Quality, Integrity, Stability

And Report on the General Affairs Industry Commentary And Report on the General Affairs of the Association

Equilibrium Fungibility Stability Themes By Year Premiumization 2015 2016 Equilibrium Premiumization 2017 2018 Fungibility Stability Themes By Year

Wine Industry Stability Stability can come in times of growth, times of regression, or amidst no change at all. Market stability is a measure of supply/demand equilibrium, regardless of specific market volume.

Moderated Vineyard Planting Planting at Attrition Rate Est.

Potential Threats To Stability Large Crops (short-term) Economic Regression (mid-term) Consumer Age Demographics (long-term)

Are Premium Wine Growth Rates Slowing? Wine Shipments Are Premium Wine Growth Rates Slowing?

Wine Shipments Slowing Percentage changes reported from the Gomberg Fredrikson Report

with slowing wine shipments? What characteristics are associated with slowing wine shipments? Incredible competition and product offerings “No-growth” segments of the market get ignored Growth brands are essentially cannibals Wine producers practice “just-in-time” supply management Speculative or opportunistic grape buying is limited Enhanced efforts surface to maintain margin Wine producers focus on value More attention on the intersection of price/quality

Merger & Acquisition Activity Keeping up with the M&A world of wine AGG is a grower’s answer to consolidation

Consolidation is at Every Level Graphic source – Wines & Vines, September 2017 Issue

AGG’s Role in, and Response to, an Ever-Changing Industry Jeff Bitter (President) Irene Ybarra (Acct/Admin Manager) Alesia Zion (Accounting and HR) Marcia Silva (Administration) Karl Lehman (Regional Manager) Ed Nikssarian (Grower Relations) Emilio Miranda Jeff Osterman Joe Osteman Chad Clark Kevin Rogers Matt Kerr A practical look at AGG – changing our people resource structure

AGG’s Role in, and Response to, an Ever-Changing Industry What will be different? “Boots on the ground” marketing Increased social media presence Prioritizing grape marketing at every level of the organization Board and policy evolution What will remain the same? Our motto & mode of operation: Quality, Integrity, Stability Our commitment to growers AGG growers first, but ultimately all growers Our industry commitment Providing information & services for all

Quality, Integrity, Stability