12 March 2007 Companion Brewery “A Sign of Good Taste”

12 March 2007

Companion Brewery“A Sign of Good Taste”

| 2Companion Brewery Pitch Deck March 2007

Exploiting 3 Trends In UK Beer Market

Exploding Specialty & Craft Beer Growth Changing Perception & Consumption

Premium, craft beer in the UK …

• Specialty Beer CAGR 27.2% 2000-2005

• Craft Beer1 CAGR 11.3% 2000-2005

• Tesco: Premium beer sales up 20% in 2004

Consumed and Paired with Food…

• Beer is being consumed with food more often

• Retailers, hiring beer “pairing experts” (Tesco)

• Food Pairings on menus (All-Bar-One, White Horse)

Growing Acceptance as a Premium Product…

• Growing menu selections

• Increasing willingness-to-pay for premium beer

Overcapacity creates opportunities for low capital, virtual operations (Virgin Model)

1 2

3

Pat


Companion Brewing Co. – How We’re Different

Core Ideology - Core Values

Passion Taste Quality Individuality

Big Hairy Audacious Goal

Replace wine at meal times

Core purpose

Sharing our passion for beer & food

Vivid description

“Create handcrafted, specialty beers brewed with passion that are designed to

make every meal more special to establish Companion as the beverage of choice at

meal time”

Mac


Companion Brewing Co. Brand

FACTS AND SYMBOLS

BRAND PERSONALITY

Sharing passion, craftsmanship &

good taste

Intense

Distinctive

Intelligent

Discerning

Independent

In Control

Unique

Knowledgeable

Interesting

HOW I WOULDDESCRIBE THE PRODUCT

HOW THE BRANDMAKES ME FEEL

HOW THE BRANDMAKES ME LOOK

WHAT THE PRODUCTDOES FOR ME

Memorable Meals

Sensory frisson

Facilitates social bonding

Striking & bold

Rewarding

Confident

Smart

Alluring

Inquisitive

Charismatic

Authoritative

Hand crafted Chef / master brewer relationship

Emotional

Rational

Symbolic imagery

Mac


Our Product: A Sign of Good Taste

• Bottle (500 ml) & Keg (50 L) & Specially designed Companion glassware

Pale AleWeiss Bier

Porter

Mac


Promotion And Communications Plan – Stage 1&2

Stage 1

30% awareness amongst on trade target

Secure product ranging in 75 outlets

Key objectives

Achieve 0.5% trial amongst A/B demographic

Extend distribution by 100% to 150 outlets

Strategy

Focus on influencing key industry journalists & figures

Build personal relationships

Create awareness amongst key A/B target in SW England

Gain endorsement by key industry figures

Build association with leading culinary events

Stage 2

Mac


Outsource To The Greatest Degree Possible

DevelopmentProduction

&Packaging

Placement &Distribution

Supply Chain Step:

Key Activities

• Celebrity Chef• Brewmaster• Develop Flavor Map

Stages• 1: On Trade, Local Distributor• 2: Specialty Off Trade, expand

regionally • 3: National Off Trade

• Select Contract Brewer• Pilot Production• Scale Production

• Interim Update (bottle mould)

Ean


Development

Barry


Contract Brewing Execution, test runs, quality control Benefit: No facilities investment State of the art bottling lines ( hygiene) Benefit: No line investment Costs:

£10.56/keg* £5.45/case

*assumes returnable keg


&Packaging


Contract Brewer Size [K bbl]

Carlserg Tetley Large >1,000

Coors Brewers

Interbrew

Wells & Young’s Medium

100 – 1,000Federation Brewery

Wolverhampton

Greene King

Caine’s

Robinson’s Brewery

Meantime Small

25 – 100Hook Norton Brewery

Wychwood Brewery

Badge Brewery

Preliminary Interviews and/or Pricing ProvidedEan


Placement & Distribution: 3 Stages


&Packaging


Independent Pubs & Restaurants0-3,000 hL•Local Distribution•Target ~75 establishments•On-trade•Relationships•Tax Credits

Regional Specialty Grocers3,000-10,000 hL•2 midsize Specialty grocers•Off-trade•Proven market•Unique product offering

0-2 Years 2-4 Years 5+ Years

National Grocers 10,000+ hL•National Distribution w/wholesaler•1 National Grocer (Sainsbury’s)•Proven market and distribution

Barry


Placement & Distribution: Virtual Operations


&Packaging


Contract Brewer

PalletteShipper

WholesaleDistributor

On Trade

Off Trade

+

Barry


Placement & Distribution: Target Market


&Packaging


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6263

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7374

1st Tier CountiesIncome/ Capita [£K] Pubs [#]

01 – Inner London 65 1400

02 – Outer London 48 3370

44 – Surrey 41 1086

11 – Berkshire 33 441

12 – Buckinghamshire 33 349

39 – Oxfordshire 33 660

24 – Gloucestershire 29 218

41 – Somerset 29 418

47 – Wiltshire 29 376

Excluded (Geographic Distance)

03 – Greater Manchester 33 409

22 – East Sussex 41 468

46 – West Sussex 41 599

Selection Factors:• Income/Capita• Geographic Proximity• Independent Breweries• Gastro-Pubs

Barry


Financial InfoYear 10 Year 5

NPV £844 £286

IRR 49% 24%Income Statement (000's £) 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

SALES £294.4 £629.4 £1,537.6 £1,956.7 £2,807.9 £3,309.8 £3,901.4 £4,598.8 £5,420.8 £6,389.7COGS -£120.4 -£274.5 -£616.5 -£820.8 -£1,149.1 -£1,321.5 -£1,519.7 -£1,747.7 -£2,009.8 -£2,311.3

Gross Profit £174.0 £354.9 £921.1 £1,135.9 £1,658.7 £1,988.3 £2,381.7 £2,851.1 £3,411.0 £4,078.5

Gross Profit Margin 59.1% 56.4% 59.9% 58.1% 59.1% 60.1% 61.0% 62.0% 62.9% 63.8%

OPERATING COSTS Before Extraordinary Items

-£162.1 -£308.2 -£821.1 -£1,044.6 -£1,566.2 -£1,854.1 -£2,193.7 -£2,629.9 -£3,103.2 -£3,661.6Operating Profit £11.9 £46.7 £100.0 £91.3 £92.6 £134.2 £188.0 £221.2 £307.8 £416.8

Operating Profit Margin 4.0% 7.4% 6.5% 4.7% 3.3% 4.1% 4.8% 4.8% 5.7% 6.5%

NON-RECURRING OPERATIONS

Product Development -£10.0 £0.0 £0.0 -£10.8 £0.0 £0.0 £0.0 £0.0 £0.0 £0.0Profit Before Tax £1.9 £46.7 £100.0 £80.6 £92.6 £134.2 £188.0 £221.2 £307.8 £416.8

TAXES -£0.4 -£8.9 -£19.0 -£15.3 -£17.6 -£25.5 -£35.7 -£42.0 -£58.5 -£79.2Net Income £1.5 £37.8 £81.0 £65.3 £75.0 £108.7 £152.2 £179.1 £249.3 £337.6

Net Income Margin 0.5% 6.0% 5.3% 3.3% 2.7% 3.3% 3.9% 3.9% 4.6% 5.3%

DIVIDENDS £0.0 £0.0 £0.0 £0.0 £0.0 £0.0 £0.0 £0.0 £0.0 £0.0RETAINTED EARNINGS £1.5 £37.8 £81.0 £65.3 £75.0 £108.7 £152.2 £179.1 £249.3 £337.6

Vlah - diddy


Key Risks

• Celebrity Chef

• Quality of Beer

• Market Acceptance (“Beer to Dine For”)

• Initial Penetration – Overconfidence

• “Mezzanine” Penetration – A lot of success depends on Waitrose (et. Al.)

• Regulatory Environment

Pat


…A Sign of Good Taste

Companion Brewery…

No One

| 16CONFIDENTIALCompanion Brewery Pitch Deck March 2007

Appendix

MARKET

PRODUCT, PROMOTION, PRICING

OPERATIONS

KEY ADVISORS


Case Study: Beer To Dine For

Launched by Green King in 2002• First beer to be marketed as “food beer” • Achieved 40% grocery distribution in 2005• Won 2004 design awards

Notable Features:• Large 750cl bottle, £2.99 each• Intended to be drunk with “spicy” foods, seafood• Citrus, light taste

Pat


Market: Share of Household Final Consumption Expenditure

| 19

Market: Alcohol in the UK in 2005

| 20

% Change in Socio-Economic Structure

-15% -10% -5% 0% 5% 10% 15% 20%

E

D

C2

C1

AB2005-2010

2000-2005

AB: 30%

C1: 25%

E: 30%

D: 30%

C2: 30%

Eat Out 1/Week +

Source: Mintel/National Statistics

Significant Growth in eating out by AB Segment

AV

| 21

Relative Beer Sales: Premium vs. Standard

Source: Euromonitor

Relative Beer Sales: Premium/Standard

80%

90%

100%

110%

2000 2001 2002 2003 2004 2005

Lag

er

25.0%

25.3%

25.7%

26.0%

Ale

Lager

Ale

5 Year CAGRLagerPrem: 5.7% Std: 0.5%AlePrem: -3.9%Std: -5.3%

AV

| 22

Weisbeer sales, proxy for specialty market, projected to grow by >100% from 2005 - 2010

Weissbier Sales Growth

0%

10%

20%

30%

40%

50%

60%

70%

80%

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

An

nu

al %

Ch

ang

e

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

Mar

ket

Sh

are

% Change

Market Share

Weissbier Sales2006: £321mm2010E: £582mm

Source: Euromonitor

AV

| 23

Growth in Pub Food/Total Beer Sales

Pub Food/Total Beer Sales

25%

30%

35%

40%

2000

2001

2002

2003

2004

2005

2006

E

2007

E

2008

E

2009

E

2010

E

Pub Food/BeerSales

Source: Mintel UK Eating Out Review, Euromonitor

AV

| 24

Craft and Specialty beer niche segments will experience explosive growth - 11.2% and 27.6% YoY resp.

Market Growth & Size

Speciality Beer27.6%

70*

Total Beer0.7%

5,966*

Premium3.6%

2,044*

Craft Beer11.2%

97*

-5%

0%

5%

10%

15%

20%

25%

30%

35%

*Millions of litres

5 Y

ear

CA

GR

AV


Appendix

MARKET


OPERATIONS

KEY ADVISORS

| 26

BRAND POSITIONING STATEMENT

For discerning food lovers who like to demonstrate their knowledge and good taste.

Companion Brewing company offers a range of distinctive, hand crafted beers that enhance the quality of your dining experience.

Unlike most beers, our product has been specially crafted by chefs and master brewers to be paired alongside your favourite foods.


Promotion And Communications Plan – Yrs 1&2

Stage 1

Achieve awareness amongst

key trade journalists & top 200

targeted restaurateurs of 30%

Secure product ranging in 75

outlets

Key objectives

Achieve trial amongst key A/B

demographic in key urban areas

of 0.5%

Extend distribution by 100% to

150 outlets

Stage 2

Strategy Activities

Focus on influencing industry

trade journalists & key figures

within restaurant industry

(chefs, critics, industry

associations, sommeliers)

Develop personal relationships

with key industry figureheads

as supporters / endorsers

Engage R&R Teamwork PR to

coordinate launch event & PR

strategy

Send launch packs to top 50 trade

and consumer “food” journalists

Targeted mailing to target accounts

Stage weekly food / beer dinners at

proposed restaurants

Make personal visits to key accounts

for sampling & education

Create awareness amongst key

A/B target segment in South

West England

Gain endorsement by key

industry figures (chefs, food

writers)

Build association with leading

food events

Targeted advertising & advertorials

in food review sections of broad

sheet newspapers

Seed product in TV cooking shows

and Cooking magazines (eg.

Delicious)

Create presence at major food

exhibitions and leading regional

food events


PACKAGING - INSPIRATION

• Will be distinctive and avoid a big brand look and feel

• Will convey authenticity and craftsmanship

• Inspiration drawn from “Brand Wheel” and non-typical, challenger brands

• Avoidance of Reds and Yellows – currently predominant in grocery SKU’s

Predominant Color – Grocery SKU’sPackaging and Brands that Inspire


inputs (editable)experimenters 10% folks willing to try our beer onceadorers 5% drink it once/weekloyalists 15% drink it once/fortnightregulars 15% drink it once/monthoccasionals 10% drink it once / 2 monthshated it 55% didn't drink it again% of all AB type drinkers in target area 50%bottle size 0.5 mlbottles consumed per sitting 1 bottlesliters per sitting 0.5

Basic Data (calculated)uk population 60209000total target area population 26655000total AB type drinkers in UK 22278000average income in target area 35,315.60£ average income outside of target area 15,187.96£ income ratio in/out of target area 2.325236333% of UK population in target area 44%total AB type drinkers in target area 11139000

Potential Consumtion by drinker type (calculated)drinker type # of drinkers liters/yr consumedexperimenters 1113900adorers 55695 1448070loyalists 167085 2172105regulars 167085 1002510occasionals 111390 334170

total drinkers of our beer --------------------> 501255 4956855 liters49569 hectaliters


Future Growth:Potential Niche Product Variations

Beer with Food Pairings Pork (Vienna lager)

Lamb (Scottish ale)

Vegetables / salads (brown ale, pilsner, Hefeweizen)

Desserts (sweet stout, Belgian kriek)

Post-meal palate cleansing (pilsner, hoppy IPA)

Health Gluten free (for coelics, vegetarians)

Low sugar / carbohydrate (diabetics, diet-conscience)

Specialty Alternative grains: sorghum, quinoa, buckwheat

Alternative packaging

Seasonal / holiday

Flavoured / Novelty Caffeine infused

Fruit

Chocolate

New product claims in ales and stouts, March 2005-March 2006 (GNPD/Mintel)

Pat


Appendix

MARKET


OPERATIONS

KEY ADVISORS


Development: Securing a Celebrity Chef


&Packaging


• Three UK Chefs have been targeted - Michelin-Star status, fame, and publically recognized affinity for beer

• Costs for involving the chef in a 1-2 day event will be approximately 5 to 10K according to celebritychefsUK.co.uk – similar cost for development tastings

• Ongoing usage of Chef’s name in promotions or packaging would need to be negotiated

• Sponsorship benefits include exclusive introductory usage of new CB beers at their restaurants, publicity, etc.

Heston Blumenthal

• Chef at Fat Duck: 3 Star Michelin, and “World’s Best Restaurant 2006” • Regular “Multi-Beer” Dinners• Passion for the “Science of Food” – Honorary Doctor of Science from University

of Reading Relationship with Oxford University

Raymond Blanc• Chef at Le Manoir aux Quaix Saison: 2 Star Michelin• In 2/2007 interview stated “Beer will be one of several big changes at Le Manoir”• Located in Oxfordshire

Michel Roux, Jr.

• Chef at Le Gavroche• Extensive Beer selection at Restaurant and regular “Beer Dinners”• Latest book “Matching Food and Wine” contains beer pairings for 12 of the

recipesSource: The Journal, Restaurant Magazine, Fatduck.co.uk, Interview notes, Sunday Times (London)

Barry


The Beer Flavor Wheel

Developed by:• Dr. Morten Meligaard.

Adopted by:• European Brewery Convention• Amer. Society of Brewing Chemistry• Master Brewers Assoc. of America Source: Beerandpoetry.com


&Packaging



Appendix

MARKET


OPERATIONS

KEY ADVISORS


Advisors and Interviewees

• Colin Stewart [Director], Wells and Young's Brewery

• Lars Huser [Brewer], Meantime Brewing

• David Arnold [Instructor], SBS

• Chris McKenna [Don], SBS

• Rick Greene [Brewer, CEO], Cotswold Brewing

• Andy Thompson [CEO], eCasks

• George Phillisherk [MD], Beer Academy

• Paul Hughs [Director], of Int.Center for Brewing and Distilling Heirot Watt Uni

• Rupert Ponsonby [Director], R&R Teamwork

• Christopher Shaw [Marketer], Diageo

Ean

12 March 2007 Companion Brewery “A Sign of Good Taste”

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