Market Development AnalysisMarket Development Analysis

Prepared for the exclusive use of Shelburne Plastics

1. Market overview1. Market overviewMarket sizeMarket sizeRegional competitorsRegional competitorsMaterialsMaterials

2. Target customers2. Target customersGreen Mountain CoffeeGreen Mountain CoffeeCabot CreameryCabot CreameryBen and Jerry’sBen and Jerry’s

3. Other possible targets3. Other possible targetsOther yogurt producersOther yogurt producersRegional dairiesRegional dairies

4. Next Steps4. Next Steps

5. Appendix5. AppendixEcoPure BrochureEcoPure BrochureVEDA financing productsVEDA financing productsNorthern Community Investment Corp Northern Community Investment Corp

Table of ContentsTable of Contents

Market OverviewMarket Overview

4

Market Size

$176 million

$409 million

5

Regional Blow Molder Competitors(with comparable product offerings)

Industry Rank**

Company

Blow molding sales(millions $)

1Graham Packaging Co. LP a

York, PA 2,195.00

6Constar International Inc. (P) c

Philadelphia, PA 683.70

56 Custom Bottle Inc.Naugatuck, CT

20.00E

56 Shelburne Plastics Inc.South Burlington, VT

20.00E

81 Currier Plastics Inc.Auburn, NY

12.00

117 J.E. Roy (Plastique) Inc.Pintendre, Quebec

4.90E

118 Blow Molded SpecialtiesPawtucket, RI

4.50

127 Ben-Pak Plastics Inc.St. Anselme, Quebec

3.101

6

117127

8156

56

118

**Per Plastic News

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Profile• 3,400 employees • 51 salesmen• 71 manufacturing facilities,

– 17 manufacturing facilities are located on-site at customers’ plants.

– cluster around Philadelphia, MA and southern NH, Southern CA, GA (headquarters)

– Canada (1 plant) Mexico (2 plants)

Consolidated Container Corp.

Products•One gallon and one-half gallon HDPE bottles for dairy•A wide variety of DPE and PP containers for juice and other beverage •HDPE and PET bottles for laundry detergents, cleaners, dishwashing liquids, etc.•HDPE, PP and PET bottles for mustard, maple syrup, edible oils and salsa. •one quart HDPE bottles for motor oil•one gallon HDPE containers for anti-freeze and windshield washer solvent. respectively.

CustomersCoca-Cola Colgate-

PalmoliveDS Waters Dean FoodsNestle Waters Procter & Gamble Pepsico

Reckitt Benckiser, Scotts

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Profile• 1,000 employees • 81 manufacturing facilities,

– 25 manufacturing facilities are located on-site at customers’ plants.

– 850 production lines

Graham Packaging

Products•Retortable PP container for Boost and Ensure adult nutritional beverages; • Aseptic HDPE container for 8th Continent soy-based beverages; • Hot-fill PET containers for juices; • Hot-fill PET and PP wide-mouth jar for Ragu pasta sauce, Seneca applesauce, Welch’s jellies and jams and Del Monte fruit slices; •Lightweight 64 oz. rectangular container for hot-fill juice; • Panel-free lightweight 16.9 oz. container for juices and teas; and • Panel-free 20 oz. container for enhanced water.

CustomersChurch & Dwight CloroxCoca-Cola Colgate-PalmoliveDanone DialExxonMobil HeinzOcean Spray PepsiCoFrito-Lay GatoradeTropicana Procter & GambleShell Pennzoil-Quaker

StateUnilever Welch’s

Generation 1 Generation 2 Generation 3

MicrobiodegradablePlastics

OxobiodegradablePlastics

Biodegradable Product Evolution

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• Made and promoted by corporate giants that have significant market influence, such as Cargill, Inc., but it has drawbacks.

• Product limitations– Based on a common food source. Significant adoption of PLA will significantly

upset the existing corn marketplace. – It imparts an off taste to water when used for water bottles– It has a short shelf life. – It is not easily recyclable and accepted in only in controlled situations – It decays so fast in many landfill environments that it generates methane before

the landfill can be capped to tap the methane releasing greenhouse gases.

PLA, corn-based plastic

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• Light naphtha-based plastic (Light naphtha is a highly volatile faction of crude oil that cannot be made into gasoline, diesel, fuel oil, or jet fuel.**)

• Most widely adopted in Europe• Offers advantages over PLA

– It is invulnerable to water.– it doesn't compete for limited the grain supply– it is stronger, less expensive, and made from an otherwise useless industrial byproduct

• Limitations– Biodegrade requires specific environmental factors-oxygen and one of the following

three circumstances-heat, UV light, or mechanical stress.– When products made with oxo-biodegradable additives enter the recycling stream in

large numbers, the resulting plastic could have a short lifespan if placed in sunlight.

Oxo-Biodegradable Plastic

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• Light naphtha-based plastic, with an microbiodegradable additive

• All the benefits of oxo-biodegradable plastics as well as:– It has the same shelf life as regular plastic– Unlike PLA and oxo-biodegradable plastic, it does not biodegrade until it is in the

presence of soil micro-organisms in either aerobic or anaerobic environments. – Biodegradation is delayed long enough that there is time to cap the landfills, so

the methane is burned off or even used to generate electricity, as is being done in almost 500 US land fills currently.

– This generation is recyclable and completely non-toxic to people, plants, and animals, and is made of ingredients approved by the FDA for food contact.

Microbiodegradable Conventional Plastic

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Microbiodegradable Additives

How does it work? • Many common soil

microorganisms can biodegrade plastic through the excretion of digestive enzymes and acids but….

• Plastics are not the preferred food source for these organisms reducing the rate of degradation.

• To work, you must attract the microorganisms capable of biodegrading plastic to the plastic.

The secret sauce….• An additive with the

ability to make conventional plastics smell and taste better than their preferred food sources, such as wood.

• That is the only difference between microbiodegradable and non-degradable conventional plastics.

Product attributes• The additive is flavorless.• Proven environmentally safe• The product constituents are

on the FDA's GRAS (generally recognized as safe) list.

• Not grain-based. Not compete for food supplies.

• Fully recyclable. PLA isn’t. Recycled oxobiodegradable plastic impairs the quality of recycled plastic products.

• Biodegrading process is ASTM 5511D (airless zone), and ASTM D5338 (soil zone) compliant.

Target CustomersTarget Customers

Selection CriteriaSelection Criteria•Proximity to existing operationsProximity to existing operations•Company with an active sustainability programCompany with an active sustainability program•Product that leverages existing production capabilities Product that leverages existing production capabilities •Market that has environmentally aware consumer baseMarket that has environmentally aware consumer base

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Green Mountain Coffee Sustainability Initiatives

• Responsible energy use• Focus on renewable energy• Reducing thermal footprint• Reducing carbon footprint

• Waste reduction

• Packaging initiatives• Packing film- In 2007, GMCR replaced a layer of petroleum-based material

with a layer of PLA in the packaging film used for our Newman’s Own® Organics line of coffees

• The Ecotainer- Working with International Paper, we developed an environmentally friendly alternative to conventional paper cups. Paper comes from sustainably managed tree farms and the liner is made from a corn-based polymer which breaks down under proper composting conditions.

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Keurig Sustainability Policy

Sustainable Packaging

…..”finding a more environmentally-friendly approach to this packaging challenge is a big priority for us. We are working on a few different fronts to improve the environmental characteristics of the K-Cup® system, as well as to mitigate its impact. “

Material requirements:•Protect the coffee inside from light, heat, moisture, and oxygen – exactly the same elements that make biodegradability possible.

Possible Strategies

We are late to the table.

Option 1-Define the next generation

offering. We will need a compelling proposition to displace the incumbent in the development cycle.

Option 2-Position ourselves with the

Supply Chain team as the qualified second source supplier.

Here’s what Keuring is doing•…actively researching alternatives to the K-Cup® Portion Pack’s petroleum –based materials.•…Life Cycle Analysis of the environmental impact of the K-Cup® Portion Pack.•… identifying the right "environmentally friendly“ packaging for Portion Packs.

Status• Plan to sell a tea product in a

renewable material portion pack in 1H ’10.

• Package with substantive improvements to follow.

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Cabot Creamery

……we understand “Sustainability” to be "living within our means and ensuring the means to

live.” Our fundamental approach to stewardship and social impact is based on the triple bottom line of social, environmental and

economic impacts.

Community Commitment• …committed to helping communities where its dairy products are sold.• …donates product to food banks, soup kitchens and shelters.• …donates cash to charity and non-profit organizations.• … sponsorship of local and regional events.• …’Ag in the Classroom’, an educational program for elementary students throughout New England to teach children about agri-culture.• …committed to green and clean, Cabot initiated Vermont’s first polystyrene and polypropylene recycling program.

Possible Strategies

• This is an ideal greenfield opportunity. Propose a development project.

• A price competitive product allows Cabot: A strong differentiator to the industry A marketing message that ties closely

to the Vermont brand

• A price competitive offering allow SP: An industry differentiator A product that has application with a

variety of diary products

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Ben and Jerry’s

“We strive to create economic opportunities for those who have been denied them and to advance new models of economic justice that are sustainable and replicable.

By definition, the manufacturing of products creates waste. We strive to minimize our negative impact on the environment.

The growing of food is overly reliant on the use of toxic chemicals and other methods that are unsustainable. We support sustainable and safe methods of food production that reduce environmental degradation, maintain the productivity of the land over time, and support the economic viability of family farms and rural communities.”

Possible Strategies

• This is an ideal greenfield opportunity. Propose a development project.

• A price competitive product allows Ben and Jerry’s:

Another clear differentiator Clear parallel to its social

responsibility agenda

• A price competitive offering allow SP:

An industry differentiator A product that has

application with a variety of frozen products

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Potential TargetsOther Yogurt Companies

Company Location Sustainability Policy

•Colombo Inc (General Mills) Methuen, MA Yes•Dannon CO Inc White Plains, NY Yes•Erivan Yogurt (Erivan Dairies) Oreland, PA Yes•Fage Usa Corp Johnstown, NY Yes•Noga Dairy Inc (Dairy Delite) Farmingdale, NY No•North Lawrence Dairy Inc •(Breyer's Yogurt Company) North Lawrence, NY Yes

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Potential TargetsRegional Dairies

Company Location Sustainability Policy

Vermont Dairies

•Booth Bros/H P Hood, Inc. Barre, VT, NH Yes Hood corporate Lynnfield, MA•Strafford Organic Creamery Strafford, VT Yes

Other Dairies

•Byrne Dairy Inc Syracuse, NY None Stated•Worcester Creameries Corp Jamaica, NY None Stated•North Lawrence Dairy Inc North Lawrence, NY Yes•Cloverland Green Spring Dairy Baltimore, MD None Stated•Penn Maid Foods Inc Philadelphia, PA None Stated

Action Plan1. Finalize SMARTvt fact finding

a) Review previous Company initiatives

2. Define target market requirements and product offeringa) Biodegradable product offeringb) Focus on coffee and dairy businesses with a strong

sustainability commitment• Single serve containers• Yogurt containers

3. Build business plan defining the project ROI

4. Prepare business proposal targeted at GMCR and Cabot

5. Strategically qualify other potential targets

6. Contact targets…make presentation

7. Define potential state and local funding sources

APPENDIX