Presentation Title

William Blair Growth Stock Conference
Steve Hughes
Chairman & CEO
Forward Looking Statements
This presentation may contain forward-looking statements within the
meaning of the safe harbor provisions of the Securities Litigation
Reform Act of 1995. Terms such as “expect,” “believe, ”continue,”
“going forward,” and “grow,” as well as similar comments, are forwardlooking in nature. Actual results may differ from these forward-looking
statements and the company can give no assurances that such
expectations can be attained.
Factors that could cause actual results to differ materially from the
Company’s expectation include: general business and economic
conditions, competitive factors, raw materials purchasing, and
fluctuations in demand. Please refer to the Company’s Securities and
Exchange Commission filings for further information.
2
Investment Highlights
 Health & wellness innovation platform:
 Eliminating “bad” ingredients such as trans fats (with patented
technology).
 Fortifying with “good” ingredients such as Omega 3, antioxidants &
plant sterols.
 Grown into the #2 player in the spreads category.
 Well positioned to capitalize on the growing healthy foods market
beyond margarine spreads.
 “Virtual” company model that generates significant free cash flow
and has limited capital requirements.
 Quality and experienced management team with promotional and
brand building expertise.
3
Corporate Vision
Create a health & wellness innovation platform that builds brands targeted at highly
motivated need states.
Fuel growth through new science/products, channels and brands.
4
Functional Foods Growth
Functional Foods Industry Sales
Functional Foods Dairy and Spreads Sales
$9.0
$7.0
$8.4
CAGR: 5.7%
$6.3
CAGR: 5.6%
$8.0
$8.0
$6.0
$6.0
$5.7
$7.6
$5.4
$7.0
$6.8
$6.4
CAGR: 7.9%
$6.1
$6.0
$5.1
Sales ($ in billions)
Sales ($ in billions)
$7.2
$5.0
$4.8
$4.6
CAGR: 7.5%
$4.1
$3.9
$4.0
$3.6
$5.5
$3.4
$5.2
$5.0
$4.7
$3.0
$4.4
$4.0
$2.0
2004 2005 2006 2007 2008 2009E 2010P 2011P 2012P 2013P 2014P
Source: Mintel, August 2009
2004
2005
2006
2007
2008 2009E 2010P 2011P 2012P 2013P 2014P
5
Growth Strategy
#1 Grow margarine spreads market share via three-tier strategy:
 Use Smart Balance®, Earth Balance®, and Bestlife™ brands, to
appeal to a wider range of consumers.
#2 Gain market share in other categories:
 National rollout of enhanced milk –a category that is ten times
larger than spreads.
#3 Innovate brands & introduce new products:
 An umbrella of brands that creates crossover consumer loyalty
and can support a broad number of products in various
categories.
6
Growth Strategy:
#1 Grow Spreads Market Share Via Three-Tier Strategy
7
History of Smart Balance Innovating the Spreads Category
 1996: Smart Balance
formed - around a patented
blend of natural vegetable oil.
 1997: Company launches
Smart Balance - heart-healthy
margarine with no trans fats.
US Food Channel $ Share Trends
25.0
I Can’t Believe It’s Not Butter
20.0
Smart Balance ®
15.0
Ttl Conagra Brands
 2007: Boulder Specialty
Brands acquires GFA Brands.
Land O Lakes
10.0
Private Label
 2008 – 2010: Company
invests approximately $150
million marketing.
2010: Company launches
three-tier spreads strategy.
5.0
Promise
CY 2003
CY 2004
CY 2005
CY 2006
CY 2007
CY 2008
CY 2009
CY 2010
Source: IRI 2003-2005; Nielsen 2006 - 2010
8
Three Tier Brands Target Different Customers
9
Smart Balance ® Consumer Scorecard – Shopper Recognized as #3
Heart Health Brand
 Among all shoppers, General
Mills brands (primarily Cheerios,
Nature Valley, and Yoplait) are most
closely associated with heart
health.
 Healthy Choice and Smart
Balance rank #2 and #3
respectively.
Source: GFA Brands 2010 Consumer Tracking Survey
10
Smart Balance (R) is the #1 Brand in Taste and Heart Health Among
Franchise Buyers
 Among Smart Balance
Franchise buyers, the Smart
Balance brand leads this
category, followed closely by
Healthy Choice, General Mills
and Kashi.
Source: GFA Brands 2010 Consumer Tracking Survey
11
Smart Balance – Innovating the Spreads Category
2007
2008
2006
2009
2010
12
Earth Balance – Super Premium Spreads

Natural ingredient profile

Certified non-GMO
ingredients

Gluten free, lactose free,
vegan

No hydrogenated oils

No artificially modified oils

Largest distribution in
health channel

2010 sales up 30%
13
Bestlife ™ Buttery Spreads
 First value brand with no hydrogenated oils
 No palm kernel oil
 Excellent source of Vitamin D
 Started shipping Q1 2010
 Current distribution in 58% of supermarkets & 2,500 WalMart stores
 Targeted marketing using Bob Greene, through Oprah media
platforms
Buttery Spread
15oz
Buttery Spread
With Extra Virgin Olive Oil
15oz
Buttery Spray
8oz
Buttery Spread
45oz
14
Three-Tier Market Share Continues to Grow
Smart Balance family of spreads (1)
52 week dollar market share
(1) Includes Smart Balance®, Earth Balance®, Bestlife™, Smart Beat®, Nucoa®
Source: IRI 2002-2005; Nielsen 2006 - 2010
15
Spreads Trends and The Great Recession
Two key trends
impacting spreads
category over past year:
Cooking/baking
category reporting unit
declines.
Value outpacing
premium.
16
GROWTH STRATEGY:
#2 GAIN MARKET SHARE IN OTHER CATEGORIES - NATIONAL
ROLLOUT OF ENHANCED MILK
17
Smart Balance Brand Equity - #1 Growth Brand in
Dairy for the past 6 Years
Act Unit
Chg
Rank
Act $
Chg
Rank
Unit %
Chg
Rank
$%
Chg
Rank
The 25 Largest Dairy
Manufacturers
$ `04-`10
CAGR
$ % Ch`10 vs Actual $ '04`04
'10 (MM)
TOTAL STORE
1.5%
9.6%
$24,886.61
7
8
2
1
SMART BALANCE INC
15.6%
138.1%
$130.81
6
5
4
8
3
12
1
13
10
15
11
9
6
4
2
10
1
7
3
12
11
13
9
15
1
3
4
5
6
11
7
12
9
17
10
8
2
3
4
5
6
7
8
9
10
11
12
13
DAISY BRAND
SARGENTO FOOD COMPANY
COCA COLA CO
FROMAGERIES BEL INC
GROUPE DANONE S A
NESTLE S.A. (SWITZERLAND)
GENERAL MILLS INC
LACTALIS USA
MICHAEL FOODS INC
CITRUS WORLD INC
CHIQUITA BRANDS INTL
TILLAMOOK COUNTY CREAMERY
14.1%
8.1%
7.4%
6.6%
6.4%
2.8%
2.4%
2.1%
1.9%
1.6%
1.4%
1.1%
120.8%
59.6%
53.9%
46.7%
45.3%
18.2%
15.0%
13.5%
12.3%
9.9%
8.5%
6.7%
$143.32
$240.86
$470.89
$80.16
$474.90
$139.45
$292.53
$35.79
$42.74
$30.11
$82.93
$16.89
18
14
20
14
UNILEVER
0.7%
4.1%
$27.77
22
16
15
15
DEAN FOODS CO
0.0%
0.2%
$4.20
25
21
13
16
PRIVATE LABEL
-0.2%
-1.1%
-$171.79
16
14
19
24
17
23
21
17
18
20
25
19
24
23
14
16
21
19
18
22
23
17
18
19
20
21
22
23
PRAIRIE FARMS DAIRY
DAIRY FARMERS OF AMERICA
H P HOOD INC
KRAFT FOODS INC
LAND O'LAKES INC
PEPSICO INC
DOLE FOODS CO INC
-0.5%
-1.7%
-2.5%
-2.7%
-3.1%
-3.6%
-6.0%
-2.8%
-9.8%
-13.9%
-15.1%
-17.4%
-19.5%
-31.0%
-$12.16
-$26.86
-$137.12
-$641.78
-$116.05
-$293.81
-$276.23
20
22
24
24
CONAGRA FOODS INC
-9.4%
-44.6%
-$271.87
2
5
25
25
AGRO FARMA INC
NEW
NEW
$231.54
Source: IRI, US Food, 2004-2010
18
Marketing Initiatives: Spreads
Grocery
Milk
Marketing in 2011 designed to drive consumer purchase intent,
leveraging the brand equity building in the prior years
All-Family FSI Coupons
Supermarket Coupons
19
Healthy Premium Milk - $1.7B Market
Healthy Premium Volume Grew 12%
Grocery Channel Full Year 2010 versus 2009
Healthy Premium Milk by Segment
+8%
+>100%
+8%
-4%
+13%
Source: Nielsen Grocery Channel Full Year ending 12.25.10, equivalent units
Note: All Other includes almond milk, acidophilus, rice milk and goats milk
20
Expanding Category Reach – Driven by Milk
 Exceptional benefits and great taste
Enhanced Milks: Varieties include an excellent source of DHA/EPA Omega-3s,
Antioxidant Vitamin E and plant sterols
Enhanced Milk category has doubled in 5 years.
• Expanded across U.S. in 2010
Milk now in 64% of supermarkets & 400 Wal-Mart stores
Added new varieties in 2011: Smart Balance™ with Calcium – Fat Free & Lactose Free
21
Gaining Share in Milk
Source: Nielsen, data through 4.16.11
22
Building Scale in Milk Will Build Leverage
$ Milk Market Share
(ending 4/16/11)
4 Weeks
12 Weeks
24 Weeks
Florida
1.22
1.05
1.03
New York
.97
.87
.82
New England
.58
.47
.42
New Markets
.28
.22
.20
New Markets/”On
Shelf”
.61
.48
.43
Total U.S. Grocery
.40
.33
.30
Source: Nielsen, data through 4.16.11
23
GROWTH STRATEGY:
#3 INNOVATE BRANDS & INTRODUCE NEW PRODUCTS
24
Highly Targeted Investment Plan
Core products’ profitability is the fuel for innovation platform
Innovation:
investment
to fuel
growth
Core
products:
profit
Source: The Nielsen Company
foundation
Milk
Bestlife™
Earth
Balance ®
Core spreads
Grocery
25
Earth Balance ® - Building a Platform Focused on the Plant-Based Diet
Spread/Stick
Nut Butters
Soymilk
GROWTH THORUGH INNOVATION
Mayo
Other
2009
2010
2011
2012
2013
 Core to the Earth Balance proposition
 No meat, no dairy
Building a Promising Platform Focused on
the Plant Based Diet
 Three type of consumers – vegan; proactive health & allergenic
 Improving your health by living lower on the food chain
 Natural foods companies leading the cause
 Innovation resulted in revenue CAGR 23% over past two years
Earth Balance ® Soy Milk
 First Non GMO Verified refrigerated soymilk; 100% USA soybean
 Launched in partnership with Whole Foods Market, as part of their renewed
commitment to organic in the soymilk category
 Whole Foods Soymilk category up double-digits since launch
 Expanded to 40% of all other natural food stores (SPINS)
27
Earth Balance ® New Product Introductions
 Earth Balance ® Coconut
Spread
• Formula with organic extra virgin
coconut oil
• Lactose-free, soy-free, organic,
vegan, non-GMO
 Earth Balance ® Mayo
 Refrigerated mayo
 No eggs/dairy
 GMO-free
28
The Bestlife ™ Franchise
Food
Diet
Seal
Books
Bestlife Buttery
Spreads, Spray
and Sticks
Online tool
Weight and
Diabetes
management
Product
certification
program
Book franchise
with 4 Best Life
titles, including
best-sellers
29
Bestlife ™ Brand & Bob Greene
Bob Greene is Oprah’s personal trainer and nutrition and fitness expert
 Author of books on diet, fitness, and nutrition
 over 10 million copies sold
 Created the Bestlife™ healthy lifestyle program
 includes eliminating trans fats and reducing saturated fats from dairy
 Recently launched 20 Years Younger book and lifestyle program
30
FINANCIAL PERFORMANCE
31
Strong Historical Performance
$ in Millions
Net Sales
Cash Operating Income (COI)
300
35
30
250
239
25
2009
2010
25
20
176
15
137
100
30
24
150
33
242
222
200
33
99
15
10
50
5
0
0
2005
2006
2007
2008
2009
2010
2005
2006
2007
2008
Note: 2010 COI excludes $4M in restructuring costs
32
Q1-2011 vs. Q1-2010
$ in millions
Q1-2011
Q1-2010
Change
Net Sales
$59.7
$63.6
(6.0%)
Gross Profit
28.4
33.4
(5.0M)
47.6%
52.4%
(480 bps)
Operating Income
7.6
5.8
31%
Net Income*
4.2
3.0
40%
$0.07
$0.05
40%
Gross Margin
E.P.S.*
* In Q1-2011, net income excludes a charge of $0.7 million, or $0.01 in EPS, related to
the forfeiture of non-vested stock options associated with restructuring actions in 2010.
33
$111 Million Reduction in Debt
$ in Millions
160
140
160
120
120
100
80
70
60
40
57
49
20
0
May 07
Dec 07
Dec 08
Dec 09
Dec 10
34
Creating Financial Flexibility
 Completed credit amendment in March 2011
 Flexibility in strategic investments, capital spending, covenants
 Share repurchase program: $25M over two years
 3.1 M shares repurchased through 3/31/2010 ($12.6 million cost)
 Restructured the organization
 Reduced headcount by 12%, $4 million annual ongoing savings
 One time charges of $4 million (Q2 and Q4)
 Ongoing supply chain productivity program
 Over $11 million annualized savings through 2010
35
2011 Priorities
 Drive Three Tier spreads strategy
 Maintain share growth in core category
 Manage through commodity driven price increases
 Expand Bestlife™ and Earth Balance® brands
 Increase Smart Balance® milk trial and distribution
 Broaden the Earth Balance ® brand
 Expand distribution of Earth Balance™ soymilk in the natural
channel
 Capitalize on Earth Balance success through new product
introductions in the natural channel
 2011 Outlook
 Net sales – mid-single digits percentage growth versus 2010
 Cash operating income – high-single digit percentage growth
versus 2010
 Focus on leveraging investments, increasing COI margin
36
Investment Highlights
 Health & wellness innovation platform:
 Eliminating “bad” ingredients such as trans fats (with patented
technology).
 Fortifying with “good” ingredients such as Omega 3, antioxidants &
plant sterols.
 Grown into the #2 player in the spreads category.
 Well positioned to capitalize on the growing healthy foods market
beyond margarine spreads.
 “Virtual” company model that generates significant free cash flow
and has limited capital requirements.
 Quality and experienced management team with promotional and
brand building expertise.
37