US Chicken Consumption Presentation to Chicken Marketing Summit

US Chicken Consumption Presentation to Chicken Marketing Summit July 18, 2017 Asheville, NC

§ Primary research sponsor § Contributing research sponsors § Research findings presented by

OBJECTIVES METHODOLOGY § Analyze chicken usage, including: § trends and shifts § importance and satisfaction § reasons chicken is chosen § consumer concerns § exposure to / knowledge of chicken care § ORC International’s online CARAVAN® omnibus § 1013 interviews of adults 18+ in the US § Weighted by age, sex, region, race and education § Statistical testing at the 95% confidence level FIELDING DATES § June 5 - 8, 2017

Agenda § Insights & Implications § Consumption Behavior § Purchase Considerations § Purchase Concerns, Media Exposure & Knowledge Levels

Insights & Implications

Insights & Implications Claimed consumption Value messaging #1 #3 Misperceptions #2 #4

Consumption Behavior

Despite slight softening, consumption remains high. SUPERMARKET Chicken Consumption Behavior Eaten Chicken Meal/Snack from Supermarket in Past 2 Weeks 2017 84% 2016 87% 2015 85% 2014 83% Average Number of Times Eaten Chicken Meal/Snack from Supermarket in Past 2 Weeks 2017 3. 6 2015 2014 3. 7 3. 3 3. 6 Arrows indicate a significant increase/decrease from previous year at the 95% confidence level. FOOD SERVICE ESTABLISHMENT Chicken Consumption Behavior Eaten Chicken Meal/Snack from Food Service Establishment in Past 2 Weeks 2017 67% 2016 72% 2015 67% 2014 70% Average Number of Times Eaten Chicken Meal/Snack from Food Service Establishment in Past 2 Weeks 2017 2. 2 2016 2. 2 2015 2014 1. 8 2. 4

Purchase Considerations

Freshness, Price and Taste remain most important at the supermarket. Attribute Importance vs. Satisfaction for Most Recent Chicken Purchase from Supermarket High Base: Purchase Chicken (961) Price Freshness / Expiration Date Importance Focus efforts here Taste How Chickens are Raised Quantity / Package Size of Individual Piece of Chicken Brand Low Convenience of Packaging Low Satisfaction C 6. Thinking of the chicken you purchase from a supermarket or other retail grocery store, how satisfied are you with each of the following? C 7. Thinking about your most recent chicken purchase from a supermarket or other retail grocery store, please rank the following factors in order of importance. High

For Heavy Users, Size and Brand rate higher for satisfaction. Attribute Importance vs. Satisfaction for Most Recent Chicken Purchase from Supermarket – Heavy Users High Base: Have Eaten Chicken from Supermarket 4+ Time in Past Two Weeks (379) Freshness / Expiration Date Price Focus efforts here Importance Taste How Chickens are Raised Quantity / Package Size of Individual Piece of Chicken Brand Low Convenience of Packaging Low Satisfaction C 6. Thinking of the chicken you purchase from a supermarket or other retail grocery store, how satisfied are you with each of the following? C 7. Thinking about your most recent chicken purchase from a supermarket or other retail grocery store, please rank the following factors in order of importance. SUPERMARKET HEAVY USERS = Have Eaten Chicken from Supermarket 4+ Times in Past Two Weeks High

Price remains important regardless of channel. Taste and Freshness are more important at a restaurant. Attribute Importance for Most Recent Chicken Purchase from Food Service Establishment and Supermarket Base: Purchase Chicken (961) Total Taste 29% 31% 60% Freshness 28% 31% 59% Price 26% How Chickens Are Raised Size of Individual Piece of Chicken 13% 21% 7% 20% 5%11% Ranked #1 47% 16% Total Price 27% 22% Freshness 26% 22% Taste How Chickens Are Raised Size of Individual Piece of Chicken Ranked #2 C 7. Thinking about your most recent chicken purchase from a supermarket or other retail grocery store, please rank the following factors in order of importance. C 8. Thinking about your most recent chicken purchase from a restaurant, fast food store, carryout shop, or employee cafeteria , please rank the following factors in order of importance. 16% 12% 21% 7% 48% 37% 19% 4%8% Ranked #1 49% 12% Ranked #2

The majority buy uncooked chicken from supermarkets. Millennials are 2 X as likely to buy pre-cooked chicken & eat it in the store. Types of Chicken Purchased by Age Cohort Base: Purchase Chicken in Past 2 Weeks from Supermarket (840) Types of Chicken Purchased in Past Year Base: Purchase Chicken in Past 2 Weeks from Supermarket (840) 60% Uncooked - cook at home 70% 72% C BC 9% 24% 23% Precooked - ready to eat or reheat 68% 21% 23% A 16% Precooked and eaten in the store 8% 5% Uncooked - cook at home Precooked - ready to eat or reheat Precooked and eaten in the store Millennials C 9. Over the past year, approximately what percentage of your chicken purchases have been of each type listed here ? Millennials Base: Purchase Chicken in Past 2 Weeks from Grocery Store (267) Gen X Base: Purchase Chicken in Past 2 Weeks from Grocery Store (225) Baby Boomers Base: Purchase Chicken in Past 2 Weeks from Grocery Store (305) Arrows indicate a significant increase/decrease vs. Millennials at the 95% confidence level Gen X Baby Boomers A

Consumers purchase chicken because it is More Healthful and Versatile. Reasons to Purchase Chicken Over Other Types of Meat from Supermarket Base: Purchase Chicken (961) More healthful 53% Versatile, can be cooked many ways 50% Convenient, easy to prepare 42% 37% Low in fat More economical Tastes better Higher quality source of protein C 10. Why do you purchase or choose to eat chicken over other types of meat? 35% 30% 27%

Purchase Concerns, Media Exposure, Knowledge Levels

Consumers remain most concerned about Food Safety. Chicken welfare is much less troubling. Chicken Purchase Concerns Extremely/Very Concerned Base: Purchase Chicken (961) Food Safety 42% Disease 40% Hormone And Steroid Use Confusing/Misleading Packaging/Label Claims 25% 23% How Chickens are Bred to Optimize Meat Produced 20% How Chickens are Housed 19% 22% How Chickens Are Raised 20% 14% Time it Takes to Raise a Chicken 13% Extremely Concerned C 11. Very Concerned 21% 24% 30% Portion Size of Individual Cuts of Chicken 23% 19% 33% Antibiotic Use In Chickens Label 27% 23% 13% Somewhat Concerned How concerned are you about each of the following when purchasing chicken? 2016 2015 6% 3% 69% 71% 6% 59% 64% 61% 26% 11% 6% 57% 55% 28% 11% 6% 55% 50% 5% 48% 49% 43% N/A 41% N/A 40% 38% 43% 38% 32% N/A 26% 19% N/A 30% 16% 31% 24% 14% 2017 17% 8% 31% 19% 10% 32% 18% 10% 42% 30% Not Very Concerned 17% 29% 4% 16% Not At All Concerned

Consumers believe themselves to be knowledgeable, yet have incorrect perceptions. Knowledge Level on Care of Chickens Base: Purchase Chicken (961) Perceived Accuracy of Statements about Care and Raising of Chickens Base: Purchase Chicken (961) 13% There added hormones or steroids present in most chicken meat 76% There antibiotics present in most chicken meat 40% 47% 25% 71% 29% Most chickens raised to be eaten are raised in cages 71% 29% Eliminating antibiotics leads to significantly more chickens dying of disease Somewhat knowledgeable 75% Most chickens are genetically modified to grow bigger and faster The way most chickens are raised increases their risk of getting Avian influenza Very knowledgeable 24% The majority of raw chicken meat contains salmonella Not at all knowledgeable C 12. How knowledgeable do you consider yourself to be on the care of chickens? In this survey, the care of chickens is defined as how chickens are raised, housed and fed. C 15. Please indicate whether you believe each of the following statements to be true or false. 54% 46% 49% 51% 46% True 54% False

Neutral and Negative media coverage is more likely to stand out. Articles Seen about Care of Chickens in Past Year Relative to Past Few Years Tone of Media Coverage Base: Have Seen Chicken Care Coverage in Past Year (693) Base: Purchase Chicken (961) 38% 23% 29% 45% 9% 39% 17% More The same Less Have not seen any coverage Positive C 13. In the past year, how much have you seen, heard or read about the care of chickens in the media compared to the past few years? C 14. In general, how would you characterize the tone of what you’ve seen, heard, or read about the care of chickens in the media in the past year? Neutral Negative

Conclusions

Growth may be slowing. • • • Insights & Implications Chicken has a value opportunity. Claimed consumption and recent frequency of purchase have dipped. Trend not corroborated in industry sources. Monitor closely. Highlight benefits of chicken. • • Health and versatility are key purchase drivers. Compare versus other meats/proteins. Millennials cook less chicken. • • Uncooked chicken purchases are lower. Precooked chicken eaten in the store is 2 X higher. Millennial behavior may be driven by life stage. • • Larger households / those with children consume more. Explore further since it shows largest decrease in supermarket consumption. • • Price is important while satisfaction is low in grocery channel. Being economical is not a key purchase driver. Promote value over other meats. • • Reinforce cost effectiveness. Emphasize chicken as an exceptional protein. Consumers have concerns about chicken. • • Many stem from misguided beliefs about chicken care and risks. Media on these topics are seen as negative versus positive. Review communication strategy. • • Simplify labeling Identify compelling, consistent messaging to make it stick

Appendix

2017 consumption is virtually the same as 2016. FOOD SERVICE ESTABLISHMENT Chicken Consumption Behavior SUPERMARKET Chicken Consumption Behavior 84% of consumers have eaten a chicken meal or snack from a supermarket in the past two weeks In the past two weeks, consumers have eaten a chicken meal or snack from a supermarket 3. 6 times More 21% About the Same [VALUE] Less 6% 67% of consumers have eaten a chicken meal or snack from a food service establishment in the past two weeks In the past two weeks, consumers have eaten a chicken meal or snack from a food service establishment 2. 2 times More 13% About the Same [VALUE] Less 16% 13% of consumers anticipate eating MORE chicken from a food service establishment in the next 12 months 21% of consumers anticipate eating MORE chicken from the supermarket in the next 12 months Base: Total (1013) C 1/2. Thinking about the meals and snacks you’ve eaten in the past two weeks, how many times did you eat chicken that was purchased from a supermarket or other retail grocery store/ restaurant, fast food store, carryout shop or employee cafeteria ? This includes fresh, frozen, or prepared chicken/prepared meals of chicken, chicken products/sandwiches, and similar foodservice chicken items. C 3/4. During the next 12 months, would you say that you are likely to eat more chicken, less chicken, or about the same amount

Monthly consumption remains high. “Weekly plus” levels have softened slightly. Chicken Purchase Frequency Base: Total (1013) Daily 3% Weekly 29% Monthly 15% Never 5% Every few months 10% C 5. How often do you purchase chicken products for your home? Every few weeks 29% A few times a week 10%

US Incidence Overview GENERAL POPULATION Age 18+ Base: Total (1013) TOTAL CHICKEN CONSUMERS 90% FOOD SERVICEESTABLISHMENT SUPERMARKET (Number of Times Have Eaten Chicken from Restaurant, Fast Food Store, or Employee Cafeteria in Past 2 Weeks) (Number of Times Have Eaten Chicken from Supermarket in Past 2 Weeks) NON-USERS (0 Times) 7% LIGHT USERS (1 -3 Times) 51% HEAVY USERS (4+ Times) 42% TOTAL NON CHICKEN CONSUMERS 10% NON-USERS (0 Times) 26% LIGHT USERS (1 -2 Times) 47% HEAVY USERS (3+ Times) 27%

Heavy users are younger, more ethnically diverse, live in larger households and have lower incomes. TOTAL CHICKEN CONSUMERS (916) SUPERMARKET HEAVY USERS (382) Gender 52% Gender 48% Age (Mean: 46. 9) Millennials (18 -34) Gen X (35 -54) Boomers+ (55+) 54% Gender 46% 49% Age (Mean: 44. 8) 30% 34% 36% Household Size (Mean 2. 6) [CATEGORY • 18% One NAME] • 44% Two 28% • 16% Three • 13% Four • 10% Five Or More Household Income Mean: $72. 5 K Less Than $35 K 31% $35 K - $50 K 12% $50 K - $75 K 17% $75 K - $100 K 14% $100 K Or More 25% 16% Hispanic FOOD SERVICE ESTABLISHMENT HEAVY USERS (247) Ethnicity 15% African American Millennials (18 -34) Gen X (35 -54) Boomers+ (55+) Age (Mean: 42. 5) 34% 33% Millennials (18 -34) Gen X (35 -54) Boomers+ (55+) Household Size (Mean 2. 7) [CATEGORY • 17% One NAME] • 42% Two 30% • 14% Three • 16% Four • 10% Five Or More Household Income Mean: $67. 4 K Less Than $35 K 36% $35 K - $50 K 11% $50 K - $75 K 18% $75 K - $100 K 14% $100 K Or More 21% 20% Hispanic 51% 43% 29% Household Size (Mean 2. 9) [CATEGORY • 15% One NAME] • 39% Two 35% • 16% Three • 17% Four • 13% Five Or More Household Income Mean: $69. 3 K Less Than $35 K - $50 K - $75 K - $100 K Or More Ethnicity 16% African American TOTAL CHICKEN CONSUMERS = Have Eaten Chicken From Supermarket Or Food Service Establishments In Past 2 Weeks SUPERMARKET HEAVY USERS = Have Eaten Chicken From Supermarket 4+ Times In Past Two Weeks FOOD SERVICE ESTABLISHMENT HEAVY USERS = Have Eaten Chicken From Food Service Establishments 3+ Times In Past Two Weeks 22% Hispanic 36% 9% 15% 21% Ethnicity 24% African American

Freshness and Price top the list for consumers at supermarkets. Attribute Importance for Most Recent Chicken Purchase from Supermarket Base: Purchase Chicken (961) Ranked #1, #2, or #3 Freshness / Expiration Date 26% Price 27% Taste Quantity / Package Size 6% Brand Convenience of Packaging Ranked #1 4% 8% 6% 6% 4% 4% 6% Ranked #2 21% 10% 12% 17% 22% 16% How Chickens Are Raised Size of Individual Piece of Chicken 22% 7% 6% 8% 8% Ranked #3 10% 20% 11% Ranked #4 14% 19% Ranked #5 9% 17% 7% 5% 4% 65% 64% 6% 4% 63% 67% 5% 3% 56% 54% 8% 31% 33% 25% 24% 27% 21% 14% 9% 9% 11% 18% 22% Ranked #7 12% 21% 25% Ranked #6 2016 33% 20% 12% 7% 13% 17% 10% 6% 11% 14% 16% 12% 9% 14% 19% 15% 13% 2017 23% Ranked #8 C 7. Thinking about your most recent chicken purchase from a supermarket or other retail grocery store, please rank the following factors in order of importance. 6%

Consumers are largely satisfied with key attributes at supermarkets. Attribute Satisfaction for Most Recent Chicken Purchase from Supermarket Extremely/Very Satisfied Base: Purchase Chicken (961) Taste 23% 21% Brand 20% 47% Quantity / Package Size 20% 46% Convenience of Packaging 19% Size of Individual Piece of Chicken 18% How Chickens Are Raised 15% Price 15% Extremely Satisfied Very Satisfied 2016 3% 2% 72% 69% 26% 3% 1% 69% 70% 29% 3% 1% 67% 64% 4% 1% 66% 62% 5% 1% 64% 62% 5% 1% 63% 62% 2% 51% 44% 8% 1% 47% 45% 49% Freshness / Expiration Date Brand 2017 24% 48% 29% 45% 30% 45% 32% 36% 38% 33% Somewhat Satisfied 43% Not Very Satisfied Not At All Satisfied C 6. Thinking of the chicken you purchase from a supermarket or other retail grocery store, how satisfied are you with each of the following? 8%

Freshness and Price top the list for heavy users at supermarkets. Attribute Importance for Most Recent Chicken Purchase from Supermarket – Heavy Users Base: Purchase Chicken (379) Ranked #1, #2, or #3 Freshness / Expiration Date 28% Price 27% Taste How Chickens Are Raised 11% 5% Size of Individual Piece of Chicken 5% Brand Convenience of Packaging Ranked #1 19% 8% 10% 7% 3% 8% 9% 9% 10% Ranked #3 12% 18% 14% 10% Ranked #4 8% 13% 10% 13% 15% Ranked #5 66% 65% 5% 62% 63% 6% 4% 50% 28% 27% 33% 26% 30% 21% 14% 11% 6% 8% 12% 13% 3% Ranked #7 8% 12% 22% 18% 20% Ranked #6 6% 18% 15% 18% 6% 2016 28% 19% 12% 7% 12% 18% 20% 11% 14% 20% 12% 5% 5% 4% 10% Ranked #2 17% 21% 15% Quantity / Package Size Brand 21% 2017 27% Ranked #8 C 7. Thinking about your most recent chicken purchase from a supermarket or other retail grocery store, please rank the following factors in order of importance. SUPERMARKET HEAVY USERS = Have Eaten Chicken from Supermarket 4+ Times in Past Two Weeks 6%

Heavy users are largely satisfied with key attributes at supermarkets. Attribute Satisfaction for Most Recent Chicken Purchase from Supermarket – Heavy Users Extremely/Very Satisfied Base: Purchase Chicken (379) 2% 2017 2016 77% 74% 75% 73% 72% 67% Taste 25% Freshness / Expiration Date 24% Brand 23% 49% 25% 2% 1% Quantity / Package Size 23% 48% 27% 2% 71% 65% 4% 69% 63% 6%1% 68% 64% 55% 46% 53% 48% Brand 52% 21% 51% Size of Individual Piece of Chicken 21% 48% Convenience of Packaging 22% 46% 23% 27% 25% How Chickens Are Raised 17% 38% 35% Price 18% 35% 40% Extremely Satisfied Very Satisfied Somewhat Satisfied Not Very Satisfied 2% Not At All Satisfied C 6. Thinking of the chicken you purchase from a supermarket or other retail grocery store, how satisfied are you with each of the following? 10% 7%

Taste and Freshness top the list for consumers at food service establishments. Attribute Importance for Most Recent Chicken Purchase from Food Service Establishment Base: Purchase Chicken (961) Ranked #1, #2, or #3 Taste 29% Freshness 28% Price Size of Individual Piece of Chicken How Chickens Are Raised 31% 26% 5% 11% 13% 10% Ranked #1 25% 16% 12% 19% 41% Ranked #2 12% 23% 21% 18% 7% 24% 25% Ranked #4 6% 9% 54% Ranked #3 4% Ranked #5 C 8. Thinking about your most recent chicken purchase from a restaurant, fast food store, carryout shop, or employee cafeteria , please rank the following factors in order of importance. 2017 2016 84% 85% 82% 83% 72% 74% 34% 30% 23%

Taste and Freshness top the list for heavy users at food service establishments. Attribute Importance for Most Recent Chicken Purchase from Food Service Establishment – Heavy Users Base: Purchase Chicken (244) Ranked #1, #2, or #3 Taste 25% Freshness 33% Price Size of Individual Piece of Chicken How Chickens Are Raised 32% 26% 22% 10% 14% 24% 9% Ranked #1 21% 15% 43% 19% Ranked #2 8% 13% 23% 48% Ranked #3 8% 11% 27% 18% 10% 11% Ranked #4 Ranked #5 C 8. Thinking about your most recent chicken purchase from a restaurant, fast food store, carryout shop, or employee cafeteria , please rank the following factors in order of importance. FOOD SERVICE ESTABLISHMENT HEAVY USERS = Have Eaten Chicken Out 3+ Times in Past Two Weeks 2017 2016 81% 83% 81% 82% 71% 74% 39% 33% 23%

Demographics Base: Total (1013)