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Exhibit TN-2: Margin Chain for Manufacturere Selling Price (Natureview Yogurt) Note: $ Figures rounded to 2 decimal places

$ Figures rounded to 2 decimal places and % to one,


except as noted below
Supermarket Channel 8oz 32 oz Input Data Source

Retail Price $0.74 $2.70 Exhibit 3


Retail Margin 27.0% 27.0% Text - Supermarkets
Retail Purchase Price (RPP) $0.54 $1.97
Distributor Margin 15.0% 15.0% Text - Supermarkets
Distributor Purchase Price (DPP) $0.46 $1.68
Manufacturer Sales Price (MSP) 0.459 1.675 (Rounded to 3 decimal places)
Cost Per Unit 0.31 0.99 Exhibit 3
Contribution per Unit Sold 0.149 0.685 (Rounded to 3 decimal places)
Manufacturer Gross Margin 32.49% 40.91% (Rounded to 2 decimal places)

Natural Foods Channel 8oz 32oz Multipack

Retail Price $0.88 $3.19 $3.35 Exhibit 3


Retail Margin 35.0% 35.0% 35.0% Text - Nat Foods
Retail Purchase Price (RPP) $0.57 $2.07 $2.18
Natural Foods Distributor Margin 9.0% 9.0% 9.0% Text - Nat Foods
Natural Foods Distributor Purchase Price $0.52 $1.89 $1.98
Wholesaler Margin 7.0% 7.0% 7.0% Text - Nat Foods
Wholesaler Purchase Price (WPP) $0.48 $1.75 $1.84
Manufacturer Sales Price (MSP) 0.484 1.755 1.843 (Rounded to 3 decimal places)
Cost Per Unit 0.31 0.99 1.15 Exhibit 3
Contribution per Unit Sold 0.174 0.765 0.693 (Rounded to 3 decimal places)
Manufacturer Gross Margin 35.96% 43.58% 37.60% (Rounded to 2 decimal places)

Exhibit TN-4 Evaluation of Growth Options

Input Data Source


Option 1 (8 oz.) 6 SKU to Supermarket
20 Supermarket Chains
2 Regions
Ad Plan $1,200,000 per region per annum text Option 1
Sales 35,000,000 units per annum text Option 1
Slotting fees $10,000 per Chain per SKU text Supermar
Gross Profit $5,220,950 formula = units sold * $ contribution per unit (Note rounding in Table TN-2)
Less Ad Costs ($2,400,000) 2 Regions
Less Incremental SGA ($320,000) $200K sales + $120K mkt text Option 1
Less Slotting Fees ($1,200,000) 20 Chains, 6 SKU per Chain
Trade Promotion Expense ($870,000) 11 Supermarkets in NE, 9 in West, 4 times p.a.
Less Broker's Commissions ($642,838) 4% of sales formula = MSP * units sold * 4% (Note rounding in Table TN-2)
Profit Contribution ($211,888)

Sales Growth $16,070,950 Market Share sales growth = MSP * units sold
1.5% of supermarket yogurt sales (last year)
2.0% of supermarket yogurt 6-8 oz sales (last yea

Option 2 (32 oz.) 4 SKU to Supermarket


64 Supermarket Chains
4 Regions
Ad Plan $120,000 per region per annum text Option 2
Sales 5,500,000 units per annum text Option 2
Slotting fees $10,000 per Chain per SKU text Supermarket
Gross Profit $3,769,425 formula = units sold * $ contribution per unit
Less Ad Costs ($480,000) 4 Regions
Less Incremental SGA ($160,000) Half of Option One text Option 2
Less Slotting Fees ($2,560,000) 64 Chains 4 SKU
Trade Promotion Expense ($1,024,000) 64 Chains 2x per annum text Option 2, Supermarkets
Less Broker's Commissions ($368,577) 4% of sales formula = MSP * units sold * 4%
Profit Contribution ($823,152)

Sales Growth $9,214,425 Market Share sales growth = MSP * units sold
10.3% of 32oz yogurt sales nationally (last year)

Option 3 (Multipack) 2 SKU of Multipack to Natural Foods Channel


Ad Plan $250,000 text Option 3
Sales 1,800,000 units per annum text Option 3
Free Cases (slotting) fee 2.5% of Manufacturer Sales (net of broker fees)
Gross Profit $1,247,073
Less Ad Costs ($250,000)
Less Free Cases ($82,927) formula = 1.8m units sold * MSP * 2.5%
Less Broker's Commissions ($132,683) 4% of sales formula = MSP * units sold * 4%
Profit Contribution $781,463

Sales Growth Year 1 $3,317,073 Market Share sales growth = MSP * units sold
11.2% of natural foods channel (last year)

Exhibit TN-3 Market Share Analysis of Yogurt Market

Market Dollar Size % Total Annual Input Data Source


Growth Rate
Total Refrigerated Yogurt Market $ 1,800,000,000 100% 3.5% Text - Yogurt Category
Supermarket Channel 1,746,000,000 97% 3.0% Text - Yogurt Category
Natural Foods Channel $ 54,000,000 3% 20.0% Text - Yogurt Categ

Total Refrigerated Yogurt Market $ 1,800,000,000 100% 3.5% Text - Yogurt Category
6 oz. & 8 oz. 1,332,000,000 74% 3.0% Ex 2A
32 oz. 144,000,000 8% 2.0% Ex 2A
Children's Multipack 162,000,000 9% 12.5% Ex 2A
All Other $ 162,000,000 9% 0.1% Ex 2A

Total Refrigerated Yogurt Market $ 1,800,000,000 100% Text - Yogurt Category


Northeast 468,000,000 26% Ex 2B
Midwest 396,000,000 22% Ex 2B
Southeast 450,000,000 25% Ex 2B
West $ 486,000,000 27% Ex 2B
and % to one,
TN-2)
YEAR
1 2 3 4 5

Option 1 (8 oz.) 6 6 6 6 6
20 20 20 20 20
2 2 2 2 2
Ad Plan $1,200,000 $1,200,000 $1,200,000 $1,200,000 $1,200,000
Sales 35,000,000 42000000 50400000 60480000 72576000 CAGR 20%
Slotting fees $10,000
Gross Profit $5,220,950 $6,265,140 $7,518,168 $9,021,802 $10,826,162 NPV
Less Ad Costs ($2,400,000) ($2,400,000) ($2,400,000) ($2,400,000) ($2,400,000) 11,013,067.12
Less Incremental SGA ($320,000) ($320,000) ($320,000) ($320,000) ($320,000)
Less Slotting Fees ($1,200,000) 0 0 0 0
Trade Promotion Expense ($870,000) ($870,000) ($870,000) ($870,000) ($870,000)
Less Broker's Commission ($642,838) ($771,406) ($925,687) ($1,110,824) ($1,332,989)
Profit Contribution ($211,888) $1,903,734 $3,002,481 $4,320,978 $5,903,173

Sales Growth $16,070,950 $19,285,140 $23,142,168 $27,770,602 $33,324,722

Option 2 (32 oz.) 4 4 4 4 4


64 64 64 64 64 CAGR 20%
4 4 4 4 4
Ad Plan $120,000 $120,000 $120,000 $120,000 $120,000 NPV
Sales 5,500,000 6,600,000 7,920,000 9,504,000 11,404,800 10,640,076.38
Slotting fees $10,000 $0 $0 $0 $0
Gross Profit $3,769,425 $4,523,310 $5,427,972 $6,513,566 $7,816,280
Less Ad Costs ($480,000) ($480,000) ($480,000) ($480,000) ($480,000)
Less Incremental SGA ($160,000) ($160,000) ($160,000) ($160,000) ($160,000)
Less Slotting Fees ($2,560,000) $0 $0 $0 $0
Trade Promotion Expense ($1,024,000) ($1,024,000) ($1,024,000) ($1,024,000) ($1,024,000)
Less Broker's Commission ($368,577) ($442,292) ($530,751) ($636,901) ($764,281)
Profit Contribution ($823,152) $2,417,018 $3,233,221 $4,212,665 $5,387,998

Sales Growth $9,214,425 $11,057,310 $13,268,772 $15,922,526 $19,107,032

Option 3 (Multipack) 2 2 2 2 2
Ad Plan $250,000 $250,000 $250,000 $250,000 $250,000 CAGR 15%
Sales 1,800,000 2,070,000 2,380,500 2,737,575 3,148,211
Free Cases (slotting) fee NPV
Gross Profit $1,247,073 $1,434,134 $1,649,254 $1,896,642 $2,181,138 4,797,808.17
Less Ad Costs ($250,000) ($250,000) ($250,000) ($250,000) ($250,000)
Less Free Cases ($82,927) $0 $0 $0 $0
Less Broker's Commission ($132,683) ($152,585) ($175,473) ($201,794) ($232,063)
Profit Contribution $781,463 $1,031,548 $1,223,781 $1,444,848 $1,699,075

Sales Growth Year 1 $3,317,073 $3,814,634 $4,386,829 $5,044,853 $5,801,581