Center Store Consumer Insights

1. Center Store Consumer Insights Our Consumers & Shoppers

2. Our Consumers & Shoppers • How the Landscape is Evolving • Economic Conditions • Changes in Shopper Behavior • Channel Trends • Continuing Behaviors • Consumer “Value” Revisited • Implications

3. Negative Positive Neutral Starting to see a modest recovery in key economic indicators Economic Conditions Sources: U.S Leading Economic Indicators

4. Economic Conditions • Unemployment remains high, yet jobs increased significantly in March 2010 • 16% of shoppers are worried about their job security, down from 20% a year ago2 U.S. Jobs Lost or Gained 10% Unemployment Rate Source: Seasonally Adjusted U.S. Total Non Farm Employment, U.S. Government; 2. Shopper Loyalty Card Data from Leading National Retailer 2010

5. 2004 2006 2008 2009 2010 2002 2003 2005 2007 2001 Economic Conditions • Consumer confidence has improved recently The Conference Board - Nine census regions, 5,000 US households; 1985 = 100

6. Our Consumers & Shoppers Impact

7. Spending on Indulgences 50% 45% 40% 35% 30% % of consumers 25% 20% Cutting holidays abroad 15% Cutting car purchase 10% Buying higher quality premium food and beverages 5% Increasing or maintaining spending on “staycations” 0% June July August September October November December Changes in Shopper Behavior • Shoppers increase their hesitancy with big expenses, but continue to indulge in food and beverage Source: Data Monitor “Recovery from Recession” March 2010

8. Changes in Shopper Behavior • Shoppers began spending more in late 2009 • Personal savings dropped to 3.1% in February 2010 from almost 5% a year ago2 Total Retail Sales ex Auto % Change vs. Prior Year Source: Dept of Commerce - Total Retail Sales exc. Auto; 2. Bureau of Economic Analysis

9. Changes in Shopper Behavior • Shopping trips increased in 2009 Average Shopping Trips per Household All Outlet % Change vs. Prior Year Source: IRI Consumer Network; 52 weeks ending 12/27/2009 and same period prior years

10. Shopper Trips Dollar Sales per Trip Unit Sales per Trip Changes in Shopper Behavior • Shoppers making less trips to Center Store Grocery, but increasing units purchased per trip Source: IRI April 2010 Total U.S. All Outlets, Total Edible Grocery

11. Changes in Shopper Behavior • Commissary shoppers are increasing their trips, and have significantly higher spend per trip than Grocery Channel shoppers Item Trips per Buyer Item $ per Trip +1% +0% +1% +3% Source: Nielsen Homescan

12. Changes in Shopper Behavior • Commissary growth outpaced Grocery during recession onset,but slowed during 2009 +3% +3% +12% +2% +5% +5% Source: Nielsen Homescan

13. Changes in Shopper Behavior • Outside the gate, consumers are increasing their purchases Source: Nielsen RMS March 2010

14. 4% Redemption Growth 4% 6% 20% 12% 12% 16% 20% 71% 65% 26% 20% 0% 100% Changes in Shopper Behavior • Coupon redemption grew 27% in 2009 across all channels Share of Redemption Military Convenience Pharmacy Dollar Mass/SC Grocery Source: Nielsen April2010

15. Our Consumers & Shoppers Lessons

16. Continuing Behaviors • Shoppers’ quest for bargain hunting is beginning to slow, but is still strong Shopping Behaviors % of Shoppers Participating in Activity Source: IRI 2010 FMI Economic Survey; Americanism Study: IRI Economic Trend Database, IRI AttitudeLink Survey of 1,067 Consumers

17. Continuing Behaviors • Pre-planning has become more important to shoppers Where Purchase Decisions Are Made % of Shoppers Source: Longitudinal Economic Study Series, IRI AttitudeLink, n=1,000 + shoppers

18. Continuing Behaviors • 64% of shoppers work from a pre-made list • Of those shoppers, store flyers are key in list-making preparation List Making Behaviors Source: IRI April 2010

19. Continuing Behaviors • 66% of shoppers admit to varying from their list Reason for Impulse Purchases Away From Lists

20. Continuing Behaviors • Home meals at highest level since 1993 # Annual Meals Prepared & Consumed In-Home per Person Source: The NPD Group

21. Our Consumers & Shoppers “Value”

22. Consumer Value: Revisited • Food price inflation in 2009 was only 0.5% for food-at-home, but 3.5% for food-away-from home2 Reasons for Preparing Meals at Home Source: The NPD Group; 2. Economic Resource Service, Food Business News March 2010

23. Brand value remains important to shoppers, especially pre-store decisions Consumer Value: Revisited What is important to you in making a decision on brand? % of Shoppers IN-STORE FACTOR PRE-STORE FACTOR Source: Longitudinal Economic Study Series, IRI AttitudeLink, n= 1000+ Shoppers

24. Consumer Value: Revisited • For consumers, “Value” continues to be much more than a price point • Value assessments are complex & ever changing • Value is perceived as all that a brand or product has to offer – and weighed in context of a price point and a host of alternative choices Mom: “It’s what I get for what I pay” Source: The J.M. Smucker Company

25. Consumer Value: Revisited 30% 12% 18% 18% 23% 25 Source: The J.M. Smucker Company

26. Consumer Value: Revisited Brand & Quality Lovers • Quality is paramount in purchase decisions • Rely on brand names to deliver quality • Willing to pay a premium for certain benefits, like health & wellness 30% 12% 18% 18% 23% 26 Source: The J.M. Smucker Company

27. Consumer Value: Revisited Brand & Quality Lovers • Quality is paramount in purchase decisions • Rely on brand names to deliver quality • Willing to pay a premium for certain benefits, like health & wellness Quality Savvy • Focus their purchase decisions on fewer, yet high quality products • Not driven by price or sales • Reduce overall buying and make thoughtful decisions to ensure they can afford the high quality items they like 30% 12% 18% 18% 23% 27 Source: The J.M. Smucker Company

28. Consumer Value: Revisited Brand & Quality Lovers • Quality is paramount in purchase decisions • Rely on brand names to deliver quality • Willing to pay a premium for certain benefits, like health & wellness Quality Savvy • Focus their purchase decisions on fewer, yet high quality products • Not driven by price or sales • Reduce overall buying and make thoughtful decisions to ensure they can afford the high quality items they like 30% 12% 18% 18% 23% Family Values • These Moms are smart shoppers who look for good prices & deals, but they do not buy on price alone • Generally less willing to pay a premium for convenience, preferring to “do-it-myself”  28 Source: The J.M. Smucker Company

29. Consumer Value: Revisited Brand & Quality Lovers • Quality is paramount in purchase decisions • Rely on brand names to deliver quality • Willing to pay a premium for certain benefits, like health & wellness Quality Savvy • Focus their purchase decisions on fewer, yet high quality products • Not driven by price or sales • Reduce overall buying and make thoughtful decisions to ensure they can afford the high quality items they like 30% 12% 18% 18% 23% Family Values Drifters • These Moms are smart shoppers who look for good prices & deals, but they do not buy on price alone • Generally less willing to pay a premium for convenience, preferring to “do-it-myself”  • No overarching value philosophy with respect to grocery purchasing • Neither strongly price-oriented, nor quality-driven • Still appreciate deals, some aspects of value, some convenience elements, and small indulgences, but not overly so 29 Source: The J.M. Smucker Company

30. Consumer Value: Revisited Brand & Quality Lovers • Quality is paramount in purchase decisions • Rely on brand names to deliver quality • Willing to pay a premium for certain benefits, like health & wellness Price Dependents • Very price conscious • Hunt for bargains in order to get by from paycheck-to-paycheck • Need to stretch every dollar and will do whatever it takes to find the best price • Brands are not very important, since price trumps all else Quality Savvy • Focus their purchase decisions on fewer, yet high quality products • Not driven by price or sales • Reduce overall buying and make thoughtful decisions to ensure they can afford the high quality items they like 30% 12% 18% 18% 23% Family Values Drifters • These Moms are smart shoppers who look for good prices & deals, but they do not buy on price alone • Generally less willing to pay a premium for convenience, preferring to “do-it-myself”  • No overarching value philosophy with respect to grocery purchasing • Neither strongly price-oriented, nor quality-driven • Still appreciate deals, some aspects of value, some convenience elements, and small indulgences, but not overly so 30 Source: The J.M. Smucker Company

31. Implications • Worst of recession appears to have passed, yet we remain in challenging times • Consumer restraint will likely become “the new normal” • Consumers are better informed and more demanding. Important to engage with them in both traditional & new ways • Success can be achieved by connecting with consumers & shoppers at the right place & time … anytime inside the gate • Targeted efforts will become more important: • Opportunity to increase trips inside the gate as consumers are shopping more outlets • Opportunity to increase impulse purchases • Continue to leverage insights to remain relevant with our consumers • Trusted brands and retailers will continue to win with innovation & differentiation

32. ThankYou