Contents:

Scope and Themes What you need to know Definition Data sources Sales data Consumer survey data Abbreviations and terms Executive Summary Market at a glance Packaged salad and greens drive growth Packaged salads and Fresh Express are growing together… …while salad dressings and Kraft decline Innovation has been slow but it is coming Cooking at home is rising—packaged salads need to broaden appeal Grocery is main channel but mass and natural sales are rising Who’s using packaged salads? And how are they using packaged salads and dressings? Health and safety concerns resonate with black and Hispanic consumers Market Size and Forecast Overall growth is moderately strong and likely to continue Even fast food restaurants have gotten salads E-coli and Salmonella scares hurt market Premium pricing will lose some consumers Figure 1: Total U.S. sales of packaged salads, salad dressings and toppers, in current prices, 2002-12 Figure 2: Total U.S. sales of packaged salad and salad dressings, in inflation-adjusted prices, 2002-12 Wal-Mart sales Competitive Context Key points Food safety is critical Interest in cooking at home is on the rise Cross-merchandise with salad kits and/or other prepared proteins and carbohydrates to compete with QSRs and prepared meals Packaging is another important element of the competitive landscape What can the industry do? Overall Segment Performance Key points Packaged greens drive growth as dressings drag down category performance Figure 3: Total retail sales of packaged salads, dressings and salad toppers, segmented by type, 2005 and 2007 Salad dressing drags down overall category sales Toppers can drive category innovation Segment Performance – Packaged Salads Key points Packaged lettuce and greens drive overall category growth Consumers and restaurants are persuaded to embrace healthier foods Flat incomes and safety concerns hurt sales Figure 4: Total sales of packaged salads, at current prices, 2002-12 Figure 5: Total sales of packaged salads, at inflation-adjusted, 2002-12 Segment Performance – Salad Dressings and Toppers Key points Salad dressing sales are slowly declining Not health-enhancing… Rise in the incidence of cooking at home Price may not justify benefits, especially given an increase in healthy eating and home cooking Figure 6: Total sales of salad dressings, at current prices, 2002-12 Figure 7: Total sales of salad dressings, at inflation-adjusted prices, 2002-12 Salad toppers sales are growing Figure 8: Total sales of salad toppings, at current prices, 2002-12 Figure 9: Total sales of salad toppings, at current prices, 2002-12 Retail Channels Key points Food stores are the primary channel but are losing share to mass merchandisers Figure 10: Retail sales of packaged salads, dressings and toppers, 2005 and 2007 Natural channel/SPINS Figure 11: Natural product supermarket retail sales of packaged salad and salad dressings, at current and inflation-adjusted prices, 52 weeks ending June 14, 2008 Sales of both packaged salads and dressings both rose in the natural channel Figure 12: Natural product supermarket retail sales of packaged salad and salad dressings, by segment, 2006-08 Natural supermarket channel sales of packaged salads rose in 2008 Figure 13: Natural product supermarket retail sales of packaged salads at current prices and inflation-adjusted prices, 2006-08 Natural supermarket channel sales, salad dressings Figure 14: Natural product supermarket retail sales of salad dressings at current prices and inflation-adjusted prices, 2006-08 Natural channel sales of packaged salad by organic Figure 15: Natural product supermarket retail sales of packaged salads, by organic, 2006-08 Natural channel brand sales Figure 16: Manufacturer brand natural supermarket sales of packaged salads, 2006 and 2008 Niche salad dressings brands doing well in the natural channel Figure 17: Manufacturer brand natural supermarket sales of salad dressings 2006 and 2008 Natural channel sales of salad dressings by organic Figure 18: Natural product supermarket retail sales of salad dressings, by organic, 2006-08 Market Drivers Key points Weight management concern and the desire to live a healthier lifestyle is driving salad sales Figure 19: Percentage of population who are overweight or obese, 20-74 years of age, 1988-2004 Figure 20: Average daily per capita calories consumed,* by food group, 1970-2004 Rise in the proportion of people currently “controlling diet” and watching fiber intake rose after 2004 and has remained high Figure 21: Attitudes about diet, trended, 2001-07 Desire to achieve better health directly influences shopping decisions Figure 22: Factors that influence grocery shopper’s purchase decisions “a lot,” 2006 Added convenience has high appeal to time-starved consumers Figure 23: Attitudes and behaviors related to cooking, September 2007 Salad remains a popular dinner item Figure 24: What consumers have for dinner, November 2007 Leading Companies Key points Fresh Express still leads the market but private label shows impressive growth Dressing manufacturers struggle Figure 25: FDMx sales of packaged salad, by company and brand, 2007 and 2008 Brand Share – Packaged Salads Key points Chiquita’s Fresh Express brand dominates the packaged salad market Food safety concerns and product recalls hurt Dole Private label is growing fast Packaging innovation need to spur usage occasions and drive sales Figure 26: FDMx sales of packaged salad, by company and brand, 2007 and 2008 Brand Share Salad Dressings Key points Shelf stable pourable dressings sales on the decline Unilever’s innovative Spritzers see slight growth Niche brands Ken’s Steakhouse and Newman’s Own growing Figure 27: FDMx sales of shelf stable pourable dressings, 2007-08 Refrigerated dressings hold their ground Figure 28: FDMx sales of refrigerated salad dressings, 2007-08 Dressing mixes are a small segment of the market that is not ideally positioned relative to the health driver Figure 29: FDMx sales of salad dressings mix brands, 2007-08 Coleslaw dressings Figure 30: FDMx sales of coleslaw dressings mix brands, 2007-08 Brand Qualities The Fresh Express brand communicates specific qualities that help it to maintain market dominance Newman’s Own leverages gourmet positioning along with social responsibility, purity and sustainability to create a unique and desirable brand proposition Innovation and Innovators Key points Premium salads help people achieve restaurant-style dining experiences Salad kits will help take salads from a side dish to an entrée Salad Sprays change the nature of dressing and effectively leverage demand for lower calorie dressings Unilever’s Wish-Bone Bountifuls appeal to the desire for pure, whole ingredients Advertising and Promotion Key points Advertisers seek emotional connections with high value customers In-store marketing can be used to add value by creating perceptions of purity, freshness and a sense of being close to the origin of the food Kraft appeals to the desire for more wholesome foods with PureKraft Figure 31: Purepare yourself for a whole new Kraft, 2008 Clorox’s Hidden Valley Ranch ads create a sense of simple pleasures, and appeal to the need to make vegetables appealing to children Figure 32: Hidden valley ranch salad, 2007 Figure 33: Hidden valley ranch salad, 2007 Unilever’s Wish-Bone Bountifuls emphasize differentiation and a new salad experience Figure 34: Wish-bone Bountifuls salad, 2007 Packaged Salads Usage and Consumption Key points Women, blacks, and Hispanics are heavy users of packaged salad products Figure 35: Packaged salad or packaged greens use, by children in the household, June 2008 Figure 36: Packaged salad or packaged greens use, by children in the household, June 2008 Figure 37: Packaged salad or packaged greens use, by race/ethnicity, June 2008 Black, Hispanic, and affluent consumers eat more salads per week Figure 38: Mean number of salads eaten in the past week, by race/ethnicity, June 2008 Figure 39: Average number of salads consumed in the past week, by income, June 2008 Types of Salad and Packaged Greens Used Key points Ethnicity drives packaged salad and greens preference Figure 40: Types of salad greens purchased, by race/ethnicity, June 2008 Affluent consumers tend to eat a wider variety of greens Figure 41: Type of packaged greens used, by income, June 2008 Salad Dressing Usage and Consumption Key points Most households use salad dressing but they are not using as much as before Figure 42: Trended salad dressings use, by sub-category, 2002-07 Figure 43: Incidence of prepared salad dressings use, by race/ethnicity, January-November 2007 Figure 44: Volume of salad dressings used, by race/ethnicity, January-November 2007 Types of salad dressing used Figure 45: Type of salad dressings used, by race/ethnicity, January-November 2007 Flavors of salad dressing used Figure 46: Flavors of prepared salad dressings used, by race/ethnicity, January-November 2007 Brands of Salad Dressing Ethnicity influences brand usage Figure 47: Brands of salad dressings used, by race/ethnicity, January-November 2008 Attitudes and Motivations Key points 18-34s are more likely to eat salad for lunch or a snack Figure 48: Occasion based packaged salad use, by age, 2008 Blacks and Hispanics are more likely to wash their packaged greens and report only purchasing organic salad greens Consumers are not convinced of the value of “prewashed” Packaging is a problem Organic salads and greens are less popular than expected Figure 49: Attitudes about packaged salads, by race, 2008 Still mainly for tossed salads Figure 50: Use for purchased greens, by race, 2008 Why aren’t consumers buying packaged salads? They often prefer to buy greens in bulk Figure 51: Reasons packaged salad greens are not bought, by income, 2008 Blacks and Hispanics have a slightly higher affinity for salad dressings Figure 52: Salad greens and dressings attitudes, by race, 2008 Appendix: Simmons cohorts Figure 68: Married couples cohorts Figure 69: Single women cohorts Figure 70: Single men cohorts Appendix—Useful Consumer Tables Lifestyle and habits Figure 71: Attitudes toward health and diet, by gender, May 2005-June 2006 Salad and dressing usage tables Figure 72: Types of packaged greens purchased, by age, June 2008 Figure 73: Type of salad dressings used, by age, January-November 2007 Figure 74: Flavors of prepared salad dressings used, by age, January-November 2007 Mayonnaise/mayo-type salad dressings Figure 75: Mayonnaise/mayo-type salad dressings use, by custom consumer groups, January 07-November 07 Figure 76: Fat-free/Non-fat mayonnaise/mayo-type salad dressings use, by custom consumer groups, January 07-November 07 Figure 77: Light/low-fat mayonnaise/mayo-type salad dressings use, by custom consumer groups, January 07-November 07 Figure 78: Low cholesterol mayonnaise/mayo-type salad dressings use, by custom consumer groups, January 07-November 07 Figure 79: Regular mayonnaise/mayo-type salad dressings use, by custom consumer groups, January 07-November 07 Appendix: Trade Associations

Companies Mentioned

- Kraft Foods Inc. (U.S.A.) - Fresh Express Incorporated - Unilever USA - U.S. Bureau of Labor Statistics - U.S. Department of Agriculture - Clorox Company , The - Dole Food Company Inc. - T. Marzetti Company - Wal-Mart Stores (USA) - Chiquita Brands International, Inc - Lancaster Colony Corporation - Litehouse Foods Inc. - Sunkist Growers, Inc. - Whole Foods Market Inc - Food and Drug Administration - Food Marketing Institute - Newman's Own Inc. - Produce Marketing Association - McCormick & Company, Inc. - River Ranch Fresh Foods LLC - American Dietetic Association (ADA) - YouTube, Inc. - Atkins Nutritionals, Inc. - Trader Joe's Company Inc - McDonald's Corporation - Yum! Brands Inc. - U.S. Bureau of the Census - Costco Wholesale Corporation - Masterfoods USA Inc - Natural Selection Foods - HJ Heinz Company - Pfeiffer - Signature Brands LLC - Organic Trade Association - Food Products Association - Private Label Manufacturers Association (PLMA) - International Food Information Council Foundation (IFIC) - Grocery Manufacturers Association (GMA) - International Fresh-Cut Produce Association (IFPA) - United Fresh Fruit & Vegetable Association