Integration of RFID Technology for Tracking our Fleet of Kegs. Presented By: Jordan Kivelstadt, Managing Partner

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2 Integration of RFID Technology for Tracking our Fleet of Kegs Presented By: Jordan Kivelstadt, Managing Partner

3 Agenda Company Overview History and Benefits of Wine on Tap Example of Wine On Tap Installation Our Kegs and How they Move Our Strategic Partners RFID Integration Question and Answer

4 Silvertap and Free Flow Wines Respective Industry Leaders Under the Same Umbrella Silvertap Wines Free Flow Wines A premium wine brand marketed exclusively in kegs Largest national wine on tap brand 3,500 cases sold to YTD2011 Sonoma County wines produced by acclaimed winemaker Bill Knuttel The industry leader in wine keg packaging with more than 20 clients Provides custom packaging, tracking, and support to wineries Proprietary cleaning/filling/ tracking systems

5 Wine on Tap Has Existed in Many Different Forms Wine on tap is not a new idea Existed in Europe for hundreds of years Italian producer Montelvini sells over 500,000 kegs of wine per year! First attempts in the U.S. failed because of poor wine quality and a lack of focus on delivery mechanisms Anheuser Busch - Master Cellars Paul Masson Inglenook

6 Wine on Tap is Changing the Way Americans Drink Sonoma-based Dan Donahoe, one of the first wine-on-tap producers, told me he sold "the equivalent of 5,000 cases" in 2010 and expects to sell four to five times that much in Wine, stored in keg and served through a method similar to a draftbeer line [will] be the glorious future of by-the-glass Kimpton Hotels & Restaurants has launched a new Wine On Tap program. Emily Wines, director of wines is leading the draft wine program through a partnership with Free Flow Wines. Demand is greater than supply Who is Putting Wine on Tap? In spite of growing demand by restaurants and hotels, few brands are available in keg Marriott, Hilton Hotels, Starwood Hotels & Resorts, Sodexo, Whole Foods, Kimpton Hotels, Slanted Door Restaurants, Moana Group

7 Why Wine on Tap? Delivers improved quality at a lower cost, increases margins, decreases carbon footprint No Spoilage Consistency Quality Ease of Use Green No cork taint, bottle variation, or oxidation Wine remains fresh; from the first glass to the last Reduced packaging costs provide higher quality wines at a lower price Wine on tap flows through the same style draft system as beer Carbon footprint reduced by eliminating packaging: no bottles, labels, corks, foils or cardboard

8 How Green = Better Profits The Cost Benefits of Moving One By-the-Glass Placement to Wine on Tap No Waste 3 cases a week = ~1,900 bottles a year An empty box of glass weighs 18 lbs Saves 1.5 TONS of trash The Perfect Pour Remove TCA problems (5% of wines) No spoilage from oxidation ¼ bottle for every 4 bottles poured Saves $9.45 per case ($1,500 per year) Efficiency Without bottles, stocking, rotating, and disposal is reduced, saving 2 man hours a day Saves $1,500 in Labor NOTE: Assuming 3 cases per week, $10 an hour for labor, $7 a bottle wholesale price

9 Kimpton Hotel Palomar Westwood

10 Kimpton Hotel Palomar Westwood

11 Free Flow Wines has 5,850 GreenCasks in Circulation GreenCasks Our GreenCasks are made of PET plastic, reducing weight to 60% of metal kegs International testing laboratory showed no taste difference versus metal kegs Made in California, using renewable energy Expected life is 8 years, at which point they are recycled to produce new kegs Cask Fleet and Tracking Currently Free Flow owns 4,450 20L kegs 1,200 15L kegs L kegs Approx. 1,400 kegs are on-site in the winery Proprietary Radio Frequency ID Tag (RFID) system to track kegs, developed by BIS Computer Solutions

12 Free Flow Wines Logistics Kegs are inspected, repaired and cleaned Kegs filled at our winery or at a clients Distributor pick up kegs from winery/ storage facility Key Services Offered Keg Cleaning Keg Filling Keg Rental Deposit Billing FFW ships from your distributor back to our facility for one low cost Distributor delivers full and picks up empty kegs FFW bills distributor for deposit, credits winery Keg Tracking Compliance Assistance Return shipping

13 Free Flow Wines - Strategic Partnerships Largest supplier of tap parts in the world Industry leader and partner in new product design Industry leader in draft system tracking Provides key data on utilization and efficiency Proprietary keg tracking software Follows the entire keg life using Radio Frequency Identification (RFID) tags National reverse logistics partner Eases burden on distributors to return kegs and handle deposits

14 MicroMatic: Key to Tap Installation Success Largest manufacturer of draft parts in the world, important Free Flow partner Produced the first Wine on Tap Catalog together with Free Flow National network of installers Mike Ciaccio: Micro Matic dealer / installer contact for any market, nationwide

15 BIS Our RFID/Inventory Partner Established in 1971 Currently Maintains Three Divisions Commercial Division Government Division Mobile Division Company Locations Corporate Headquarters, La Crescenta, CA. Italy Utah New York Satellite Sales

16 The Support We Needed to Make RFID a Reality BIS have a dedicated support team who are available 24/7 to assist you with the solution should additional training or issues accrue Support and Developer Certified Oracle Certified Developers Oracle Certified Database Administrators Platinum Oracle Partner Member of the Oracle Development Alliance Network Microsoft Gold Certified

17 Our Challenge Currently Free Flow has about 6,000 kegs in circulation growing to 20,000 this year These kegs are cleaned, filled, stored and shipped from one location Key pieces of information to track: Is the keg dirty, clean or full? Where is it? How long has it been there? When can we expect to get it back?

18 Key Considerations in Developing an Inventory System When FFW decided to implement an inventory tracking system we needed to understand our utilization needs: Working in a cold, humid environment Tracking lots of small objects (pallets of kegs) Prevent vendors and restaurants from removing/ destroying tags

19 RFID is the Almost Ideal Solution After looking at 2D and 3D barcodes, RFID proved a better solution for FFW, because: We can scan entire pallets in one step The RFID tags are hidden in the kegs, protecting them to the rigors of a kegs life But, there have been challenges: Kegs are liquid filled vessels (dampening RFID signal strength) Currently only using handheld readers

20 How FFW Implemented RFID UHF DogBone 2 - RFID tag hidden between chime and body 2 PSION handheld RFID scanners

21 Experiences so far with RIFD Implementation and Tracking Benefits to RFID tracking: Fast and efficient pallet scanning Kegs returned scratched/dented, but RFID tags remain in great shape Challenges with RFID Variations in tag readability from keg to keg Reading kegs that are not on the pallet being scanned Lack of ability to identify the missing keg

22 FFW Plans to Expand RFID Capabilities and Integration Install fixed readers at key stages in the cleaning, filling, storage, and shipping locations Continue to improve RFID location and readability Adapt to both plastic and metal kegs

23 Questions? Jordan Kivelstadt

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