6x Village Super Market, Inc % 102% x 0.19x NA 4.7x 4.6x NA 15.1x 14.3x NA -9.4% NA 0.7x Weis Markets, Inc % 131% 1,099 1, x 0.34x NA 6.4x 6.1x NA 14.5x 12.6x NA NA NA 0.3x Mean: 0.38x 0.41x 0.39x 7.5x 7.9x 7.4x 22.2x 41.2x 18.6x -25.6% 7.0% 2.1x Median: 0.32x 0.34x 0.39x 6.4x 6.6x 6.5x 21.3x 22.8x 13.8x -17.9% 7.0% 1.8x Wholesale, Foodservice, & Distribution AMCON Distributing Company $ % 110% $62 $ x 0.11x NA 11.3x 11.3x NA 21.2x 21.2x NA -49.1% NA 3.9x Colabor Group Inc % 118% x 0.14x 0.16x 7.6x 6.7x 8.3x NM 105.1x 9.8x NA NA 4.6x Core-Mark Holding Company, Inc % 120% 1,451 1, x 0.17x 0.11x 15.4x 14.6x 11.0x 35.1x 26.8x 22.3x NA 16.2% 4.3x Performance Food Group Company % 153% 3,363 4, x 0.28x 0.26x 13.0x 13.8x 10.9x 32.3x 35.8x 26.0x 32.9% 16.4% 3.8x SpartanNash Company % 141% 966 1, x 0.21x 0.20x 7.1x 7.2x 6.4x NM 17.2x 11.6x NA -0.3% 2.9x Sysco Corporation % 125% 31,701 39, x 0.72x 0.69x 13.1x 13.2x 12.1x 27.8x 29.3x 21.9x 26.8% 10.4% 3.0x The Chefs' Warehouse, Inc % 170% x 0.75x 0.63x 15.3x 16.3x 11.9x 37.3x 172.8x 33.8x NA -7.5% 5.5x United Natural Foods, Inc % 149% 2,214 2, x 0.31x 0.27x 8.2x 8.3x 7.8x 17.0x 17.2x 15.9x 2.4% 5.9% 1.4x US Foods Holding Corp % 127% 6,920 10, x 0.45x 0.42x 11.4x 11.9x 9.4x 27.6x 31.3x 18.7x NA 23.0% 4.0x Mean: 0.33x 0.35x 0.34x 11.4x 11.5x 9.7x 28.3x 50.7x 20.0x 3.2% 9.1% 3.7x Median: 0.28x 0.28x 0.27x 11.4x 11.9x 10.1x 27.8x 29.3x 20.3x 14.6% 10.4% 3.9x Pet Food and Products Blue Buffalo Pet Products, Inc. $ % 152% $6,366 $6, x 5.64x 4.66x 21.6x 24.4x 18.0x 37.5x 50.2x 30.2x NA 16.5% 1.3x Central Garden & Pet Company % 131% 1,927 2, x 1.14x 1.09x 11.6x 11.6x 10.9x 25.1x 25.1x 22.8x 74.7% 11.0% 2.0x Freshpet, Inc % 202% x 4.99x 3.50x 79.0x 85.4x 29.0x NM NM 166.2x NA NA 0.7x Mean: 3.58x 3.92x 3.08x 37.4x 40.5x 19.3x 31.3x 37.6x 73.1x 74.7% 13.8% 1.3x Median: 4.38x 4.99x 3.50x 21.6x 24.4x 18.0x 31.3x 37.6x 30.2x 74.7% 13.8% 1.3x 8

9 SENIOR BANKING TEAM Brian Boyle Head of Food & Beverage Investment Banking Mark Goodman Head of Consumer Investment Banking David Clark Head of Financial Sponsors Investment Banking Ben Rodman Financial Sponsors Monika Nickl Consumer monika.nickl@raymondjames.com Dirk Damegger Consumer & Retail dirk.damegger@raymondjames.com 9

10 NOTES & DISCLOSURES Sources of data include Capital IQ, FactSet and other news organizations. Information obtained from third-party sources is considered reliable, but we do not guarantee that the information herein is accurate or complete. This report was prepared within Raymond James & Associates Investment Banking Department and is for information purposes only. This report is not a product of Raymond James & Associates Research Department; recipients of this report should not interpret the information herein as sufficient grounds for an investment decision or any other decision. The report shall not constitute an offer to sell or the solicitation of an offer to buy any of the securities mentioned herein; past performance does not guarantee future results. Any performance mentioned does not include transaction fees and costs which would reduce an investor s return. An investment cannot be made directly in a market index. EBIT: Earnings Before Interest and Taxes EBITDA: Earnings Before Interest, Taxes, Depreciation and Amortization EPS: Earnings per Share LTM: Last Twelve Months NA: Not Applicable NM: Not Meaningful PE: Price Earnings Ratio TEV: Total Enterprise Value Raymond James & Associates, Inc. member New York Stock Exchange/SIPC. 10