Canadian Market Overview

1. Canadian Market Overview Presentation by: Louise Roberge, President, Tea Association of Canada June 8th, 2007

2. AGENDA • Introduction • Market Place Overview • Trends & Opportunities • Barriers • Tea Association of Canada Programs

3. Who are Canadians?

7. The Evolving Canadian Consumer Age 65+ 1961 8% 2005 13% 2026 21% Income >$75K 20012006 23% 32% Income >$70K 2001 23% 2006 32% Employed Women 2001 55% 2006 58% 70% Full Time Age 65+ 196120052026 8% 13% 21% Employed Women 20012006 55% 58% 70% Full Time Try to Eat Healthier 86% Try to Eat Healthier 86% Older More Affluent Time Pressured Wellbeing Focused Internet Connected Fragmented Demanding & Discerning Source: ACNielsen Homescan –Statistics Canada

8. MARKET PLACE OVERVIEW • Tea Imports • Market Share by Country of Origin • Consumption • Grocery Sales • Foodservice Sales

9. Tea ImportsVolume Metric Tons (000,000) Source: International Tea Committee

10. Tea Imports 2006 Category Percentage 21% 79% Source: International Tea Committee

11. Producing Country Canadian Market Share Black Tea (2006) Source: International Tea Committee

12. Producing Country Canadian Market Share Green Tea (2006) Source: International Tea Committee

13. MARKET PLACE OVERVIEW • Tea Imports • Market Share by Country of Origin • Consumption • Grocery Sales • Foodservice Sales

14. Consumption

15. Canadian Beverage Consumption Share of Throat(Litres per Person)

16. MARKET PLACE OVERVIEW • Tea Imports • Market Share by Country of Origin • Consumption • Grocery Sales • Foodservice Sales

17. Tea Sales by Category(Dollars)

18. Tea Sales Yearly Trend (2003 – 2006) Dollars (000,000’s) Regular Tea Bags SpecialtyTeaBags

19. Tea Sales by Type Dollars (000,000’s)

20. Green Tea Sales Dollars (000,000’s)

21. Tea Sales by Region 32% 42% 10% 16%

22. Tea rebounded in shelf presence at Grocery retailers driven by Green Tea and Flavoured Black Tea SKUs Source: ACNielsen MarketTrack, National Grocery Banner - Latest 52 Weeks Ending January 20, 2007

24. MARKET PLACE OVERVIEW • Tea Imports • Market Share by Country of Origin • Consumption • Grocery Sales • Foodservice Sales

25. Tea occasions outside the home peak in the afternoon whereas evening is the peak for inside the home. Tea Consumption (Time of Day) - % Inside versus Outside the Home Almost ¾’s of respondents consume tea at home in the evening Base = Hot tea drinkers, N=11,234

26. Three out of ten hot tea drinkers have consumed hot tea at the workplace or family restaurant. Thinking about the last three months, where have you consumed Hot Tea when you are outside of your home?* Base = Hot tea drinkers that drink hot tea outside of their home, N=7,497 *Multiple mentions Source NPD Group Canada

27. Key Learning's For Tea in Commercial Foodservice… Key Trends in Commercial Foodservice: • Ethnic • Health • Snacking Tea, more so than any other beverage, can capitalize on these influential trends

28. CANADIAN TRENDS & OPPORTUNITIES

29. Trends & Opportunities • Green Tea • Tea as an ingredient in cooking and cocktails • Tea as a health and beauty aid • Fancy Tea bags • Cause related Tea • Organic Tea & foods in general

30. Health Claim • After a period of extensive review, the NHPD has approved three health claims for tea. All types of tea infusions (black, green and oolong) are recognized as: • a source of antioxidants for the maintenance of good health. • Tea is approved for increasing alertness. • Tea is further accredited as helping to maintain and/or support cardiovascular health.

31. BARRIERS

32. Regulatory Issues HIGH Priority MEDIUM Priority • Healthy Living PESTICIDE MRL’S CBSA-CFIA HIGHLIGHTED INGREDIENTS NHP’s Product Specific Health Claims MANDATORY NUTRITION LABELLING Generic Health Claim WHO report Fortification Codex Caffeine Labelling Health &Safety Act Stewardship Ontario LOW Priority On the Radar

33. Pest Management Regulatory Agency (PMRA) • Canadian MRL’s (default 0.01 ppm) • TAC Working Group

34. Current Framework Legislators: Producer countries & Consumer countries Tea Associations: FAO IGG Dr T C Chaudhuri, Co-Leader Andrew Scott Co-Leader Tea Assn of Canada Louise Roberge, Phil Berenger JS AC AS Tea Boards: Experts in Producer Countries Tea Assn of the USA Joe Simrany, Frank Farrell, JS AC AS Co-ordination: Andy Crimes (Unilever) John Snell (VRNA) Andrew Scott (Tetley) Eg India Dr Chaudhuri, ITB Tata Tea (Percy Siganporia), Hindustan Lever, Toklai, Upasi etc ETC C Pineau, T Henn, M Beutgen, AC Eg China Professor Chen (TRI Hangzhou) Tea Industry Forum (Aus) Janet McDonald, David Mould AC AOS Eg Indonesia, Sri Lanka, Kenya, Malawi, Argentina …. Pesticide Manufacturers

35. New Canadian Organic Regulations • December 22, 2006- Final publication in Canada Gazette II • To be phased in over a two year period • Product must meet revised CGSB standard as well as the New Organic regulations • Must contain at least 95% organic ingredients

36. After The Two Year Transition Period • All organic products must be certified for international trade • Canada joins more than 40 other countries world-wide with organic regulations

37. Organic Logo • Canadian logo permitted on food meeting the revised standard for organic production • Imported Products require an attestation from country of origin that the product meets Canadian organic requirements • The logo may be either in black & white or in colour (green and red on a white background with white lettering )

38. PROGRAMS

39. Media

41. Tea Certification In efforts to streamline tea education across Canada, the Tea Association of Canada in collaboration with George Brown College has founded the Tea Sommelier Program started Fall 2006. Tea Appreciation Certificate Tea Sommelier

42. www.tea.ca