Value Added Oat Products

William A. BonnerConAgra MillsJuly 23, 2006

Outline

Whole Grain TrendsConsumer TrendsConventional Value AddComponent Values

Whole Grain Trends

Never strayed from whole grainPractical reasons – oil separation

Whole Grain TrendsWheat – biggest usage in baking Varieties specific to end product

Integrity in finished product

Actual amount labelingMilk fat example

Whole Grain Trends

Rice – crisped rice to Brown RiceCorn – corn germ shelf life implicationsBarley

Consumer Data – Hot Cereal

Year end 2003 – 352,974,560 # Year end 2004 – 353,750,016Year end 2005 – 369,195,45612 Mo 6/18/06 – 370,942,848

Consumer Data – Hot Cereal

% Change year agoYear end 2003 – (3.1) Year end 2004 – 0.2Year end 2005 – 4.412 Mo 6/18/06 – 1.0

Consumer Data – RTE Cereal

Year end 2003 – 2,223168,000 # Year end 2004 – 2,169,517,056Year end 2005 – 2,143,369,47212 Mo 6/18/06 – 2,131,229,568

Consumer Data – RTE Cereal

% Change year agoYear end 2003 – (3.3) Year end 2004 – (2.4)Year end 2005 – (1.2)12 Mo 6/18/06 – (1.0)

Consumer Data – Granola Bars

Year end 2003 – 122,563,944 # Year end 2004 – 128,589,464Year end 2005 – 140,274,28812 Mo 6/18/06 – 142,443,888

Consumer Data – Granola Bars

% Change year agoYear end 2003 – 7.5 Year end 2004 – 4.9Year end 2005 – 9.112 Mo 6/18/06 – 7.1

Consumer Trends

INDUSTRY ENVIRONMENTCONVENTIONAL OAT MILLING

›Increasingly diverse consumer population creates new eating habits›Chewy granola bars and cereal bars in general strong expansion ›Hot cereal consumption renewed. Indicated growth in Hispanic market›Continuing health trends and positive findings for whole grains ›Glycemic index and diabetes ›Obesity

Test foods are compared against glucose solution or white bread on an equal available carbohydrate basis

GI <55 is Low GI(compared to glucose solution=100)

Applicable for carbohydrate-based foods

Crisped rice cereal, GI = 82White bread, GI = 70Oatmeal, GI = 58Pasta = 55

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Glycemic Index

Glycemic Indexing is a ranking of foods based on the effect on blood sugar levels

Conventional Value Add

WOG/SCOG GruelFlakesFlavored instant oatmealPrecooked – heat & serveDrinks

Smoothie/Vegetable basedNutraceutical

Conventional RTE Value Add

Whole Grain ProductFunctionality

Conventional Flake Value Add

Coated Oats/GrainsWhole grain appearanceBland toasted background noteDesigned textures

Component Value AddOat Fiber

Pure clean insoluble fiberNo heart health claim80 – 90 % TDFRelatively blandMoisture controlBest in conventional baked goods

Oat Cellulose

Component Value Add

Oat Protein – Hydrolyzed – greater solubility than native Hair and skin applicationsReplace animal derived proteinsFat binding

Component Value Add

Oat Oil – Dermatological applications – Linoleic Emulsification AntioxidantPolar, bipolar and non polar lipids

Component Value Add

Oat StarchOat BranPhytochemical Separations

Colloidal Oatmeal

Value Added Oat Products

William A. BonnerConAgra MillsJuly 23, 2006