2023 March Board Book

E-commerce: As the new year gears up, we take a hard look at grocery e-commerce and where it is projected to go from here. 2022 was filled with significant potential which materialized into an ebb and flow across the months driven by a variety of factors. A newly published 5-year report from Brick Meets Click & Mercatus projects US e grocery sales to grow at an 11.7% compound average over the next five years, increasing the online share of overall grocery spending to 13.6% in 2027. The top two reasons for shoppers utilizing online grocery remain constant: health concerns and convenience. Economic headwinds as inflation slowly retreats will continue to impact this forecast. Retail Consumer Promotions: We will have 4 larger market-focused promotions in 2023, down from 6 in 2022. We will start the year with our Lenten season Hispanic dairy promotion followed by our Tacos, Tequila y Más partnership with Camarena and the California Beef Council. We will repeat our Summer Snacking and Holiday Breakfast promotions – with these two promotions casting the widest net in terms of product categories with the benefit of being highly relevant occasions for our positioning. We expect to run 10-12 shopper marketing promotions this year, down from 16 in 2022. Where we run these promotions will be largely driven by the strategic retailer relationships we’re looking to strengthen. It will be a mix of California and out-of-state retailers of various sizes. Offering sampling demos and instant redeemable coupons (IRCs) will be a primary support tool for processors gaining new distribution this year.