02- Sr[1]. John Shelford June 21 20053

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1

“Expectations and Tendencies of the

Blueberries in the USA Market”

2005 Chile Export AssociationBerries SeminarSantiago, Chile

June 21-22, 2005

Presented byJohn Shelford

President Global Berry Farms



2

Blueberries:Blueberries:

Profitable in FiveProfitable in Five Years? Years?



3

Outline

Industry Status Reports

Elements of Demand

Challenges & Opportunities



4

1 9 3 . 1

1 6 5 . 3

1 9 2 . 5

1 8

5 . 2

2

1 4 . 3

2 3 2 . 8

2 4 2 . 9

2 3 6 . 6

2 4 9 . 5

2 9 6 . 6

1 2 8 . 8

1 3 1 . 8 1 4

0 . 8

1 0 3 . 6

1 7 5 . 7

1 9 9 . 7

1 7 5 . 3

1 6 3 . 8 2

0 0 . 4

1 6 0 . 2

0

5 0

10 0

150

2 0 0

2 5 0

3 0 0

3 5 0

4 0 0

4 5 0

5 0 0

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

Year

M i l l i o n s o f P

o u n d s

LowbushHighbush

Industry Status

North American Production 95-04

Source: USHBC



5

NORTH AMERICAN PROCESS BLUEBERRY

PRODUCTION

1995-2004

1 2 8 , 7 6

1 3 1 , 7 8

1 4 0 , 7 6

1 0 3 , 6 4 7

1 7 5 , 7 4

1 9 9 , 7 6

1 7 5 , 3 1

1 6 3 , 7 5

2 0 0 , 3 7

1 5 7 , 9 0

103,148 88,022

106,981

90,799

122,445

128,126

130,620

108,010

111,430

133,200

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

HIGHBUSH

LOWBUSH

T h o u s a n d

P o u n

Industry Status

Source: USHBC



6

NORTH AMERICAN FRESH BLUEBERRY PRODUCTION

INCLUDING FRESH IMPORTS1993- 2004/05

CYCLE IS APRIL - MARCH

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

180,000

1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

DOMESTIC CHILE ARGENTINA

Industry Status

Source: USHBC



7

NORTH AMERICAN BLUEBERRY PRODUCTION Actual 1998 to 2004, Forecast 2005 to 2009

1 8 5 . 2

2 1 4 . 3

2 3 2 . 8

2 4 2 . 9

2 3 6 . 6

2 4 9 . 5

2 9 6 . 6

3 2 2 . 0

3 5 2

. 0

3 8 3 . 0

4

2 1 . 0

4 5 9 . 0

1 0 3 . 6 1

7 5 . 7

1 9 9 . 8

1 7 5 . 3

1 6 3 . 8

2 0 0 . 4

1 6 0 . 2

1 7 0 . 0 1 7

6 . 0

1 8 4 . 0

1 9 0 . 0 1

9 5 . 0

0

100

200

300

400

500

600

700

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

M I L L I O N S O F P O

U N D

HIGHBUSH TOTAL LOWBUSH TOTAL

Industry Status

Source: USHBC



8

NORTH AMERICAN FRESH HIGHBUSH BLUEBERRY PRODUCTION

AND FRESH IMPORTS

Actual 1998 to 2004, Forecast 2005 to 2009

9 4

9 2 1

0 5

1 1 2

1 2 9

1 3 6 1 5

7

1 6 5

1

7 5

1 8 5

1 9 5

2 0 5

48

8

1118

1626

3135

4045

0

50

100

150

200

250

300

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

M I L L I O N S O F P O

U N D

NA Fresh Chile Fresh Argentina Fresh

Industry Status

Source: USHBC



9

North America Per Capita Consumption

0.00

0.20

0.40

0.60

0.80

1.00

1.20

1.40

1 9 9 0

1 9 9 1

1 9 9 2

1 9 9 3

1 9 9 4

1 9 9 5

1 9 9 6

1 9 9 7

1 9 9 8

1 9 9 9

2 0 0 0

2 0 0 1

2 0 0 2

2 0 0 3

2 0 0 4

Weeks

C o n s u m

p t i o

Fresh per Capita Processed per Capita

Industry Status

Source: USHBC



10

Industry Status

NA Fresh Blueberry Industry Sales by Pounds2004 compared to 2005 Weeks 36-21

-

1

2

3

4

5

36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21

M i l l i o n s o f P o

u n d

$-

$2.00

$4.00

$6.00

$8.00

$10.00

$12.00

03-04 Pounds 04-05 Pounds 03-04 $/Pound 04-05 $/Pound

Source: USHBC



11

NA Fresh Blueberry Industry Sales by Pounds2004 Weeks 22-35

-

2.0

4.0

6.0

8.0

10.0

12.0

22 23 24 25 26 27 28 29 30 31 32 33 34 35

M i l l i o n s o f P o

u n d s

$-

$0.50

$1.00

$1.50

$2.00

$2.50

P r i c e P e r P o u n

Pounds $/Pound

Industry Status

Source: USDA



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Industry Status

NA Blueberry Industry Total PoundsWeeks 22-34 compared to Weeks 35-52,1-21

$1.49$1.47

$1.45

$3.51$5.25 $4.85

-

20

40

60

80

100

120

2002 2003 2004

Season

M

i l l i o n s o f P o u n d

$-

$1.00

$2.00

$3.00

$4.00

$5.00

$6.00

Wks 22-34 Wks 35-52,1-21 Wks 22-34 Price Wks 35-52,1-21 Price

Source: USDA



13

Industry StatusBlueberry Average Pounds Per Week

with Average Price per WeekSource: USDA

01

2

3

4

56

7

8

9

2002 Avg/Wk 2003 Avg/Wk 2004 Avg/Wk

Year

M

i l l i o n s o f P o

u n d

Wks 22-34 Wks 35-52,1-21

$3.51

$1.47$1.49

$1.45

$5.25 $4.85



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Industry StatusNational Berry Category Contribution to Total Produce Dollars

Conventional & Organic Combined by Berry Type

(average per week per store)

4.5%4.4%

5.2%

5.7%6.0%

4.0%

3.2%3.1%

3.6%4.0%

1.0%1.0%0.7%

0.8%1.2%

0.5%0.4%0.5%

0.3%0.5%

0.1% 0.1% 0.2%0.2% 0.3%

0.0%0.0%0.0%0.0%0.1%

2000 2001 2002 2003 2004

Total Berry Category Strawberr ies Blueberries Raspberr ies Blackberries Specialty & Other Berries



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Industry StatusNational Berry Category Dollar Share

Conventional & Organic Combined by Berry Type


9.0%

2.9%

15.2%

73.3%

7.7%

2.4%

69.0%

18.3%

9.3%

2.9%

68.8%

19.0%18.0%

8.7%

69.7%

3.4%

66.7%

20.3%

8.5%4.3%

Strawberries Blueberries Raspberries Blackberries

2000 2001 2002 2003 2004



16

Industry StatusNational Berry Dollar Sales - Conv entional & Organic

Combined by Berry Type


$147

$47$28$89

$846

$175

$39

$123$242

$914

$310

$1,120

$64

$1,327

$165

$343

$84$165

$395

$1,297

Strawberries Blueberries Raspberries Blackberries

2000 2001 2002 2003 2004



17

Is the Demand Sustainable?Is the Demand Sustainable?

Great Question!Great Question!



18

Health Benefits¾ An early beneficiary of antioxidant

research¾ Very low in fat and sodium

¾ Contains Vitamin A, C, Potassium & Folate

¾ 16% DV of Fiber¾ Anti-Aging

¾ Reduces bad cholesterol¾ Reduces Urinary Tract Infection¾ Eases eye fatigue and improves

eyesight

¾ Improves memory¾ Contains Polyphenols - fights

Alzheimer’s & heart disease

Elements of the Recent Demand

Growth for Blueberries



19

¾ Supercenters

¾ Club Stores

¾ Now supermarkets and traditionalretailers

Year round supplies

¾ 4.4oz pack has provided morecases to assure distributionduring short supply periods



Distribution



20

8.7

8.9

9.0

9.8

11.4

11.9

12.2

12.8

14.2

25.4

25.7

28.5

39.3

39.5

107.0

CVS

H.E. Butt

Target

Tengelman (A&P)

Winn Dixie

SuperValu

Delhaize (Food Lion)

Walgreens

Publix

Albertson's

Costco

Safeway

Kroger

Ahold

Wal-Mart

Source: M+M Planer Retail 2004

Top 15 U.S.

RetailersFood Sales 2004

($ Billions)



21

0

10

20

30

40

50

60

1929 1948 1963 1975 1984 1994 1999 2003

P e r c e n t

Top 4 chains Top 8 chains

Source: Chain Store Guide, Directory of

Supermarket,Grocery and Convenience StoreChains, Supermarket News , Top 75 Company

Rankings for 2002, Progressive Grocer.

Market Shares For

U.S. Grocery Chains1929-2003



22

Berry category is growing, dynamic



¾ All berries are favorable in consumersminds

¾ Increased refrigeration at retail point of purchase

¾ Increased display area

¾ Identified growth category creatingretailer commitment and attention

¾ Exciting, colorful

¾ Increased supplies



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¾ Today’s results – consumer hasactionable high value perception forblueberries

¾ What will sustain this valueperception?

¾ What are the elements of this value?

¾ What actions will sustain and improvethe value perception?

Value

Challenges/Opportunities



24

Great variation in eating experience

¾ Many varieties, types,

maturity, sizes, texture

¾ Inconsistency

¾ Do health benefits trumpeating experience?




25

Taste

Flavor




26

Prioritize Flavor¾ Variety selection

¾ Maturity at harvest

¾ Post harvest handling to

enhance or preserve




27

Del Monte Gold



28

Target research to keep the health

benefits leading edge Publicity and market development

¾ USHBC

What May Be Done?


http://www.ushbc.org



29

$12.00 per ton¾ All United States Products¾ All United States Imports

United States Highbush Blueberry Council

$1,334,000 – 2003 Collection $1,585,200 – 2004 Collection

Industry Funded Market Development


Wh A Bl b iWh A Bl b i



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When they don’t disappoint

When they are consistent

When they increase consumption

When consumers ask for them by name

When consumers switch stores to get “those” berries When they build store loyalty

When price does not matter

When competitor retail ads don’t drive the business When shrink is in single digits

When they come with no rejections and 99.9%service levels!

When Are BlueberriesWhen Are Blueberries

NotNot “ “Just Blueberries?Just Blueberries?” ”



31

Blueberries Events



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NABC Michigan Blueberry Farm &NABC Michigan Blueberry Farm &

Packing Plant ToursPacking Plant Tours

October 13, 2005October 13, 2005

USHBC MeetingsUSHBC Meetings

Grand Rapids, MichiganGrand Rapids, Michigan

October 14October 14--15, 200515, 2005

Blueberries Events

Documents

02- Sr[1]. John Shelford June 21 20053