Copyright 2017 SPINS LLC All Rights Reserved - PDF document

1 Copyright © 2017 SPINS, LLC. All Rights
Copyright © 2017 SPINS, LLC. All Rights Reserved. Update for Naturally Boulder Copyright © 2017 SPINS LLC. All Rights Reserved. In the past decade, sales of natural products have more than doubled, climbing to a $110+ billion market. 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 $48B $114B About SPINS THE NATURAL PRODUCTS INDUSTRY Copyright © 2017 SPINS LLC. All Rights Reserved. CROSS - CHANNEL INDUSTRY OVERVIEW Copyright © 2017 SPINS LLC. All Rights Reserved. Cross - Channel Industry Overview CROSS CHA

2 NNEL REPORTING We capture the natural &
NNEL REPORTING We capture the natural & specialty stores where many health & wellness products originate alongside the traditional supermarkets and mass retailers such as Walmart and Target. NATURAL SPECIALTY GOURMET CONVENTIONAL MULTI OUTLET $8.1B Channel Sales Total Channel Sales +7% $8.3B Channel Sales $605B Channel Sales Natural Products +7% Specialty/Wellness Products +7% Total Channel Sales +0.4% Natural Products +2% Specialty/Wellness Products +2% Total Channel Sales +1% Natural Products +10% Specialty/Wellne

3 ss Products +6% UPC Items Only – Natur
ss Products +6% UPC Items Only – Natural, Specialty Gourmet, Conventional MULO Channels, 52 Weeks Ending 12/25/16 Copyright © 2017 SPINS LLC. All Rights Reserved. Channel Performance NATURAL CHANNEL PRODUCT MIX Natural Channel $ Sales ($MM) $ % Change $ Growth ($MM) % Dolla r Share Natural Products (NPI) $6,521 7.4% $449 80% Health & Wellness Products (HWI) $976 7.1% $65 12% Conventional Products $605 5.6% $32 7% Total Universe $8,102 7.2% $546 100% The Natural Channel continues to drive the development of the N

4 atural Products Industry. • Natural pr
atural Products Industry. • Natural products comprise lion’s share of sales mix • Retailers are selectively adding Health & Wellness and Conventional products with success UPC Items Only - Total U.S. Retail Dollar Sales – Natural Channel , 52 Weeks Ending 12/25/16 Copyright © 2017 SPINS LLC. All Rights Reserved. Channel Performance SPECIALTY GOURMET CHANNEL PRODUCT MIX Specialty Gourmet Channel $ Sales ($MM) $ % Change $ Growth ($MM) % Dollar Share Natural Products (NPI) $2,344 2.2% $50 28% Health &

5 Wellness Products (HWI) $2,273 1.9% $43
Wellness Products (HWI) $2,273 1.9% $43 27% Conventional Products $3,727 (1.7%) ($64) 45% Total Universe $8,345 0.4% $30 100% UPC Items Only - Total U.S. Retail Dollar Sales – Specialty Gourmet Channel, 52 Weeks Ending 12/25/16 Within the Specialty Gourmet Channel, Natural, Specialty, Functional products are driving all growth • Retailers investing heavily in Natural products and continuing to grow Specialty/Functional products • Conventional products continue to lose share within the Specialty Channel

6 and are declining slightly. Copyright ©
and are declining slightly. Copyright © 2017 SPINS LLC. All Rights Reserved. Channel Performance CONVENTIONAL MULO PRODUCT MIX Conventional Multi Outlet $ Sales ($MM) $ % Change $ Growth ($MM) % Dollar Share Natural Products (NPI) $42,655 9.9% $3,827 7% Health & Wellness Products (HWI) $75,416 4.9% $3,535 12% Conventional Products $487,273 (0.2%) ($933) 80% Total Universe $605,343 1.1% $6,429 100% UPC Items Only - Total U.S. Retail Dollar Sales – Conventional MULO, 52 Weeks Ending 12/25/16 In Conventional ch

7 annel, we’re seeing greater emphasis
annel, we’re seeing greater emphasis on Natural & Specialty products with almost 10% growth • Significant focus on Natural and Specialty products • While Conventional products represent more than 80% of sales, they represent a negative contribution to growth, declining by almost $1B. Copyright © 2017 SPINS LLC. All Rights Reserved. Natural Brand Positioning NATURAL PRODUCT GROWTH Natural products dollar sales reached more than $51 billion in 2016. Top Natural Categories by Dollar Volume PRODUCE 10.2% REFR

8 IGERATED YOGURT & KEFIR 11.3% SHELF STAB
IGERATED YOGURT & KEFIR 11.3% SHELF STABLE CHIPS & PRETZELS & SNACKS 6.6% REFRIGERATED MILK 2.3% REFRIGERATED EGGS - 2.4% VITAMINS & MINERALS 5.3% REFRIGERATED JUICES & FUNCTIONAL BEVERAGES 8.0% SHELF STABLE WELLNESS BARS & GELS 12.5% FROZEN & REFRIGERATED MEAT POULTRY & SEAFOOD 9.5% REFRIGERATED PLANT BASED MILK & CREAMER 7.5% Dollar Growth Three Year Natural Product Sales Growth $43.5B $47.1B $51.5B 2014 2015 2016 9.2% DOLLAR SALES DOLLAR GROWTH Total U.S. Retail Dollar Sales – Natural, Specialty Gourmet, Conven

9 tional MULO Channels, 52 Weeks Ending 12
tional MULO Channels, 52 Weeks Ending 12/25/16 Copyright © 2017 SPINS LLC. All Rights Reserved. Natural Brand Positioning NATURAL PRODUCT GROWTH 59.7% 18.7% 71.9% 50.5% 46.9% 31.6% 61.1% 24.2% 40.3% 28.1% 49.5% 13.5% 8.6% 38.9% 75.8% 81.3% 39.6% 59.8% This Conventional Channel shift is occurring across all departments. Grocery $236.0 0.8% General Merchandise $83.1 1.0% Frozen $75.6 - 1.0% Refrigerated $71.8 - 2.5% Body Care $40.9 1.1% Produce - Packaged $25.3 3.7% Vitamins & Supplements $10.8 3.5% Herbs & Homeopat

10 hic $1.5 16.6% *Conv. declining Departm
hic $1.5 16.6% *Conv. declining Department Sales ($B) Sales Mix % of $ Growth $ % Chg Conventional Products Specialty /Wellness Products Natural Products *Spec. declining *Conv. declining 6.8% 2.8% 6.1% 13.3% 4.3% 12.6% 30.8% 60.3% 12.2% 1.1% 6.4% 10.4% 3.1% 5.3% 69.2% 39.7% 81.0% 96.1% 87.5% 76.3% 92.6% 82.0% Total U.S. Retail Dollar Sales – Conventional MULO Channel, 52 Weeks Ending 12/25/16 * Conv . declining Copyright © 2017 SPINS LLC. All Rights Reserved. Questions? Contact: David Winter dwinter@spins.c