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					Food Industry. Facts. Insights. Consulting.




                                The Mushroom Council
                              Assessment of Fresh Mushrooms in the
                                               Foodservice Channel

                   Volumetric Projection of Fresh Mushrooms in the
                                               Foodservice Channel


Prepared by:                          Funded by:
                                                    April- August, 2005
               &
Mushroom Methodology: Overview



                               20 one on one
                               interviews of
                               operators in major
                               chains &
                               Independents


      Primary Research
      (Independent                                       Projection
                                             Consumer
      Operators &                                        Modeling
                                             Interview
      Distributors
      interviewed in primary
      research)

                               Secondary Data
                               from
                               Technomics
                               (Industry Volume &
                               Trends)




                                                                      2
Objectives
   Understand operator usage dynamics relating
    to mushrooms
   Develop market size and segmentation data
    on fresh mushrooms in the foodservice
    marketplace




                                                  3
Segment Scope

                      Sub-segments/                                    Sub-segments/
Segment                 Examples                 Segment                 Examples
Limited         Fast food, includes             Business &     In-plant, in-office feeding
Service          hamburgers, sandwich,           Industry
Restaurants      Mexican and specialty
(LSRs)          Excludes pizza
LSR Pizza       Includes all restaurants with   Healthcare     Hospitals
                 a pizza menu orientation                       Nursing homes

Full Service    Midscale, casual dining and     Education      K-12 Schools
Restaurants      fine dining sit-down                           Colleges
(FSRs)           establishments
Travel &        Hotels                          All Other      Supermarket foodservice
Leisure         Recreation                      Foodservice    Convenience store
                Airlines                                        foodservice
                                                                Retailer foodservice
                                                                Military
                                                                Corrections

                                                                                               4
Methodology
                                            # of Completed
                                               Interviews
 1.   Structured Operator Interviews
      Restaurants
      - Full Service Restaurants                127
      - Limited Service Restaurants              50
      - Other Limited Service Restaurants        50
      - Business & Industry                      64
      - Travel & Leisure                        101
      - Healthcare                               72
      - Education                                69
      - Corrections                              10
      - Total                                   543
 2.   Chain Headquarters                         15
 3.   Distributors/Produce Wholesalers           25
 4.   Growers/Suppliers                           5
 5.   Analysis and reporting                       -         5
Product Scope
Fresh mushrooms are the major focus of this
study. Processed mushrooms are specifically
excluded from this assessment

            Formats                     Mushroom Types
                                   White
  Whole
                                   Oyster
  Pre-Sliced                      Portabella
                                   Enoki
  Pre-Marinated                   Shiitake
                                   Woodear
  Pre-Cooked to Specifications
                                   Crimini/Baby Bellas
                                                          6
I. Operator Usage and Attributes
Mushroom Usage
  Over half of all operators use fresh
   mushrooms in their operations
  In particular, FSR and pizza restaurants have
   highest fresh mushroom penetration levels
  Operator in the West and Midwest have
   highest penetration level
  Canned mushrooms are used by one in four
   operators contacted for the study
  Few operators use frozen mushrooms
  Operators strongly prefer fresh mushrooms
   over canned
                                                   8
Heaviest Fresh Mushrooms Penetration in
FSR, Pizza Restaurants

              % Operators Using Fresh Mushrooms

             79%


                          62%
 58%

                                     45%
                                             42%         40%       38%

                                                                            23%




 Total       FSRs      Pizza Rest.   B&I   Healthcare   Travel &   LSRs   Education
                                                        Leisure
                                                                                      9
     *Weighted based on units
     Base: All operators contacted
West Has Highest Mushroom Penetration
Levels

           % Operators Using Fresh Mushrooms*

                                                     70%
                       64%
   58%
                                   53%      54%




   Total            Northeast      South   Midwest   West
                                                            10
   *Weighted based on units
   Base: All operators contacted
  Few Operators Use Frozen Mushrooms
       % Operators Using *

                                                                    Rationale for Using
  Fresh                                                             Frozen** Mushrooms
                                           58%
Mushroom
                                                         1.   Only type distributors offers   22%

                                                         2.   Best for breaded/deep frying    22
 Canned
                          25%
Mushrooms
                                                         3.   Same as fresh mushrooms         11

                                                         4.   Easier to serve than fresh      11
   Frozen        7%
                                                         5.   Good for backup when            11
                                                              operator runs out of fresh

    Other     <1%                                        6.   Lower priced than fresh         11

                                                         7.   Don’t know                      11

                                                                                                   11
            *Base: All operators contacted
            **Base: Operators using frozen; small base
“We Prefer to Use Fresh Mushrooms Over Canned
or Processed Mushrooms”

                        % Operators Indicating

                     Completely
                      Disagree
                         3%

            Somewhat
             Disagree
                1%
                                     Completely
             Neither                   Agree
            Agree Nor                   82%
            Disagree
               5%


                    Somewhat
                      Agree
                       9%
                                                  12

    Base: Fresh mushroom users
Mushroom Forms and Varieties Used
   Whole is the predominant mushroom format
    used. Almost 80% of fresh mushroom users
    utilize this format.
   Pre-cut usage is highest in LSR traditional and
    pizza restaurants.
   White mushrooms dominate.
   Whole portabellas and Shiitake enjoy
    significant usage penetration.
   Pre-sliced usage is minimal beyond white
    mushrooms.
   Virtually no pre-cooked to spec was identified.
                                                  13
Whole Predominates Formats Used

                          % Operators Using


           Whole                              79%



         Pre-Cut                    38%



  Pre-Marinated         4%


  Pre-Cooked to
                      <1%
      Spec

                                                    14

   Base: Fresh mushroom users
Fresh Mushroom Formats Used by Operator
Segment
                                     % Operators Using
                                                               Pre-      Pre-Cooked
 Operator Segment                        Whole     Pre-Cut   Marinated     to Spec

 LSR Traditional                             65%    41%         9%           3%

 Pizza Restaurants                           48     57          4            0

 Full-Service Restaurants                    88     26          2            0

 Travel & Leisure                            88     32          6            0

 Business & Industry                         78     41          4            0

 Education                                   88     33          0            0

 Healthcare                                  75     57          8            0

 Total*                                      78%    38%         4%          <1%

                                                                                      15
          *Weighted average based on units
          Base: Fresh mushroom users
Fresh Mushroom Formats by Region
                                      % Operators Using
                                                             Pre-      Pre-Cooked
 Region                                 Whole    Pre-Cut   Marinated     to Spec

 Northeast                               82%      35%         7%          <1%

 South                                   80       37          6            1

 Midwest                                 68       55          2            0

 West                                    83       30          3            0

 Total                                   78%      38%         4%          <1%




                                                                                    16

         Base: Fresh mushroom users
Fresh Mushroom Usage by Variety
                                       % Operators Using
                                                              Pre-      Pre-Cooked
 Mushroom Type                           Whole    Pre-Cut   Marinated     to Spec

 White                                    67%      33%         2%          <1

 Portabella                               39        4          2            0

 Shiitake                                 21        2          0            0

 Oyster                                   11       <1          0            0

 Baby Bellas                              11        1          0            0

 Enoki                                     5        1          0            0

 Woodear                                   6       <1          0            0

 Total*                                   78%      38%         4%          <1%

                                                                                     17

          Base: Fresh mushroom users
Whole Mushrooms Used by
Operator Segment
                                       % Operators Using
                                                                       Baby
Operator Segment             White    Portabella   Shiitake   Oyster   Bellas   Enoki   Woodear

LSR Traditional              57%         17%         7%        3%       3%       0%       3%


Pizza Restaurants            48           8          0         0        0        0        0


Full-Service Restaurants     72          57        39         24       17        7        7


Travel & Leisure             73          51        34         14       10       10        9


Business & Industry          61          44        20         10       14        7        7


Education                    80          47        27         13       20        7        7


Healthcare                   62          40        13          9        9        5        5


Total*                       67%         39%       21%        11%      11%       5%       6%


                                                                                               18
         *Weighted based on units in each segment
         Base: Fresh mushroom users. Multiple mentions accepted
Pre-Sliced Mushrooms Used by Operator
Segment
                                       % Operators Using
                                                                       Baby
Operator Segment            White     Portabella   Shiitake   Oyster   Bellas   Enoki   Woodear

LSR Traditional             41%           5%         0%        0%       0%      5%        0%


Pizza Restaurants           52            5          0         0        0       0         0


Full-Service Restaurants    26            0          0         0        0       0         0


Travel & Leisure            27            3          2         0        0       0         0


Business & Industry         31           13          4         0        0       0         0


Education                   33            0          0         0        0       0         0


Healthcare                  50           10          5         5       10       5         5


Total*                      33%           4%         2%       <1%       1%      1%      <1%


                                                                                               19
         *Weighted based on units
         Base: Fresh mushroom users
Specifications of White and
Portabella Mushrooms Used
   Grade #1 medium is the most popular used by
    operators using whole white mushroom
   Grade #1 also most prevalent presliced white
    mushroom used
   Whole is the most popular among portabella
    mushroom users




                                               20
Grade #1 the Most Popular White
Mushroom

               % Operators Using by Specification
             Whole White1                  Pre-Sliced2
           64%                                              83%




 25%                25%

                                                                       20%
                                       11%
                             8%



Grade #1 Grade #1 Grade #1 Grade #2   Jumber              Grade #1   Grade #2
 Small   Medium    Large              Stuffer


       1Base:                                                                   21
              Operators using whole white mushrooms
       2Base: Operators using presliced whole mushrooms
Whole Most Popular Portabella Mushroom
Specification Used
                        % Operators Using
                   Portabella Mushrooms Types
     79%




                             27%


                                     12%
                                                 3%

    Whole                    Caps    Baby       Cubes
                                                        22

   Base: Portabella mushroom users
Usage Trends
   More operators indicate that they are
    increasing usage of fresh mushrooms than
    indicating decreased usage over the past two
    years.
   White, Portabella, Shiitake and Baby Bella
    have positive “nets.”
   However, Oyster, Enoki and Woodear have
    negative “nets.”
     However, sample size of users of these varieties is
      small.
     Looking forward, less than one-quarter see
      significant growth in mushroom usage.
                                                        23
Net Reported Increases in Key
Fresh Mushroom Varieties

                                     Over Past Two Years, Usage Has…
  Mushroom Type                    Increased           Decreased                “Net”
  Whole                                 26%                   4%               +22%
  Portabella                            31                    8                +23
  Shiitake                              22                    5                +17
  Baby Bellas*                          25                    4                +21
  Oyster*                                 9                 12                    -3
  Enoki*                                  7                 14                    -7
  Woodear*                                7                 13                    -6




    Note: Balance to get to 100% of increase and decrease is “volume has stayed the same”
                                                                                            24
    *Small base
    Base: Users of each mushroom type
Net Increases Reported for
Each Mushroom Format

                                     Over Past Two Years, Usage Has…
  Mushroom Format                  Increased           Decreased                 Net
  Whole                                 27%                   3%               +24%

  Pre-Cut                               20                    4                +16

  Pre-Marinated*                        23                    8                +15




    Note: Balance to get to 100% of increase and decrease is “volume has stayed the same”
                                                                                            25
    *Small base
    Base: Users of each mushroom
Rationale for Mushroom
Volume Increases
   “Adding menu items that call for mushrooms,”
    and “growth in overall business” are key
    reasons mushroom volume has increased
    according to operators.
   Consumer demand also drives growth.
   “Stuffed mushrooms” is the key menu item
    added by operators which is driving increased
    mushroom usage.
   Steak/meat and vegetarian dishes are main
    areas where mushrooms have been added to
    dishes.
                                                    26
Reasons for Mushroom
Volume Increase
                                                                % Operators Indicating

                                                               Whole                 Pre-Cut
Added new menu item(s) that call
                                                                  39%                   22%
for mushrooms
Growth in overall business                                        33                    46

Greater consumer demand for mushrooms                             20                    18

Added mushrooms to existing menu items                            20                    10
Increased sales of menu items containing
                                                                  19                    12
mushrooms
Format change                                                       4                     7
Switch from processed (e.g., canned)                                3                     3

More promotion of mushrooms by operators                            1                     6

Labor savings                                                       0                     4

     Base: Operators reporting whole mushroom or pre-cut usage has increased over the past two years 27
     Multiple mentions accepted
Menu Items Added
Containing Mushrooms
                                                      % Indicating
              Stuffed Mushrooms                              36%

              Italian Foods                                  23

              Steak Dishes                                   21

              Vegetarian Foods                               18

              Chicken Dishes                                 11

              Seafood Items                                    6

              Egg/Omelet Dishes                                5

              Soups                                            3


   Base: Operators reporting mushroom volume has increased due to adding of new menu
                                                                                       28
   items containing mushrooms
   Multiple mentions accepted
Added Mushrooms to
Existing Menu Items
                                                       % Indicating
             Steak/Meat Dishes                                32%

             Vegetarian Foods                                 29

             Italian Foods                                    21

             Chicken Dishes                                   21

             Stuffed Mushrooms                                15

             Soups                                            12

             Egg Omelet                                        6

             Seafood Items                                     3

             Mexican Items                                     3
                                                                                         29
   Base: Operators indicating mushroom volume has increased due to adding of mushrooms
   to existing menu items. Note: Small base.
Current Menu Items Containing Mushrooms
Which Have Increased in Sales

                                                            % Indicating
             Stuffed Mushrooms                                     34%
             Steak/Meat Dishes                                     31
             Italian Foods                                         19
             Chicken Dishes                                        16
             Vegetarian                                            13
             Soups                                                   6
             Mexican Foods                                           6
             Egg Omelet                                              3
             Seafood Items                                           3
                                                                                              30
    Base: Operators indicating mushroom volume has increased due to current menu items
    containing mushrooms increasing in sales. Note: Small base. Multiple mentions accepted.
“Consumers Are Increasingly Ordering Menu Items
Containing Mushrooms as an Ingredient”

                           % Operators Indicating
        Somewhat
          Agree
           19%


Completely
  Agree                         Neither
   18%                                           Net
                                                Net
                               Agree Nor
                               Disagree

 Completely
                                 45%              +9%
                                                +9%
  Disagree
     6%

       Somewhat
        Disagree
          12%

                                                        31

       Base: Fresh mushroom users
“In Our Organization, We See Significant Increase in
Mushroom Usage in the Next Two Years”

                          % Operators Indicating
       Somewhat
         Agree
          11%

Completely
  Agree
   12%                         Neither
                              Agree Nor
                                                Net
                                               Net
                              Disagree
                                47%
Completely                                       +9%
                                               +3%
 Disagree
   14%

      Somewhat
       Disagree
         16%


                                                       32

      Base: Fresh mushroom users
Rationale for Mushroom Usage Decline
   Among the few who report mushroom volume
    has decreased, decline in operators’ overall
    business is the most prevalent reason for this
    occurring
   Discontinuation of menu items containing
    mushrooms and perceived low consumer
    demand are secondary reasons given by
    operators



                                                     33
Reasons for Mushroom
Volume Decline
                                                                   % Indicating
    Overall decline in operators’ business                                40%

    Discontinued menu item with mushrooms                                 19

    Less consumer demand for mushrooms                                    19
    Discontinued mushroom usage in
                                                                           7
    existing items
    Decreased sales of menu items
                                                                           4
    containing mushrooms
    High price of mushrooms                                                4

    Don’t know                                                             7


                                                                                  34
   Base: Operators stating that mushroom volume has declined in past two years.
   Small base
Mushroom Seasonality
   Overall, about one-third of all operators
    experience variations of mushroom usage by
    season
   Almost half of Shiitake and Oyster mushroom
    users’ usage varies by season
   These operators report that their usage of
    mushrooms is lowest January-March
   Higher usage is in July-September



                                                  35
   Mushroom Usage Seasonality

                           %
                      Indicating           Jan-Mar               Apr-Jun             Jul-Sep             Oct-Dec
                        Volume
Mushroom               Varies by
Format Type             Season      Higher     Lower      Higher      Lower    Higher     Lower    Higher     Lower
Whole White               29%        17%        31%        29%        23%       42%        35%      29%       21%

Pre-Cut White             20           *             *       *             *     *             *     *             *

Whole Portabella          38         20         27         34         20        46         24       46        22

Whole Shiitake            48         13         33         23         20        47         17       47        17

Whole Oyster              49           *             *       *             *     *             *     *             *

Whole Baby Bellas         43           *             *       *             *     *             *     *             *

Whole Enoki               60           *             *       *             *     *             *     *             *

Whole Woodear             47           *             *       *             *     *             *     *             *



                                                                                                                   36
               Base: Users of specific mushroom variety
               *Small base of users does not allow for valid data regularly
Mushroom Menu Items
  On average, operators have almost 50 items
   on their menus. Of these, about 15% contain
   mushrooms
  Of the menu items that contain mushrooms,
   about 13% of them “feature” mushrooms




                                                 37
   Mushroom Menu Items

                                                                        # of Menu       Share of
                                              # of Menu    Share of     Items with    Mushroom
                                                Items     Menu Items   Mushrooms     Items Where
                                # of Total   Containing   Containing       as the    Mushrooms
Operator Segment               Menu Items*   Mushrooms*   Mushrooms*     Feature*    Are Featured
LSR Traditional                     44.5          4           9%            2            50%

LSR Pizza Restaurants               40           10          25             1            10

Full Service                        45            6          13             2            33

Travel & Leisure                    40           10          25             2             8

B&I                                 35            4          11             2            50

Education                           75           12          16             2            13

Healthcare                          50            5          10             2.5          50

Total Average                       47            7          15%            2            13%




                                                                                               38

               *Median operator response
Future for Fresh Mushrooms
   Among operators interviewed, greatest
    opportunities for fresh mushroom are seen in
    the full service (both fine dining and casual
    dining) segment
   More menu mentions and addition of
    mushrooms to existing items cited by many as
    opportunities for greater usage
   Operators state that new recipes with
    mushrooms as ingredients are desired
   Versatility is a major mushroom benefit that
    can be leveraged
                                                    39
Operator Segments Representing Best
Opportunity for Increased Mushroom Usage

                                                      % Indicating
  Full-Service Restaurants (Other than Fine Dining)       21%

  Fine Dining                                             14

  Pizza Restaurants                                        5

  Fast Food                                                3

  Hotels                                                   3

  Other                                                    1

  Don’t Know                                              53



                                                                     40

    Base: Fresh mushroom users
Opportunities for Greater Mushroom Usage
in Foodservice
                                                 % Indicating
   Mention usage in menu items                       17%
   Add to existing menu items                        17
   No opportunities                                  11
   Customer pull through/demand                      11
   New applications                                   9
   Use in vegetarian items                            7
   Use of different mushroom varieties                4
   Raise public awareness of nutritional value        3
   Lower price                                        1
   Better availability                                1
   Better packaging to keep mushrooms fresh           1
   Don’t know                                        21         41

   Base: Fresh mushroom users
Operator Support Desired from
Mushroom Industry
                                               % Indicating
 New recipes with mushrooms as an ingredient       19%
 Lower mushroom pricing                            19
 Nothing                                           19
 Offer fresher product                             10
 Create demand for mushrooms                        7
 Better containers for longer shelf life            6
 Educate consumers on nutritional benefits          5
 Ensure year-round mushroom availability            4
 Develop new mushroom varieties                     4
 More promotional materials for foodservice         4
 Don’t know                                        20
                                                              42

      Base: Fresh mushroom users
“Mushrooms Are Extremely Versatile and Can be
Used in a Variety of Menu Applications”

                        % Operators Indicating

                         Completely
                          Disagree
                             2%
                Somewhat
                 Disagree
                    2%

               Neither                Completely
              Agree Nor                 Agree
              Disagree                   68%
                 9%


                   Somewhat
                     Agree
                      19%

                                                   43

    Base: Fresh mushroom users
II. Distributor Findings
Mushrooms Carried by Distributors
   Whole pre-sliced carried by the overwhelming
    majority of distributors interviewed
   White and portabella are the most
    predominant varieties offered
   Vast majority of distributors indicate variety
    volume increasing
   Business growth and increased operator
    application usage are reported to be driving
    mushroom within distributors interviewed

                                                     45
All Distributors Interviewed Offer White
Mushrooms

                            % Distributors Offering

          White                                             100%

   Portabella                                         85%

      Shiitake                               58%

  Baby Bellas                          38%

         Oyster                  23%

     Woodear                  15%

          Enoki             8%

                                                                   46

    Base: 26 distributors
Whole, Pre-Sliced Predominant Forms
Offered by Distributor

                           % Distributors Carrying

         100%
                                     92%




                                                         19%




         Whole                     Pre-Sliced        Pre-Marinated
                                                                     47

   Base: 26 distributors
Vast Majority of Distributors See Increases
in Mushroom Volume

      % Distributors Indicating Mushroom Volume
          Has Increased Over Past Two Years
          85%                                85%                          87%




         White                            Portabellas                    Shiitake
   Base: Distributors carrying each variety                                         48
   Note: Very small base for all other varieties makes data unreliable
Perceived Rationale for Increased
Mushroom Volume Usage

                                                                 % Indicating
   Growth in overall business                                        42%
   Operators adding new menu items with
                                                                     27
   mushrooms
   Operators adding mushrooms to existing
                                                                     23
   menu items
   Operators reacting to greater consumer
                                                                     19
   demand
   Increased distributor focus on
                                                                     12
   produce/promotion of produce




                                                                                49
   Base: Distributors indicating mushroom volume has increased
   Multiple mentions accepted
Trends Impacting Future Usage of Mushrooms (In
Order of Distributor Mentions)

  1. “Increasing customer sophistication in
     food, which would result in demand for
     exotic mushroom varieties”
  2. “Big chains getting more involved in
     offering fresh products”
  3. “More pre-cut in different varieties”
  4. “Healthy eating, resulting in usage of
     healthier ingredients, including
     mushrooms”

                                                 50
Trends Impacting Future Usage of Mushrooms (In
Order of Distributor Mentions)

  1. Teaching consumers about health benefits
     of mushrooms
  2. Teaching operators numerous ways to use
     mushrooms
  3. More organic products/specialty
     mushrooms




                                                 51
Support Desired from the Mushroom Industry (In
Order of Distributor Mentions)

  1. New applications/menu ideas using
     mushrooms
  2. Showing distributors how to best sell
     mushrooms
  3. More education on mushroom varieties
     and forms




                                                 52
III. Fresh Mushroom Market Overview
Fresh Mushroom Market Size
   The total foodservice fresh mushroom market
    accounts for 356MM pounds in 2004
   Whole accounts almost 60% of format used
   White mushrooms represent the lion’s share of
    mushroom consumption in foodservice
   West represent highest volume usage for
    foodservice




                                                54
Total Foodservice Market by Form

                       Total = 356MM Lbs.


                                            Pre-Cut
                                            136MM
                                             38%

                          Whole
                          208MM
                           58%                    Pre-
                                                Marinated
                                                 10MM
                                                   3%
                                    Cooked to
                                    Spec 2MM
                                       1%


                                                            55

   Source: Technomic
Total Foodservice Market by Variety

                         Total = 356MM Pounds


                                                      Brown*
                                                    61.9MM lbs.
                                  White                 17%
                                 271.1MM
                                   lbs.
                                   76%
                                                      Shiitake
                                                        4%


                                            All Other**
                                           9.5MMM lbs.
                                                3%



   *Portabella, Baby Bellas
                                                                  56
   **Includes, Oyster, Enoki, Woodear
   Source: Technomic
Total Foodservice Market by Region


                               Mushroom Volume    Share of Total
Region                      #MM lbs.     Share   Industry Volume
Northeast                      67       19%            18%

South                          85       24             35

Midwest                        90       25             25

West                          114       32             22

Total                        356       100%           100%




                                                                   57

        Source: Technomic
Operator Market Size Segmentation
   Full service restaurants represent about 60%
    of total fresh mushrooms volume used
   Pizza restaurant usage is high in comparison
    to total industry volume of all goods going into
    pizza restaurants




                                                       58
Total Foodservice Market by
Operator Segment
                                   Mushroom Volume        Share of
                                                       Industry Total
    Operator Segment            MM Lbs.        Share      Volume

    LSR Traditional              24.9           7%         23%

    Pizza Restaurants            77.1          22           5

    Full-Service Restaurants    210.0          59          25

    Travel & Leisure             18.0           5           7

    Business & Industry          10.2           3           6

    Education                     5.0           1           7

    Healthcare                    7.5           2           4

    All Other Foodservice         3.3           1          23

    Total                       356.0         100.0%      100%



                                                                        59

   Base: Fresh mushroom users
Historical and Forecasted Fresh Mushroom
Growth by Variety

                                         CAGR

                                                                            17.0%
           3-Year Historical     3-Year Forecast
                                                                    14.0%




                                               8.0%
                                        7.0%
                                                             6.0%
                                                      5.0%
 3.0% 3.5%
                          2.0%
                  1.0%


   Total              White              Brown*        Shiitake      All Other

   *Portabella, Baby Bellas
                                                                                    60
   **Includes, Oyster, Enoki, Woodear
   Source: Technomic
Mushroom Growth
                               Growth Drivers
                    Consumer demand for healthier foods;
                     produce items including white
                     mushrooms will benefit.
 White Mushrooms    High usage in pizza restaurants will
                     offset some growth, as this segment is
                     maturing.




                               Growth Drivers
                    Operators are increasingly adding
                     specialty mushrooms into their recipes
                     to add variety and uniqueness.
    All Other       Consumers are increasingly adventurous
                     and experimented with their food-away-
    Varieties        from-home experiences. They are
                     demanding unique flavors and textures,
                     which are provided by specialty
                     mushroom products.

                                                              61
Fresh Mushroom Market Projection




             arjun@arjunsen.com
                 303-521-1988
Penetration and Usage
                                                 250.00
   Total FreshMushroom Usage (MM lbs) (MM lbs)




                                                 200.00
                                                                                                           FSR
      Total Fresh Mushroom Usage




                                                 150.00




                                                 100.00
                                                                                                   Pizza



                                                  50.00                            LSR
                                                                                     Travel & Leisure
                                                                 Education
                                                   0.00                   Healthcare Business

                                                          0.00        0.20          0.40           0.60          0.80
                                                                           Fresh Mushroom Penetration
                                                                       Fresh Mushroom Penetration                       63
Fresh Mushroom Projection




                            64
   Fresh Mushroom Market Projection




Projection For Restaurant Usage Only
Restaurant Mushroom Consumption
Current Usage




                                  66

   Base: Fresh mushroom users
Restaurant Mushroom Consumption
Number of Units in the next 5 yrs

                                          Approximate            Approximate
                                          Restaurants    5 yr    Restaurants
                             # of         using Fresh   CAGR     using Fresh
                          Restaurants     Mushrooms     Growth   Mushrooms
   Total LSR                    216,000      82,080      5%         86,184


   Total Pizza                   62,000      38,440      1%         38,825




   Total FSR                    250,000     197,500      1%        207,841


   Total Restaurants            528,000     316,800      1%        319,968



                                                                               67

   Base: Fresh mushroom users
Restaurant Mushroom Consumption
Number of Units in the next 5 yrs

                           Current             Projected Usage 5 years from now
                                        Low end projection       High end projection



                                                  Total Fresh             Total Fresh
                         Total Fresh              Mushroom                Mushroom
                         Mushroom                 Usage (MM               Usage (MM
                       Usage (MM lbs)                 lbs)                   lbs)
  Total LSR                  24.9       5.0%         26.1       24.8%        31.1


  Total Pizza                77.1       1.0%         77.9       14.6%        88.4


  Total FSR                  210        5.2%         220.9      17.2%        246.1


  Total Restaurants          312        4.1%          325       17.3%        366



                                                                                        68

      Base: Fresh mushroom users
    Fresh Mushroom Market Projection




Projection For Limited Service Restaurants (LSR)
                    and Pizza
Restaurant Mushroom Consumption
LSR & Pizza: Current Usage




                                  70

   Base: Fresh mushroom users
Restaurant Mushroom Consumption
LSR & Pizza: # of Units in the next 5 yrs




                                            71

     Base: Fresh mushroom users
Methodology For Projection.
 To develop a projection model, the first step was to determine key driver variables.
 They are
      • Unit Growth: Natural growth in number of restaurants or industry units (e.g. schools,
      businesses) over time. This simply means that if everything else remains the same, mushroom
      usage will increase or decrease at the same rate of growth of units. This is a driver that the
      mushroom industry cannot influence. Still this is a key driver of Mushroom growth.
      • Mushroom Penetration Growth: This driver is what % of restaurants or other industry units
      (e.g. schools, businesses) are using mushrooms. This is an area the Mushroom Industry can
      influence both in a macro and micro sense. Just like it is important to educate and assist units
      to get more units to use fresh mushrooms, it is also important to assist current users so that
      they continue to use fresh mushrooms and may be more.
      • Mushroom Volume per Restaurant Growth: This is equivalent to a per capita or per unit
      usage. This is an area again where the mushroom industry can assist and influence. In order
      to increase the amount of mushrooms used by each restaurant/unit, we have to help them the
      units to the following:
            • More Menu items featuring mushrooms.
            • Increasing the sale of mushroom menu items

 The next step was to determine how each of the driver’s have changed over the
 last few years. That helped us determine different scenarios for the future.
 The final step was to determine the projection models which follow.                                     72
  Driver’s of Mushroom Volume Growth
1. Unit Growth:
Natural growth in number of restaurants over time.



2. Mushroom Penetration Growth:
A higher percentage restaurants use mushrooms over
time.



3. Mushroom Volume per Restaurant
Growth:
Increasing the amount of mushrooms used by each
restaurant by:
        - More Menu items featuring mushrooms.
        - Increasing the sale of mushroom menu items.




                                                        73
Restaurant Mushroom Consumption
LSR: Current Usage




                                  74

   Base: Fresh mushroom users
Restaurant Fresh Mushroom Consumption
LSR: Usage by Mushroom Type
                            Current          Scenario 1             Scenario 2
                                      Driven By Unit Growth   Driven my Mushroom
                                      Only                    Penetration Only
  Total Penetration
  Whole                      65%               24.0%                  33.5%
   White                     57%                5.0%                  14.2%
   Portabella                17%                5.0%                  35.9%
   Shiitake                   7%                5.0%                  80.0%
   Oyster                     3%                5.0%                   n/a
   Baby Bellas                3%                5.0%                   n/a


  Pre-Cut                    41%                5.0%                  17.8%
   White                     41%                5.0%                  17.8%


  Pre Marinated               9%                5.0%                   n/a


  Pre-Cooked to Specs         5%                5.0%                   n/a

                                                                                   75

     Base: Fresh mushroom users
Restaurant Mushroom Consumption
Pizza: Current Usage




                                  76

   Base: Fresh mushroom users
Restaurant Mushroom Consumption
Pizza: Usage by Mushroom Type




                                  77

   Base: Fresh mushroom users
Fresh Mushroom Market Projection




Full Service Restaurants (FSR)
Restaurant Mushroom Consumption
FSR: Current Usage




                                  79

   Base: Fresh mushroom users
Restaurant Mushroom Consumption
FSR: Number of Units in the next 5 yrs




                                5.2%




                                         80

   Base: Fresh mushroom users
Restaurant Mushroom Consumption
FSR: Current Usage




                                  81

   Base: Fresh mushroom users
Restaurant Fresh Mushroom Consumption
FSR: Usage by Mushroom Type
                                         Current              Scenario 1             Scenario 2
                                                   Driven By Unit Growth Only   Driven my
                                                                                Mushroom
                                                                                Penetration Only
Total Penetration
Whole                                     88%                   24.0%                  31.0%
 White                                    72%                    5.0%                  12.5%
 Portabella                               57%                    5.0%                  14.4%
 Shiitake                                 39%                    5.0%                  18.7%
 Oyster                                   24%                    5.0%                  27.1%
 Baby Bellas                              17%                    5.0%                  36.1%


Pre-Cut                                   26%                    5.2%                  25.4%
 White                                    26%                    5.2%                  25.4%


Pre Marinated                             2%                     5.2%                   n/a
 White                                    2%                     5.2%


Pre-Cooked to Specs                       1%                     5.2%                   n/a        82

            Base: Fresh mushroom users
Fresh Mushroom Market Projection




       Non- Restaurants
Non-Restaurant Fresh Mushroom Consumption
Growth




  Even though growth is marginal, still this segment is important
      • As more than 10% of the volume of Fresh Mushrooms come from here.



                                                                            84
    Fresh Mushroom OPPORTUNITY INDEX




In this section, we have developed an opportunity Index by region and
industry. Follow-up pages show action steps that can be taken.
Regional Mushroom Opportunity Coefficient
            The Coefficient Computation:
  This coefficient is a measure of the opportunity of fresh mushroom in different industry segments.


      Factors:

    Opportunity in that
    Industry segment
                                                                         Regional Mushroom
                                                                            Opportunity
    Opportunity in that                                                      Coefficient*
         region
                                                          How to Read Opportunity Coefficient*
                                                          Value Ranges from 0 to 400
                                                                 Where     0 to 20      is Low Opportunity

      Opportunity of                                                       21 to 100    is average Opportunity
                                                                           101 to 250   is better than average Opportunity
     Mushroom Types                                                        251 to 500   is high opportunity
                                                                           501 +        is very high opportunity



       *This defines volume opportunity only. It does not take into account wastage, prices by
                  mushroom type and profitability of different types of mushrooms.

                                                                                                                             86
Regional Mushroom Opportunity Coefficient
                The Coefficient Computation:
 This coefficient is a measure of the opportunity of fresh mushroom in different industry segments.
   The three main factors chosen were:
 • Opportunity in that Industry Segment: This is a measure of current usage in the segment, the
   segment growth over the last 5 years and the growth projection for the segment.
 • Opportunity by Region: After the first factor is established, it is adjusted by regional variations.
 • Opportunity of Mushroom Types: Finally the first two factors were adjusted by mushroom types.

 The following factor is important but was NOT considered in the model
  Eating out Frequency. After analyzing it was determined that Eating out frequency is a function
  of industry growth, by industry, by region and then the relevance of different types of
  mushrooms in each area.

 The weights used:
 All three factors were equally weighted. As the regionality and the mushroom type is nestled
  inside the industry projections, it makes it a robust projection model.

 The cut-off values:
 The cut-offs were arrived at by looking at the current volumes and then breaking them in the
  values.



                                                                                                          87
Regional Mushroom Opportunity Coefficient
               The Coefficient Computation:


                                            Opportunity in the
 Opportunity in that   Opportunity in the                        Adjusted for Overall   Opportunity
                                             Mushroom Type
 Industry Segment          Region                                     Number            Coefficient




      Example: How the Northeast White Coefficient for Pizza was
      computed.
      White in Pizza Restaurant                       48%
      Pizza usage                                     77.1%
      Pizza % of Volume                               22.60%
      Northeast Usage                                 82%
      Other factors added: Category growth in the past 5 years.
                                                                                                  88
A Frame-Work for TAKING ACTIONS
          HOW CAN THE MUSHROOM INDUSTRY BE MORE
                       SUCCESSFUL?




                                                  MUSHROOM
   GROWER’S                                       CATEGORY
   INDIVIDUAL                                      SUCCESS
    SUCCESS




                              INFLUENCING         INFLUENCING
        WHAT INDUSTRY                                             INFLUENCING
        AM I TARGETING
                                  KEY
                             DEMOGRAPHICS
                                                      KEY
                                                   INDUSTRIES
                                                                  DISTRIBUTORS   This is the framework
                                                                                 Details for each area
         UNDERSTAND
        THE INDUSTRY”S
                              Build Relevant
                               Awareness
                                                  Understanding
                                                   their needs
                                                                                  is in the following
         SEASONALITY                                                                    section.
                                 Benefit
          UNDERSTAND            (Nutrition)       New Recipes
              THE             Communication
         DISTRIBUTOR’S
             NEED

                                                   New Recipes
                                 Make
                                                  enhanced with
            TYPE OF            Mushrooms
                                                    mushroom
         MUSHROOM TO              Fun
                                                     addition
           PRODUCE


                                                   Mushroom
                                                   Handling
                                                   Education



                                                                                                         89
Fresh Mushroom Opportunity




  Regional Projections
Total Mushroom Volume by Region

                          Total = 356MM Lbs.
West Contributes                                    Northeast contributes

nearly1/3rd   of                                    less than1/5th  of
   mushroom                                              mushroom
  consumption                                           consumption
                                        Northeast
                   West                   19%
                   32%




                                          South
                                          24%


                          Midwest
                           25%

                                                                            91
Summary of Strategy: Valid for all regions
These opportunity areas are valid for all regions

•Use whole white mushrooms to focus for maximum opportunity on
    • Full Service Restaurants

•Whole white also has significant opportunities among
    • Pizza

•Whole Portabella mushroom have strong opportunity in
    • Full Service Restaurants

•Sliced white mushrooms show some opportunity on
      • FSR




                                                                 92
Summary of Strategy: by region
West:
•   Whole white also has significant opportunities among LSR.
•   Shiitake, Oyster and Baby Bellas continue to have opportunities in the Full Service Restaurants.
•   Enoki and Woodear show the most opportunity among all regions in the west.
•   Sliced white mushrooms show some opportunity on LSR and Pizza.


South:
•   LSR usage is very low. This could turn out to be a significant opportunity for the mushroom industry to develop this segment.
•   Whole Portabella and Shiitake, mushroom have strong opportunity in Full Service Restaurants.
•   Shiitake opportunity is the highest in the South among all regions.
•   Oyster and Baby Bellas continue to have opportunities in the Full Service Restaurants.



Northeast:
• LSR usage is very low. This could turn out to be a significant opportunity for the mushroom industry to develop this segment .
• Portabella, Shiitake, Oyster and Baby Bellas continue to have opportunities in the Full Service Restaurants.
• Sliced white mushrooms also has some opportunity among Pizza.


Midwest:
• LSR usage is very low. This could turn out to be a significant opportunity for the mushroom industry to develop this segment .
• Portabella, Shiitake, Oyster and Baby Bellas continue to have opportunities in the Full Service Restaurants.


                                                                                                                                    93
Other Key Issues
Interviewing operators in major chains, regional chains and independents revealed:

• All operators need information on mushroom handling, storage, processing and quality
  determination.
• The primary and the sole source of the information is distributors and vendors.
     • It should be noted that the perception is that distributors and vendors do not proactively
        give information out to the industry.
     • For independents the distributor and the vendor is the same person.
     • Some operators did mention education material they had received on mushroom in the
        past as very helpful.
          • But in an industry where turnover is above 180%, it is important to keep education and
            information flow on-going and not one-time.


Hence it is of primary importance for the distributor and the vendor to on an ongoing basis to
  educate the end-user about handling, storage, processing and quality determination of
  mushrooms.




                                                                                                     94
Some Tactic Examples

- Revisit past communication materials and update them on an ongoing basis.
    - Communicate the information to the end-users through.
         - A website that is communicated on all mushroom materials
         - Through communication and training materials.
         - Annual mushroom convention that focuses on:
              -   Best practices
              -   Handling, sourcing, processing, storage and quality detection training.
              -   Exciting information and facts
              -   Recipes and easy of cooking
              -   Taste testing
              -   What is new in the mushroom world
              -   Mushroom promotions by region, by time of the year.
              -   Mini-breakouts by Chain vs Independents and by industry.


- Mushroom recipes by mushroom type and regions.




                                                                                            95
           By Region
                                 Population vs. % Using Mushrooms:                                         Per Capita Usage Of Mushrooms:



                                30
                                                                                                                                        25.0
                                                                West          Midwest
                                                                                              South
                                25                                                                                                                                          19.9




                                                                                                            Per Capita Mushroom Usage
                                                                                                                                        20.0
% of pop using Fresh Mushroom




                                                                  Northeast
                                20                                                                                                               15.6
                                                                                                                                                           14.5
                                                                                                                                        15.0

                                15
                                                                                                                                                                     9.5
                                                                                                                                        10.0

                                10
                                                                                                                                         5.0
                                 5

                                                                                                                                         0.0
                                 0                                                                                                             Northeast Midw est   South   West
                                     0   5     10    15          20           25        30   35       40
                                                          Pop (in Millions)




                                         Population vs. % Using Mushrooms:
                                         1.  Even though west is not the most populated of the regions, it accounts for the highest %
                                             of mushroom sales as it has the highest per-capita mushroom consumption.
                                         2.  South, is the most populated but has the lowest % of mushroom sales as per capita
                                             consumptions is less than ½ of that of the west.
                                         3.  Northeast has a lower % of population using mushrooms.
                                                                                                                                                                                   96
West: Mushroom Opportunity Coefficient
  This coefficient is a measure of the opportunity of fresh mushroom in different industry segments.




                             WHOLE                       White    Portabella    Shiitake    Oyster    Baby Bellas    Enoki    Woodear
                             LSR Traditional              123          34           13         5           5           0         7
                             Pizza Restaurants            321          49           0          0           0           0         0
                             Full-Service Restaurants     1312        959          627        346         263         119       142
                             Travel & Leisure             114          74           47         17          13          15        16
                             Business & Industry           54          36           16         7           11          6         7
                             Education                     35          19           10         4           7           3         3

                             SLICED                     White    Portabella    Shiitake    Oyster    Baby Bellas    Enoki    Woodear
                             LSR Traditional             89         10            0          0           0           10        0
                             Pizza Restaurants          348         31            0          0           0           0         0
                             Full-Service Restaurants   474         0             0          0           0           0         0
                             Travel & Leisure            42         4             3          0           0           0         0
                             Business & Industry         27         11            3          0           0           0         0
                             Education                   14         0             0          0           0           0         0




                                                                                                                               97
How to WIN the West?
• Use whole white mushrooms to focus for maximum opportunity on
     • Full Service Restaurants

• Whole white also has significant opportunities among
    • Pizza and
    • LSR

• Whole Portabella mushroom have strong opportunity in
    • Full Service Restaurants

• Shiitake, Oyster and Baby Bellas continue to have opportunities in the
      • Full Service Restaurants

• Enoki and Woodear show the most opportunity among all regions in the west.

• Sliced white mushrooms show some opportunity on
      • LSR and
      • Pizza

• Sliced white mushrooms also has some opportunity among
      • Full Service Restaurants

                                                                               98
South: Mushroom Opportunity Coefficient
  This coefficient is a measure of the opportunity of fresh mushroom in different industry segments.




                          WHOLE                       White    Portabella    Shiitake    Oyster    Baby Bellas    Enoki     Woodear
                          LSR Traditional               70          20           9          3           3             0          4
                          Pizza Restaurants            182          29           0          0           0             0          0
                          Full-Service Restaurants     745         572          413        211         147            77         75
                          Travel & Leisure              65          44           31         11          7             9          8
                          Business & Industry           31          21           10         4           6             4          4
                          Education                     20          11           7          3           4             2          2



                          SLICED                     White    Portabella    Shiitake    Oyster    Baby Bellas    Enoki     Woodear
                          LSR Traditional             50         6             0          0           0           7          0
                          Pizza Restaurants          198         18            0          0           0           0          0
                          Full-Service Restaurants   269         0             0          0           0           0          0
                          Travel & Leisure            24         3             2          0           0           0          0
                          Business & Industry         16         6             2          0           0           0          0
                          Education                   8          0             0          0           0           0          0



                                                                                                                                  99
How to WIN the South?
• Use whole white mushrooms to focus for maximum opportunity on
     • Full Service Restaurants

• Whole white also has significant opportunities among
    • Pizza

• LSR usage is very low. This could turn out to be a significant opportunity for the mushroom industry to
  develop this segment.

• Whole Portabella and Shiitake, mushroom have strong opportunity in
    • Full Service Restaurants

• Shiitake opportunity is the highest in the South among all regions.

• Oyster and Baby Bellas continue to have opportunities in the
     • Full Service Restaurants

• Sliced white mushrooms also has some opportunity among
      • Full Service Restaurants

                                                                                                            100
Northeast: Mushroom Opportunity Coefficient
  This coefficient is a measure of the opportunity of fresh mushroom in different industry segments.




                    WHOLE                       White    Portabella    Shiitake    Oyster    Baby Bellas    Enoki     Woodear
                    LSR Traditional               67          19           8          4           4             0          3
                    Pizza Restaurants            174          28           0          0           0             0          0
                    Full-Service Restaurants     712         550          355        268         185            74         61
                    Travel & Leisure              62          42           27         13          9             9          7
                    Business & Industry           29          21           9          5           7             4          3
                    Education                     19          11           6          3           5             2          1


                    SLICED                     White    Portabella    Shiitake    Oyster    Baby Bellas    Enoki     Woodear
                    LSR Traditional             48         6             0          0           0           6          0
                    Pizza Restaurants          189         18            0          0           0           0          0
                    Full-Service Restaurants   257         0             0          0           0           0          0
                    Travel & Leisure            23         2             2          0           0           0          0
                    Business & Industry         15         6             2          0           0           0          0
                    Education                   8          0             0          0           0           0          0


                                                                                                                                101
How to WIN the Northeast?
• Use whole white mushrooms to focus for maximum opportunity on
     • Full Service Restaurants

• Whole white also has significant opportunities among
    • Pizza

• LSR usage is very low. This could turn out to be a significant opportunity for the mushroom industry to
  develop this segment.

• Whole Portabella mushroom have strong opportunity in
    • Full Service Restaurants

• Portabella, Shiitake, Oyster and Baby Bellas continue to have opportunities in the
     • Full Service Restaurants

• Sliced white mushrooms also has some opportunity among
      • Full Service Restaurants and
      • Pizza



                                                                                                            102
Midwest: Mushroom Opportunity Coefficient
  This coefficient is a measure of the opportunity of fresh mushroom in different industry segments.




                          WHOLE                       White    Portabella    Shiitake    Oyster    Baby Bellas    Enoki     Woodear
                          LSR Traditional               74          20           9          5           5             0          4
                          Pizza Restaurants            194          30           0          0           0             0          0
                          Full-Service Restaurants     791         579          408        315         220            64         70
                          Travel & Leisure              69          44           31         16          11            8          8
                          Business & Industry           33          22           10         6           9             3          3
                          Education                     21          11           7          4           6             2          2



                          SLICED                     White    Portabella    Shiitake    Oyster    Baby Bellas    Enoki     Woodear
                          LSR Traditional             53         6             0          0           0           5          0
                          Pizza Restaurants          210         19            0          0           0           0          0
                          Full-Service Restaurants   286         0             0          0           0           0          0
                          Travel & Leisure            25         3             2          0           0           0          0
                          Business & Industry         17         6             2          0           0           0          0
                          Education                   9          0             0          0           0           0          0



                                                                                                                                 103
How to WIN the Midwest?
• Whole white mushrooms have the maximum opportunity in
    • Full Service Restaurants

• Whole white also has significant opportunities among
    • Pizza

• LSR usage is very low. This could turn out to be a significant opportunity for the mushroom industry to
  develop this segment.

• Whole Portabella mushroom have strong opportunity in
    • Full Service Restaurants

• Portabella, Shiitake, Oyster and Baby Bellas continue to have opportunities in the
     • Full Service Restaurants

• Sliced white mushrooms also has some opportunity among
      • Full Service Restaurants and
      • Pizza



                                                                                                            104
Fresh Mushroom Opportunity




       By Industry
 Total Mushroom Volume by Industry

                                    Total = 356MM Lbs.
  Non-Restaurant
Industry contributes                     Healthcare   Oth Foodservice
                            Education       2%
   to 12%   of
                       Business
                               1%
                                                            1%        LSR
                                                                       7%
    mushroom             3%
   consumption
                                                                    Pizza
                 Travel & Leisure
                                                                    22%
                        5%




                                                                            Restaurant Industry
                                                                                         88%
                                                                            contributes to
                                                                                of mushroom
                                                                                consumption
                                        FSR
                                        59%




                                                                                                  106
Full Service:               Mushroom Opportunity Coefficient

  This coefficient is a measure of the opportunity of fresh mushroom in different industry segments.



                             WHOLE                 White   Portabella   Shiitaki   Oyster   Baby Bellas   Enoki   Woodear
                             Midwest                791       579         408       315        220         64        70
                             Northeast              712       550         355       268        185         74        61
                             South                  745       572         413       211        147         77        75
                             West                   1312      959         627       346        263        119       142


                               SLICED              White   Portabella   Shiitake   Oyster   Baby Bellas   Enoki   Woodear
                               Midwest              286        0           0         0          0          0        0
                               Northeast            257        0           0         0          0          0        0
                               South                269        0           0         0          0          0        0
                               West                 474        0           0         0          0          0        0




                                                                                                                  107
How to WIN the FSR?
2 national and 3 regional chain operators were interviewed in detailed one-on-one interviews.



                                     - Include in Daily Special
          Current Recipes            - Incentives to promote
     (HOW TO PROMOTE BETTER)         - More presence in the menu
                                        - Assist with descriptions and photography
                                     - Help romance the menu


                                   - Help develop seasonal menu items
                                     - Educate operators what is mushroom seasonality
                                   - Help define expectations
            New Recipes               - How many do you expect to sell.
                                   - Bring more varieties of mushrooms to the menu
                                   - Help source mushrooms



                                   - Understand most common issues
                                     - Storage
                                     - Handling
      Operations / Handling Help
                                     - Shelf Life
                                     - How to determine quality                                 108
                                   Answer FAQ
LSR: Mushroom Opportunity Coefficient
   This coefficient is a measure of the opportunity of fresh mushroom in different industry segments.




                          WHOLE                 White    Portabella    Shiitake    Oyster    Baby Bellas    Enoki    Woodear
                          Midwest                 74         20           9             5           5         0           4
                          Northeast               67         19           8             4           4         0           3
                          South                   70         20           9             3           3         0           4
                          West                   123         34           13            5           5         0           7


                          SLICED               White    Portabella    Shiitake    Oyster    Baby Bellas    Enoki    Woodear
                          Midwest               53         6             0          0           0           5         0
                          Northeast             48         6             0          0           0           6         0
                          South                 50         6             0          0           0           7         0
                          West                  89         10            0          0           0           10        0




                                                                                                                              109
How to WIN the LSR?
3 national and 2 regional chain operators were interviewed in detailed one-on-one interviews.

                                - Some have mushrooms in them in the recipe.
                                - Why not use in more recipes.
   Mushroom As An Auxiliary          - Perception: Mushrooms are polarized
      Item in a Menu Item            - Perception: Mushrooms require different handling.
                                     - Perception: Waste could be high




                                - Most operators find a challenge to attract vegetarian
                                customers.
     Mushroom as a Feature
            Recipe                   - They go with mixed vegetables or blends to reduce risks.
                                - They need to be educated on the appeal of mushrooms



                                  - Understand most common issues
                                    - Storage (do you need freezer or refrigerator space)
                                    - Handling (can it be handled with meat)
                                    - Sourcing
   Operations / Handling Help       - Pricing
                                        - (how can I get the portions I need at a good price?
                                        - This will be an issue to educate distributors           110
                                  Answer FAQ
Pizza: Mushroom Opportunity Coefficient
   This coefficient is a measure of the opportunity of fresh mushroom in different industry segments.




                          WHOLE                 White    Portabella    Shiitake    Oyster    Baby Bellas    Enoki    Woodear
                          Midwest                194         30              0          0           0           0         0
                          Northeast              174         28              0          0           0           0         0
                          South                  182         29              0          0           0           0         0
                          West                   321         49              0          0           0           0         0

                          SLICED               White    Portabella    Shiitaki    Oyster    Baby Bellas    Enoki    Woodear
                          Midwest              210         19            0          0           0           0         0
                          Northeast            189         18            0          0           0           0         0
                          South                198         18            0          0           0           0         0
                          West                 348         31            0          0           0           0         0




                                                                                                                              111
How to WIN the Pizza?
2 national and 2 regional and 2 local chain operators were interviewed in detailed one-on-one
interviews.


                                  Mushrooms go well with other toppings, but mushroom
          Current Menu
                                  only have low mix.


                                 - Most operators find a challenge to attract vegetarian
     Mushroom as a Feature       customers.
            Recipe                     - They go with mixed vegetables or blends to reduce risks.
                                 - They need to be educated on the appeal of mushrooms

                                  - Understand most common issues
                                    - Cooking: Fresh mushroom dries out faster
                                        - Placing mushroom under the cheese maintains integrity,
                                          texture and flavor
    Operations / Handling Help
                                  - Storage (without the correct air tight packing, they dry out faster)
                                  - Washing: How do you wash Mushrooms?
                                  - Quality: How do you know it has gone bad?
                                    - Answer FAQ

                                  - Operators need to see beyond white or portabella. They
  Educate on Mushroom Variety     need to be educated that premium mushroom will allow
                                  them to offer premium menu items at signature prices.                    112
Non-Restaurant: Mushroom Opportunity Coefficient
   This coefficient is a measure of the opportunity of fresh mushroom in different industry segments.

                             Travel & Leisure
                            WHOLE                 White    Portabella    Shiitake    Oyster     Baby Bellas    Enoki     Woodear
                            Midwest                 69            44           31         16           11          8          8
                            Northeast               62            42           27         13           9           9          7
                            South                   65            44           31         11           7           9          8
                            West                   114            74           47         17           13          15         16
                            SLICED              White     Portabella    Shiitake    Oyster     Baby Bellas    Enoki     Woodear
                            Midwest               25          3            2          0            0           0          0
                            Northeast             23          2            2          0            0           0          0
                            South                 24          3            2          0            0           0          0
                            West                  42          4            3          0            0           0          0

                             Education
                            WHOLE                 White    Portabella    Shiitake    Oyster     Baby Bellas    Enoki     Woodear
                            Midwest                21             11           7          4            6           2          2
                            Northeast              19             11           6          3            5           2          1
                            South                  20             11           7          3            4           2          2
                            West                   35             19           10         4            7           3          3
                            SLICED              White     Portabella    Shiitake    Oyster     Baby Bellas    Enoki     Woodear
                            Midwest               9           0            0          0            0           0          0
                            Northeast             8           0            0          0            0           0          0
                            South                 8           0            0          0            0           0          0
                            West                  14          0            0          0            0           0          0
                                                                                                                              113
Non-Restaurant (contd.): Mushroom Opportunity
Coefficient
    This coefficient is a measure of the opportunity of fresh mushroom in different industry segments.




                            Business & Industry
                           WHOLE                 White    Portabella    Shiitake    Oyster    Baby Bellas    Enodi    Woodear
                           Midwest                33          22          10          6           9            3         3
                           Northeast              29          21           9          5           7            4         3
                           South                  31          21          10          4           6            4         4
                           West                   54          36          16          7           11           6         7

                           SLICED               White    Portabella    Shiitake    Oyster    Baby Bellas    Enodi    Woodear
                           Midwest               17          6            2          0           0            0         0
                           Northeast             15          6            2          0           0            0         0
                           South                 16          6            2          0           0            0         0
                           West                  27          11           3          0           0            0         0




                                                                                                                          114
How to WIN the Non-Restaurants?
2 schools, 2 travel n leisure areas (one cruise and one resort) and 2 businesses (cafeterias)
operators were interviewed in detailed one-on-one interviews.



In Non-Restaurants the biggest challenge is:

To find the key decision maker and the decision process.
      •    In case of the schools, decision is made by a committee in the school board.
      •    The criteria used by them is more nutrient and health oriented than taste.
      •    Of course kid or young adult preferred items (e.g. pizza, chicken nuggets, burgers,
           sandwiches) make the menu easier.

Recommendation:
1. Communicate nutrient and health information.
2. Get an independent survey to prove the appeal of mushrooms among children and young
    adults.
3. Assist travel-leisure and businesses with
    1. Recipe
    2. Sourcing and
    3. Handling information
                                                                                                 115
Fresh Mushroom Opportunity




by
                                         At Home vs. Away From Home:

                                           Current Situation:                                                    Opportunities:

                                70                                                                          Even though 88% of mushroom
                                                                                                            consumption is from restaurants, Away
                                60
                                                                                               Home
                                                                                                            From Home occasions, other the FSR
% of pop using Fresh Mushroom




                                50                                                                          provide significant opportunity for
                                                                            Away From Home
                                                                                                            growth.
                                40

                                                                                                            The fresh mushroom industry needs to
                                30
                                                  Other Restaurants                                         focus on Home Occasions, as that is
                                20                                                                          currently developed. This can be
                                                                                                            further enhanced by:
                                10                        Fast Food

                                                       Others                                                   • Offering more exotic varieties of
                                 0       School
                                     0            20            40          60            80   100    120
                                                                                                                mushroom in grocery/retail outlets.
                                                                      Pop (in Millions)
                                                                                                                • Attaching free recipes on
                                                                                                                packaging.
                                                                                                                • Referring on the package to a
                                                                                                                website that has recipes.
                                                                                                                                                  117
By Race

                                 Current Situation:                                                                                       Actions:

                                90                                                                                            This will be an interesting area to
                                80
                                                                                                        White, non-Hispanic   probe:
                                70                                                                                            • Why is it that the non-white population
% of pop using Fresh Mushroom




                                60                                                                                            have a lower usage of mushrooms?
                                50                                                                                            This will lead to an understanding of
                                40                                                                                            mushroom perception by these
                                30
                                                                                                                              demographic groups and also develop
                                                                                                                              recipes to include mushroom usage in
                                20
                                                                                                                              ethnic food (e.g. Mexican, Chinese etc.)
                                                  Hispanic
                                10

          Others
                                         Asian
                                                      Black, non-Hispanic
                                                                                                                              This will serve gains in two directions.
             0                            Mexican
                                     0           10          20       30           40         50   60        70         80
                                                                                                                              They are:
                                                                            Pop (in Millions)
                                                                                                                              • Consumption will increase among non-
                                                                                                                              white population.
                                                                                                                              • More restaurants too will start using
                                                                                                                              fresh mushrooms.
                                                                                                                                                                         118
                                     By Gender N Age

                                         Current Situation:                                                                                      Actions:

                                25                                                                                                It is interesting to see that Fresh
                                                                                                               Female: 20-39
                                                                                                                                  Mushroom is the food of the emerging
                                20                                                                                  Male: 20-39   generation. This gives us the following
% of pop using Fresh Mushroom




                                                                                                                                  opportunities.
                                15                                                             Female: 40-59
                                                                                                                                  • How can we make Mushrooms Relevant to
                                                                                          Male: 40-59
                                                                                                                                  kids?
                                10                                      Female: 60 and over
                                                                                                                                       • Make mushrooms exciting and interesting
                                                           Male: 60 and over
                                                                                                                                       • How to incorporate fresh mushrooms in their
                                5                                                                                                      favorite recipes.
                                                       Male: 12 to 19
                                                   Female: 12 to 19
                                                  Female: 2 to 11         Male: 2 to 11
                                                                                                                                       • Through PR and product placement make it “cool”
                                0
                                                                                                                                       to eat mushrooms.
                                     0    2   4    6             8            10          12            14     16           18
                                                                Pop (in Millions)                                                 • The 20 to 39 yr olds, who have a higher
                                                                                                                                  consumption of mushrooms, how can we
                                                                                                                                  hold on to them as they grow older?
                                                                                                                                  • How can we target the aging population?
                                                                                                                                       • Promote the nutritional values of mushrooms.
                                                                                                                                       • Educate to break any old myths.                119
     Fresh Mushroom Opportunity




by   Mushroom Type
Mushroom Type: How to increase volume


      Educate End-
      Users
      (population)




      Educate
      Distributors



                     Develop   Assist in   Assist to      VOLUME
                     Recipe    Handling    Communicate   INCREASE



      Educate
      Operators




                                                                    121
White:
 Current Situation:




 Actions:
 White mushroom has extremely high usage in the FSR, primarily in the West.
       - FSR’s in the west should be explored to determine why usage is high.
 Pizza has high usage both in whole and sliced.
       - A detailed description in the pizza section discusses how to increase volume.
 LSR and Travel is showing signs and needs to be pursued.




                                                                                         122
Portabella:
 Current Situation:




 Actions:
 Portabella usage is high usage in the FSR, primarily in the West.
        - FSR’s in the west should be explored to determine why usage is high.
 Pizza has potential, especially for upscale pizzerias.
        - Recipes should be published in Pizza magazines e.g. Pizza today.
 LSR and Travel is showing signs and needs to be pursued.
        - Gourmet burger chains should be encouraged to test meat-free portabella burgers.




                                                                                             123
Shiitake:
 Current Situation:




 Actions:
 Fresh Shiitake mushroom usage in high the FSR
       - FSR’s in the west should be explored to determine why usage is high.
 Travel is showing signs and needs to be pursued.
       - This is a mushroom that needs awareness and education.
             - Recipes would help significantly.
             - Distributors need to be made aware and educated.




                                                                                124
Oyster:
 Current Situation:




 Actions:
 Oyster mushroom usage is restricted in the FSR.
       - FSR’s should be encouraged so we have
             - More restaurants using the Oyster mushrooms
             - Restaurants can rotate recipes in.
             - Educating restaurant guest will increase sales mix.




                                                                     125
Baby Bellas:
 Current Situation:




 Actions:
 Baby bellas usage is limited to the FSR.


 Even though the volumetric does not reflect, this can have a high opportunity in pizza especially as
        - It has high shelf life
        - Easy handling
        - Offers the portabella flavor as a lower cost.


 This also could have significant home usage. Its look and feel could make it a common household vegetable.
        - This needs to be marketed through distributors and to the direct consumers.


                                                                                                              126
Enoki:
 Current Situation:




 Actions:
 Enoki mushroom has limited usage and that too focused in the FSR.
       - FSR’s should be educated along with distributors.




                                                                     127
Woodear:
 Current Situation:




 Actions:
Woodear mushroom has limited usage and that too focused in the FSR.
      - FSR’s should be educated along with distributors.




                                                                      128
Fresh Mushroom Volume Increase




       How to Increase
 Methodology
Consumer Centric View:
In a National Omnibus Study, 1200 respondents (who do not have a negative disposition) to mushrooms were
asked the following questions.
           1. How many menu items do they expect?
                      - Mushroom as main ingredients
                      - Mushroom as one of the key ingredients?
           2. What needs to happen to make them offer Mushrooms entrees more often?




                                                                                                           130
 Mushroom Items Expected: Consumer Feedback
How many menu items do they expect?

Consumers expect mushroom entrees and menu items with mushrooms from all types of restaurants.




 Mushroom as main ingredients                            Mushroom as one of the key ingredients
  100%      5%         3%          3%                    100%
                                                                    6%        5%          3%
                       8%          4%                                                     3%
            6%
  90%                                                     90%       8%        9%
            8%         12%
  80%                              26%                    80%       12%                   26%
                                                                              18%
  70%       22%                                           70%
                                             4 or More                                            4 or More
  60%                  35%                   3            60%                                     3
                                                                    38%
  50%                                        2            50%                                     2
                                   41%                                        46%
  40%                                        1            40%                             56%     1
                                             0                                                    0
  30%       59%                                           30%

  20%                  42%                                20%       36%
                                   26%                                        22%
  10%                                                     10%
                                                                                          12%
   0%                                                     0%
            LSR        Pizza       FSR                              LSR       Pizza       FSR
 Average:   1.70      1.65         1.47                  Average:    1.85     2.63         2.21


                                                                                                      131
 Making Mushrooms More Appealing: Consumer Feedback
What needs to happen to make them offer Mushrooms entrees more often?




                      Tell me about Mushroom
                                                                                                36%
                              Nutrients

                         Specials/Promotional
                                                                                          33%
                               offering

                      Chef Inspired Mushroom
                                                                                        31%
                             Recipees

                             Do not overcook
                                                                                26%
                               mushrooms

                      Use Quality Mushrooms                               22%


                                    Sampling                        19%

                          I need to see w hole
                                                                  17%
                               mushrooms

                      Educate on Mushrooms
                                                            11%
                              safety

                                                 0%   10%          20%            30%             40%
                                                                                                        132

				
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