Whole Foods Market Vendor Broker Summit 101714 We

Whole Foods Market Vendor & Broker Summit 10/17/14

� We Sell the Highest Quality Natural and Organic Products Available � We Satisfy, Delight and Nourish Our Customers � We Support Team Member Happiness and Excellence � We Create Wealth Through Profits & Growth � We Serve and Support Our Local and Global Communities � We Practice and Advance Environmental Stewardship � We Create Ongoing Win-Win Partnerships with Our Suppliers � We Promote the Health of Our Stakeholders Through Healthy Eating Education WFM Core Values

�The information presented in this deck is specifically applicable to Whole Foods Market Northeast, and not applicable to any other WFM regions �Conversely, the approach for any other region of Whole Foods Market will not necessarily apply in WFM NE �Please reach out to Regional Grocery Leadership in any WFM region to understand their policies, processes, & protocols ***Disclaimer***

NE Regional Grocery Coordinator Kara Rubin oversees all aspects of the Grocery Program for the NE region, including strategic development of the grocery program, operations, distribution, systems, & merchandising processes. kara. rubin@wholefoods. com NE Local Forager Elly Truesdell manages the onboarding process & relationships with the numerous local brands of the Northeast Region across all store teams. Elly will be interim Grocery Coordinator when Kara takes maternity leave. elly. truesdell@wholefoods. com NE Regional Grocery Buyers John Lawson is responsible for managing the NE product mix, including new item selection process, category reviews, discos, core lists john. lawson@wholefoods. com Sandy Daus is responsible for promotional strategy, planning, and pricing, as well as many special one-off programs in stores sandy. lacko@wholefoods. com NE Regional Grocery Purchasing Assistant Tim Lapietra assists Kara, Sandy, and John with taming & organizing the endless flow of information from our vendor partners tim. lapietra@wholefoods. com NE Regional Associate Coordinators Dan Morrison works with Space Planning tools to maximize use of shelf space for reset planograms, as well as new stores, renovations, & remodels dan. morrison@wholefoods. com Johan Sanchez & Kelvin Abdulla (with one vacancy remaining to be filled soon) are our operations points - each of them answer specific store questions, drive reset execution, organize layout, tweak merchandising, and engage & support both new item as well as promotion execution at store level johan. sanchez@wholefoods. com Kelvin. abdulla@wholoefoods. com WFM NE Regional Grocery Team

� WFM Northeast added 3 stores in 2013: ◦ Danbury, CT, in May ◦ Portchester, NY, in October ◦ Brooklyn, NY, in December � And 2 stores in 2014: ◦ Marlboro, NJ, in May ◦ Albany, NY, in June � NE Grocery program grew fastest in all WFM regions, at 14% YOY � NE Grocery increased its share of all WFM Grocery by 50 bp YOY � NE remains 5 th ranked WFM Grocery region in overall sales 2014 Recap

Prior Years’ Themes • 2010 -2011 * Newest coolest trendiest items • 2011 -2012 * Brand building with promo focus • 2012 -2013 * Strengthening our foundation • 2013 -2014 * Mission & Innovation • 2015 is the year of NEW DIRECTIONS, as we (Sandy & John) have plunged into and continue to acclimate to our respective programs. We hope to quickly establish baseline expectations with you, our vendor/broker/distributor partners, and build out from a well-established core. We are both building on solid programs and hope to work closely with you as we take the Northeast Grocery program in exciting new directions. Recap of Prior Years…& 2015

�New item presentation �Honoring quid pro quo reset agreement �Meetings & Business Reviews �Measuring performance in NE �WFM Standards Review �Innovating together �Promotions �Proper communication pathways �Policies & procedures �What to expect in 2015? 2015 Topics for Review

� NE follows a Category Review Calendar ◦ Category Review refers to the order in which WFM Regional Grocery Teams systematically review brands’ performance across their region’s stores ◦ NE will not consider products out of cycle in most cases ◦ Category submissions must follow guidelines in order to be considered: �Final product samples must be submitted �Product Powerpoint slide must be correctly filled out and emailed (Brokers’ exception: meetings)—please NO PDF, PPT only �Subject line of email MUST include the round # for which product is submitted �A completed PIE should be sent to line up with the initial submission (to John only). �When final selects are circulated, a revised, edited PIE should be sent to Tim (cc: John) with just the selected products. ◦ Submissions must arrive by the due date indicated on the calendar (updated calendar is located on the NE Vendor Information website: http: //www. wholefoodsmarket. com/vendor/grocery_ne New Item Presentation

� Category Submission (cont. ): ◦ Free fill should be noted on the Cat Review Vendor PPT; we will also require confirmation when round selects are circulated ◦ First promotions should be submitted for the month after a product launches (e. g. Feb promo for Jan launch) ◦ Any product can be input in VIP—WFM NE only pulls data for authorized SKUs ◦ Any product can be sent to CEN team for space planning imaging—WFM NE only pulls data/images for selected/authorized SKUs �Failure to submit products properly for space planning may result in planogram struggles for those items at the reset ◦ If a UPC is set up incorrectly, this requires a free fill for all planogrammed stores to correct. New Item Presentation

� Delivering samples ◦ Samples can be shipped to the NE office (USPS, Fedex, UPS, etc) ◦ ◦ ◦ � Sorry, we do not confirm receipt of samples—consider using tracking Samples can also be dropped off at NE office � If dropping off samples, please do not ask Reception TM to put it away immediately If your product is perishable, frozen or refrigerated, please CLEARLY mark the outside of the box as PERISHABLE or KEEP REFRIGERATED. Make sure you add enough coolant (ice packs, dry ice, etc) to maintain temp � Dry ice is very painful to the touch—please consider that when packing your samples Please deliver samples Monday – Thursday, Friday delivery may be refused or discarded Notes on product samples: � Styrofoam packing peanuts are strongly discouraged � Please always use only sustainable/recyclable packing material, if using popcorn make sure it is biodegradable and does not stick to the product. � Always affix contact info (onto every product sample—name, phone #, email address), whether that is broker or producer—if you do not sticker an item, how will we know who to contact if it’s selected? ? � We request a max of two item samples per product for review � Please do not send the same products repeatedly for the same review � Any submitted product should have a clearly marked code date on the package � Paperwork included in the submission must also be emailed. New Item Presentation

� What is WFM Northeast looking for? ◦ Differentiation—how does this product enhance & push forward the category? ◦ Innovation—does this product break new ground? (design, packaging, usage, etc) ◦ Trendsetting—in what way does this product harness current &/or up & coming trends? ◦ Sustainability/Mission—what are the product’s attributes? ◦ Exclusivity—where will the product be available outside of WFM, and when? ◦ Relationship—does the brand have a history of win-win partnership with WFM NE? ◦ Support: �Demo—what is the demo strategy (how many, where, and over what period) for this product? �Promo—has the brand experimented with discounts & price points, & also used Portal to triangulate optimal promo retail? Has the brand budgeted for a targeted promo strategy? �Marketing—does the brand drive traffic to WFM using social media? Does the brand have a cohesive Marketing strategy? New Item Presentation

� Same item, new distribution ◦ Official WFM NE position is that distribution is up to the brand ◦ That said, all distribution changes must be approved by WFM NE Grocery Team (since we will need to process & troubleshoot them) ◦ Steps: �WFM NE approval �Current distributor signs off �Transition date is set (always Wednesday) �Paperwork submitted atleast 10 business days in advance ◦ Disco and Transition Template ◦ WFM Regional PIE (macro-enabled xlsm) ◦ Both available on the NE Vendor Information website: http: //www. wholefoodsmarket. com/vendor/grocery_ne �Brand, broker, &/or new distributor should plan to monitor stores on first day of transition to ensure the tags have properly flipped ◦ WFM NE reserves the right to require free fill as a cost for processing a distributor transition Product Transition Process

� Same distribution, new UPC ◦ WFM NE policy requires free fill (to all current planogrammed stores) to process this transition ◦ Free fill component allows for a hard cutoff on the old UPC, thereby avoiding residual scan issues ◦ This creates a win-win for WFM and the brand—less data hangover + reduced customer confusion at the shelf ◦ Steps: �Brand notifies WFM NE Team about 4 weeks in advance of pending change �Transition date is set (always Wednesday) �Brand submits paperwork atleast 10 business days in advance ◦ Free fill authorization ◦ Disco and Transition Template ◦ WFM Regional PIE (macro-enabled xlsm) ◦ Both available on the NE Vendor Information website: http: //www. wholefoodsmarket. com/vendor/grocery_ne �Grocery teams are notified over regular weekly Update & Conference Call �Free fill ships for the Monday before the Wednesday transition �On the Wednesday of the transition, NE will shut down (disco & deauth) the old UPC and teams will follow direction to loss out & donate remaining inventory, and replace with new SKU on the shelf �It is always a best practice for brand &/or broker to monitor stores on first day of transition to ensure the tags have properly flipped and product has been properly replaced Product Transition Process

� Same UPC, same distributor, with VIN, size or other attribute change ◦ There is no free fill requirement for this transition ◦ Steps: �Brand notifies WFM NE Team about 4 weeks in advance of pending change �Transition date is set (always Wednesday) �Brand submits paperwork atleast 10 business days in advance ◦ Disco and Transition Template ◦ WFM Regional PIE (macro-enabled xlsm) ◦ Both available on the NE Vendor Information website: http: //www. wholefoodsmarket. com/vendor/grocery_ne �Grocery teams are notified over regular weekly Update & Conference Call �Brand, broker, &/or new distributor should plan to monitor stores on first day of transition to ensure the tags have properly flipped Product Transition Process

�Other Transitions ◦ Swapping out SKUs �Swapouts or “fixing the mix” should be submitted with the relevant round �While a brand should not assume neutrality before sales data is rolled up, a brand should always submit any needed SKU neutral, one-for-one exchanges to maintain blocs �In Cat Review process we will always consider these swaps if the brand performance justifies Product Transition Process

Rules for “Quid Pro Quo” Agreement – Distributors, Brands & Brokers � When you miss one reset, you must make it up with two ◦ A callout must take place before the reset period has ended ◦ The callout should be an email to WFM NE (To: Johan; CC: John) ◦ WFM NE alone will determine which two resets you’ll be assigned as makeup If you do not properly call out for a reset, any next upcoming meeting will be cancelled. This will be considered a “strike two”, with third strike initiating next point (below). � When you miss three resets, even if you have properly called out, we will cancel all planned meetings for that Fiscal Year. � When you miss four resets we will pull all promotions for your brands for one month, in addition to the penalty above. � Beyond this point, it becomes necessary to reassess your relationship with WFM NE. � Reset Attendance Policy

Rules for “Quid Pro Quo” Agreement (continued) � The bottom line is this—WFM NE Team allocates significant time working with Brands & Brokers through ongoing and comprehensive communications. In exchange, we must ask that you & your team honor your commitments to ours. Please show up for scheduled resets. This is the WFM WIN-WIN partnership core value. � WFM NE has always done our best to honor requests for resets at specific stores. Due to the complexity of scheduling dozens of merchandisers across 30 stores, we cannot guarantee to accommodate such requests and the responsibility remains on the brand/broker to ensure staffing for every scheduled reset. Reset Attendance Policy

� Mandatory for all Brand meetings ◦ An up-to-date version of the NE Business Review must be filled out completely (failure to have this document will forfeit the meeting) ◦ We always want to look at new item innovations, however we also require brands to bring homework (Business Review PPT): �Focused, concise and “apples to apples” sales data �Category conclusions and trends �Competitive landscape for the brand its category �REG and SAL pricing analysis ◦ Be granular when reviewing your brand �If you sell products in multiple segments, break out the sales & data for each segment �Address decline or growth in each of those segments separately (use a separate sales slide for each segment you are reviewing) ◦ Timing is everything! Don’t exceed your allotted meeting time, or we will have cut you off mid-thought (sorry!) Business Review Process

� How can I measure my success in the Northeast? ◦ WFM NE never offers benchmark targets for success, as those metrics are constantly changing ◦ Use the Portal! It’s free! You will lose access if you don’t log in over a month period. ◦ Work with Sandy on a muscular promo calendar ◦ Determine a successful promo retail and drive volume by hitting that repeatedly ◦ Get into the stores & train your Team Member sales force ◦ Meet your customer/fans, and find new ones, by scheduling as many demos as you can manage ◦ Remember also when you are looking at sales data to consider comp store sales vs all store sales—it’s a false positive if your sales are up based on new stores only ◦ WFM NE cannot accept a regional EDLC or EDLP at this time Performance Metrics

� Other ways to optimize win-win partnership in WFM NE: ◦ Planogram matrix—this can be requested up to once per month, send a list of UPCs in the proper format (no spaces, dashes, or check digits) in text format (ie, list in an email) to John. He will send back a grid of planogrammed stores by product/SKU. ◦ Vendor portal access—please contact John for setup information. WFM NE, however, does not offer support for Portal issues. ◦ Consider hiring a Broker who understands the WFM NE purchasing process—this is the best way to get your questions answered, your new items presented, and your existing auth’d SKUs promoted. ◦ NE Demo program—for information on either Vendor Staffed Demos or Culinary Live Demos (done by WFM staff for a fee) please contact Claudia. Burke@wholefoods. com Performance Metrics

� Non-GMO Project Verified ◦ We’ve committed to labeling all food products in our US and Canadian stores to indicate whether they contain Genetically Modified Organisms (GMOs) by 2018. Many are already labeled and many more will be labeled ahead of this deadline http: //www. wholefoodsmarket. com/gmo -your-right-know ◦ Non-GMO Project Verified is the only certification for “no GMO” accepted by WFM (besides organic or biodynamic) ◦ If a package claims no GMOs in any way, and does not label Project verification specifically, please be able to address GMO labeling status ◦ 2018 is only three years away, what steps has your brand/company taken toward compliance? Standards Review

� Other claims ◦ Unverifiable claims (All Natural, Nothing Artificial, etc) �Any claim(s) that cannot be verified by a third party certifier �These should be removed from product packaging ◦ Green claims (biodegradable, ecofriendly, or any other similar callouts) �FTC Green Guide Compliance details can be found at www. ftc. gov/green ◦ Gluten Free �All Gluten Free items are required to provide third party certification if selected—preferably before introduction to our stores �You can find details on submitting gluten free claims to our Global Quality Standards Team at the NE Vendor Information website: http: //www. wholefoodsmarket. com/vendor/grocery_ne Standards Review

�Sustainable/mission-based sourcing ◦ Whole Foods Market strives toward transparency in all of our products. ◦ To that end, we have both internal product standards, as well as recognized external ones. ◦ Consider these attributes, and how/where they are impactful: Standards Review

�Ecoscale Rating System ◦ In 2011, Whole Food Market rolled out Ecoscale certification for cleaning products ◦ All products sold in our stores must meet basic ingredient transparency requirements, and based on that an Ecoscale rating will be applied to each product (see below) ◦ NE Grocery will be building a regular promotion program around Ecoscale rated items, please indicate the Ecoscale rating of your product on promo submissions Standards Review

� Quality Standards ◦ As defined by WFM: �We carefully evaluate each and every product we sell �We feature foods that are free of artificial preservatives, colors, flavors, sweeteners, and hydrogenated fats �We are passionate about great tasting food and the pleasure of sharing it with others �We are committed to foods that are fresh, wholesome and safe to eat �We seek out and promote organically grown foods. �We provide food and nutritional products that support health and well-being ◦ Acceptable Ingredients: http: //www. wholefoodsmarket. com/about-ourproducts/quality-standards/food-ingredient Standards Review

� Ongoing Request for Proposal ◦ Concepts are welcome anytime! ◦ We are open to ideas both within the Grocery Department footprint, as well as outside of it—store exterior, cross-merchandising proposal, café placement, etc. ◦ We are always looking to tie new product launches—or innovative concepts—into new stores ◦ Use the innovation Powerpoint (will be attached on recap) to submit new concepts ◦ We have included questions on the slide to help guide your thoughts, please try to sketch the topline of your concept within the parameters of the PPT. ◦ If we are interested, we will get back to you—please understand that due to general volume of requests we cannot reply in every instance Innovation

Please ensure your submission form is filled out correctly on the Northeast Submission Form; i. e. , correct UPC in correct format, all data entered into the correct column, and either an A or B entered for Promo Period. Incorrect Data will render Promo Submission Void Indicate Month in subject Send one month at a time in your email All promo submissions & queries must be sent to the following email alias: NE. Grocery. Promo. Submission@wholefoods. com Items must have at least 15% promo discount (OI, MCB, or scan) in order to be considered If you are submitting a promo for items that are distributed via DSD, all DSD partners must be copied on the promo submission email, and each DSD partner must have the discount properly loaded in their Vendor Internet Portal (VIP) promo cost file. Promo Submissions

�Deadlines are firm!! 2015 calendar is released. �Late submissions will be added as always, however: ◦ Submissions received after the due date will not be confirmed. ◦ There will be no volume projections to the distributor for late submissions ◦ VIP must be loaded properly (no exceptions) ◦ Invoicing must reflect correct discount (no exceptions) Deadlines

When there is a line extension: ◦ If the new SKU is being cut in during a given month, and the rest of the line is already scheduled to promote during that month, please make sure to submit a separate promo form for the new item(s) with specific instructions (including round # rollout) so we can slot in the new items, line price for the period, and not have missing sale tags for the given line When there is an entirely new line: ◦ We will not promote the new line until 1 month after the rollout, since not all stores will show the product until resets wrap up at the end of the month. New Item Promo Submission

Shelf Special (TPR): • 15% minimum discount (required always) • Any promotion submitted at a lesser discount will be rejected. • Scanbacks must meet the 15% threshold as well. • OI, MCB, and scanback can be combined to hit the 15% minimum. Off Shelf Display: • Minimum 30% discounting required. • Meeting this discount does not guarantee off shelf placement. • OI, MCB, and scanback can be combined to hit the 30% minimum • Regional offshelf cannot be all scanback • Items merchandised in coolers do qualify as off shelf displays Discounting & Promotion Tiers

Promo Cost Effective Dates • • All WFM NE Promos must be loaded into VIP 30 days in advance of the buy-in date Buy-in date (in all cases) is 7 days prior to promo (Wednesday before following Wednesday) start date. All UNFI discounting is monthlong (Wednesday before promo starts through the last Tuesday of the B cycle in any period) All other vendor discounting applies one cycle only (Wednesday before promo starts through the last Tuesday of the agreed cycle) Promo Cost Effective Dates

First check to see if the product is scanning at the register It is scanning at correct sale retail? ◦ Please follow up with the Grocery Team to print a tag ◦ Multiple Team Members have the ability to print tags ◦ Confirm that all shelf locations are tagged It is not scanning at the correct sale retail? ◦ ◦ ◦ Please email promo alias (NE. Grocery. Promo. Submission@wholefoods. com) Include details including UPC, store, picture (where necessary) and SRP for the promotion Also, where possible please forward the original email with attachment so we can trace any issues on our side It’s Wednesday…No sale tag in place?

�Weekenders ◦ 3 Day only sales (Friday through Sunday) ◦ Funded by all scanback discounting, which protects supplier from distributor &/or store buy-in ◦ Scanback applies Thursday through Tuesday ◦ Deep & Fully funded discounting to hit BOGO Sale Retails ◦ Sales Flyers, Social Media and heightened team member awareness through emails, conference calls & recaps Feature Programs

�Contests ◦ Will always run monthlong (A&B promo cycles) ◦ Contests require fully funded promotion ◦ The standard prize format for contests requires vendors to offer �$25 gift cards to each Team Member on the winning team �For the 3 winning stores � 1 store wins from each of these metrics: ◦ Highest % of subteam sales ◦ Highest % lift over predetermined prior period ◦ Total volume sales ◦ Focus for 2015, is including other subteams and products for proposed contests. Feature Programs

�Grand Opening Discount ◦ Request a 35% minimum discount for these promotions ◦ The best deals will be accepted for off shelf features ◦ Only accepted promotions will be confirmed New Store Openings & Store Focus Promotions

�Focus on differentiation and mission �Request for proposals will be sent for specific themes �Discounting is expected to be along the lines of any off shelf deal �Product is preordered &/or allocated to all stores as part of the program �Ideas are always welcome for new opportunities (see Innovation slide)! Themed Promotions

�Hydration Station ◦ Engages our customers to sample beverages that we are promoting in our stores. ◦ Supply each store with a free case of product for the promotion Additional Promotion Opportunities

�Grocery Demo Delegates ◦ Grocery Team Members that enjoy educating our customers and team members about the specific differentiators, and have a strong passion for food! ◦ The Demo Delegates take part in active demos during each promo period ◦ To participate in the Grocery Demo Delegate program, we need: �Complementary set of products �Possible incentives for demo team �Marketing materials on the package (IRC coupon, education piece, etc) Additional Promotion Opportunities

� Emails eat up a lot of time! ◦ Any email that is submitting for a category round must have the Round # in the SUBJECT LINE. ◦ Same goes for promotions—one email per promotional cycle, and that cycle should be noted in the SUBJECT LINE as well ◦ Please do not change the subject line in an ongoing thread (aka email conversation). ◦ Also, please do not start a new email if there is already a thread in progress. This splits the email conversation. � UPC format should always be no dashes, no spaces, no check digits � Promo alias should always be used for promo submission as well as promo queries Communication

� Store/sales floor relationship ◦ Grocery Team Members can be a brand’s most valuable asset ◦ Here are some rules & tips for interacting with WFM NE TMs: �Gift policy ◦ Nothing can be given to a TM that exceeds $25 value ◦ Nothing of any kind can be given to a Team Member as a quid pro quo for brand favoritism �Support ◦ The best way to develop a productive, lasting relationship at the store level is to work with the team on their terms ◦ Be willing to lend a helping hand—pitching in is always appreciated even if it has nothing to do with your brand ◦ Understand the multitudinous tasks required of our TMs daily and respect when they say no by not becoming pushy �It is always appreciated when you assist Team Members with facing shelves, and that’s also a good time to speak with them (working side by side). Also, please respect that Customers’ assistance takes priority—let TMs help Guests first in all cases Policies & Procedures

�Store/sales floor relationship (cont. ) ◦ WFM NE supports our Teams making deals on the sales floor with brands, merchandisers, &/or distributors—with some explicit caveats: �Teams are required to execute the Regional Merch Planner in full before dealing on sales floor space �Teams are never allowed to accept free product from anywhere except the IRMA authorized distributor, and always with a PO (even for a $0 invoice) �Regional Grocery reserves the right to direct the team to move or dismantle a display at any given time, regardless of the agreement. We will always try to work out a solution with the team in these cases. �Teams cannot accept free product for better shelf placement under any circumstances (see Gift Policy) Policies & Procedures

� Store/sales floor relationship (cont. ) � Brands, brokers, & distributors may not, under any circumstances, alter the shelf as it is set in the store without explicit approval. If a store is not following planogram &/or your product has been removed from the set where it is planogrammed, please reach out to Regional Grocery. And include a UPC (as always). � WFM NE has a clean channel / clean floor policy. Any proposals for signage in the channels, display fixtures, or any other peripheral collateral must run NE Regional Grocery first. If approved, we will discuss how it rolls out to teams. Policies & Procedures