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DOMESTIC AQUACULTUREA Darden Restaurant Perspective

DOMESTIC AQUACULTUREA Darden Restaurant Perspective

April 16, 2008April 16, 2008

2008 USDA ARS/CSREESAquaculture Stakeholder Workshop

2008 USDA ARS/CSREESAquaculture Stakeholder Workshop

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Why Domestic AquacultureWhy Domestic Aquaculture

Darden Restaurants is committed to growth

Global demand for seafood will grow

Wild capture stable

Responsible aquaculture must fill the gap

Domestic aquaculture should play a greater role

– 80% of the seafood consumed in the U.S.is imported

Darden Restaurants is committed to growth

Global demand for seafood will grow

Wild capture stable

Responsible aquaculture must fill the gap

Domestic aquaculture should play a greater role

– 80% of the seafood consumed in the U.S.is imported

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Darden OverviewDarden Overview

Six concepts:

Largest publicly traded, owned and operated full-servicedining restaurant company in world

Over 1700 restaurants in U.S., Canada and Puerto Rico

170,000 employees

400 million guests per year

$6.7 billion in annual sales

Six concepts:

Largest publicly traded, owned and operated full-servicedining restaurant company in world

Over 1700 restaurants in U.S., Canada and Puerto Rico

170,000 employees

400 million guests per year

$6.7 billion in annual sales

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We Are a Global Seafood PurchaserWe Are a Global Seafood Purchaser

Darden sources seafood from over 30 countries

We are unique in the restaurant business -- Seafood Center of Excellence

Food safety is our number one priority

Our seafood purchases are roughly $900 Million, aquaculture representing 60%

Darden sources seafood from over 30 countries

We are unique in the restaurant business -- Seafood Center of Excellence

Food safety is our number one priority

Our seafood purchases are roughly $900 Million, aquaculture representing 60%

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Darden BrandsDarden Brands

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Global Wild Harvest Supply ProductionGlobal Wild Harvest Supply Production

Source: FAO FishStat

'50 '55 '60 '65 '70 '75 '80 '85 '90 '95 '00 '040

20

40

60

80

100Millions of MT

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World Aquaculture ProductionTotal Growth Rate

World Aquaculture ProductionTotal Growth Rate

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

E

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

E

Source: FAO Aquaculture Production, by FAOSTAT Group,Source: FAO Aquaculture Production, by FAOSTAT Group,

Growth has slowed from over16% in the early 1990's toaround 5% per year

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Sustainable SeafoodSustainable Seafood

Darden being a global purchaser of seafood

– is committed to sustainable wild-capture fisheries

– is committed to sustainable aquaculture

– recognizes there is a need for sustainable fisheries and aquaculture to meet global protein needs

Darden being a global purchaser of seafood

– is committed to sustainable wild-capture fisheries

– is committed to sustainable aquaculture

– recognizes there is a need for sustainable fisheries and aquaculture to meet global protein needs

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Demand and Supply GapDemand and Supply Gap

2.1

2.2

2.3

2.4

2.5

2.6

2.7

2.8

2006 2008 2010 2012 2014 2016 2018 2020 2022 2024 2025

2.1

2.2

2.3

2.4

2.5

2.6

2.7

2.8

2006 2008 2010 2012 2014 2016 2018 2020 2022 2024 2025

Data from U.S. Census and FAOAssumes constant seafood consumption of 7.48kg/capita and population growth of 0.9% per annum (US Census)

Millions of MT

Current ProductionCurrent Production

Required ProductionRequired Production400,000 MT deficitrequires an 18%

increase in supply

400,000 MT deficitrequires an 18%

increase in supply

To Maintain Per Capita Status Quo (16.5 lbs. ) Requires Approximately400,000 Additional Metric Tons (edible wt.) by 2025

To Maintain Per Capita Status Quo (16.5 lbs. ) Requires Approximately400,000 Additional Metric Tons (edible wt.) by 2025

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U.S. Restaurant Industry – Demand GrowthU.S. Restaurant Industry – Demand Growth

$42.8

$119.6

$239.3

$379.0

$558.3

1970 1980 1990 2000 2008

$42.8

$119.6

$239.3

$379.0

$558.3

1970 1980 1990 2000 2008

Source: National Restaurant Association 2008 Restaurant Industry Forecast

67% Increasein less than

10 years

67% Increasein less than

10 years

Restaurant Industry Sales(Billions of Current Dollars)

Restaurant Industry Sales(Billions of Current Dollars)

945,000 Restaurants Will Hit $558.3 Billion in Sales in 2008945,000 Restaurants Will Hit $558.3 Billion in Sales in 2008

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Darden’s Transition with Evolutionin Seafood Industry

Darden’s Transition with Evolutionin Seafood Industry

SPECIES

Shrimp

Salmon

Tilapia

Trout

Catfish

Arctic Char

Hybrid Stripped Bass

Mussels

Oysters

Clams

1 9 6 8 - 1 9 8 8

WILD-CAPTURE AQUACULTURE

X X

X X

X

X

X

X

X X

X

1 9 8 8 - 2 0 0 8

WILD-CAPTURE AQUACULTURE

X X

X X

X

X

X

X

X

X

X

X

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Aquaculture DriversAquaculture Drivers

Supply – year round accessibility

Quality Product

Variety

Price Consistency

Traceability

Supply – year round accessibility

Quality Product

Variety

Price Consistency

Traceability

Power of Domestic AquaculturePower of Domestic Aquaculture

Fresh Product

Regional Markets

Variety

Short supply chain

Strict environmental conditions

Fresh Product

Regional Markets

Variety

Short supply chain

Strict environmental conditions

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Darden’s Recommended List of Aquaculture Species

Darden’s Recommended List of Aquaculture Species

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Darden’s Recommended List of Aquaculture Species

Darden’s Recommended List of Aquaculture Species

Redfish

Sea Trout

Red Snapper

Pompano

Halibut

Tuna

Grouper

Lobster

Cod

Dungeness Crab

Redfish

Sea Trout

Red Snapper

Pompano

Halibut

Tuna

Grouper

Lobster

Cod

Dungeness Crab

Tier One SpeciesTier One Species

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Darden’s Recommended List of Aquaculture Species

Darden’s Recommended List of Aquaculture Species

Redfish

Sea Trout

Red Snapper

Pompano

Halibut

Tuna

Grouper

Lobster

Cod

Dungeness Crab

Redfish

Sea Trout

Red Snapper

Pompano

Halibut

Tuna

Grouper

Lobster

Cod

Dungeness Crab

Mahi Mahi

Bay scallops

Oysters

Clams

Blue/Swimming Crabs

Mussels

Mahi Mahi

Bay scallops

Oysters

Clams

Blue/Swimming Crabs

Mussels

Tier One SpeciesTier One Species Tier Two SpeciesTier Two Species

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Darden’s Recommended List of Aquaculture Species

Darden’s Recommended List of Aquaculture Species

Redfish

Sea Trout

Red Snapper

Pompano

Halibut

Tuna

Grouper

Lobster

Cod

Dungeness Crab

Redfish

Sea Trout

Red Snapper

Pompano

Halibut

Tuna

Grouper

Lobster

Cod

Dungeness Crab

Cobia

Black Drum

Trippletail

Snook

Amberjack

Hogfish

Sea Bream

Other Flatfish

Conch

Cobia

Black Drum

Trippletail

Snook

Amberjack

Hogfish

Sea Bream

Other Flatfish

Conch

Mahi Mahi

Bay scallops

Oysters

Clams

Blue/Swimming Crabs

Mussels

Mahi Mahi

Bay scallops

Oysters

Clams

Blue/Swimming Crabs

Mussels

Tier One SpeciesTier One Species Tier Three SpeciesTier Three SpeciesTier Two SpeciesTier Two Species

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Closing Thoughts Closing Thoughts

Be guided by what the customer wants

Take advantage of your location – regional production

Customer –Producer-Researcher partnership

Regulatory climate conducive to aquaculture

Leverage existing US infrastructure

Be guided by what the customer wants

Take advantage of your location – regional production

Customer –Producer-Researcher partnership

Regulatory climate conducive to aquaculture

Leverage existing US infrastructure

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Vision for Domestic AquacultureVision for Domestic Aquaculture

Profitable/Attracts Capital

Opportunities for Coastal and Farming Communities

Gold Standard for Sustainable Aquaculture

Global Technology Leader

Profitable/Attracts Capital

Opportunities for Coastal and Farming Communities

Gold Standard for Sustainable Aquaculture

Global Technology Leader