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The Best Way to Predict the Future is to Invent
it Gary Hirshberg, President CE-Yo Stonyfield
Farm
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• Loss of Family Farms Farmland
• 1.2MM acres of US farmland lost annually
• 2 acres of farmland lost per minute
• to development
• Almost 75 of Vermont farms lost
• in past 60 years
• 8 of farms account for about 68 of total
  U.S. agricultural production

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Ecological Consequences

• Hypoxia in Gulf of Mexico

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Global Consequences
UNEP, GEO Yearbook 2003

• 146 hypoxia (dead) zones worldwide
• Since 1960, number has doubled each decade
• Major culprit agricultural run-off
• Annual fertilizer use has increased tenfold in
  last half century

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Childrens Exposure to Pesticides
Pesticides pose special concerns to children
because of their high metabolisms and low body
weights.

• Study US 3- to 6-year-olds on conventional diets
  had mean pesticide concentrations in urine 6X
  higher than children on organic diets
• Study US Infants polluted with 287 toxins
• 180 cause cancers (in humans or animals)
• 217 are toxic to the brain and nervous system
• 208 cause birth defects

SOURCES State of the World 2004, Special Focus
The Consumer Society, January 2004. School of
Public Health and Community Medicine at the
University of Washington, March 2003. CDCs
Environmental Health Laboratory Study, January,
2003. Environmental Working Group (EWG) study,
July 2005.
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About Stonyfield
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Stonyfield Farm1983 to Present

• Founded as part of an organic farming school
• Producer of yogurt, yogurt smoothies, organic
  milk, cultured soy, milk, frozen yogurt and ice
  cream
• 3 yogurt brand in the U.S., 75 of U.S. organic
  yogurt
• 420 employees
• Majority stockholder is Groupe Danone (Jan. 04)
• 85 organic
• Operates under Stonyfield Farm, Brown Cow Oikos
• Also launched in Canada, Ireland, UK and France
  (so far)

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Stonyfield Farms Mission
QualityTo provide the very highest quality,
best-tasting, all natural and certified organic
products.
Sustainable FarmingTo educate consumers and
producers about thevalue of protecting the
environment and of supporting family farmers and
sustainable farming methods.
ProfitabilityTo recognize our obligations to
stockholders and lenders by providing an
excellent return on their investment.
Employee Well-beingTo provide a healthful,
productive, and enjoyable workplace for all
employees, with opportunities togain new skills
and advance personal career goals.
Environmental ResponsibilityTo serve as a model
that environmentally and socially responsible
businesses can be profitable.
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Encoding the Mission
L. reuteri boosts the body's immune system

• enhance digestion
• improve nutrient absorption
• boost the immune system

Six live and active cultures
First dairy processor in US to pay farmers not to
use rBST

• inhibit the growth and activity of
  disease-producing organisms

First US mfr to offset 100 of CO2 emissions from
facility energy use.
Organic products made without the use of
antibiotics, synthetic growth hormones and toxic
pesticides or fertilizers
10 of our profits for the Planet
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18 yr. CAGR 27.4
Millions of (US)
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Energy Efficiency

• 1995-2005 Achieved 33 reduction in energy use
  and CO2 emissions per lb. of product.
• Saved over 1.7 million dollars and 46 million
  kilowatt hours of energy
• Efficiency gains have come from
• Incorporating heat recovery
• Installing energy efficient equipment
• Green building practices
• Refrigeration system changes
• Growth

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Supporting the Mission Solar Installation

• NHs largest solar installation and one of New
  Englands largest
• 50 KW system produces c.1 of our electricity
  needs

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Offsetting Emissions

• Investment in Carbon Offsets
• Wind Power
• Reforestation
• Energy Efficiency
• Methane Capture
• First US manufacturer to offset 100 of the CO2
  emissions from our facility energy use (since
  1997)
• Eliminated 40,000 metric tons of global warming
  gases
• Equivalent to taking 7,300 cars off the road for
  a year
• Wrote how-to guide for other businesses

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Components of our GHG Footprint
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Comprehensive Analysis Measuring 2005 Greenhouse
Gas Emissions from our Operations and Supply Chain
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Ten New Teams MAP-ing The Future

• Transport/Distribution
• Energy Efficiency
• Renewable Energy
• Plant Spoilage and Usage
• Sustainable Packaging
• Waste Management and Recycling

• Incoming Materials- Transport and the Materials
• Water
• Green Chemistry
• Events

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Environmental socialbenefits of projects
indeveloping countries
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Sample of Pesticides Used on Non-Organic Bananas
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Sugar growing, Brazil

• Began converting 97 today over 35,000 acres
  certified organic
• 90 reduction in pest damage with growth of
  beneficial insect populations
• Increased biodiversity (up to 5X more than
  conventional cane fields - 189 species of
  birds, reptiles, amphibians and mammals returned)
• Significantly higher drought resistance
• Organic content of soil increased from 1 to 3
  (native forests are 4)
• Soil now teems with beneficial insects,
  microorganisms, and earthworms
• 10 increase in yields and increased groundwater
  quality and volume

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Economics of Organic Soy

• Assumed 20 higher yield on non-organic which is
  very generous.
• The best organic farmers are at the same
  yields/acre as the best non-organic farmers.
• Costs for non-org are growing faster than organic
  because of the costs of petroleum and increased
  corn for ethanol is putting pressure on supply
  and price of fertilizers and pesticides.
  Localized shortages.
• Source- Lynn Clarkson of Clarkson Grain, May 2007

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Economics of Organic Corn

• Assumed 20 higher yield on non-organic which is
  very generous.
• The best organic farmers are at the same
  yields/acre as the best non-organic farmers.
• Costs for non-org are growing faster than organic
  because of the costs of petroleum and increased
  corn for ethanol is putting pressure on supply
  and price of fertilizers and pesticides.
  Localized shortages.
• Ethanol Tsunami has caused land prices for corn
  to double.
• Source- Lynn Clarkson of Clarkson Grain, May 2007

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Comparing Organic vs Conventional Pay Price
Organic Milk Conventional
Milk Org. Milk Budget. 07
Conv. Milk Budget 07
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Supply Chain Packaging

• LCA Studies with Center for
• Sustainable Systems
• (available at www.stonyfield.com)
• Foil lid replacement
• 16 less energy used
• 13 less water used
• 6 less solid waste created
• 1 MM saved annually
• Form, fill and seal
• Reduced packaging by more than one third!
• Efficiency and productivity gains
• 1.8 MM saved annually

Annual savings of 730 tons or 36 truckloads of
materials
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Wastewater Treatment

• Common design for dairy industry Aerobic
  Biological Treatment serious environmental
  impacts
• Large energy inputs
• Large amount of waste generation - sludge

• Innovation Anaerobic/Aerobic Hybrid Biological
  Treatment
• Runs partially on the biogas it generates
• 13 higher capital cost
• 80 reduction in energy use
• 90 reduction in waste generation - sludge
• 75 reduction in operating costs

• EXPECTED SAVINGS 5.5 MM over 1st 10 years

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Waste Prevention

• Recycle or reuse over 60 of the solid waste
  generated at our plant
• Over the past 10 years
• Prevented 16 million pounds of materials from
  going to landfills or incinerators
• Translates to 8,000 tons of CO2 from entering the
  atmosphere and enough to take 1,400 cars off the
  road for one year
• Recycling and reuse has saved us over 1,000,000!
  (decreased trash hauling and increased revenues
  from recyclables).

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New Markets

• Renewables market
• Biofuels Expected to grow from 15.7B in 05 to
  52.5B by 2015
• Wind 11.8B in 2005 to 48.5B in 2015.
• Solar PV 11.2B in 05 to 51.1B by 2015
• Fuel Cells and distributed Hydrogen 1.2B in 06
  to 15.1B in 2015
• GE Revenues from sale of energy efficient
  environmentally advanced products services.
  6.2B in 2004, 10.1B in 2005, 17B in 2006.
• "Ecomagination is paying off for our investors
  and customers. Our advanced environmental
  products and services are helping customers
  increase their energy efficiency and reduce costs
  and emissions. And it is providing the growth we
  expected for GE, as we are ahead of our plan to
  reach 20B in annual sales of ecomagination
  products by 2010."
• - GE Chairman CEO Jeff Immelt.
• Dupont The company expects to derive additional
  revenues of 6B or more by 2015 from the targeted
  effort.
• "Our top priority is to create value for our
  shareholders. We will do that by delivering
  sustainable solutions through science and
  innovation."
• - DuPont Chairman and CEO Charles O. Holliday,
  Jr

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Education MarketingMarketing Education
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Flipping our Lids
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Stonyfield.com

• Stonyfield.com is the 1 Most Visited Yogurt
  Website
• 466,000 Visitors/Month
• 46 Stay More Than 5 Minutes
• Average visit duration - 56 seconds
• 662,000 Moosletter subscribers
• 2 Web Logs (BLOGs)
• 10,000 Visitors/Month

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Web-based Programs Promotions
Have-A-Cow Program

• Educational program to teach consumers about life
  
• on a farm through the eyes of a cow

• Hundreds of thousands of sponsors since 1989
• Sponsors receive, certificate, photo, cow bio,
  newsletter
• Over 42,000 Subscribers to our HAC quarterly
  newsletter

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Community Marketing
College Campus Tour including SF sampling
Climbing wall on NOLS bus
Vegetable oil and solar powered
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MOOville Mobile Tour
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Community Marketing
Transit campaign, Chicago
 

• Tire inflation stations, Houston

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The Opportunity
young adult
Area of opportunity Primary target 15-29 Core
18-24 Secondary target Parents of Gen Y-ers
positive nutrition
empty nutrition
all-family
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Introducing
The only natural energy drink that provides a
sustainable energy source!
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Shift Positioning
Energy Drinks Caffeine Taurine Carnitine
Sports Nutrition Drinks
Shift provides positive nutrition to help fuel
active lifestyles
Shift provides sustainable energy without caffeine
Replenishment Drinks
Nutrient Fortified Drinks
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Stonyfield Farm Shift

• All Natural and Certified Organic
• Good Source of Protein
• Key nutrient for energy production
• Rich in Calcium and Vitamin D
• For strong bones and body
• Excellent Source of Vitamins B3, B6, and C
• B3, B6 Supports mental and physical performance
• C Immunity boosting antioxidant
• Contains Acai
• Antioxidant and nutritional superfruit from
  Brazil
• Known for its energizing health properties
• With Ginseng
• Combats fatigue
• 200 calories, 99 fat free, 1/3 less sugar than
  regular smoothies
• Available in 3 Energizing Flavors
• Berry Boost
• Power Punch
• Strawberry Banana

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Product Comparison
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The Moment of a Lifetime

• Why cant we climate activists change the 21st
  century the way anti-apartheid activism changed
  the 20th century?

• The anti-apartheid divestment movement rocked the
  world
• Consumers, students, shareholders mobilized the
  power of the purse to make business/industry
  listen and change
• "The end of apartheid stands as one of the
  crowning accomplishments of the past century."
  Archbishop Desmond Tutu

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Our new non-profit campaign that puts consumers
front and center in the fight to stop global
warming We score companies annually (including
ours) on their voluntary actions to reverse
climate change Well then publish these results
in a handy guide you can use whenever you buy
something from a computer to a dishwasher to a
six-pack of beer.

• www.climatecounts.org

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How will consumers be activated?

• At Live Earth concerts on 7-7-07
• Millions of pocket scorecards through in-person
  guerrilla marketing
• Web marketing through ClimateCounts.org
  one-click activism (with one click, send a letter
  to CEOs)
• Campus activism
• Environmental NGO alliances
• Cobranding, POP and POS with green brands
• Green companies catalogs
• Green retailers stores

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How will consumers be motivated?
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France Sept, 2006
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Delight Your Clients

• Wide ranging menu incorporating the latest
  flavors and eating trends
• Seasonal specials
• 100 natural organic ingredients
• Plenty for meat eaters, vegetarians and other
  dietary preferences
• Built with environmentally friendly materials
• Quick with quality
• www.onaturals.com

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Predicting the Future

• Truly integrated brands will wind up on top as
  the links between planet, food and health become
  ever clearer.

• Encoding the Mission into Product and Practices
  Top Brand Value

• Superior Value comes from People and People like
  to be part of a successful, innovative,
  mission-driven team.

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Our Permanent Address