National Confectioners Association State of the Industry Conference Miami, FL February 20, 2010

National Confectioners National Confectioners AssociationAssociation

State of the Industry State of the Industry ConferenceConference

Miami, FLMiami, FL

February 20, 2010February 20, 2010

AgendaAgenda

Company Overview & FootprintCompany Overview & Footprint Market Review & OutlookMarket Review & Outlook DFI CapabilitiesDFI Capabilities Consumer TrendsConsumer Trends

Company Overview

Only sugar supplier with national brands

Distribution channels include Ingredients, Food Service and Grocery customers

Produces more than 1500 SKUs of both branded and private label products

First Sugar Cane Company to produce certified organic sugar

Produces a full line of rice products, including half of all the rice consumed in South Florida

Consumer Goods

Florida Crystals Corporation and the Sugar Cane Growers Cooperative have created the first fully integrated sugar cane company in North America, taking products from field to shelf. The addition of the Domino , C&H , and Redpath brands has created a North American distribution capability.

Farms 180,000 acres in South Florida

Operates 2000 pieces of farm equipment

Crop is harvested between October and April

Uses rice for crop rotation

Operates three sugar mills and a rice mill

Mills process 800,000 tons of raw sugar annually

Farming

Operates refineries in New York, Baltimore, South Florida, New Orleans, San Francisco, Toronto

Operates a 130 Megawatt cogeneration plant

Produces more than 3,000,000 tons of refined sugar annually

Refining

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®

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Our North American Footprint

Market Outlook

• World market deficit becomes very evident in December 2009.

The 2010 DEFICIT in pictures – Historically…

-40

-30

-20

-10

0

10

20

30

40

50

60

-20

-15

-10

-5

-

5

10

15

20

66 69 72 75 78 81 84 87 90 93 96 99 02 05 08

US c/lb'000 mt

Global Sugar Balance v NY11

Surplus/Deficit

NY11 monthly av (RHS)

Market Outlook


• Brazil crop ends – fails to meet expectations.

Brazilian Industrial Yields:kg/tonne of cane - bi-weekly

Jenkins Sugar GroupSource: UNICA

Market Outlook


• Brazil crop ends – fails to meet expectations.

• India becomes consistent importer due to crop shortfalls

Exports and Imports

-3.0

-2.5

-2.0

-1.5

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

5.5

04/0505/06

06/0707/08

08/09E

09/10E

Exp

ort

s an

d I

mp

ort

s in

Mil

lio

n M

TR

V

Exports Imports

INDIA

• Cane shifts with prices• This year’s deficit not fully addressed yet; election delayed decisions•Yield could be impacted by fertilizer usage•Poor Monsoon – El Nino•Crushing capacity is there going forward

Difficult to model…Unclear until it actually happens. Export volume test, or elasticities of demand?Government intervention can accentuate and accelerate it – seizures, hoarding

rules, priceThis time LDC’s are importers.

DEMAND DESTRUCTION - HOW LIKELY?

Market Outlook/Summary

• 2010/2011 shows a more balanced market• Projected surplus is small and in places that

tend to “stock build” and “not export”.• Brazil & India offer huge swing potentials.• Funds, who hold a record 18.0 million mt of

sugar, could lighten.• As always, WEATHER is a huge and

unpredictable variable.

Raw Sugar Prices - #16 Market

Domino * C&H * Florida Crystals * Redpath

• Reliable provider to the Confectioners Industry for over 100 years.

• Current supply source in all of North America (USA, Canada & Mexico)

• Supplier to confectionery industry of all grades of sugar (granulated, liquid, Invert, Large Grain, Fondants, Molasses, Colored Crystals & Grain Extracts).

Specialty IngredientsSpecialty Ingredients

Molasses Grain Extracts – Malt & Rice Invert Syrups Fondant Sugars Confectioners Colored Sugar

Crystals

SPECIALTY INGREDIENTS WITHAPPLICATION TO CONFECTIONERY INDUSTRY

INNOVATIVE FUNCTIONAL INGREDIENTS

© 2007 Domino Specialty Ingredients. All Rights Reserved.


Liquid MolassesLiquid Molasses

MOLASSES FLAVOR: Flavor Profile: caramelized sugar, mild to robust, licorice, bitter to sweet

Sweetness

Mask Unpleasant Flavors: e.g. bitter taste of bran

Enhances Flavors of: Praline Rums Licorice Maple Caramel Coffee Butterscotch Chocolate Roasted Peanuts



Malt ExtractMalt Extract

MALT PRODUCT RANGE

100 % Malt Extract – Conventional and Organic Dry Malt Extract Co-Extracts Malt/Corn Blends Traditional Applications Specialty Breads – French & Italian, Rolls, Bagels Crackers Cookies – Peanut Butter, Malt Confections – Malted Milk Balls Snack Items – Pretzels, Bread Sticks, Pizza Dough RTE Cereals Malt Vinegar



Invert SyrupInvert Syrup

INVERT SYRUPS Product Types

Full Invert – Liquid – FreshVert®/Nulomoline®

Paste – FreshVert Creamy/Nulomoline Congealed Partial Invert - #11 Nulomoline® & Crystal 50 Invert/Honey – Mate ‘N Match™ Honey

Traditional Applications

Bakery Cakes & Cookies Icings/Confectionery Snacks



Fondant SugarsFondant Sugars

Product Types Nulofond® – Sucrose Agglomerate Bakers Drivert®/Drifond® – 7 to 9% Invert EasyFond® – 3 to 4% Invert Amerfond® – 5% Invert

Functional Properties Rapid Rate Particle Dispersion Eliminates Cooking Process Free-Flowing

Traditional Applications Confections – Cream Centers, Fudge, Cherry Cordials, Mints

FONDANT SUGARS



Confectioners Colored Crystals Sugar

ADDITIONAL PRODUCTS

Confectioners Colored Sugar Crystals -

Coarse grain sugar available in 8 individual colors or a “rainbow” of all colors combined: red, orange, yellow, green, blue, violet, pink, white


Major Consumer Trends Impacting Sugar Consumption

• Conversions from HFCS to Sucrose

• Concerns about “Effectiveness” of Artificial Sweeteners

• Concerns about “Healthfulness” of Artificial Sweeteners

HFCS–55 Total Deliveries

4,500

4,800

5,100

5,400

5,700

Tho

usan

d S

hort

Ton

s, R

efin

ed V

alue

1998 1999 2000 2001 2002 2003 2004

5,561

5,637

5,565 5,593 5,599

5,4435,374

+ 300

300

+ 270

+ 76

- 72

+ 28 + 6

- 156

- 69

HFCS–55 Deliveries for Human Consumption, Calendar Years 1998 – 2009

Change From Previous Calendar Year

2005 2006

5,314

- 60- 22

5,292

2007

Source: USDA. Economic Research Service, Briefing Room. Sugar and Sweetener Yearbook Tables: Excel (.xls) Spreadsheets, Tables 28 and 30. http://www.ers.usda.gov/briefing/sugar/Data/data.htm. Accessed November 23, 2009.

© The Sugar Association, Inc.November 24, 2009

2008

4,968

- 159

Projection based on comparable CY 2005 – CY 2008 9–month deliveries

2009

4,736

- 232

5,150

- 142

-863,000 strv = - 15.4%Avg. -123,285/ yr.

List of Products which have Switched from HFCS to Sugar

• Thomas’ English Muffins• Capri Sun• Bull’s Eye BBQ Sauce• Ocean Spray Drinks &

Craisins• Fuze• Vitamin Water• Throwback (Pepsi)

• Snapple• Red Bull & Monster• Prego Tomato Sauce• Sips• Flowers Brands• Hunt’s Ketchup• Heinz Ketchup• Jones Soda

Select Learnings from Positioning Research

Brand, Private Label, Artificial Sweetener Users• Consumers think of Domino/C+H as the brand they can trust, and

value that Domino has been around for generations/100 years• Artificial sweetener users were just as likely as brand and private

label users to value the natural purity of sugar, expressing some guilt over consuming artificial ingredients

• The taste of sugar remains unrivaled by other sweeteners, all consumers prefer to use real sugar for baking

• Artificial sweetener users are less likely to care about the taste of real sugar when it comes to coffee and other hot beverages

• Nearly all consumers were pleasantly surprised to learn that sugar is just 15 calories per teaspoon, adding that knowing this would make them more likely to use sugar in their hot beverages at a minimum

• Many were convinced by the “sugar in moderation” studies read in magazines

Artificial Sweeteners actually cause weight gain

• Studies in rats show they don’t lose weight when they eat artificially sweetened food. They eat more, and gain more. (Dr. Susan Swithers, Purdue University, article in Behavioral Neuroscience Feb. 2009) http://www.ama-assn.org/amednews/2008/04/07/hlsa0407.htm

• “A paper in the Feb. 12 Circulation, for instance, associated drinking one can of diet soda per day with a 34% increased risk of developing metabolic syndrome compared with those who did not drink any carbonated beverages. People who drank the sugar-sweetened versions had a 10% increase in risk.” http://www.ama-assn.org/amednews/2008/04/07/hlsa0407.htm

• "I'm wondering if maybe the artificial sweetener makes you feel hungrier somehow," said Lyn Steffen, MPH, PhD, one of the authors and associate professor at the University of Minnesota in Minneapolis. "You drink this artificially sweetened drink, and you might feel satisfied for a short time. At the end of the day, it actually makes you eat more.“ http://www.ama-assn.org/amednews/2008/04/07/hlsa0407.htm

Select Findings – Artificial Sweetener Users

• Number of calories are very important to these consumers; however they are the second least likely (behind health conscious consumers) to know that there are only 15 calories– On average people think there are 62 calories per teaspoon

• Brand sugar 48• Artificial Sweetener 73• Health Conscious 78• Organic 55

• They feel some guilt about using artificial ingredients and many say they “would never let my kids use artificial sweeteners”

• They use zero calorie sweeteners predominantly in hot beverages• Several were aware that zero calorie sweeteners create cravings so

you end up eating more calories

Documents

National Confectioners Association State of the Industry Conference Miami, FL February 20, 2010