American Egg Board 2010 Shopper Research Study

Overview • Major marketers are focusing on the “last mile, ” attempting to influence the many buying decisions that are made in-store • Success in this key area is driven by shopper insights that go beyond traditional consumer market research. • Insights must come from an understanding of attitudes, motivations and actions that are specifically tied to the shopping experience.

Objectives Overall: • Increase the overall knowledge of egg shoppers, and how they think and behave • Identify opportunities to stimulate increased retail egg sales

Objectives More Specific Objectives: Provide insights regarding • The egg purchase process • Motivations for egg purchases • Factors promoting/inhibiting purchase of all types of eggs • Potential impact of in-store factors on egg purchases

Methodology • Conducted by K. L. Simon & Associates • Quantitative survey among a nationally representative sample of egg purchasers • 1400+ completed surveys among light, medium and heavy users of eggs – Light = buy one carton or less a month – Medium = buy 11/2 – 2 cartons a month – Heavy = buy 3 or more cartons a month

The Egg Purchase Overview: • Eggs are primarily a planned purchase • But not typically purchased with a use in mind • Always on the list and constantly being restocked

The Egg Purchase Influencing factors: • Price/promotion consistently appear as key influencers on…whether to buy, how much to buy, which type of eggs to buy. • Store factors also play a key role – Product condition and appearance – Code dates and pricing – Availability of desired variety

The Egg Purchase Relative importance of factors: • 84% of respondents say “appearance of eggs inside carton” is a very important influencer • Code Dates (66%) and Price (67%) are also key contributing factors. • Health/dietary concerns are very important to 32% of respondents

The Egg Purchase Spontaneous egg purchases do occur • 72% of those surveyed buy eggs when they were not on their list – driven primarily by heavy users • Even 60% of light users made unplanned buys • Unplanned egg sales are triggered by: – Noticing a sale price – Buying something else that requires eggs – Remembering a need while in-store

Overall Egg Usage Influencing amount of eggs purchased: • Amount of eggs purchased varies significantly from trip to trip – particularly among heavy users. • The opportunity exists to increase average purchase quantity via in-store stimuli and improved egg case conditions

The Egg Purchase Attitudes/perceptions encouraging egg use • Perceptions of nutritional benefits – Heavy users much more likely to perceive positive nutritional benefits of eggs – Perceptions of eggs as good protein source most widespread among heavy users • Perceptions of price/value – Heavy users more likely to see eggs as a good value and economical meal • Openness to eating/serving more eggs – All egg user groups expressed a definite openness to consuming more eggs

The Egg Purchase In-Store Factors discouraging purchase • 40% of egg purchasers go to the egg case, examine the options and walk away! • Why? – Eggs are broken or in poor condition – Egg prices are too high – Lack of availability of desired variety

The Egg Purchase Other Factors limiting purchase • Number of occasions they want to eat eggs (34%) • Number of egg dishes they know how to make (21%) • Concerns about cholesterol (23%)

The Egg Purchase Other Factors limiting purchase • Perceptions of nutritional benefits – 2/3 of egg shoppers do not hold the belief that eggs contain important nutrients you cannot easily get in other foods – 1/3 are mixed about the overall health benefits of eggs – 1/4 do not see eggs as one of the best protein sources • Perceptions of price/value – Almost 40% do not see eggs as a particularly good value or economical meal

The Egg Purchase Impact of the egg case • The egg case is perceived as easy to shop • The number of product choices is viewed as appropriate • However, there are many opportunities to improve: – 25 -30% are confused about the differences in egg types and options – Poor egg condition dissuades a significant number of purchases – Light/medium users are less likely to enjoy the egg purchase experience

Overall Egg Usage Breakfast focus limits purchases: • Majority of egg users (particularly medium/light) do not use eggs for nonbreakfast occasions. • Another opportunity to increase purchasing by promoting non-breakfast usage via instore messaging.

Heavy/Medium/Light Users Usage patterns vary greatly across user groups: • 46% of heavy users use eggs for lunch vs. 22% for light users. • Heavy users are also much more likely to use eggs for dinner/snacks…but still far below breakfast usage levels. • Opportunity to increase non-breakfast usage across all groups and all occasions.

Heavy/Medium/Light Users Heavy user differences • Heavy users are much more likely to – Perceive positive nutritional benefits of eggs – See eggs as a good value and an economical meal – Be motivated by in-store promotions – Find the egg case appealing – Assign greater importance to code dates and egg appearance in the carton

Egg Types Perception & Knowledge • Significant differences in familiarity and knowledge of egg types across user groups • Heavy users have the greatest overall knowledge of all egg types. • But, familiarity with Organic (34%), Cage. Free(30%) and Nutrient-Enhanced(16%) eggs is quite limited among all groups.

Egg Types Perception & Knowledge • The majority of egg shoppers do not understand the differences that would lead them to buy one kind of egg over another • Overall favorability ratings of alternative egg types are lower than for regular white eggs • Very few see Organic, Cage Free and Nutrient-Enhanced as a good value for the money.

Opportunity Summary The Egg Case • What if even 10% of those walking away from the case had made a purchase? ? ? • Capitalizing on this opportunity requires: – Better in-carton egg quality – Full availability of egg options

Opportunity Summary In-store messaging • Attitudes impeding egg purchase can be impacted via succinct messaging in the “last mile” • Messaging opportunities on the carton and in the aisle/section include: – – – Non-breakfast serving suggestions Recipes for all day-parts Information on all health/nutritional benefits of eggs New data to alleviate cholesterol concerns Education information on various egg types. Information on the positive value story for eggs

Opportunity Summary In-store promotion • Every day price and regular features are still the number one motivator across all user groups • A variety of promotional tactics should be explored to try and drive increased purchases – Tie-in promotions with complimentary items – Inclusion in retailer circular (with or without price discount) on a regular basis – Coupons delivered via carton, online or FSI

Opportunity Summary Improving the overall experience can drive increased usage across all user groups • Maintain a neat, well organized case • Assure well stocked sections with eggs that are in good condition • Provide information on new ways to enjoy eggs • Reinforce the many positive health/nutritional aspects of eggs • Inform shoppers on the various egg types • Present relevant promotions that support the value, flexibility, and nutritional story that is unique to eggs.