WATERMELON PRESENTATIONA & U Studies (Domestic & Canada)

rose research, llc.

November, 2006

2

Study Purpose

• Understand the dynamics operating in the watermelon category - - among purchasers (respondents who have purchased watermelon in the past 12 months) and non-purchasers.

• Update the attitudes and behavioral practices of consumers since the last project was conducted in 2004.

• Determine reaction to four new product ideas including - -

- Watermelon Juice - Watermelon Sorbet

- Watermelon Bread - Watermelon Yogurt

3

Methodology

Domestic A & U

A total of 3,128 telephone interviews were conducted during June - August, 2006, among men and women in the United States, 18 years of age or older, who are the primary grocery shoppers of their household. Within the sample, 2,400 interviews were conducted among watermelon purchasers - - who must have purchased watermelon (in any form) in the past 12 months, and 728 non-purchasers. The watermelon purchasers were equally distributed among 8 regions across the U.S., including California, the West, the Plains states, the South Central, Great Lakes, Mid-South, Southeast and Northeast.

Canadian A & U

In addition, a total of 253 telephone interviews were conducted during June - August, 2006, among men and women in Toronto, Canada, 18 years of age or older, who are the primary grocery shoppers of their household. Within the sample, 200 interviews were conducted among watermelon purchasers - - who must have purchased watermelon (in any form) in the past 12 months, and 53 non-purchasers.

Detailed Findings

5

Fruit Purchased Within the Past 12 Months

77%

95%

79%

37%

80%77%

92%96%

42%

85%

62%

95%

36%

72%72%74%

87%92% 90%95%

66%70%

77%

33%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Bananas Apples Watermelon Cantaloupe Oranges Honeydew

Domestic 2006 Toronto 2006 2004 2002

Household penetration of watermelon continues to grow compared to previous domestic studies.

•Domestic purchasing is slightly lower than Toronto this year.

6

Watermelon Purchasers (By Region)

Watermelon purchasing has either increased or remained static in every region of the country (except the South Central and the Plains states) compared to previous years.

80% 77% 78% 77%84%

73%74%73%73% 72%72%74%75%77%80%

72%65% 61%65%

78%

60% 58%64%

57%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

California West Plains SouthCentral

Southeast GreatLakes

Northeast Mid-South

2006 2004 2002

7

Influence of Children on Watermelon Purchasing

Children have a significant impact on watermelon purchasing (both domestically and in Toronto) - - as about four-fifths of the respondents mentioned that their children have at least some influence when shopping.

43%

36%

20%

34%

41%

35%

24%

51%

13%

0%

10%

20%

30%

40%

50%

60%

Greatly Influence Purchase Somewhat Influence Purchase Do Not Influence Purchase At All

Domestic 2006 Toronto 2006 2004

8

Preference for Seeded or Seedless Watermelon

Seedless watermelon continues to be preferred over watermelon with seeds - - higher than in both the 2004 and 2002 domestic studies.

•Consumers in Toronto are even more favorable toward seedless watermelon compared to respondents in the United States.

•In addition, the following subgroups also prefer seedless watermelon:

• More affluent households ($50,000 or higher)

• Younger respondents (less than 46 years old)

• College graduates

9

Preference for Seeded or Seedless Watermelon

60%

18%21%

17%

56%

23% 21%

47%

31%

22%

69%

15%

0%

10%

20%

30%

40%

50%

60%

70%

80%

Seedless Seeded No Preference

Domestic 2006 Toronto 2006 2004 2002

Preference for Seeded or Seedless Watermelon

WATERMELON SEED PREFERENCES BY LOCATION, INCOME AND PRESENCE OF MINOR CHILDREN

Age Income Education

<46%

46+%

< $50K%

$50K- < $75K

%$75K+

%

< College Grad.

%College +

%

I prefer seedless watermelon

65 59 54 61 70 58 64

I prefer watermelon with seeds

16 20 21 18 15 20 16

I have no preference

19 22 25 21 16 22 20

10

11

Watermelon Cut by Season

Similar to 2004 and 2002, summer is the time watermelon is usually bought - - with the whole variety most popular throughout the year.

•Incidence of purchasing watermelon (in any form) is higher in Toronto during the spring, winter and fall seasons.

•Sections/slices are just as popular as the whole variety during the winter.

12

19%19%

43%

59%

99%

35%

52%

72%

99%

19%

39%

61%

99%

99%

64%

36%

0% 20% 40% 60% 80% 100%

Winter

Fall

Spring

Summer

Domestic - 2006

Toronto - 2006

2004

2002

Purchase Penetration by Season

13

8%11%

10%

30%

59%

13%

11%

32%

57%

23%

11%

40%

39%

78%

26%

16%

0% 20% 40% 60% 80% 100%

Watermelon Cubes

Mini Watermelon

WatermelonSections/Slices

Whole Watermelon

Winter

Fall

Spring

Summer

Watermelon Cut by Season

14

Most Important Reason for Purchasing Watermelon

“Good taste” is the most important reason for buying watermelon

Followed by “my family/kids like it”,

“it’s healthy/nutritious” and

“it’s cool/refreshing/juicy”

15

Most Important Reason for Purchasing Watermelon

MOST IMPORTANT REASON FOR PURCHASING WATERMELON

Domestic2006

%

Tastes good/I like to eat it 43

My family/kids like it 13

It’s healthy and nutritious 12

It’s cool/refreshing/juicy 11

It’s in season 4

It’s a good snack 4

For a picnic, party or special occasion 3

It looked fresh/appealing 2

It’s a good value 2

It’s fun to eat 2

When there is an advertised or promotional price 1

To use as an ingredient in a recipe 1

16

Influence of Recipes, Carvings and New Ways to Use Watermelon on Purchase Intent

In addition, about 3 in 10 of the respondents mentioned that “new recipes” or “ways to use it” would motivate them to use watermelon more often - - both domestically and in Toronto - - particularly watermelon purchasers.

17

Influence of Recipes, Carvings and New Ways to Use Watermelon on Purchase Intent

INFLUENCE OF RECIPES, CARVINGS, AND NEW WAYS TO USE WATERMELON ON PURCHASE INTENT

Domestic2006

Toronto 2006

Domestic2004

Domestic2002

Purchasers%

Non-Purchasers

%Purchasers

%

Non-purchasers

%

Purchasers%

Non-purchasers

%Purchasers

%

Non-purchasers

%

Yes 27 21 42 23 32 20 33 23

Possibly/Not sure

13 12 11 19 14 14 22 17

No 60 66 47 58 54 65 45 60

18

Reasons for Not Purchasing Watermelon

The top two reasons for not purchasing watermelon during the winter, spring and fall is “lack of availability” and the fact that some consumers consider it to be a “summer fruit” - - particularly infrequent summer purchasers.

19

Reasons for Not Purchasing Watermelon – By Season

35%33%32%

36%33%

30%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

Watermelon is a summer fruit It's not available

Spring Winter Fall

20

Reasons for Not Purchasing Watermelon – By Season

Watermelon is a Summer Fruit

31% 30% 31%

40%

34% 36%

0%5%

10%15%

20%25%

30%35%

40%45%

Spring Winter Fall

Frequent Summer Purchasers Infrequent Summer Purchasers

21

Awareness of Health Benefits (By Purchaser Status)

Less than 4 in 10 of the consumers (35%) are aware of watermelon health benefits in both the U.S. and Toronto - - a message which should continue to be reinforced.

•Purchasers are more knowledgeable than non-purchasers.

35%38%

26%

35%

40%

15%

38%41%

29%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

Total Purchasers Non-Purchasers

2006 Domestic 2006 Toronto 2004

22

Awareness of Specific Health Benefits

Those aware of watermelon health benefits spontaneously played back that it has “has vitamins (in general)”.

•In total (unaided + aided), the majority of the respondents recalled that watermelon is - - “low in fat”, “low in calories”, “high in Vitamin C” and contains “the antioxidant lycopene” - - significantly higher than 2004 domestic findings.

23

Awareness of Specific Health Benefits

AWARENESS OF SPECIFIC HEALTH BENEFITS (UNAIDED & TOTAL)

Domestic 2006

Toronto 2006

Domestic 2004

Unaided%

Unaided + Aided

%Unaided

%

Unaided + Aided

%Unaided

%

Unaided + Aided

%

Low in fat 7 91 6 82 5 93

Low in calories 13 87 7 82 8 87

High in Vitamin C 18 68 18 63 14 67

Red watermelon contains the antioxidant lycopene 10 57 3 36 4 46

High in Vitamin A 5 47 2 48 3 45

High in Vitamin B-6 2 34 - 31 1 27

Has vitamins 28 28 26 26 31 31

Contains vitamins & minerals (net) 15 15 15 15 19 50

Contains water/High water content 14 14 23 23 28 28

Good for you/Healthy 7 7 10 10 12 12

24

Awareness of Watermelon Health Benefits and Purchase Intent

Moreover, and an indication of the importance of “watermelon health benefits”, the vast majority of the respondents (who are aware of watermelon health benefits) would buy watermelon because “it’s good for them”.

77%

23%17%

78%

21%

83%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

Yes No/Don't know

Domestic 2006 Toronto 2006 2004

25

Awareness of Heart-Healthy Benefits of Watermelon and Purchase Intent

Knowing that watermelon is “good for your heart” is even more impactful, as 81% of the respondents indicated that they would be more apt to buy it if they had this information.

81%

19%

Yes No/Don't know

New Watermelon Product Ideas

27

Top 2-Box Purchase Interest in New Watermelon Products (Definitely/Probably Would Buy)

Purchase interest of watermelon juice, watermelon sorbet and watermelon yogurt all surpassed our purchase interest target of 50% in Toronto, while falling short in the U.S.

37%43% 44%

21%

57% 59% 59%

31%

0%

10%

20%

30%

40%

50%

60%

70%

Watermelon Juice Watermelon Sorbet Watermelon Yogurt Watermelon Bread

Domestic - 2006

Toronto - 2006

•However, interest in watermelon bread was low in both Toronto and the U.S.

Recommendations

29

The National Watermelon Promotion Board should continue to stress its health strategy to consumers - - especially the heart healthy messages recently approved by the USDA.

Recommendations

In addition, the NWPB should consider positioning watermelon as a “year round fruit the whole family can enjoy” in order to increase consumption during the spring, fall and winter.

30

We would also recommend that the NWPB commission a study to further investigate the attitudes and behavioral practices of infrequent versus frequent summer purchasers as a means of determining how to increase consumption.

Recommendations

Finally, the NWPB should consider conducting a nationwide study in Canada in order to accurately measure consumer attitudes and behavioral practices toward watermelon across the various provinces.