Albany, GA - Jan 15, 2009 - A Manufacturer s Perspective on A Manufacturer s Perspective on the Future of the Peanut Industry -
Crystal ball The future has a way of arriving unannounced. JAN 2006
The Future With a Look At History In the 1800 s, seed was once distributed by Congressmen.
Bumpkin Pumpkin Peanut Pumpkin - 10 seeds for sale on - 10 seeds for sale on ebay for $2.99 -
ARCTIC ISLAND SEED VAULT - In 2008, 100 million seeds were placed into a Norwegian doomsday repository. -
The Crisis of the Aging Farmer? Thi i Ri h d B b 70 f -This is Richard Barber, 70, one of the few large-farm operators left in Marion County. Bruce Ackerman / Ocala Business Journal
Force Field Analysis Current State Desired State DRIVING FORCES RESTRAINING FORCES FOCUS: Biotech Peanuts Allergy Research & Education Precision Agriculture SUPPORT: American Peanut Council The Peanut Foundation The Peanut Institute National Peanut Board Future Farmers of America Other Organizations HEALTH & NUTRITION SEED OTHER What Forces affect the future prosperity of the peanut industry? LACK OF FOCUS: Resource Exhaustion No constancy of purpose Competing demands LACK OF SUPPORT: Multi-organization dysfunction Limited resources Anti-GMO organizations FOOD SAFETY SEED OTHER
Flavor is #1!
Roasted dpeanut Flavor Peanutty Taste No off flavors Freshness Eating Quality Stickiness Texture Physical Attributes Spreadability Color ---- Signal to taste Specks SEED SEMINAR Consumer Noticeables
48% Fat +/- 4.5% Sugar +/- PV =.5 max Free of atox Micronutrients - SEED SEMINAR Chemical Composition
Uniformity Skins Removal Brittleness/Meal - SEED SEMINAR Physical Attributes
Roastabilityt Variability Sizing Pieces Sugar Fat Moisture Handling Grind Free of Foreign Material - SEED SEMINAR Raw Peanut Processing
Thoughts for Consideration Reduce variability between Southeast t and Southwest t Peanuts Find earlier maturing varieties for both the Southeast and the Southwest (20-30 days) Manage High Oleic seed increases/monitor carefully (*?*) (?) Allow the new seed/variety system to have acceptance evaluation early in the process Continue development of standard d criteria i that t includes all segments. Speak with one language. (Seed Index?)
Key Developments/Outlook The Peanut Butter category is a growing business. Up +7.3% in dollar sales Up +0.4% in volume
Key Developments/Outlook Peanut Butter is a great inexpensive source of protein, which is especially important in this economy.
Key Developments/Outlook Innovation has been critical as the category matures in order to stay relevant.
Key Developments/Outlook Natural and Organic Peanut Butter have been driving category volume growth in Total U.S. up +3.5% and +57.4% respectively vs year ago.
Key Developments/Outlook Stabilized natural offerings have been key drivers of growth in the natural segment as a more convenient natural option. - look for Natural no stir options -
Category Trends/Outlook Number of Products Consumed per Person per Day with Label Indicating a Health Benefit 2.10 201203 2.01 2.03 2.09 1.94 1.83 1.87 1.87 1.79 1.82 1.89 1.89 1.73 1.79 1.85 2.39 92 93 94 95 96 97 98 99 '00 '01 '02 '03 '04 '05 '06 '07 Source: AC Nielsen 52 weeks ending 7/07; The NPD Group s National Eating Trends Service 2007
Consumer Trends/Outlook Easy for You/Innovation - consumers want convenience with minimal effort.
Consumer Trends/Outlook Willing to trade down if quality is perceived to be good enough due to economic impact.
Consumer Trends/Outlook Consumers on a strict budget are choosing smaller size options; while price/value consumers are looking for upsize options.
Consumer Trends/Outlook Consumers are asking more questions and more detailed questions Increased coupon usage Increased importance on recipe usage
Consumer Demographics HH Penetration FY07 FY08 Demographic Skew Peanut Butter 72.0% 72.5% Larger HH (4-6 members) w/ kids, Middle Aged (MHH 35-54) Stabilized 66.7% 66.6% Larger HH (4-6 members) w/ school aged children, Middle Aged (MHH 35-54) Natural 12.7% 12.9% College educated MHH w/income over $100k Combination 1.8% 2.1% Larger HH (4+), kids ages 12-17, MHH is blue collared, income is $55k-$99.9k Organic 1.7% 2.3% College educated HH, income over $100k, lives in metropolitan areas Source: IRI Household Panel 4/08
Category Dynamics/Outlook Projected $ Share Peanut Butter 80.0% 0% 70.0% 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% 0.0% 2007 2008 2009 2010 2011 STABILIZED PB NATURAL PB SPECIALTY COMBINATION PB ORGANIC PB Source: IRI InfoScan Reviews Data Ending July 13, 2008 Projected Data Influencing Factors Considered: 1. Consumer Trends including; HH Penetration, Purchase Frequency, etc.; Demographic/Ethnic Trends, Usage, and Segment Life Cycle and Trends. 2. Commodity Trends and Inflationary Impact to Consumer Purchase Behavior. 3. Price Sensitivity 4. New Product Introduction/Innovation
Simple Truths Video The Johnny s of our industry will determine our future. All of us can make a difference. THANK YOU!