Chilean Fresh Fruit Association Best Fruit Practices of Best Performing Retailers

1. Chilean Fresh Fruit Association Best Fruit Practices of Best Performing Retailers Berries, Grapes, Nectarines, Peaches and Plums

2. Chilean Key Selling Season: January thru April Grapes, Berries, Nectarines, Peaches & Plums Many options for retailers to maximize sales. Key questions: How many varieties of each category should you carry? When should you begin to sell Chilean Fresh Fruit? Should you combine different grape varieties in a single ad? Upsizing berries; is it the best way to increase sales? Stone fruit; should I promote all fruit together or run each one in a separate ad? What is the best way to promote strawberries? By themselves or with other berries?

3. Uncovering the “High Performing Retailers” category merchandising techniques for Berry, Grape, Nectarines, Peaches and Plums. Quantifying their efforts & leverage the insights to improve sales of other retailers Discovery of best practices in each product category High Performing Retailers: Sales gain vs YAGO Higher sales gain than CRMA(grow in excess of other competing in-market retailers) Exceed Fair Share 2008 higher than in 2007 Benchmark category trend vs Total Produce Objectives of StudyAnd how it was structured…

4. DiscoveriesChilean Fresh Fruit - Jan-April Sales Jan-April Dollar Share US Produce Dollars Chilean Fresh Fruit Assn Categories The data reveals that retailers who incorporate the following key elements in their go-to- market strategy had significantly better results than retailers who did not do any or only some of these tactics. Assortment Expand variety across each category Upsize berry packages especially blueberries 18 oz unit Promote early in the season Promote multiple varieties at the same time Fixed weight grape packages sell at higher retails per pound than random weight products and growing faster than category Pricing: Successful using hi/low or EDLP; following other best practices including promotions Promotion: Chilean Fruit is price sensitive and customers buy more on promotion Grapes, Berries, Nectarines, Peaches & Plums All Other Produce 10.3% (CFFA) 89.7% (All Other Produce)

5. BerriesOptimizing Jan-April Sales Fresh Berry Dollars Jan-April %CHG vs YAGO • High Performing Retailers outperformed Total US almost 2X • NW Retailer Blackberries 6 oz +53% • LA based retailer Raspberry 6oz +39% • Mountain Retailer Blueberry 4.4 oz +41% • Assortment included Strawberries, Blueberries, Raspberries and Blackberries • Blueberries & Raspberries are driving the increases in pounds and dollars • Upsize your berries… especially Blueberry 12 & 18oz & Strawberry 32oz • Promotions • Multiple berries simultaneously. Combine Strawberries in promotional mix • Early in Season promotions = best results • Blueberries with Blackberries show higher promotional response • Promote your upsized packages with the smaller packages for best impact

6. GrapesOptimizing Jan-April Sales Fresh Grape Dollars Jan-April %CHG vs YAGO High Performing Retailers posted double-digit gains. Total US declined. • Select High Performing trends %CHG YAGO: • Assortment/Variety expansive with Ruby, Thompson and Globe • Begin selling Globes early • Red and green seedless drive the grape category sales with over 90% of sales • Alternate red, green, and black varieties promotions to highlight the varietals differences • Display selected varieties to create consumer awareness and excitement High Performing Retailers Total US

7. GrapesOptimizing Jan-April Sales Midwest Retailer Grape Dollars, Lbs & Price 1Wk Increments ending 03/27/08 Natural Thompson Seedless Pricing Best Practices • Grapes are highly price elastic. Consumers react strongly to retail pricing in terms of volume sold each week. Pricing of Ruby and Thompson was successful with two approaches; • Everyday Pricing • High/Low Pricing • Similar line pricing across both Ruby and Thompson varieties during non-promoted periods. • Globe pricing and merchandising can be different from Ruby and Thompson Merchandising Best Practices • Primary Displays: • Display allocation drives consumer planned and impulse purchases of grapes. Data suggest +25 linear feet of display area is ideal & can generate up to +63% percent more sales dollars per store. • Quality and freshness are key to grape category sales. Product should not be stacked more than two layers high to maintain this key objective. • Alternate red, green and black varieties for eye catching color breaks • Secondary displays • Provides additional category impulse sales. • Excellent way to highlight unique varieties or packs that can be overlooked on primary display. AD Ruby AD

8. GrapesOptimizing Jan-April Sales Promotional Best Practices • Featured front page promotions generate approximately +70% percent increase in sales and up to three times base volume increase. Even minimal price discounts achieve positive lift. • Alternating weekly ad activity between varieties • Early promo activity = stronger category performance • Ideal promotional frequency = 3 out of 4 weeks • Implement Multiple pricing strategies such as 2/$3, 2/$4 Consider grape category theme promotions such as a “Grape Extravaganza”, “Grape Spectacular”, “June in January” or “Chilean Fruit Basket” to generate customer excitement. Key components for a successful theme promotion include: • Large promotional displays in high traffic areas • Single price point for all varieties. • Support after the theme event with a sub feature ad to maintain store grape volume.Continue to build incremental grape sales. • Mix up the promotional types of promotionssuch as main feature, sub feature, in store and theme events on a four week basis to create continuous customer excitement.

9. NectarinesOptimizing Jan-April Sales Fresh Nectarine Dollars Jan-April %CHG vs YAGO High Performing Retailers outperformed Total US 3X Southeast Retailer #1 +39.7% Southeast Retailer #2 +23.4% Northwest Retailer +34.7% Assortment Best Practices Expand nectarine variety across category to include Yellow, White and Regular varietals Pricing Best Practices Pricing was successful either using variable pricing format or consistent steady price format Consistent retail pricing across each variety during season Promotional Best Practices Promoting greater assortment throughout the season including “Yellow”, “White Flesh” and “Regular” significantly increased sales and tonnage. Promote multiple varieties of each category at the same time Chilean Fruit is price sensitive and customers buy more on promotion. Promote early season generates stronger sales for season

10. PeachesOptimizing Jan-April Sales Fresh Peaches Dollars Jan-April %CHG vs YAGO HighPerforming Retailers outperformed Total US 4X Mid Atlantic Retailer +75.4% Southeast Retailer +44.1% Southeast Retailer #2 +24.9% California Retailer +21.6% Northeast Retailer +19.8% Assortment Best Practices Expand varieties to include full Yellow & White Early season sales coincide with strong results Pricing Best Practices Pricing was successful using hi/low or consistent everyday price Consistent retail pricing across each variety during season Promotional Best Practices Peaches are promotionally responsive Promote early in the season Promotional non-price events such as theme promotions and expanded stores displays can significantly increase sales Promote multiple varieties of category at the same time Chilean Fruit is price sensitive and customers buy more on promotion.

11. PlumsOptimizing Jan-April Sales Fresh Plums Dollars Jan-April %CHG vs YAGO Assortment Best Practices • Expand plum variety to include Black, Red, Yellow & Pluots • Red & Black varieties = majority of sales • Early season sales coincide with strong results Pricing Best Practices • Each variety can be priced independently. • Pricing was successful using hi/low or consistent everyday price • Consistent retail pricing across each variety during season Promotional Best Practices • Promote multiple varieties at the same time • Non-price promos such as theme promotions and expanded stores displays can significantly increase sales • Chilean Fruit is price sensitive and customers buy more on promotion. • Data suggest price promotion in one variety increases sales in other variety High Performing Retailers Total US

12. Soft Fruits: Nectarines, Peaches & PlumsOptimizing Jan-April Sales • Know your customer. While peaches are the best known by customers, nectarines are on par in terms of customers’ knowledge of variety and reflected in their sales. Tailor displays to regional preferences as well. • Peaches and nectarines are the key category sales generators and the most apt to generate excitement among consumers. • Contrast color and varietal differences. Alternate peach, plum & nectarine displays. • As lesser known sub segments become available such as plucots, white flesh peaches or apricots add to the assortment to both enhance the department image as well as generate additional impulse sales. Pricing Best Practices • Of the Chilean soft fruit category peaches and nectarines are the most price sensitive to the consumer and most likely to be compared to each other as far as retail price. Consumers will react both in terms of selecting one variety over the other as well as deciding whether to purchase the category in total. • By contrast plums are not near as price sensitive due in part to the lack of customer familiarity. Additionally due to the lower volumes there exists opportunities to price multiple varieties at a single price point which will yield additional incremental sales and trial.

13. Soft Fruits: Nectarines, Peaches & PlumsOptimizing Jan-April Sales Promotional Best Practices • Variety is the spice of life. Multiple varieties drive more sales vs single variety promos. • Consider promoting peaches and nectarines together to target the broadest range of soft fruit users. • Consider changing the promotional focus. Promote good health. Consumers are very interested in the health benefits of soft fruit as well as information on how to select the best piece of fruit. • Explore multiple pricing strategies such as 2 lbs for $3 or 10 lbs for $10. • During the winter season soft fruit is an excitement generator with the customer. Consumers aren’t expecting to find this traditional summer time favorite. Mix up the promotional types such as main features, sub features in store or theme events to continually surprise the customer. • Theme promotions are a great avenue with soft separately such as “Soft Fruit Festival” or Tree-mendous Festival” or as part of a larger event grouping whether “June in January” or “The best from Chile”. • Consider a single price point on similar varieties. • Return with a sub feature ad after the event to maintain store soft fruit volume and build additional incremental sales. • A minimum of biweekly promotional frequencyeither a media promotion, temporary price actionor in store event yields maximum sales for the category. Impulse sales drive the majority of the consumer purchases for this category.

14. Soft Fruits: Nectarines, Peaches & PlumsOptimizing Jan-April Sales Display Best Practices • Quality and fresh appealing soft fruit is key to driving customer impulse sales • Limit handling and Keep out of the flavor “kill zone”. • Rotate- identify the ripest fruit for customers. • Mix colors, sizes and varieties to create an eye catching display. • Display near such complementary commodities as grapes or berries as impulse sales will increase for all categories. • To grab the customer’s attention that something additional is happening on the display add Chilean point of sale materials. According to the Point of Sale Institute a 22 percent increase in sales is generated when POS is utilized. • Providing the proper space allocation drives the additional impulse and planned purchases for this excitement generating category. • Since soft fruit is highly perishable; highly impulse driven and complementary to high traffic items as grapes and berries, display in a high volume area. Soft Fruit Secondary Displays : • Provides another opportunity to trigger impulse sales with the consumer.

15. Information included herein is aimed at assisting retailers to maximize sales across Chilean Fresh Fruit from January thru April Regional and economical differences require retailers to carefully consider merchandising techniques for their specific markets. Good Luck! For further information, please contact: Tom Carl Tjerandsen tomtj@ix.netcom.com 670 West Napa Street Suite – D Sonoma, CA 95476 (707) 938-8400 – office (707) 938-8455 - office fax (415) 999-6289 - cell