CONFIDENTIAL AND PROPRIETARY © 2011 Zpryme Research & Consulting, LLC Any duplication, reproduction, or usage of this document or any portion thereof without the written consent of the firm is prohibited.

FROZEN FOOD INSIGHTS

July 2011

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CONFIDENTIAL AND PROPRIETARY © 2011 Zpryme Research & Consulting, LLC Any duplication, reproduction, or usage of this document or any portion thereof without the written consent of the firm is prohibited.

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What’s Inside

Table of contents

• Frozen Food Market Summary

Frozen Food Market Snapshot - 1

World, Asia, and North America Frozen Food Market - 2

World, Asia, and North America Frozen Pizza Market - 3

World, Asia, and North America Frozen Potato Market - 4

World, Asia, and North America Frozen Ready Meals Market - 5

World, Asia, and North America Frozen Food Growth Rates - 6

UK Frozen Food Trends - 7

North American Frozen Food Trends - 8

North American Frozen Food Outlook - 9

Frozen Food Market Summary

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Market Insights:

Frozen Food Market Snapshot

o Economics, healthy choices and convenience will drive product growth across all frozen product categories in the near term.

o North America sales of frozen pizza will continue to make up almost 50% of the global market.

o Driven by an emerging middle class, Asia Pacific (especially in India and China) frozen potato and ready meal sales will see significant growth in 2011 and 2012.

o Frozen food products will see strong competition from fast food restaurants and from supermarkets offering fresh ready to eat meals and products.

o Forward-looking: beauty/lifestyle frozen foods that boast anti-aging agents or increase energy will increasingly become more popular again as global consumer purchasing sentiment grows positive for 2012.

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In 2010, the global frozen food market reached $194 billion, while the Asia Pacific and North America market values were $16.5 and $42.9 billion, respectively.

World, Asia, and North America Frozen Food Market

2005 – 2010

$11.6 $12.0 $12.9 $14.9 $15.6 $16.5

$34.7 $36.5 $38.4 $40.0 $41.2 $42.9

$151.8 $157.3

$174.7

$187.1 $188.2 $194.1

$0.0

$50.0

$100.0

$150.0

$200.0

$250.0

2005 2006 2007 2008 2009 2010

Global, Asia, and North America Frozen Food Market

2005 – 2010 (in U.S. billions)

Asia Pacific North America World Source: Zpryme

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World, Asia, and North America Frozen Pizza Market

2005 - 2010

$0.3 $0.3 $0.3 $0.3 $0.3 $0.3

$4.8 $4.9 $5.2

$5.5 $5.9

$6.2

$9.9 $10.3

$11.2

$12.1 $12.3

$13.0

$0.0

$2.0

$4.0

$6.0

$8.0

$10.0

$12.0

$14.0

2005 2006 2007 2008 2009 2010

Global, Asia, and North America Frozen Pizza Market

2005 – 2010 (in U.S. billions)

Asia Pacific North America World

In 2010, the global frozen pizza market reached $13.0 billion, while the Asia Pacific and North America market values were $0.3 and $6.2 billion, respectively.

Source: Zpryme

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World, Asia, and North America Frozen Potato Market

2005 - 2010

$0.4 $0.4 $0.4 $0.5 $0.5 $0.5

$1.5 $1.6 $1.7 $1.7 $1.8 $1.9

$5.9 $6.2

$6.8

$7.2 $7.0

$7.2

$0.0

$1.0

$2.0

$3.0

$4.0

$5.0

$6.0

$7.0

$8.0

2005 2006 2007 2008 2009 2010

Global, Asia, and North America Frozen Potato Market

2005 – 2010 (in U.S. billions)

Asia Pacific North America World

In 2010, the global frozen potato market reached $7.2 billion, while the Asia Pacific and North America market values were $0.5 and $1.9 billion, respectively.

Source: Zpryme

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World, Asia, and North America Frozen Ready Meals Market

2005 - 2010

$0.9 $0.9 $0.9 $1.1 $1.2 $1.2

$10.8 $11.5 $11.9 $12.3 $12.4 $12.8

$21.0

$22.5

$24.4

$26.0 $24.8

$26.0

$0.0

$5.0

$10.0

$15.0

$20.0

$25.0

$30.0

2005 2006 2007 2008 2009 2010

Global, Asia, and North America Frozen Ready Meals Market

2005 – 2010 (in U.S. billions)

Asia Pacific North America World

In 2010, the global frozen pizza market reached $26.0 billion, while the Asia Pacific and North America market values were $1.2 and $12.8 billion, respectively.

Source: Zpryme

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World, Asia, and North America Frozen Food Growth Rates

2005 - 2010

Market Segment World Asia Pacific North America

Frozen Processed Food 5.0% 7.3% 4.3%

Frozen Pizza 5.5% 3.1% 5.3%

Frozen Processed Potatoes 4.0% 4.8% 4.8%

Frozen Ready Meals 4.3% 6.8% 3.4%

Frozen Food Compound Annual Growth Rates by Segment and Region Time Period: 2005 - 2010

From 2005 to 2010, the world frozen food market grew by 5.0% annually. The world frozen pizza, frozen potato, and frozen ready meal markets grew by 5.5%, 4.0%, and 4.3% annually, respectively.

Source: Zpryme

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Declining consumer purchasing power coupled with a stronger monitoring of overall healthy (more convenient and ‘fun’) foods will be the key drivers of the frozen pizza, potato, and ready meal markets.

UK Frozen Food Trends

Market Trends

Frozen Pizza

According to Zpryme (May ‘11) UK consumers opted more often for frozen pizza over restaurant dining as: a) pizza offerings have been more ‘fun’ (e.g. more assortments like pineapple) b) can save money while being with family/friends (e.g. staying in and watching movie).

Frozen Potatoes According to Zpryme (June ‘11) UK parents are looking for varieties of frozen potato products with food manufacturers concealing additional veggies (also fortified vitamins and minerals).

Frozen Ready Meals According to Zpryme (July ‘11) UK consumers have become more aware than ever of their growing waistline and dwindling pockets, shifting their taste for healthier (high protein, lower sugar/sodium) that offers value for money.

Source: Zpryme

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Harsh economic times combined with health and convenience will be the key drivers of the frozen pizza, potato, and ready meal markets.

North American Frozen Food Trends

Market Trends

Frozen Pizza In 2010 about 68% of U.S. households consumed frozen pizza products, up about four percentage points since 2007. In 2010, the market leader in this category was Digorno.

Frozen Potatoes

In 2010 about 64% of U.S. households consumed frozen potato products, up about three percentage points since 2007. The Ore-Ida brand of products is the market leader in the this category.

Frozen Ready Meals

In 2010 about 53% of U.S. households consumed frozen ready meals, up about five percentage points since 2007. Fresh or ready to eat meals in supermarkets have become a significant threat to the frozen ready meal market.

Source: Zpryme

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Asia Pacific consumers will increasingly use frozen potatoes and ready meals in 2011 and 2012, creating strong opportunities for companies able to capture the attention of consumers in the region.

North American Frozen Food Outlook

Market 2011 – 2012 Outlook

Frozen Pizza

The north American market will continue to drive growth in the frozen pizza market. Frozen pizza sales will see growth between 6% to 8% a year in north America. Families with children will continue to make up the majority of sales in the category. Healthy pizzas will also see strong growth in 2011 and 2012.

Frozen Potatoes

Frozen Potatoes sales grow faster in Asia Pacific than North America. However, frugal North American consumers will increasingly fit frozen potato products into their three main meals of the day. Baked potato products will see a surge in demand due as well as new varieties of healthy potato products.

Frozen Ready Meals The world ready meal market will grow by 4% to 5% a year. Demand in Asia Pacific will grow by 7% to 8%. Middle class families in North America and Asia Pacific will continue to drive sales in both these markets.

Source: Zpryme

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CONFIDENTIAL AND PROPRIETARY © 2011 Zpryme Research & Consulting, LLC Any duplication, reproduction, or usage of this document or any portion thereof without the written consent of the firm is prohibited.