APU MODY CONSUMER PRODUCTS SENIOR VICE PRESIDENT 1
DEL MONTE CONSUMER PRODUCTS Value Proposition Focused on growing in large, robust categories with well established #1 or #2 share position • Category captaincy – strong retailer partnerships, thought leadership Powerful brands that are meaningful and delivering consistent earnings • Driving pricing power – steady cash flow generation Innovation into attractive Health and Wellness consumer trends Go-to-market platform that has consistently executed and is winning • Maintained all-outlet shares despite growing price premiums Efficient infrastructure that keeps costs competitive StarKist business challenge that we are addressing 2
LARGE AND GROWING CATEGORIES We compete in healthy, growing categories in the center store
POWERFUL BRANDS Powerful brands have supported significant pricing in the past three years - an average of ~3.5% annually Weighted Average Pricing Actions F05
F06
F07
Fruit
n/a
~6%
~6%
Price Leader
Vegetables
~8%
~5%
n/a
Price Leader
Tomato
~2%
~2%
~8%
Price Leader
Broth
~2%
~5%
~4%
Price Follower
Tuna
~4%
~8%
~5%
Price Leader
TOTAL
~2%
~5%
~4% 6
GO-FORWARD PERFORMANCE DRIVERS Key levers drive topline and margin expansion
Net Sales Growth Effective Effective Go-To-Market Go-To-Market Platform Platform
Margin Improvement EPS Growth
Efficient Efficient Infrastructure Infrastructure
Cash Flow Generation Thought Thought Leadership Leadership
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DRIVER: VALUE-ADDED INNOVATION Core consumer forces creating Del Monte opportunity
Big Big Gaps Gaps in in Diets…the Diets…the pyramid pyramid is is upside upside down down
Today’s Today’s Famine Famine is is Time… Time… fewer fewer family family dinners dinners == less less healthy healthy families families
We are eating • 1/3 the fruits • 2x the sugar
People People want want help help
90% want to improve their health 64% are trying Only 3% live truly healthy lifestyles 8
DRIVER: VALUE-ADDED INNOVATION Del Monte’s healthy products taste great and provide competitive advantage Big Big Gaps Gaps in in Diets…the Diets…the pyramid pyramid is is upside upside down down
Today’s Today’s Famine Famine is is Time… Time… fewer fewer family family dinners dinners == less less healthy healthy families families
Obesity Obesity at at all-time all-time High High
People People want want help help
Del Monte and StarKist provide delicious, good for you nutrition • Real foods that help fill the gap in today’s diets Del Monte and StarKist provide quick and convenient meal solutions • More healthy dinners = More healthy families Preventable with proper nutrition • Del Monte – Fruit, Veg & Tomato • StarKist – Low Fat / High Protein Del Monte and StarKist offer credible, practical and enjoyable health programs 9
DRIVER: VALUE-ADDED INNOVATION Consumer insights and brand platforms create branded businesses platforms to drive scalable innovation Examples
Consumer Insights
Healthy Snacking Portable; Freeze & Eat
Wholesome Prepared Meals and Sides Portable; Heat & Serve
Del Monte
Brand Platforms
Fruit Naturals; Fruit Chillers; Harvest Selections
StarKist Lunch to Go; Creations
Brand Built platforms supporting cumulative innovation
Business Platforms
Technology Sourcing Selling Distribution
Buildable and scalable Platform focused Leverages key assets, including strong brand equities Resulting innovation fully integrates consumer needs with brand equities 10
DRIVER: VALUE-ADDED INNOVATION Refine our thinking to play against bigger opportunities Example: Healthy Snacking
Healthy Snacking $10B+
Fruit ~$2B+
Healthy Snacking Fact: Kids select fruit as #1 preferred healthy snack Source: Nielsen FY2007.
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DRIVER: VALUE-ADDED INNOVATION Del Monte Fruit Chillers Consumer Insights Benefit Platform – Healthy Snacking Product Platform – Freeze & Eat Brand Platform: Del Monte Fruit Chillers Focuses Del Monte brand into healthy but tasty shelf-stable snacks Business Platform Incorporates: Process Technology – Proprietary blending and sealing technology Sourcing – Existing Selling - Existing Distribution - Existing Size Size of of the the Prize Prize Single Serve Plastic Fruit Size: ~$800M Growth: ~14% vs. YAG Source: Nielsen Homescan Panel All Outlet Estimates – FY2007
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DRIVER: VALUE-ADDED INNOVATION Del Monte Fruit Naturals Consumer Insights Benefit Platform – Healthy Snacking Product Platform – Portable Snacks Brand Platform: Del Monte Fruit Naturals Extends Del Monte equity into produce aisle, with single serve healthy adult snacks Business Platform Incorporates: Process Technology – Unique cutting and sealing Sourcing – Existing Selling – Dedicated produce salesforce Distribution – Existing refrigerated Size Size of of the the Prize Prize Value-Added Produce Size: ~$1B+ Growth: ~17% vs. YAG Source: Nielsen Homescan Panel All Outlet Estimates – FY2007
13
DRIVER: VALUE-ADDED INNOVATION Del Monte Harvest Selections Consumer Insights Benefit Platform – Wholesome Prepared Meals and Sides Product Platform – Heat & Serve Brand Platform: Del Monte Harvest Selections Extends Del Monte equity into microwavable meals differentiated with 2 vegetable servings Business Platform Incorporates: Process Technology – Unique formulation and sealing technology Sourcing – U.S. Partner Selling - Existing Distribution – Existing; Currently in test markets
Size Size of of the the Prize Prize Non-prep Microwavable Meals Size: ~$300M Growth: ~27% vs. YAG Source: Nielsen Homescan Panel All Outlet Estimates – FY2007
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DRIVER: EFFECTIVE GO-TO-MARKET PLATFORM Integrated promotion and merchandising programs across multiple channels
Digital Marketing TV Show & DVD
Public Relations
Newspaper Inserts
In-Store Displays
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DRIVER: THOUGHT LEADERSHIP Category thought leadership initiatives drive increased sales for Del Monte and our customers Consumer Aisle Leadership: Vegetable “STAR” Set Before
After
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CONSISTENT PERFORMANCE Superior execution and highly relevant brands enable share maintenance, despite pricing All Outlet Shares vs. Price Gaps to Private Label Fruit
Vegetables
40%
Tomatoes 25%
30%
35% 25%
20%
30% 20%
25%
15%
20%
15% 36%
15%
33%
27%
34%
25%
25%
10%
20%
20%
20%
10% 10%
0%
0%
0% F05
Price Gaps to Private Label1
5%
5%
5%
28%
F06
34%
F07
38%
F05
F06
F07
F05
F06
F07
70%
75%
72%
59%
59%
71%
1. Price gaps to private label for major core fruit, core vegetables and solid tomatoes. Source: Nielsen Homescan Panel All Outlet Estimates – FY2007
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SITUATION ASSESSMENT: STARKIST SEAFOOD Tuna category health historically has been dictated by valueadded innovation and a more “stable” cost environment F03-F06
F03-F06: Category Performance $ Sales
StarKist experienced consistent levels of profitability • Driven primarily by value-added pouch and specialty • Despite rising fish cost environment
Today
Volume
~+13% ~(2)% ~+1%
Pouch/Specialty “Halves” Total Tuna
~+9% ~(5)% ~(3)%
Rising Fish Cost Environment Light Meat Prices per Short Ton (Skip Jack 4-7.5lbs) 1200 1100
SITUATION ASSESSMENT: STARKIST SEAFOOD We have defined a strategy to stabilize StarKist Seafood over the next 12 to 18 months Potential Revitalize Pouch Growth
Convenient and healthy new products Product and packaging improvements More integrated marketing with key consumer benefits Resource allocation aligned with margin contribution of business
Revised, well-tested label Improved communication of change to consumer
Volume driver Center store traffic generator Primary source of low-cost protein for millions of Americans
Drive integrated merchandising across the Tuna category Resource allocation aligned with margin contribution of business 19
DEL MONTE CONSUMER PRODUCTS Value Proposition Focused on growing in large, robust categories with well established #1 or #2 share position • Category captaincy – strong retailer partnerships, thought leadership Powerful brands that are meaningful and delivering consistent earnings • Driving pricing power – steady cash flow generation Innovation into attractive Health and Wellness consumer trends Go-to-market platform that has consistently executed and is winning • Maintained all-outlet shares despite growing price premiums Efficient infrastructure that keeps costs competitive StarKist business challenge that we are addressing 20
