New York City January 23, 2007 The U.S. Wine Market 2008 – Consumer Trends and Analysis

Total Table Wine Consumption (Millions of cases) Source: Beverage Information Group *Estimate 271*

Adult Per Capita Table Wine Consumption vs. Population Growth Adult Population Gallons per Adult Source: U.S. Census Bureau, Beverage Information Group *Estimate 218* 3.00*

Beer/Spirits 25.6% Core Wine Drinkers 15.7% Marginal Wine Drinkers 15.2% Non-Drinkers 43.5% (Ages 21+ HHI $35K+) Consumer Segments U.S. Adults 2008 Core Wine Drinker: Drinks wine once a week or more often. Marginal Wine Drinker: Drinks wine less than once a week but more than once every 2 or 3 months. Source: Wine Market Council

Beer/Spirits 25.6% (24.9%) Core 15.7% (15.2%) Marginal 15.2% (15.8%) Non-Drinkers 43.5% (44.1%) (Ages 21+ HHI $35K+) Consumer Segments U.S. Adults 2008 vs 2006 Core Wine Drinker: Drinks wine once a week or more often. Marginal Wine Drinker: Drinks wine less than once a week but more than once every 2 or 3 months. Source: Wine Market Council

Consumer Segments, 2008 Core Wine Drinkers Marginal Wine Drinkers15.29 Beer/Spirits Drinkers25.60 Non-Drinkers43.50 TOTAL100 % Sample % Volume (Ages 21+ HHI $35K+) Source: Wine Market Council

Table Wine Drinking Frequency, Daily Weekly + Once Wk. 2-3 X Mo Once Mo. 1 x 2-3 Mo. CoreMarginal (Percentages by segment) 14

Table Wine Drinking Frequency, 2008 vs Daily Weekly + Once Wk. 2-3 X Mo Once Mo. 1 x 2-3 Mo. Core Marginal (Percentages by segment)

Consumer Segments by Gender, 2008 Core Marginal Male 52% Female 48% Male 45% Female 55% Source: Wine Market Council

Purchase by Channel and Gender, 2008 Source: Wine Market Council (Percentage past 3 month purchase)

Net Gain in Wine Consumption, 2008 (Net gain “Drinking more wine” vs. year or two ago, by gender) Source: Wine Market Council

Swing ( ) 30 Million Relative Size of Generations Source: American Generations WW II (77 and over) 32 Million Boomer ( ) 77 Million Generation X ( ) 44 Million Millennial ( ) 70 Million 12% 11% 29% 26% 16% (Age ranges in 2009)

Younger Generations Drive New Growth, 2008 (Net percent gain/loss in wine consumption by generation) 46% 23% 7% -1% Source: Wine Market Council Millennial 21 – 32 Yrs Old Gen X 33 – 44Yrs Old Boomer Yrs Old Swing & WWII 64+ Yrs Old

Male vs. Female Ratio of Wine Drinkers by Generation, (Percentage by segment and generation) 50 Source: Wine Market Council Millennial 21 – 32 Yrs Old Gen X 33 – 44Yrs Old Boomer Yrs Old Swing & WWII 64+ Yrs Old

Glasses per Occasion by Generation, 2008 Source: Wine Market Council Millennial 21 – 32 Yrs Old Gen X 33 – 44Yrs Old Boomer Yrs Old Swing & WWII 64+ Yrs Old 2.83 glasses 1.79 glasses 2.13 glasses 2.41 glasses

“I Associate Wine with Fun Times” 2008 (Percent completely/somewhat agree) Source: Wine Market Council Millennial 21 – 32 Yrs Old 2.83 glasses/occ. Gen X 33 – 44Yrs Old 2.41 glasses/occ Boomer Yrs Old Swing & WWII 64+ Yrs Old

 The Wine Industry has experienced 15 years of consecutive growth. With per capita consumption at 3 gallons per person in  This growth is expected to continue in  Around 31% of the adult population drinks wine, with 15.7% drinking wine weekly or more often. These core wine drinkers account for around 91% of all wine volume.  Men vs Women: –Men are slightly more likely to be core wine drinkers while women are more likely to be marginal wine drinkers. –Men are more likely to buy wine in a liquor or wine store while women are more likely to buy wine in a grocery store or warehouse/club store. Summary

 Industry growth trends are expected to continue in 2009 because… –Men say they’re drinking wine more vs a few years ago. –The Millennial consumers (21 – 32 yrs old) say they’re drinking more wine vs a few years ago. –Millennial consumers drink more per occasion vs older consumers. –Millennial consumers associate wine with fun time. Summary

Thank You