&e | U 4 ‘CHALLENGE BOLD « UNIQUE - dia BEER FOR ALL Create a porfolio strategy to launch non-alcoholic beverage in AB InBev India “%NON ALCOHOLIC BEVERAGES - GOAL 2025 An important aspect of AB InBev’'s Global Smart Drinking Goals is to ensure that low and no-alcohol beer contributes to at least 20% of our global beer volume by 2025 which will enable us to empower consumers through choice to enjoy beer responsibly. THE INDIAN CONTEXT The world's leading brewer, Anheuser-Busch InBev (AB InBev] forayed into the Indian market more than a decade ago with the flagship brand Budweiser. Today Budweiser, the leading beer brand in the premium segment, is the fastest growing brand in the category and has an awareness level of more than 90% among beer drinkers. AB INBEV FORAYS INTO NON - ALCOHOLIC MARKET IN INDIA. While the beer market is set to continue its upward growth trajectory, 70% of the Indian population still abstains from alcohol. Non-Alcoholic Beverages (NAB) will help us foster inclusivity by catering to this section of the audience, opening up opportunities for them to discover the refreshing and crisp taste of our iconic beers sans the alcohol. NAB will also cater to beer connoisseurs who want more choices to enjoy the taste of beer freely and responsibly on ‘occasions where they want to abstain from alcohol 66 THE COMPANY WILL LAUNCH THE TWO PRODUCTS BUDWEISER 0.0 & HOEGAARDEN 0.0 IN THE NEXT THREE MONTHS. FOR NOW, THE PRODUCTS WILL BE IMPORTED INTO INDIA. BEN VERHAERT BU President, AB InBev South Asia The No-alcohol Beer market is currently in a nascent stage with very few brands present here. With the introduction of Budweiser 0.0 and Hoegaarden 0.0 in retail channels, this category is poised to grow in the coming few years. Our No-alcohol Beers are crafted using the same process as that of our iconic beers. That's because our commitment to brewing great beer never changes, even if we do decide to go alcohol-free. As our Brewmasters say "Taste is the only thing that matters" We'e still brewing with our same signature ingredients, and the same deep commitment to getting it just right. During the final stages, the alcohol is removed through a special process to retain the taste that's true to the standards of our beers. The brewing method has been altered slightly to avoid the acidity that would otherwise be induced by the de-alcoholisation process.Ua aT Te 0 COUTTS LU STS a eS RL La ENJOY FREELY THE INDIAN NON ALCOHOLIC BEVERAGES MARKET The Indian NAB market can be broadly divided into Carbonated and Non-Carbonated soft drinks. The former is primarily dominated by carbonated soft drinks while MED (Mango Based Drinks) and Juices have a huge share of pie in the Non-Carbonated Soft Drink market. THE INDIAN BEVERAGES MARKET CONSTRUCT reny CoedDISTRIBUTION CHANNEL COVERAGE IN NON - ALCOHOLIC BEVERAGES Non-Alcoholic Beverages essentially has four channels: = Convenience (Paan Shops Chemist) = Eating & Drinking Outlets (Bakery, Mithai Stores, Small Restaurants with/uithout bar) and Grocers = Modern Trade Stores = Emerging Ecommerce Channel Big Basket, Flipkart, Grofers, Amazon etc. INDIAN CONSUMER CONTEXT The NAB industry has been growing at around 10% CAGR for the last 4 years in India. The reach of the total Non-Alcoholic Beverages industry is around 3.8 Mn stores in India, Carbonated Soft Drinks (CSD) still dominates the Non-Alcoholic Beverage market with a value share of 57% ina $6.4 billion Industry. Although their contribution is steadily declining for the last 5 years. In the year 2013, the CSD contribution was roughly around 65% which is now down to 57%. In the last 2 years the decrease in contribution has been around 3%. The 3 categories that have gained shares are Dairy / Soy Beverages, Juices and Ready To Drink / Energy Drinks. The 3 categories overall now contribute to 15% to the overall NAB market. Dairy / Soy Beverages Juices RTD/Energy Drinks Mix Change from the last 2 years 17% 15% 0.5% Contribution to NAB in 2018 66% 7.1% 13% CAGR from the last 3 years 25% 23% 40% ] ‘The MBD (Mango Based Drinks) and Packaged Water have been stable in their contribution to the overall NAB category. MBDs contribute around 12% to the overall beverage market whereas Packaged Water contributes to around 15% of the category. Urban India contributes to around 66% of the total consumption whereas rural contributes around 34%. A few (directional not exhaustive) questions need to be answered before kicking-off this exercise: 1 Who are the potential consumers of NAB? 1 What should be the communication themes? 1B What is the opportunity of NAB in India? 1 Where will the growth come from in this segment for the next 5 years? lB What organic and inorganic opportunities are available to AB InBev to build a robust NAB portfolio?