Copyright © 2007 by Monitor Company Group, L.P.

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COMPANY CONFIDENTIAL

SAN FRANCISCO SÃO PAULO SEOUL SINGAPORE TOKYO TORONTO ZURICHSHANGHAI

BEIJING CHICAGO HONG KONGCAMBRIDGE DELHI DUBAI JOHANNESBURG

PARISLOS ANGELES MADRID MUMBAI MUNICH NEW YORKMOSCOWLONDON

Mulino BiancoBarilla S.p.AInitial US market Entry Thoughts and Consumer Profiling

October 27, 2007John Gregg.Director,Monitor Company Croup, Boston

2Copyright © 2007 Monitor Company Group, L.P. — Confidential — LAX

Breakfast, Breads and Healthy Snacking

‏ United States Market Analysis 2006/2007

3Copyright © 2007 Monitor Company Group, L.P. — Confidential — LAX

Why are we here

To review US bakery categories and to share insights with Mulino Bianco on best practices, trends in the healthy foods segment and provide “thought starters” for future product development and positioning of your brand in the United

States.

4Copyright © 2007 Monitor Company Group, L.P. — Confidential — LAX

We’re a country defined by our generations

2000

2500

3000

3500

4000

4500

5000

1909-1932

68 Million1933-1945

34 Million

1946-1964

76 Million

1965-1975

41 Million

1976-1994

71 Million

Baby Boom

40-58

yrs old

WW II

72-95

yrs old

Bopper

59-71

yrs old

Gen-X

29-39

yrs old

Gen-M

10-28

yrs old

Birth

s (

000)

1995-2015

84 Million

Gen-Z

<9

yrs old

5Copyright © 2007 Monitor Company Group, L.P. — Confidential — LAX

Three generations to pay attention to

‏ Boomers: The Rebels that Defy Age

Have come of age In their peak earning years Loyal to their brands Entering prime healthcare – driving functional foods market

• Especially the Heart Health Market ( low cholesterol & low fat) And, it’s the Generation that eats the most cereal!!

‏ Gen M: The Fragmented – but, Connected- Generation

4 key targets with tremendous spending power– Pre-teens (16.9%)– Teens (33.5%)– Family Starters (23.8%– Young Adults (25.8%)

“Diversity” friendly hearts and “Vegetarian” taste buds Self proclaimed unskilled cooks!

‏ Gen Z: The Spoiled Children of Gen X’rs

Youngest American generation and projected to be the largest in history– reaching 84 million by 2015

6-8 year olds, are the leading segment of this group who spend over $40 billion annually They are the key target of the government's “Healthy Nutrition” efforts Little Chefs: According to the Wonder Group 2004, 64% of Boys and 71% of girls of kids

6-12 make their own breakfast at least once a week.– And, 67%of kids 6-17 years actually ENJOY going to supermarket to buy food!!

Source: Yankelovich Youth Monitor, 2006; U.S. Kids Market, Packaged Facts, 2007

6Copyright © 2007 Monitor Company Group, L.P. — Confidential — LAX

We Are Also a Country with a Morphing Home Life

7Copyright © 2007 Monitor Company Group, L.P. — Confidential — LAX

Home

77%

Foodservice

21%

Unknown

2%

While home remains the source of most meals…

Home includes: Prepared and consumed in home, carried from home and eaten at somebody else's home.Restaurants include Commercial, Supermarkets and C-StoresNon-Commercial includes Work/School/Vending

8Copyright © 2007 Monitor Company Group, L.P. — Confidential — LAX

The reality is… we are not preparing those meals!!!

888

835

1985 2005

Prepared and Consumed In-Home Annual Meals per Person

Source: The NPD Group’s National Eating Trends® Service

9Copyright © 2007 Monitor Company Group, L.P. — Confidential — LAX

We are obsessed with “Dream Kitchens”… but, don’t use them!!

Americans seem to aspire to the warm, convivial imagery of an open kitchen, but don’t necessarily aspire to the “work/ time involved”

According to the U.S. Census Bureau, the amount spent on kitchen remodeling doubled between 1999 and 2006, rising from $4.8 billion to $10.5 billion.

The American Use of Time Survey 2006 revealed that the average time spent preparing a meal is 13 minutes!

Source: Mintel- Home Channel News, 02-13-2007

10Copyright © 2007 Monitor Company Group, L.P. — Confidential — LAX

Why?

Ever Increasing:

‏ Dual income families

‏ Working moms

‏ On the go lifestyle

So, there is a heightened need for convenience

– Take-out

– Pre-prepared foods

– Specialty stores

– One-stop-shop Mega-Supermarkets

0

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40

50

60

70

Ja

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4

50’s60’s

70’s

80’s

90’s 00’s

Source: US Bureau of Labor Statistics

11Copyright © 2007 Monitor Company Group, L.P. — Confidential — LAX

We Are Also a Country of Choices

12Copyright © 2007 Monitor Company Group, L.P. — Confidential — LAX

Yet, more and more we seem to be overwhelmed by them

‏ A greater number of product choices may appeal to a wider range of consumers

– too many choices can cause stress and actually decrease the likelihood of making any purchase.

Shoppers are 10 times more likely to make a purchase from among 6 flavors of jam than from among 24 flavors.

• Consumers do not want innumerable choices and the almost guaranteed regret and dissatisfaction that results from having to decide among so many options.

• Instead, consumers want to be able to choose from a limited subset of options that are the most appropriate to them.

• Simple, Clear, Intuitive, and Familiar Product Propositions are favored by today’s “overwhelmed consumer”

Source: Yankelovich Monitor Minute, Freedom of Choice, 2007

13Copyright © 2007 Monitor Company Group, L.P. — Confidential — LAX

1. Sandwiches (52)

2. Milk (47)

3. Carb. Soft Drinks (46)

4. Vegetables (44)

5. Coffee (42)

6. Fruit (40)

7. Fruit Juice (36)

8. Potatoes (35)

9. RTE Cereal (31)

10. Bread (29)

19961. Sandwiches (51)

2. Carb. Soft Drinks (49)

3. Vegetables (44)

4. Milk (43)

5. Fruit (43)

6. Coffee (38)

7. Potatoes (35)

8. Fruit Juice (33)

9. RTE Cereal (29)

10. Bread (26)

2006

This is what we eat at home…

14Copyright © 2007 Monitor Company Group, L.P. — Confidential — LAX

Women

1. French Fries 13.8%

2. Burgers 13.1%

3. Pizza 8.2%

4. Side Dish Salad 6.8%

5. Chicken Sandwich 5.3%

6. Breakfast Sandwich 4.9%

7. Main Dish Salad 4.6%

8. Chinese 4.1%

9. Chicken Nuggets 3.8%

10. Rice 3.6%

Men1. Burgers 17.4%2. French Fries 14.2%3. Pizza 9.0%4. Breakfast Sandwich 6.2%5. Side Dish Salad 5.7%6. Eggs 4.5%7. Donuts 4.2%8. Hash Browns 4.1%9. Chinese 4.0%10. Main Dish Salad 3.4%

And, this what we eat out…

Source – 2007 Minitor Group Food Habits, 2500 Respondens

15Copyright © 2007 Monitor Company Group, L.P. — Confidential — LAX

And, this is why we eat…

16Copyright © 2007 Monitor Company Group, L.P. — Confidential — LAX

Food fulfills much more than hunger!

‏ Stress Eating: when we get stressed out, stress hormones like cortisol create intense food cravings, especially for fats and carbohydrates.

A survey commissioned by the American Institute for Cancer Research (AICR) has found that after Sept. 11, 2001& Iraq War many of us are doing a lot of stress eating.

– 20 % eat more comfort foods such as mashed potatoes and gravy, fried chicken, and macaroni and cheese.

– 19 % eat more sweet, sugary foods such as cookies and

ice cream

Source: Yankelovich MonitorMinute, 11.28.2007

17Copyright © 2007 Monitor Company Group, L.P. — Confidential — LAX

There is also a positive –aspirational- role for food in our lives

‏ It’s a way of bonding: Sharing a meal is part of the much needed (and ever so scarce) family time

– 49% of Americans agree that “It is important for families to eat dinner together every night”

‏ It’s a way to preserve traditions– Immigrant families view food as a fundamental connection to their

ethnicity

‏ It’s the #1 reward in 2005: Things you do when you really want to treat yourself

– Eat Something Decadent! 32% ( up from 25% in 2004)

‏ It’s a way to experience other cultures and be adventurous

– 59% of consumers state their interest in ethnic foods

‏ Food is a source of Personal Joy

– 69% say that food is an important source of pleasure in their life.

– 48% say they have a real passion for food.

Source: Yankelovich MonitorMinute, 07.28.07

18Copyright © 2007 Monitor Company Group, L.P. — Confidential — LAX

Ultimately, we have an intense relationship with food, and we seem to be paying the price for it !

19Copyright © 2007 Monitor Company Group, L.P. — Confidential — LAX

We are facing an emerging obesity epidemic

20Copyright © 2007 Monitor Company Group, L.P. — Confidential — LAX

“Overweight and obesity are at

an all-time high in America and

the public health consequences

are enormous… We must act

now… in order to improve the

health of our country’s adults and

children”

– Tommy Thompson

Secretary of Health & Human Services

Health has become a government mandate as well

21Copyright © 2007 Monitor Company Group, L.P. — Confidential — LAX

In fact, the government is orchestrating an unprecedented effort to ensure a “Healthier America”

“Belly”

“Double‏Chin”

22Copyright © 2007 Monitor Company Group, L.P. — Confidential — LAX

“Every study that comes

out, America’s kids are the

most obese kids, America

is the most obese country.”

– Mark, 32, Current User

“I think there is poor

health in America. I

think there is a lot of

obesity, but I see a lot

of people wanting to

be healthier.”

– Jessica, 28, Current

User

“I heard 66% of Americans

are overweight.”

– Sean, 32, Current User

American’s acknowledge, somewhat

embarrassingly, this new focus on health

Source: Monitor Consumer Pulse, March 2007

23Copyright © 2007 Monitor Company Group, L.P. — Confidential — LAX

And while we are interested in losing weight, we seem to be losing interest in “dieting”

“I would like to lose at least 20 pounds.”Percent of Respondents Completely Agreeing, Agreeing Mostly, or Agreeing Somewhat with the Statement:

Source: National Eating Trends®Years Ending February

61.4 61.161.2

53.7

56.0

54.5

56.656.3

54.2

52.0

53.753.0

55.1

56.0

57.2

58.9 58.659.1

62.1

63.362.5

85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 '00 '01 '02 '03 '04 '05

24Copyright © 2007 Monitor Company Group, L.P. — Confidential — LAX

And, “Whole Grains” seem to be the next “it” ingredient

61%

59%

56%

54%

52%

Whole Grains*

Calcium

Vitamin C

Dietary Fiber

Protein

Percent of Adults Saying They are Trying to Get More

Source: The NPD Group’s Diet Monitor * Reflects data from 4/20/75 to 6/29/07

25Copyright © 2007 Monitor Company Group, L.P. — Confidential — LAX

33%

18%

17%

15%

Cereal

Brown Rice

Dark/MG Bread

Cooked Oats

Where do American’s source their “Whole Grains” intake from?

Source: The NPD Group’s Diet Monitor * Reflects data from 4/20/75 to 6/29/07

26Copyright © 2007 Monitor Company Group, L.P. — Confidential — LAX

But, it’s not just about a change in the Intake, the change in American’s attitude towards food is

fundamentally a Mindset shift

27Copyright © 2007 Monitor Company Group, L.P. — Confidential — LAX

Americans are turning toward balance and moderation to improve their nutrition

From low:

•Fats

•Dairy

•Carbs

•Sugars

Balance/

Moderation

To Lifestyle

Approach:

Endurance

Vitality

Strength

28Copyright © 2007 Monitor Company Group, L.P. — Confidential — LAX

Mulino Bianco’s opportunity

29Copyright © 2007 Monitor Company Group, L.P. — Confidential — LAX

Observation

Mulino Bianco owns a rich emotional brand space that could be leveraged to resonate with the emerging American desire for “food authenticity” – a more wholesome, engaging and rewarding experience

Choose a Genuine World

30Copyright © 2007 Monitor Company Group, L.P. — Confidential — LAX

Search for food authenticity

• What started with a demand for fresh and more natural products has turned into a search for foods that engage the senses, are richer in taste and that consumers can learn about how they are grown.

• “Americans are finally connecting the food they eat with agriculture and nature”-Farmers Market Growth Spurt. Boston Ledger February ‘06

31Copyright © 2007 Monitor Company Group, L.P. — Confidential — LAX

A paradigm shift…

Foods I Need Foods I want

Functional Sea of Products Shared Values with Brands

Food Authenticity- Artisanship

32Copyright © 2007 Monitor Company Group, L.P. — Confidential — LAX

This provides Mulino Bianco a great opportunity to stand out in our market

33Copyright © 2007 Monitor Company Group, L.P. — Confidential — LAX

Not Tasty

Authentic/ Wholesome

Tasty

Processed- Engineered

“Remember What’s Good”At Pepperidge Farm

we think of ourselves as bakers, not manufacturers,

so every product we create is special.

Home of all the fresh baked brands

America has loved for generations

“Every Body Has a Favorite”

“America’s Favorite Bread”Over 80 years of building strong bodies“Give them what they love…Wonder!”

‘Something To Smile About” Good for your heart -30 day

challenge-and has fiber, cholesterol free, whole

grains….America’s Healthiest food

“The 1 and Only - Cheerios”Kids choice – and now for their

parentsHealthy Heart Choice (Whole

Grain)

34Copyright © 2007 Monitor Company Group, L.P. — Confidential — LAX

Strong potential to introduce brands to the US market

We love ethnicity

– The baked goods category responds particularly well to that which is perceived as ethnic

The trend toward grains is on the upswing

– Speaks to our growing desire for balance

We crave wholesomeness that tastes good

– Capitalize on our desire to eat food that is considered indulgent yet made with ingredients that are natural/good for you

Mulino Bianco represents a fulfillment of many of our emotional needs for which we turn to food.

35Copyright © 2007 Monitor Company Group, L.P. — Confidential — LAX

Opportunity to take best practices and apply them to the Italian/European market

Cultural landscape entirely different.

– Not faced with the same issues of obesity

– Italian culture prioritizes time for enjoying meals and eating experiences

– That said, there are some best practices in how we market to children that

are transferable

Cool kids snacks & breakfast foods

– Interactive/ Self-Preparation/ High Entertainment Value

– Mesh-Creativity / share ownership of the brand with kids

Keep doing what you are doing in Italy. It works!

36Copyright © 2007 Monitor Company Group, L.P. — Confidential — LAX

Next steps

• John Gregg, Monitor Director will lead the team throughout all stages of

the project ensuring it is on time, on budget and creates the Launchpad

for Mullino Bianco

• Within the next week we will deliver a full project scope, methodology, market

entry roadmap and delivery timelines including but not limited to;

• Strategic Positioning recommendations and testing for Mulino Bianco to

enter US Market

• Product Portfolio/ Innovation & Architecture evaluation

• Tactical plans to breakthrough in engaging the consumer – going beyond

traditional channels

• In store partnership assistance with Mega Supermarket Chains ( Costco,

BJ’s,‏etc

Thank YouQuestions?

John Gregg

Director,

Monitor Company Group

Cambridge, BostonJohn.gregg@monitor.com

Copyright © 2009 Monitor Company Group, L.P. — Confidential — LAX