Agricultural Product DifferentiationIndustry Perspective

November 15, 2004

CORNY GALLAGHERAGRIBUSINESS EXECUTIVE

More than $14 billion in commitments to the industry sector.

Clients value our industry knowledge and expertise as well as our ability to provide a complete range of financial products and services.

Bank of America is one of the largest providers of financial services to agribusiness and food processing industries throughout the United States.

FOOD FORESIGHTPRIORITY TRENDS

FALL 2004

FOOD FORESIGHTPRIORITY TRENDS

FALL 2004

GATHERS TRENDS AND ISSUES GATHERS TRENDS AND ISSUES INFORMATION FROM AROUND THE INFORMATION FROM AROUND THE GLOBEGLOBE

IDENTIFIES EMERGING ISSUES AND IDENTIFIES EMERGING ISSUES AND TRENDSTRENDS

2004 TREND 12004 TREND 1

PRODUCERS FIND THEMSELVES IN AN EVER-TIGHTENING VICE:

Increasing scrutinyIncreasing scrutiny

Must trace and document practicesMust trace and document practices

Increasingly legislation and Increasingly legislation and regulation leads to unequal playing regulation leads to unequal playing field for U.S. agriculturefield for U.S. agriculture

2004 TREND 22004 TREND 2

VULNERABILITIES TO TERRORISM ADD A NEW WRINKLE OF INSECURITY AND ARE REDEFINING “ROUTINE” AGRICULTURAL PRACTICES:

Department of Homeland Security will play increasing leadership role

GMO wars will continue and trickle-down

2004 TREND 32004 TREND 3

BIG GLOBAL COMPETITORS AND MARKETS ARE ENGINEERING A WILD RIDE FOR THE AGRI-FOOD CHAIN:

Rising affluence and demand for high-value products with tastes of home

2004 TREND 42004 TREND 4

OBESITY IS OVERWHELMING THE DIET/HEALTH LANDSCAPE :

-Is high fructose corn syrup the real villain?

- Is it caused by the micronutrients?

Perception shifted from food is healthful to food is bad for me

2004 TREND 52004 TREND 5

NEW SCIENCES AND GENETIC INNOVATION ARE ACCELERATING THE ARRIVAL OF A NEW FRONTIER

PERSONALIZED NUTRITION

YOUR OWN RUBICS CUBE RATHER THAN THE FOOD PYRIMID

2004 TREND 52004 TREND 5

2004 TREND 5CONCEPTS

2004 TREND 5CONCEPTS

Genotyping - individuals' genetic make-up Metabolic profiling finger-stick tests Nanotechnology, in wrong hands used as

bio terrorism? DARPA is driving radical nutrition research

in biochemical pathways and processes like ketogenic diets

micronutrients in certain foods lead to new opportunities

2004 TREND 62004 TREND 6

WHAT CONSUMERS WANT, CONSUMERS WILL GET . . .

Shift to a genuine "pull" marketing environment

"if you don't like this, you might like this" suggestions tied to likes and needs

2004 TREND 72004 TREND 7

FOOD SERVICE SECTOR IS SURGING

Dominant share of consumer food spending

Innovating through an explosion in ethnic flavors and cuisine

2004 TREND 7CONCEPTS

2004 TREND 7CONCEPTS

Confluence of mega trends; the dramatic rise in ethnic foods, blurring between "formal" and "casual" eating

Asian flavors are the top trend gainer in the top 200 chains

Food service providers must offer more choices

FOOD SYSTEM OPPORTUNITIESFOOD SYSTEM OPPORTUNITIES

Health benefits of ag products and parts.Health benefits of ag products and parts. Changing demographics = New products.Changing demographics = New products. Food Service Chefs looking for menu ideas.Food Service Chefs looking for menu ideas. Health Consciousness driving productHealth Consciousness driving product

choices.choices. Environmental improvement. It’s not waste it is Environmental improvement. It’s not waste it is

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