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➢ CONSUMER SENTIMENT

➢ RETAIL ORGANIC MILK SALES

ORGANIC

1

2

Source: The Hartman Group, The Future of Snacking - 2016

Key Findings

• Consumers are increasingly seeking to consume more “Natural” foods

• They idealize food that is as close to its “natural” form as possible,

believing that it is better – physically, morally, environmentally.

• The Consumer definition of “Natural Eating” encompasses products

labeled as organic & natural, but is also more complex

• Rising in importance for consumers are concepts and on-package

indications around “local”, less processed and “clean” ingredient lists.

• Organic milk captures 5% of U.S. fluid milk sales at retail. However, a few

markets have significantly higher development (San Fran. 20% share)

• While sales have grown long term, 2017 sales are down slightly

THE CONSUMER VIEW:

ORGANIC & NATURAL FOODSExcerpts from The Hartman Group, Natural & Organic Report - 2016

3

Approach

Quantitative

• Online survey among a national

representative sample of 2,274 U.S.

adults age 18 to 70; Primary grocery

shoppers

• Organic Cell: n=1,521

• Natural Cell: n=753

Timing

August 2016

Topics

• Consumer distinctions between organic and natural*(evolution of meanings)

• Properties associated with the words organic and natural

• Organic and natural product usage and barriers to purchasing

• Purchase criteria, pathways and channels for organic and natural

• Pricing, trading-out to organic, natural or conventional products

• Perspectives on GMOs

4

Source: The Hartman Group, Organic & Natural- 2016

• Perceptions of organic, natural and associated language

• Motivations for purchase

• Shopping behaviors

• Trade-offs and decision making

Qualitative

Focus groups, shop-alongs and virtual

interviews conducted with

respondents age 22-66, with a mix of

gender, income, race/ethnicity and at

various levels of organic/natural

engagement

Background & Methodology

*To ensure parity in consumer understanding of “NATURAL” and to create a distinction between organic and natural categories, participants in the

natural cell were exposed to the below definition prior to receiving questions on labeling, usage, purchasing/trade-offs and channel behaviors: Are

more “real” – less processed, recognizable ingredients; Have no artificial ingredients (no artificial flavors, colors, preservatives); Have no growth

hormones or antibiotics; Are not certified as organic

Over 8 in 10 U.S. adults are users of organic or natural food and beverages

82%ORGANIC USERS

(Past 3 months)

+9 pts since 2014

89%NATURAL USERS

(Past 3 months)


5

Organic & Natural 2016. Q6. How often have you USED ORGANIC foods or beverages in the PAST THREE MONTHS? Base: Total Sample 2016 (n=1521); 2014 (n=1728). Q6A How often have you USED NATURAL foods or beverages in the PAST THREE MONTHS? Base: Total Sample (n=753). P3M Usage defined as those that have used at least occasionally. Note: Natural sample was exposed to definition of Natural prior to this question.

The extent to which these consumers seek out organic/natural foods &

beverages can vary significantly, depending on their level of engagement

Most

engaged

• Early adopters, trendsetters and evangelists

• Highly literate in the quality cues and issues that characterize organic and natural products

• know some general principles • experiment occasionally with

organic• prioritize other concerns.

Least

Engaged

INCOME

ETHNICITY EDUCATION

GENERATION

MARITAL STATUS

GENDER

44%

Malevs. 48% non-users

56%

Femalevs. 52% non-users

ORGANIC USER PROFILE:

Organic users continue to skew higher income, higher education and

younger

14% HS or less vs. 17% non-users

28% Some Collegevs. 35% non-users

36% College Gradvs. 28% non-users

23% Graduate Schoolvs. 19% non-users

25%32%

43%42%

26%32%

Millennial(18-37)

Gen X(38-51)

Boomer(52-70)

Non-Users Organic Users

Hispanic vs. 7% non-users

Caucasianvs. 83% non-users

African Americanvs. 15% non-users

Asian/Pacific Islander vs. 1% non-users

79%

12%

8%

12%

HOUSEHOLD SIZE

Households with Children under 18vs. 27% non-users

Under $40Kvs. 38% non-users

$40K to $79Kvs. 31% non-users

31%

31%

37%$80K or more vs. 30% non-users

31%

REGION

Northeastvs. 14% non-users

Midwestvs. 28% non-users

18%

20%

38% Southvs. 40% non-users

25% Westvs. 18% non-users

Marriedvs. 49% non-users

49%

Singlevs. 27% non-users

29%

Divorce/Separate/Widowvs. 16% non-users

12%


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INCOME

ETHNICITY EDUCATION

GENERATION

MARITAL STATUS

GENDER HOUSEHOLD SIZE

REGION

44%

Malevs. 53% non-users

56%

Femalevs. 47% non-users

14% HS or less vs. 19% non-users

29% Some Collegevs. 27% non-users

32% College Gradvs. 32% non-users

24% Graduate Schoolvs. 21% non-users

22%34%

44%40%

24%36%

Millennial(18-37)

Gen X(38-51)

Boomer(52-70)

Non-Users Natural Users

Hispanic vs. 6% non-users

Caucasianvs. 84% non-users

African Americanvs. 8% non-users

Asian/Pacific Islander vs. 8% non-users

78%

13%

7%

11%

Households with Children under 18vs. 20% non-users

Under $40Kvs. 34% non-users

$40K to $79Kvs. 19% non-users

31%

34%

34%$80K or more vs. 42% non-users

30%

Northeastvs. 22% non-users

Midwestvs. 27% non-users

19%

20%

37% Southvs. 27% non-users

24% Westvs. 23% non-users

Marriedvs. 50% non-users

49%

Singlevs. 28% non-users

28%

Divorce/Separate/Widowvs. 14% non-users

12%

NATURAL USER PROFILE:

Millennials and Boomers are equally likely to use natural food & beverage products


7

Many Consumers Believe Natural Food is Better – Physically, Morally,

Environmentally

HealthBetter for the body

The World Better for people and ecosystems

Consumers believe “more natural” has the capacity to support living a healthier, higher-quality life. This is the most motivating belief supporting natural foods.

Consumers are learning about the interconnectivity between farming practices and their surrounding natural and social environments. “More natural” farming is believed to create healthier, more balanced systems.

TrustLess corruptible

Underlying both of these narratives is consumers’ skepticism of the motivations of big business (and, to a lesser degree, the government) in their approach to food creation. There is a sense that natural foods are less likely to have been changed for the worse as a route to profit and thus to do harm.

8


Consumer Language Map of Organic and Natural

9


It’s widely accepted that consumers are more literate in food than ever before. However, as their literacy has grown, so has the complexity of language and claims around organic and natural. There is an intensification in consumer talk about the challenges of navigating foods that they can feel good about. They have to manage diversification of quality distinctions, unregulated terms, multiple meanings, mismatched terminology, changing and conflicting advice, and breadth of considerations. Organic remains a resonant symbol of food quality, particularly as it pertains to food being grown naturally.

68%

64%

63%

61%

57%

57%

46%

41%

41%

40%

39%

38%

35%

34%

34%

26%

24%

20%

20%

19%

19%

17%

16%

Absence of pesticides

Absence of herbicides

Absence of growth hormones

Absence of antibiotics

No artificial…

Absence of genetically modified foods

Absence of food irradiation

Environment-friendly

Pure

Safer for one's health

Better for one's health

Clean

Real

Fresh

Absence of Mad Cow Disease (BSE)

Premium product

Whole

Better treatment of animals

Higher nutritional content

Sustainable production

Better taste

Family (small-scale) farms

Local

Orga…

Properties Implied or Suggested by the Term “ORGANIC” - By All Primary Shoppers -

“Organic” is clearly differentiated from natural by connotations of being grown naturally; an absence of negatives introduced at the farm level

• Organic is primarily differentiated from natural by a focus on farm-level practices.

• Natural is a broader term focusing on the perceived ‘realness’ of the food and what has (or has not) been done to it after the farm.

• This distinction holds regardless of the level of engagement in the World of Organic.


10

49%

45%

52%

50%

61%

49%

41%

26%

45%

36%

35%

37%

47%

40%

29%

20%

28%

16%

19%

14%

21%

12%

14%

Absence of pesticides

Absence of herbicides

Absence of growth…

Absence of antibiotics

No artificial…

Absence of genetically…

Absence of food irradiation

Environment-friendly

Pure

Safer for one's health

Better for one's health

Clean

Real

Fresh

Absence of Mad Cow…

Premium product

Whole

Better treatment of animals

Higher nutritional content

Sustainable production

Better taste

Family (small-scale) farms

Local

Na…

“NATURAL”- By All Primary Shoppers -

• Secondary meanings of organic

Made simply

Fewer “bad” ingredients, less nutritional compromise through processing

Made responsibly

All aspects of product reflect greater respect for consumer health, animal welfare, the environment and

workers.

• Primary meaning of organic

Grown naturally

•Farm-level purity – no pesticides, hormones, antibiotics

Organic remains a resonant symbol of food quality, particularly as it

pertains to food being grown naturally


of consumers are awarethere are governmental standards regulating the use of the ORGANIC label on foods and beverages

I Trust the USDA Organic Label...- By Total -

9%

44%

34%

10%

4%

…Completely

…For the most part

…Somewhat

…Very little

…Not at all

60%

“If something was raised organically, I’m assuming

it’s more natural, with no pesticides or herbicides

and things like that. But I have to depend on the

veracity of those who call it organic.” (Outer Mid-

level, female)

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However, the distinctiveness of organic is being diluted by the spread of

organic and natural foods

Grown naturally, Made simply, Made responsibly

Perceptions of organic’s purity as a quality standard have been threatened by a number of related trends in both organic and natural foods, including:

Organic “junk” food: An increase in highly processed foods made to organic standards has compromised organic products’ moral high ground and health halo. These days, consumers still need to check the ingredient list of organic foods for “bad” ingredients.

Industrial farmers/manufacturers going organic: As organic becomes less a mark of the small, passionate farmer, consumers expect greater adherence to the letter of organic standards, rather than the broader spirit of “farming better.”

Dilution of organic meanings

Why Organic Purchasers Don’t Buy More Organic

11% (+4 pts since 2014) because they believe the requirements for organic are being significantly weakened

22% (+7 pts since 2014) because they can’t tell if a product is really organic

Organic & Natural 2016. Q10. Why don’t you purchase MORE ORGANIC foods/beverages than you currently do? (Please select all that apply). Mentions of 2% or less not shown. Base: P3M Organic Purchasers 2016 (n=1232); 2014 (n=1250).

Growth in more focused quality cues: As an abundance of highly specific “natural” quality cues emerges (e.g., no hormones, no preservatives, no artificial colors) and consumers become more sensitive to them, it may become harder for organic (which encompasses a range of standards) to differentiate itself.

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“Natural” serves as an umbrella term used by consumers to describe how

they think food should be

When seen on-pack, “natural” continues to be regarded with some skepticism

I Trust the “All Natural” Label…- By Total -

2%

18%

42%

28%

10%

…Completely

…For the most part

…Somewhat

…Very little

…Not at all


However, consumers differentiate between how they reference natural and how it

is used by the food industry on packaging.

“I travel a lot, so I buy a lot of snack foods and they’re all in packages. I think it can still be natural if it has unknown ingredients, but there’s a limit. If there’s one or two, it’s OK, but more than that I might look at something else.” (Inner Mid-level, female)

13

• The avoidance of “chemicals” has come to the forefront as a motivating force for

participation in organic and natural foods

Fear of “chemicals” is perhaps the most consistent and motivating health

narrative in consumer discussion of natural foods

What is a “chemical?” Any substance that has been added to a product, at any stage of the production process, that a consumer does not recognize, understand or think necessary, most prominently pesticides, hormones, antibiotics, “additives,” “toxins,” “artificials” and “unpronounceable” ingredients.

What’s the issue? Most consumers do not believe the “chemicals” in food have an immediate, noticeable or even measurable effect – and this is partly what makes them so concerning.

Even relatively disengaged consumers have developed a simplified narrative of bioaccumulation, the idea that small amounts of substances build up in the body over time and cause illness that is impossible to connect to its source (and thus to any kind of accountability).

“Chemical” additives have become an explanation for public health issues of our timeObesity, diabetes, cancer, allergies, hormonal issues…

Notably, this belief is not falsifiable with standard scientific methodsEngaged consumers believe that this is not something that can be ‘tested’ due to the complexity and duration of observation required. As such, reassurance can come only in the form of TRUST.

Bioaccumulation


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Consumers describe “naturalness” beyond growing practices in terms of “less processing” - foods that intuitively retain the integrity of the original ingredients

Processing definition Identifying a ‘less processed’ food

Changed from its original form

Close to original form of ingredients: Looks,tastes, feels like it should

Unfamiliar chemical additions, e.g., colors, preservatives, flavors

Short, pronounceable and recognizable ingredients

Ingredients that make sense for the product

Colors appropriate to primary product ingredients

Known “unnecessary” flavoring additions, e.g., sugars, salts, fats

Sugars, salts low on ingredient list

Appropriately low amounts of sugar, sodium on nutritional facts panel

Grinding, shape changing,reformulating

Visible whole ingredients

Culturally appropriate shape

Narratives and vocabulary of careful or minimal production, e.g., handmade, high-pressure processing, raw.

Repeated heating and cooling, diluting, evaporating

Consumers believe less processed products are self evident. They are not looking for a “less processed” label.

Consumer examples of less processed foods


“Food that is not enriched or refined. Food like brown rice, multigrain, whole wheat. I usually look at the first 5 ingredients to make sure they are not chemicals and do not include sugar (or any derivative).” (Inner Mid-level, female)

15

“Clean” is the newer kid in the ever-growing class of natural food vocabulary

Uncontaminated. The heart of clean heavily overlaps perceptions of natural, organic and less processed: simple, not interfered with, free from ‘impure’ additions at any stage.

Transparent. Clean also connotes a product that is both knowable and forthcoming about its ingredients and practices.

As with natural and less processed products, consumers expect “clean” foods to be self-evident and not called out on pack.

The term “clean” has been gathering strength among both consumers and the food industry. However, its future within mainstream natural food vocabulary is still in question, as it can be met with skepticism. Today, it means:

Unknown. Not all consumers use clean beyond the literal definition of “not dirty” – rendering it confusing outside of a hygiene context.

Pretentious and neurotic. Clean, more than other "natural" vocabulary, is associated with highly restrictive eating patterns and the people who engage in them.

Gimmicky. Clean is subject to the growing critique of other quality cues, that it’s simply another marketing term used to justify higher prices.

However, Clean can also be:

“They stay away from anything potentially harmful to the body, like sugar… Clean is very picky! Life is too short to be overly picky.” (Outer Mid-Level, female)


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• Shared values and trust. Consumers have an instinctive sense of connection with more local sources and vendors, particularly when they can be met and spoken with. Local feels real.

• Smaller-scale production. Small is intuitively connected to a more passionate business. However, even local, large-scale businesses are more likely to be trusted than their distant counterparts.

• Support of local economy. Buying locally allows consumers to feel like their purchases contribute to community vitality.

• Freshness and seasonality. Food that has not had to travel as far is assumed to be higher quality and potentially more nutritious.

• Knowing where it’s not from. More engaged consumers typically have an array of locations they prefer their food to not be from, due to concerns about safety and production standards and practices.

• A sensible way of sourcing food. A food system in which the default is food coming from far away just doesn’t make sense to consumers, logistically,

economically, socially and environmentally.

“Local” can trump organic for all but the most dedicated organic

consumers, offering a more tangible quality assurance and feel-good

factor

You know the story, you can trust the quality, …you also feel like you’re supporting the local economy instead of some big corporation when you don’t know what’s happening. (Inner Mid-level, female)

Local food and beverage continues to offer benefits that can outshine those of organic, particularly when supported by a warm narrative. Consumers associate local with:

38% (+9% from 2014) of

consumers say they are buying

more local than a year ago


17

Consumer definitions of “local” are flexible and product-dependent

Where is local anyway?Consumers typically have a pragmatic definition of what “local” is that depends on the product.

1) In general terms, they think of the very local (their town/city and surrounding area) first, and this is the most resonant form of local.

2) However, products sourced from their own state or region still meet local criteria.

3) Definitions become more flexible when the product simply cannot be grown in the local climate, but the consumer still wants it.

• Here, locale becomes significant; demonstrating connection between the product and the land, culture and traditions in which it was created.

Seattle Trader Joe’s “Northwest” local stand meets consumer criteria for local credibility


18

Consumers’ organic and natural purchasing is characterized by

prioritization and compromise

This system of trade-offs has become increasingly complex as the number of quality distinctions beyond organic has proliferated. Furthermore, the information necessary to make those trade-offs has spread across front and back of pack and beyond

Consumers engage in a subtle system of trade-offs in determining how to prioritize their organic and natural dollars, influenced by:

a) Their level of engagement with organic and naturalb) Cost and the category they are purchasingc) The purchase and consumption occasion


“Natural is not all or nothing; it's a spectrum...organic food I rip from the trees, that's 100% natural. Then there's 100% artificial – a thing you don't even recognize as food, like toothpaste.”(Inner Mid-level, male)

19

There are recurrent themes in how consumers rationalize preferring organic sometimes and not others

More likely that organic is valued in…

Categories “close to the farm”:” In categories where the farm is front of mind, consumers tend to prioritize organic because they are thinking about pesticides (this is particularly true of the “Dirty Dozen”).

Avoiding hormones and antibiotics is also top of mind, but this is increasingly possible to attain without organic.

Categories eaten frequently or in large quantities: Here, organic is more likely to be prioritized because consumers are concerned about long-term accumulation of negative ingredients in conventional products.

‘Healthful’ aspiration categories: The more prominently the category is being used as a pillar in healthy eating, the more likely organic is to be chosen.

Categories purchased for dependents: When buying for their own children (particularly babies) and sometimes even pets, they are more likely to be risk averse, and so prioritize organic.


20

Categories perceived as being processed or particularly indulgent are a lower priority for organic

Less likely that organic is valued in…

Processed categories: Consumers intuitively assume that the more that has been done to an ingredient, the more diluted the benefits of organic become. The focus becomes ensuring simple ingredients and reducing processing.

The exception here is consumers’ choosing of organic as a heuristic for a product being “made simply” when they are pushed for time and in a category where they are concerned about additives.

Indulgent categories: Categories where pleasure is paramount, and so both health and sustainability aspirations are put on hold.

Convenience or price sensitive categories: Consumers are more likely to sacrifice/not think about organic when other daily priorities make convenience paramount. A large price differential between organic and non-organic products also reduces likelihood of interest.

Categories featuring diverse quality cues other than organic: Categories in which consumers are weighing up lots of different quality cues, particularly if those cues overlap with organic.


21

Trigger events thus tend to move consumers out of the world of conventional

products and into the world of organic and natural.

The ubiquity of natural food knowledge means that life changes increasingly translate into food and eating changes

He

alth

+

We

llne

ss

Aging

Disease & health issues

Pregnancy & child rearing

Weight loss

Fitness

Foo

d

Cu

ltu

re

Food industry experience(e.g., working in a restaurant)

Travel

Taste experiences (e.g., wine tasting)

Sust

ain

abili

ty&

So

cial

Ju

stic

e Eye-opening experiences(e.g., documentaries, farm visits)

Ongoing new learning(e.g., climate and environment, animal welfare, food waste, food access and justice issues)

Trigger Consult Knowledge Change Behaviors

Sou

rce

so

f in

form

atio

n Experts (doctors, dieticians, trainers)

Friends, family and coworkers

Media (online, social, traditional)

Food retail (restaurants, retailers, signs, products, claims)

Co

mm

on

sen

sekn

ow

led

ge a

nd

ta

ken

-fo

r-gr

ante

db

elie

fs

Food should be as natural as possible –fresh/less processed food is healthier

Processed food is unhealthy

Chemicals and artificial ingredients are unhealthy

Simple, recognizable ingredients mean fresh/less processed

Organic means not pesticides, morenatural, less processed and healthier

Reprioritize product attributes

Question & scrutinize current (conventional) products

Investigate organic and natural options

Incorporate new products into buying habits


22

• Aging healthfully and avoiding disease

No matter the trigger, consumers’ first instincts are increasingly to go “more natural” in what they eat

Having children

“I had a preemie baby. That’s when I started buying organic –everything for her was organic. Still I buy a lot of organic things for the kids. The milk is always organic no matter the price because all of the qualities of the grass go into the milk. We get paid back because they’re healthier, with fewer doctor’s visits.” (Inner Mid-level, female)

Eye-opening experiences

“I saw that video on YouTube of how hot dogs are made and it was disgusting. So I’ve stopped eating those. I also had to stop eating baby carrots when I saw that video, too – it’s just a processed carrot.”(Outer Mid-level, female)

“I used to buy the huge jar of JIF at Costco, but when I tried to get healthier, I switched to almond butter because almonds seem better. Then I learned you could get it ground fresh at Whole Foods, and that’s even more natural and it tastes yummy.”(Inner Mid-level, female)

“I visited a farm once with a co-op, and the farmer said that she went out to their orchard one day after spraying it [with pesticides] and all the birds had died. She said that’s when they decided to go organic, because she couldn’t feed her kids those apples. So yes, I think organic is better!” (Inner Mid-level, female)

“I took a nutrition class when I was pregnant and had to go on a forced diet, basically. I learned more about food, and that led me to more natural foods and looking at ingredients.”(Outer Mid-level, female)

“Things that aren’t natural aren’t healthy, because there’s so much we don’t know! I saw that food coloring can cause ADD and even cancer! My husband also has a lot of skin allergies and so now we try to avoid propylene glycol, but good God, it’s in more things than you can imagine! “(Outer Mid-level, female)

“I was getting older and having some health issues, so I decided to get healthy and lose some weight. I went to a dietician and now I try to eat as healthy as possible – no cans, nothing frozen, no packages, no added salt, no added sugar.” (Inner Mid-level, female)


23

• Consumers struggle to identify where their organic and natural general knowledge comes

from; it’s just everywhere. However, when consumers have specific questions and

motivations, they do have trusted sources they turn to first.

•Overall, the more actively a consumer has sought out knowledge, whether looking up a

question or investigating a Facebook post, the more influential their particular source

becomes in their decision making.

With so much information around them, consumers typically privilege information that they sought out themselves

It’s everywhere, all around

Saw it in the news/social media

Someone I know talks about it

I read/ watched it myself

I did my own investigation

MORE INFLUENTIALLESS INFLUENTIAL


24

ORGANIC MILK AT RETAILNov. 2017

25

After seeing volume growth for organic milk at retail through

2016, we are seeing modest declines in 2017 year-to-date.

- However, Organic’s share of total milk volume has continued to

increase into 2017

172 179 188 188 191

130

0

50

100

150

200

250

300

350

400

450

500

2012 2013 2014 2015 2016 YTD 2017

Vol. Sales (million gallons)

% Change Volume

vs. Prior Year: N/A +4.6% +4.9% +0.1% +1.4% -1.4%

Organic % Share

of Total Milk

Volume:4.0% 4.4% 4.8% 4.8% 5.0% 5.1%

(thru Sep 10)

Source: IRI Market Advantage, DMI Custom Milk Database. MULO+C.

26

27

$7.70 $7.72 $7.95 $8.46 $8.50 $8.41

$4.01 $4.09 $4.39 $4.11 $3.93 $3.95

2012 2013 2014 2015 2016 2017 YTD(thru Sep.

10)

Average Price per volume (gallon equivalent)

Orgainic Milk Total Milk

Organic Milk: N/A 0.2% 3.0% 6.5% 0.5% -1.0%

Total Milk N/A 2.1% 7.4% -6.4% -4.3% 1.9%

Price: % Chg.

Vs. Prior Year

The Average Price of Organic Milk Sustained Growth Through

2016, but Has Seen a Small Decrease in 2017 Year-to-date


$1,321 $1,385$1,496

$1,595 $1,624

$1,091

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

$1,800

2012 2013 2014 2015 2016 YTD 2017

Dollar Sales, (million dollars)

% Change Dollar

Sales vs. Prior

Year:N/A 4.8% 8.0% 6.6% 1.9% -2.4%

Organic % Share

of Total Milk Sales: 7.8% 8.2% 8.6% 10.0% 10.8% 10.8%

(thru Sep 10)


Total Dollar Sales Have Been Impacted by a Slight Decline in

Volume and Price in 2017 Year-to-date

28

Organic Milk Sells at a Premium Price

– Even Among Milk Category Value Added Products

29

Conventional

$3.71

Non-Dairy Alternative

$6.80

Flavored

$7.62

Lactose-free

$8.04

Organic

$8.41

• Private Label - $2.98

• Branded - $5.08

• Private Label - $6.67

• Branded - $9.96


Average Price per volume (gallon equivalent)2017 Year-to-date thru 9-10-17

The Most Developed for Organic Milk are the California and Northeast

Regions, while the least developed are the Plains, Great Lakes and South

Central Regions

30

Source: IRI Market Advantage, Multi-Outlet + Convenience, 52 WE 9/10/17

Top Sales Markets(by share of total milk in market)

• San Francisco/Oakland – 20.4%

• Seattle/Tacoma – 13.8%

• New York City – 13.8%

• Balt./Washington D.C. – 12.2%

• San Diego – 9.8%

• Miami/Ft. Lauderdale - 9.4%

Bottom Sales Markets

• Green Bay – 1.2%

• Salt Lake City -1.5%

• Wichita - 1.7%

• Toledo - 1.7%

• Oklahoma City - 1.9%

• Tulsa - 2.1%

Product Development Index= volume sales relative to population

with 100=average; >120= High; <80=Low

Regional Product Development Index*

• 124 - California

• 123 - Northeast

• 111 - West

• 111 - Mid-South

• 101 - Southeast

• 100 -Total U.S.

• 77 - South Central

• 77 - Great Lakes

• 51 – Plains

Who is More/Less likely than Average to Purchase Organic Milk?

Above Average Purchases of Organic Milk are

seen in households that are:

• In upper income per capita (volume index=

201)

• Older millennial (146) and Gen X (145)

• Young families with children, especially

families with children age 5 and under (264)

• Asian (275)

Organic Milk Purchase Skews (volume index*)

Below Average Purchases of Organic Milk

are seen in households that are:

• Lower income per capita (volume index= 41)

• Single person (43) or without children (61)

• African American (49)

• Younger boomer (67), Older Boomer (61),

Retiree & Senior (43)

* Compares average volume purchased by demographic to average volume purchased by all households. Volume index above 120

represents greater than average, below 80 represents lower than average.

Source: IRI Panel, Total U.S. All Outlets, 52 weeks ending Sept. 3, 2017

31

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