State of the Consumer through the eyes of

Steve Tursi

Produce Merchandise Manager, Wal-Mart Stores Inc.

December 7, 2006

Consumer InsightsTime is a scarce commodity

• 70% moms still working • 53% of all dinners prepared by

mom• Hours spent with kids up 19%• Take-out becoming best source

of in-home dinner

Health & Wellness

• Increase in older, empty nester households driving increasing health concerns

Multi-Cultural Population Growth

• By 2050, one out of four persons will be of Hispanic origin

• Ethnic food growth is 7% (vs. 5% for TTL Food)

The Gen Y Mom Dynamic

Dinnertime experiences differ vs. Boomer moms

• More dinners eaten away from home

• Less extensive meal repertoire

• Less savvy in the kitchen

• Less time preparing evening meals

Time is a scarce commodity

Convenience is a lifestyle now

What is the definition of Cooking in 2006?less scratch prepared mealsfewer side dishesfewer fresh itemsmore frozen, ready to eat items

Versions of Convenience

Elements of Convenience:

Food On Demand

New Options for At Home Meals

Meal Planning Simplified

Where are Consumers purchasing Food?

New Options:

• Non-traditional retail

• Making Meals

• Farmer’s Markets

• Take Home Meals

53.0

41.9

39.1

34.5

34.0

1. Requiring little effortor easy

2. That takes little/noplanning

3. Made with foods thatare on-hand

4. Everyone would like

5. Easily cleaned up

Make It Easy, Make It Fast!

dinner time is dilemma time

Day Before20%

Day Of80%

Dinner is a Last Minute Decision!

80% of consumers plan meals the same day they

are consumed

Eating at Home- Taken from Restaurant

“New” is key customers willing to pay :TasteConvenienceNutrition

Be “first to market”

New items will differentiate & drive loyalty

Baking in 2006

Warm Delights

Just add water & Microwave

Ready in 3 Minutes

Health & Wellness

Trends-Fads-Lifestyle changes in eating

Consumers are making an effort to eat healthy

Childhood Obesity

Selling in a Multi Cultural Society

• First Generation Customer

•Being sold bulk or packaged

•Correct Assortment

•Bi lingual Packaging

Key Selling Attributes

Locally Grown

Organic

Sustainability

Locally GrownAre you telling a growing message?

Packaging-ExteriorOn the actual unit-

Bag or PLU sticker

How involved in industry group or state department of Agriculture?

Featuring Locally Grown

The Organic Adoption Cycle

First Phase“Gateway Products”

ProduceDairy

Non-dairy Beverage (Soy)Baby Food

Second PhaseJuice

Single Serve BeveragesMeat/PoultryCold Cereal

Snacks

Third PhaseFrozen Foods

BreadsPasta Sauces, Canned

Tomatoes, Salsa

Fourth PhaseCanned Goods

Bulk Goods

Source: Hartman 2003

Why are consumers purchasing organic foods?

Source; Hartman Group – Organic Consumer Evolution 2003.

66%

38%

30%

26%

0% 10% 20% 30% 40% 50% 60% 70%

Environment

Food Safety

Taste/Quality

Health/Nutrition

Source: NBJ/Spin Organic Foods Report 2003

4.1 4.9 5.97.1 8.5

10.212.3

14.717.2

0

5

10

15

20

25

1998

1999

2000

2001

2002

2003

2004

E20

05E

2006

E20

07E

$20B!

Total U.S. Organic Food Sales

The Definition of Sustainability

Sustainability is simply about actions that support the quality of life now and for generations to come.

EnvironmentalSocietalFinancial

Sustainability in Produce

Is there a message to tell with your product?

If so how are you going to tell it?

All® Small & Mighty

Less Gallons of water Save Gallons of diesel in shippingReduces actual # of trucks neededPlastic resin reductionReduces # of out of stocks- since greater shelf capacity

Consumer Insight- ASSORTMENT

Do You know who is the End User?

Do You know what drives decision at shelf?

Do You know which skus are substitutable?

Do You understand demographic shifts?

Do You know where else they shop and why?

Are you matching these insights to SOTC?