Ham Trends

Provided by:National Pork Board

2

Contents

Ham definitionsHam nutritional profileIn-home ham consumptionIn-home ham intake development indicesHam sales at retailAway-from-home ham consumption

Ham definitions

4

Ham defined

Hind leg of a hogTypes: Wholes, halves, portions, boneless, bone-in, semi-boneless skinless shankless, spiral sliced, steak/slices, country hams, cannedFormats: Fresh, cured, cured-and-smoked, ready-to-eat (fully cooked hams, canned and prosciutto), luncheon and deli ham

Source: www.fsis.usda.gov

5

Ham label designations

Ham contains no added water is at least 20.5% protein

Ham with Natural Juicescontains at least 18.5% protein

Ham - Water Addedcontains at least 17% protein, with 10% added solution

Ham and Water Product may contain any amount of water but the label must state the percent of “added ingredients”

6

Butt end, half or portion

Upper, meatier part of whole legButt portion has some center slices removed for sale separately as ham steaks or center cut ham slices. The half includes this meat.

Source: www.fsis.usda.gov; www.cooksham.com

Half Ham Portion HamSemi-boneless Ham

7

Spiral sliced

Bone-in ham that is pre-slicedHoney Baked Ham had exclusive patent on spiral slicing process (expired in 1981)

Source: Business Courier, June, 2001; www.cooksham.com

8

Skinless, shankless

Skin and shank removedLeg bone and hip bone remain

Source: www.fsis.usda.gov; www.cooksham.com

9

Curing solutions

Addition of salt, sodium nitrate, nitrites and sometimes sugars, seasonings, phosphates and ascorbates For preservation, color development and flavor enhancementNitrate and nitrites contribute to cured flavor and reddish-pink color of cured porkNitrite and salt inhibit bacteria growth Can be added by injection by needle or tumbling/massaging/soaked

Source: www.fsis.usda.gov

10

Dry curing

Country hams and prosciuttoFresh meat is rubbed with a dry-cure mixture of salt and other ingredientsProcess draws out moisture and results in more concentrated ham flavorAged from a few weeks to more than a year, six months is commonCan be injected with curing solutions or placed in curing solutions but they may not be smoked

Source: www.fsis.usda.gov

11

Wet curing or brine cure

Brine curing is most popular way of producing hamsWet cure whereby fresh meat is injected with a curing solution before cookingSmoke flavoring (liquid smoke) may also be injected

Source: www.fsis.usda.gov

12

Smoking and smoke flavoring

After curing, some hams are smokedProcess where hams are hung in a smokehouse and allowed to absorb smoke from smoldering firesGives added flavor and color, slows development of rancidityFlavor depends upon what wood is used

Source: www.fsis.usda.gov, Albuquerque Journal, December, 2001

Ham nutritional profile

14

Nutritional Profile

Ham is a lean protein3.4-ounce serving of roasted extra-lean ham

145 calories 5.5 grams fat 21 grams of protein 53 milligrams cholesterol

Significant amount of thiamin (vitamin B-1) and vitamin B-12Low and reduced sodium products availableHam steaks 94 % lean

Source: www.cooksham.com

In-home ham consumption

16

24% of individuals consume entree ham at least one time in an average two week

period

Yr. Ending Feb. 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

19.3 20.9 19.5 17.0 18.8 19.2 17.8 22.0 24.1 24.0

All data is for year ending February. Page 5

Ham (Excl Lunchm eat)

24

76

C onsum e D o Not C onsum e

SIZE O F M A R K ETHam (Excl Lunchm eat)

% of Individuals Consum ing at Least O nce in Tw o W eeks 2006/2007

Percent of Individuals Consum ing at Least O nce in Two W eeks by Year

17

And, almost 30% of individuals consume ham lunchmeat regularly at least one

time in an average two week period.

Yr. E nd ing Feb . 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

35.7 38.8 37.5 38.0 37.5 36.9 38.1 32.4 26.8 28 .4

A ll data is for year end ing F ebruary. P age 5

H am Lun chm eat (P ork B ased)

28

72

C onsum e D o N ot C onsum e

S IZE O F M A R K E TH am Lunchm eat (P ork B ased)

% of Ind ividuals C onsum ing a t Least O nce in Tw o W eeks 2006/2007

P ercent o f Ind ividua ls C onsum ing a t Least O nce in Two W eeks by Year

18

Ham entrée consumption has rebounded from 2004.

All data is for year ending February. Page 6

TREND IN PER CAPITA CONSUM PTIONHam (Excl Lunchmeat)

Annual Eatings Per Capita

10.31 10.079.10

7.468.48

9.298.02

11.17

12.89 12.42

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

19

Ham consumed most at dinner meal; lunchmeat at midday

Ham entrees - % of Eatings

Source: The NPD Group, Inc. National Eating Trends

1

12

8

38

41

In-Home Snack

Carried From Home

In-Home Breakfast

In-Home Lunch

In-Home Dinner

2

7

19

20

53

In-Home Snack

In-Home Breakfast

In-Home Dinner

Carried From Home

In-Home Lunch

Ham lunchmeat - % of Eatings

Two Years Ending February 2007

20

Entrée ham consumption skews to holiday months

Index to Sam ple Inds: Eatings108 88 88 116 108 97

All data is for year ending February. Page 8

2722 22

29 31

69

Spring(M AM )

Sum m er(JJA)

Fall (SO N) W inter (DJF) W eekend (S-S)

W eekday(M -F)

W EEKPAR T VS. SEASO N ALITY PRO FILEHam (Excl Lunchm eat)

% of Eatings 2006/2007

21

Ham lunchmeat consumption skews to spring/summer; weekday meals

In d ex to S am p le In d s: E atin g s92 120 96 92 91 104

A ll da ta is fo r year end ing F ebruary. P age 8

2330

24 23 26

74

S p rin g(M AM )

S u m m er(JJA)

F all (S O N ) W in ter (D JF ) W eeken d (S -S )

W eekd ay(M -F )

W E E K P A R T V S . S E A S O N A L IT Y P R O F IL EH am Lunchm eat (P ork B ased)

% of E a tings 2006 /2007

22

49.937.5

16.015.2

12.912.6

11.36.4

4.63.93.73.43.33.23.02.52.4

Vegetables Potatoes

Eggs/Omelettes Bread Salads

Fruit Buns/Rolls

Macaroni & Cheese Rice (Plain)

Cheese Cakes

Biscuits Pies

Baked Beans/Pork & Beans Cookies

Corn Bread/Muffins Stuffing

Vegetables served most often with ham entrees

% of In-Home Ham Entree Meals Which Include

Source: The NPD Group, Inc. National Eating Trends 2006

Corn

Green Beans

Peas

Mixed/Combo

13.0

12.6

5.8

4.0

s5

Slide 22

s5 NOT UPDATEDschafers, 3/27/2007

23

55% as ingredient ;43% eaten as an entrée

All data is for year ending February. Page 10

USAG E PRO FILEHam (Excl Lunchm eat)

How Used?% of Eatings

43

55

2

Base D ish Ingredient Additive Cooking Aid

2006/2007

24

Most ham entrees prepared in oven or on the stove top

A ll da ta is fo r year end ing F ebruary. P age 11

Top App liance /P rep aration M ethods

3

4

5

5

7

8

9

11

40

N o Ap p l: U n co o ked /R aw

S to ve T o p : B o ild /S tew ed /S im m r

O v en : W arm ed /H eated

N o Ap p l: C h illed /F ro zen

S to ve T o p : W arm ed /H eated

S to ve T o p : F ried /P an B ro iled

O ven : B aked /R o asted

M icro w ave

N o Ap p l/N o P rep M eth o d /N r

A P P L IA N C E B Y P R E P A R A TIO N M E T H O DH am (E xc l Lunchm eat)

% of E atings 2006 /2007

SummaryNo Appliance (leftover): 40%Stove Top: 19%Oven: 14%Microwave: 11%

25

Ham Entree consumption skews to…

In-Home - Based on Index to Total Sample >120 – 2006/2007

Source: The NPD Group, Inc. National Eating Trends 2006

HH Income: Under $10k, not $60K-$69K

HH Size: Not 1 member

Age of Female Head: 55+

Employ. Of Fem. Head: All averages

Occupation of HH Head: Out of the Work Force

Race: Black, not Asian

Census Regions: Mid Atlantic… not New England, E.N. Central, Pacific

Life Cycle Segments: Empty Nesters, Single Active Seniors, and Married Active Seniors…not Affluent Trad. Families

Age/Sex of Eater: Adults 55+ … not kids <6

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Ham Lunchmeat consumption skews to...

In-Home - Based on Index to Total Sample >120 – 2006/2007

Source: The NPD Group, Inc. National Eating Trends

HH Income: All income breaks are average

HH Size: Not 1 member households, remainder are average

Age of Female Head: Not <34 … others average

Occupation of HH Head: Blue collar…not professional

Race: Hispanic … Whites are average … not Asian, Black, or Other

Census Regions: Mid-Atlantic….not New England or Pacific

Age/Sex of Eater: Low/Mid Income Empty Nesters not kids <6

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Entrée consumption skews to South Central

% o f S a m p le 3 .9 % 1 5 .1 % 1 6 .3 % 9 .2 % 1 8 .7 % 6 .8 % 9 .7 % 7 .7 % 1 2 .7 %

% o f E a t in g s : 2 .8 1 5 .1 1 5 .2 1 0 .3 2 0 .5 9 .9 1 2 .5 5 .7 8 .0

N O T E : A n in d e x o f 8 0 -1 2 0 is c o n s id e re d a v e ra g e

A ll d a ta is fo r y e a r e n d in g F e b r u a ry . P a g e 1 5

7 1

1 0 0 9 3

1 1 2 1 1 0

1 4 6

1 2 8

7 56 3

N e wE n g la n d

M id A t la n t ic E a s t N o r thC e n tr a l

W e s t N o r thC e n tr a l

S o u thA t la n t ic

E a s t S o u thC e n tr a l

W e s t S o u thC e n tr a l

M o u n ta in P a c i f ic

% o f E a t in g s In d e x e d to S a m p le 2 0 0 6 /2 0 0 7

R E G IO N A L P R O F IL EH a m (E x c l L u n c h m e a t)

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Ham lunchmeat consumption skews to Mid-Atlantic and West North Central

% of Sample 3.9% 15.1% 16.3% 9.2% 18.7% 6.8% 9.7% 7.7% 12.7%

% of Eatings: 2.5 17.5 16.1 10.4 19.2 7.4 10.5 7.1 9.4

NOTE: An index of 80-120 is considered average

All data is for year ending February. Page 15

66

115

99

113103

109 108

92

74

NewEngland

Mid Atlantic East NorthCentral

W est NorthCentral

SouthAtlantic

East SouthCentral

W est SouthCentral

Mountain Pacific

% of Eatings Indexed to Sample 2006/2007

REGIONAL PROFILEHam Lunchmeat (Pork Based)

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*Includes: Ham Salad, Chicken Salad, Egg Salad, Tuna Salad etc.

Percent of In-Home Lunches That Include Sandwiches

Ham is the number one sandwich

Source: The NPD Group, Inc. National Eating Trends 2006

0

1

2

3

4

5

6

7

8

85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 '00 '01 '02 '03 '04 '05 '06 '07

Ham

Poultry

Salad*

In-home ham intake development indices

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Intake development indices

An econometric analysis conducted by Texas A&M University provided insight on consumption of meats over a six year period, among individuals 18 years and olderResults showed the likelihood of consumption, measured as “intake development indices”

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Intake development indices

“Intake development” represents the relationship between intake (in grams over a 2-week period) and individuals (both eaters and non-eaters)Above average development is when the share of intake is greater than the share of individuals (index >100) and translates to a percent advantageFor example smoked ham development is 12% higher with “at most high school” than the average across education levels

33

Intake development demographic differences

EducationSmoked

HamCanned

Ham

At Most High School 112 132

Some College 93 82

At least Undergraduate Degree 92 73

IncomeSmoked

HamCanned

Ham

Less Than $10,000 74 177

Between $10,000 and $20,000 92 177

Between $20,000 and $30,000 104 76

Between $30,000 and $40,000 97 82

Between $40,000 and $50,000 112 83

Between $50,000 and $60,000 114 101

Between $60,000 and $70,000 104 66

Between $70,000 and $100,000 111 89

Between $100,000 and $150,000 81 34

Greater than $150,000 65 51

Canned ham and smoked ham development is highest with “at most high school”Canned ham intake is highest at lower incomesSmoked ham intake is highest at mid-income levels Ham intake is highest for individuals over 50

Source: Texas A&M Econometric Analysis 2003

Intake Development Indices:= High Development = Low Development

34

Intake development demographic differences

AgeSmoked

HamCanned

Ham

18 TO24 78 48

25 TO 29 86 84

30 TO 39 83 73

40 TO 49 95 83

50 TO 59 105 125

60 TO 64 123 111

65 AND UP 127 150

Ham intake is highest for individuals over 50Ham, and overall pork intake development, is greater in males

Source: Texas A&M Econometric Analysis 2003

Intake Development Indices:= High Development = Low Development

GenderSmoked

HamCanned

Ham

Male 121 106

Female 82 95

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Intake development demographic differences

EthnicitySmoked

HamCanned

Ham

Hispanic 58 121

Non Hispanic 102 99

RaceSmoked

HamCanned

Ham

White 103 84

Black 101 305

Oriental 29 65

Other 34 67

UrbanizationSmoked

HamCanned

Ham

SMSA 94 101

NONSMSA 117 97

Source: Texas A&M Econometric Analysis 2003

Hispanic intake strong for canned hamsCanned hams have high development among African Americans and low development with Caucasians and OrientalsSmoked ham intake is above average in rural areas

Intake Development Indices:= High Development = Low Development

Ham sales at retail

37

Ham dollar sales are back up after a slight decline in 2006

2.0%

-0.9%

2.0%

2005 vs. 2004 2006 vs. 2005 2007 vs. 2006

Ham Dollar Sales - % Change

Source: Fresh Look syndicated data; calendar year 2007 vs. prior years

2005 2006 2007

This was driven by increased tonnage (+1.2%) and a slight increase in price

38

In 2007, entrée hams continued to generate the greatest sales

Total Ham $ Sales

Total Ham Pounds Sold

Entrée Hams $ Sales

Entrée Ham Pounds Sold

2007 % Share

Within Entrée Hams

Within Entrée Hams

Source: Fresh Look syndicated data; calendar year 2007Note: RFG dinners are refrigerated ham-based prepared dinners (e.g. maple brown sugar ham entrees)

Entrée Hams81%

Ham Steaks14%

RFG Dinners

1%

All Other4%

Quarter7%

Whole17%

Portion19%

Halves57%

All Other4%RFG Ham

<1% Ham Steaks

8%

Entrée Hams87%

Quarter4%

Whole18%

Portion27%

Halves51%

Note: Within Entrée hams, whole hams have lost share (-2 share points versus last year) to more convenient halves, portions and quarters

39

1%

-1%

165%

2%

-3%

7%

123%

-6%

EntréeHam(1)

Ham Steaks

RFGDinners(2)

All Other(3)

-2%

1%

506%

1%

-7%

6%

143%

EntréeHam(1)

Ham Steaks

RFGDinners(2)

All Other(3)

-1%

Most ham segments show good growth

Two Year Trend - % Change

Note: (1) Entrée Ham = whole hams, portions, halves and quarters(2) RFG Dinners = refrigerated ham-based prepared dinners- exceptionally strong growth due to very low base(3) All Other = cubes, ends and pieces, fat and bones, hocks, skins, etc.

2006 (2006 vs. 2005) 2007 (2007 vs. 2006)

Source: Fresh Look syndicated data; calendar year 2007

$ Sales Pounds Sold

Entrée hams sales (dollars and pounds) are up after a slight decrease in 2006Ham steak sales continue to growRefrigerated ham-based dinners (RFG dinners), although a small segment, are showing continued growth

40

Within entrée hams, spiral cuts show continued strength

While spiral cuts have experienced strong growth over the past several years, non-spiral hams still represent largest share of sales

Share of $ Sales

Share ofPounds Sold

6%

-5%

5%

-1%

11%

-6%

Spiral Non-Spiral

2006 vs. 2005 2007 vs. 2006 2 year growth

Spiral35%

Non-Spiral Hams65%

Spiral31%

Non-Spiral Hams69%

Source: Fresh Look syndicated data; calendar year 2007. Note: This represents share of spiral cuts WITHIN entrée hams.

Two Year Trend - % $ Sales ChangeCalendar Year 2007

41

Bone-in hams represent largest share of volume…

…yet boneless hams are more profitable

Share of $ Sales

Share ofPounds Sold

Source:NPB Composite Database

Boneless20% Bone-in

71%

Semi-BL9%

106%

Vs. Bone-In

Source: Fresh Look syndicated data; calendar year 2007

Boneless27%

Bone-in67%

Semi-BL6%

Calendar Year 2007 Boneless “profit per pound” Advantage

42

Ham sales are strongest during the holiday months

54 58

174

327

46454547

208

776667

Jan Feb Mar Apr (Easter) May Jun Jul Aug Sep Oct Nov(Thanksgiving)

Dec(Christmas)

Index of Ham $ Sales vs. Average Month in 2007

Source: Fresh Look syndicated data; calendar year 2007

Note: An index over 100 means the month is out performing vs. the average month. An index below 100 means the month is under-performing. For example: January ham sales are 33% less than the average month and April sales are 108% more than the average month.

Average Month Index = 100

43

Ham feature activity mirrors key sales periods

5270

87

175

42 46 5032

61 64

244

330

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Index of # of Ham Features vs. Average Month in 2007

Source: Leemis Promo Data ad activity analysis across 169 Grocery Accounts/Market combinations; calendar year 2007

Easter

Average Month Index = 100

Thanksgiving Christmas

44

61 5672

234

38 34 34 34 42 46

189

376

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Holiday sales are driven by entrée hams*

Index of Entrée Ham $ Sales vs. Average Month in 2007

*Entrée Hams = wholes, quarters, portions and halves

Source: Fresh Look syndicated data; calendar year 2007

Average Month Index = 100

45

However, seasonality has less impact on ham steaks…

Index of Ham Steaks $ Sales vs. Average Month in 2007

10199111110

100989688

96106108

89

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Average Month Index = 100

Source: Fresh Look syndicated data; calendar year 2007

…making them a great year-round meal option

Away-from-home ham consumption

47

Trends in Operators Menuing Ham

Ham, All Menu Parts 2007 2004 2001 2007 2004 2001

Market Sectors % % % # # #Casual Chains 44 42 37 2.3 2.1 2.2Fast Casual Chains 53 53 47 4.6 4.0 3.2Family Dining Chains 73 74 71 7.5 7.9 7.8QSR Chains 49 48 40 5.2 4.6 4.8Cutting Edge Independents 43 39 34 1.9 1.9 2.0Casual Independents 50 50 na** 2.7 2.6 na**Midscale Independents 58 60 na** 6.5 6.4 na**QSR Independents 43 na** na** 5.5 na** na**Non Commercial 74 74 na** 3.2 3.6 na**

Category Incidence Ham Items/Operator

Overall, Category Incidence Rising(Category Incidence is % Operators Menuing):

▲ Chains: Casual, Fast Casual, QSRIndep: Cut Edge

▼ Family Dining Chains

** No earlier data available

# Ham Items/Operator Menuing

▲Chains: Casual, Fast Casual, QSR

▼Family Dining Chains, Cut Edge

MenuMine, Foodservice Research Institute

48

Ham menuing is increasing

19% of pork menu mentions are hamHam menu mentions increased 21% from 2000 to 2005

Source: The NPD Group, Inc. CREST 2005

49

Ham entrees served most at breakfast meal

Morning Meal63%

Lunch17%

Supper18%

PM Snack2%

Morning Meal

Lunch

Supper

PM Snack

9% PCYA

+% PCYA*

-5% PCYA

15% PCYA

Distribution of Ham Entrée ServingsYE Dec 2007

Source: The NPD Group / CREST *Low Sample = Cannot Trend

50

Ham sandwiches served most at lunch meal

Morning Meal7%

Lunch60%

Supper26%

PM Snack7%

Morning Meal

Lunch

Supper

PM Snack

0% PCYA

+% PCYA*

-5% PCYA

+% PCYA*

Source: The NPD Group / CREST *Low Sample = Cannot Trend

Distribution of Ham Sandwich ServingsYE Dec 2007

51

Ham entrée served equally at chains and independents

Major Chains42%

Small Chains12%

Independents46%

Major Chains

Small Chains

Independents

17% PCYA

1% PCYA

4% PCYASource: The NPD Group / CREST

Distribution of Ham Entree ServingsYE Dec 2007

52

Half of ham sandwiches served at chains

Source: The NPD Group, Inc. CREST 2005

Major Chains53%

Small Chains17%

Independents30%

Major Chains

Small Chains

Independents

5% PCYA

-5% PCYA

7% PCYA

53

.

Ham - Product ProfilesDemographic and Regional Indices* - Yr. Ending Nov. '07

*Indexed to Panel. Index of 100=Average Usage

Demographics Census RegionsIndex

Yr Ago

11982

146

8595111104105109

477698114141

Dist.

Gender57%Male43%Female

Age of Eater

17%65+

HH Income18%Under $25,00020%$25-$44,99913%$45-$59,99912%$60-$74,99915%$75-$99,99922%$100,000 and more

13%<187%18-24

14%25-3424%35-4925%50-64

Dist.

16%East25%Central37%South22%

IndexYr Ago

871179994West

Index

11784

141

889796104113106

5372102107144

Index

8711210295

Source: The NPD Group/NPD Foodservice®/CREST®. For the exclusive use of CREST subscribers.

54

.

Ham Sandwich - Product ProfilesDemographic and Regional Indices* - Yr. Ending Nov. '07

*Indexed to Panel. Index of 100=Average Usage

Demographics Census RegionsIndex

Yr Ago

10694

63

809695104111120

83138121107103

Dist.

Gender51%Male49%Female

Age of Eater

9%65+

HH Income19%Under $25,00019%$25-$44,99912%$45-$59,99912%$60-$74,99916%$75-$99,99922%$100,000 and more

19%<1810%18-2418%25-3425%35-4919%50-64

Dist.

19%East26%Central35%South19%

IndexYr Ago

10011410381West

Index

10595

75

949493101120103

78107130110110

Index

1041199882

Source: The NPD Group/NPD Foodservice®/CREST®. For the exclusive use of CREST subscribers.