Future of opportunity

1. The fonts, font sizes, colours & styles have been set according to the guidelines laid down by the Marketing Division. Please do not change any of the above. Future of opportunity AgriSeta Awards 2010 The information contained in this document is confidential, for internal use only and may not be distributed outside the Standard Bank Group.

2. AGENDA Where does the sector find itself? • Macro economic environment • Global • Domestic • Agricultural economic environment • The consumer and future trends • BFAP • Other global trends Press Ctrl+d to duplicate this slide The information contained in this document is confidential, for internal use only and may not be distributed outside the Standard Bank Group.

3. Global Economy Recession costs Crisis not costless and recovery not certain? Press Ctrl+d to duplicate this slide The information contained in this document is confidential, for internal use only and may not be distributed outside the Standard Bank Group.

4. Global Economy IMF forecasts Economic activity on the mend Press Ctrl+d to duplicate this slide The information contained in this document is confidential, for internal use only and may not be distributed outside the Standard Bank Group.

5. Global Economy Recovery profile of advanced economies How long will it take the SA economy to close the “output gap” Press Ctrl+d to duplicate this slide The information contained in this document is confidential, for internal use only and may not be distributed outside the Standard Bank Group.

6. Domestic Economy Still experiencing a hangover? ......deviation in GDP relative to trend last 3 downswings • Recent recession somewhere between downswings of ’81 and ‘96. • Surprisingly strong GDP growth in Q1 probably not sustainable. • Do not expect double dip • BUT growth could be relatively slow. Press Ctrl+d to duplicate this slide The information contained in this document is confidential, for internal use only and may not be distributed outside the Standard Bank Group.

7. Domestic Economy Not creating jobs fast enough Jobless growth Press Ctrl+d to duplicate this slide The information contained in this document is confidential, for internal use only and may not be distributed outside the Standard Bank Group.

8. Domestic Economy Household debt How long will deleveraging of consumers take Press Ctrl+d to duplicate this slide The information contained in this document is confidential, for internal use only and may not be distributed outside the Standard Bank Group.

9. Domestic Economy Household deleveraging Can take up to 5 years?? Press Ctrl+d to duplicate this slide The information contained in this document is confidential, for internal use only and may not be distributed outside the Standard Bank Group.

10. Agriculture Agric in a squeeze Agriculture’s terms of trade is at it’s lowest levels in more than a decade Press Ctrl+d to duplicate this slide The information contained in this document is confidential, for internal use only and may not be distributed outside the Standard Bank Group.

11. Agriculture Gross Income Earned Press Ctrl+d to duplicate this slide The information contained in this document is confidential, for internal use only and may not be distributed outside the Standard Bank Group.

12. Agriculture Gross Income Earned Field crops Press Ctrl+d to duplicate this slide Source: DoA, 2010 The information contained in this document is confidential, for internal use only and may not be distributed outside the Standard Bank Group.

13. Agriculture Gross Income Earned Livestock Press Ctrl+d to duplicate this slide Source: DoA, 2010 The information contained in this document is confidential, for internal use only and may not be distributed outside the Standard Bank Group.

14. Agriculture Gross Income Earned Horticulture Press Ctrl+d to duplicate this slide Source: DoA, 2010 The information contained in this document is confidential, for internal use only and may not be distributed outside the Standard Bank Group.

15. Agriculture Food consumption forecast in SA Press Ctrl+d to duplicate this slide Source: BMI, SA Food and Drink Report The information contained in this document is confidential, for internal use only and may not be distributed outside the Standard Bank Group.

16. Consumer Trends What does the SA consumer look like? The SAARF LSM Segments: Proportion of SA adult population and average monthly household income in 2009 Source: SAARF (2010a) Press Ctrl+d to duplicate this slide Source: BFAP, Agricultural Outlook 2010 The information contained in this document is confidential, for internal use only and may not be distributed outside the Standard Bank Group.

17. Consumer Trends The SA consumer – class mobility LSM class mobility: All adults during the period 2004 to 2008 Source: SAARF AMPS data for the period 2004 to 2009 Press Ctrl+d to duplicate this slide Source: BFAP, Agricultural Outlook 2010 The information contained in this document is confidential, for internal use only and may not be distributed outside the Standard Bank Group.

18. Consumer Trends Global Perspective Trend- “Pattern of gradual change in a condition, output or process, or average or general tendency of a series of data points to move in a certain direction over time, represented by a line or a curve on a graph.” Press Ctrl+d to duplicate this slide • Global trends: • Health/ Wellbeing • Indulgence • Ethical and environmental concerns • Simplicity • Convenience “successful food products usually rely on ‘double-positioning strategies’, where food products are designed to address at least two (or more) consumer food trends” Source: BFAP, Agricultural Outlook 2010 The information contained in this document is confidential, for internal use only and may not be distributed outside the Standard Bank Group.

19. Global Trends Future trends...... • BRAND FABRIC Press Ctrl+d to duplicate this slide Source: Consumer Watch 2010 and 2011 The information contained in this document is confidential, for internal use only and may not be distributed outside the Standard Bank Group.

20. Global Trends Future trends...... • BRAND FABRIC • INNOVATION INSANITY - Invent, improve, copy…or perish. Press Ctrl+d to duplicate this slide Source: Consumer Watch 2010 and 2011 The information contained in this document is confidential, for internal use only and may not be distributed outside the Standard Bank Group.

21. Global Trends Future trends...... • INNOVATION INSANITY - Invent, improve, copy…or perish. • Wine vendor donates clean water Press Ctrl+d to duplicate this slide Source: Consumer Watch 2010 and 2011 The information contained in this document is confidential, for internal use only and may not be distributed outside the Standard Bank Group.

22. Global Trends Future trends...... • INNOVATION INSANITY - Invent, improve, copy…or perish. • In Japan Kit Kat releases 9 regional favourites Press Ctrl+d to duplicate this slide Source: Consumer Watch 2010 and 2011 The information contained in this document is confidential, for internal use only and may not be distributed outside the Standard Bank Group.

23. Global Trends Future trends...... • INNOVATION INSANITY - Invent, improve, copy…or perish. • Organic soups delivered weekly by bicycles Press Ctrl+d to duplicate this slide Source: Consumer Watch 2010 and 2011 The information contained in this document is confidential, for internal use only and may not be distributed outside the Standard Bank Group.

24. Global Trends Future trends...... • INNOVATION INSANITY - Invent, improve, copy…or perish. • British retailer issues bonds with returns paid in chocolate Press Ctrl+d to duplicate this slide Source: Consumer Watch 2010 and 2011 The information contained in this document is confidential, for internal use only and may not be distributed outside the Standard Bank Group.

25. Global Trends Future trends...... • BRAND FABRIC • INNOVATION INSANITY - Invent, improve, copy…or perish. • URBANY Press Ctrl+d to duplicate this slide Source: Consumer Watch 2010 and 2011 The information contained in this document is confidential, for internal use only and may not be distributed outside the Standard Bank Group.

26. Global Trends Future trends...... • URBANY Press Ctrl+d to duplicate this slide Source: Consumer Watch 2010 and 2011 The information contained in this document is confidential, for internal use only and may not be distributed outside the Standard Bank Group.

27. Global Trends Future trends • BRAND FABRIC • INNOVATION INSANITY - Invent, improve, copy…or perish. • URBANY • ECO EASY Press Ctrl+d to duplicate this slide Source: Consumer Watch 2010 and 2011 The information contained in this document is confidential, for internal use only and may not be distributed outside the Standard Bank Group.

28. Global Trends Future trends...... • ECO EASY Press Ctrl+d to duplicate this slide Source: Consumer Watch 2010 and 2011 The information contained in this document is confidential, for internal use only and may not be distributed outside the Standard Bank Group.

29. Global Trends Future trends...... • BRAND FABRIC • INNOVATION INSANITY - Invent, improve, copy…or perish. • URBANY • ECO EASY • TRACKING AND ALERTING Press Ctrl+d to duplicate this slide Source: Consumer Watch 2010 and 2011 The information contained in this document is confidential, for internal use only and may not be distributed outside the Standard Bank Group.

30. Global Trends What would the crystal ball hold for Agriculture over the medium term? • More partnerships/ JV’s and linkages throughout the value chain • Food prices will probably increase • Consolidation to continue • Global demand and supply transitions • Shift in traditional marketing strategies • Energy opportunity • Water challenge Press Ctrl+d to duplicate this slide The information contained in this document is confidential, for internal use only and may not be distributed outside the Standard Bank Group.

31. Medium term Forecasts – Standard Bank Group Economics Source: Standard Bank Group Economics South Africa, Macroeconomic perspectives, 6 September 2010

32. Thank you for your time. • Lumé Kleynhans • lume.kleynhans@standardbank.co.za