3. Poultry Six Year Incentive Income History
1.5%
$50,000,000
1.3%
Purchases
Labatt Purchases
$40,000,000 1.1%
% Tier to Labatt Purchases
% Incentive To Purchases
0.9%
$30,000,000 % Tier Goal Goal
% Incentive
0.54% 0.7%
2011 Incentive
2011 Incentive
$20,000,000 0.5%
Max Year Rate Goal .54%
Rate Goal
.54%
0.3%
$10,000,000
0.1%
0.21%
$- -0.1%
2006 2007 2008 2009 2010 est
2011
4. Poultry
2006 Max Incentive Year vs.
Current Year
• 2006 Max Year Incentive Program: 0.54% of
Poultry Incentive Purchases
Results • 2011 Estimated Incentive Payout: $104,057
or 0.21% of Purchases
High Level • Included Items Changed to Excluded Status
2006 vs. 2011 • Included Product Lines (PL) changed
Incentive • Items were switched from one PL to another
Changes PL
5. Impact of Poultry Incentive Change
from 2006 to 2011
180,000
160,000
140,000
$57,994 2011
Actual Loss from
120,000
Incentive Change
100,000
80,000 Tier Earnings
Incentive Earnings
60,000
40,000
20,000
0
2011 Tier Estimated Return
2011 Incentive Return 2011 Volume w/ 2006 Program
2011 Volume With 2006 Program
6. Poultry 2011 Exclusion Detail
2011 Total Poultry Lb Breakout Excluded Lbs Breakout
2006 Included
Items, Excluded in 2011
Items Included in '06 & 55% 40%
'11 Program Excluded
34%
2011 New Items
2011 New (Excluded)
Items 12%
(Included) Items that were always
11% Excluded
3%
2011 Total Purchases 20,956,335 lbs
7. Poultry 2011 Exclusion Detail
by Product Category
Poultry,
9,602,928 lbs ,
89% of Excluded
Lbs
Prepared
Mexican Category, , 1,239,284 lbs
Mexican
, 11% of Excluded
Original, 608lbs, >1
Lbs
% of Excluded Lbs
• 2011 -55% of all current purchases are excluded (11.5MM lbs excluded, $23.2MM)
• Of the 55% Excluded lbs, The Poultry category makes up 89% of the exclusions with 73
items worth 9.6MM Lbs of Labatt purchases that were included or not purchased in
2006
Total 2011 Excluded: 11,593,096 lbs
8. Poultry 2011 Excluded Detail for
Poultry Category
18,000,000
16,000,000
14,000,000 2006 Included Items,
Excluded in 2011
12,000,000 60%
8,182,071
Excluded
51% of Poultry
10,000,000
8,000,000
1,420,856
6,000,000
4,000,000 40%
1,509,163, Included
2,000,000
- 977,483
Poultry
2006 Included Items, Excluded in 2011
2011 New Items Excluded
Old Items Included in '06 & '11 Program
2011 New Included Items 2011 Poultry Total: 16,038,791 Lbs
9. Poultry Exclusion Examples
Included in 2006 Incentive Program Excluded in 2011 Incentive Program
Item Included in PL 4 Item Changed to Excluded ML 629
# 22628-928 # 22628-928
Excluded for 2011 Poultry, Chicken Fajita Strips
Poultry, Chicken Fajita Strips
2006 Volume: 8,085 lbs 2011 Volume: 35,820 lbs
2011 Earnings Loss: $752
Included in 2006 Program Minor Line 16 Excluded
# 3732328 # 3732328
Excluded for 2011 Poultry, Chicken Chunk Patties
Poultry, Chicken Chunk Patties
2006 Volume: 599,742 lbs 2011 Volume: 1,521,527 Lbs
2011 Earnings Loss: $31,952
11. Poultry Excluded Commodity
Items Sold Commercially
$50,000,000
$45,000,000
$40,000,000 47% Business Not Paid Program
$35,000,000
$30,000,000
Commodity Codes (Sold Commercially)
$25,000,000
$20,000,000
Commodity Codes (Sold to Schools)
$15,000,000
$10,000,000 All Other TysonSales
Other Poultry Sales
$5,000,000
$-
2007 2008 2009 2010 2011
• Each year the proportion of excluded volume grows as a larger
% of Labatt’s mix.
12. Conclusion
Incentive Program:
•Go direct with Poultry on all programs
•Make us whole
•The only way to reach our 0.54% goal is to pay on commodity sales
•Pay EDA on Select Brand
Commodity Items:
•Include Commodity Items sold commercially in local program for 2012
•Long term build a program to pay on all commodity sales
Wright Brand Items:
•Pay Labatt on all Select brand items
•Keep us whole