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COWEN COLLABORATIVE INSIGHTS February 25, 2019 Beer 2 We believe CBD infused beer can serve as a niche segment ina rapidly evolving beer category. With core beer under pressure, a continued theme from the key manufacturers within the space has been a focus on innovation, as well as a move away from alcohol into low and no-alcohol offerings (ABI is targeting 20% of portfolio to be low / no alcohol by 2025). On the innovation front, hard seltzer looks to be resonating with consumers, which we believe is sticky, as it offers consumers a new product and opportunity to drive incremental drinking occasions, while checking the box from a health and wellness standpoint. In 2018, the hard seltzer category achieved a 1% market share of the combined beer category, which includes, core beer, cider and FMBs. If we assume that CBD-infused beer is able to capture a modest fifth of that amount of share by 2020 (~20 bps), that could result in a revenue opportunity of over $130 mm. We have been hearing growing interest in companies looking to combine CBD in alcoholic beer to offer potential hangover relief. Figure 66 Hard Seltzer Achieved A 1% Dollar Share In 2018 Figure 67 Assuming ~20 Bps Of Share For CBD Beer = $135 MM 1.2% U.S. Hard Seltzer $ Share U.S. CBD Beer Sales ($ in mm) 1.0% $150 $135 1.0% I 0.8% I . ‘0 $100 I $90 0.6% I 0.4% 0.3% I ° $50 $36 0.0% 50 I Source: The Nielsen Company and Cowen and Company Source: Cowen and Company These estimates are benchmarked to a category that has grown sales at a 1.6% CAGR over the past three years. If we assume Nielsen provides 50% coverage of the total category and extrapolate that growth out, total off-premise revenues should approach $72 bn by 2020. We provide a sensitivity analysis below on the 2020 revenue opportunity based on different levels of market share capture. We estimate every 5 bps of share is worth $36 mm. Figure 68 1.6% Growth Should Result In Category Revs Of ~$72 BN Figure 69 Each 5 bps Of Share Is Worth $36 MM In Revenue U.S. Combined Beer Sales ($ in bn) 974 I 672 2020 Market Share Scenario Analysis $72 | $72 S69 $70 $70 eee I Market Share 0.09% 0.14% % | 0.24% 0.29% 968 $67 $66 I Absolute Sales ($ inmm) | $63 $135 $171 $207 $64 I $62 l Source: The Nielsen Company and Cowen and Company Source: Cowen and Company Note: Assumes 50% coverage in Nielsen; off-premise sales only COWEN.COM 441 HOUSE_OVERSIGHT_024857