1

International Pasta Organisation

I.P.O.

U.S. Pasta Industry State of the Union

New York, NYOctober 26, 2009

2

Total Amount of PastaConsumed AnnuallyWithin the U.S.:

6.0 billion lbs.19.8 lbs. per person

3

Enough Pasta laid end to end to travel to the moon and back 600 times!

143,314,200 - Million Miles

756,698,976,000 - Trillion Feet

6,053,591,808,000 - Quadrillion Pieces of Gemelli

4

Enough Pasta to fill 5 Roman Coliseums!

5

1 Lb. of Pasta for Every Man, Woman,and Child on the Face of the Earth

6

Total Mega Pasta Category Sales Trend

Source: Nielsen Strategic Planner 52 weeks 2006 - 2009

24%23%

24% 26%

8%2%Food, Drug, Mass & Wal-Mart 52 wk Dollar Sales

CAGR

+6.2%

(-1.5%)

+13.3%

+4.1%

+10.8%

Dry Pasta at a +13.3% CAGR is outperforming mega-pasta category

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

$8,000

$9,000

2006 2007 2008 2009

dolla

rs (0

00,0

00)

Frozen Entrees Italian Dry Macaroni Dinners Dry PastaCanned & S.S. Pasta Frozen & Refrigerated

$7.5 B

$5.8 B $6.3 B

$6.7 B

+12%+6%

+9%

+8.9%

Total Food Drug Mass and Walmart

7

Total Dry Pasta Category Performance

Both Dollar and Unit growth versus Year Ago

Source: Nielsen 52 Weeks Ending August 9, 2009 – Grocery Channel

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

+3%

+14%

$1,593 bil.

1,166 bil.

DRY PASTA 52 Week Consumption, Dollars and Units

(000

,000

)

Units Dollars

8Source: Nielsen 52 Weeks Ending August 8, 2009 – Grocery Channel

Dry Pasta Category Dollar and Unit Sales

(-0.01%)

Dry Pasta Consumption by Type Latest 52 Wks

1,022,742

1,166,420

143,678

1,330,242

1,593,183

262,941

0 200,000 400,000 600,000 800,000 1,000,000 1,200,000 1,400,000 1,600,000 1,800,000

White

Healthy

Dry Pasta

Mea. (000)

+13.7%

+6.1%

+12.8%

+13.9%

Dollars

Units

+2.8%

+2.3%

Both primary segments showing growth vs. Year Ago

9

Dry Pasta Sales by Trade ChannelBusiness is dominated by the Grocery Channel

87% of Dollar Sales

Percent of Dollar Sales by Channel

15%7% 5% 1% 0.5%

72%

0%

20%

40%

60%

80%

Grocery Super

Center

All Other Club Dollar Drug

10

Dry Pasta Ranking Within US Supermarkets Nielsen 52 Weeks Ending 6/14/09

Dry PastaCategory

Rank

% Change vs.

Previous Year

Rank within top 100 categories based on

percent change

$ Sales $1.62 Billion # 47 +17.5% # 2

Unit Sales 1.18 Billion # 21 +3.0% # 1

Dry Pasta generated the highest unit growth rate amongst the top 100 categories in grocery

stores during 2009

11

U.S. Manufacturer Unit Shares26 weeks through June 20th, 2009

New World Pasta 24.2; +1.8pts

All Other 15.9; -1.5pts

Barilla 22.9; -0.8pts

Private Label

26.8; +0.9pts

AIPC

10.2; -0.4pts

Consumption

+9.0%

Consumption

-5.0%

Consumption

+13.8%

Consumption

+1.5%Consumption

+1.0%

12

Monthly Durum Price Trend (Cost per Cwt)

Durum Price Trend 2007 -Present (Cost per Bushel)

$-

$5.00

$10.00

$15.00

$20.00

$25.00

$30.00

$/B

ush

el

Canadian $/BuU.S. $/Bu

13

Consumer Household Panel Data52 Weeks Ending 5/30/09

Key Observations:

• Household penetration up +0.5%

• Purchase frequency up +3.5%

• Buying Rate up +2.3%

2008 2009 ∆ 2008 2009 ∆ 2008 2009 ∆ 2008 2009 ∆

Dry Pasta 84.2 84.6 0.45 12.1 12.4 0.27 6.4 6.6 0.23 1.9 1.9 -0.03

% Household Penetration

Item Buying Rate (Volume)

Purchase Frequency

Purchase Size (Volume)

TOTAL U.S.Total Buyers

Source Nielsen Consumer Facts

14

2008 Inflationary Impact upon PastaNielsen 52 Weeks Ending 12/27/08

Price Points

Average Selling Price Increase vs.

Previous Year

Unit Sales % Change vs.

Previous Year

Total U.S. Retail Sales

N/A +7.6% -3.4%

Dry Pasta $1.34 +23.6% +0.8%

Key Causals:

• Pasta still only $0.20 per serving…one of the great values in the store

• Pasta rediscovered due to widespread inflation

• Consumption migrating from “out of home” to “in home”

15

2009 Inflationary Impact upon PastaNielsen 26 Weeks Ending 7/11/09

Price Points

Average Selling Price Percent Increase vs.

Previous Year

Unit Sales % Change vs.

Previous Year

Dry Pasta $1.35 +3.8% +4.9%

Key Causals:

• Quality merchandising is up +16% driving incremental growth of +19%

16

Growth Is Being Driven by Strong Trade Merchandising

Consumption vs. PY

Total Unit +4.6%

Total Base +1.1%

Total Incremental +16.4%

Source: AC Nielsen YTD ending 10/03/09

17

Dry Pasta Retail Merchandising

Trade is merchandising Pasta aggressively to drive customer traffic:

• Incremental volume % change vs. Year Ago: +16%

• Promotional weeks % change vs. Year Ago: +1%

• Weeks of quality merchandising % change vs. Year Ago: +19%

• % of units sold with Quality merchandising % change vs. Year Ago: +12%

Source: The Nielsen Company, 2009 YTD ending 10/03/09

18

Dry Pasta Retail Distribution

Average # of Items Per Store

Change vs. PY % Change

139 -3 -2%

Points of distribution are declining by -2% per year

as the trade rationalizes redundant brands/SKUs

Source: The Nielsen Company, YTD ending 10/03/09

19

Pasta Consumption by Geography

CDI = 83

CDI = 87

CDI = 89

CDI = 87

CDI = 94CDI = 149

CDI = 110

SOUTHEAST

Source: Nielsen Consumer Facts – All Outlets 7/22/08

20

Pasta Spending Index by Household Size

47

97

127

163

1 Member 2 Members 3 to 4 Members 5 or MoreMembers

HH Size

82

134 138 137 141

No Kids < 18 Kids < 18 Kids < 6 Kids 6 to 12 Kids 13 to17

HH Kids

Source: Nielsen Consumer Facts – All Outlets 7/22/08

21

Pasta $ Consumption by Household Income

Source: Nielsen Consumer Facts – All Outlets 7/22/08

68.0

78.0

92.0

96.0

109.0

120.0

127.0

Income Under $20k

$20k - $29.9

$30k - $39.9

$40k - $49.9

$50k - $69.9

$70k - $99.9

$100k +

Income Under $20k $20k - $29.9 $30k - $39.9 $40k - $49.9

$50k - $69.9 $70k - $99.9 $100k +

22

Age and Pasta Consumption

Pasta $ Index by Female Head of Household Age

103

127114

92

75

88

0

20

40

60

80

100

120

140

18-24 25-34 35-44 45-54 55-64 65+

Age

Ind

ex

.

Source: IRI Panel Data 2007

23

U.S. Population % Change 2020 vs. 2000Strong Population Growth Among 45+

19%

8%4%

34%

54%

70%

< 4 5 to 19 20 to 44 45 to 64 65 to 84 85+

Age

% G

row

th

Source: U.S. Census

Insight:

• Aging population creates new opportunity for targeted pasta products

24

U.S. Population % Change 2020 vs. 2000Stronger Growth from Ethnic Consumer Segments

Source: U.S. Census

Insight:• Ethnic influence will continue to impact American cuisine as group

population grows dramatically

14%

27%

68% 67% 68%

White Black Asian Other Hispanic

Race

% G

row

th

25

Four Trends Are Driving CPGs That Are Winning with Consumers

26

Top Health & Wellness Claims Across Categories

Source: Nielsen Label Trends, Total U.S. Food/Drug/MassExcluding Walmart, 52 Weeks Ending 4/19/08

Insight:• Many of the largest Health & Wellness claims are intrinsic to core pasta

52-Week Chg vs. Chg vs.Product Label Claim $ Sales Year Ago 4 Yrs AgoFat Claim $45.6 Billion +12% +31%Natural $21.3 Billion +12% +36%Calorie Claim $17.1 Billion +6% +26%Salt or Sodium Claim $15.9 Billion +2% +9%Preservative Claim $13.3 Billion +5% +17%Cholesterol Free $10.4 Billion +7% +13%Whole Grain $10.3 Billion +8% +33%Sweetener Claim $9.8 Billion +8% +35%Calcium Claim $9.4 Billion +3% +10%Organic (UPC-Coded) $4.4 Billion +25% +142%

27

Fastest Growing Health & Wellness Claims

Source: Nielsen Label Trends, Total U.S. Food/Drug/Mass Excluding Walmart, 52 Weeks Ending 4/19/08

52-Week Chg vs. Chg vs.Product Label Claim $ Sales Year Ago 4 Yrs Ago

Absence of Specific Fat $11.8 Billion +30% +152%Less Sugar $1.4 Billion +20% +175%Organic (UPC-Coded) $4.4 Billion +25% +142%Antioxidants $1.7 Billion +26% +141%Gluten Free $1.4 Billion +21% +86%Probiotic(Live Microorganisms) $1.1 Billion +47% +268%FlaxOr Hemp $153 Million +64% +358%Plant Sterol $85 Million +29% +133%Low Glycemic $46 Million +28% +797%

28

Global Growth within RTE Meals ($U.S. MM)

Source: Nielsen Insights – 2006

29

Pasta Innovation

Quick Cook

Garden Delight

Gluten FreeBertolli Frozen

Pizza Hut

Healthy Choice Fresh Mixers

Bird’s Eye Steamfresh

30

Why Do Consumers Not Eat More Pasta?

Insight:• Dry Pasta core consumers ranked health concerns as the top

2 reasons for not eating more pasta

Source: Synovate Omnibus Barrier Study, June 2008

31335A pasta meal is too difficult to make

304106 Family doesn’t like Italian food

3510510A pasta meal takes too long to make

3712712A pasta meal requires too much cleanup

38181214Pasta is not a healthy food

33313229want to serve the same thing too often

45353133Concerned eating pasta will cause weight gain

50%39%34%38%Pasta has too many carbohydrates

Do Not Cook Dry Pasta At Home

(N=140)

W25-49

No Kids

(N=275)

W25-49

With Kids 6-17 (N=202)

Total

(N=2000)

31335A pasta meal is too difficult to make

304106

3510510A pasta meal takes too long to make

3712712A pasta meal requires too much cleanup

38181214Pasta is not a healthy food

33313229 Only have a few pasta recipes and don’twant to serve the same thing too often

45353133

50%39%34%38%

(N=140)

W25-49

(N=275)

W25-49

-17 (N=202)(N=2000)

Industry Opportunity

31

Objectives

• Increase consumption rate of current Pasta consumers

• Regain lapsed users• Develop platform for national roll out

Strategies

• Educate consumers on health benefits• Promote versatility• Leverage price/value benefit

Messaging

• Complex carb, low Glycemic Index, energy, versatile, value

“The Perfect Food”

National Pasta Association Communication Campaign

32

Program Architecture

National Pasta Association Communication Campaign

Pasta: The

Perfect Food

360 Integration

TVIntegrations

Spokesperson

Website

MediaOutreach

Sweepstakes

33

2009 NPA Consumer ProgramPositioning

• “The Perfect Food”

Location

• Florida test market• Miami top 20% category index market• Tampa top 25% market• Jacksonville top 35% market

Duration

• 6 month continuity campaign

Elements

• Sweepstakes• Celebrity Chef• Radio• Print• Website• Media outreach

34

The Future of Pasta

“The best way to predict the future is to create it."

- Peter Drucker

35

A Glimpse into the Future

More Healthy Offerings• Health Plus• Health Minus• Disease Prevention• Low Glycemic Index• Gluten Free• Heart Healthy• Reduced Calorie

36

A Glimpse into the Future

Culinary Adventurism

• New taste/flavorcombinations

• Restaurant Quality

• Exotic new herbs, spices, and flavor profiles

37

A Glimpse into the Future

Greater Convenience

• Pouches• Portion Control• Portable• Meal Solutions• Easy Open• Quicker Cook Times• Resealable

38

A Glimpse into the Future

Diverse Ethnic Offerings

•Asian

•Hispanic

•Indian

•Thai

•African American

39

“Everything you see I owe to spaghetti.”

Sophia Loren

40

Let’s Hope That “Spaghetti” Delivers

Similar Results for IPO Members in 2010!!!!

Thank You

Gracias

Merci

Grazie

Danke