Slide 1: The Humane Society of the United States
THE HUMANE SOCIETY OF THE UNITED STATES
Slide 2: Disclaimer
DISCLAIMER Special note regarding this presentation This presentation includes information based on, among other sources, data found in filings with the SEC, independent industry publications, press releases and other sources. We have not sought, nor have we received, permission from any third-party
Slide 3: The Cone Nonprofit Power Brand 100
Cone Communications connate {A Public Relations & Marketing Agency se [TE oboe The Cone Nonprofit Power Brand 100 In collaboration with Intangible Business The Cone Nonprofit Power Brand 100 ‘To explore the unique relationship between nonprofit brand image and financial performance, Cone, in collabo
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Slide 6: What about farm animals?
what about farm animals?
Slide 7: Consumer Preferences for Farm Animal Welfare
Consumer Preferences for Farm Animal Welfare: Results of a Nationwide Telephc 4-444 Jayson L. Lusk F. Bailey Norwood Robert W. Prickett Department of Agricultural Economics Oklahoma State Univ
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Slide 13: Most Important Social Issues to Restaurant Patrons
MOST IMPORTANT SOCIAL ISSUES TO RESTAURANT PATRONS * Health Insurance Coverage Living Wages Animal Welfare Environmentalism Working Conditions – (domestic) Community Development Immigration Reform Fair Trade Local Sourcing Diversity Organics 77% 70% 58% 52% 45% 34% 32% 28% 24% 24% 19%
Slide 14: Most Important Social Issues to Restaurant Patrons
MOST IMPORTANT SOCIAL ISSUES TO RESTAURANT PATRONS *
Slide 15: Most Important Social Issues to Restaurant Patrons
MOST IMPORTANT SOCIAL ISSUES TO RESTAURANT PATRONS * Health Insurance Coverage Living Wages Animal Welfare Environmentalism Working Conditions – (domestic) Community Development Immigration Reform Fair Trade Local Sourcing Diversity Organics 77% 70% 58% 52% 45% 34% 32% 28% 24% 24% 19%
Slide 16: Most Important Social Issues to Restaurant Patrons
MOST IMPORTANT SOCIAL ISSUES TO RESTAURANT PATRONS * Health Insurance Coverage Living Wages Animal Welfare Environmentalism Working Conditions – (domestic) Community Development Immigration Reform Fair Trade Local Sourcing Diversity Organics 77% 70% 58% 52% 45% 34% 32% 28% 24% 24% 19%
Slide 17: Most Important Social Issues to Restaurant Patrons
MOST IMPORTANT SOCIAL ISSUES TO RESTAURANT PATRONS * Health Insurance Coverage Living Wages Animal Welfare Environmentalism Working Conditions – (domestic) Community Development Immigration Reform Fair Trade Local Sourcing Diversity Organics 77% 70% 58% 52% 45% 34% 32% 28% 24% 24% 19%
Slide 18: Most Important Social Issues to Restaurant Patrons
MOST IMPORTANT SOCIAL ISSUES TO RESTAURANT PATRONS * Health Insurance Coverage Living Wages Animal Welfare Environmentalism Working Conditions – (domestic) Community Development Immigration Reform Fair Trade Local Sourcing Diversity Organics 77% 70% 58% 52% 45% 34% 32% 28% 24% 24% 19%
Slide 19: Most Important Social Issues to Restaurant Patrons
MOST IMPORTANT SOCIAL ISSUES TO RESTAURANT PATRONS * Health Insurance Coverage Living Wages Animal Welfare Environmentalism Working Conditions – (domestic) Community Development Immigration Reform Fair Trade Local Sourcing Diversity Organics 77% 70% 58% 52% 45% 34% 32% 28% 24% 24% 19%
Slide 20: Most Important Social Issues to Restaurant Patrons
MOST IMPORTANT SOCIAL ISSUES TO RESTAURANT PATRONS * Health Insurance Coverage Living Wages Animal Welfare Environmentalism Working Conditions – (domestic) Community Development Immigration Reform Fair Trade Local Sourcing Diversity Organics 77% 70% 58% 52% 45% 34% 32% 28% 24% 24% 19%
Slide 21: Most Important Social Issues to Restaurant Patrons
MOST IMPORTANT SOCIAL ISSUES TO RESTAURANT PATRONS * Health Insurance Coverage Living Wages Animal Welfare Environmentalism Working Conditions – (domestic) Community Development Immigration Reform Fair Trade Local Sourcing Diversity Organics 77% 70% 58% 52% 45% 34% 32% 28% 24% 24% 19%
Slide 22: Restaurant Industry Initiation
Industry Focus Restaurants Restaurant Industry Initiation @ Restaurant Initiation — We are initiating coverage of the restaurant industry. We rate Burger King a Buy/Medium Risk (1M), McDonald's a Hold/Low Risk (2L), YUM! Brands a Hold/Medium Risk (2M) and Domino's Pizza a Hold/Speculative Risk (2S).
Slide 23: Potential headline risks including animal cruelty
There are also a number of potential headline risks that could tarnish the image of restaurant companies, including concerns over animal cruelty.
Slide 24: Headline risks
headline risks
Slide 25: Concerns over animal cruelty
concerns over animal cruelty
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Slide 27: HSUS President Wayne Pacelle Announces Candidacy for Board Seat at Tyson
HSUS President Wayne Pacelle Announces Candidacy for Board Seat at Tyson Foods, Renowned Investor Carl Icahn To Advise I fefin n F shen ne 3 cing é pigs cannot ¢ 0 ential Renowned inve as agreed to serve ad ah N imperai an Tysc r n any cu artners, ar are demandi r st ates an Tyson ! 7 tain crit : r
Slide 28: HSUS position on gestation crates is the right one
I firmly believe that the position of HSUS regarding gestation crates is the right one.
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Slide 30: What is the solution?
what is the solution?
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Slide 33: Improving Animal Welfare: A Practical Approach
Improving Animal Welfare A Practical Approach Edited by Temple Grandin
Slide 34: Making Ethical Decisions
food animals and working animals with that is worth living. Confining an a al for hich it is not abl a decent life. Making Ethical Decisions Scientific research she at-some behavioural needs are more important to the animal than oth: ers. For example, providing a secluded nest box is re important fo
Slide 35: Confining an animal in a box does not provide a decent life
Confining an animal for most of its life in a box in which it is not able to turn around does not provide a decent life.
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Slide 37: A tipping point
A A tipping potnt Mixed response Discussion over gestation housing continues among processors, experts and consumers
Slide 38: Studies show crates have more negative attributes
Studies show crates have more negative attributes that positive ones
Slide 39: Increased sow mortality
increased sow mortality
Slide 40: Negative public perception
negative public perception
Slide 41: Inability of the sow to demonstrate normal social behavior
inability of the sow to demonstrate normal social behavior
Slide 42: But is it feasible?
but Is it feasible?
Slide 43: Impact of Gestation Housing System on Weaned Pig Production Cost
Iowa State University Animal Industry Report 2007 Impact of Gestation Housing System on Weaned Pig Production Cost AS. Leaflet R2235 Pete Lammers, research assistant; Mark Honeyman, professor, department of animal science; Jim Kliebenstein, professor, department of economics; Jay Harmon, professor,
Slide 44: Group housing resulted in lower weaned pig cost
Group housing resulted in a weaned pig cost that was 11 percent less than the cost of a weaned pig from the individual stall confinement system.
Slide 45: Percent less
11 percent less
Slide 46: Broad support
broad support
Slide 47: State gestation crate bans
Oregon: Currently illegal Colorado: Illegal by 2018 Michigan: Illegal by 2019 Maine: Currently illegal Arizona: Illegal by 2013 California: Illegal by 2015 Florida: Currently illegal Ohio: Illegal by 2025 Rhode Island: Illegal by 2013
Slide 48: Why should investors care
mD. Why AR Pt ‘Should ,Care Ab
Slide 49: Humane Eggs (New York Times)
Che New York Cimes A Humane Eggs July 11, 2010 The life of animals raised in confinement on industrial farms is slowly improving, thanks to pressure from consumers, animal rights advocates, farmers and legislators. In late June, a compromise was reached in Ohio that will gradually put an end to the
Slide 50: Industrial confinement is cruel and senseless
Industrial confinement is cruel and senseless and will turn out to be, we hope, a relatively short-lived anomaly in modern farming.
Slide 51: Industrial confinement is cruel and senseless
Industrial confinement is cruel and senseless and will turn out to be, we hope, a relatively short-lived anomaly in modern farming.
Slide 52: Industrial confinement is cruel and senseless
Industrial confinement is cruel and senseless and will turn out to be, we hope, a relatively short-lived anomaly in modern farming.
Slide 53: Companies are changing
companies are changing
Slide 54: McDonald's Takes Action Toward Ending Gestation Stall Use
eae Rae ‘THE HUMANE SOCIETY ® ‘OFTHE UNITED STATES FOR IMMEDIATE RELEASE McDonald’s Takes Action Toward Ending Gestation Stall Use; Humane Society of the United States Supports Effort (Feb. 13, 2012) — McDonald’s Corporation today announced that it will require its U.S. pork suppliers to outline the
Slide 55: McDonald's Set to Phase-Out Suppliers' Use of Sow Crates
McDonald’s Set to Phase-Out Suppliers’ Use of Sow Crates By STEPHANIE STROM February 13, 2012 The McDonald’s Corporation said on Monday that it would begin working with its pork suppliers to phase out the use of so-called gestational crates, the tiny stalls in which sows are housed while pregnant. A
Slide 56: McDonald's Asks Farmers for a Kinder McRib
McDonald’s Asks Farmers for a Kinder McRib THE WALL STREET JOURNAL By BILL TOMSON and JULIE JARGON McDonald’s Corp is pushing its pork suppliers to stop confining sows in small pens known as gestation stalls, moving to address concerns raised by animal-welfare advocates—and catch up with some compet
Slide 57: Earthquake in the pig business
‘EARTHQUAKE’ IN THE PIG BUSINESS: MCDONALD’S TO END USE OF RESTRAINING CRATES
Slide 58: Food companies logos
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Slide 59: Food companies logos
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Slide 60: Costco, Safeway
CosTco Ko SAFEWAY Ingredients for life.
Slide 61: Aramark, Sodexo, Compass Group
IT ARAMARK sodexo a. 7 COMPASS GROUP
Slide 62: Campbell, ConAgra
7 Lad 7 Campbell ConAgra @Foods
Slide 63: Jimmy Dean
Om _ Jimmy Dean
Slide 64: What about the pork industry?
what about the pork industry?
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Slide 66: No longer a debate about viability of gestation crates
This is no longer a debate about the viability of gestation crates in hog production, but rather a discussion about how producers will respond to meet expectations.
Slide 67: No longer a debate about viability of gestation crates
This is no longer a debate about the viability of gestation crates in hog production, but rather a discussion about how producers will respond to meet expectations.
Slide 68: McDonald's unveils 10-year phase-out plan
June 4,2012 vou e4-No2s MeDonald’s unveils, “Pyyoducers need ‘bridge’ 10-year phased-out plan MCDONALD'S has unveiled a Nort America Supply Chain plan that calls for the phas- Management, said in & Stal py ROD SMITH ing out of gestational crates in Ment “Our aj isto OY its ts supply chake within 9,
Slide 69: Key Points
fren em dale & pore Key Points & Gestation stalls no lon- ger defendable. mi Producers need man- agement and skill sets to make pens work. mi Resistance will ncreasing- ly threaten pork demand and trust in producers,
Slide 70: Key Points
fren om dale & jete Key Points ll Gestation stalls no lon- ger detendable. agement and ‘skill sets to make pens work. 1® Resistance will increasing- ly threaten pork demand and trust in producers.
Slide 71: Key Points
; . 7 — a ay - 2a i. | J < - “ fe POLS Be? Dv ehewes eee! tewke fren om dale & jete Key Points Gestation stalls no lon- ger detendabie. 1m Producers need man- agement and skill sets to make pens work w Resistance will increasin« ly threaten pork demand and trust in producers.
Slide 72: Consider risks involved in building sow stall barn
Consider risks involved in building sow stall barn
Slide 73: Rocks in your head to build a new sow barn
You’d have to have rocks in your head to build a new sow barn with gestating sow stalls.
Slide 74: Editorial: The big one
EDITORIAL: The big one In mid-February, the Humane Society of the United States had the last word in its long argument with the meat industry over the use of gestation crates: In a joint press release, McDonald's joined HSUS, saying its pork suppliers would have to make the shift to group housing. A
Slide 75: Game over
Game over. For any pork producer still on the fence, the…move is inevitable.
Slide 76: Game over
Game over. For any pork producer still on the fence, the…move is inevitable.
Slide 77: Smithfield
Smithfield
Slide 78: Annual Report 2007
|, aio Om ANNUAL REPORT 2007
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Slide 80: Phasing out individual gestation stalls at its sow farms
phasing out individual gestation stalls at its sows farms
Slide 81: Replacing stalls with group pens over ten years
replacing the gestation stalls with group pens over the next ten years
Slide 82: Desire to be more animal friendly
was made as a result of the desire to be more animal friendly
Slide 83: Address concerns and needs of customers
as well as to address certain concerns and needs of our customers
Slide 84: So what about Tyson?
so what about (son) & ie ?
Slide 85: Animal Well-Being Mission Statement
Animal Well-Being Our Mission Statement on Animal Well-Being "Tyson Foods is committed to the well-being, proper handling, and humane slaughter of all the animals that are used in our food products. This is a long-standing commitment, and we pledge our diligence in leading the industry pursuit of ne
Slide 86: Animal Well-Being Mission Statement
Animal Well-Being Our Mission Statement on Animal Well-Being "Tyson Foods is committed to the well-being, proper handling, and humane slaughter of all the animals that are used in our food products. This is a long-standing commitment, and we pledge our diligence in leading the industry pursuit of ne
Slide 87: Animal Well-Being Mission Statement
Animal Well-Being Our Mission Statement on Animal Well-Being "Tyson Foods is committed to the well-being, proper handling, and humane slaughter of all the animals that are used in our food products. This is a long-standing commitment, and we pledge our diligence in leading the industry pursuit of ne
Slide 88: Animal Well-Being Mission Statement
Animal Well-Being Our Mission Statement on Animal Well-Being "Tyson Foods is committed to the well-being, proper handling, and humane slaughter of all the animals that are used in our food products. This is a long-standing commitment, and we pledge our diligence in leading the industry pursuit of ne
Slide 89: Sustainability & Stewardship: Commitment to Animal Care
Sustainability & Stewardship: Our-never ending commitment Commitment to Animal Care “We are committed to proper animal care and have a moral and ethical obligation to the humane treatment of animals. We believe food animals can and should be raised, transported and processed using procedures that ar
Slide 90: Sustainability & Stewardship: Commitment to Animal Care
Sustainability & Stewardship: Our-never ending commitment Commitment to Animal Care “We are committed to proper animal care and have a moral and ethical obligation to the humane treatment of animals. We believe food animals can and should be raised, transported and processed using procedures that ar
Slide 91: Sustainability & Stewardship: Commitment to Animal Care
Sustainability & Stewardship: Our-never ending commitment Commitment to Animal Care “We are committed to proper animal care and have a moral and ethical obligation to the humane treatment of animals. We believe food animals can and should be raised, transported and processed using procedures that ar
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Slide 96: Tyson Consumer Replies: Sow Housing Statement
From: Tyson Consumer Replies [mailto:ConsumerReplies@tyson.com] Sent: Monday, July 09, 2012 Subject: Re: Please stop using gestation crates! Sow Housing Statement The issue of sow housing is not as black and white as some would lead you to believe. Over the years, farmers, universities and animal ca
Slide 97: Tyson buys hogs from independent farm families
cS We buy hogs from thousands of independent farm families who use different types of sow housing, including individual
Slide 98: Tyson expects to continue to buy from them
cS and we currently expect to continue to buy from them.
Slide 99: Seaboard Foods: U.S. Swine Industry Practices Media Statement
News Release Tuesday, January 31, 2012 Tuesday, January 31, 2012 David Eaheart, APR david_eaheart@seaboardfoods.com U.S. Swine Industry Practices Media Statement U.S. Swine Industry Practices Media Statement It is important to recognize animal welfare programs, including housing for gestating sows,
Slide 100: Seaboard Foods: U.S. Swine Industry Practices Media Statement
News Release Tuesday, January 31, 2012 Tuesday, January 31, 2012 David Eaheart, APR david_eaheart@seaboardfoods.com U.S. Swine Industry Practices Media Statement U.S. Swine Industry Practices Media Statement It is important to recognize animal welfare programs, including housing for gestating sows,
Slide 101: Seaboard Foods will convert all sow farms by 2018
“In Colorado, Seaboard Foods will convert all its sow farms to group housing by 2018.”
Slide 102: Seaboard Foods will convert all sow farms by 2018
“In Colorado, Seaboard Foods will convert all its sow farms to group housing by 2018.”
Slide 103: Seaboard Foods will convert all sow farms by 2018
“In Colorado, Seaboard Foods will convert all its sow farms to group housing by 2018.”
Slide 104: State gestation crate bans
Oregon: Colorado: Michigan: Maine: Currently illegal Illegal by 2018 Illegal by 2019 Currently illegal Ohio: Illegal by 2025 Rhode Island: Illegal by 2013 California: Illegal by 2015 Arizona: Illegal by 2013 Florida: Currently illegal
Slide 105: Colorado: Illegal by 2018
Colorado: Illegal by 201:
Slide 106: State gestation crate bans
Oregon: Colorado: Michigan: Maine: Currently illegal Illegal by 2018 Illegal by 2019 Currently illegal Ohio: Illegal by 2025 Rhode Island: Illegal by 2013 California: Illegal by 2015 Arizona: Illegal by 2013 Florida: Currently illegal
Slide 107: Improving Animal Welfare: A Practical Approach
Improving Animal Welfare A Practical Approach Edited by Temple Grandin
Slide 108: Impact of Gestation Housing System on Weaned Pig Production Cost
bows Seem | er er a Rename! betentr: Rogers lam Impact of Gestation Housing System on WV caned Pig Production ( ost AS Lewis BID te ee et me ee my meet oS ne ee ee we ee Net ee ne ee te ee me et ee ie me ee ee ee ee ne at ee ee et es emt eg me ee eS ee ee ee i me ee ee ee ee eee ae 11 percent less a
Slide 109: Smithfield
Smithfield
Slide 110: Food companies logos
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Slide 111: No longer a debate about viability of gestation crates
This is no longer a debate about the viability of gestation crates in hog production, but rather a discussion about how producers will respond to meet expectations.
Slide 112: Feedstuffs: Gestation stalls no longer defendable
Feedstuffs = ates Gendent i | _ Rey FoI Gestation stalls no lon- ger defendable. ~~
Slide 113: Rocks in your head to build a new sow barn
You’d have to have rocks in your head to build a new sow barn with gestating sow stalls.
Slide 114: Game over
Game over. For any pork producer still on the fence, the…move is inevitable.
Slide 115: HSUS position on gestation crates is the right one
I firmly believe that the position of HSUS regarding gestation crates is the right one.
Slide 116: Eliminating crates will improve Tyson's business prospects
Eliminating those crates will both prevent cruelty to animals, and will improve Tyson’s business prospects by putting the company on an equal competitive footing with the bulk of the industry that is already rejecting gestation crates.
Slide 117: Eliminating crates will improve Tyson's business prospects
Eliminating those crates will both prevent cruelty to animals, and will improve Tyson’s business prospects by putting the company on an equal competitive footing with the bulk of the industry that is already rejecting gestation crates.
Slide 118: Eliminating crates will improve Tyson's business prospects
Eliminating those crates will both prevent cruelty to animals, and will improve Tyson’s business prospects by putting the company on an equal competitive footing with the bulk of the industry that is already rejecting gestation crates.
Slide 119: M&A Edge Note: Humane Society's Proxy Contest at Tyson Foods
M&A EDGE NOTE: NORTH AMERIC. Humane Society’s Proxy Contest at Tyson Foods (TSN): Environmental & Social Activism Breaks Out of the Cage At Tyson Foods’ annual meeting in 2013, a recent SEC filing announced, the Humane Society, ad: vised by activist investor Carl Icahn, will bring its campaign for a
Slide 120: Long term risk
If ‘gestation crates’ are not part of the lingua franca of most investors, ‘long term risk’ certainly is.
Slide 121: Long term risk
If ‘gestation crates’ are not part of the lingua franca of most investors, ‘long term risk’ certainly is.
Slide 122: BlackRock / The Humane Society of the United States
BLACKROCK Wat “REN. THE HUMANE SOCIETY OF THE UNITED STATES