1. An introduction to
BACCHUS
CONSULTING
GROUP
Business
Consultants
to
the
Wine
Industry
February
2016
Confidential

2. Preface
The
following
material
has
been
prepared
to
answer
quesJons
about
Bacchus
ConsulJng
Group.
This
booklet
outlines
our
experiences,
capabiliJes,
and
methodology.
We
welcome
the
opportunity
to
discuss
more
specifically
how
we
can
assist
you
in
achieving
your
unique
objecJves.
Prepared: February 2016 2Confidential

3. Content
Who
is
Bacchus
ConsulJng
Group?
/
page 4
Our
ConsulJng
Philosophy
/
page 5
Our
Focus
/
page 6
Winery
ConsulJng
/
Advisory
Service
/
page 7
Interim
Management
Services
/
page 13
Finance
and
Fundraising
Advisory
Service
/
page 14
How
Does
Bacchus
Differ
From
Other
ConsulJng
Firms?
/
page 15
Select
Clients
of
Bacchus
ConsulJng
Group
/
page 20
Bacchus
Consultants
/
page 21
Prepared: February 2016 3Confidential

4. WHO
IS
BACCHUS
CONSULTING
GROUP?
Profile
Founded
in
2002
Network
of
wine
industry
professionals
Offices
in
Napa,
San
Francisco,
and
Millbrae,
California
Services Provided
Winery
ConsulJng/Advisory
Services
Winery
Interim
Management
Services
Finance
and
Fundraising
Advisory
Services
Philosophy of Holistic Approach and Experience
Bacchus
ConsulJng
Group’s
holisJc
approach
combines
experJse
across
a
range
of
funcJonal
areas
with
a
strategic
perspecJve
and
cornerstone
financial
model
that
reflects
our
extensive
wine
industry
experience.
Prepared: February 2016 4Confidential

5. O U R C O N S U L T I N G P H I L O S O P H Y
Prepared: February 2016 5Confidential
BCG
is
defined
by
a
holisJc,
mulJ-­‐funcJonal
consulJng
approach
as
opposed
to
pure
specialty
consulJng.
BCG
underpins
all
of
its
consulJng
services
with
a
custom
proprietary
financial
model
based
on
each
client’s
specific
needs
and
goals.
PROPRIETARY
FINANCIAL
MODEL
EXPERIENCED
CONSULTANTS
STRONG
INDUSTRY
FOCUS
HOLISTIC
APPROACH

6. O U R F O C U S
CONSULTING/ADVISORY
SERVICES
INTERIM
MANAGEMENT
SERVICES
Prepared: February 2016 6Confidential
FINANCE
&
FUNDRAISING
ADVISORY
SERVICES

7. CONSULTING/ADVISORY
SERVICES
Our
consulJng
services
focus
on
assisJng
wineries
in
the
following
funcJonal
areas:
BUSINESS / STRATEGIC PLANNING
WINERY OPERATIONS OPTIMIZATION
DIRECT TO CONSUMER
WHOLESALE
FINANCE / ACCOUNTING
Prepared: February 2016 7Confidential

8. CONSULTING
SERVICE:
BUSINESS / STRATEGIC
PLANNING
Strategic
planning
and
the
creaJon
of
a
custom
financial
model
are
the
first
steps
in
the
development
of
a
results-­‐based
accountable
organizaJon.
The
strategic
planning
process
guides
clients
in
an
objecJve
evaluaJon
of
the
following
quesJons:
• Where
are
we?
• What
do
we
have
to
work
with?
• Where
do
we
want
to
be?
• How
will
we
know
we
got
there?
As a result of the strategic planning process, a client will have:
• A
fact-­‐based
plan
that
takes
into
account
market
realiJes
and
the
client’s
current
situaJon.
• Focused
strategic
and
operaJonal
acJons
to
achieve
short-­‐term
and
long-­‐
term
goals.
• A
targeted
strategic
plan
with
quarterly
goals
and
metrics.
Prepared: February 2016 8Confidential

9. CONSULTING
SERVICE:
WINERY OPERATIONS OPTIMIZATION
Winemaking
is
an
art,
a
self-­‐expression
of
terroir
and
the
winemaker.
OpJmizaJon
ConsulJng
is
the
discipline
of
adjusJng
a
process
so
as
to
opJmize
some
specified
set
of
parameters
without
violaJng
some
constraint.
The
most
common
goal
focuses
on
maximizing
a
winery’s
unrealized
potenJal.
Our consultants review the entire process or a section of the process and make
recommendations that are tied back to our proprietary financial model.
Bacchus
is
focused
on
serving
clients
facing
different
types
of
operaJonal
challenges
which
can
be
broken
down
to
a
financial
metric
or
lack
thereof.
Our
operaJon
reviews
can
be
grouped
into
the
following
categories:
• Winegrower
Management
• Winemaking
efficiency
and
controls
• Bocling
efficiency
and
controls
• Human
Capital
Prepared: February 2016 9Confidential

10. CONSULTING
SERVICE:
DIRECT TO CONSUMER SALES
The
new
life
blood
of
wineries
is
DTC;
it
is
where
wineries
can
tell
their
story
directly
to
consumers.
Growth
in
the
DTC
channels
has
been
tremendous
the
past
10
years;
however,
as
Silicon
Valley
Bank
notes,
“The
top
20%
of
wineries
outperform
the
bocom
80%.”
Our consultants first develop an integrated high level plan and then pull in
operational subject matter experts to develop a tactical plan that is tied
back to our proprietary financial model for a ROI review.
Bacchus
focuses
on
three
main
revenue
centers:
• TasJng
Room
(On
–Property)
• Wine
Club
(On
–Property)
• Other
DTC
• Tele-­‐Sales
(Off-­‐Property)
• Internet
driven
sales
(Off
–Property)
• On-­‐
and
Off-­‐site
Events
(depending
on
winery
assets)
Prepared: February 2016 10Confidential

11. CONSULTING
SERVICE:
WHOLESALE SALES
There
is
a
symbioJc
relaJonship
between
Wholesale
and
DTC
in
the
sale
mix
of
a
winery’s
revenue
profile.
The
wholesale
channel
has
changed;
managing
this
channel
takes
a
specific
skill
set
that
is
foreign
for
many
wineries.
Our consultants first develop a national wholesale footprint map and overlay it
with a “market by market profitability” template. Successful existing practices
are paired with new tactics developed by leading industry experts, all of which
are tied back to our proprietary financial model for a ROI review
Bacchus
focuses
on:
• Modeling
wholesale
channel
profitability
net
of
D/As,
SPAs
and
other
sales
expense
for
each
distributor/market.
• CreaJng
the
“Sales
Process”
for
the
Wholesale
Channel,
which
includes
reviewing
distributor
performance.
• CreaJng
the
“Top
500
Retailers
and
Restaurants”
list
which
drives
the
Direct
to
Trade
CommunicaJons
Plan.
Prepared: February 2016 11Confidential

12. CONSULTING
SERVICES:
FINANCE and ACCOUNTING
Our
proprietary
Financial
Model
is
the
cornerstone
our
consulJng
pracJce;
it
is
the
tool
and
fact
base
we
use
to
evaluate
each
client’s
current
and
future
situaJon.
Through
the
model,
we
develop
a
fact-­‐based
understanding
of
each
client’s
current
situaJon
and
how
to
grow
their
business.
We have developed a comprehensive model that evaluates the following
inputs to help us produce an accurate picture of the business:
• Current and Future Sales Trends
• Current Inventory (Bulk and Bottled)
• Annual Grape Intake Sheet
Deliverables
include
the
following:
• Long
Term
Plan
(5-­‐Year
forward-­‐looking
model)
• P&L
Statement,
Balance
Sheet,
and
Cash
Flow
Analysis
• Margin
Analysis
by
Channel
by
SKU
• “What
if
Scenario”
funcJonality
to
measure
impact
of
different
strategies
• The
Monthly
Management
Package
Prepared: February 2016 12Confidential

13. INTERIM
MANAGEMENT
SERVICES
Interim
management
is
the
“loaning”
of
human
capital.
Our
team
works
in
a
variety
of
situaJons,
from
an
organizaJon
that
needs
help
due
to
financial
difficulJes
(turnaround
situaJon)
to
organizaJons
that
are
growing
and
need
the
help
of
a
seasoned
execuJve
on
a
part-­‐Jme
basis.
These engagements may range for two days per week to full
months and beyond.
The
posiJon
may
include:
Interim
CEO
/
Interim
CFO
/
Interim
CMO
/
Interim
Controller
/
Interim
DTC
Professionals
Prepared: February 2016 13Confidential

14. FINANCE
AND
FUNDRAISING
ADVISORY
SERVICES
Our
specialized
finance
experience
includes
the
following
areas:
DEBT FINANCING
• 1st
Lien
• Mezzanine
PRIVATE EQUITY
ALTERNATIVE FINANCING
• EB
-­‐
5
• Crowdfunding
and
DPO
TURNAROUNDS AND RESTRUCTURING
COURT APPOINTED RECEIVERSHIP PROJECTS
Prepared: February 2016 14Confidential

15. HOW
DOES
BACCHUS
DIFFER
FROM
OTHER
CONSULTING
FIRMS?
“The Bacchus Process” assist clients by:
Providing
a
network
of
consultants
who
have
experienced
as
General
Managers
or
FuncJonal
Managers
in
well-­‐known,
successful
wineries.
Customizing
our
proprietary
financial
model
to
provide
clients
with
a
quanJtaJvely
sound
system
for
evaluaJng
their
current
situaJon
and
planning
for
future
growth.
Providing
objecJve
analysis
in
areas
where
outsiders
can
be
more
effecJve,
especially
in
external
assessments
of
the
winery
operaJons,
customers
and
compeJJon.
Energizing
and
focusing
the
team
process.
Bacchus
can
facilitate
an
effecJve
process,
diffuse
poliJcal
tension,
and
create
enthusiasm
through
the
experience
of
success.
Synthesizing
the
results.
The
most
successful
strategy
efforts
pull
together
findings
into
a
coherent
and
concise
“story”
that
the
team
convincingly
communicates.
Bacchus
provides
this
synthesis.
ImplemenJng
our
system
which
has
proven
to
reduce
the
stress
of
transiJons
and
has
led
to
faster,
economically
sound
decisions,
companywide
alignment,
and
competent
execuJons.
Prepared: February 2016 15Confidential

16. T H E B A C C H U S P R O C E S S
Are my goals well defined?
Personal aspirations
Tolerance for risk
Size or type of business we want to be
Where are we going?
Access to capital
Do we have the right strategies?
Clear definition
Profitability and potential for growth
Rate of growth
Strategies for the plan
Do we have the right tactics?
Can I execute the plan?
Resource deployment
Organizational infrastructure
The Winery Executive’s role
If the answer is yes ...
If the answer is no ...
The
Business
Plan
The
Opera0ng
Plan
If the answer is yes ...
If the answer is no ...
Define
the
Goal
Prepared: February
2016 16Confidential

17. T H E B A C C H U S F R A M E W O R K
Phase I
Gather
the
Facts
by
FuncJon
Area
&
Analyze,
Synthesize,
and
Develop
Strategic
IniJaJves
by
FuncJonal
Area
Phase II
Aggregate
and
Integrate
into
the
Business
Plan
&
Build
Financial
and
OperaJng
Model
&
Develop
TacJcs
and
the
OperaJng
Plan
Phase IV
ExecuJon
of
Project
Plan
&
Interim
Management
to
Execute
the
Plan
Phase III
PresentaJon
of
Deliverables
to
Management
and
Advisor
Prepared: February
2016 17Confidential

18. T H E B A C C H U S F R A M E W O R K
VINEYARD
WINEMAKING
MARKETING
and
BRANDING
BUSINESS
PLAN
FIN
MODEL
OPERATING
PLAN
DIRECT
TO
CONSUMER
WHOLESALE
SALES
Gather the Facts by Function Area
&
Analyze, Synthesize, and Develop Strategic Initiatives
by Functional Areas
Phase I Phase II
Prepared: February
2016 18Confidential

19. T H E B A C C H U S F R A M E W O R K
Phase I
Gather
the
Facts
by
FuncJon
Area
&
Analyze,
Synthesize,
and
Develop
Strategic
IniJaJves
by
FuncJonal
Area
Phase II
Aggregate
and
Integrate
into
the
Business
Plan
&
Build
Financial
and
OperaJng
Model
&
Develop
TacJcs
and
the
OperaJng
Plan
Phase IV
ExecuJon
of
Project
Plan
&
Interim
Management
to
Execute
the
Plan
Phase III
PresentaJon
of
Deliverables
to
Management
and
Advisor
Prepared: February
2016 19Confidential

20. SELECTED
WINERY
CLIENTS
Prepared: February 2016 20Confidential

21. Prepared: February 2016 21Confidential
Avi
Gallant
has
over
15
years
of
experience
providing
financial
analysis
and
business
consulJng
services
to
wine
industry
clients.
Specific
areas
of
experJse
include
building
complex
business
models
that
incorporate
all
aspects
of
winery
supply
and
demand,
project-­‐
comprehensive
financial
statements,
and
cost
of
goods
sold.
He
has
also
developed
several
winery
acquisiJon
models
that
have
resulted
in
posiJve
cash
flow
and
equity
for
the
acquirer.
Throughout
his
career,
Avi
has
worked
and
consulted
in
accounJng,
finance,
and
sales
operaJons
for
Napa
and
Sonoma
wineries,
including
Huneeus
Vintners,
Diageo,
Icon
Estates,
Ravenswood,
Beringer,
Artesa,
and
others.
He
earned
a
Bachelor
of
Science
degree
in
Finance
from
the
University
of
Maryland.
AVI
GALLANT
Quinton
is
Managing
Director
and
Founder
of
Bacchus
ConsulJng
Group.
Concurrently,
Quinton
is
the
Proprietor
of
Bacchus
Wine
Shop
(BWS),
a
full-­‐service
retail
merchant
of
fine
wines
and
crao
beers
located
in
Millbrae,
CA.
Prior
to
BCG
and
BWS,
Quinton
was
Managing
Director
of
Bacchus
Capital
Management,
a
niche
private
equity
firm
that
specialized
in
wine
industry
investments.
Quinton’s
winery
management
experiences
include:
President
and
NaJonal
Sales
Manager
at
Panther
Creek
Cellar,
General
Manager
at
Artesa
Winery,
Business
Manager
at
Etude
Wines
and
General
Manager
at
Bonny
Doon
Vineyards.
Prior
to
the
wine
industry,
Quinton
worked
at
The
Coca-­‐Cola
Company
and
Bank
of
America.
He
holds
an
M.B.A.
from
J.L.
Kellogg
School
of
Management
at
Northwestern
University
and
B.S.
degree
in
finance
from
California
State
University
Long
Beach.
QUINTON
JAY

22. CONTACT
Prepared: February 2016 22Confidential
Director Financial Analysis
T: 707-812-8898
AGallant@BacchusCG.com
Managing Director
T 415-828-8898
QJay@BacchusCG.com
AVI
GALLANT
QUINTON
JAY