B&G Goes to India

1. B&G Goes to India Source: www.pantaloon.com

2. Agenda Company Overview International Growth Opportunities Reason for Choosing India Mode of Entry Financing the Joint Venture Impact on the Overall Strategy of B&G Conclusion

3. Company Overview 1889: Bloch & Guggenheimer starts producing pickles and peppers. Dec. 1996: Renamed B&G Holding corporation, the company implements an aggressive growth strategy by acquisition. 1997 1999 1999 1999 2003 Today: B&G Foods, Inc has 18 leading brands.

4. Company Overview Organization Headquaters located in NJ 5 Facilities & 4 distribution centers Customers Customers include grocery store chains and food service institutions Wal-Mart accounted for 10.4% of 2006 Net Sales. 2006 Financial results Net Sales : $ 411.3 million, +8.4% compared to 2005 Net Income: $ 11.6 million or 2.8% of sales

5. International Growth Opportunities 2007 Global Retail Development Index TM (GRDI)Source: Euromoney, Wold bank, Global Competitiveness Report 2005-2006, A.T Kearney Analysis 100 2007 GRDI Score 0 Brazil Chile Ukraine China India Low CountryRisk High Market Attractiveness Low Market Saturation Urgency To Enter Market

6. International Growth Opportunities 2007 GRDI Country AttractivenessSource: A.T Kearney Analysis On the radar screen Slovenia 100 United Arab Emirates To consider Mexico Low priority Hungary Chile Size of bubble = sales China Lativa Lithuania Thailand Malaysia India Croatia Country Risk(0 = high risk, 100 = low risk) Bulgaria Saudi Arabia Tunisia Russia Brazil Vietnam Romania Turkey Colombia Peru Egypt Philippines Ukraine Indonesia Uruguay 25 Market Potential (0 = low potential, 100 = high potential) 100

7. International Growth Opportunities Window of Opportunity AnalysisSource: A.T Kearney Opening Peaking Declining Closing China (2007) High Ukraine (2007) India (2003) India (2007) GRDI Ranking India (1995) Low

8. Reasons for choosing India India Economy One of the fastest growing economy in the world with an 8% to 9% annual growth Agriculture accounts for 28% of the GDP. Market potential Estimated food processing industryof $ 70 billion Estimated growth rate of 9% to 12% per year

9. Reasons for choosing India Demand Drivers Rapid urbanization with an estimated increase of urban population from 30% today to 50% in the next 10 to 15 years Rising per capita income Changing lifestyles Government Policies Creation of new laws to allow 100% Foreign Direct Investment is in progress Ministry of Food Processing Industry has a program to support and encourage food processing development. Several tax incentives Heavy Investments to upgrade infrastructure

10. Mode of Entry Foreign Direct Investment (FDI): Joint Venture with 50:50 equity based model Sourcing and Distribution channels Culture and Marketing Operations Finance availability Legal Form of Entity: Joint venture Subsidiary registered as Private Corporation under Indian Companies Act. Fund operations by equity, debt and internal accruals Repatriation of dividends Treated as domestic company for tax purposes

11. Mode of Entry Joint Venture Partner “Vision: Dedicated to the health and well being of every household” Founded in 1884 Fourth largest FMCG* Company in India Has a strong distribution network that covers 175 towns and 75,000 retail outlets across India Plans to foray into processed food and ready-to-eat category Processed Fruit juices under brand name of “Real” * Fast Moving Consumer Goods

12. Mode of Entry Alternate Distribution Opportunities In 2006, 97% of food retail sector is operated by small independent stores but major Indian company are investing to create supermarket chains: Reliance industries invested $750 million. Food Bazaar launched its supermarket chain in 2002 and had already built 47 supermarket by end of 2006. Godrej Agrovet had created a chain of 18 supermarket in less than a year and plans to open 1000 supermarkets in rural India in the next 5 years. Walmart & Bharti Group signed joint venture.

13. Mode of Entry Market Penetration Strategy Short Term Fruit products - Variant of Polaner product line Utilize Dabur’s Fruit processing capabilities Mid Term Target urban markets Ready to eat products segment – variants of Ortega, B&M Long Term Diversify product lines through acquisitions

14. Financing the Joint Venture Investment Building of a facility with a 750 tones capacity Plant construction cost and operational cost parameters are proportionally derived from samples provided on GOI sites.

15. Financing the Joint Venture Production and Sales revenue Estimate Capacity utilization will increase as sales increase Excess capacity is required to handle seasonal character of raw materials

16. Financing the Joint Venture Cost assumptions Costs are based upon a percent of sales

17. Financing the Joint Venture

18. Financing the Joint Venture

19. Financing the Joint Venture Break Even Sales and Production levels

20. Impact on the Overall Strategy of B&G Small Financial Impact Low start up cost shared 50/50 with Dabur Favorable environment to finance through debt Advantages for B&G in the US Import from India of “exotic” products for the North American market Delocalization of some US market products to lower labor cost area International growth of B&G India is a first step toward international growth (China, Russia, Brazil…) Long term, India could become a substantial source of revenue

21. Conclusion India provides growth opportunity for B&G. Foreign Direct Investment in India through Joint Venture Dabur as a Joint Venture Partner Mid-term objective of product line diversification Long-term objective of growth by acquisition

22. Questions & Answers