Christian Lohbauer

CitrusBR President

Future of Global Orange Juice Industry

Market Demand – Factors that influence demand for OJ

Citrus Research and Education Center

April 7th, 2010

“European OJ Demand and Consumption”

PROGRAM

European Market Overview

World x European consumption Brazilian Exports to Europe European preferences on orange juice Challenges

Strategic Actions in the European Market

Meeting consumer demands Divulging benefits of OJ consumption Marketing strategy Sustainability

Conclusion

Perspectives and current challenges

European Market Overview

ORANGE JUICE CONSUMPTION WORLD DEMAND IN 2008/09

Europe consumes 40% of all the orange juice produced in the world and also has a large share of imports of orange juice, about 60% of all imported juice.

ORANGE JUICE CONSUMPTION WORLD MAIN IMPORTERS IN 2008/09

CONSUMPTION OF FRUIT JUICE IN EUROPE So

urc

e:

Can

ade

an

CONSUMPTION OF FRUIT JUICE IN EUROPE So

urc

e: C

anad

ean

CONSUMPTION OF ORANGE JUICE IN USA TENDENCIES ON USA CONSUMPTION - COMPARISON

From 1999-2000 to 2007-2008, per capita consumption in the USA fell by 30%.

Source: USDA, FDOC; Elaborated by Markestrat/USP (Center for Research and Projects in Marketing and Strategy) using slide kindly provided by Bob Behr.

DESTINATION OF BRAZILIAN ORANGE JUICE DESTINATION OF BRAZILIAN OJ IN 2009

71 %

20%

3% 2% 4%

EU + Switzerland

USA

Japan

China

Others

Source: Secex 2009

Europe accounts for more than 70% of Brazilian Orange Juice Exports.

BRAZILIAN ORANGE JUICE EXPORTS BRAZILIAN EXPORTS TO EUROPEAN UNION FROM 2000 TO 2009

Source: Secex 2010

In the last decade, Brazilian exports to European Union have been quite stable.

* Brazil started exporting NFC juice in 2002. In order to standardize the data, exports of NFC have been converted to a Brix value equivalent to the concentrate juice .

DEMAND ON FRUIT BEVERAGES - 2008 EUROPEAN MARKET

The consumption is greater in Western Europe, though juice beverages in Eastern Europe have a larger participation.

Source: Euromonitor . Elaborated by Markestrat/USP (Center for Research and Projects in Marketing and Strategy) using slide kindly provided by Roel Van Poppel.

FUTURE OF W EUROPEAN MARKET FOR BEVERAGES ESTIMATES FOR THE WESTERN EUROPEAN MARKET FOR BEVERAGES

Estimates show that, for coming years, the Western European Juice Market is forecasted to further stagnate.

Source: Euromonitor . Elaborated by CitrusBR using Roel Van Poppel slide.

0 20000 40000 60000 80000 100000 120000

2009

2010

2011

2012

2013

32522,9

32881,2

33200

33551,7

33881,2

12421,3

12547,1

12687,4

12837,6

12995,7

57732,1

58647

59654

60624,7

61554,7

Carbonates

Fruit/Vegetable juice

Bottled Water

DEMAND ON FRUIT BEVERAGES EUROPEAN MARKET

The market for private labels is more mature in Western Europe than in Eastern Europe. In Western Europe the Private label share is highest in 100% Juice (47.6%). In Eastern Europe, Juice Drinks have the highest share with 7.5%.

Source: Euromonitor Off Trade Volume GBO 2008. Elaborated by Markestrat/USP (Center for Research and Projects in Marketing and Strategy) using slide kindly provided by Roel Van Poppel.

MARKET SHARE IN %

MARKET SHARE IN %

CONSUMPTION OF FRUIT JUICE IN EUROPE BY TYPE

FRUIT JUICE FLAVORS PREFERENCES ON FRUIT JUICE FLAVORS IN EUROPE - 2008

DEMAND ON FRUIT BEVERAGES

Source: Canadean. Elaborated by Markestrat/USP (Center for Research and Projects in Marketing and Strategy) using slide kindly provided by Rob Shutlleworth.

DEMAND ON FRUIT BEVERAGES

There was a decline in two key markets - USA and Germany - and growth in Russia and China.

Source: Elaborated by Markestrat/USP (Center for Research and Projects in Marketing and Strategy) using slide kindly provided by Rob Shutlleworth.

Strategic Actions in

the European Market

EUROPEAN CONSUMER DEMAND FOR ORGANIC AND NATURAL PRODUCTS (RELATED TO HEART HEALTH, IMMUNITY, BRAIN HEALTH)

Source: Elaborated by Markestrat/USP (Center for Research and Projects in Marketing and Strategy) using slide kindly provided by Roel Van Poppel.

EUROPEAN CONSUMER

DEMAND FOR SUSTAINABLE PRODUCTS

Source: Elaborated by Markestrat/USP (Center for Research and Projects in Marketing and Strategy) using slide kindly provided by Roel Van Poppel.

EUROPEAN CONSUMER

DEMAND FOR SUSTAINABLE PRODUCTS

Source: Elaborated by Markestrat/USP (Center for Research and Projects in Marketing and Strategy) using slide kindly provided by Guy Wollaert.

SUSTAINABILITY

Our efforts to have a sustainable chain and then meet, not only the consumers demands, but also our own principles, are evidenced by our sustainability subcommittee, designed to discuss technical issues related to the sector.

The first discussion includes carbon emissions and capture and water usage, followed by proper usage of residues, sustainable agricultural practices and others. Studies are already in progress with the intention to disclose numbers related to the carbon footprint.

CitrusBr understands the concept of sustainability as “development that meets the needs of the present without compro-mising the ability of future generations to meet their own needs”.

DIVULGING BENEFITS OF ORANGE JUICE

In Europe, fruit juice has been losing consumers because it is said to contain too much natural sugar.

Although some studies show this is not true, they get little support.

Nevertheless, orange juice provides many benefits for health

(Vitamin C, folic acid, phytovitamins, potassium, calcium, among others), which certainly compensates its sugar content.

Then, it is extremely important that everybody works on the

POSITIVE image of orange juice (with marketing campaigns or positive news on the media), divulging the several benefits of its consumption.

DIVULGING BENEFITS OF ORANGE JUICE

Attending this demand on a great

market campaign to increase

orange juice consumption,

CitrusBR, in partnership with

Apex-Brazil, is developing a

strategic project in global scale

that intends to attract many new

orange juice consumers, as well as

to recover those lost to other

kinds of beverages.

Conclusions

PERSPECTIVES AND CHALLENGES

Consumption of OJ in consolidated European markets is stable. Though, there is an expectation to achieve and enhance participation of new markets, mainly in developing countries in the long term.

In the short and medium terms, efforts should be focused on

recovering the consumption of 100% Orange Juice in EU and USA

Strategic actions to increase OJ consumption, specially in Europe, include reducing economic barriers to OJ, global marketing campaigns, divulging of OJ benefits and efforts to advance on sustainable projects (water, carbon footprints, etc).

European consumer is getting more and more demanding. To meet their demands, it is necessary to bet on organic, natural and sustainable products.