U.S. Market Overview U.S. Total Seafood Total Retail Seafood - PowerPoint PPT Presentation

U.S. Market Overview

U.S. Total Seafood

Total Retail Seafood dollars have grown from $9.8 in 2011 to $11.9 billion in 2017. Fresh and Frozen account for a combined 80% of the sales while Shelf-Stable seafood sales account for 20% Note: Fresh does not reflect Food Service/restaurants - $9.4B market in N. America 3

U.S. Frozen Seafood

Total frozen seafood sales generated $5.35 billion in the last year. This represents an increase of $213 million (+4.1%) versus year ago. Shrimp now represents more than half of the total category. 5

The percent of US households consuming frozen seafood varies widely by species. 70% of households buy one or more species. The top four include Shrimp (47%), Pollock (24%), Tilapia (20%) and Salmon (16%). Frozen Tuna represents almost 2% 6

U.S. Frozen Tuna

With just below 2% of households purchasing, U.S. sales of frozen tuna (through retail channels) have nearly doubled since 2011- from $19.4MM to $37.3MM in the latest 52 Week Period 8

The typical US household demographic of frozen tuna purchasers tends to be Urban, mid-to-high income young adults as well as Boomers and suburban small families. Frozen Tuna - IRI Household Clusters % Dollars Source: IRI Shopper Sights % Target % HH Volume per 100 2018 US HHs Buying Sales HH Index Top 10 O54 Striving Single Scene 2.7% 7.9% 2.9% 312 G25 Urban Edge 1.6% 2.9% 2.3% 205 P58 Heritage Heights 0.5% 0.8% 1.6% 201 L41 Booming and Consuming 1.0% 2.0% 3.5% 201 O53 Colleges and Cafes 0.9% 1.4% 3.7% 189 A04 Picture Perfect Families 0.7% 1.3% 3.1% 181 E19 Full Pockets Empty Nests 1.5% 2.4% 2.2% 162 A05 Couples with Clout 0.8% 1.2% 3.2% 155 O52 Urban Ambition 1.3% 2.1% 2.4% 154 D17 Cul de Sac Diversity 0.7% 1.1% 2.3% 151 Bottom 5 S70 Tight Money 0.2% 0.1% 0.7% 40 K38 Gotham Blend 1.3% 0.4% 0.9% 37 Q65 Senior Discounts 1.6% 0.5% 1.1% 34 N48 Rural Southern Bliss 1.5% 0.5% 0.9% 32 S69 Urban Survivors 1.6% 0.3% 0.8% 21 TOTAL US Households 100.0% 100.0% 1.8% 100 • 9

In relation to shelf-stable tuna, the U.S. Consumers of frozen tuna are closely aligned with more premium ambient solutions like canned albacore and tuna pouches IRI PANEL - Total US - All Outlets BUYER INDEX - 52 Weeks Ending Dec-31-2017 CANNED CANNED FROZEN FROZEN POUCH CANNED POUCH CANNED LIGHT LIGHT TUNA TUNA ALBACORE TUNA TUNA ALBACORE TUNA TUNA 1 Person HH 72 90 94 87 2 Person HH 136 98 115 102 Race - White 108 103 105 99 3 Person HH 90 110 100 105 Race - African American 65 101 88 105 4 Person HH Race - Asian 100 112 90 103 115 67 69 74 5+ Person HH 78 99 84 113 Race - Other / Unknown 73 90 89 113 Income lt $15K 35 79 82 112 Income $15-24.9K 42 93 94 112 Yngr Millennial: HH born 1990+ 101 84 50 93 Income $25-34.9K 68 91 89 112 Older Millennial: HH born 1981-89 110 108 73 93 Income $35-49.9K 79 98 97 109 Gen X: HH born 1965-80 110 110 90 99 Income $50-69.9K 97 110 99 105 Yngr Boomers: HH born 1956-64 111 102 112 106 Income $70-99.9K Older Boomers: HH born 1946-55 133 108 104 94 95 92 121 104 Income ge $100K 142 104 114 82 Seniors: HH born b4 1946 61 78 130 101 • 10

U.S. Shelf Stable Seafood

Shelf Stable seafood accounted for $2.6 billion in sales over the last 52-weeks. Tuna purchases represent nearly three-quarters of the total category sales. 12

Most segments of Shelf Stable Seafood posted increases vs. the prior year. Core canned tuna products increased (Albacore +2% and Light Tuna +1%), with Pouch Tuna, Sardines and Ready To Eat Kits generating increases of 17%, 15% and 6% respectively • 13

U.S. household consumption of shelf-stable seafood is 71.5% in total. Canned light tuna is purchased by 41% of households followed by canned albacore (27%), Pouch . Tuna (17%), Salmon (14%) and Sardines (12%) Percent of US Households Purchase by Shelf-Stable Seafood Segment Source: IRI Panel - 52-Weeks Ending 3-25-18 71.5 40.8 27.3 16.8 13.7 11.5 7.2 5.1 3.9 2.8 2.5 2.2 1.9 1.7 1.3 14

Light tuna is the largest shelf stable tuna segment, contributing 39.4% of the dollars sold and 54.2% of the tonnage. Albacore, follows with 36.6% of dollars and 31% of volume sales. Pouch and RTE Kits are the smallest segments, but the fastest growing. Shelf Stable Tuna Dollar and Volume Share By Type Dollar Share Case Volume Share 15 Source: IRI

Annual Shelf Stable Tuna dollar sales have rebounded back near the level of 2014. Overall case volume sales have eroded slowly – with cans down 3.7 million cases (-12.4%) offset by a +1.3 million case gain for pouches and kits (+40%). 16

StarKist is the leading brand of Tuna in the U.S. market, accounting for 42% of the category dollars. Bumble Bee ranks #2 with 25%, followed by Chicken of the Sea (15%) 17

On a volume basis, Starkist accounts for 37% of Tuna sales, followed by Bumble Bee (23%) and Chicken of the Sea (17%) 18

The number of households purchasing canned tuna declined over the last 5 years by 4 percentage points. The largest decline was canned light tuna, whereas the percent of households purchasing Tuna Pouches and Ready-To-Eat Kits is increasing. 19

78% of US shelf-stable tuna sales are sold in Traditional Grocery stores (55%) and Walmart (23%). The three Club Stores (Costco, SAMS and BJ’s) account for another 13%. 20

We believe that canned and pouch Tuna is positioned for growth given the incredible health benefits, it’s an affordable lean protein and convenient for a quick meal or snack Consumer Trends Continue To Be Favorable For Tuna • Consumer trends support growth opportunities – Boomers and Millennials alike seeking “better for you” and cleaner product options – that taste delicious – Convenience is a critical factor in product offerings especially snacking and on-the-go solutions – Consumers with “fish forward” attitudes and behaviors • Shelf Stable Tuna fits consumer needs – Protein is “hot” today – Healthy, nutritious and convenient – Low in fat, calories and cholesterol – High in Omega-3 EPA/DHA and excellent source of protein – Linked to reduction in heart disease, Alzheimer’s, strokes – Easy to prepare – Affordable “go to source” of lean protein 21

There are multiple industry and NGO initiatives underway in the U.S. to educate and amplify the message about the health benefits of seafood across a diverse spectrum of stakeholders Leverage The Positive Science And Reach Key Targets Key Opinion Leaders Stakeholders RDs, MDs, Scientists Engagement & Accountability Consumers Medical Pregnant/Nursing Moms Institutions & Associations Net Effects Report Media Health Care Providers Traditional and Non-Traditional OBGYN, Peds, Nurses 22

We continue to closely monitor the conversation that is taking place in traditional/digital media and social media in regards to “TUNA” and have seen a sustained wave of “positive” stories/posts compared to “negative” • 23

Finally, progress continues with the great work being conducted by ISSF Industry Commitment • ISSF expects the tuna industry to demonstrate and deepen its commitment to sustainable fishing and responsible seafood sourcing • From bycatch mitigation to product traceability, ISSF participating tuna companies, ISSF participating companies have committed representing 75% of the to conforming to conservation measures and canned tuna industry, have each committed to comply other commitments designed to drive positive with ISSF’s conservation change — and to do so transparently through measures. third-party audits • Tuna vessels of all gear types can join ISSF’s ProActive Register (PVR), an online database, and be audited on their compliance with select ISSF sustainability measures.

ISSF is currently in the process of rolling out their strategic goals for the next five years – 2018 through 2022

ISSF is encouraged with increased participation and compliance among Tuna companies with conservations measures - and also with the growth of vessel registrations on the Proactive Vessel Registry (PVR). At the end of 2017, 966 vessels were registered,

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