Annual Meeting. Domestic Marketing Committee

Annual Meeting Domestic Marketing Committee

Co-Chair Report

Research Update

Market Research KPI Total Potato Volume Sales Potato Share of at Home Meals Volume & Dollar Sales of all Potatoes Sold at Retail Recipe Views Volume & Dollar Sales of Potatoes Sold at Foodservice Potato Menu Mentions Potato Offerings on School Menus Potato Share of New Product Launches Market Research Sales and Utilization Attitudes and Usage Nielsen Website Analytics Technomic Foodservice Volume & Menu Tracking Technomic K-12 Menu Tracking Innova New Product Tracking

Total U.S. Potato Utilization Total U.S. Potato Utilization in Billion Pounds Fresh Weight Equivalent Retail + FS + Exports - Imports = Total Utilization 2015 14,644 19,181 6,911 4,716 36,019 2016 14,524 20,389 6,976 5,119 36,690 % change -0.8% 6.3% 0.9% 10.2% 1.9%

Retail vs. Foodservice 2015 2016 Retail 14,229 43% Foodservice 19,181 57% Retail 14,131 42% Foodservice 20,389 58% Millions of lbs. (FWE)*

Retail Sales by Product Retail (millions of pounds FWE) 2015 2016 % change Fresh 4,973 4,892-1.6% Chips 5,884 5,870-0.2% Dehy 890 864-3.0% Frozen 2,070 2,066-0.2% Refer 411 439 6.9% Frozen RTE 355 337-5.0% Canned 60 57-5.0% Total 14,644 14,524-0.8%

Total Store Potatoes Volume & Dollars Retail Sales Total Store Potato Sales 1,400,000,000 $1,320,000,000 1,200,000,000 $1,300,000,000 $1,280,000,000 1,000,000,000 $1,260,000,000 800,000,000 $1,240,000,000 600,000,000 $1,220,000,000 400,000,000 200,000,000 $1,200,000,000 $1,180,000,000 $1,160,000,000 0 FY15 Q2 FY15 Q3 FY15 Q4 FY16 Q1 FY16 Q2 FY16 Q3 FY16 Q4 FY17 Q1 $1,140,000,000 Volume Dollars

Frozen Potatoes Volume & Dollars Retail Sales Frozen Potatoes Dollars and Volume 1,200,000,000 $1,600,000,000 1,150,000,000 $1,550,000,000 1,100,000,000 1,050,000,000 $1,500,000,000 $1,450,000,000 $1,400,000,000 1,000,000,000 950,000,000 $1,350,000,000 $1,300,000,000 900,000,000 $1,250,000,000 850,000,000 2012 2013 2014 2015 2016 $1,200,000,000 Lbs Dollars

Dehydrated Potatoes Volume & Dollars Retail Sales Dehydrated Potatoes Dollars and Volume 155,000,000 $520,000,000 150,000,000 $500,000,000 145,000,000 $480,000,000 140,000,000 $460,000,000 135,000,000 $440,000,000 130,000,000 $420,000,000 125,000,000 2012 2013 2014 2015 2016 $400,000,000 Lbs Dollars

Refrigerated Potatoes Volume & Dollars Retail Sales Refrigerated Potatoes Dollars and Volume 250,000,000 $500,000,000 $450,000,000 200,000,000 $400,000,000 $350,000,000 150,000,000 $300,000,000 $250,000,000 100,000,000 $200,000,000 $150,000,000 50,000,000 $100,000,000 $50,000,000 0 2012 2013 2014 2015 2016 $- Lbs Dollars

Fresh Potatoes Volume & Dollars Retail Sales Total US Fresh Potatoes Volume & Dollars 3,200,000,000 $2,020,000,000 3,150,000,000 3,100,000,000 3,050,000,000 $2,000,000,000 $1,980,000,000 $1,960,000,000 $1,940,000,000 3,000,000,000 $1,920,000,000 2,950,000,000 2,900,000,000 $1,900,000,000 $1,880,000,000 $1,860,000,000 2,850,000,000 2012 2013 2014 2015 2016 $1,840,000,000 Volume Dollars

Russet Potatoes Volume & Dollars Retail Sales Russet Potatoes Dollars & Volume 2,300,000,000 2,250,000,000 2,200,000,000 2,150,000,000 $1,160,000,000 $1,140,000,000 $1,120,000,000 2,100,000,000 2,050,000,000 2,000,000,000 1,950,000,000 $1,100,000,000 $1,080,000,000 $1,060,000,000 1,900,000,000 1,850,000,000 1,800,000,000 1,750,000,000 2012 2013 2014 2015 2016 $1,040,000,000 $1,020,000,000 $1,000,000,000 Volume Dollars

Red Potatoes Volume & Dollars Retail Sales Red Potatoes Dollars & Volume 540,000,000 530,000,000 520,000,000 510,000,000 $480,000,000 $470,000,000 $460,000,000 $450,000,000 $440,000,000 $430,000,000 500,000,000 $420,000,000 490,000,000 480,000,000 $410,000,000 $400,000,000 $390,000,000 470,000,000 2012 2013 2014 2015 2016 $380,000,000 Volume Dollars

White Potatoes Volume & Dollars Retail Sales White Potatoes Dollars & Volume 240,000,000 $150,000,000 220,000,000 200,000,000 180,000,000 $145,000,000 $140,000,000 $135,000,000 $130,000,000 $125,000,000 160,000,000 $120,000,000 140,000,000 120,000,000 $115,000,000 $110,000,000 $105,000,000 100,000,000 2012 2013 2014 2015 2016 $100,000,000 Volume Dollars

Yellow Potatoes Volume & Dollar Retail Sales Yellow Potatoes Dollars and Volume 300,000,000 $300,000,000 280,000,000 $280,000,000 260,000,000 $260,000,000 240,000,000 $240,000,000 220,000,000 $220,000,000 200,000,000 $200,000,000 180,000,000 $180,000,000 160,000,000 $160,000,000 140,000,000 $140,000,000 120,000,000 2012 2013 2014 2015 2016 $120,000,000 Volume Dollars

Purple/Blue Potatoes Volume & Dollars Retail Sales Purple/Blue Potatoes Dollars and Volume 1,600,000 $3,900,000 1,400,000 $3,400,000 1,200,000 $2,900,000 $2,400,000 1,000,000 $1,900,000 800,000 $1,400,000 600,000 $900,000 400,000 2012 2013 2014 2015 2016 $400,000 Volume Dollars

Fingerling Potatoes Volume & Dollars Retail Sales Fingerling Potatoes Dollars and Volume 7,000,000 $17,000,000 6,500,000 $15,000,000 6,000,000 5,500,000 5,000,000 4,500,000 4,000,000 $13,000,000 $11,000,000 $9,000,000 $7,000,000 3,500,000 $5,000,000 3,000,000 2012 2013 2014 2015 2016 $3,000,000 Volume Dollars

Other Potatoes Volume & Dollars Retail Sales Other Potatoes Dollars and Volume 40,000,000 $75,000,000 35,000,000 $65,000,000 30,000,000 $55,000,000 25,000,000 $45,000,000 20,000,000 $35,000,000 15,000,000 $25,000,000 10,000,000 $15,000,000 5,000,000 2012 2013 2014 2015 2016 $5,000,000 Volume Dollars

Foodservice Sales by Product Foodservice (millions of pounds FWE) 2015 2016 % change Fresh 4,310 4,379 1.6% Chips 1,544 1,560 1.0% Dehy 918 1,323 44.1% Frozen 11,886 12,425 4.5% Refer 522 702 34.5% Total 19,181 20,389 6.3%

Fresh Sales at Foodservice Foodservice Segment % of Fresh ($) Restaurants 72% Limited Service 13% Full Service 59% Beyond Restaurant 28% Travel & Leisure 9% Retail Hosts 5% Business & Industry 3% College & University 3% K-12 Schools 2% Healthcare 5% All Other 1%

CONSUMER

Consumer Attitudes Important Food Attributes 1 2 3 Flavor Freshness Healthy Be prepared or served quickly and easily +4% points from 2016 to 2017 Source: 2017 Consumer A&U

Consumer Attitudes Diet Trends U.S. Diet Trends Low carb Vegetarian Gluten free 21% 18% 15% 3% 11% 6% 6% 8% 8% 10% 9% 2% 2014 2015 2016 2017 Source: 2017 Consumer A&U

Consumer Usage Reported Share of Total Meals, Home Vs. Away Share of Potato Occasions in Typical Week Retail vs. Foodservice Channel Sales Restaurant 39% Home 61% Retail 14,131 42% Foodservice 20,389 58% 2017 Total U.S. Source: 2017 Consumer A&U 2016 Million of lbs. (FEW) Source: 2016 S&U

Consumer Usage Share Across Meals at Home 2017 Potato Share of at Home Meal Occasions Including Chips With Potatoes With Chips Total Prepared at Home 4.3 4.1 5.1 4.2 0.4 0.9 0.7 0.8 0.6 1.5 1.2 0.5 Breakfast Lunch Dinner Snacks SHARE: (including chips) vs. without chips 26% (vs. 16%) 41% (vs. 20%) 41% (vs. 29%) 40% (vs. 12%) Source: 2017 Consumer A&U

Consumer Usage Share of At-Home Dinners Share of At-Home Dinners Gen Pop #1 Source: 2017 Consumer A&U 2017 % pt. change Potatoes (including chips) 41% +2pt Pasta 40% +2pt Rice 36% -2pt Poultry 31% +1pt Beef 29% +3pts Bagged salad 20% -1pt Broccoli 20% -1pt Corn 20% +1pt Green beans 20% -1pt Pork 18% +1pt Seafood 16% -1pt Sweet potatoes 12% -1pt Quinoa (or other grains) 10% +2pts

Consumer Usage Eaten at Least Once in the Last 7 Days 1 2 3 4 Favorite Vegetable Potatoes Broccoli Corn Green Beans Share of At-Home Dinners Served at Home for Dinner at Least Once in the Last Seven Days (Weekly Penetration) Vegetables Gen Pop Food Enthusiasts Potatoes 71% 76% Green beans 57% 62% Corn 57% 63% Broccoli 55% 63% Bagged salad 50% 61% Sweet potatoes 36% 45% Source: 2017 Consumer A&U

Consumer Usage Last Served, How Were They Prepared 2017 2016 Mashed French fries Baked Potato salad Roasted Stew / soup Boiled Hash browns Scalloped Tater tots Casserole Grilled Steamed 19% 14% 18% 16% 12% 10% 11% 9% 11% 12% 11% 9% 10% 9% 9% 6% 6% 5% 6% 40% 42% 38% 30% 35% 36% Source: 2017 Consumer A&U Other 3% 3%

Consumer Usage Frequency of Use Frequency of Use by Type/Segment (U.S. sample - % Often or Occasionally ) FRESH FORMS PREPACKAGED FORMS White 62% 63% Frozen French fries 56% 54% Russet Red Yellow Petite Fingerling Purple/blue 30% 24% 24% 21% 23% 20% 61% 60% 58% 58% 52% 48% Total 2017 Sample Total 2016 Sample Frozen tater tot Instant/dehydrated Frozen hash browns Potato salad (pre made) Refrigerated mashed 46% 40% 44% 38% 43% 40% 40% 39% 32% 29% Source: 2017 Consumer A&U

Consumer Usage Most Motivating Messages Most Motivating Messages to Make Potatoes More Often Recipes/Ideas for New ways of preparing potatoes 37% 35% Different tastes and textures 29% 29% Shorter cook time 28% 26% Healthier nutritionals Using different types of potatoes (e.g. russet, red, yellow, etc.) Fewer ingredients 27% 24% 23% 21% 22% 22% Total 2017 Sample Total 2016 Sample Source: 2017 Consumer A&U

Consumer Usage Top 5 Things Consumers Love About Potoates 1 2 3 4 5 Filling Satisfying A Good Side Dish Fresh A Good Value Source: 2017 Consumer A&U

Foodservice

Where Are Potatoes Thriving? At Foodservice SIDE DISHES REGIONAL CHAINS Base: 1,533 Restaurants With Menus Q2-Q4 2016 Source: Q4 MenuMonitor 2017 Technomic Inc.

Foodservice Usage Top Dishes When Eating at a Restaurant Top Dishes When Eating at a Restaurant 46% 43% 35% 33% 24% 19% 18% 17% 13% 13% 12% 8% 7% 4% 2% Q: When you think about side dishes you order at a restaurant, please select your top 3 from the following list. 2017 Technomic Inc.

Foodservice Usage Top Entrée Formats Featuring Potatoes Sandwich Burgers Beef Dish Egg Dish Chicken Dish Fish Dish Combo Plates Shellfish Dish Pork Dish Mixed Grill 1,499 1,307 993 891 685 467 433 400 2,603 4,248 Base: 22,912 Potato Dishes in 2016 Source: Q4 16 MenuMonitor 2017 Technomic Inc.

Foodservice Usage Potatoes Mentioned Most Across Menus As a Percentage of Total Potato Dishes Excluding Fries & Chips Yukon Gold Red 3.0% 2.9% Fingerling 1.9% "New" Russet 0.8% 0.6% Blue/Purple "Heirloom" 0.1% 0.01%

Foodservice Usage Menu Applications: Top 5 Potato (MMlbs) French fries 5,834 Mashed 1,376 Roasted potatoes 1,073 All hash browns/breakfast potatoes 771 Baked 568 2017 Technomic Inc.

Consumer Preferences Top Dishes When Eating at a Restaurant Top Dishes When Eating at a Restaurant 46% 43% 35% 33% 24% 19% 18% 17% 13% 13% 12% 8% 7% 4% 2% Q: When you think about side dishes you order at a restaurant, please select your top 3 from the following list. 2017 Technomic Inc.

Consumer s Attitudes Observed Potato Incidences on Menus Observed Potato Incidence on Menus VS. One Year Ago 16% 25% More options About the same 59% Fewer option Base: 900 Q: In general, would you say you are seeing more, less, or about the same number of potato options on restaurant menus versus a year ago? 2017 Technomic Inc.

Consumer s Attitudes Attitudes toward health (Top 2 box) I'd like restaurants to add healthier potato options to their menus 54% Low carb diet (75%) Diabetic diet (72%) Gluten free (65%) Adding potatoes to a meal enhances the meal s healthfulness 39% The quality of the potato dish influences where I decide to eat 34% The origin of potatoes (where it was grown) is important to me 29% Base: 900 Q: How much do you agree or disagree with the following statements about potatoes? 2017 Technomic Inc.

Consumer Preferences Consumers prefer meals with potatoes All Respondents I prefer meals that include potatoes over meals that do not. Meals with potatoes are a better value. 47% 46% Base: 900 Q: How much do you agree or disagree with the following statements about potatoes? 2017 Technomic Inc.

Consumer s Attitudes Words that Describe Potatoes Top words respondents used to describe potatoes Tasty Filling Good Delicious Healthy Versatile Easy Yummy Starchy Great 29% 25% 22% 22% 12% 8% 6% 6% 4% 4% Base: 900 Q: How much do you agree or disagree with the following statements about potatoes? 2017 Technomic Inc.

Kimchi Fries Potato fries, topped with creamy kimchi, onion, mayo, spicy sauce, sesame seeds and nori. Rosemary Shoestring Potatoes Tossed to order with a rosemary-infused olive oil and dusted with rosemary sea salt. Base: 7,479 Non-Fry/Non-Chip Potato Dishes in 2016 Source: Q4 16 - MenuMonitor 2017 Technomic Inc.

Jalapeno Cheddar Potato Bites Potato Skins Snack Menu Image may not represent the exact menu item Source: Q4 16 - MenuMonitor 2017 Technomic Inc.

Grilled Potato And Mushroom Salad Crispy Shiitakes, Romas, Garlic Aioli, Tamarind Vinaigrette. Meat And Potatoes Striploin Steak, Confit Potatoes, Marinated Mushroom, Chimichurri, Radish Sprouts. Image may not represent the exact menu item Source: Q4 16 - MenuMonitor 2017 Technomic Inc.

Butcher's Meat And Potatoes Hand-Cut USDA Choice Top Sirloin, Tomato, Mushroom, Stout Gravy, Garlic Mashers, Crispy Onions. Fall Hash Sweet And Red Bliss Potatoes, Turkey Sausage, Kale, Brussel Sprouts And Portabellas, Topped With A Fried Egg And Cracked Pepper. Image may not represent the exact menu item Source: Q4 16 - MenuMonitor 2017 Technomic Inc.

Ingredient

New Product Launches U.S. Total and Potato Introductions (2011-2016) 26,694 24,249 Food Introductions 23,312 Total Potato Introductions 25,356 24,337 21,855 1,005 1,479 1,616 2,068 2,201 1,973 2011 2012 2013 2014 2015 2016 2011 2012 2013 2014 2015 2016 Potato Share of Food Intros 3.8% 6.1% 6.9% 8.2% 9.0% 9.0%

Program Updates Fiscal Year 17

Domestic Objectives More people eating more potatoes in more ways Consumers know potatoes for one key lifestyle benefit and supporting health claim: Performance Protect and enhance the good reputation of U.S. potatoes and the potato industry

Does it drive consumption? More People. More Potatoes. More Ways. Does it eliminate barriers? Boring. Fattening. Inconvenient.

PotatoGoodness.com

Consumer Celebrate the potential of potatoes with Food Enthusiasts

Food Enthusiasts

Print Advertising

Retail Print Advertising

Digital Advertising

Social Media

Amazing People. Amazing Potatoes.

Weekly Recipe Email

Influencer Programs

Consumer Press Coverage

New Recipes

Most Motivating Messages Most Motivating Messages to Make Potatoes More Often Recipes/Ideas for New ways of preparing potatoes 37% 35% Different tastes and textures 29% 29% Shorter cook time 28% 26% Healthier nutritionals Using different types of potatoes (e.g. russet, red, yellow, etc.) Fewer ingredients 27% 24% 23% 21% 22% 22% Total 2017 Sample Total 2016 Sample Source: 2017 Consumer A&U

Spud Nation Inspire consumers with a food to fork potato adventure

Spud Nation Denver

Spud Nation Washington, DC

Social Media

Yelp

Paid Search

Nutrition Celebrate the performance lifestyle benefit of potatoes

Potatoes Are Good For You

Potatoes = Performance

Sports Media RD Ambassadors

Nutrition Press

Updated - New Nutrition Label

Retail Increase retailer involvement to grow sales

October 1911

Consumer Ads at Retail

Insights & Data Meetings & Events Resources Shipper Outreach

Shipper Meetings

Events & Trade Shows

Insights Data Resources Retailer Outreach

Shipper Resources PotatoesUSA.com/Growers

Retail Sales Data

Retail Data

Retail Media Print Feb March April May June Print + Digital Digital Print + Digital Print Print Print + Digital Print Print Print Digital Digital Digital

Reaching out to the Retailers

Market Track April-Sept 319 Total Promotions in 2015 Fresh: 140 Frozen: 136 Instant/Boxed: 43 349 Total Promotions in 2016 Fresh: 142 Frozen: 141 Instant/Boxed: 66

A Lens Into the Future

How to Capture Shoppers Annual Store Buyer Worth Average Store Basket Ring The Fresh Potato shopper spends more across the store on both an annual and per trip basis $80 $2,364 +6.5% $2,517 $73 +9.6% Average Store Shopper Fresh Potato Shopper Average Store Shopper Fresh Potato Shopper

A Lens Into the Future

Ingredient Innovate ways to use potatoes as an ingredient in new products

Ingredient MVP

Piping Hot Inspiration

Event Marketing

Trade Publicity

Potatoes Fueling Success

Foodservice Inspire culinary professionals to offer more potatoes on their menus

Advertising & Media Experiential Marketing Events Broad Visibility Direct Influence Public Relations Culinary Innovation

Advertising & Media Content Generation & Distribution Digital Display Digital Video Social Amplification

Content Generation

Public Relations

Digital Display Ads

Digital Video Shirley Chung

Social Amplification The LinkedIn for Chefs

Chef s Roll Promotion Facebook & Instagram

Event Marketing

Culinary Innovation

CIA Chef Workshop

School Foodservice Create future potato enthusiasts by introducing them to potatoes

FY17 Program At-A-Glance Jul Aug Sept Oct Nov Dec Jan Feb Mar Apr May Jun

Smart Brief E-newsletter published by SNA

E-Newsletter Potatoes Raise the Bar

Marketing Kit

School Breakfast Challenge

School Breakfast Challenge Recipe Contest

Breakfast Campaign Press

Social Media

SNA Webinar

Events

Marketing Kit Salad Bar

Salad Bar Tour Charles Oblock Junior Barrett High Elementary School Plum School Borough Alexandria, School District, VA PA

Salad Bar Challenge

Salad Bar Donations 264 Total Donations

Making a Difference?

Reputation Management Protect and enhance the good reputation of U.S. potatoes and the potato industry

Monitoring

Vulnerability Assessment Prepared Response Statements GMO Pesticides Kids and Fries Glycemic Index Obesity High Carb Content Fries and Chips Foodborne Illness Potato Reputation Processing

Pesticide Residue Potatoes Among Fresh Produce Tested Potatoes on the Dirty Dozen List

Preparing Response Strategy Fact Check Sheets

Strategic Approach Fiscal Year 18

Strategic Planning Process Measure

Retail is Changing

Online Shopping

Online Retail In 2014 Source: Kantar Retail analysis; Retailer websites

Online Retail Since 2014 Source: Kantar Retail analysis; Retailer websites

Grocerants

Meal Kits

Delivery

Start, Stop, Continue Continue Marketing programs focused on : Consumers and Nutrition Retail Foodservice, including school foodservice Ingredient Establishing a relationship with Food Enthusiasts Highlighting inspired recipes and imagery

Start, Stop, Continue Continue Focusing on convenience/quick-prep Leveraging consumer health, wellness and diet trends to showcase opportunities with potatoes

Non-Commercial Foodservice

Start, Stop, Continue Start Seeding Performance messaging Focusing on Prepared Foods at Retail/Grocerants Formalizing a non-commercial foodservice program for Universities/Colleges

FY18 Domestic Investments Proposed Marketing Program Investments - minus research & overall program expenses 15% Consumer 25% Retail Foodservice Non- Fresh Center Snack Grocerant Commercial Commercial 10% 50% Ingredient

Initial Budget Proposals FY17 FY18 Change Reputation Management $80,000 $80,000 - Digital & Measurement $125,000 $125,000 - Research & Analysis $542,400 $530,000 (-$12,400) Consumer $2,465,000 $2,062,391 (-$402,609) Retail $507,600 $603,718 +$96,118 Foodservice $824,782 $1,006,195 +$181,413 Ingredient $160,000 $402,478 +$242,478 Marketing Total $4,704,782 $4,809,782 +$105,000 Includes PotatoGoodness.com, Database, Pulse Includes Macro Research, Sales Data and Sales & Utilization Includes Nutrition & Sampling Includes Commercial, Noncommercial (schools) Shift to Grocerant/Prepared Foods Focus Salad Bars $450,000 $100,000 Spud Nation $182,000 $25,000 Special Projects Total $632,000 $125,000

Other Business

Thank You