Truett-Hurst, Inc. - FWP filing on 2013-06-07

Filed Pursuant to Rule 433

Issuer Free Writing Prospectus

Dated June 6, 2013

(To Prospectus dated June 5, 2013)

Registration Statement No. 333-187164

June
2013

Truett-Hurst, Inc. has filed a registration statement (including a
preliminary prospectus) with the Securities and Exchange
Commission, or SEC, for the offering to which this
communication relates. Before you invest, you should read the
prospectus in that registration statement and other documents
Truett-Hurst, Inc. has filed with the SEC for more complete
information about Truett-Hurst, Inc. and this offering. You may
get these documents for free by visiting EDGAR on the SEC
Web site at www.sec.gov. Truett-Hurst, Inc.’s Central Index
Key, or CIK, on the SEC Web site is 0001564709.
Alternatively, Truett-Hurst, Inc. or WR Hambrecht + Co will
arrange to send you the prospectus if you request it by calling
WR Hambrecht + Co toll-free at 1-800-673-6476.

Introduction

• We are a fast-growing ultra-premium wine
company based in the acclaimed Dry Creek and
Russian River Valleys of Sonoma County,
California

• The core of our business is unique custom label/
private label partnerships with major retailers,
such as Trader Joe’s, Total Wine and Safeway

• We work closely with our channel partners to
develop tailored brands to be sold to the
discovery oriented wine buyer

Our mission is to change the way consumers
buy wine through our disruptive distribution
model, partnerships with key retailers, and
our innovative packaging & design

Our Brands

Dearly Beloved is sold
through Trader Joe’s and
is expected to be our best
selling wine in FY13
and FY14

Paperboy is a new label
launching with Safeway in
FY14 featuring a novel
paper bottle

VML is our highest end
label, and sells mainly
through our wine club
and tasting room

We produce and sell over 30 brands, some in partnership
with major retailers, and some independently

Key Customers

Major distribution partners include
Young’s and RNDC

Trader Joe’s, Total Wine and Safeway
are the largest retail partners, together
accounting for over 50% of sales

Disruption of Wine Distribution Model

Wineries grow and produce wine, build inventory, and work with distributors to
sell it through traditional 3-tier system

Winery starts small,
producing wine & label

Works toward a
wine publication rating

Gets on restaurant
wine lists

Grow sales team

Rely on distributors
for shelf placement

Traditional Model

Disruption of Wine Distribution Model

• Our private label business model disrupts traditional wine producers by
working directly with retail partners to develop pricing and packaging before
producing the wine

• Co-developing brands with retailers allows us to access retailers’ data on
what wines and packaging are in demand

• Private label brands go straight to shelf with premium placement

Our Model

Market Overview

Sources: The Wine Institute

Source: Nielsen, 2010 data

% of Private label Wine Sales

Total US Wine Sales

2010

2000

Australia

Penetration of US private label sales from 3.7% to 15%
equates to approximately a $4 billion revenue opportunity

• US is world’s largest wine
market, growing 5% annually
over the past decade

• Private label segment growing
rapidly, at 20% unit growth in
2010, and remains under-
penetrated

Competitive Pressures : The 3-Tier Model

Producers

Distributors

Retail Outlets

“Big 6”

Southern

Charmer Sunbelt

RNDC

Glazers

Youngs

Wirtz

CA Wine Producers

National Distribution

Top 4 = 65% of shipments

Big 6 = est. 80% of total

To compete with powerful producers and suppliers for this growing
market, grocery retailers have turned to private labels to gain margin,
customer loyalty and differentiation.

EJ Gallo

Wine Group

Constellation

Trinchero

Bronco

All Others

Business Strategy - Paperboy Case Study

• Paperboy is a brand we developed with Safeway -
expected to launch with a significant case order in
FY2014

• Our competitive grape sourcing, high quality wine
making, and world-class packaging and label design
deliver a premium product for the $10-25 price market

• Innovative paper bottle is 80% lighter than a glass bottle
with a 67% lower carbon footprint, with better insulation
properties

• Target market is early adopters / eco-friendly Millennials,
outdoor enthusiasts, and hipsters looking for the next
new thing

• Safeway can scale their orders and we will not require
capital for wide scale wine making or grape production as
we source from bulk market

• We own the Paperboy brand - after 90 days of
exclusivity, we can sell it through other retailers

Experienced Team

Experience and success of this team exceeds the size of Truett-Hurst’s
present business and will allow the company to scale for many years

Over 20 years experience in the wine business, as wine
maker at Fetzer and SVP International Sales at Golden
State Vitners; Co-founded and built WineryExchange
into $100m private label beer and wine business

27 years at Fetzer as winemaker and President; scaled
Fetzer to 4 million cases

CPA and audit background, 25 years in wine industry
including K-J, Coppola, Ascentia and Rodney Strong

Prior wineries include De Loach Vineyards, La Follette
and Hendry Ranch

16 years in wine industry, managed cellar operations
for Fetzer

Phil Hurst, Co-founder, CEO, President

Paul Dolan, Co-founder

Jim Bielenberg, CFO

Virginia Lambrix, Director of Wine Making

Heath Dolan, Co-founder, Director of Vineyards

Kevin Shaw, Creative Director

Founder, Stranger & Stranger design agency -
Designed 100+ beverage brands per year

Product Overview

• We have over 30 brands in our product lines

• Three brands each account for more than 10% of sales, including Dearly Beloved,
Sauvignon Republic and Healdsburg Ranches

• FY2013 Top selling brands include:

- Direct to Consumer - Truett-Hurst, VML

- Traditional 3-Tier Distribution: Healdsburg Ranches, Stonegate, Bradford Mountain

- Private Label - Dearly Beloved and Sauvignon Republic for Trader Joes; Curious Beasts,
Paper Boy, Schucks and Fuchsia series for Safeway, Eden Ridge and Harbor Front for Total
Wine

Dearly Beloved (PL)

Savignon Republic (PL)

Healdsburg Ranches/ (3T)

Hobson Estate/
Kiarna (PL)

Curious Beast (PL)

Paper Boy (PL)

Schucks (PL)

Top three brands account
for just under 40% of sales

12 brands sell in excess of 10,000 cases

California Square (PL)

Stonegate Collection (3T)

Fuchsia (Rose/White) (PL)

Truett Hurst (DTC)

Harbor Front (PL)

3T = 3 Tier PL = Private Label DTC = Direct to Consumer

Revenues Overview

• Total revenues in FY2012 were $12.7 million, a 135% increase from $5.4 million in FY2011

• Private label accounts for 72% of FY13 estimated sales, traditional 3-tier 10%, and direct to
consumer 18%

• 3Q13 revenues (to March 2013) were $12.1 million, an increase of 17% YoY

• Quarterly revenues are lumpy as large orders may not be evenly distributed through the year

Revenue ($M)

FY11

FY12

Net Sales ($M)

3QFY12

3QFY13

18%

72%

Private
Label

Direct to
Consumer

10%

3 Tier
Wholesale

Revenue Breakdown (%)

Gross Margin Overview

• Gross margin was 27.8% for the year ended June 2011

• Gross margin declined to 24.2% in FY12 due to price discounting during the
launch of the Harbor Front brand, and a one-off low margin sale of C. Donatiello
wine inventory

• Fiscal year 2013 margins widened to over 30% due to new brand introductions at
higher price points

• First nine months FY2013 gross margin was 33.4%

Gross Margins

P&L Overview

• We achieved a small profit in FY2012, after start-up losses of $0.8 million in FY11

• In the first nine months of FY2013, we reported a loss of $0.5 million and EBITDA loss of $0.1
million on $12.1 million sales

• Safeway’s ramp in sales volumes will be seen starting in the Summer and Fall of 2013, so will
be reflected in FY2014 results

Selected Profit & Loss Data ($000)

		FY11			FY12			3QFY13

Net sales	$	5,402		$	12,693		$	12,144

Gross profit		1,501			3,075			4,052
Operating expenses		1,920			2,575			4,303
Income (loss) from operations		(419	)		500			(251	)
Interest / other expense		(401	)		(473	)		(270	)
Income (loss) before income taxes		(820	)		27			(522	)
Income tax expense		(1	)		(1	)		(2	)
Net income (loss) before noncontrolling interest		(821	)		26			(524	)
Loss attributable to noncontrolling interest		-			-			44
Net income (loss) attibutable to HDD, LLC members		(821	)		26			(480	)

Balance Sheet Overview

• At March 2013, total assets had increased by $6.9 million over June 2012, mostly
due to increased inventories ahead of growing order size

• At March 2013, T-H had total debt of around $15.0 million versus equity of $5.8
million

Selected Balance Sheet Data ($000)

	FY11		FY12		3Q13

Cash and cash equivalents	$	274	$	167	$	170
Inventories		3,567		6,852		11,801
Total current assets		4,786		8,622		14,433
Total assets		10,100		14,083		20,870
Total current liabilities		4,558		5,991		11,366
Long-term debt, net of current maturities		2,749		2,637		3,517
Total debt		7,307		8,628		15,023
Members' equity (includes redeemable contributed capital (A))		2,705		5,259		5,847

Valuation Considerations

Source: WR Hambrecht + Co Valuation Analysis for Truett-Hurst and CapitalIQ

• Price range of $6 - $8 reflects a market value of $39.6 million to $52.8 million;
the mid-point of $7 reflects a market value of $46.2 million

• The closest comps in the industry are much larger businesses that are growing
at a slower rate

• Recently listed Crimson Wine Group, which owns Seghesio Winery, is the
closest comp in terms of size of business

• Disruptive B2C companies trade at a significant premium to their market
counterparts

Summary Multiples

(in millions of USD)