Where is Our Milk Being Produced, Who is Buying it ? Rick Naczi ADADC Inc.

1. Where is Our Milk Being Produced, Who is Buying it?Rick NacziADADC Inc.

2. The number of occasions of milk drinking per capita has “slipped” over time as well for younger kids and adults age 50 Kids 0-5 had 2.4 fewer milk occasions/week in 2012 vs. 2006 Source: Kantar Worldpanel

3. Monthly MilkHistorical Snapshot: Milk Sales Maintain Downturn Through 2013 YTD; Average Prices Still Remain Down $0.20 From December Of 2012 Milk Sales % Chg- based on ADADC Multi-Outlet Annual Average % Chg. $4.32 7/14/2013 -4.1% 7/14/2013 Note: Milk includes White Milk, Eggnog, Buttermilk and Kefir milk segments Source: IRI DMI Custom database, ADADC Multi-Outlet. Multi-Outlet (MULO) retail channel includes: Grocery, Drug, Walmart, Club, Dollar, Military, and AO Mass stores

4. Declining Sales + Growing Population = Falling Per Capita consumption Since 2002, fluid milk through all channels has declined over 4%, while population has grown almost 12% * Includes all milk products, buttermilk, eggnog and other misc. products Source: USDA/AMS

5. Decline of Households with Children Impacts Milk Beverage Milk Consumption by Age Annual Eatings Per Capita Percentage of households with children under age 18 Source: GfK Consulting

6. How Will this growingConsumer Base Affect US Beverage Categories in 2020? • Boomers getting older • 12% of population age 65+ • Fast growing • +36% 2010-20 versus +6% Other Age Groups • Growth of 15 million • Between 2010-20 People Age 65+

7. How Will this growingConsumer Base Affect US Beverage Categories in 2020? • Largest minority group • 16% population • Fastest growing • +33% 2010-20 vs +6% Non-Hispanic • Growth of 17 million • Between 2010-20 HISPANICS

8. In 2012, Fluid Milk Declines Most significantly through Retail, The Major Channel 2011 Milk Sales Share by Channel Foodservice 14.2% Schools 7.2% Retail Measured through IRI 69.8% Sources: Prime/MilkPEP All Channel Tracking, 2011; NPD/Crest; SymphonyIRI, DMI Custom DB Multi-Outlet Data (MULO), includes: Grocery, Drug, Wal-Mart, Club (ex. Costco), Dollar, Military and Mass Stores. Excludes Convenience Stores.

9. ADADC Multi-Outlet Milk Sales/Pricing: Milk Sales Are Down Nearly -3% For 2013 YTD, As Prices Begin Increasing ADADC Multi-Outlet – Data Through 7-14-2013 Volume % Chg. vs. Year Ago Total Fluid Milk Volume Share 2013 YTD - ADADC Average Price Per Volume Grocery outlet declining while All Other outlets are growing, as consumers find lower average prices at Club stores All Other outlets have much lower prices than traditional Grocery stores “All Other” Outlet includes: Walmart, Club, Dollar, Military, AO Mass Source: IRI DMI Custom database, ADADC Multi-Outlet. Multi-Outlet (MULO) retail channel includes: Grocery, Drug, Walmart, Club, Dollar, Military, and AO Mass stores

10. Volume Growth by Beverage Category Source: Beverage Marketing Corporation

11. Fastest Growing Milk Segments

12. ADADC Multi-Outlet Milk Segments: 2013 YTD (Jul 14th) Share of Milk % Chg vsYago Snapshot based on combined ADADC Multi-Outlet Source: IRI DMI Custom database, ADADC Multi-Outlet. Multi-Outlet (MULO) retail channel includes: Grocery, Drug, Walmart, Club, Dollar, Military, and AO Mass stores

13. ADADC Multi-Outlet Milk Segments: 2013 YTD (Jul 14th) Share of Milk % Chg vsYago Snapshot based on combined ADADC Multi-Outlet Source: IRI DMI Custom database, ADADC Multi-Outlet. Multi-Outlet (MULO) retail channel includes: Grocery, Drug, Walmart, Club, Dollar, Military, and AO Mass stores

14. ADADC Multi-Outlet Milk Segments: 2013 YTD (Jul 14th) Snapshot based on combined ADADC Multi-Outlet Share of Milk % Chg vsYago Share of % Chg Milk + Non-Dairy Yago Source: IRI DMI Custom database, ADADC Multi-Outlet. Multi-Outlet (MULO) retail channel includes: Grocery, Drug, Walmart, Club, Dollar, Military, and AO Mass stores

15. Milk’s Strengths Do Not Fully Align With Consumer Beverage Needs Source: Kantar World Panel 12 months ending March 2012

16. Competitiveness Ramped Up Today The number of choices Consumers have at retail has exploded in the past 40 years 2000’s • Milk • Soft Drinks • Coffee • Juice • Bottled Water • RTD Juice • Teas • Wellness • Sports Drinks • Flavored Teas • Functional Bevs • Energy Drinks • Enhanced Water • RTD Coffee • Almond Drink • Coconut Bevs • Vegetable/Fruit Blend Juice • Sparkling Juice • Fusion Drinks • Fermented Tea • Coconut Water • Milk • Soft Drinks • Coffee • Juice • Bottled Water • RTD Juice • Teas • Wellness • Sports Drinks • Flavored Teas • Functional Beverages • Energy Drinks • Enhanced Water • RTD Coffee • Almond Drink • Coconut Bevs 1990’s • Milk • Soft Drinks • Coffee • Juice • Bottled Water • RTD Juice • Teas • Wellness • Sports Drinks • Flavored Teas 1980’s • Milk • Soft Drinks • Coffee • Juice • Bottled Water • RTD Juice • Teas 1970’s • Milk • Soft Drinks • Coffee • Juice

17. Total U.S. new milk product introductions account for only 5% of all new beverages introduced worldwide Source: Innova

18. Many new U.S. products were familiar forms, flavors Outside the box TruMoo Limited Edition Halloween Orange Color Vanilla Milk Friendly Farms Pumpkin Spice Milk Shamrock Farms' Rockin' Refuel Protein Fortified Low Fat Strawberry Milk Drink Lucerne Protein + Refuel Protein Fortified Dairy Beverage: Chocolate Core Power 26g Protein Honey Source: Innova

19. Beyond our bordersMilk Multi-Taskers • Vitamin B for Energy, Immune System • Fiber for Intestinal Health • Vitamin A for Healthy Eyes • Coconut Water for Hydration • Glucosamine for Healthy Joints Skimmed Milk Drink Enriched with Plantsterol. Scientifically proven. Skimmed milk drink with additional plantsterol. Actively reduces cholesterol. NesfluidHydra Nutrition Renforce Cocoa Flavored Milk Drink with Coconut Water. For enhanced hydration NutricimaBliss Smoothie Fruit Milk: Orange and Pineapple. Contains vitamins A, C, and E for immunity; vitamin B complex for energy Jalea Vital with vitamin B6 to boost the immune system Vanilla flavored semi-skimmed milk with added vitamins and minerals. With vitamin A for healthy eyes. Japan: Yakult Compressed Healthy Glucosamine Dairy Drink: Apple. Includes glucosamine to strengthen chondrocyte. Also include chondroitin for the endurance of cartilage. Added 20% of apple citrus to give refreshing flavors. Fibre to boost intestinal transit Source: Innova

20. Worst of the Worst Walgreens - East Windsor, NJ Stewarts - Ballston Spa, NY

21. CVS New Hyde Park Before After

22. Walgreen’s NYC and Western NY

23. Specialty Coffee Accounts for Significant and Growing Share of Fluid Milk Through Restaurants Servings of Milk and Specialty Coffee are used to gauge Milk’s performance at restaurants: • as servings of milk • as ingredient in other beverages such as specialty coffee and shakes - Specialty Coffee drinks often contain at least an 8 oz. serving of Milk* * As determined by review of ingredient/nutrition data on Starbuck’s and McDonald’s websites Source: NPD/Crest

24. McDonald’s: Despicable Me & Fluid Milk Milk Jug Packaging Promotional Materials McPlay App

25. Safeway: Make It with Milk April 2013: 2 weeks in 1400 stores nationwide • Results • Higher sales volume • Retailer support • Loyalty program activation • Online consumer engagement Quaker 17% Milk 5% • Next Steps • Monitor long-term behavior change • Expand to more retailers for sustained effort • Make It with branded Milk • Support with print campaign and social media

26. When Milk Stretches Into Other Categories, Success has Followed

27. Thank Yournaczi@adadc.com