1. New York City January 23, 2007 The U.S. Wine Market – Consumer Trends and Analysis Kennewick, WA – February 6, 2008

2. Wine Market Council Key Facts: All Tiers of the Industry Involved Promotion of Imported and Domestic Wines Focus on Expanding U.S. Consumer Market for Wine

3. Wine Market Council Mission Statement: “…to establish the widespread acceptance of wine as a rewarding part of American culture and to encourage the responsible enjoyment of wine by current and future generations of adults in the United States.”

4. Ongoing Consumer Research  Quantitative studies  Focus groups and Internet studies National Public Relations Campaign  Target marginal wine consumers  Mainstream consumer media  Raise comfort level with wine Wine Market Council Initiatives

5. New York City January 23, 2007 2007: “Tipping Point Year”

6. Consumption Frequency Segmentation, 2007 Source: Merrill Research 45% 55%

7. Total Wine Consumption – U.S. (Millions of cases) Source: Impact Databank 212 225 229 231 245 259 270 279 290 304* *Estimate

8. 1970 1975 1980 1985 1990 1995 2000 2005 2007 U.S. Adult Per Capita Table Wine Consumption v. Population Growth Adult Population Gallons per Adult 134 147 154 164 173 184 194 1.05 1.78 2.58 2.29 1.96 2.13 2.46 2.81 211 Source: U.S. Census Bureau, Adams Beverage Group *Estimate 216* 3.02*

9. Male v. Female Ratio of Wine Drinkers, 2007 50 47 53 Millennial Gen X Boomer Source: Merrill Research (Percent by segment and generation)

10. Net Gain in Wine Consumption, 2007 Source: Merrill Research (Net gain “Drinking more wine” vs. year or two ago, by gender) 22% 25%

11. Consumer Segments by Gender, 2007 Core Marginal Source: Merrill Research Male 54% Female 46% Male 41% Female 59%

12. Segments by Age, 2007 (Mean) 45.6 46.9 Source: Merrill Research

13. Younger Generations Drive New Growth, 2007 (Net percent “drinking more wine” by generation) Source: Merrill Research 47 37 10

14. Don’t drink wine 57% Drink wine 43% (Ages 21 – Plus) Beverage Alcohol Consumers, 2000 Source: Merrill Research 49 M 64 M

15. Don’t drink wine 43% Drink wine 57% (Ages 21 – Plus) Beverage Alcohol Consumers, 2007 Source: Merrill Research 75 M 56 M

16. New York City January 23, 2007 Consumer Segmentation

17. Beer/Spirits 25.8% Core 17.8% Marginal 17.2% Non-Drinkers 39.2% (Ages 21 – Plus) Consumer Segments U.S. Adults, 2007 Source: Merrill Research

18. 100 70 82 86 80 100 Wine Drinker Consumption of Beer and Spirits, 2007 Core Marginal Source: Merrill Research (Percent by segment)

19. Net Gain/Loss in Beverage Alcohol Consumption, 2007 Source: Merrill Research (Percentage gain or loss by beverage type) -15% 23% -7% Wine Beer Spirits

20. Drinking Less Beer or Spirits but More Wine: “Trade – Off” Drinkers, 2007 Source: Merrill Research 90% 10%

21. “Trade-Off” Consumers Skew Younger, 2007 19 24 34 24 27 39 MillennialGen X Boomer Source: Merrill Research 15 18 Aged 62+ (Percentages by generation)

22. 17 28 37 57 26 34 Reasons for Increased Wine Consumption, 2007 More occasions More per occasion Both Source: Merrill Research (Percentage by statement)

23. 26 27 33 32 17 21 “I would drink more wine if…” 2007 Less $ in restaurant More affordable Spouse drank wine Source: Merrill Research (Percentage by statement – drinking same or less than year or two ago) No small children 7 13

24. New York City January 23, 2007 Purchase and Usage Behaviors

25. Frequency of Purchase by Price Point, 2007 (Frequent or occasional purchase) 17 9 38 29 74 63 81 65 64 45 37 25 $20 Source: Merrill Research

26. Color Mix by Segment, 2007 CoreMarginal Source: Merrill Research

27. Appellation Mix Consumed by Segment, 2007 Core Marginal Source: Merrill Research

28. Imported Wine Purchases by Country, 2007 (Percent have purchased wine by country in past 3 months) 23 Source: Merrill Research 32 44 26 41 52 26 18 26 16 22 12 23 9 18 6 14 6

29. Wine Purchases by State, 2007 (Percent have purchased wine by state in past 3 months) 90 79 24 18 28 13 23 12 Source: Merrill Research

30. New York City January 23, 2007 Winery and Internet Direct Markets

31. 13 5 76 93 6 2 Membership in Wine Clubs – 2007 (Percent by membership and segment) 5 0 None 1 Club 2 Clubs 3+ Clubs Source: Merrill Research

32. 2007 - Ever Purchased Wine Directly from a Winery? (Percent by channel and segment) Source: Merrill Research 59 44 15 6 7

33. 2007 - Ever Purchased Wine Over the Internet? 18 9 Source: Merrill Research (Percent by segment)

34. Internet Wine Purchases by Channel, 2007 (Percent purchase by channel) Source: Merrill Research 3 8 35 64

35. Increase in Winery Online Sales, 2003 - 2007 (Percent “ever purchased from winery site”) Core Marginal 6 1 6 17 Source: Merrill Research 11 5

36. New York City January 23, 2007 Millennial Generation

37. American Generations WW II (76 and over) 32 Million Swing (63 - 75) 30 Million Boomer (44 - 62) 77 Million Generation X (32 - 44) 44 Million Millennial (14 - 31) 70 Million Source: American Generations (Age ranges in 2008)

38. 26 35 21 18 Segments by Generation, 2007 Millennial Gen X Boomer Source: Merrill Research (Percentage by segment and generation) 62-plus 18 17 22 43

39. Wine Consumed Most Often – Imports vs. Domestic - by Generation, 2007 Millennial Gen X Source: Merrill Research Boomer

40. Imported Wine Purchases by Country, 2007 (Percent have purchased wine by country in past 3 months) 43 57 36 50 33 36 23 22 24 22 Source: Merrill Research 27 18 17 15 13 10

41. Have Purchased Wine Online, 2007 23% 16% 11% Source: Merrill Research

42. Importance of Information from the Internet when purchasing Wine, 2007 (Top 3 box) 49% 36% 21% Source: Merrill Research

43. New York City January 23, 2007 The U.S. Wine Market – Consumer Trends and Analysis Kennewick, WA – February 6, 2008