Overview

Company ProfileThe Inventure Group,Inc. is a marketer and manufacturer of Intensely Different™food brands under a variety of owned or licensed brand names, including T.G.I. Friday’s®, Poore Brothers®, Bob’s Texas Style®, Boulder Canyon Natural Foods™ and Tato Skins®.

$60 billion industry: The domestic market for snacks alone, where growth is driven primarily by the introduction of innovative products, was estimated to be approximately $60 billion in 2004. Salted snack products — the segment in which SNAK principally participates — account for nearly 40% of the market, with the balance consisting of cookies, candy, crackers, bars and other baked goods, etc.

Seasoned management: With backgrounds that include senior sales, marketing and operations positions at Coca-Cola, Kelloggs, Frito-Lay, Dial Corp., Quaker Oats, Danone, and Procter & Gamble, management has established SNAK as a recognized industry leader of innovation in new brands, products and flavors. SNAK was awarded the “2004 Snack Manufacturer of the Year” by Snack Food & Wholesale Bakery Magazine.

Expertise launching innovative national brands: The Company’s successful introduction of T.G.I. Friday’s® brand snacks highlights its ability to combine nationally recognized licensed brands with its abundant and unique manufacturing and marketing capabilities to create high impact niche snack food brands. Launched in late 2000, T.G.I. Friday’s® brand snacks now represent approximately two-thirds of the Company’s net revenues.

The Company’s goal is to replicate the success of the T.G.I. Friday’s® brand snacks by licensing, developing or acquiring additional innovative national niche food brands that:provide a strategic fit with existing brandshave strong, nationally recognized brand equitycomplement, rather than compete with, category-leading brands of larger competitorshave the potential to improve operational capacity utilization and enhance margins

Sales and distribution capabilities: SNAK brands are sold directly to major retailers across the nation such as Wal-Mart, SAM’s Club, Costco, Kroger, Safeway and Albertson’s, as well as through a select group of independent distributors to reach vending operators and convenience store retailers. The Company’s sales force is assisted by Acosta, a large national food broker with over 11,000 employees in more than 70 locations in North America.

Competition: The Company’s strategy is to complement rather than compete with Frito-Lay, Nabisco and other large food companies by creating niche brands that deliver category growth to retailers. In the Company’s view, many smaller snack food manufacturers emulate Frito-Lay products and thus compete directly against them without a competitive advantage and do not possess the Company’s product innovation or branding capabilities.

Ample capacity for growth: With a total of 200,000 ft2 at production facilities in Indiana and Arizona, the Company has manufacturing capacity capable of supporting up to $150 million at wholesale – providing an opportunity to significantly improve operating efficiencies.

Business Strategy

The Company’s business strategy is to build a diverse portfolio of national niche food brands with annualized revenues of $5 million to $50 million each through licensing, acquisition or development. The goals of this new strategy are to (i) capitalize on national niche market opportunities, (ii) deliver incremental category growth for retailers, (iii) provide product innovation targeted to a defined consumer segment, (iv) complement, rather than compete directly against, large national competitors with leading national brands, and (v) build relationships with major retailers in all channels of distribution by providing them higher margins, excellent customer service and constant innovation. The primary elements of the Company’s long-term business strategy are as follows:

Develop, Acquire or License Innovative Food Brands. A significant element of the Company’s business strategy is to develop, acquire or license new innovative food brands that provide strategic fit and possess strong national brand equity in order to expand, complement or diversify the Company’s existing business. In October 2000 the Company initiated this element of its strategy by launching its first national niche brand, T.G.I. Friday’s® brand salted snacks, under an exclusive license from TGI Friday’s Inc.

Broaden Distribution of Existing Brands. The Company plans to increase distribution and build the market share of its existing branded products through selected trade activity in various existing or new markets and channels. Marketing efforts may include, among other things, trade advertising and promotional programs with distributors and retailers, in-store advertisements, in-store displays and limited consumer advertising, public relations and coupon programs.

Develop New Products for Existing Brands. In addition, the Company plans to continue its innovation activities to identify and develop (i) new line extensions for its brands, such as new flavors or products, and (ii) new food segments in which to expand the brand’s presence. For example, in the second quarter of 2005 the Company plans to commence initial shipments of a new line of tender meat snacks under the T.G.I. Friday’s® brand. In June 2000 the Company acquired the Boulder Potato Company® brand natural potato chips.

Leverage Infrastructure and Capacity. The Company’s Indiana and Arizona facilities are currently operating at approximately 40% and 50% of their respective manufacturing capacities. The Company currently has arrangements with several grocery chains for the manufacture and distribution by the Company of their respective private label potato chips and believes that additional contract manufacturing opportunities exist. While they are extremely price competitive and can be short in duration, the Company believes that they may provide a profitable opportunity for the Company to improve the capacity utilization of its facilities. The Company intends to seek additional private label and contract manufacturing customers located near its facilities who demand superior product quality at a reasonable price.

The Company also utilizes contract manufacturers’ excess capacity to produce items that the Company does not have the equipment or know-how to manufacture.

Improve Profit Margins. The Company plans to increase gross profit margins through increased revenues, improved operating efficiencies, and higher margin new products. It believes that additional improvements to its manufactured products’ gross profit margins are possible with the achievement of the business strategies discussed above. Depending on product mix, the Company believes that the existing manufacturing facilities could produce, in the aggregate, up to $150 million in annual revenue volume and thereby further reduce manufacturing product costs as a percentage of net revenue.

The content of this site is provided to you for information purposes only. Information not of historical fact are “forward-looking” statements as that term is defined in the Private Securities Litigation Reform Act of 1995. Because such statements include risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements. Factors that may cause actual results to differ from the forward-looking statements and that may affect the Company’s prospects in general include, but are not limited to, the potential need for additional financing, acquisition-related risks, significant competition, customer acceptance of new products, dependence upon major customers, general risks related to the food products industry, and such other factors as are described in the Company’s filings with the Securities and Exchange Commission.

Additionally, certain information herein has been prepared and/or provided by third parties not affiliated with Poore Brothers. This information is provided for information purposes and it should not be assumed that Poore Brothers endorses the analyses, opinions and projections contained therein. Any questions regarding the content or conclusions of third-party content providers should be addressed not to Poore Brothers but directly to the publishers of the information.