Fuller Smith and Turner Fuller Smith and Turner PLC. PLC.

An analysis by Juliane Gundersen An analysis by Juliane Gundersen

AgendaAgenda

BackgroundBackground The Cask, The Beer and The UK MarketThe Cask, The Beer and The UK Market

Fullers – From My POVFullers – From My POV Fullers SWOT AnalysisFullers SWOT Analysis Sharp’s DoombarSharp’s Doombar Conclusion Conclusion

Background Background

25 million drinkers 25 million drinkers 700,000 jobs, 700,000 jobs, £18 billion retail value£18 billion retail value 3,000 different beers 3,000 different beers 650 operating breweries, 650 operating breweries, 200,000 licensed premises.200,000 licensed premises. 2.5 million pints of Export2.5 million pints of Export £6 billion a year in VAT and duty£6 billion a year in VAT and duty £38.2 million invested into Sports and Music£38.2 million invested into Sports and Music

The Cask, The Beer and The UK, MarketThe Cask, The Beer and The UK, Market

2 system of production2 system of production Low quality mass marketLow quality mass market High quality brewed local ale High quality brewed local ale

Cask beer grew 5% Cask beer grew 5%

Cask ale outperformed the total beer market Cask ale outperformed the total beer market Cask accounts for 15.2% of total on-trade beer volumes Cask accounts for 15.2% of total on-trade beer volumes

Regional and local cask ale brewers increased volume Regional and local cask ale brewers increased volume by 1% and 5% respectively, by 1% and 5% respectively,

Multinational brewers decreased volume by 11%Multinational brewers decreased volume by 11%

The Cask, the Beer and The UK, MarketThe Cask, the Beer and The UK, Market

121,000 people started drinking cask ale, 121,000 people started drinking cask ale, 18-24 year old cask drinkers grew by 17% 18-24 year old cask drinkers grew by 17%

3,000 more pubs started selling cask ale3,000 more pubs started selling cask ale

Premium Bottled and Canned Ale recruiting over 100k more shoppers Premium Bottled and Canned Ale recruiting over 100k more shoppers Standard Canned Ale lost 210k shoppers. Standard Canned Ale lost 210k shoppers.

Dark beer sector dropped by 12.2% (in value terms) since 2006. Dark beer sector dropped by 12.2% (in value terms) since 2006. 9.6% growth from 2011 to 2015. 9.6% growth from 2011 to 2015.

85% of beer sold in the UK is produced in the UK with a predominantly UK 85% of beer sold in the UK is produced in the UK with a predominantly UK supply-chainsupply-chain

The UK grocery retail sector now represents over 80% of the beer marketThe UK grocery retail sector now represents over 80% of the beer market

Fullers – From My POVFullers – From My POV

Ale – not on the agendaAle – not on the agenda Manly drinkManly drink No information No information

Premium ale Premium ale QualityQuality

Strong competition Strong competition BottlesBottles PubsPubs

Fullers Strengths Fullers Strengths

A well known brand A well known brand Quality products Quality products Independent family brewery - full control Independent family brewery - full control Strong fan baseStrong fan base Strong pub baseStrong pub base

Fullers WeaknessesFullers Weaknesses

““Old man’s” imageOld man’s” image Lack of creativity and innovation Lack of creativity and innovation Company structure Company structure Limited capacity at brewery site. Limited capacity at brewery site.

Fullers OpportunitiesFullers Opportunities

Resources for new productsResources for new products Staff educationStaff education Increased exportIncreased export Expansion Expansion

Fullers ThreatsFullers Threats

Tax and VATTax and VAT Laws and regulationsLaws and regulations Micro breweriesMicro breweries Consumer trendsConsumer trends Increased wine Increased wine

consumption consumption

Increased Increased consumption at homeconsumption at home

CompetitionCompetition Acquisition Acquisition

DoombarDoombar

2003 2003 10,000 10,000 2008 2008 45,000 45,000 2011 2011 83,000 83,000 A growing brandA growing brand

£2.2m in new brewery£2.2m in new brewery £500.000 in marketing£500.000 in marketing

Expansion Expansion

Doombar SWOTDoombar SWOT

StrengthsStrengths Financial backupFinancial backup

• Molson CoorsMolson Coors Contemporary ImageContemporary Image Strong fan baseStrong fan base

WeaknessesWeaknesses Lack of support from Lack of support from

CAMRACAMRA Too image focused Too image focused

OpportunitiesOpportunities Expansion Expansion

ThreatsThreats ““Beer of the moment”Beer of the moment”

• CompetitionCompetition

Consumer trendsConsumer trends

Doombar Doombar

““Our branding is young and modern, we Our branding is young and modern, we don’t go for the cartoon-like images and don’t go for the cartoon-like images and

we don’t pretend that we have a 300-year we don’t pretend that we have a 300-year history behind us. Doom Bar is a modern, history behind us. Doom Bar is a modern,

progressive drink brand.” progressive drink brand.”

Conclusions Conclusions

Strong brandStrong brand Safe fan baseSafe fan base Safe structureSafe structure

Lack of innovationLack of innovation Competition Competition Midlife crisisMidlife crisis Solution Solution

Education Education