Trends in Consumer Goods: Israel's Exports to the United States Panel Discussion

1. Israel Consumer Goods Exports to the United States Panel Discussion Leonard N. Budow, Esq. April 10, 2016

2. Trends in Consumer Goods – Does your Product Meet, Follow or Leapfrog Those Trends? Knowledge Risk Panel Questions: • Do you consider the United States a trend setter or follower? • What are the primary demand and supply drivers in the United States consumer goods industry today and what do you see over the next decade? • Is there Global convergence or divergence for middle class consumer markets?

3. Factors to Consider • The Green Revolution • Technology - Digital, Gigs and Apps affecting consumer goods distribution channels • Health • Demography, Age, Taste and Needs - one country or 119? • Fair Trade • Working Wages • NAFTA and TPP • Changing OECD Tax Regimes

4. Key Trends in Consumer Goods • The beast awakens - the digital consumer • Value beats luxury • Demography or the inverted pyramid

5. Demography Trends

6. Regulations and Your Business Launch? Be Aware Panel Questions: • Is the regulatory environment in the United States prohibitively costly for new entrants? • How does it compare to your other ex-U.S. territorial operations? • Do you need a lobbyist to conduct business in the United States?

7. Factors to Consider • Federal Trade Commission • Labeling and California Consumers Legal Remedies Act • Consumer Product Safety Commission • Environmental Protection Agency • Department of Transportation • Federal Trade Commission • Sarbanes Oxley • 2010 Health Care Act • State and Local - where do I conduct business

8. Let the Numbers Speak or Now I know Why There are so Many Lawyers • 1,000,000 regulations (not laws) in 2010 • 174,545 pages in the Code of Federal Regulations • The index of the Code of Federal Regulations is 1,242 pages

9. The Sentier Dream Beyond a One Off Sale or for 100,000,000 Francs I am Yours Panel Questions: • Is proof of concept in Israel adequate to secure funding, co-venture, franchisee, distributor or agent in the U.S.? • What do you look for when you co-venture with an off shore entity? • Do you feel more secure if there is a subsidiary and/or infrastructure in the United States? • How does an Israeli venture sell itself to an American? • How does an Israeli company protect itself from Target Canada, Circuit City, Linens & Things, A&P, Radio Shack, Blockbuster, Sbarro, Christian Bernard or Brookstone?

10. Factors to Consider • Personal history of the principal behind the venture • Serial entrepreneurs • Investor backing-private equity, crowdfunding • Length of time in business • Business outside of Israel • Balance sheet and fiscal integrity - accountants? • Pre-existing business in the United States • Exclusivity? • Nature of product - subject to extensive regulation? • Legal structures - board members and fidelity to normative process; layers? • The Big Sale or my Sentier Dream Come True • Credit Insurance - Receivable Insurance • Limits Insurers • Letters of Credit or in the EU a Bank Guaranty

11. The Israel Label – Plus, Negative or Neutral Panel Questions: • Hypothetically does BDS affect your business decisions in buying Israeli products? • How do you advise your Israeli Partners in how to and whether to address the issue? • Is BDS a long term threat to Israeli exporters? • Does it depend upon which industry?

12. Factors to Consider • Campus movement creating a youth generation antithetical to support of Israel • Is the BDS campaign affecting internal green line companies? • Alienation of certain Christian groups although evangelicals appear firmly committed to Israel • Do we export to America and the EU as Israeli companies or companies based in Israel • Does support from Jewish and Christian Fundamentalist sectors outweigh any negative effects of BDS?

13. Timing – Is it Now or Never? Economic Risk Panel Question: When Electing to Launch in the United States, do you advise taking in to account macro economic, local political and monetary conditions?

14. Factors to Consider • Shekel Cost Average or all in • Stanley Fisher versus Lael Brainard- does the panel see pressure on wages and the ability to increase prices in the consumer goods area? Are you a Fisherite (divergence and diversification) or Brainardite (convergence and unification)? • Will US consumers continue to spend in a tightening monetary cycle? • Currency - to hedge or not to hedge; to care or not to care • Proof of Concept - maturation of the launch vehicle • Industry specific issues or hemlines up, hemlines down • Macro Economic Cycles - is diversification a virtue to off set risk • The Donald or Hillary - does it matter to your launch?

15. United States and Israel Today – In Sync?

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19. Leonard Budow, Esq. 212.878.7902 LBudow@foxrothschild.com