Consumer Staples

<h2 class="MsoNormal" style="text-align: justify;"><span style="font-size: 12pt;">Q1. Could you start by giving us a brief overview of your professional background, particularly focusing on your expertise in the industry?</span></h2><ul style="margin-top: 0cm; text-align: justify;" type="disc"><li class="MsoNormal" style="mso-list: l0 level1 lfo1; tab-stops: list 36.0pt;">BS Animal Science-Oklahoma State University</li><li class="MsoNormal" style="mso-list: l0 level1 lfo1; tab-stops: list 36.0pt;">Nearly 41 years with ibp, inc./Tyson Foods Inc., one of the largest multiple protein companies in the world.</li><li class="MsoNormal" style="mso-list: l0 level1 lfo1; tab-stops: list 36.0pt;">Expertise was mainly in beef and pork, with limited poultry.</li><li class="MsoNormal" style="mso-list: l0 level1 lfo1; tab-stops: list 36.0pt;">Held numerous positions with the Fresh Meat Group at Tyson, including but not limited to pricing and margin management, sales and marketing, hides group, strategic short and long-term planning, succession planning, industry participation with livestock, industry, and trade associations; and the last 13 years in International including the last five years as SVP-International Fresh Meat Sales.&nbsp;</li></ul><p class="MsoNormal" style="text-align: justify;">&nbsp;</p><h2 class="MsoNormal" style="text-align: justify;"><span style="font-size: 12pt;">Q2. Who are the main players in the fresh meat industry, and what market share or position does each represent?</span></h2><p class="MsoNormal" style="text-align: justify;">Assuming US:</p><p class="MsoNormal" style="text-align: justify;"><strong>Pork</strong>: Smithfield, Tyson, JBS, Seaboard, Triumph Foods, Clemens Foods, Seaboard/Triumph, Hormel Foods</p><p class="MsoNormal" style="text-align: justify;"><strong>Beef</strong>: Tyson, JBS, Cargill, National, Greater Omaha Beef, Creekstone, Agri Beef.</p><p class="MsoNormal" style="text-align: justify;">&nbsp;</p><h2 class="MsoNormal" style="text-align: justify;"><span style="font-size: 12pt;">Q3. What is the go-to-market strategy for the fresh meat industry?</span></h2><p class="MsoNormal" style="text-align: justify;">Low-cost producer of the highest quality with service and total value that exceeds the competition.</p><p class="MsoNormal" style="text-align: justify;">&nbsp;</p><h2 class="MsoNormal" style="text-align: justify;"><span style="font-size: 12pt;">Q4. Is there an opportunity for more price increases, or are customers pushing back on pricing?</span></h2><p class="MsoNormal" style="text-align: justify;">Continued price increases are limited but not impossible at this point. However, the consumer is trading down to lower-valued beef items, and poultry demand is increasing.</p><p class="MsoNormal" style="text-align: justify;">&nbsp;</p><h2 class="MsoNormal" style="text-align: justify;"><span style="font-size: 12pt;">Q5. Are there any mergers and acquisitions/consolidations that are expected in the fresh meat industry?</span></h2><p class="MsoNormal" style="text-align: justify;">Not really. And, if any of the top 4 were to try to buy a competitor, I'd think that the US Dept of Justice would have a long look at the purchase.</p><p class="MsoNormal" style="text-align: justify;">&nbsp;</p><h2 class="MsoNormal" style="text-align: justify;"><span style="font-size: 12pt;">Q6. What are the best growth opportunities in the fresh meat market, and why?</span></h2><p class="MsoNormal" style="text-align: justify;">Anything dealing with value added is the main play. Whether that be in packaging enhancement, product differentiation, food safety, etc., is important because of the possible revenue enhancement.</p><p class="MsoNormal" style="text-align: justify;">&nbsp;</p><h2 class="MsoNormal" style="text-align: justify;"><span style="font-size: 12pt;">Q7. If you were an investor looking at companies within the space, what critical question would you pose to their senior management?</span></h2><ul style="margin-top: 0cm; text-align: justify;" type="disc"><li class="MsoNormal" style="mso-list: l1 level1 lfo2; tab-stops: list 36.0pt;">What types of innovation are you utilizing, and how does it affect margins/control cost?</li><li class="MsoNormal" style="mso-list: l1 level1 lfo2; tab-stops: list 36.0pt;">How are you maintaining or improving plant efficiencies to maintain or capture competitive advantages?</li><li class="MsoNormal" style="mso-list: l1 level1 lfo2; tab-stops: list 36.0pt;">What type of cost controls are in place that will enable you to remain competitive within the marketplace?&nbsp; &nbsp;</li></ul><p style="text-align: justify;">&nbsp;</p><p style="text-align: justify;">&nbsp;</p><p style="text-align: justify;">&nbsp;</p><p style="text-align: justify;">&nbsp;</p>