Overview

Vinegar is a versatile product that has been used in all corners of the world for over thousands of years. Having long been viewed as a necessity
for every home with its various applications, vinegar is increasingly popular with consumers as new blends, uses and specialty products continue
to enter the marketplace. While vinegar is a global product, its varieties vary by region. Today, traditional vinegar products specific to regional
markets are appearing globally as new and innovative goods with marketable health benefits and multiple uses.

Global Vinegar Market

With an increase in health consciousness in major markets worldwide, as well as the popularity of new meal seasonings, demand for vinegar is
rising. This was evidenced by a large rise in the number of new vinegar products introduced worldwide between 2002 and 2005, an approximate
1,162% increase. In particular, balsamic and infused or flavoured vinegars are dominating the market and seeing continued growth. Europe is
currently the world's top region for vinegar sales, followed by North America. Top vinegar importers and exporters worldwide are listed below
and represent key markets of entry and major competitors in the global vinegar market respectively.

World's Top 10 Vinegar Importers (2006)

World's Top 10 Vinegar Exporters (2006)
Canada's Target Markets Canada's Competitors

Country Imports (CAD$ millions) Canada's Share of Country's Imports Country Exports (CAD$ millions)
United States $87.6 2.01% Italy $216.9
Germany $44.2 0.01% France $25.8
United Kingdom $28.3 0.05% Spain $24.5
France $25.5 0.01% Germany $20.3
Canada $22.0 N/A United States $14.3
Italy $17.1 0.003% Japan $12.4
Japan $11.3 0.00% China $10.1
Austria $10.9 0.00% Greece $7.7
Spain $9.5 0.00% South Africa $6.6
Australia $9.4 0.04% United Kingdom $5.5
While vinegar is a global product, its uses and variations vary considerably by market. From North America's household staple white vinegar, to
rice vinegar in Asia, to Italy's balsamic or Britain's malt vinegar, the similarities and differences between vinegar varieties can act as both
barriers and areas of opportunity for Canadian producers in the world vinegar market.

Europe

• The European marketplace is home to some of the finest traditional vinegars worldwide; therefore, marketing innovative vinegar varieties
of the best quality Canadian ingredients may be most successful in European countries.
• Due to its renowned products and long history of vinegar consumption, Europe holds six out of the world's ten largest vinegar markets,
with four of which also ranking as the largest vinegar exporters worldwide (Greece also made the top exporters list with eighth place in
2006). These figures position Europe a key target market for premium Canadian vinegar products; however, Canada faces considerable
competition in the region from European countries, especially European Union (EU) states, which primarily source imports from one
another.
• However, the EU maintains a high level of protectionism for many of its regional foodstuffs through a quality system regulation program,
making it increasingly challenging for Canadian products to enter the European marketplace. Currently, such regulations only impact
Canadian balsamic vinegar producers (additional information is provided under Balsamic Vinegar in the Vinegar Varieties section of this
report). There is also an EU protected designation for organic products. This organic regulation will also impact Canadian vinegar
producers looking to sell organic products in Europe, as they will have to comply with EU organic certification standards. Detailed
information on the EU's organic designation and its regulations can be found at ec.europa.eu/agriculture/qual/organic/index_en.htm.
• Specific vinegar varieties of interest may include organic, blueberry, cranberry, Saskatoon berry, Icewine, maple syrup, and dessert
products.
• High-end European foodservice and hospitality sectors may hold the most opportunity for Canadian vinegar products.

North America

• The United States vinegar market is fairly similar to that in Canada, and consumer tastes and vinegar uses are comparable.
• Not surprisingly, Italy remains the largest source for imported vinegar in the United States, a total of $62.4 million in 2006. Spain ($7.9
million), France ($4.4 million), Japan ($4 million) and China ($2.4 million) follow Italy as major vinegar suppliers to the United States,
just ahead of Canada with $1.7 million in 2006. Canadian vinegar producers, therefore have to compete with high quality European
varieties and inexpensive Asian products in the American marketplace.
 • Introducing vinegar made with famous top-quality Canadian products, as well as innovative vinegar varieties (e.g. apple, Saskatoon
berry, pumpkin, Icewine) may be well received in the American marketplace.
• The gourmet foodservice and retail grocery industries may hold areas of opportunity for Canadian vinegar exporters.

Asia Pacific

• Countries in the Asia Pacific region vary greatly in levels of development, wealth, and consumer markets; therefore, vinegar opportunities
for Canadian products significantly differ by market.
• In Asian countries, such as China and Japan, rice vinegars are extremely popular and have been a part of local cuisine and culture for
many years. In fact, vinegar as a beverage has become increasingly popular in Japan and is enjoyed mixed with champagne, water or
milk. Such beverages along with health vinegar are increasingly being consumed for their nutritious properties. The Japanese market for
health vinegar was estimated at $559.6 million in 2005, and is projected to grow 15% annually.
• The Chinese market remains highly saturated with inexpensive vinegar varieties, making it difficult for Canadian producers' high quality
products to compete in the marketplace. Therefore, potential opportunities for Canadian exporters may only lie in offering unique,
gourmet vinegar varieties to upper class consumer segments in wealthy, urban areas of China, including Hong Kong.
• Particular gourmet vinegar varieties that may well received in China and other Asian markets include maple, Icewine, Saskatoon berry,
pumpkin, and dessert vinegar.
• Given the huge popularity of Canadian Icewine in Asian markets, Icewine vinegar may prove a particularly successful niche product
amongst consumers.
• The Asia Pacific region primarily relies on China and Japan (i.e. the sixth and seventh largest vinegar exporters worldwide respectively)
for its bulk of vinegar imports, closely followed by several European countries and the United States. In fact, Hong Kong, Singapore,
Taiwan, South Korea, Australia and India all meet their import vinegar requirements from many of such countries. Therefore, Canadian
vinegar exporters will likely be competing alongside premium European brands and regional leaders with popular inexpensive products.
• Top vinegar exporters supplying the Japanese market in 2006 included Italy ($4.6 million), China ($3.6 million), France ($1.5 million),
the United States ($426,491), and Spain ($404,709). Japan's affluent consumer market's tastes are reflected in its choice of key vinegar
import sources, i.e. high quality products from top European vinegar exporting countries through to large imports from China, likely
being inexpensive traditional Chinese rice wine—a long-time staple of the region.
• In contrast to other Asian markets, sugar cane vinegar is popular in India, the Philippines, and Indonesia. Opportunities in such markets
may lie in vinegar products made with quality Canadian goods (e.g. wheat, berries/fruit, honey, herbs).
• Popular vinegar varieties in Australia include balsamic, red and white wine, cider and malt.
Focus on China

Local Varieties/Pricing

The vinegar market in China remains highly saturated with inexpensive vinegar varieties that are widely used in cooking, during mealtime, as
well as for their health and weight loss benefits. Popular varieties include rice, garlic flavoured, and red vinegar which range from $0.07 to $0.87
per bottle. Cider and fruit infused vinegar health drinks are also popular amongst women who consume the beverages for their health properties.
Such beverages sell for approximately $1.75 for a 500 ml bottle. However, due to the low average price point for vinegar in China, Canadian
exporters may find it challenging to enter the market with premium products that command higher selling prices.

Consumption Trends

The Chinese vinegar market has seen continued growth over the past few years, increasing from $29.3 million in 2003 and $34.4 million in
2004, to reach $46.1 million in 2005, or 57% growth overall during the period. Approximately 2.5 million tonnes of vinegar or 4.2 lb per capita is
consumed annually in China. Markets that hold higher per capita vinegar consumption levels than the national average include Taiyuan city,
Shanxi province at more than five times the country average; and the municipality of Tianjin (close to Beijing) at roughly 1.5 times the national
average.

Local Market

The largest areas for vinegar sales across China in 2005 included the Inner Mongolian region at $85.9 million or $4.04 per capita, the
municipality of Shanghai at $79.3 million or $5 per capita, Guangdong province at $68.6 million or $0.84 per capita, Guizhou province at $66.4
million or $2 per capita, and Shandong province at $58 million or $0.70 per capita. Three of such areas (i.e. the municipality of Shanghai,
Guangdong province and Shandong province) are found in the more urbanized and wealthier southeastern and coastal regions of China, where
GDP per capita and consumer incomes are among the highest in the country.

China's principal vinegar import sources, Japan (52%), Germany (10.3%), Italy (10%), the United States (8%) and Taiwan (7.7%), represent
Canada's top competition in the Chinese vinegar market. Furthermore, Hong Kong remains highly saturated with vinegar from Japan and Taiwan.
Canada began exporting vinegar to China in 2005, a total of $7,227 or 22,762 lb for an average of $0.06 per 100 ml. Canada currently accounts
for 0.26% of China's total vinegar imports.
Latin America

• Herb-infused and fruit flavoured vinegars are extremely popular in the Latin American region; therefore, Canadian vinegars made from
well known domestic goods (e.g. apples, berries, herbs, honey) may prove most popular amongst consumers.
• Balsamic, red and white wine vinegars are most consumed in the Brazilian marketplace. The degree of brand loyalty and/or premium
Brazilian consumers are willing to pay for a particular vinegar variety depend on how strong a product's brand and advertising are over
country of origin. Italy, Portugal and Spain have heavily invested in country-wide branding initiatives and raising their products' image
through various culinary events and sampling opportunities. United States-based Heinz has also capitalized on its strong marketing
activities in the country.
• Markets vary by preference but there are similarities. For instance, popular vinegar flavours in Uruguay include balsamic, red and white
wine, cider, fruit (e.g. raspberry, peach, orange) and herb infused varieties, which are similar to preferences continent wide.
• Mexico and Brazil remain the largest markets for vinegar in Latin America having imported $2.7 million and $1.6 million respectively in
2006. Top competition in the Mexican vinegar market in 2006 were products from Italy ($1.2 million), the United States ($980,800),
Spain ($343,000), France (174,400) and Germany ($29,600). Top vinegar imports into Brazil in the same year included varieties from
Italy ($1.4 million), Spain ($76,100), Portugal ($58,100), France ($49,300) and Chile ($17,600).

Middle East and Africa

• Blueberry and date vinegar are popular in the Middle East; therefore, introducing infused or other fruit flavoured vinegars to the region
may also prove successful.
• Specific varieties that may be well received include those products that Canada is renowned for (e.g. apple, cranberry, raspberry, honey,
potato).

Benchmark of Popular Vinegar Varieties by Market

Region Country Variety Price (CAD$)/ 100 ml

Cider
Balsamic
North America United States $0.11 - $15.18
Red wine
White wine
 Rice
Garlic
Asia Pacific China $0.07 - $0.87
Red
Cider
Cider
Balsamic
Australia Red wine $0.18 - $2.48
White wine
Malt
Balsamic
Latin America Brazil Red wine $0.05 - $2.99
White wine
Balsamic
Red wine
White wine
Uruguay $0.12 - $2.98
Cider
Fruit & herb
infused

Global Vinegar Market Statistics

The Vinegar Institute (www.versatilevinegar.org/markettrends.html) provides vinegar sales information for various world markets. The following
information is referenced from charts and statistics found on the organisation's website, which are sourced from Mintel Custom Solutions Data.
Vinegar categories referenced in the analysis include balsamic, cider, rice, white distilled, red wine, and other vinegar varieties (i.e. infused or
flavoured products). Such flavoured vinegars include but are not limited to apple, cranberry, fig, grape, herbs, honey, lemon, raspberry, and
shallot flavours.

North American Market

• Vinegar introductions in the North American market between 2002 and 2005 were dominated by balsamic vinegar, which showed the
most growth in 2002, accounting for approximately 40 products that entered the market.
• In 2005, balsamic vinegar made up 45% of all vinegar introductions to the market, while other vinegar varieties (i.e. flavoured) followed
at 25%.
Global Vinegar Introductions

• Other vinegar varieties (i.e. flavoured) and balsamic vinegar accounted for the largest vinegar introductions worldwide between 2002 and
2005, with the greatest growth taking place in 2005 at approximately 105 and 100 product introductions respectively.
• Red wine vinegar introductions also experienced considerable growth in 2005 with roughly 50 product introductions, a 100% increase
over 2004 levels.
• Between 2002 and 2005, all vinegar category introductions increased globally, with the exception of white distilled vinegar products
which saw a slight decrease to about eight product entries from nine in 2004.

Global Vinegar Introductions by Region

Global vinegar introductions by region between 2002 and 2005 revealed Europe as the top vinegar market, followed by North America, Asia
Pacific, Latin America and the Middle East and Africa.

• 2005 represented a very strong year for vinegar introductions across all regions, with the exception of the Middle East and Africa which
saw a modest increase to seven product introductions over the 2004 total of five entries.
• Latin America and Europe experienced particularly strong growth between 2004 and 2005, seeing 407% and 60% increases in product
introductions over the 2004 levels of 14 and 56 entries respectively.
• Latin America saw the largest growth over the 2002 to 2005 review period, with 57 new vinegar product introductions by 2005 up from
just one in 2002, a 5600% increase overall.

Global Vinegar Market Shares by Type (2005)

• Other vinegar (i.e. infused or flavoured) (36%)

• Balsamic vinegar (34%)
• Red wine vinegar (17%)
• Cider vinegar (7%)
• Rice vinegar (4%)
 • White vinegar (2%)

Top Ten Global Vinegar Flavours (2005)

• Apple (27%)
• Garlic (10%)
• Herb (10%)
• Raspberry (10%)
• Fig (8%)
• Lemon (8%)
• Cranberry (7%)
• Honey (7%)
• Shallot (7%)
• Grape (6%)

Top Five Vinegar Flavours by Region (2005)*

Europe North America Asia Pacific Latin America Middle East & Africa
Shallot Cranberry Apple Apple Apple
Apple Garlic Honey Herbs Blueberry
Tomato Lemon Grape Tarragon Fig
Fig Pepper Aloe Vera Basil
Garlic Raspberry Champagne Fruit

*In order of popularity

Apple vinegar is the most popular flavour in the Asian Pacific, Latin American and Middle Eastern & African regions, and is the second most
preferred flavour in the dominant European market.
Vinegar Varieties

Typical retail varieties of vinegar include balsamic, cider, infused or flavoured, malt, rice, white distilled, and white and red wine. Flavoured
vinegars are particularly growing in popularity, as such specialty products are seasoned to add a unique taste when added to foods. Herbal
specialty vinegars are made from wine or white distilled vinegar, with popular flavourings including garlic, basil and tarragon. Specialty fruit
vinegars are also made from wine or white distilled vinegar, and can be produced with fruit or fruit juice to create a sweet-and-sour taste. Apple
and raspberry flavoured vinegars remain widely popular, as does maple vinegar which is indigenous to Canada.

Balsamic Vinegar

Although widely unknown to many consumers, there are two types of balsamic vinegar: traditional balsamic vinegar, which is a very high-quality
product produced in Modena and Reggio Emilia, Italy with limited availability (that holds a distinction similar to the difference between sparkling
wine and champagne); and non-traditional or commercial balsamic vinegar.

• Traditional balsamic vinegar, which can take hundreds of years to produce and can sell for hundreds of dollars a bottle, is treated with a
reverence reserved for the finest wines.
• Traditional balsamic vinegar can also be blended with various aged vinegars to reduce costs.
• Non-traditional balsamic vinegar is typically a blend of various ages of balsamic. This commercial variation can contain very high-end
balsamic and is treated as a more economical alternative to the traditional version.
• Commercial balsamic vinegar is not subject to the same geographic and technological restrictions of its traditional counterpart. Currently
in North America, there are no restrictions on the use of the term "balsamic vinegar", and products vary from being of very high-quality
to something purists would describe as unrecognizable.
• Regardless, commercial products remain of high-quality and are suitable for use in marinades, vinaigrette dressings and sauces.
• However, the EU continues to safeguard its traditional balsamic vinegars from international competition through its quality system
regulations. Established in 1992, the program includes protected designation of origin (PDO), protected geographical indication (PGI) and
traditional specialty guaranteed (TSG) laws and certification to protect the names of traditional and regional European foods. Balsamic
vinegar, for example, can only be labelled and sold as such in the EU if it is processed according to traditional production practices and
made in Modena or Reggio Emilia, Italy. Raw ingredients must also be sourced and labelled as from either of these areas.
• This protectionism program applies to a number of products across all food and beverage categories; a complete listing of such protected
foodstuffs can be found on the European Commission's website at ec.europa.eu/agriculture/foodqual/quali1_en.htm.
• Although such regulation does not entirely stretch to markets outside the EU, there are some bilateral agreements in place with non-EU
countries that protect certain European products abroad (e.g. 2003 Canadian-EU agreement that protects the names of wines and
spirits). These geographic indications, however, make it considerably difficult for Canadian balsamic vinegar producers to export their
 product to the EU. Therefore, Canadian exporters are highly encouraged to contact Canadian Embassies, as well as local importers and
distributors in international markets of interest prior to export for assistance in working through such regulations.

Cider Vinegar

• Cider vinegar is produced from the double fermentation of the juice of apples.
• This vinegar variety is often sold unfiltered with a brownish-yellow appearance.
• Cider vinegar is commonly used in cooking and for medicinal purposes.

Infused or Flavoured Vinegar

• Infused vinegars are produced by adding flavourings (e.g. fruit, garlic, herbs, etc.) to cider, white distilled and wine vinegars.
• Infusing vinegars with flavours adds spicy and tangy qualities to the product, which can then be used as vinaigrettes, marinades, or in
sauces for meat.

Malt Vinegar

• Malt vinegar is made by malting barley, and is typically light brown in colour.
• Malt vinegar has a distinct flavour that is most commonly used in England as a famous condiment for fish and chips.
• Malt vinegar is typically used for pickling, especially walnut pickles.

Rice Vinegar

• Rice vinegar is traditionally an Asian product, and is widely used in the preparation of Asian dishes, particularly sushi.
 • Like its balsamic counterpart, rice vinegar has a renowned variety commonly known as "black rice vinegar". This is also an aged product
that is blended with various ages of rice vinegar, which determine its price.
• Due to its mild flavour, rice vinegar can be complimented with herbs, spices and fruit flavouring.
• Rice vinegar can also be used over salads, fruit and vegetables, as well as in stir-fries.

>White Distilled Vinegar

• White vinegar is made by oxidizing a distilled alcohol, or by producing an acetic acid and water solution.
• This vinegar variety is also commonly made from grains (e.g. maize) and water.
• White vinegar is commonly used in cooking, as a cleaning agent and for medicinal purposes.

White and Red Wine Vinegar

• White wine vinegar has a distinct acidic taste and is clear or pale gold in appearance, while that of red wine vinegar is ruby in colour.
• Much like wine, wine vinegars range in quality depending on the duration of maturity in wood barrels, which often takes up to two years
for a smooth flavour.
• Wine vinegars typically taste less acidic than their white distilled and cider counterparts.
• White wine vinegar can add flavour to fruit, sauces, glazes, fish, and poultry, while red wine vinegar can be used in salad dressings and
red meat marinades.
• White wine vinegar is a healthy alternative to heavy cream or butter, and reduces the need for salt in many meals.

History

Our Western knowledge of vinegar originates from the old French meaning vin aigre, or "sour wine", and its general principle involves fermenting
natural sugars to alcohol, followed by secondary fermentation to produce vinegar. Produced from the oxidation of ethanol in wine, cider, beer and
fermented fruit juice, most table vinegar's acetic acid concentration ranges from four to eight per cent. Vinegar is a source of vitamin B-1,
riboflavin, as well as mineral salts that provide its distinct flavour.
Dating back to 5,000 BC, vinegar was first used by the Babylonians as a condiment and preservative. Its use continued as Romans consumed
vinegar as a beverage, and Greeks used it to pickle meat and vegetables. The healing properties of vinegar have also been referenced in the
bible and the work of Hippocrates. By 2,000 BC, vinegar production became commercialized and served to treat disease and wounds in such
historical events as the American Civil War and World War I. Today, vinegar is used as a staple culinary ingredient, as well as a cleaning,
cosmetic and medical agent.

Various Uses and Health Benefits

Vinegar has many culinary uses. It is often flavoured with herbs, spices and other ingredients to produce vinaigrettes which are very popular
among North American consumers, and in other world markets, where they are commonly used as sauces, marinades and salad dressings.
Vinegar can stand alone as a condiment, is often used in the process of pickling vegetables, and included as an ingredient in mustard, ketchup
and mayonnaise.

Research suggests that vinegar is one of the healthiest foods in the world. Vinegar is proven to reduce fever, release several toxic substances
from the body, aid in diet control, and be a disinfectant. In fact, consuming vinegar with meals increases the feeling of fullness, therefore
reducing the amount of food consumed. Even a single application of vinegar has shown to reduce food intake for an entire day. Most vinegar
does not contain any fat and has less than three calories per tablespoon. However, specialty vinegars made with additional ingredients may
contain more calories.

Global Opportunities for Canadian Vinegar Exporters

Canada annually exports an average $2 million in vinegar varieties to over 50 countries worldwide. Vinegar exports totalled just over $2 million
in 2006, a slight $8,000 decrease from 2005 values. Overall, Canada's vinegar exports have declined in recent years, from its $2.4 million total
in 2003, mainly due to decreases in exports to its largest market, the United States. This downward trend can be partly attributed to the large
drop in grain consumption in the United States, as low-carbohydrate diets remain quite popular and vinegar usage often goes hand-in-hand (e.g.
in pasta sauces, dips for bread, etc.) with such foods. The United States accounted for 86% of Canada's vinegar exports in 2006, followed by
Cuba (5%), Taiwan (1.6%), Colombia (1.1%), and St. Vincent and the Grenadines (0.9%).

Canada's Global Vinegar Trade (2006)

Canada's Total Trade $24.107 million
Exports $2.045 million
Imports $22.062 million
Trade balance ($20.017 million)

Canada's Top 5 Vinegar Export Markets (2006)

United States $2,045,608

Cuba $102,232
Taiwan $33,264
Colombia $22,497
St. Vincent and the Grenadines $18,428

Although the United States remains Canada's greatest market for vinegar exports, other international markets and regions hold considerable
potential for new, innovative, and high-quality Canadian vinegar products. However, careful consideration of marketing and product positioning
needs to be made for each market of entry, as vinegar's popularity, product variety, and traditional uses vary by region. Even so, opportunities
clearly lie in offering premium products that can influence new and existing flavours, uses, and varieties in innovative ways, or compliment
regional delicacies and popular dishes. Potential product and marketing opportunities that Canadian vinegar producers and exporters can
capitalize on are outlined in the following sections.

Quality, Canadian Ingredients

Offering high-quality vinegars made from agriculture and agri-food products that Canada is renowned for worldwide, e.g. berries (blueberry,
cranberry, raspberry, and blackberry), apples, potatoes, wheat, beer and honey, may prove successful in entering and/or expanding Canadian
vinegar business in foreign markets.
Innovative Varieties, Native to Canada

Introducing new, innovative vinegar varieties to foreign markets (e.g. Saskatoon berry, Icewine, organic, pumpkin, maple syrup, and dessert
vinegars, etc.) that act as niche products to existing vinegar offerings in such countries may also assist Canadian vinegar producers with
expanding their business overseas.

Marketing Health Properties/Benefits of Vinegar

Canadian producers can also benefit from the global trend toward healthier living, by leveraging the marketable health properties and benefits of
vinegar, an attractive feature for health conscious consumers.

Promoting such marketable features and vinegar varieties in new ways to international markets will be key to successful market entry and
increasing market share. For example, since vinegar beverages are currently popular in China and Japan, marketing yet another vinegar drink to
the market may prove unsuccessful. However, introduction of an innovative product variety or use, such as Icewine or dessert vinegar (which
would capitalize on the popularity of Canadian Icewine and the current vinegar beverage trend), may be popular with affluent consumer
segments in such Asian markets and benefit from first-mover advantage.

Vehicles/Venues for Foreign Market Entry

Canadian vinegar producers looking to enter foreign markets and/or expand their current exporting business should consult the Agri-Food Trade
Service website for listings of trade shows and events taking place in their area and in foreign markets of interest at www.ats.agr.gc.ca. Industry
events worth noting include foodservice, retail food, specialty food, hospitality, and gift shows. Events showcasing Mediterranean, European,
Western and Asian cuisine may also be of interest to vinegar producers, depending on their intended target markets.

Exporters should also note that the high-end restaurant industries in international markets may be excellent points of entry for Canadian vinegar
products, as many Canadian exporters have found success through these sectors. International gourmet culinary shows provide great forums for
exporters to showcase their products to foreign buyers. This is also an excellent arena for determining whether a particular variety suits a
market or compliments local fare, a very important step in developing a market.
Vinegar Users

Research conducted by The Vinegar Institute has shown that vinegar users characteristically fall into one of three categories based on their usage and
attitudes towards vinegar. Read below to determine which category you fall into.

Virgins (over 33 million Americans fall into this group)

Virgins are simply unaware of white distilled vinegar’s various uses and have not purchased or used white distilled vinegar in the last year. It’s possible
they may know the following uses, but have never actually tried them:

• Spray on mirrors for a streak-free reflection

• Clean coffee makers/tea kettles

Visitors (158 million Americans are considered visitors)

Visitors purchase white distilled vinegar two times a year or less and use it no more than once every two to three months and are open to experimenting
with various uses once they hear about them.

• Spray on kitchen counters to keep ants away

• Freshen carpets
• Wash walls, woodwork & blinds
• Unclog drains
• Clean garbage disposals

Visionaries (over 31 million Americans are visionaries)

Visionaries are in the know about white distilled vinegar’s various uses and apply the product for a variety of uses; they may even create their own new
uses. Visionaries purchase white distilled vinegar three or more times a year and use it at least once a month. In addition to the uses listed above, they
also keep vinegar on hand for the following uses:
 • Clean kitchen surfaces exposed to raw meat
• Clean bathroom surfaces
• Clean chrome fixtures and sinks
• Remove lime and hard water deposits from faucets/showerheads
• Get rid of unwanted grass
• Freshen air and remove odors
• Remove glass water rings on wood furniture
• Soften a hard paint brush
• Unclog a steam iron

Source: Synovate White Distilled Vinegar Attitude and Usage Study, September 2004 and February 2005

General Trends

According to The Nielsen Company, vinegar sales were up 1.6% in 2006 with specialty vinegars leading the way. Specialty vinegars hold 45% of the
dollar share of vinegar and 12% of the unit volume. The remaining 88% of unit volume is dominated by private label white distilled and apple cider
vinegars.

Other trends are:

• Balsamic and red wine vinegars are leaders in the specialty category
• When compared to 2005, the organic vinegar category grew 43.5% in 2006.
• The natural vinegar category grew 1.2% in 2006 when compared to 2005.

Source: 2006 Nielsen Data Presented at 2007 VI Annual Meeting

Supermarket Sales of All Types of Bottled Vinegar in Millions of Dollars

 Source: Yearly July or September issue of Progressive Grocer Magazine (part of
Bill Communications in New York) that tracks sales of supermarkets having sales
of $2 million or more. Progressive Grocer revised base dollar sales volumes in
1999, but the percent changes were not affected. 1999 sales of vinegar were
not broken out by Progressive Grocer.
Vinegar Introductions
Source: Mintel Custom Solutions Data Presented at 2006 VI Annual Meeting
Source: Mintel Custom Solutions Data Presented at 2006 VI Annual Meeting
 Source: Mintel Custom Solutions Data Presented at 2006 VI Annual Meeting

Vinegar Unit Shares by Types

Source: Mintel Custom Solutions Data Presented at 2006 VI Annual Meeting
Source: Mintel Custom Solutions Data Presented at 2006 VI Annual Meeting
 Source: Mintel Custom Solutions Data Presented at 2006 VI Annual Meeting

According to Mintel Custom Solutions, apple dominated vinegar flavors in 2005, with an increase of 90% from 2004. All other flavors also saw significant
increases between 2004 and 2005.
Source: Mintel Custom Solutions Data Presented at 2006 VI Annual Meeting
 Source: Mintel Custom Solutions Data Presented at 2006 VI Annual Meeting

According to Mintel Custom Solutions, overall non-food introductions containing vinegar increased 131% between 2004 and 2005. Household product
introductions accounted for over 50% of non-food introductions containing vinegar in the sub-category in 2005, which was a 100% increase from 2004.

Mintel Custom Solutions also reports that non-food introductions containing vinegar increased significantly in Asia Pacific and Europe between 2004 and
2005, accounting for 86% of activity in 2005.
Number of Vinegar Products on the Average Grocery Shelf

The number of vinegar items on the average Grocery store shelf in 1998 was 29 - an all time high providing more variety to the consumer – compared to
27 in 1994.

Source: Information Resources, Inc. (Based on data from 1994 - 1998)

Vinegar Purchase Behavior

• According to ACNielsen, 53 million households buy vinegar and spend $4.07 per household on the category.
• Vinegar sales are somewhat seasonal, with a peak in the summer months and a secondary peak in April most likely due to the Easter holiday and
the use of vinegar in dying Easter eggs.
• Vinegar buyers like the 16/17 ounce size the best with the 32/34 ounce size as the second favorite.

Sources: Progressive Grocer, September 2001 and 2002; 2002 ACNielsen Data Presented at 2003 VI Annual Meeting

Vinegar Household Penetration

In a 2007 report, The Nielsen Company noted that White Distilled Vinegar has 68% of the unit share. Cider vinegar accounts for 20% and specialty
vinegars account for 12%. Of the specialty vinegar category, 39% is comprised of red wine, 30% balsamic, 13% all other wine, 12% rice vinegar and
6% all other specialty. According to Information Resources Inc. (IRI) information from 1994 – 1998, of the 48% of households that purchased vinegar,
5% purchased the growing Balsamic segment.
 Sources: Information Resources, Inc. (Based on data from 1994 - 1998); 2002
ACNielsen Data Presented at 2003 VI Annual Meeting; 2006 Nielsen Data Presented at
2007 VI Annual Meeting
Where Do Consumers Buy Vinegar?

According The Nielsen Company, traditional grocery has lost 8 share points in 4 years with supercenters and club stores continuing to attract food
shoppers. The chart below provides insight into where vinegar is purchased in various retail outlets.

Outlet % Vinegar Dollar Sales by Outlet Type

Large Grocery Stores 65.9
Supercenters 13
Warehouse Clubs 9.1
Mass Merchandisers 2
Other* 10
Source: 2005 Nielsen Data Presented at 2007 VI Annual Meeting

Vinegar Category Volume Sales by Region of the U.S.

"More vinegar is sold in the Northeast, Southeast and the Great Lakes area compared to the remainder of the U.S."
Among white distilled vinegar users, the South has the most heavy users (48%) and the West has the most non-users (20%). Heavy users use vinegar
at least once per month.

Source: Information Resources, Inc. (Based on data from 1994 – 1998); TeleNation, February 20 –22, 2004

Vinegar As An Ingredient in Other Product Categories

Although bottled vinegar sold at retail makes up a large part of the vinegar market, vinegar is also a key ingredient in a number of familiar products.
Vinegar adds flavor and zip to salad dressings, sauces, marinades, ketchup, mustard, pickles, tomato products and more. Next time you’re at the store,
check out the ingredient statement on some of your favorite products -- chances are vinegar makes the list.

A summary of the disposition by food category of the vinegar produced in the U.S. appears below.

Bottled 33.7%
Dressings & Sauces 16.8%
Pickles 14.8%
Mustard 11.5%
Other Processed Foods 10.5%
Tomato Products 8.5%
Other 4.2%
Source: Vinegar Institute Production Survey, 1989