This information is confidential and was prepared by Mesoamerica solely for the use of our client;...

This information is confidential and was prepared by Mesoamerica solely for the use of our client; it is not to be relied on by any 3rd party without Mesoamerica's prior written consent.

Britt Travel Retail Development

Café Britt Coffee Corporation

Airports Conference of the Americas,St. Maarten, July 20 2008

071202-RJ-POAS-Avance #1 v02 2

• Executive Summary

• Strategy

• Operations

• Conclusions

Agenda


Café Britt: Leading travel retailer with sense of place in the Americas

• From coffee company to travel retailer with 51 stores in airports, hotels at key tourist locations (free-standing concepts)

• Britt owns and manufactures its key brands in premium coffees, chocolates and specialty items, designs most of its products

• Integration of physical and web channels

• Know-how in product and store creation and execution skills

• Unique travel retailer

• Sense of place systematically developed

Café Britt: Snapshot

•Founded: 1985

•First store opening: 2001

•International expansion: 2005 (Peru)

•Headquarters: Costa Rica

•Financial summary: $65M in revenues

•Markets: Current retail presence in Costa Rica, Peru, Chile, Curaçao and US Virgin Islands; Miami Airport stores opening soon; Foodservice/Wholesale and Direct Sales in 20 countries

•President & Founder: Steve Aronson

•CEO: Pablo E. Vargas

•Employees: ~860

071202-RJ-POAS-Avance #1 v02

Tienda Perú Perú (Internacional)

Aeropuerto Internacional Jorge Chávez, Perú


Aeropuerto Intl. Hato, CuraçaoAntillas Holandesas

Además:Aeropuerto Jorge Merino Benítez, Santiago, Chile


Tienda Tabacón Hot Springs Resort & SpaVolcán Arenal, La Fortuna, Costa Rica


Curaçao

Chile

Peru

Store-in-store concept

Stores in key tourism

locations in Costa Rica

Additional airport stores in

Costa Rica

Online store cafebritt.com

Mail order concept

Coffee tour and first store

Key Company milestones

…1985 ´ 88 ´ 90 ´ 92 ´ 94 ´ 96 ´ 98 ´00 ´ 02 ´ 04 ´ 06 2008…

First airport kiosk in Costa

Rica

“Jambo” Sauces

Coffee roastingPremium chocolate products


1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 20080

10

20

30

40

50

60

$70M

Coffee roasting

9

The Company has been growing at an average of ~50% per year over the last 20 years…

Café Britt has grown from a premium coffee roasting company to an international travel retailer and currently

operates 36 stores in the AmericasNote: Data as of June 30th of each year

Café Britt: Sales Evolution

Airport retail

Intl. retail


…and currently operates 51 stores

ChileNumber of stores: 8Retail space: 759 m²Retail concepts: AirportOperation highlights: The 5 stores are the Company’s most recent openings

US Virgin IslandsNumber of stores: 1Retail space: 180 m²Retail concepts: Hotel retailOperation highlights: Located in the Marriot Frenchman’s Reef Resort

CuraçaoNumber of stores: 3Retail space: 296 m²Retail concepts: Airport retailOperation highlights: Opened in mid-2006, the stores are extremely popular in a country historically lacking coffee culture.

PeruNumber of stores: 6Retail space: 602 m²Retail concepts: Airport, hotelOperation highlights: Coffee roasting facility

Costa RicaNumber of stores: 22 + 11Retail space: 1,651 m²Retail concepts: Airport, hotel, retailer, supermarket, free-standingOperation highlights: Headquarters, coffee roasting facility, chocolate manufacturing, coffee tour

Source: Café Britt’s Management

Stores Stores and production facilities


Basic value creation engines

Sense-of-place based retail concepts

• Retail concepts celebrate the local culture of its store locations and offer the customer unique products with a local touch

• A multi-disciplinary team tours the target country to understand the underlying themes that attract the traveler which are then incorporated into country-specific stores

• An innovation and development team creates products adapted for all locations and leads the brand portfolio development

Product development capacity

• Expanded “Britt” brand name into confectionery products, such as chocolate-covered coffee beans, nuts (macadamia, cashew, hazelnuts, etc) and fruits (guava, passion fruit, lucuma, etc.)

• The Company has developed brands in textiles (“Morpho”) and gourmet tropical sauces (“Jambo”)

• Constantly designing many non-branded products in the souvenir category


What Café Britt includes

12

• Britt has coffee and chocolate production facilities in Costa Rica and Peru, roasting more than 3 million lbs. of premium coffee and producing ~600,000 lbs. of confectionery per year

• Retail: Britt has 36 stores in airports, hotels, and as free-standing concepts in 5 countries, covering a total of 3,488 m²

• Foodservice/Wholesale channel: The Company serves more than 1,400 foodservice and wholesale clients

• Direct Channel: In FY 06-07 sales through the website and customer contact center accounted for ~9% of total sales

• Britt has distribution centers in Costa Rica, Peru, and Miami (the latter mainly for e-commerce sales) and a network of warehouses that serve the remaining countries

• Most non-airport retail stores are re-stocked on a weekly basis and airport stores on a daily basis

Production

DistributionChannels

Logistics

• The “Britt” brand is synonymous with top-quality gourmet coffee and chocolates whose reputation extends beyond the countries where Britt operates

• The Company is able to charge premium prices for the majority of its products

Brands


Financial Summary

Sales

Retail

Direct Marketing (e-commerce)

Foodservice/Wholesale

Coffee Tour

Total Sales

Revenue Growth

COGS

Gross Margin

% of Revenues

SG&A & other income (expense)

EBIT

% of RevenuesEBITDA% of Revenues

04/05

22.1

3.2

7.5

0.9

33.6

13.8

19.8

58.9%

14.7

5.1

15.2% 6.1

18.2%

05/06

27.8

4.0

9.1

1.0

41.9

24.5%

17.2

24.7

58.9%

18.5

6.2

14.8% 7.4

17.7%

06/07

33.5

4.6

10.7

0.9

49.7

18.7%

20.2

29.5

59.3%

22.9

6.6

13.2% 8.3

16.6%

07/08B

46.1

5.4

13.2

1.1

65.8

32.5%

26.4

39.4

59.9%

28.7

10.8

16.3% 12.6

19.1%

08/09F

60.1

6.5

16.3

1.1

84.0

27.6%

33.2

50.8

60.5%

35.7

15.1

18.0% 17.3

20.5%

Pro-Forma Grupo Café Britt (Consolidated)

Notes:

1. Fiscal year runs july 1st through June 30th

2. Fiscal year 07/08 includes 6 months actual (results have been above budget) + 6 months budget; fiscal year 08/09 is estimated based on stand-alone management case

3. Figures exlude green coffee business, gains and losses on future and options contracts and are adjusted for extraordinary expenses and management contract

US$ millions


Agenda


• Strategy

• Operations

• Conclusions


Our Business Model

• Multi-channel approach

• 5 countries

• Airports as platform for country rollout

• Retail concepts that celebrate local culture

• Unique products in country-specific stores

• “Britt” brand means top-quality, gourmet, coffee, chocolate products

• Premium prices

• New product and brand development15Bain-Template (revised)

Products BrandsW

eb

Sto

res

Who

lesa

le

Traveler


Sourcing

Green coffee

Handcrafts

Chocolates

Other (textiles, souvenirs, etc.)

Britt’s sources of competitive advantage

Distribution channels

Presence in 5 countries

3 different concepts- Retail- Direct Marketing- Foodservice/Wholesale

Key strengths

Intense interaction with coffee producers (training, advice) ensuring supply of high quality raw materials

Long-term relationships with local handcraft designers/suppliers tailoring product development to company needs

Offshore sourcing permits high margins in “Other” product categories

Key strengths

Strong in-house capabilities including product innovation, brand management and IT services with capacity to support aggressive growth targets

Control over production process and product quality

Experienced management team with international experience

Key strengths

Recognized “sense-of-place” concept, offering unique store design and quality destination merchandise

Retention of retail customers via “virtual store” offering worldwide delivery

Commercial alliances with foodservice clients, including managing and supervising licensed stores in supermarkets and hotels

Transformation

Product innovation

Brand management

Production

Support services


Agenda


• Strategy

• Operations

• Conclusions


• Operations

-Organizational Structure

-Country Profiles

-Products & Brands

-Distribution Channels

-Operations

Agenda


The company is currently being re-structured towards a matrix organization

CEO

Commercial Director

Board of Directors

Costa RicaRetail Mgr

ChileCountry Mgr

Curaçao Country Mgr

Costa RicaCountry Mgr

Legal Dpt Mgr

ITMgr

OperationsMgr

CSRMgr

Costa RicaCommercial Mgr

QualityMgr

Corporate Imageand Design Mgr

Peru Country Mgr

Distrib. CenterMgr

Coffee TourCoordinator

Peru Regional CFO

ChileCFO

St. ThomasCountry Mgr

CorporateAccounting Mgr

AccountsMgr

OperationsMgr

ITMgr

ITMgr

HR Mgr OperationsMgr

Corporate Image and Design Mgr

FinanceMgr Finance Mgr

LogisticsMgr

Food andDrinks Mgr HR Mgr HR Mgr

Miami Distrib. Center Mgr

Country OperationsCorporateSupport Areas

Planning and Budgeting Mgr

OperationsDevelopment Mgr

Logistics Mgr

CIO

Retail Mgr

Development andInnovation Mgr

Retail coordinator

Retail coordinator

Direct MarketingMgr


Britt’s store at Lima airport was awarded the Moodie’s 2007 “Destination Merchandise Store of the Year” award

Perú Perú, Jorge Chávez International Airport, Perú

Source: Café Britt

Moodie’s characterized the store as “a magic emporium of Peruvian products, crafts, and culture


Britt’s e-commerce operations receives excellent reviews in independent reviews

As a 2004 winner of the BizRate.com Circle of Excellence Gold Honoree Awards, Café Britt is among a select group of the best 46 on-line retailers, having met the strict criteria set by BizRate.com to recognize outstanding customer service throughout the year.

BizRate praised the Company for being one of the sites that excelled at customer satisfaction with ratings above the Industry average in 7 key categories

- Ease of finding desired products

- On-time delivery

- Overall satisfaction

- Selection of products

- Customer support

- Product fulfillment of expectations

- Customer repurchase intent.

Security: Café Britt's website is regularly monitored to ensure that customers' transactions are private and secure. These third-party evaluations allow the Company to offer every customer a confident and worry-free shopping experience.

Note: BizRate.com is a specialized on-line search engine designed to help on-line shoppers locate, compare and buy any kind of product. Its database includes some 40,000 stores

Source: Café Britt


Britt has developed a strong customer base that include some of the most prestigious hotels

Note: Hotels listed represent only a sample of Britt’s client hotelsSource: Café Britt Management

Costa Rica:• Four Season’s Resort• Real InterContinental• Los Sueños Marriott

Ocean & Golf Resort• Hotel Punta Islita• Tabacón Grand Spa

Peru:• JW Marriott Lima• Hotel Monasterio (Orient-Express Hotel)• Machu Picchu Sanctuary Lodge (Orient-

Express Hotel)• Swissôtel Lima• Libertador Hotels (Puno-Arequipa-Cuzco)

Chile:• Santiago Marriott Hotel

Mexico:• JW Marriott Cancun• CasaMagna Marriott Cancun• Mandarin Oriental Riviera Maya• Fairmont Mayakoba

Caribbean:• Four Seasons Resort Bahamas• Four Seasons Resort Nevis• St Kitts Marriott Resort• Frenchman’s Reef & Morning

Star Marriott, St. Thomas• Hyatt Regency Trinidad• CuisineArt Resort, Anguilla• Rosewood Little Dix Bay, Virgin

Gorda


IT – Customer Relationships

Website CafeBritt.com is an in-house developed website that is

constantly updated with new sections and relevant company & product information

A team of 5 people are constantly working to improve the site and convert it into a “virtual store” offering a broader product choice for shipping and adapting the website to reflect the different countries in which Britt operates

CRM To manage Britt’s call center clients, the Company uses

Siebel Systems, and is currently upgrading the system from version 6 to 7.1. The project is expected to be going-live in July/August this year

Pocket Route In mid-2007, Britt created a solution for salespeople in the

foodservice/wholesale business to improve order processing as well as client management

- The routing system is based on handheld devices carried by salespersons when in-route

- Order details are entered in the device and later synchronized with a central database to initiate the product dispatching

- Furthermore, client data such as past orders, accounts receivables, and customer information is available “on the spot”

- Handhelds are also able to print invoices, administer cash deposits, and maintain in route inventory.


IT – Operating Software

(1/2)

Point-of-Sale Britt is currently implementing a completely new web-based

point-of-sale system

The system is structured into three main areas:- Cashier interface: Allows cashiers to easily capture and print

customer invoices- Supervisor interface: Gives supervisors and headquarters a

variety of options, including user management, pricing, offer configurations, cash management, discount management and real time sales administration

- Communications: In order to reduce costs and improve access for remote stores, the system uses FTP as its main data transfer mechanism

The system complies with local tax rules and thus permits paperless invoicing on .XML basis approved by Costa Rican tax authorities

Export IT In the last quarter 07, Britt implemented a system to better

manage its phone and internet orders

The system integrates with FedEx, DHL and UPS and is able to route orders to these courier services depending on their pricing structure for the delivery service

The software results in same-day dispatching and has reduced overall delivery time by up to 4 days


IT – Operating Software

(2/2)

Warehouse Mgmt Software

Britt maintains an in-house-developed warehouse-management system, with four main applications:

- Orders: The system manages special orders for stores, such as office supplies, and new products.

- Returns: Administration of damaged, expired, or discontinued products

- Purchasing: The module manages the re-stocking of the warehouses; inventories are managed based on sales, not remaining stock, thus keeping constant days-of-inventory and adjusting the amount of stock according to the season.

- Restocking: The module manages the re-stocking of Britt’s stores based on the scanned sales.

A major upgrade of the system is underway and is expected to be implemented by mid-08


Britt has been recognized on various occasions for its outstanding innovation, customer attention and support services

• 2007: Destination Merchandise Stores of the Year - Moodie Report 2007 awards Café Britt store “Perú Perú” as the best destination retail stores worldwide. “This year’s award goes to the extraordinary ‘Café Britt’ at Lima Jorge Chávez International Airport, a magic emporium of Peruvian products, crafts and culture.”

• 2006: Overall Excellence Award for outstanding performance in leadership, customer service, processes, environmental, innovation & HHRR (Costa Rica's Chamber of Industries)

• 2005: Café Britt named third most competitive company in Latin America among the region's top 100

• 2004: One of the 100 most admired companies in Central America (Summa Magazine)

• 2003: Innovation Award (Costa Rica Chamber of Commerce)


The Company also enforces a stringent quality assurance process

Six years ago, Café Britt began employing comprehensive management

instruments based on the INTE-ISO 9001:2000 quality standard. Today

Britt has integrated its management system with the inclusion of other

norms such as:

- ISO 14001:2004 Environmental Management Systems, with the aim of

ensuring solid environmental performance in all the organization’s

activities

- BASC (Business Alliance for Secure Commerce) to ensure effective

management of the entire logistic chain’s security

- Corporate Social Responsibility policy elements, with the purpose of

transparency, anti-corruption practices, and equal development

opportunities for the employees

- OHSAS 18001 (Occupational Health and Safety Management Systems)

elements, for the Management of Occupational Hazard Prevention.

- GMP (Good Manufacturing Practices) and HACCP (Hazard Analysis and

Critical Control Points) to ensure safety in all our products

Source: Café Britt


Case study: Britt’s management successfully entered Peru in 9 months

Source: Café Britt

• In 2005, Café Britt won the concession for significant retail area at the Jorge Chavez International Airport in Peru

• The event started a new era for the Company in terms of international expansion of its travel retail and food manufacturing businesses

• Shortly after signing the contract for managing the stores at Lima’s Airport, the Company initiated a successful 9-month implementation to enter this market

- A core team from several departments toured the country for several weeks to get a sense of the country’s environment and traditions

- A coffee roasting facility was set up. From here several varieties of coffee (16 presentations) were launched from local sourcing

- The team established relationships with local craftsmen and other local suppliers to define the country’s product base to be offered at the stores

- The innovation and development department in Costa Rica worked to develop additional products with local characteristics

The market entrance to Peru proved the scalability of the Company’sbusiness model and duplicability of business practices


Britt produces and sells its branded coffee, confectionery, salsas, and textiles

Confectionery

Products

White & Dark chocolate covered coffee beans

Dark chocolate covered Lucuma

Dark chocolate covered Banana

Espresso

Dark chocolate covered Guava

Presentation

Doypack 170g (6oz)

Pyramid 28g (1oz)

Mini-pyramid 2 units

Dark Roast

Tarrazú

Decaffeinated

GourmetCoffee

Light RoastBean: whole and ground

Dark chocolate covered Pineapple

Dark chocolate covered Passion fruit

White & Dark chocolate covered gourmet macadamia

Poás 250g and 340g bags

Tres RíosTri-laminated package, freshness valve, tin tie

Dark chocolate covered gourmet macadamia nuts

Dark chocolate covered macadamia brittle

Gourmet hot cocoa

Chocolates filled with coffee liquor

Category

Source: Café Britt


Britt produces and sells its branded coffee, confectionery, salsas, and textiles

Textiles

Products

Mango chutney

Tropical fruits chutney

Calypso hot salsa

T-shirts

Presentation

Individual items

Caribbean jerk seasoning

Mango coconut hot salsa

Passion fruit hot salsa

Salsas Habanero hot pepper salsaBottle 296g (10.5oz)

Caps

Hooded sweaters

Aprons

Cayenne hot pepper salsa

Jalapeño hot pepper salsa

Chipotle hot pepper salsa

Category

Source: Café Britt


Britt also designs non-branded products and outsources their production

Products

Souvenirs Keychains

Pins

Pens

Magnets

Category

Source: Café Britt



• Strategy

• Operations

• Conclusions

Agenda


Britt is a well positioned travel retailer with a strong focus on sense-of-place concepts and quality destination merchandise

Key initiatives

• Enter in 3-4 new markets in the next 3 years

• Grow retail space at existing/new locations

• Penetrate foodservice/wholesale in current and new markets

• Leverage e-commerce capabilities

Travel retail industry growing at >10% per

year

1

Profitable and scalable business model with

sustainable competitive advantages

2

Successful geographic expansion with concrete growth

opportunities

3

Experienced management team and organizational platform

4

Forecast

0

50

100

150

200

0

50

100

150

200

Net sales (US$ M)

07-0

8B

66

08-0

9F

84

09-1

0F

110

10-1

1F

130

11-1

2F

151

12-1

3F

174

13-1

4F

199

Source: Projections provided byCafé Britt’s Management

This information is confidential and was prepared by Mesoamerica solely for the use of our client;...

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