Calculate a TEV (Total economic value)

CALCULATE A TEV (TOTAL ECONOMIC VALUE)

TEV = price of the next-best alternative + expected system savings - added operating costs

Exhibit 1 Caesan Product Lines by Percentage of Retail Revenue (2018) Classic Cheddars (%) Flavored Cheddars (%) Non-Cheddars (%) Medium 18.5 Garlic and herb 10.8 Brick 8.4 Sharp 13.7 Spicy 9.7 Monterey Jack 5.6 Extra sharp 10.5 Smoked 5.5 White 10.3 Reduced-fat medium 7.0 d to Exhibit 2 Caesan Consolidated Income Statement (Annual 2018) U.S.S 50,584,000 49,560,000 1,024,000 % of Revenue 100.0 98.0 2.0 Revenue Retail Direct to consumer Variable costs Cost of goods-raw materials Cost of goods-production Cost of goods-distribution Gross profit Fixed costs Selling expenses General and administrative expenses Operating profit 9,124,800 14,227,200 9,910,400 17,321,600 5,482,000 3,630,000 8,209,600 Exhibit 3 Caesan Cheese Gross Margins per Unit (Annual 2018 and Proposed) 2018 Retail $3.00 2018 Consumer Proposed Natural $2.50 Proposed Artisan S8.00 $4.45 Revenue per unit Variable costs Cost of goods raw materials Cost of goods-production Cost of goods-distribution Gross profit per unit $0.561 $1.060 30.548 S0.853 50.600 $0.999 $0.548 $0.853 $0.500 $0.599 $0.561 $1.060 $0.890 $1.939 $6.379 Exhibit 4 Results of A/B Test Brand Cheese Product 11 Cart (%) Competitor Natural cheddar (S4.59) Artisan cheddar (S6.99) Irish whiskey artisan cheddar ($7.49) Caesan Natural cheddar ($4.59) Artisan cheddar (S6.99) Irish whiskey artisan cheddar ($7.49) Jameson Irish Whiskey Artisan Cheddar ($7.49) 1,000 1,000 1,000 1,000 1,000 500 500 64 18 12 61 15 10 17 Exhibit 5 Summary of Draft Licensing Agreement Caesan Cheese Cooperative (hereafter, Caesan") receives exclusive licensing rights to utilize the Jameson Irish Whiskey trademark in connection with natural cheese it sells in the United States and Canada, as long as the cheese meets or exceeds established quality standards. Caesan will not produce, market, or sell any other version of whiskey cheddar (natural, artisan, farmstead, or variations thereof) for the period of the agreement. Caesan pledges to use its best efforts in marketing Jameson Irish Whiskey Artisan Cheddar. Pernod Ricard USA (hereafter, PR-U) promises to provide limited support for marketing and communications through its website, media relations, and cooperative advertising. Caesan will pay a royalty of $0.25 to PR-U for every unit of Jameson Irish Whiskey Artisan Cheddar sold at wholesale. Jameson Irish Whiskey Artisan Cheddar is required to meet a series of steadily increasing annual net sales targets during the first two years of the agreement. The sales targets must also be met in each subsequent year. The Jameson Irish Whiskey brand name will be displayed prominently on each unit. All advertising and promotional materials for Jameson Irish Whiskey Artisan Cheddar require written approval from PR-U prior to publication or use. PR-U may terminate this agreement during 2020 if, in PR-U's sole judgment, sales of Jameson Irish Whiskey Artisan Cheddar adversely impact sales of Jameson Irish Whiskey or any derivative thereof. Exhibit 6 Two-Year Budget for New Product Launch (U.S.S) Investment Staff ($75,000/year) Factory equipment Packaging materials Branding and testing Traditional paid advertising Digital and social media advertising In-store sampling and trade shows TOTAL Irish Whiskey Artisan Cheddar $150,000 $200,000 $150,000 $50,000 $750,000 $200,000 $300,000 $1,800,000 Jameson Irish Whiskey Artisan Cheddar $150,000 $200,000 $150,000 $50,000 $500,000 $100,000 $250,000 $1,400,000 Exhibit 1 Caesan Product Lines by Percentage of Retail Revenue (2018) Classic Cheddars (%) Flavored Cheddars (%) Non-Cheddars (%) Medium 18.5 Garlic and herb 10.8 Brick 8.4 Sharp 13.7 Spicy 9.7 Monterey Jack 5.6 Extra sharp 10.5 Smoked 5.5 White 10.3 Reduced-fat medium 7.0 d to Exhibit 2 Caesan Consolidated Income Statement (Annual 2018) U.S.S 50,584,000 49,560,000 1,024,000 % of Revenue 100.0 98.0 2.0 Revenue Retail Direct to consumer Variable costs Cost of goods-raw materials Cost of goods-production Cost of goods-distribution Gross profit Fixed costs Selling expenses General and administrative expenses Operating profit 9,124,800 14,227,200 9,910,400 17,321,600 5,482,000 3,630,000 8,209,600 Exhibit 3 Caesan Cheese Gross Margins per Unit (Annual 2018 and Proposed) 2018 Retail $3.00 2018 Consumer Proposed Natural $2.50 Proposed Artisan S8.00 $4.45 Revenue per unit Variable costs Cost of goods raw materials Cost of goods-production Cost of goods-distribution Gross profit per unit $0.561 $1.060 30.548 S0.853 50.600 $0.999 $0.548 $0.853 $0.500 $0.599 $0.561 $1.060 $0.890 $1.939 $6.379 Exhibit 4 Results of A/B Test Brand Cheese Product 11 Cart (%) Competitor Natural cheddar (S4.59) Artisan cheddar (S6.99) Irish whiskey artisan cheddar ($7.49) Caesan Natural cheddar ($4.59) Artisan cheddar (S6.99) Irish whiskey artisan cheddar ($7.49) Jameson Irish Whiskey Artisan Cheddar ($7.49) 1,000 1,000 1,000 1,000 1,000 500 500 64 18 12 61 15 10 17 Exhibit 5 Summary of Draft Licensing Agreement Caesan Cheese Cooperative (hereafter, Caesan") receives exclusive licensing rights to utilize the Jameson Irish Whiskey trademark in connection with natural cheese it sells in the United States and Canada, as long as the cheese meets or exceeds established quality standards. Caesan will not produce, market, or sell any other version of whiskey cheddar (natural, artisan, farmstead, or variations thereof) for the period of the agreement. Caesan pledges to use its best efforts in marketing Jameson Irish Whiskey Artisan Cheddar. Pernod Ricard USA (hereafter, PR-U) promises to provide limited support for marketing and communications through its website, media relations, and cooperative advertising. Caesan will pay a royalty of $0.25 to PR-U for every unit of Jameson Irish Whiskey Artisan Cheddar sold at wholesale. Jameson Irish Whiskey Artisan Cheddar is required to meet a series of steadily increasing annual net sales targets during the first two years of the agreement. The sales targets must also be met in each subsequent year. The Jameson Irish Whiskey brand name will be displayed prominently on each unit. All advertising and promotional materials for Jameson Irish Whiskey Artisan Cheddar require written approval from PR-U prior to publication or use. PR-U may terminate this agreement during 2020 if, in PR-U's sole judgment, sales of Jameson Irish Whiskey Artisan Cheddar adversely impact sales of Jameson Irish Whiskey or any derivative thereof. Exhibit 6 Two-Year Budget for New Product Launch (U.S.S) Investment Staff ($75,000/year) Factory equipment Packaging materials Branding and testing Traditional paid advertising Digital and social media advertising In-store sampling and trade shows TOTAL Irish Whiskey Artisan Cheddar $150,000 $200,000 $150,000 $50,000 $750,000 $200,000 $300,000 $1,800,000 Jameson Irish Whiskey Artisan Cheddar $150,000 $200,000 $150,000 $50,000 $500,000 $100,000 $250,000 $1,400,000