PIN Wave 10 Week Results Review Label POV

1. PIN Wave 10 Week Results ReviewLabel POV

2. Neenah Label Initiative

3. Background /Opportunity / Goal Background • While our traditional Text & Cover business continues to decline we need to look at other areas for growth. As previously identified in Pin 1 the label market is an area where we have had success and have opportunity for growth. We need to better understand the market and where opportunities exist. • This initiative will look at the entire label market segment to identify where opportunities exist and can utilize our core competencies. • We will also look at market opportunities that may require minor capital investment assuming a positive ROI. • We will not be looking at markets that are clearly outside our capabilities or require major capital investments. Opportunity Statement • As our traditional business continues to decline we have opportunity to look for growth within the label market. We will look at the overall label market and break it into smaller sub-segments based on end use application. We will then rank the segments and identify markets where opportunities exist. We will build an implementable business plan to pursue the key markets.

4. Results Review / Deliverables • Our team found there was an opportunity for Neenah to expand its position in the premium label market, specifically the wine, beverage, and food/condiments label markets. • A sales plan has been developed to pursue new market opportunities in the areas of beverage and food/condiment labels. • Orders for label applications of this type will be tracked in Oracle by end-use as well as by Label Specialist (Sales person) • In addition to new markets we also found Neenah has a significant share of the uncoated wine label market and a number of new competitors have targeted our position. • The sales plan that was developed also includes a response to the competitive threat on our existing wine label products. • Sales will be tracked and analyzed through Oracle reporting. In addition we will be able to track all orders by end-use application.

5. Market • The North American Label Market demand is 6,820 million MSI. • Paper represents 75% of the total demand or 75% or 5,115 million MSI of the market is paper. • 95% Coated Paper • 5% or 256 million MSI is uncoated paper. • Films, foils, plastics etc, represent the remaining amount of demand. • 256 Million MSI = roughly 161,000 tons of uncoated paper used for labels. • The opportunity for premium uncoated label paper is .5% or 16,000 tons.

6. Market Opportunity • Wine label opportunity includes all types of wines. • Current market share for wine is 80% or about 4,000 tons • Objective to maintain and grow by an additional 500 tons. • Beverage includes micro-brews, bottled water, spirits, and organic beverages. • Current market share is small, less than 1%. • Objective to capture as much market share as possible. • Food/Condiment includes packaging with indirect food contact such and bottled or canned products. • Current market share is small, less than 1%. • Objective to capture as much market share as possible.

7. Printing Methods • Web fed offset is the primary print method in the label market and require rolls. Typically manufacturers will be required to manufacture rolls to customer requirements. This process will produce the best quality printing results. • All of Neenah’s paper can be printed using this process. • Flexography is a very common and economical process of printing labels and packaging. As with web fed offset this process requires rolls and will be manufactured to customer specifications. Flexor printing produces adequate printing results however technology continues to improve the quality of Flexor printing. • Flexo printing lends itself better to a smoother sheet as some textures are too deep to accept the ink uniformly. • Most of Neenah’s papers can be printed Flexor but sheets with texture should be tested for performance. • Screen printing is a process often used to print on irregular surfaces. For the purposes of the premium label segment this type of process will likely not be used. • Letterpress is rarely used which exception of very high end applications. Our papers have long been suited for letterpress application. • Digital is a growing printing process. We are working on qualifying the Estate brand. • Ultimately there are no printing applications that we are not well suited for or would prevent us from being successful .

8. Sales Plan • A market opportunity exists in the labeling market in the following segments: • Wine – red, white and blush • Beverage – soft drinks, spirits, water, organic drinks • Food – canned or bottled indirect contact • Targeted selling effort: • Utilization of “Label Specialists” • Pull through selling effort starting with the end-user • Relationship building with label printers and converters • Sales training to include: • Label printing techniques • Application training – pressure sensitive application (PSA) and glue applied • Technical training – product attributes • Bottling process

9. Timeline

10. Sustainability Plan • This sales plan will now be implemented with the support of the area directors. • Label Specialists (LS) need to be identified for each area. • Jeff Ringgold (JCR) will coordinate the required training of the Label Specialists. • Bi-weekly update calls with the LS will be scheduled by JCR • Monthly reporting will be done by JCR, once established will transfer to the LS. • Paper and technical specification to be kept up to date by Bob Arriola. • Mike O’Connell to keep the LS’s updated on Tech Products • Division of long term responsibilities to be discussed during future pin waves.

11. Key Learning's and Recommendations Other Key Learning's • While developing a tool to track label sales we realized this tool could be used to track all the end uses of our papers. Combining what our papers are being used for along with SPOT would give us a very powerful tool to use with our distribution partners. • We found that hang tags are considered a form of label and we have already established a position through our luxury packaging efforts. • Research indicated that the PSA market is growing significantly and overtaking the glue applied market. We are currently aligned with the largest PSA manufacturers giving us the opportunity to leverage those relationships into the identified markets we have chosen to pursue. Recommendations • We recommend immediate implementation of the label sales plan to pursue wine, beverage and food/condiments market. • Introduction of an economically priced alternative to Estate # 8. • Continue to work on digital qualification of Estate Label.