New Product Development Stage Gate Process Overview Structure

New Product Development Stage Gate Process Overview

Structure of the NPD Team New Product Development Manager Elizabeth Miller Program Mgmt Officer Vacancy Project Lead STILLS Project Lead SPARKLING Project Lead BEER Project Lead SPIRITS Rachel de Leon Paul Burns Jill Pirrit Melinda Blayney Project Manager Stills Project Manager Sparkling Jacqueline Diamond Rebecca Fisher Alex Braham Simone Isherwood Project Coordinator Project Manager Sparkling Ryan Lynch Darren Cousins

Cross-Functional, Cross-System Process • NPD process is used to monitor and evaluate change management in relation to any existing or new SKU within the CCA/CCSP system; • It consists of a four-stage gate process with increasing level of project and financial analysis at each stage; • Projects are facilitated by NPD Project Managers (CCA), however each project has a cross functional and cross system WIP team who are responsible for making decisions and preparing the project for the next gate stage; • The process manages and tracks the project from idea stage through to post launch review in market; • Gate keepers are the key decision makers who accept risks and provide authority to progress the project thus authorising the activities of the next stage; • Gatekeepers are representative of specialist functional areas and should be equally represented across the system, and • Both CCA only and system (TCCC) projects are managed through the process.

The Stages of the NPD Gate Process GATE STAGE PRE ONE TWO THREE FOUR Resources Committed Low Medium High Medium Financial Detail Low Medium High Low Accuracy Low Medium High Likelihood of change High Medium Low

NPD Project Management is a cross-functional process Marketing Insights Brand TCCC Finance CORE NPD Project Team: Category managers Licensed team Commercial Management Led by NPD Project Manager Sales Accounting Account teams Field Sales Legal/ Technical CCA Regulatory Commercial Managers Operations Development IC team Demand & Supply Planning Supply Chain Technical G&P team CCA Finance Technical TCCC Size and Scale of project dictated by funnel process: • Gate 1 – small team, concept stage, high level information – subject to change • Gate 2 – significantly greater resources, less chance of “falling over”, information more refined – small changes only from now on • • Gate 3 – full cross function team employed, prior to execution phase, information finalised Gate 4 – go to market team including as a minimum sales, marketing, operations

Idea scoping takes place prior to entry into the gate process • Brand, Channel and Category Plans should form the basis of ideas and target is to have an 18 month rolling NPD calendar; • Ideas may also enter the process which have not been part of any formal business planning (i. e. specific customer requests, new opportunities etc. ); • Any one can enter an idea into the process, however, it must gain support from one or more functions (usually to align strategy with the above plans) prior to being considered at a gate meeting by the gate keepers; • Gate 1 approves the idea and triggers the formation of a cross-functional team to begin to build the concept further in preparation for gate 2, and • Whilst only concept acceptance, pre-gate 1 work should be well thought out to ensure that the project resources aren’t committed to something which will recycle between the next gates. • Steps involved to scope an idea are shown on the next slide.

Cross-functional responsibility during idea scoping (prepare for Gate 1) Marketing Define Concept Validate potential opportunity (volume, RRP, DME – top line only) CBL, desk research, commissioned research Define the consumer need or customer support, along with target channels etc Document Portfolio Considerations Define project opportunity (Gold / Silver / Bronze) NPD Review provisional timeline Review versus other priorities Sense check all information Align all gate keepers prior to presenting for gate 1 Identify any roadblocks Supply Chain Provide guidance on likelihood of production and distribution including indicative view of whether capital, third parties etc. will need to be considered. Provide indicative capital estimates or other identified costs (top line only) Finance Understand provide indicative high level view on cost assumptions Category/N ational Managers Filter against current long term plans Provide strategic answers quickly, based on prior research Reduce wheel spin and duplication in NPD and Operations teams to focus on execution of current agreed plans Technical Review concept and provide ingredient and packaging guidance. Provide indicative milestones for technical Provide information regarding regulatory and global compliance. Sales Review concepts and provide comment on customer interest and likelihood of ranging. Identify any infield considerations (top line only)

Gate One approval gives authorisation for a project team to form • Gate 1 objective: Determine whether idea is strategically aligned, deserves additional resources and / or ratifies decision made about its urgency in the “Idea Generation” phase; • All information on the previous slide is collated and presented on a gate 1 document for consideration at the gate keepers meeting; • NPD chair alignment sessions between key parties to ensure all agree on the information which is being presented; • The final deck to be considered at the next meeting are distributed to gate-keepers plus a wide variety of process users a minimum of 2 working days prior to the meeting; • Gatekeepers review their area of expertise and request clarification or further information during pre-alignment to enable them to make their decision at the gate-keeping forum (SMM); • If gate-keepers cannot be present at the meeting, decisions will be made on the balance of risk depending on the area under discussion, and • Post approval, NPD will form a cross-functional, cross system project team to work weekly on the project.

Post Gate 1 approval, the team prepares a business case • • Cross functional team reviews idea and works up more detail in each area; If more than one solution is available, then team is responsible for reviewing each and presenting a recommendation on which concept to move forward with; • Cross-functional representatives are empowered to make decisions on behalf of their function, however, they must align within their function and/or manager and seek further approvals where necessary; • Most projects fail between gate 1 and gate 2 due to lack of agreement on preferred solution; • • Gate 1 to 2 has the greatest risk of project cycling, consuming resources, and Steps involved to prepare the business case are shown on the next slide.

Cross functional responsibility during business case (prepare for Gate 2) Marketing NPD Supply Chain Finance Refine Concept Create target timeline Validate assumptions made at gate 1 or investigate others as necessary Prepare preliminary Value chain Assumption/ price build Refine Territory Research (Qualitative & Quantitative) Refine possible launch date Chair weekly WIPs to drive and review project progress Highlight risks Point of contact for total project updates Run-out plan completed Provide indicative COGs and capital Provide information regarding warehousing, distribution and any other factors Ensure timeline is realistic and capacity available System agreed inputs Sensitivities Capital evaluation Competitor pricing Inform Sales Accounting of project Category/ National Managers Provide top down volumes Guide project team through issue resolution Continue to provide strategy and category perspective Technical Sales Refine Development Time Understand project and goals Initiate product and package development Identify preliminary COG’s and capital requirements alongside Supply Chain. Confirm shelfllife and testing requirements Identify any underwrite required Channel team to research RRP, margins, competitors, volume, cannibalisation, D&A, ’ 01 price. Begin to prepare to assess volume opportunity at next stage

Gate 2 approval gives authorisation to begin full development • Gate 2 Objective: Determine if idea should become a project with (i) a defined launch date, (ii) a larger working team and (iii) a budget to further develop. • • • Concept is now agreed; Gatekeepers accept preliminary financials (although they will still be subject to refinement); Research, trials and other validations can commence; Most changes should now be refinement of base concept only; All assumptions will be thoroughly verified and confirmed between stages two and three; Steps involved in full development are shown on the next slide.

Cross functional responsibility during full development (prepare for Gate 3) Marketing NPD Supply Chain Develop and Signoff Communications Plan Finalise time lines and select launch date Create demand plan Begin working with NPD GTM project manager to prepare go to market activities Ensure artwork developed Set up material masters, spec sheets and all other systems necessary Engage sales and commercial managers to create bottom up volumes Commence go to market planning Finance Category/N ational Managers Technical As for Gate 2 but final signed-off Include inputs volume in included capacity and Concentrate planning price and/or assumptions commercial Identify when agreement raw materials ready for will have to be sign-off by ordered and gatekeepers quantities Work alongside category and sales to assist with bottom up volumes Get formula developed and approved. Prepare technical aspects of Capex Engage suppliers Capex and ’ 01 pricing to finalised post SMM Approval Strike Line trials and agreement transport trials on etc. concentrate price Get package developed and approved. Establish Quality Measures. Finalise Time Lines. Sales Bottom up volumes Begin preparing channel plans and customer decks

Gate 3 approval gives authorisation to prepare for launch • • • Gate 3 Objective: To approve Launch and communication to customers. Final SKU’s to be launched are now locked in and agreed; Gatekeepers agree to value chain and any costs or capital identified. Approval is now given to incur these costs although Capex is subject to a separate approval process; • • Ingredients can be ordered, artwork printed and beverage base produced; All QA protocols for production will be completed and documented, and Point of Sale material will be finalised and orders placed. Steps involved in launch preparation are shown on the next slide.

Cross functional responsibility for launch preparation (prepare for Gate 4) Marketing Launch communications prepared and ready to execute (consumer, customer, system) Consumer feedback mechanisms in place NPD Supply Chain Finance Category/N ational Managers Technical Sales Creation of Scorecard with post launch KPI’s All raw materials at point of manufacture Creation of Scorecard with post launch k. PI’s Assist with Customer sellins if necessary Validation and testing of packaging and product completed Channel plans and customer plans completed Go to market pack issued to all relevant parties Quality plans completed Mixing instructions etc. issued Sales team sell in with 01 Pricing Initial production runs scheduled

Gate 4 approval gives authorisation to execute in market • Gate 4 Objective: To approve product into market place and agree on KPI’s to track launch progress; • • • Scorecard completed and KPI’s approved by gatekeepers; Commercial Agreement signed by both parties; Supply Chain commence full production of pipeline fill, and Sales force engaged. A go to market team now tracks the project versus scorecard for the first three months of launch.

Cross functional responsibility during market execution Marketing NPD MEASURE: Distribution Sales / Execution Volume per outlet Consumer Awareness Gate 3 and 4 forecast versus actual volumes Raw material levels Stock holdings POS stock holdings Customer feedback Supply Chain Initial stock production Quarantine Distribution of stock Finance REVIEW: Category/ National Managers Technical Sales MEASURE: MONITOR: MEASURE: Distribution Consumer complaints. Distribution Results versus Sales / Execution scorecard Consumer Awareness Product and packaging performance in market place Sales / Execution Consumer Awareness

Role of NPD Project Manager • Responsible for facilitating the strategic sales and marketing expertise necessary for the successful development, launch, and post-launch review, of new packages, products and promotions. • • Responsible for the management of assigned projects from inception to unsuppression. Management of timeline Management of risk profile and risk escalation Preparation of gate documents (along with project team) Responsible for project team meetings, minutes and documentation Facilitate gathering of sales volumes Provide the information needed to each functional group to allow them to complete their project tasks • Sense check information at each stage of the project based on previous experience

Role of NPD Project Manager contd. • • • Provide a Clear and Consistent Time Line for Go To Market launch plan Provide clear and concise Roles & Responsibilities for GTM deliverables Accountability for all GTM Team Members – Including escalation process Project Management, Category launches, L&D, Sampling, POS, Channel and Customer Plans Post Launch Reviews + Capturing Learnings Work closely and gain alignment with IC focus GTM Team Plan • Research and understand category and brand expectations • Define category of project • Build project team (line with category requirements) • Build the GTM time line Do • Source and Present -Brand Plan -Strategy and Category overview -Launch Date -Key Visual -DME -Pricing structure • Brief team on roles and responsibilities • Provide templates and tools required for each Channel Manager • Manage team to ensure project is on track via (time line) Review • Review of process and get 360 degree feedback from -GTM project team -IC and C&P sales representatives • Post Launch review with Channel representatives • Close project

Role of NPD Financial Representative • • Provide support to project managers in bringing an NPD to life Work with relevant teams from the wider business to source information Use this information to evaluate the investment decision: Value chain Capital requests Investment analysis (sensitivities, NPV, IRR, payback) Financial and business risks Concentrate price negotiation with TCCC & ’ 01 price setting or Commercial agreements in place with third parties/JV’s. • Challenge inputs (COGS, pricing etc) as the value chain and business case become clearer, and to propose direction changes as appropriate • Build Business case to recommend on whether to proceed or cancel

Role of NPD Gate-Keepers Development of high level estimates of market opportunity, technical scoping, and financial impact. GATE ONE APPROVAL: Gate Objective… to determine if this idea: • Is in-line with current strategy; • Deserves additional resources to evaluate further and • Ratify the decision made about its urgency. GATE 1 GATE TWO APPROVAL: Gate Objective… to determine if the developed idea has Allocation of a cross functional team to further investigate the concept, opportunity, first concepts, and more detailed financials. sufficient merit to become a project with: • A defined launch date, • A larger working team committed to the project for a period of time, and • A budget to further develop the product. GATE 2 GATE THREE APPROVAL: Gate Objective…to approve production based on the following: Product development and approval, detailed research, stability testing, detailed financial impact calculations, preparation of capital submissions. GATE 3 • Acceptance of value chain presented, including volumes and pricing, • Acceptance of any spend required (Cap-ex, DME, artwork costs, write-offs etc. ) • Agreement to timing and sales force support to launch product. Formula approval, placement of orders, capital submission and approval, development of sales execution plan and materials. GATE FOUR APPROVAL: Gate Objective… to agree that all criteria has been met to launch the product and any supporting communication to market • Agreement on final scorecard GATE 4 Make, Sell, Market and Distribute.

Overview of Cross-functional teams National Manager (Strategy) NPD Project Manager (Technical) NPD Project Manager (Go To Market) Ops Dev Manager SC NPD Execution Manager Demand Planning Supply Planning & RAW Team Finance Brand Sales Technical Commercialisation

Overview of average timelines Change Type Critical Path** Formula early order or Pack reduced testing*** Early Order Air Freight (determines timeline) (lowest risk & no added cost) New Formula 19 months 16 months 13 months + Existing Formula (exists within TCCC)* 16 months 13 months 10 months + New Glass pack 19 months 16 months 13 months 18 months 15 months 12 months 24 months 18 months n/a (added risk) (added risk & cost) (not existing in TCCC) (new moulds) New PET pack (new moulds) New closure (new design) *Exists current concentrate supply point/s and requires no modifications **Critical Path assuming appropriate testing and lowest acceptable risk ***Early order for Formula is prior to Formula PAR approval & Reduced Pack testing is production of full mould set prior to unit mould testing is complete