NutraCea Company Presentation

© 2008 NutraCea • Proprietary and Confidential

Sowing the Seeds of Growth

NutraCea

December 2008


NutraCea Overview

Company NutraCea, Inc. (OTC BB: NTRZ)

Business Engages in the development and distribution of food and nutraceutical products based upon its unique, proprietary process that stabilizes rice bran and other grains

Domestic Ops Stage 1 – Stabilization FacilitiesStage 2 – Derivative ManufacturingWarehouse & Distribution Centers

Phoenix, AZ – Headquarters


Pelotas, Brazil – RBO Processing

China & Brazil China – RBO Oil ProcessingBrazil – RBO Oil Processing

Business Engages in the refining and distribution of rice bran oil and refined by-products.

Indonesia Wheat Flour Mill and Wheat Bran Stabilization

Business Proof of concept for wheat stabilization

NutraCea Overview


Rice Bran Background

Rice is the primary food source for over 70% of the world• Once milled, rice bran quickly becomes rancid

and is unfit for human consumption

• Raw rice bran is mostly sold as animal feed

• Approximately 60 million metric tons of raw rice bran is produced globally as a by-product of the milling process

• With stabilization, this underutilized resources is now available for human consumption

8 - 10% of the rice kernel contains the majority of the nutritional value with many health benefits

NutraCea’s foundation is its proprietary technology to stabilize rice bran


NutraCea Core Technologies

Stabilization of Bran in the Milling Process • Prolongs shelf life, maintains nutritional profile, improves flavor• Rice Bran, Wheat Bran

Rice Bran Oil• Largest RBO Refinery in South America

Derivative SRB Products• Dextrinized• Insoluble fiber• Soluble fraction

Functional Ingredients• Substantial investments in R&D to create “value add” opportunities

for business partners


Research & Development

NutraCea Approach• Ingredient supported by functionality & science

• Demonstrated economic, nutritional and sensory benefits

• Meaningfully differentiated & consistent with customer needs

Aggressive R&D Patenting• 8 Patents Issued

• 17 Provisional Applications Filed

Focus on Functional Ingredients & Food Applications • Meat Enhancement

• Batter and Breading

• Baked Goods

• Shelf Life Extension


NutraCea Meat Patty Extension

ObjectiveTo provide cost savings in fully cooked pork sausage patties by replacing a portion of the meat block with RiBran Isolate while maintaining finished product quality.

Case Study Objectives• To reduce Purge and Cook yield

• Increase Blend Cost Savings

• To replace meat with stabilized rice bran

• To determine the nutritional benefits

• To evaluate effects on finished product quality

• To quantify economic effects

Materials and Methods• Grind pork 72’s through a ½” plate

• Mix Formulation with pork 72’s for 3 minutes

• Add water and mix for 2 minutes

• Form into patties

• Cook in convention over at 350º F until IT 165º

• Blast freeze at -40º until completely frozen

Conducted at Iowa State Meat Laboratory by Gits Prabhu, Ph.D, PHD Technologies, LLC.



Ingredient Control 2% RiBran Isolate

Pork 72's 94.60 92.60

Water 3.00 3.00

RiBran Isolate 0.00 2.00

Sodium Phosphate .40 .40

Spice Blend (with salt) 2.00 2.00

Total 100.00 100.00

Formulation




Cook Yield

78.1

78.7

75

75.5

76

76.5

77

77.5

78

78.5

79

79.5

80

Contol 2% Ribran Isolate

Pe

rce

nt

(%)





Value Proposition & Conclusion

Control 2% RiBran Isolate

Blend Cost ($/lb) $0.5192 $0.5136

Blend Cost Savings vs Control ($/lb) $0.01

Blend Cost Savings vs Control (%) 1.08%

Cooked Yield (%) 78.07% 78.10%

Yielded Blend Cost ($/lb) $0.6650 $0.6576

Yielded Blend Cost Savings vs Control ($/lb) $0.01

Yielded Blend Cost Savings vs Control (%) 1.12%

The use of NutraCea RiBran Isolate resulted in a cost savings of 1.1% when compared to the control while maintaining finished product quality.



NutraCea Sausage, Burger & Hotdog

Case Study Objectives• To reduce Purge and Cook yield


• To replace meat with stabilized rice bran




Materials and Methods• Full replacement of soy protein isolate

• Replace 1- 4 percent on a weight / weight basis

• Mix mechanically for 5 minutes

• Add RiBran Isolate while mixing at low speed

• Cook to an internal temperature of 162º F

• Shower product for 30 minutes.

ObjectiveTo provide cost savings in regular sausage, burger and/or fat hot dog by replacing a portion of the meat block with RiBran Isolate while maintaining finished product quality.




Ingredient Control1% RiBran

Isolate2% RiBran

Isolate3% RiBran

Isolate

Pork 90's 25.64 25.64 25.64 25.64

Beef 50's 44.50 44.50 44.50 44.50

Water 22.00 22.00 22.00 22.00

Salt 2.25 2.25 2.25 2.25

K Lactate/Na Diacetate 2.00 2.00 2.00 2.00

Corn Syrup Solids 0.91 0.91 0.91 0.91

Flavorings (Spices) 2.25 2.25 2.25 2.25

Sodium Phosphate 0.40 0.40 0.40 0.40

Sodium Erythorbate 0.04 0.04 0.04 0.04

Sodium Nitrite 0.01 0.01 0.01 0.01

RiBran Isolate 0.00 1.00 2.00 3.00

Total 100.00 101.00 102.00 103.00

Formulation




Cook Yield

86.60

87.61

88.30

88.84

85.00

85.50

86.00

86.50

87.00

87.50

88.00

88.50

89.00

89.50

Control 1.00% 2.00% 3.00%

RiBran Isolate

Pe

rce

nt

(%)

Consistent increase in cooked yield with the use of RiBran Isolate from 1% to 3%




Week 2 Purge

0.98

0.830.86

1.02

0.84 0.84

0.92

0.670.72

0.59

0.77 0.77

0.00

0.20

0.40

0.60

0.80

1.00

1.20

Control 1.00% 2.00% 3.00%

RiBran Isolate

Pe

rce

nt

(%)

2 weeks 6 weeks 12 weeks

The trends show decreased purge values as RiBran Isolate usage increases




Value PropositionUtilizing RiBran Isolate at 1%, 2% and 3% in frankfurters provided a calculated formulation cost reduction: of $0.006, 0.012 and $0.018/lb and Yielded Blend Cost Savings of 2.21%, 4.07% and 5.83% respectively.

Control

1% RiBran Isolate

2% RiBran Isolate

3% RiBran Isolate

Blend Cost ($/lb) $0.5792 $0.5732 $0.5672 $0.5612

Blend Cost Savings vs Control ($/lb) $0.006 $0.012 $0.018

Blend Cost Savings vs Control (%) 1.04% 2.07% 3.11%

Cooked Yield (%) 86.60% 87.61% 88.30% 88.84%

Yielded Blend Cost ($/lb) $0.6688 $0.6543 $0.6424 $0.6317

Yielded Blend Cost Savings vs Control ($/lb) $0.0146 $0.0265 $0.0371

Yielded Blend Cost Savings vs Control (%) 2.21% 4.07% 5.83%



• Cooked yields were significantly increased at RiBran Isolate inclusion rates of 2% and higher

• Purge was reduced over 12 weeks with the use of RiBran Isolate

• Panelists found no significant difference in interior firmness, interior cohesiveness or rancidity over the 90 day storage period for any of the RiBran Isolate inclusion treatments

• As RiBran Isolate inclusion rates increased to 3.5%, panelists did tend to detect lower cured meat aroma in frankfurters

• RiBran Isolate can be successfully used as a functional ingredient in comminuted meat products to increase yield, reduce purge and improve textural characteristics without significantly altering the sensory attributes


Conclusion


NutraCea Whole Muscle Injection

ObjectiveTo provide cost savings in a 50% extended chunked and formed ham by replacing a portion of the ham with RiBran Isolate.

Case Study Objectives• To reduce Cook yield


• To extend meat with RiBran Isolate




Materials and Methods• Extend meat yield with RiBran Isolate

• Replace 2% on a weight / weight basis

• Grind hams through a kidney plate.

• Add water, sodium phosphate and ingredients

• Tumble for 4 hrs at 8 rpm under vacuum.

• Stuff hams into fibrous casings.

• Cook hams to internal temperature of 155°F.

• Cool product overnight, slice, package and store in cooler.




Formulation

Ingredient Control 2% RiBran Isolate

Ham 66.66 64.66

Water 29.88 29.88

Salt 2.00 2.00

Dextrose 1.00 1.00

Sodium Phosphate 0.40 0.40

Sodium Erythorbate 0.05 0.05

Sodium Nitrite 0.01 0.01

RiBran Isolate 0.00 2.00

Total 100.00 100.00




Cook Yield

89.52

88.81

85

86

87

88

89

90


Pe

rce

nt

(%)





Value Proposition & ConclusionThe use of NutraCea RiBran Isolate resulted in a cost savings of 2.9% when compared to the control while increasing cooked yields and providing a firmer texture.

Control

2% RiBran Isolate

Blend Cost ($/lb) $0.71 $0.69

Blend Cost Savings vs Control ($/lb) $0.02

Blend Cost Savings vs Control (%) 2.12%

Cooked Yield (%) 88.81% 89.52%

Yielded Blend Cost ($/lb) $0.80 $0.77

Yielded Blend Cost Savings vs Control ($/lb) $0.02

Yielded Blend Cost Savings vs Control (%) 2.90%



NutraCea Pizza Crust

ObjectiveTo provide cost savings in formula and increase production through the introduction of De-Fatted Rice Bran (DFB) in a standard pizza crust formulation.

Case Study Objectives• Replace Flour with De-Fatted Rice Bran

(DFB) In Pizza Crust

• Determine the Nutritional Differences

• Evaluate the Effects on Finished Product Quality

• Quantify Yield and Economic Effects

Materials & Methods:• Replace 20% of Flour with DFB

• Mix and Prepare Pizza Crust Dough

• Bake at 500 F for 7 Minutes

• Blast Freeze at -40 F Until Frozen

• Sensory and Yield Evaluation




Formulation(s)




Nutritional Comparison




Value Proposition & ConclusionThe use of NutraCea De-Fatted Rice Bran resulted in a cost savings of 9% (.024/lb) when compared to the control while increasing product yield.

• 10.1% Increase in Product Yield• 9% Reduction in Costs• 100% More Fiber• 15% Reduction in Calories• No Impact on Color, Taste, or Texture• No Impact on Baked Weight of Crust



NutraCea Coatings

Case Study Objectives• To reduce oil pickup

• To replace batter with stabilized rice bran




Materials and Methods• Replace 3% and 6% of batter mix with SRB• Apply batter to hot dogs• Fry in 400oF oil for 2 minutes• Blast freeze at -40oF until frozen• Reconstitute in oven at 350oF for evaluation

Ingredients Control 3% SRB 6% SRB

Batter Mix 60% 56% 49%

SRB - 3% 6%

Water 40% 41% 45%

Total 100% 100% 100%

ObjectiveReduce oil pick-up and provide cost savings in corn dogs by replacing a portion of the batter mix with NutraCea’s Stabilized Rice Bran



6.56

4.02

2.84

10.04

5.20

2.36

0.00

2.00

4.00

6.00

8.00

10.00

12.00

Control 3% Batter Mix Replacement withExtra Fine Ground SRB

6% Batter Mix Replacement withExtra Fine Ground SRB

Pe

rce

nt

%

Mean Moisture Loss Mean Fat Gain

NutraCea Coatings

Moisture Loss and Fat Gain



NutraCea Coatings

40.83

48.76

17.8623.0620.94

47.39

27.06

17.02

44.7449.01

23.29

46.17

0.00

10.00

20.00

30.00

40.00

50.00

60.00

Mean Moisture Mean Fat Mean Moisture Mean Fat

Prior to Frying Post Frying

Per

cen

t (%

)

Control

3% Batter Mix Replacement w ith Extra Fine Ground SRB

6% Batter Mix Replacement w ith Extra Fine Ground SRB

Moisture and Fat Composition



NutraCea Coatings

3% SRB 6% SRB

Reduction in Edible Oil Cost 5% 8%

Fat Reduction in Finished Product 15% 23.5%

Calorie Reduction 12% 19%

“Batter” Cost Reduction (Yield) - 3.2%

Value Proposition & Conclusion


Conclusion• 15% and 23.5% Less Fat in Finished Product when SRB is used at 3% and 6%• 4.84% & 7.68% Less Oil Uptake when SRB is used at 3% and 6%• 12% and 19% Less Calories in Finished Product when SRB is used at 3% and 6%• 3.2% Reduction in Cost when SRB is used at 6% (Current Batter Pricing)• No Effect on Color, Taste of Texture


NutraCea Rice Bran Oil

Pelotas, Brazil Refinery• Feb 2008 – purchased largest South American rice bran

oil processing facility located in Pelotas, Brazil

Refinery• Crude Rice Bran Oil• Refined Rice Bran Oil• Other value added by-products

*Capacity utilization is subject to seasonal variances in supply and availability


Benefits of Rice Bran Oil

Kitchen Functionality• Good storage stability and fry life

• Delicate, nut-like character complements the natural flavor of foods without overpowering them

• Creates less polymers than other cooking oils which means superior flavors and easier clean-up

• Versatile-performs well in demanding and widely varying applications

High smoke point 490°F and light viscosity• The high smoke point and light viscosity also prevent fatty acid

breakdown at high temperatures and allows less oil to be absorbed in cooking

• Rice bran oil mixes better in salad dressings and improves the taste of baked goods

*University of Rochester Medical Center (May 12, 2005). Can Rice Bran Oil Melt Away Cholesterol?. Science Daily. Retrieved on 2008-05-10

Health Benefits• Cholesterol and trans fat free

• Hypoallergenic

• Excellent balance of saturated, monounsaturated and polyunsaturated fats as recommended by the American Heart Association and the World Health Organization

• Excellent source of vitamin E, gamma oryzanol and naturally occurring phytosterols

• Research has shown that rice bran oil lowers LDL cholesterol levels without lowering HDL*


Application Improvements

Frying/Stir-Frying• With extremely high smoke point 490F rice bran oil exhibits excellent frying

performance and absorbs less oil which contributes to a lighter, more palatable flavor to fried food and reduced calories

Salad Dressings/Dipping Oils• Rice bran oil emulsifies easily and is perfect for preparing dressings and dipping oils

that require delicate flavors to come through without a greasy mouth feel or aftertaste

Baking• Rice bran oil has a light, barely perceptible flavor making it a healthy and natural

choice to replace shortenings in baking applications


Sowing the Seeds of Growth

NutraCea

Thank You

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