Shopper © Copyright 2015 Shopper Tracker / SMI Simon Ford, Managing Director, Shopper Tracker Liquor, Drinks Industry Show 2015 Shopper benchmarking metrics to drive category and customer planning

Shopper © Copyright 2015 Shopper Tracker / SMI Future is not the present Engage the shopper better Drive Growth & Margin

Shopper © Copyright 2015 Shopper Tracker / SMI We launched in Australia in 2009 (now also in New Zealand, UK, US, Canada, France, Netherlands) One common industry view Measures behaviours & perceptions Consistent benchmarks category vs. category, retailer vs. retailer 250+ categories in Australia (Liquor, Grocery, Convenience, Pharmacy) 140,000+ Shoppers p.a. All retailers

Shopper © Copyright 2015 Shopper Tracker / SMI We spoke to 20,018 Liquor shoppers in 2015 Other retail banners: - Standalone: n= Specialists / Fine Wine: n=946 N = 1818N = 1775 N = 4998 (split equally attached, standalone, drive-thru) N = 1770 N = 497 N = 1940 (split equally standalone, drive-thru) N = 1608 (split equally standalone, drive-thru) N = 1042 N = 1142 (split equally standalone, drive-thru) N = 1381 New in 2015

Shopper © Copyright 2015 Shopper Tracker / SMI Covering all main categories Beern = 4698 Lightn = 126 Midn = 683 Full Strengthn = 775 Premium/ Importedn = 1045 Craft/ Boutiquen = 1045 Contemporaryn = 1024 Spiritsn = 4305 Vodkan = 983 Rumn = 675 Bourbonn = 987 Whiskyn = 992 Liqueursn = 668 Winen = 6159 White under $15n = 777 White over $15n = 785 Red under $15n = 780 Red over $15n = 795 Sparklingn = 1075 Champagnen = 1045 Caskn = 902 Pre-Mixn = 3655 Vodkan = 971 Bourbonn = 676 Whiskyn = 672 Rumn = 679 Liqueursn = 657 Cidern = 1201 Traditionaln = 626 Flavouredn = 575

Shopper © Copyright 2015 Shopper Tracker / SMI Quiz: Heads or Tails? QuestionHeadsTails 1 Which has a higher percentage of women shoppers?MoscatoPremium Beer

Shopper © Copyright 2015 Shopper Tracker / SMI Quiz: Heads or Tails? QuestionHeadsTails 1 Which has a higher percentage of women shoppers?Moscato (76%)Premium Beer (31%) 2 Which has a higher percentage of over 40s shoppers?ChampagneSav Blanc

Shopper © Copyright 2015 Shopper Tracker / SMI Quiz: Heads or Tails? QuestionHeadsTails 1 Which has a higher percentage of women shoppers?Moscato (76%)Premium Beer (31%) 2 Which has a higher percentage of over 40s shoppers?Champagne (67%) Sav Blanc (80%) 3 How many shoppers specifically go out to buy alcohol (vs. buying when they’re out doing something else)? 1 in 32 in 3

Shopper © Copyright 2015 Shopper Tracker / SMI Quiz: Heads or Tails? QuestionHeadsTails 1 Which has a higher percentage of women shoppers?Moscato (76%)Premium Beer (31%) 2 Which has a higher percentage of over 40s shoppers?Champagne (67%) Sav Blanc (80%) 3 How many shoppers specifically go out to buy alcohol (vs. buying when they’re out doing something else)? 1 in 32 in 3 4 Who has the youngest shoppers (under 40)?BottlemartCelebrations

Shopper © Copyright 2015 Shopper Tracker / SMI Quiz: Heads or Tails? QuestionHeadsTails 1 Which has a higher percentage of women shoppers?Moscato (76%)Premium Beer (31%) 2 Which has a higher percentage of over 40s shoppers?Champagne (67%) Sav Blanc (80%) 3 How many shoppers specifically go out to buy alcohol (vs. buying when they’re out doing something else)? 1 in 32 in 3 4 Who has the youngest shoppers (under 40)?Bottlemart (45%)Celebrations (34%) 5 Who has the lowest average liquor category spend per trip?AldiIGA

Shopper © Copyright 2015 Shopper Tracker / SMI Quiz: Heads or Tails? QuestionHeadsTails 1 Which has a higher percentage of women shoppers?Moscato (76%)Premium Beer (31%) 2 Which has a higher percentage of over 40s shoppers?Champagne (67%) Sav Blanc (80%) 3 How many shoppers specifically go out to buy alcohol (vs. buying when they’re out doing something else)? 1 in 32 in 3 4 Who has the youngest shoppers (under 40)?Bottlemart (45%)Celebrations (34%) 5 Who has the lowest average liquor category spend per trip?Aldi ($30.30)IGA ($35.40) 6 How many off trade shoppers also bought Liquor in the on trade (pub/ venue etc) in the last week? 14%34%

Shopper © Copyright 2015 Shopper Tracker / SMI Quiz: Heads or Tails? QuestionHeadsTails 1 Which has a higher percentage of women shoppers?Moscato (76%)Premium Beer (31%) 2 Which has a higher percentage of over 40s shoppers?Champagne (67%) Sav Blanc (80%) 3 How many shoppers specifically go out to buy alcohol (vs. buying when they’re out doing something else)? 1 in 32 in 3 4 Who has the youngest shoppers (under 40)?Bottlemart (45%)Celebrations (34%) 5 Who has the lowest average liquor category spend per trip?Aldi ($30.30)IGA ($35.40) 6 How many off trade shoppers also bought Liquor in the on trade (pub/ venue etc) in the last week? 14%34% 7 How many off trade shoppers also bought Liquor online in the last week?6%16%

Shopper © Copyright 2015 Shopper Tracker / SMI Quiz: Heads or Tails? QuestionHeadsTails 1 Which has a higher percentage of women shoppers?Moscato (76%)Premium Beer (31%) 2 Which has a higher percentage of over 40s shoppers?Champagne (67%) Sav Blanc (80%) 3 How many shoppers specifically go out to buy alcohol (vs. buying when they’re out doing something else)? 1 in 32 in 3 4 Who has the youngest shoppers (under 40)?Bottlemart (45%)Celebrations (34%) 5 Who has the lowest average liquor category spend per trip?Aldi ($30.30)IGA ($35.40) 6 How many off trade shoppers also bought Liquor in the on trade (pub/ venue etc) in the last week? 14%34% 7 How many off trade shoppers also bought Liquor online in the last week?6%16% 8 Which has a higher percentage bought from the chiller/ fridge?Pre-mix VodkaFlavoured Cider

Shopper © Copyright 2015 Shopper Tracker / SMI Quiz: Heads or Tails? QuestionHeadsTails 1 Which has a higher percentage of women shoppers?Moscato (76%)Premium Beer (31%) 2 Which has a higher percentage of over 40s shoppers?Champagne (67%) Sav Blanc (80%) 3 How many shoppers specifically go out to buy alcohol (vs. buying when they’re out doing something else)? 1 in 32 in 3 4 Who has the youngest shoppers (under 40)?Bottlemart (45%)Celebrations (34%) 5 Who has the lowest average liquor category spend per trip?Aldi ($30.30)IGA ($35.40) 6 How many off trade shoppers also bought Liquor in the on trade (pub/ venue etc) in the last week? 14%34% 7 How many off trade shoppers also bought Liquor online in the last week?6%16% 8 Which has a higher percentage bought from the chiller/ fridge?Pre-mix Vodka (49%) Flavoured Cider (57%) 9 Who has the higher percentage of affluent shoppers?VodkaBourbon

Shopper © Copyright 2015 Shopper Tracker / SMI Quiz: Heads or Tails? QuestionHeadsTails 1 Which has a higher percentage of women shoppers?Moscato (76%)Premium Beer (31%) 2 Which has a higher percentage of over 40s shoppers?Champagne (67%) Sav Blanc (80%) 3 How many shoppers specifically go out to buy alcohol (vs. buying when they’re out doing something else)? 1 in 32 in 3 4 Who has the youngest shoppers (under 40)?Bottlemart (45%)Celebrations (34%) 5 Who has the lowest average liquor category spend per trip?Aldi ($30.30)IGA ($35.40) 6 How many off trade shoppers also bought Liquor in the on trade (pub/ venue etc) in the last week? 14%34% 7 How many off trade shoppers also bought Liquor online in the last week?6%16% 8 Which has a higher percentage bought from the chiller/ fridge?Pre-mix Vodka (49%) Flavoured Cider (57%) 9 Who has the higher percentage of affluent shoppers?Vodka (59%) Bourbon (52%) 10 Which retailer is chosen more as a destination because of its good prices?Dan Murphy’sAldi

Shopper © Copyright 2015 Shopper Tracker / SMI Quiz: Heads or Tails? QuestionHeadsTails 1 Which has a higher percentage of women shoppers?MoscatoPremium Beer 2 Which has a higher percentage of over 40s shoppers?ChampagneSav Blanc 3 How many shoppers specifically go out to buy alcohol (vs. buying when they’re out doing something else)? 1 in 32 in 3 4 Who has the youngest shoppers (under 40)?BottlemartCelebrations 5 Who has the lowest average liquor category spend per trip?AldiIGA 6 How many off trade shoppers also bought Liquor in the on trade (pub/ venue etc) in the last week? 14%34% 7 How many off trade shoppers also bought Liquor online in the last week?6%16% 8 Which has a higher percentage bought from the chiller/ fridge?Pre-mix VodkaFlavoured Cider 9 Who has the higher percentage of affluent shoppers?VodkaBourbon 10 Which retailer is chosen more as a destination because of its good prices?Dan Murphy’sAldi

Shopper © Copyright 2015 Shopper Tracker / SMI Quiz: Heads or Tails? QuestionHeadsTails 1 Which has a higher percentage of women shoppers?Moscato (76%)Premium Beer (31%) 2 Which has a higher percentage of over 40s shoppers?Champagne (67%) Sav Blanc (80%) 3 How many shoppers specifically go out to buy alcohol (vs. buying when they’re out doing something else)? 1 in 32 in 3 4 Who has the youngest shoppers (under 40)?Bottlemart (45%)Celebrations (34%) 5 Who has the lowest average liquor category spend per trip?Aldi ($30.30)IGA ($35.40) 6 How many off trade shoppers also bought Liquor in the on trade (pub/ venue etc) in the last week? 14%34% 7 How many off trade shoppers also bought Liquor online in the last week?6%16% 8 Which has a higher percentage bought from the chiller/ fridge?Pre-mix Vodka (49%) Flavoured Cider (57%) 9 Who has the higher percentage of affluent shoppers?Vodka (59%) Bourbon (52%) 10 Which retailer is chosen more as a destination because of its good prices?Dan Murphy’s (61%) Aldi (73%)

Shopper © Copyright 2015 Shopper Tracker / SMI Tie break: What % of Dan Murphy’s baskets are single item (sku)? Answer: 81%

Shopper © Copyright 2015 Shopper Tracker / SMI Future is not the present Engage the shopper better Drive Growth & Margin

Shopper © Copyright 2015 Shopper Tracker / SMI Shoppers in some segments are very fixed in their decision Fixed decision (brand/ size/ flavour) Flexible decision (brand/ size/ flavour) Why is this relevant? Tells you how important a brand is in the category, or to the retailer Drives range and space (availability) decisions Tells you where to invest on the path (pre- store vs in-store) High brand planned Will walk away if disappointed Pre-store promo effective

Shopper © Copyright 2015 Shopper Tracker / SMI Some segments offer opportunity to trade up and build retailer loyalty High differentiation Why is this relevant? Tells you where you should drive a higher margin per unit strategy vs volume through price Tells you how important a segment/ brand is in driving loyalty to a retailer ) Willing to pay more High retailer loyalty Low differentiation

Shopper © Copyright 2015 Shopper Tracker / SMI A framework for investment: High differentiation Low differentiation Fixed decision brand/ size/ flavour Flexible decision brand/ size/ flavour e.g. Premium Beere.g. Red Wine over $15 e.g. Bourbone.g. Pre-mix Vodka Destination value “I know exactly what I want and I’ll go wherever I can find it at a good price” Drive value at shelf “Give me decent value, I don’t mind what brand/ option I choose” Inspire & inform at shelf “Educate and inspire me so I can make a decision, I’m open to different brands/ options” Hero skus “I’ll seek out a retailer that does exactly what I want well and don’t mind paying a bit more”

Shopper © Copyright 2015 Shopper Tracker / SMI Hero skus Drive value at shelf Inspire & inform at shelf Destination Value Liquor segments 2015 High differentiation Low differentiation Fixed decision brand/ size/ flavour Flexible decision brand/ size / flavour

Shopper © Copyright 2015 Shopper Tracker / SMI Focus on Destination Value Brands/ sizes critical: Invest in Price pre-store to win store & brand decision Invest in availability and simplicity at shelf Retailer attracts shoppers on that trip via price/ deal Consider a volume/ footfall through price strategy Brands/ sizes critical: Invest in Price pre-store to win store & brand decision Invest in availability and simplicity at shelf Retailer attracts shoppers on that trip via price/ deal Consider a volume/ footfall through price strategy Top 5 segments Full Strength Beer Light Beer Mid Strength Beer Contemporary Beer Bourbon Whiskey Destination Value Low differentiation Fixed decision brand/ size/ flavour

Shopper © Copyright 2015 Shopper Tracker / SMI Price image has improved (all categories) Aldi is challenging Big Box 81.4 The prices are great on the [CATEGORY] products I buy in [RETAILER] Price image 2014 vs 2015

Shopper © Copyright 2015 Shopper Tracker / SMI Staff: 12% Innovation: 30% Signage: 27% Shelf Layout: 20% Location: 9% Availability: 45% Packaging: 12% Ideas: 21% Less Choice: 4% % of shoppers: If you had to improve something, which would you choose Availability remains the #1 priority at shelf overall

Shopper © Copyright 2015 Shopper Tracker / SMI

Shopper © Copyright 2015 Shopper Tracker / SMI

Shopper © Copyright 2015 Shopper Tracker / SMI Focus on Drive Value at Shelf Occasion drives trip, but shoppers switch at shelf Win the segment/ brand/ pack/ flavour via impulse Win extra volume via impulse Win with a great price/ offer Occasion drives trip, but shoppers switch at shelf Win the segment/ brand/ pack/ flavour via impulse Win extra volume via impulse Win with a great price/ offer Top 5 segments Pre-mix Vodka White Wine less than $15 Vodka Red Wine less than $15 Traditional Cider Drive value at shelf Low differentiation Flexible decision brand/ size / flavour

Shopper © Copyright 2015 Shopper Tracker / SMI Segment decisions in “Drive Value” are more likely to be made at shelf Top 5 Unplanned segments Flavoured Cider31% Pre-mix Vodka28% Pre-mix Dark/ Light Rum27% Pre-mix Liqueurs25% Pre-mix Bourbon Whiskey22% Occasion drives trip (e.g. Party) Occasion drives trip (e.g. Party) But 1 in 4 shoppers decide segment at shelf Action: invest in-store to drive switching

Shopper © Copyright 2015 Shopper Tracker / SMI

Shopper © Copyright 2015 Shopper Tracker / SMI Focus on Inspire & Inform at Shelf Innovate, inspire, inform, invest in quality Flagship investment, retailer wins loyalty in these segments At shelf switching: win the sku decision in-store Drive high unit margin/ premium (shallow price discounts) Innovate, inspire, inform, invest in quality Flagship investment, retailer wins loyalty in these segments At shelf switching: win the sku decision in-store Drive high unit margin/ premium (shallow price discounts) Top 5 segments Red Wine more than $15 White Wine more than $15 Craft Beer Flavoured Cider French Champagne Inspire & inform at shelf Flexible decision brand/ size / flavour High differentiation

Shopper © Copyright 2015 Shopper Tracker / SMI Shoppers are increasingly willing to pay more for these segments Most willing to pay more* 1 White Wine More than $1561% 2 Red Wine More than $1560% 3 Craft / Boutique Beer57% 4 French Champagne56% 5 Shiraz55% +6% more willing to pay more +5% more willing to pay more -1% +12% more willing to pay more +4% more willing to pay more Difference vs 2014? *I don’t mind paying a bit more for some types of XXX in RETAILER for better quality/ something different Price still plays a role (e.g. impulse volume) But less need to deep discount

Shopper © Copyright 2015 Shopper Tracker / SMI This is led by Vintage Cellars and Big Box 19.6 Willingness to pay more (trade up) 2014 vs 2015 I don’t mind paying a bit more for some types of XXX in RETAILER for better quality/ something different

Shopper © Copyright 2015 Shopper Tracker / SMI

Shopper © Copyright 2015 Shopper Tracker / SMI “Inspire and Inform” via new is not improving however 15.7 New ideas 2014 vs 2015 Q. There are often appealing new ideas in (CATEGORY) in (RETAILER)

Shopper © Copyright 2015 Shopper Tracker / SMI More shoppers are being traded up on volume First Choice clearly leads on this strategy 6.9 Persuaded to buy extra 2014 vs 2015 I'm often persuaded to buy extra [CATEGORY] in [RETAILER]

Shopper © Copyright 2015 Shopper Tracker / SMI

Shopper © Copyright 2015 Shopper Tracker / SMI

Shopper © Copyright 2015 Shopper Tracker / SMI Focus on Hero skus Hero skus Flagship investment, retailer wins traffic, margin and loyalty Brands critical, must innovate, inspire and be worth a premium The brand (sku) drives the destination: invest pre-store Drive high unit margin/ premium (shallow price discounts) Flagship investment, retailer wins traffic, margin and loyalty Brands critical, must innovate, inspire and be worth a premium The brand (sku) drives the destination: invest pre-store Drive high unit margin/ premium (shallow price discounts) Top 5 segments Premium/ Imported Beer Pre-mix Scotch Whisky Scotch Whisky Dark/ Light Rum French Champagne High differentiation Fixed decision brand/ size/ flavour

Shopper © Copyright 2015 Shopper Tracker / SMI Liquor retailers are getting better at driving retailer loyalty, led by Dan Murphy’s Retailer loyalty 2014 vs 2015 One of the reasons I go to (RETAILER) is because it does (CATEGORY) particularly well 31.7

Shopper © Copyright 2015 Shopper Tracker / SMI Hero skus Drive value at shelf Inspire & inform at shelf Destination Value In summary, invest appropriately High differentiation Low differentiation Fixed decision brand/ size/ flavour Flexible decision brand/ size / flavour

Shopper © Copyright 2015 Shopper Tracker / SMI Future is not the present Engage the shopper better Drive Growth & Margin

Shopper © Copyright 2015 Shopper Tracker / SMI Hero skus Drive value at shelf Inspire & inform at shelf Destination Value Segments can change quickly High differentiation Low differentiation Fixed decision brand/ size/ flavour Flexible decision brand/ size / flavour Flavoured Cider Traditional Cider

Shopper © Copyright 2015 Shopper Tracker / SMI Retail can change quickly 81.4 The prices are great on the [CATEGORY] products I buy in [RETAILER] Price image 2014 vs 2015

Shopper © Copyright 2015 Shopper Tracker / SMI

Shopper © Copyright 2015 Shopper Tracker / SMI Aldi concept store, NSW

Shopper © Copyright 2015 Shopper Tracker / SMI Walgreens, USA

Shopper © Copyright 2015 Shopper Tracker / SMI Coles Grocery

Shopper © Copyright 2015 Shopper Tracker / SMI Coles Grocery

Shopper © Copyright 2015 Shopper Tracker / SMI Dan Murphy’s

Shopper © Copyright 2015 Shopper Tracker / SMI Future is not the present Engage the shopper better Drive Growth & Margin

Shopper © Copyright 2015 Shopper Tracker / SMI

Shopper © Copyright 2015 Shopper Tracker / SMI

Shopper © Copyright 2015 Shopper Tracker / SMI Casual Event 64% of Liquor 28% of Liquor 11% of Liquor Special Occasions Relaxing/ Everyday 6% of Liquor Gifting Relaxing/ Everyday dominates, but don’t forget events that are more important to your shopper

Shopper © Copyright 2015 Shopper Tracker / SMI Morrisons, UK

Shopper © Copyright 2015 Shopper Tracker / SMI Tesco, UK

Shopper © Copyright 2015 Shopper Tracker / SMI n= n= Fewer women are buying Liquor STA 2015 Liquor Program Gender Split

Shopper © Copyright 2015 Shopper Tracker / SMI Casual Event 64% of Liquor 28% of Liquor 11% of Liquor Special Occasions Relaxing/ Everyday 6% of Liquor Gifting Females are more likely to be concerned about making the right decision (opportunity) Buy for me Buy for others Female Over Indexing Male Over Indexing

Shopper © Copyright 2015 Shopper Tracker / SMI Women: more premium, more impulsive

Shopper © Copyright 2015 Shopper Tracker / SMI Point of Purchase Opportunities Female / Male (2015) Average Category Male AVAILABILITY INNOVATION EASE OF SHOP NAVIGATION PACKAGING THEATRE LOCATION IN STORE STAFF LESS CHOICE Female Men: Availability, Simplicity Females: Navigation, Theatre, Staff help

Shopper © Copyright 2015 Shopper Tracker / SMI

Shopper © Copyright 2015 Shopper Tracker / SMI Future is not the present Engage the shopper better Drive Growth & Margin Thank You!