Future challenges for

the Food Industry

NIGEL DICKIE

The HJ Heinz Company

World-class iconic brands

Global portfolio with sales in excess of $11b

Strong profitable growth in emerging markets

Excellent cash flow and return to shareholders

Experienced and proven global leadership team

Tradition of quality

Celebrating 144 years

as the original

Pure Food Company

“To do a common thing uncommonly well

brings success,” Henry J. Heinz

Focused portfolio

Geographies

Categories

Ketchup & Sauces

Infant / Nutrition

Meals & Snacks

Developed Markets

United States

United Kingdom

Western Europe

Italy

Australia/ New Zealand

Canada

Emerging Markets

Brazil

Russia

India

China

Indonesia

Latin America

79% of Sales 21% of Sales

Based on 9M YTD FY12 sales from continuing operations

94% of Sales Are in Three Core Categories

3 core categories in Europe

Ketchup & Sauces 40% of Sales

Meals & Snacks 37% of Sales

Infant / Nutrition 18% of Sales

Note: Percentages are of FY11 full year sales from continuing operations.

Global Ketchup UK Beans

UK Soups

Italy - Plasmon

UK & Russia - Heinz

Key Areas of Focus

No.1 brands

No. 1 Food brand in UK

No. 1 Infant Feeding in Italy

No. 1 Ketchup across Europe

No. 1 “Preferred” Food brand in Poland

No. 1 in 7 categories in Netherlands

No. 1 in K&S & Infant Cereal in Russia

No. 1 in Category

No.1 Brands Represent 70% of European Sales

One of the nation’s favourites

Food manufacturing

Part of a world-class industry

The largest manufacturing sector

3.6 million UK jobs

14% of UK employment

15% of UK manufacturing output

Up 3% over the last 10 years

UK food exports worth £14 billion, up 7%

Future challenges

1. Health and Wellness

2. Sustainability and Food Security

3. Food Safety

4. Communications

5. Economic Outlook

Challenge 1

Health and Wellness

Health and Wellness

£5.1 billion

Health and Wellness

36% adults 25 – 34 years

Health and Wellness

>50% adults overweight and obese

Getting the balance right

Project Neptune

Auditable data shared with FSA

10% YoY reduction for soups &

sauces for 3 years

Pan manufacturer collaboration

No competitive advantage

What we’ve

achieved

40%

-40%

Salt reduction

success

Salt reduction

success -40%

53% -53%

Salt reduction

success -40%

-53%

39% -39%

Salt reduction

success -40%

-53%

-39%

-63%

63%

Challenge 2

Sustainability and food

security

UK food chain impact

18% of all UK GHG emissions

8% direct GHG emissions from agriculture

14% of energy consumption from food industry

7m tonnes of CO2 pa

UK food chain impact

25% of all HGV kilometres in the UK

>5m tonnes of waste food and drink packaging

10% of all industrial use of water

Sustainable palm oil

RSPO Roundtable on Sustainable Palm Oil

Review of the Year

WRAP film

Carbon Trust

film

Challenge 3

Food safety

Food Standards Agency

2011

1,714 food and environmental incidents

209 more than 2010

Natural chemical contamination incidents rose 25%

Allergen incidents rose 44% to 114

Those relating to milk rose from 9 to 27

Microbiological contamination – 16% of all incidents

Food safety

Commitment to food safety rooted in the vision and

values of Henry Heinz, a prominent advocate for the

adoption of the US Pure Food & Drug Act in 1906

Processes designed to ensure that our food products

meet stringent quality and safety specifications

Food safety

Heinz supplier auditors consistently enforce

our quality and food safety standards

Our goal is to maintain compliance levels at 100%

Best practices shared with our Emerging Markets

businesses to drive consistently high food safety

standards

Challenge 4

Communications

GMOs

Irradiation

Nanotechnology

Acceptance of novel technologies

Heinz policies

GM Heinz remains committed to taking every possible step to ensure that Heinz varieties remain free from ingredients

derived from genetically modified (GM) crops.

Where there is the potential for GM material to be present, or where ingredients are derived from soya or maize, we

source non-GM, identity preserved ingredients through carefully audited suppliers. In addition, independent testing is

carried out.

BPA Although UK and European food authorities have stated that minute levels of BPA in can coatings are safe, Heinz

remains committed to moving to alternatives.

We do not use BPA in any Heinz Baby packaging. This pledge here in the UK is part of our global programme to phase

out its use.

Heinz continues to advance research into alternative coatings in response to consumer opinion but safety remains our

first priority before making any changes.

Challenge 5

Economic challenges

Inflation - has eroded real income

c.£3,300 versus 2008

Above the official target of 2% for most

of the past 5 years now 2.7% CPI, 3% RPI

Economic challenges

Grocery Inflation now at 3.5% and projected to

increase again

Rising food prices highest ranked

‘budget’ concern for the next 12 months?

Economic challenges

26% of consumers say they have no

spare cash after essential living

expenses (Nielsen Q3 2012)

86

140

0

20

40

60

80

100

120

140

160

No

v-0

6

Ap

r-0

7

Sep

-07

Feb

-08

Jul-

08

De

c-0

8

May

-09

Oct

-09

Mar

-10

Au

g-1

0

Jan

-11

Jun

-11

No

v-1

1

Ap

r-1

2

Sep

-12

UK Average Petrol Price P / Lt (unleaded 95 octane)

AA fuel price report

Rental Inflation 4.5% (LSL property)

Gas Prices +40% in five years Electricity +24% in five years 4m hh’s in ‘Fuel Poverty’ (pay 10% or more of their income on heating)

FPAG 2012

Economic challenges

23% of grocery spending @ Round Pound

20% growth in on-line grocery shopping

Kantar

Over 20% growth in On line shopping YoY – significantly ahead of total grocery sales

£ %

Ch

ange

23% of Grocery Spending - & Growing - @ Round Pound Prices £1 - £4. £1 now up to 11.5% of all spend

What are people making

size growth

Roast chicken 24m +42%

Bubble and Squeak 19m +36%

Veg stew/casserole 24m +33%

Stir Fry Oriental Dish 24m +33%

Vegetable curry 91m +23%

Sweet & Sour 15m +22%

Chicken curry 228m +21%

Risotto/Paella 50m +13%

Lasagne 130m +13%

Beef Stew/Casserole 57m +10%

Meat Balls 36m +9%

size

Chicken curry 228m

Shepherds/Cottage pie 209m

Spaghetti Bolognaise 174m

Lasagne 130m

Chilli 127m

Vegetable soup 113m

Vegetable curry 91m

Chicken Stew/Casserole 84m

Pizza 63m

Stir Fry Oriental Dish 62m

Quiche/Flan 61m

Future challenges

1. Health and Wellness

2. Sustainability and Food Security

3. Food Safety

4. Communications

5. Economic Outlook

Future challenges for

the Food Industry

NIGEL DICKIE