Pine Hill Dairy Process and Package Innovation

1. Pine Hill DairyProcess and Package Innovation April 15th, 2010

2. Our Presentation • Overview • Motivation for Change • New Manufacturing Process • Ultra Pasteurization • New Portfolio • In-Store Merchandising • Pricing • Communication

3. Overview • Founded in 1966 • Portfolio includes dairy products and juices • Pine Hill - leading brand in the Milk and Juice category • Key product attributes • Quality • Fresh • Wholesome • Healthy • Market Leader in Barbados, presence in CARICOM • Experienced with chilled and Extended Shelf Life Products

4. Key Issues • Mature and competitive market place • Low consumption of Freshly Produced Cow’s Milk • Although UHT white milk is accepted, chilled products are the preferred choice • Pine Hill recognises the need for change • Our Objective is to revitalise the category by differentiating whilst maintaining affordability for the consumer • Requires an Innovative Processing, Packaging and Distribution solution while maintaining our strong brand image

5. Solution • Ultra-Pasteurised Process + Tetra Gemina Aseptic (TGA )Packaging is our solution to the challenges that we currently face • Extensive taste testing carried out using independent consumer research • Positive Results: • Taste Compared favourably with existing chilled products • Easy to open and close • Other significant positives: Superiority in pouring, handling, storage and general perception (shape etc.) • “We did not commit to this project without first checking with the consumer. The consumer has endorsed this process and package and has determined that Ultra-Pasteurised processing associated with the Tetra Gemina Aseptic packaging was the right decision for the Pine Hill Brand • It is the evolution that we need! -

6. The Manufacturing Process

7. Sequence of Operations • Aseptic Processing/Storage/Filling • Packaging

8. Thermal Process • Aseptic processing occurs at very high temperature for a very short time • In the VTIS this operation involves injecting steam directly into the milk • This phase is followed immediately by flash cooling to restore the product to its original composition

9. (Vapor Thermal Instant Sterilizer) VTIS/Flex

10. VTIS – Steam Injection

11. Flash Cooling Vessel

12. Aseptic Storage • After the heat treatment, the product is cooled to ambient and stored in the aseptic storage tank prior to filling

13. Aseptic Storage - Alsafe

14. Aseptic Filling • Filler is maintained under sterile conditions • Packaging material tube is filled with product in the aseptic chamber of the filler • The filled tube is continuously converted to 1 litre packages at 7,000 units per hour • The gable top and flat bottom are completed in the final folder section

15. Tetra Gemina Aseptic (TGA) Filler – side view showing final folder section

16. Tetra Gemina Aseptic (TGA) Filler- showing roll of packaging material loaded

17. TGA Filler- In Production

18. TGA Filling line – From Filler to Cap Applicator

19. Cap Applicator- showing packages just before cap application

20. Cap Applicator- showing caps being applied

21. Case Packer • The individual packages are fed from the Cap Applicator to the cardboard packer. There are 12 packages per case, in 6X2 arrays • The case is a full wrap around box/carton

22. Cardboard Packer- case is being formed and filled with 12 packages

23. Cardboard Packer- packages approaching infeed

24. From Cardboard Packer to Palletizing

25. Production Efficiency • The TGA line offers us the opportunity to produce larger volumes of our SKUs • This will result in improved yields • This will also allow us to improve on the availability of product in the market

26. Ultra-Pasteurization

27. Ultra-Pasteurization • Pasteurization and Ultra-Pasteurization are heat processes that are designed to kill bacteria (germs) in milk that may be harmful and/or may cause spoilage of milk products • Milk from farms is transported to dairy processing plants and is generally heat processed within a few days after milking to prevent spoilage and to prolong its shelf-life

28. Ultra-Pasteurization • “Shelf-life” can be defined as the length of time that a food can be held under recommended or practical storage conditions and still maintain its “freshness” or acceptable quality • The major differences between Pasteurized and Ultra-Pasteurized milks are the heat treatment and the method of packaging, both of which influence the anticipated shelf-life and sell-by dates

29. Ultra-Pasteurized Milk • “Ultra-Pasteurized” means that the milk is heated to a minimum of 137.7°C for a minimum of 2 seconds • This temperature and time destroys virtually all of the bacteria in milk without significant impact on its nutritional value • Typically, ultra-pasteurized milk is packaged under near sterile conditions, which makes recontamination with spoilage bacteria unlikely and rare

30. Ultra-Pasteurized Milk • Though Ultra-Pasteurized milk is processed to be free of spoilage and harmful bacteria, it is not usually considered sterile if it is not hermetically sealed. That is, packaged in an airtight container and protected from outside influence • Pine Hill milk will be packaged under sterile conditions and to maintain, freshness (colour, mouth feel, taste) we recommend the product be refrigerated • The average shelf-life of Ultra-Pasteurized milk products can be as much as 90 days, however, in our market we anticipate turnover to be 30 days

31. Ultra-Pasteurized Milk • Once an Ultra-Pasteurized product is opened it may become contaminated with spoilage bacteria • Thus, after opening Ultra-Pasteurized milk should be kept well refrigerated and consumed within 4 days for best quality and taste

32. 20 40 60 80 100 120 TIME SECS Instant Heating and Cooling 160ºC 140ºC 120ºC 100ºC 80ºC 60ºC 40ºC 20ºC • Ultra Pasteurization • Direct steam injection from 80°C to 140oC for 1-4 seconds • Flash cooling from 140oC to 80oC • Pasteurization • Indirect heat treatment from chilled temperature to 80oC back to chilled temperature • UHT • Indirect heat treatment from chilled temperature to 137.7oC and cooled to room temperature UHT ULTRA Pasteurisation Pasteurisation This slide compliments of Tetra Pak, S.A. Ltd.

33. The New TGA Portfolio

34. The NEW TGA Milk Portfolio (1Litre) 2% White Milk Whole Milk Chocolate Milk Vanilla Milk Strawberry Milk TuttiFrutti Milk

35. The NEW TGA Milk Portfolio (500ml) 2% White Milk Whole Milk Chocolate Milk Vanilla Milk Strawberry Milk TuttiFrutti Milk

36. The NEW TGA Juice Portfolio Fruit Punch Apple Cranberry Cocktail Orange Pineapple Banana Black Currant Bajan Cherry Passion Fruit Pink Grapefruit

37. Package Attributes • Design • Eye-catching and modern • High consumer acceptance • Excellent shelf impact • Delivers positive brand perception • Functionality • Easy to open and close • Easy to grip, hold and pour from • Excellent product flow

38. In-store Merchandising • Chilled Counters • Replace current PHD Pasteurised products • Maintain existing space, maintain rate of sale • A chilled product conveys a Fresh product • Habitual shopping patterns • Familiarity results in a better shopping experience • Shelf Sets • Milk – merchandise by product/flavour, then by size • Juice – block merchandise by flavour/colour

39. Pricing • Currently under review • Key drivers are cost (TBD) and current pricing • Committed to indexed based pricing • Hoping to maintain the price of Milk and for a reduction in the price of Juice • Considering multiple purchase pricing incentives for consumers (with your support)

40. Communication – Milk & Juice • Media Campaigns • Television ads • Radio ads • Press ads • Print ads • POS • In-Store Signage • Outdoor Signage • PR Campaign • Traditional Media • Web Messaging: Reassurance of PineHill’s commitment to Freshness, Quality & Dependability Product and Package attributes

41. Promotional support – Milk & Juice • Sampling • Multiple Purchase Discounts(TBD) • Giveaways